ASRT Assertio Holdings Inc

Item 1.01                    Entry into a Material Agreement

Exchange Agreement

On August  8, 2019, Assertio Therapeutics, Inc. (the “ Company ”) announced it has entered into separate, privately negotiated exchange agreements (the “ Exchange Agreements ”) with a limited number of holders of the Company’s currently outstanding 2.50% Convertible Senior Notes due 2021 (the “ Exchanged Notes ”).  Pursuant to the Exchange Agreements, the Company will exchange approximately $200.0 million aggregate principal amount of Exchanged Notes for a combination of (a) its new 5.00% Convertible Senior Notes due August 15, 2024 (the “ New Convertible Notes ”), (b) a cash payment plus accrued but unpaid interest on the Exchanged Notes, and (c) an agreed number of shares of the Company’s common stock, $0.0001 par value (the “ Common Stock ”).  The transactions are subject to customary closing conditions and are expected to close on August 13, 2019.  The shares of the Company’s Common Stock and the New Convertible Notes will be issued in private placements exempt from registration in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”).  The Company will issue approximately $120.0 million aggregate principal amount of New Convertible Notes, pay an aggregate of approximately $30.0 million in cash and issue an aggregate of approximately 15.8 million shares of its common stock in the transactions.  The Company will not receive any cash proceeds from the issuance of the New Convertible Notes or the shares of its common stock.

A copy of the Form of Exchange Agreement is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

Indenture and Third Supplemental Indenture

The New Convertible Notes will be governed a third supplemental indenture dated as of the closing date to a base indenture dated September 9, 2014, as amended (the base indenture as amended by the second supplemental indenture thereto, together with the third supplemental indenture, the “ Indenture ”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

The New Convertible Notes will bear interest at a rate of 5.00% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2020.  Holders may convert their New Convertible Notes at any time at their option prior to the close of business on the business day immediately preceding August 15, 2024 at an initial conversion rate of 323.5198, which is equivalent to an initial conversion price of approximately $3.09 per share of the Company’s common Stock.  The Company may settle conversions in cash, shares of Company’s Common Stock or a combination of cash and shares of the Company’s Common Stock, at the Company’s election.  The New Convertible Notes will mature on August 15, 2024, unless earlier converted or repurchased in accordance with their terms prior to such date.  Holders of the New Convertible Notes who convert their New Convertible Notes in connection with a fundamental change, as defined in the Indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate.  Additionally, in the event of a fundamental change, holders of the New Convertible Notes may require the Company to purchase all or a portion of their New Convertible Notes for cash at a purchase price equal to 100% of the principal amount of New Convertible Notes, plus accrued and unpaid interest, if any, up to, but not including, the fundamental change repurchase date.  The Company may redeem the New Convertible Note, in whole and not in part, for cash, at the Company’s option, on or after August 20, 2020, if the last reported sale price of the Company’s common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the New Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.  Conversions of New Convertible Notes called for redemption will entitle converting holders to a full coupon make-whole, payable in shares or cash at the Company’s option.

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A copy of the Indenture, a copy of the second supplemental indenture thereto and a copy of the Form of Third Supplemental Indenture are incorporated herein or attached hereto as Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3, respectively, and are incorporated by reference herein.

Amendment to Note Purchase Agreement

On August 9, 2019, the Company, the other credit parties thereto, the purchasers parties thereto and Deerfield Private Design Fund III, L.P., as collateral agent (“ Deerfield ”), entered into a Fifth Amendment to Note Purchase Agreement (the “ Amendment ”) with respect to the Note Purchase Agreement, dated as of March 12, 2015, among the Company, the other credit parties party thereto, the purchasers party thereto and Deerfield (the “ Note Purchase Agreement ”).  Pursuant to the Amendment, the Company may use up to $30.0 million to make certain investments or payments, including in connection with the exchange of the Company’s 2.5% Convertible Senior Notes Due 2021 described above.  The Amendment also modifies certain other provisions of the Note Purchase Agreement.

A copy of the Amendment is attached hereto as Exhibit 10.2 and is incorporated by reference herein.