A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses), may
compel our board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the control shares. If no request for a meeting is
made, the corporation may itself present the question at any stockholders meeting. If voting rights of control shares are not approved at the meeting or if the acquiring person does not deliver
the statement as required by the MGCL, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have
previously been approved) for fair value.
Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any
meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved by the stockholders at a special meeting and
the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of
such appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition. The control share acquisition statute does not apply (1) to shares
acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (2) to acquisitions approved or exempted by a corporation's charter or bylaws.
Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions of our capital stock. We cannot provide you any assurance
that our board of directors will not amend or eliminate this provision at any time in the future, and our board of directors may do so on a retroactive basis.
Title 3, Subtitle 8 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent
directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any of (1) a
classified board, (2) a two-thirds vote requirement for removing a director, (3) a requirement that the number of directors be fixed only by vote of the directors, (4) a requirement that a vacancy
on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred, or (5) a majority requirement for the calling of
a special meeting of stockholders.
Through provisions in our charter and bylaws unrelated to Subtitle 8, we already require a two-thirds vote for the removal of any director from the board, vest in the
board the exclusive power to fix the number of directorships, subject to the limitations set forth in our bylaws, and require, unless called by our president, a majority of our board of directors or a
majority of our independent directors, the written request of stockholders entitled to cast not less than a majority of all votes entitled to be cast at such meeting to call a special meeting. We
have not elected to create a classified board; however, our board may elect to do so in the future without stockholder approval.
Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets or engage in a share exchange
unless approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a lesser percentage (but not less than a majority of
all of the votes entitled to be cast on the matter) is set forth in the corporation's charter. Our charter does not provide for a lesser percentage of votes for stockholder approval of the dissolution,
merger, sale of all or substantially all of our assets or share exchange on the part of the company. However, because operating assets may be held by a corporation's subsidiaries, as in our
situation, this may mean that a subsidiary of a corporation can transfer all of its assets or engage in other extraordinary actions without any vote of the corporation's stockholders.
Our charter generally provides that charter amendments requiring stockholder approval must be declared advisable by our board of directors and approved by the
affirmative vote of stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter. However, the affirmative vote of stockholders holding at least two-thirds of all of the
votes entitled to be cast thereon is required to amend, alter, change, repeal or adopt any provisions inconsistent with the sections of our charter relating to removal of directors, the prohibition
on cumulative voting in the election of directors, the requirements for independent directors, the prohibition on preemptive rights (except as provided in the terms of any series of preferred
stock), indemnification and limitation of liability of directors and officers, and amendment of the charter. Currently, there are no provisions of our charter granting cumulative voting or preemptive
rights to holders of our capital stock.
In addition, our board may, upon the vote of a majority of our board of directors acting without stockholder approval, increase (up to the maximum number authorized
under our charter but unissued) or decrease (to an amount not less than the total amount then outstanding) the number of shares of stock of any class that the corporation has authority to
issue.
Our board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws, provided that amendment of certain
provisions in our bylaws requires the affirmative vote of 80% of our entire board of directors.
The advance notice procedures of our bylaws generally provide that, to be timely, a stockholder's notice with respect to director nominations or proposals for an annual
meeting must be delivered to our corporate secretary at our principal executive office not less than 90 nor more than 120 days prior to the first anniversary of the date of our preceding year's
annual meeting.
Anti-takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws
The general applicability of the business combination provisions of the MGCL, the provisions of our charter on removal of directors and the advance notice provisions of
the bylaws could delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for holders of our common stock or otherwise be in their best
interest. Likewise, if our board of directors were to opt in to certain of the provisions of Title 3, Subtitle 8 of the MGCL, or if the provision in the bylaws opting out of the control share acquisition
provisions of the MGCL were rescinded, these provisions of the MGCL could have similar anti-takeover effects.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
Stock Market Listing
Our shares of common stock are listed for trading on the Nasdaq Global Market under the symbol "PTX."
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DESCRIPTION OF OUR WARRANTS
We may issue warrants to purchase shares of our common stock, preferred stock and/or debt securities in one or more series together with other securities or
separately, as described in each applicable prospectus supplement or free writing prospectus. Below is a description of certain general terms and provisions of the warrants that we may offer.
Particular terms of the warrants will be described in the applicable warrant agreements and the applicable prospectus supplement or free writing prospectus for the warrants.
The applicable prospectus supplement or free writing prospectus will contain, where applicable, the following terms of and other information relating to the warrants:
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the specific designation and aggregate number of, and the price at which we will issue, the warrants;
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the currency or currency units in which the offering price, if any, and the exercise price are payable;
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the designation, amount and terms of the securities purchasable upon exercise of the warrants;
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if applicable, the exercise price for shares of our common stock and the number of shares of common stock to be received upon exercise of the warrants;
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if applicable, the exercise price for shares of our preferred stock, the number of shares of preferred stock to be received upon exercise of the warrants, and a
description of that series of our preferred stock;
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if applicable, the exercise price for our debt securities, the amount of our debt securities to be received upon exercise of the warrants, and a description of that
series of debt securities;
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the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if the warrants may not be continuously exercised
throughout that period, the specific date or dates on which the warrants may be exercised;
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whether the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of these forms, although, in any case,
the form of a warrant included in a unit will correspond to the form of the unit and of any security included in that unit;
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any applicable material U.S. federal income tax or foreign tax consequences;
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the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents, registrars or other agents;
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the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange or market;
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if applicable, the date from and after which the warrants and the common stock, preferred stock and/or debt securities will be separately transferable;
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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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information with respect to book-entry procedures, if any
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the anti-dilution provisions of the warrants, if any;
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any redemption, put or call provisions;
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whether the warrants are to be sold separately or with other securities as parts of units; and
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any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.
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Transfer Agent and Registrar
The transfer agent and registrar for any warrants will be set forth in the applicable prospectus supplement or free writing prospectus.
Description of Outstanding Warrants
As of November 22, 2017, there were 32,992 warrants to purchase shares of our common stock outstanding. See "Description of Our Capital Stock -
Common Stock Warrants."
DESCRIPTION OF OUR DEBT SECURITIES
This section describes the general terms and provisions of our debt securities that we may issue from time to time. We may issue debt securities, in one or
more series, as either senior or subordinated debt or as senior or subordinated convertible debt. While the terms we have summarized below will apply generally to any future debt securities
we may offer under this prospectus, the applicable prospectus supplement or free writing prospectus will describe the specific terms of any debt securities offered through that prospectus
supplement or free writing prospectus. The terms of any debt securities we offer under a prospectus supplement or free writing prospectus may differ from the terms we describe below.
Unless the context requires otherwise, whenever we refer to the "indentures," we also are referring to any supplemental indentures that specify the terms of a particular series of
debt securities.
As of September 30, 2017, we have outstanding (a) $172,069,814 of 12% Senior Secured Notes due 2020, (b) $78,225,000 of 4.25% Convertible Senior Notes due
2021, and (c) $36,242,500 of 4.25%/5.25% Exchangeable Notes due 2022.
We will issue any senior debt securities under the senior indenture that we will enter into with the trustee named in the senior indenture. We will issue any subordinated debt securities
under the subordinated indenture that we will enter into with the trustee named in the subordinated indenture. We have filed forms of these documents as exhibits to the registration statement,
of which this prospectus is a part, and supplemental indentures and forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration
statement of which this prospectus is a part or will be incorporated by reference from reports that we file with the SEC.
The indentures will be qualified under the Trust Indenture Act of 1939, as amended, or the Trust Indenture Act. We use the term "trustee" to refer to either the trustee under the
senior indenture or the trustee under the subordinated indenture, as applicable.
The following summaries of material provisions of the senior debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by reference to,
all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplement or free writing prospectus related to the debt
securities that we may offer under this prospectus, as well as the complete applicable indenture that contains the terms of the debt securities. Except as we may otherwise indicate, the terms
of the senior indenture and the subordinated indenture are identical.
General
We will describe in the applicable prospectus supplement or free writing prospectus the terms of the series of debt securities being offered, including:
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the aggregate principal amount being offered, and if a series, the total amount authorized and the total amount outstanding;
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the issue price or prices, expressed as a percentage of the aggregate principal amount of the debt securities;
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any limit on the aggregate principal amount that may be issued;
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whether or not we will issue the series of debt securities in global form, and, if so, the terms and who the depository will be;
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whether and under what circumstances, if any, we will pay additional amounts on any debt securities held by a person who is not a United States person for tax purposes, and whether we
can redeem the debt securities if we have to pay such additional amounts;
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the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular
record dates for interest payment dates or the method for determining such dates;
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whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;
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the terms of the subordination of any series of subordinated debt;
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the place where payments will be payable;
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restrictions on transfer, sale or other assignment, if any;
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our right, if any, to defer payment of interest and the maximum length of any such deferral period;
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the date, if any, after which, the conditions upon which, and the price at which, we may, at our option, redeem the series of debt securities pursuant to any optional or provisional
redemption provisions and the terms of those redemption provisions;
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the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund or analogous fund provisions or otherwise, to redeem, or at the holder's option,
to purchase, the series of debt securities and the currency or currency unit in which the debt securities are payable;
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whether the indenture will restrict our ability or the ability of our subsidiaries to:
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incur additional indebtedness;
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issue additional securities;
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create liens;
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pay dividends or make distributions in respect of our capital stock or the capital stock of our subsidiaries;
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redeem capital stock;
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place restrictions on our subsidiaries' ability to pay dividends, make distributions or transfer assets;
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make investments or other restricted payments;
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sell or otherwise dispose of assets;
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enter into sale-leaseback transactions;
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engage in transactions with stockholders or affiliates;
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issue or sell stock of our subsidiaries; or
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effect a consolidation or merger;
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whether the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios;
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a discussion of certain material or special United States federal income tax considerations or foreign tax considerations applicable to the debt securities;
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information describing any book-entry features;
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provisions for a sinking fund purchase or other analogous fund, if any;
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the applicability of the provisions in the indenture on discharge;
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whether the debt securities are to be offered at a price such that they will be deemed to be offered at an "original issue discount" as defined in paragraph (a) of
Section 1273 of the Internal Revenue Code of 1986, as amended;
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the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof;
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the currency of payment of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars; and
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any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any additional events of default or covenants provided with respect to the debt
securities, and any terms that may be required by us or advisable under applicable laws or regulations or advisable in connection with the marketing of the debt securities.
Conversion or Exchange Rights
We will set forth in the applicable prospectus supplement or free writing prospectus the terms on which a particular series of debt securities may be convertible into or exchangeable for
our common stock, our preferred stock or other securities (including securities of a third-party). We will include provisions as to whether conversion or exchange is mandatory, at the option of
the holder or at our option. We may include provisions pursuant to which the number of shares of our common stock, our preferred stock or other securities (including securities of a third-party)
that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, the indentures will not contain any covenant
that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to or acquirer of such assets must
assume all of our obligations under the indentures or the debt securities, as appropriate. If the debt securities are convertible into or exchangeable for other securities of ours or securities of
other entities, the person with whom we consolidate or merge or to whom we sell all of our property must make provisions for the conversion of the debt securities into securities that the
holders of the debt securities would have received if they had converted the debt securities before the consolidation, merger or sale.
Events of Default Under the Indenture
Unless we provide otherwise in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, the following are events of default under the
indentures with respect to any series of debt securities that we may issue:
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if we fail to pay interest when due and payable and our failure continues for 90 days and the time for payment has not been extended;
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if we fail to pay the principal, premium or sinking fund payment, if any, when due and payable at maturity, upon redemption or repurchase or otherwise, and the time for payment has not
been extended;
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if we fail to observe or perform any other covenant contained in the debt securities or the indentures, other than a covenant specifically relating to another series of debt securities, and our
failure continues for 90 days after we receive notice from the trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series;
and
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if specified events of bankruptcy, insolvency or reorganization occur.
We will describe in each applicable prospectus supplement or free writing prospectus any additional events of default relating to the relevant series of debt securities.
If an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the holders of
at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the
unpaid principal, premium, if any, and accrued interest, if any, due and payable immediately. If an event of default specified in the last bullet point above occurs with respect to us, the unpaid
principal, premium, if any, and accrued interest, if any, of each issue of debt securities then outstanding shall be due and payable without any notice or other action on the part of the trustee or
any holder.
The holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its
consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the
indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the indentures, if an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers
under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the trustee reasonable indemnity or security
satisfactory to it against any loss, liability or expense. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt securities of that series,
provided that:
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the direction so given by the holder is not in conflict with any law or the applicable indenture; and
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subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in
the proceeding.
A holder of the debt securities of any series will have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies if:
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the holder has given written notice to the trustee of a continuing event of default with respect to that series;
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the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request, and such holders have offered reasonable indemnity
to the trustee or security satisfactory to it against any loss, liability or expense or to be incurred in compliance with instituting the proceeding as trustee; and
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the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other
conflicting directions within 90 days after the notice, request and offer.
These limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities, or other
defaults that may be specified in the applicable prospectus supplement or free writing prospectus.
We will periodically file statements with the trustee regarding our compliance with specified covenants in the indentures.
Modification of Indenture; Waiver
Subject to the terms of the indenture for any series of debt securities that we may issue, we and the trustee may change an indenture without the consent of any holders with respect to
the following specific matters:
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to fix any ambiguity, defect or inconsistency in the indenture;
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to comply with the provisions described above under "Description of Our Debt Securities-Consolidation, Merger or Sale;"
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to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act;
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to add to, delete from or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication and delivery of debt securities, as set forth
in the indenture;
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to provide for the issuance of and establish the form and terms and conditions of the debt securities of any series as provided under "Description of Our Debt Securities-
General," to establish the form of any certifications required to be furnished pursuant to the terms of the indenture or any series of debt securities, or to add to the rights of the holders of
any series of debt securities;
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to evidence and provide for the acceptance of appointment hereunder by a successor trustee;
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to provide for uncertificated debt securities and to make all appropriate changes for such purpose;
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to add to our covenants such new covenants, restrictions, conditions or provisions for the benefit of the holders, to make the occurrence, or the occurrence and the continuance, of a
default in any such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred to us in the indenture; or
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to change anything that does not materially adversely affect the interests of any holder of debt securities of any series.
In addition, under the indentures, the rights of holders of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least a majority in
aggregate principal amount of the outstanding debt securities of each series that is affected. However, subject to the terms of the indenture for any series of debt securities that we may issue
or as otherwise provided in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, we and the trustee may make the following changes only
with the consent of each holder of any outstanding debt securities affected:
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extending the stated maturity of the series of debt securities;
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reducing the principal amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the redemption or repurchase of any debt
securities; or
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reducing the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver.
Discharge
Each indenture provides that, subject to the terms of the indenture and any limitation otherwise provided in the prospectus supplement or free writing prospectus applicable to a
particular series of debt securities, we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations
to:
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register the transfer or exchange of debt securities of the series;
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replace stolen, lost or mutilated debt securities of the series;
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maintain an office or agency with respect to each series of debt securities;
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maintain paying agencies;
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make, or cause to be made, payment of principal (and premium, if any) and interest due on each series of debt securities and hold monies for payment in trust;
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recover excess money held by the trustee;
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compensate and indemnify the trustee; and
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appoint any successor trustee.
In order to exercise our rights to be discharged, we must deposit with the trustee money or government obligations sufficient to pay all the principal of, any premium and interest on, the
debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement or free writing
prospectus, in denominations of $1,000 and any integral multiple thereof. The indentures provide that we may issue debt securities of a series in temporary or permanent global form and as
book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company or another depository named by us and identified in a prospectus supplement or free writing
prospectus with respect to that series.
At the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement or free writing
prospectus, the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and
aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement or free writing prospectus, holders of the debt
securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the
security registrar, at the office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder
presents for transfer or exchange, we will make no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
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We will name in the applicable prospectus supplement or free writing prospectus the security registrar, and any transfer agent in addition to the security registrar, that we initially designate
for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer
agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities of any series, we will not be required to:
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issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of
redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or
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register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in
part.
Information Concerning the Trustee
The trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the
applicable indenture. Upon an event of default under an indenture, the trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own
affairs.
Subject to this provision, the trustee is under no obligation to exercise any of the powers given it by the indentures at the request of any holder of debt securities unless it is offered
reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement or free writing prospectus, we will make payment of the interest on any debt securities on any interest payment
date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.
We will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated by us, except that unless we otherwise
indicate in the applicable prospectus supplement or free writing prospectus, we will make interest payments by check that we will mail to the holder or by wire transfer to certain holders. Unless
we otherwise indicate in the applicable prospectus supplement or free writing prospectus, we will designate the corporate trust office of the trustee as our sole paying agent for payments with
respect to debt securities of each series. We will name in the applicable prospectus supplement or free writing prospectus any other paying agents that we initially designate for the debt
securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities that remains unclaimed at the end of two years after
such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the Trust Indenture Act is
applicable.
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Ranking of Debt Securities
The subordinated debt securities will be subordinate and junior in priority of payment to certain of our other indebtedness to the extent described in a prospectus supplement or free
writing prospectus. The subordinated indenture does not limit the amount of subordinated debt securities that we may issue. It also does not limit us from issuing any other
secured or unsecured debt.
The senior debt securities will rank equally in right of payment to all our other senior unsecured debt. The senior indenture does not limit the amount of senior debt securities that we may
issue. It also does not limit us from issuing any other secured or unsecured debt.
8.00% Convertible Senior Notes due 2019
On February 21, 2014, we issued $65.0 million aggregate principal amount of our 8.00% Convertible Senior Notes due 2019, or the 8.00% Convertible Notes,
in accordance with each of the Securities Purchase Agreements dated February 4, 2014, by and between us and the investors party thereto, and the related Indenture, dated February 21,
2014, by and between us and the trustee. During the year ended December 31, 2015, the holders of the 8.00% Convertible Notes converted the outstanding notes at a conversion
price of $36.00 per share. We issued 1.8 million shares pursuant to this conversion and retired the $65.0 million of the outstanding 8.00% Convertible Notes.
12% Senior Secured Notes due 2020
On August 19, 2014, we issued $220,000,000 aggregate principal amount of our 12% Senior Secured Notes due 2020, or the August 2014 Notes, pursuant to an Indenture, or the
August 2014 Indenture, dated as of August 19, 2014 among us, certain of our subsidiaries, or the Treximet Guarantors, and U.S. Bank National Association, or the August 2014 Trustee, as
trustee and collateral agent.
The August 2014 Notes mature on August 1, 2020 and bear interest at a rate of 12% per annum, payable in arrears on February 1 and August 1 of each year, beginning on February 1,
2015. On each payment date, commencing August 1, 2015, we will pay an installment of principal of the August 2014 Notes in an amount equal to 50% of net sales of Treximet,
as such term is defined in the August 2014 Indenture, for the two consecutive fiscal quarters immediately preceding such payment date (less the amount of interest paid on the August 2014
Notes on such payment date).
The August 2014 Notes are unconditionally guaranteed, jointly and severally, by the Treximet Guarantors. The August 2014 Notes and the guarantees of the Treximet
Guarantors are secured by a continuing first-priority security interest in substantially all of our assets and the assets of the Treximet Guarantors related to Treximet®, other than inventory
and certain inventory related assets, including accounts arising from the sale of the inventory.
We may redeem the August 2014 Notes at our option, in whole at any time or in part from time to time, on any business day, on not less than 30 days' nor more than 60 days' prior notice
provided to each holder's registered address. The redemption price will equal 100% of the outstanding principal amount of the August 2014 Notes being redeemed plus accrued
and unpaid interest thereon.
The August 2014 Indenture contains covenants that limit our ability and the ability of the Treximet Guarantors to, among other things: incur certain additional indebtedness; pay dividends
on, redeem or repurchase stock or make other distributions in respect of its capital stock; repurchase, prepay or redeem certain indebtedness; make certain investments; create restrictions on
the ability of the Treximet Guarantors to pay dividends to us or make other intercompany transfers; create liens; transfer or sell assets; consolidate, merge or sell or otherwise dispose of all or
substantially all of its assets and enter into certain transactions with affiliates. Upon the occurrence of certain events constituting a change of control, we are required to make an offer to
repurchase all of the August 2014 Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any to the repurchase
date.
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The August 2014 Indenture provides that an event of default will occur if, among other things, (a) we default in any payment of interest on any August 2014 Note when due and payable,
and such default continues for a period of 30 days; (b) we default in the payment of principal of or premium, if any, on any August 2014 Note when due and payable on the maturity date, upon
declaration of acceleration or otherwise, or to pay the change of control repurchase price, when due and payable, and such default continues for a period of five days; (c) we fail to make
a repurchase offer in the event of a change in control when required under the August 2014 Indenture, which continues for three business days; (d) we or any Treximet Guarantor fails to
comply with certain covenants after receiving written notice from the August 2014 Trustee or the holders of more than 25% of the principal amount of the outstanding August 2014 Notes; (e) we
or any Treximet Guarantor defaults with respect to other indebtedness for borrowed money in excess of $8,000,000 and such default is not cured within 30 days after written notice from the
August 2014 Trustee or the holders of more than 25% of the principal amount of the outstanding August 2014 Notes; (f) we or any Treximet Guarantor has rendered against it a final judgment
for the payment of $8,000,000 (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) under certain circumstances; (g) certain bankruptcy, insolvency,
liquidation, reorganization or similar events occur with respect to us or any Treximet Guarantor; (h) a guarantee of the August 2014 Notes (with certain exceptions) is held to be unenforceable
or invalid in a judicial proceeding or ceases to be in full force and effect or a Treximet Guarantor disaffirms its obligations under its guarantee of the August 2014 Notes; or (i) certain changes in
control of a Treximet Guarantor.
On April 21, 2015, we and the August 2014 Trustee entered into a First Supplemental Indenture to the August 2014 Indenture, or the August 2014 First Supplemental Indenture, to among
other things, allow us to incur up to $42.2 million of additional debt. On July 21, 2017, we, certain of our subsidiaries, or the New Guarantors, and the August 2014 Trustee entered into a
Second Supplemental Indenture to the August 2014 Indenture, or the August 14 Second Supplemental Indenture, pursuant to which the New Guarantors provided guarantees of our obligations
with respect to August 2014 Notes.
On November 2, 2017, we, certain holders of the August 2014 Notes and the August 2014 Trustee entered into a Waiver,
Amendment and Consent Agreement, pursuant to which such holders of the August 2014 Notes, representing a majority in aggregate principal amount of the August 2014 Notes then
outstanding, agreed to waive compliance with, and modify certain provisions of, the August 2014 Indenture in order to permit and facilitate the distribution and marketing of an authorized
generic version of Treximet in the United States by one of our wholly-owned subsidiaries, Macoven. In connection with the Waiver, Amendment and Consent Agreement, the Required Holders,
as such term is defined in the August 2014 Indenture, were granted, among other things, certain consent rights with respect to the termination provisions in the Intercompany Distribution
Agreements, as such term is defined in the August 2014 Indenture.
4.25% Convertible Senior Notes due 2021
On April 22, 2015, we issued $130.0 million aggregate principal amount of our 4.25% Convertible Senior Notes due 2021, or the 4.25% Convertible Notes. The
4.25% Convertible Notes mature on April 1, 2021, unless earlier converted, redeemed or repurchased. The 4.25% Convertible Notes are governed by the terms of an Indenture, or the April
2015 Indenture, between us and Wilmington Trust, National Association, or the April 2015 Trustee, which was entered into on April 22, 2015.
The 4.25% Convertible Notes are our general unsecured obligations and bear interest at a rate of 4.25% per annum, payable semiannually in arrears on April 1 and
October 1 of each year, beginning on October 1, 2015. The 4.25% Convertible Notes will mature on April 1, 2021, unless earlier converted, redeemed or repurchased. The Notes will be
convertible into shares of our common stock at a conversion rate of 8.7237 shares of common stock per $1,000 principal amount of the 4.25 % Convertible Notes, which represents a
conversion price of approximately $114.63 per share. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not
limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets,
the payment of cash dividends and certain tender or exchange offers.
We may not redeem the 4.25% Convertible Notes prior to April 6, 2019. However, the holders may convert their 4.25% Convertible Notes at any time prior to the close of
business on the business day immediately preceding January 1, 2021 only under certain circumstances. Upon conversion, we will deliver a number of shares of our common stock equal to the
conversion rate in effect on the conversion date. In addition to the holder option to convert, the 4.25% Convertible Notes may be redeemed upon the occurrence of certain events.
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No "sinking fund" is provided for the 4.25% Convertible Notes, which means that we are not required to periodically redeem or retire the 4.25% Convertible
Notes. If we undergo a "fundamental change", as defined in the April 2015 Indenture, subject to certain conditions, holders may require us to repurchase for cash all or
part of their 4.25% Convertible Notes in principal amounts of $1,000 or an integral multiple thereof. The fundamental change repurchase price will be equal to 100% of the principal amount of
the 4.25% Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The April 2015 Indenture does not
contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our
subsidiaries. The April 2015 Indenture does not contain covenants or other provisions to afford protection to holders of the 4.25% Convertible Notes in the event of a fundamental change or
other corporate transaction involving it except to the extent described above.
The April 2015 Indenture also provides for customary events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving us) occurs and
is continuing, the April 2015 Trustee by notice to us, or the holders of at least 25% in principal amount of the outstanding 4.25% Convertible Notes by written notice to us and the April 2015
Trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all of the 4.25% Convertible Notes to be due and payable. Upon such a declaration of acceleration,
such principal and accrued and unpaid interest, if any, will be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving us,
100% of the principal of and accrued and unpaid interest, if any, on all of the 4.25% Convertible Notes will become due and payable automatically. Notwithstanding the foregoing, the April 2015
Indenture provides that, to the extent we elect and for up to 270 days, the sole remedy for an event of default relating to certain failures by us to comply with certain reporting covenants in the
Indenture consists exclusively of the right to receive additional interest on the 4.25% Convertible Notes.
4.25%/5.25% Exchangeable Senior Notes due 2022
On July 20, 2017, we entered into the July 2017 Exchange Agreement with certain holders of the 4.25% Convertible Notes, or the Supporting Holders,
pursuant to which, among other things, our wholly-owned subsidiary, Pernix Ireland Pain Limited, or PIPL, issued $36,242,500 aggregate principal amount of PIPL's 4.25%/5.25%
Exchangeable Senior Notes due 2022, or the Exchangeable Notes, in exchange for the tender to PIPL of $51.8 million aggregate principal amount of the 4.25% Convertible Notes held by the
Supporting Holders. The Exchangeable Notes are governed by the terms of an Indenture, or the July 2017 Indenture, among PIPL, us and our subsidiaries party thereto as guarantors and
Wilmington Trust, National Association, or the July 2017 Trustee, which was entered into on July 21, 2017. Subsequent to the execution of the July 2017 Indenture, on August 9, 2017, PIPL
changed its name and form of organization under Irish law to Pernix Ireland Pain Designated Activity Company, or PIP DAC, remaining the primary obligor with respect to the July 2017
Indenture.
The Exchangeable Notes are senior, unsecured obligations of PIP DAC. Interest on the Exchangeable Notes will be paid in cash or a combination of cash and in-kind
interest at PIP DAC's election. Interest paid in cash, or the All Cash Method, will accrue at a rate of 4.25% per annum, while interest paid in a combination of cash and in-kind will accrue at a
rate of 5.25% per annum, with 2.25% per annum of interest (plus additional interest, if any) capitalized to the principal amount of the Exchangeable Notes, and the balance paid in cash. The
maturity date of the Exchangeable Notes Indenture is July 15, 2022.
The Exchangeable Notes initially are exchangeable into shares of our common stock at an exchange price per share of $5.50, or the Exchange Price. The Exchange
Price is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of certain stock dividends on our common stock, the issuance of
certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, the payment of cash dividends or certain tender or exchange offers.
Holders may exchange all or a portion of their Exchangeable Notes at their option at any time prior to the close of business on the second scheduled trading day
immediately preceding the maturity date.
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Upon not less than 30 nor more than 45 trading days' notice, if the daily VWAP, as defined in the July 2017 Indenture, of our common stock has been at least 120% of
the Exchange Price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately
preceding the date on which such notice of redemption is provided, we will have the right to redeem any or all of the Exchangeable Notes at a price equal to 100% of the principal amount
thereof (including any interest capitalized thereto) plus accrued interest that has not been paid or capitalized to, but excluding, the date on which the Exchangeable Notes are to be redeemed.
The redemption price will be paid in cash.
No "sinking fund" will be provided for the Exchangeable Notes, which means that PIP DAC will not be required to periodically redeem or retire the
Exchangeable Notes. If we or PIP DAC undergoes a fundamental change, as defined below, subject to certain conditions, holders of the Exchangeable Notes may require PIP DAC to
repurchase for cash all or part of their Exchangeable Notes. The fundamental change repurchase price will be equal to 100% of the principal amount (including any interest capitalized thereto)
of the Exchangeable Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the date, chosen by PIP DAC, that is not less than 20 business days or more than 35
business days following the date on which notice of the fundamental change was provided by PIP DAC.
Under the July 2017 Indenture, a "fundamental change" will be deemed to have occurred if, among other events, any of the following occurs: (i) any "group"
or "person," within the meaning of Section 13(d) of the Exchange Act, other than a permitted holder under the July 2017 Indenture, becomes the direct or indirect "beneficial owner," as defined
in Rule 13d-3 under the Exchange Act, of our common stock representing more than 50% of our voting power; (ii) we consummate any recapitalization, reclassification or change of our
common stock, subject to certain exceptions as contained in the July 2017 Indenture; (iii) we effect any share exchange, consolidation or merger pursuant to which our common stock will be
converted into cash, securities or other property or assets; (iv) we effect any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of our
consolidated assets to a person or entity other than a permitted holder under the July 2017 Indenture; (v) our stockholders approve a plan or proposal for our liquidation or dissolution or the
liquidation or dissolution of PIP DAC; or (vi) our common stock ceases to be listed on The New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any
of their respective successors).
Holders of the Exchangeable Notes are entitled to receive, in certain circumstances, additional shares of our common stock upon exchanges of Exchangeable Notes in
connection with a provisional redemption or certain fundamental changes.
Subject to certain limited exceptions, the Exchangeable Notes contain covenants which prohibit or limit the ability of PIP DAC and the guarantors under the July 2017
Indenture to, among other things: (i) pay cash dividends or make distributions on our capital stock or redeem or repurchase our capital stock; (ii) create, assume or suffer to exist at any time
any lien upon any of our properties or assets; (iii) incur any debt other than debt permitted under the terms of the Exchangeable Notes Indenture; (iv) enter into transactions with affiliates other
than on terms and conditions that, taken as a whole, would be obtained in an arm's-length transaction with non- affiliates; or (v) make any sale of our assets and the assets of our subsidiaries
except in accordance with the terms of the July 2017 Indenture.
The July 2017 Indenture also provides for customary events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization
involving PIP DAC) occurs and is continuing, the July 2017 Trustee by notice to PIP DAC, or the holders of at least 25% in principal amount of the then outstanding Exchangeable Notes by
written notice to PIP DAC and the July 2017 Trustee, may declare 100% of the accreted principal of and accrued and unpaid interest, if any, on all of the Exchangeable Notes to be due and
payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving PIP DAC, 100% of the principal of and accrued and unpaid interest, if any, on
all of the Exchangeable Notes will become due and payable automatically, including a make-whole premium in an amount equal to the present value of the interest that would accrue on such
Exchangeable Notes (assuming the All Cash Method) from, and including, such date of acceleration until the maturity date of the Exchangeable Notes, with such present value computed using
a discount rate equal to the sum of (i) the yield to maturity of United States Treasury securities with remaining maturity equal to that of the Exchangeable Notes (as determined in a
commercially reasonable manner by PIP DAC) on such date of acceleration and (ii) 50 basis points. Notwithstanding the foregoing, for up to 270 days after the occurrence of an event of
default, PIP DAC may elect to have the sole remedy for an event of default relating to certain of PIP DAC's failures to comply with certain reporting covenants in the July 2017 Indenture consist
exclusively of the right to receive additional interest on the Exchangeable Notes.
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Holders of Exchangeable Notes will not be entitled to receive shares of our common stock upon exchange of any Exchangeable Notes to the extent such holder (or
group of which such holder is a part) would beneficially own more than 9.99% of the outstanding shares of our common stock. Subject to such limitation, at the initial Exchange Price, the
Exchangeable Notes will be exchangeable into approximately 40% of our outstanding common stock as of the date hereof (after giving effect to the issuance of
1,100,498 shares of our common stock to certain Holders of the Exchangeable Notes in connection with the July 2017 Exchange Agreement
and the common
stock underlying the Exchangeable Notes).
DESCRIPTION OF OUR UNITS
The following, together with the additional information we may include in the applicable prospectus supplement or free writing prospectus, summarizes the material
terms and provisions of the units that we may offer under this prospectus. While the terms summarized below will apply generally to any units we may offer, we will describe the particular terms
of any series of units in more detail in the applicable prospectus supplement or free writing prospectus.
We may, from time to time, issue units comprised of one or more of the other securities that may be offered under this prospectus, in any combination. Each unit will be
issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The
unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately at any time, or at any time before a specified date.
We will describe in the applicable prospectus supplement or free writing prospectus the terms of the series of units, including:
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the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or
transferred separately;
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the rights and obligations of the unit agent, if any;