Document:

mmsi_Ex10_1

		
			Exhibit 10.1
		

		
			AGREEMENT
		

		
			This Agreement (this “Agreement”) is made and entered into as of May 26, 2020 by and among Merit Medical Systems, Inc. (the “Company”) and the entities and natural persons set forth in the signature pages hereto (collectively, “Starboard”) (each of the Company and Starboard, a “Party” to this Agreement, and collectively, the “Parties”).
		

		
			RECITALS
		

		
			WHEREAS, the Company and Starboard have engaged in various discussions and communications concerning the Company’s business, financial performance and strategic plans; 
		

		
			WHEREAS, as of the date hereof, Starboard has a beneficial ownership (as determined under Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, or the rules or regulations promulgated thereunder (the “Exchange Act”)) interest in the Common Stock, no par value per share, of the Company (the “Common Stock”) totaling, in the aggregate, 4,841,860 shares, or approximately 8.7% of the Common Stock issued and outstanding on the date hereof; 
		

		
			WHEREAS, Starboard submitted a letter to the Company on January 24, 2020 (the “Nomination Notice”) nominating a slate of director candidates to be elected to the Board of Directors of the Company (the “Board”) at the Company’s 2020 Annual Meeting of Shareholders (the “2020 Annual Meeting”); and
		

		
			WHEREAS, as of the date hereof, the Company and Starboard have determined to come to an agreement with respect to the composition of the Board and certain other matters, as provided in this Agreement.
		

		
			NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound hereby, agree as follows:
		

			
	
			
				
			

			
	
			
			1.Director Nominations and Related Agreements.

			
	
			
				 
			(a)Director Nominations

			
	
			
				 
			(i)The Company agrees that the Board and all applicable committees of the Board shall take all necessary actions to (A) nominate Lonny J. Carpenter and David K. Floyd (each a “Starboard Independent Appointee” and collectively, the “Starboard Independent Appointees”) for election to the Board at the 2020 Annual Meeting as directors of the Company for terms expiring at the Company’s 2023 Annual Meeting of Shareholders (the “2023 Annual Meeting”), (B) nominate James Hogan (together with the Starboard Independent Appointees, the “Independent Appointees”) for election to the Board at the 2020 Annual Meeting as a director of the Company for a term expiring at the 2023 Annual Meeting, and (C) accept the resignation tendered by Franklin J. Miller, M.D. as a director of the Company, who the Company hereby represents has submitted, or shall no later than the date hereof submit, an irrevocable letter of resignation to the Board that will become effective no later than immediately following the conclusion of the 2020 Annual Meeting. The Company shall use its reasonable best efforts to hold the 2020 Annual Meeting no later than June 30, 2020; provided,  however, that if the 2020 Annual Meeting is not held and concluded by June 30, 2020, then the Board and all applicable committees of the Board shall take all necessary actions to immediately (A) accept the resignations tendered by each of Nolan E. Karras, Kent W. Stanger, and David M. Liu, M.D., who the Company hereby represents has submitted, or shall no later than the date hereof submit, an irrevocable letter of resignation to the Board that will become effective on June 

		 

		

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	30, 2020 if the 2020 Annual Meeting is not held on or prior to June 30, 2020 and (B) appoint the Independent Appointees to the Board for terms expiring at the 2020 Annual Meeting. The Board has determined that each of the Starboard Independent Appointees (x) would qualify as “independent” pursuant to NASDAQ listing standards and (y) would satisfy the guidelines and policies with respect to service on the Board applicable to all non-management directors.

			
	
			
				 
			 (ii)The Company agrees that (A) the Board shall nominate the Independent Appointees, and only the Independent Appointees, for election to the Board at the 2020 Annual Meeting, subject to their consent to serve, for terms expiring at the 2023 Annual Meeting and (B) the Board shall, upon the resignation of Dr. Miller. as a director of the Company as contemplated by the preceding subsection (i), appoint Lynne N. Ward to fill the unexpired portion of Dr. Miller’s term expiring at the Company’s 2021 Annual Meeting of Shareholders (the “2021 Annual Meeting”)  and (C) the Company shall recommend, support and solicit proxies for the Independent Appointees at the 2020 Annual Meeting.

			
	
			
				 
			 (iii)The Company agrees that, subject to entering into a customary non-disclosure agreement with the Company in a form provided by the Company and to be agreed between the Parties, each of the Independent Appointees may attend and participate in any meeting of the Board held from the date of this Agreement (whether such meetings are held in person, telephonically or otherwise) until the earlier of the appointment of the Independent Appointees to the Board (if applicable) or the conclusion of the 2020 Annual Meeting (the “Observer Period”) as a non-voting observer (each an “Observer” and collectively, the “Observers”).  Each of the Observers shall receive copies of all documents distributed to the Board during the Observer Period, including notice of all meetings of the Board, all written consents executed by the Board, all materials prepared for consideration at any meeting of the Board, and all minutes related to each meeting of the Board contemporaneous with their distribution to the Board (except to the extent any such materials are privileged as determined by the Board in good faith).

			
	
			
				 
			 (iv) If any Starboard Independent Appointee (or any Starboard Replacement Director (as hereinafter defined), if applicable) is unable or unwilling to serve as a director for any reason prior to his or her election or appointment to the Board, as the case may be, or at any time thereafter, if any Starboard Independent Appointee (or any Starboard Replacement Director, if applicable) is unable or unwilling to serve as a director and ceases to be a director, resigns as a director, is removed as a director, or for any other reason fails to serve or is not serving as a director at any time prior to the expiration of the Standstill Period (as defined below), and at such time Starboard beneficially owns (as determined under Rule 13d-3 promulgated under the Exchange Act) in the aggregate at least the lesser of three percent (3%) of the Company’s then-outstanding Common Stock and 1,661,521 shares of Common Stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments)(the “Minimum Ownership Threshold”), Starboard shall have the ability to recommend a person to be a Starboard Replacement Director in accordance with this Section 1(a)(iv) (any such replacement nominee shall be referred to as a “Starboard Replacement Director” and upon becoming a Starboard Replacement Director, such person shall be deemed a Starboard Independent Appointee for purposes of this Agreement). Any Starboard Replacement Director must (A) be reasonably acceptable to the Board (such acceptance not to be unreasonably withheld), (B) qualify as “independent” pursuant to NASDAQ listing standards, (C) have the relevant financial and business experience to be a director of the Company, and (D) be independent of Starboard (for the avoidance of doubt, the nomination by Starboard of any person to serve on the board of directors of another company shall not (in and of itself) cause such person not to be deemed independent of Starboard). The Environmental, Social and Governance Committee of the Board (the “Governance Committee”) shall make its determination and recommendation regarding whether such Starboard Replacement Director nominee meets the foregoing criteria within five (5) business days after (1) such nominee has submitted to the Company the documentation required by Section 1(c)(iv) and (2) representatives of the Board have conducted customary interview(s) of such nominee, if such interviews are requested by the Board or the Governance Committee. The Company shall use its reasonable best efforts to conduct any interview(s) contemplated by this Section 1(a)(iv) as promptly as practicable, but in any 

		 

		

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	case, assuming reasonable availability of the nominee, within ten (10) business days after Starboard’s submission of such nominee. In the event the Governance Committee does not accept a person recommended by Starboard as the Starboard Replacement Director, Starboard shall have the right to recommend additional substitute person(s) whose appointment or nomination, as applicable, shall be subject to the Governance Committee recommending such person in accordance with the procedures described above. Upon the recommendation of a Starboard Replacement Director nominee by the Governance Committee, the Board shall vote on the appointment or nomination, as applicable, of such Starboard Replacement Director to the Board no later than five (5) business days after the Governance Committee’s recommendation of such Starboard Replacement Director; provided, however, that if the Board does not appoint or nominate, as applicable, such Starboard Replacement Director to the Board pursuant to this Section 1(a)(iv), the Parties shall continue to follow the procedures of this Section 1(a)(iv) until a Starboard Replacement Director is appointed to the Board. Subject to NASDAQ rules and applicable law, upon a Starboard Replacement Director’s appointment to the Board, the Board and all applicable committees of the Board shall take all necessary actions to appoint such Starboard Replacement Director to any applicable committee of the Board of which the replaced director was a member immediately prior to such director’s resignation or removal. Subject to NASDAQ rules and applicable law, until such time as any Starboard Replacement Director is appointed to any applicable committee of the Board, the other Starboard Independent Appointee will serve as an interim member of such applicable committee.  Any Starboard Replacement Director designated pursuant to this Section 1(a)(iv) replacing a Starboard Independent Appointee prior to the mailing of the Company’s definitive proxy statement for the 2020 Annual Meeting shall stand for election at the 2020 Annual Meeting together with the other director nominees. Following the appointment of any Starboard Replacement Director to replace any of the Starboard Independent Appointees in accordance with this Section 1(a)(iv), all references to the Starboard Independent Appointees and the Independent Appointees herein shall be deemed to include any Starboard Replacement Director (it being understood that this sentence shall apply whether or not references to the Starboard Independent Appointees or the Independent Appointees expressly state that they include any Starboard Replacement Director). 

			
	
			
				 
			 (v)During the period commencing with the date of this Agreement until the conclusion of the 2020 Annual Meeting, the Board and all applicable committees of the Board shall not (A) increase the size of the Board to more than ten (10) directors or (B) seek to change the classes on which the Board members serve, in each case without the prior written consent of Starboard. Effective upon the conclusion of the 2020 Annual Meeting through the expiration of the Standstill Period, the Board and all applicable committees of the Board shall not (A) increase the size of the Board to more than nine (9) directors or (B) seek to change the classes on which the Board members serve (other than appointing Ms. Ward to fill the unexpired portion of Dr. Miller’s term), in each case without the prior written consent of Starboard.

			
	
			
				 
			(vi)Following the execution of this Agreement and no later than fifteen (15) days following the 2020 Annual Meeting, the Board and all applicable committees of the Board shall take all necessary actions to appoint a new Lead Independent Director; provided,  however, that the Board shall not appoint the new Lead Independent Director until the earlier of the appointment of the Independent Appointees to the Board (if applicable) or the conclusion of the 2020 Annual Meeting; provided,  further, that Messrs. Karras, Stanger, Liu, and Miller shall not participate in the selection process nor the Board’s approval of the new Lead Independent Director and shall be recused from all such Board meetings and discussions relating to the selection and appointment of such new Lead Independent Director; provided,  further, that the Independent Appointees will be permitted to (A) participate in all discussions relating to the selection and appointment of a new Lead Independent Director, whether serving as Observers or directors of the Company, and (B) vote upon the selection and appointment of a new Lead Independent Director when such appointment is made in accordance with this Section 1(a)(vi).

			
	
			
				 
			(b)Board Committees.

		
			

		 

		

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			(i)Operating Committee.

		
			Immediately following the execution of this Agreement, the Board and all applicable committees of the Board shall take all necessary actions to form an ad hoc advisory committee called the Operating Committee (the “Operating Committee”) to work with management to establish operating targets for the business and to recommend such targets to the Board for approval, which targets (following approval by the Board) will be publicly announced in conjunction with the Company’s financial results for the third quarter 2020 and (B) appoint the Starboard Independent Appointees to the Operating Committee, plus James Hogan and Fred Lampropoulos, and appoint Mr. Carpenter as its Chairperson. Promptly following the earlier of the appointment of the Starboard Independent Appointees to the Board (if applicable) or the conclusion of the 2020 Annual Meeting, the Board and all applicable committees of the Board shall take all necessary actions to make the Operating Committee a formal committee of the Board. Effective upon the formation of the Operating Committee as an ad hoc advisory committee and during the Standstill Period (including following such time as the Operating Committee becomes a formal committee of the Board), unless otherwise agreed by the Operating Committee, the Operating Committee shall be composed of four (4) individuals, including the Starboard Independent Appointees (or Starboard Replacement Director(s), if applicable), James Hogan and Fred Lampropoulos, with Mr. Carpenter serving as its Chairperson.  The Operating Committee shall be in existence until the 2021 Annual Meeting unless its continuation is approved by the Board. The Operating Committee, whether as an ad hoc advisory committee or a formal committee, will be provided with the resources and authority necessary for the Operating Committee to discharge its purpose, including to hire and direct the work of any consultant and/or adviser to assist the Operating Committee if requested by the Operating Committee. 
		

		
			(ii)Other Committee Assignments.
		

		
			In addition to appointing the Starboard Independent Appointees to the Operating Committee, immediately following the election or appointment of the Starboard Independent Appointees to the Board, the Board and all applicable committees of the Board shall take all necessary actions to appoint (i) Mr. Floyd to the Audit Committee of the Board and the Governance Committee of the Board and (ii) Mr. Carpenter to the Compensation Committee of the Board and the Finance Committee of the Board. Mr. Floyd and Mr. Carpenter will serve on such committees for the duration of the Standstill Period. 
		

		
			(vi)Committee Appointments During Standstill Period.
		

		
			The Board and all applicable committees of the Board shall take all actions necessary to ensure that following the election or appointment of the Starboard Independent Appointees to the Board through the expiration of the Standstill Period, each committee and subcommittee of the Board, including any new committee(s) and subcommittee(s) that may be established, shall include at least one (1) Starboard Independent Appointee (or a Starboard Replacement Director, if applicable); provided that at least one (1) Starboard Independent Appointee (or a Starboard Replacement Director, if applicable) satisfies any NASDAQ listing standards and legal requirements for service on any such committee with respect to financial expertise and independence. Without limiting the foregoing, the Board shall give each of the Starboard Independent Appointees the same due consideration for membership to any committee of the Board as any other independent director.
		

			
	
			
				 
			 (c)Additional Agreements.  

			
	
			
				 
			(i)Starboard shall comply, and shall cause each of its controlled Affiliates and Associates to comply with the terms of this Agreement and shall be responsible for any breach of this Agreement by any such controlled Affiliate or Associate. As used in this Agreement, the terms “Affiliate”  

		 

		

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	and “Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Exchange Act and shall include all persons or entities that at any time during the term of this Agreement become Affiliates or Associates of any person or entity referred to in this Agreement.

			
	
			
				 
			(ii)Starboard, on behalf of itself and its controlled Affiliates and Associates, hereby irrevocably withdraws its Nomination Notice and any related materials or notices submitted to the Company in connection therewith. During the Standstill Period, except as otherwise provided herein, Starboard shall not, and shall cause each of its controlled Affiliates and Associates not to, directly or indirectly, (A) nominate or recommend for nomination any person for election at any annual or special meeting of the Company’s shareholders, (B) submit any proposal for consideration at, or bring any other business before, any annual or special meeting of the Company’s shareholders, or (C) initiate, encourage or participate in any “vote no,” “withhold” or similar campaign with respect to any annual or special meeting of the Company’s shareholders. Starboard shall not publicly or privately encourage or support any other shareholder, person or entity to take any of the actions described in this Section 1(c)(ii).  

			
	
			
				 
			(iii)Starboard shall appear in person or by proxy at the 2020 Annual Meeting and vote all shares of Common Stock beneficially owned by Starboard at the 2020 Annual Meeting (A) in favor of all directors nominated by the Board for election, (B) in favor of the ratification of the appointment of Deloitte & Touche as the Company’s registered public accounting firm for the fiscal year ended December 31, 2020, (C) in accordance with the Board’s recommendation with respect to the Company’s “say-on-pay” proposal and (D) in accordance with the Board’s recommendation with respect to any other Company proposal or shareholder proposal or nomination presented at the 2020 Annual Meeting; provided,  however, that in the event Institutional Shareholder Services Inc. (“ISS”) or Glass Lewis & Co., LLC (“Glass Lewis”) recommends otherwise with respect to the Company’s “say-on-pay” proposal or any other Company proposal or shareholder proposal presented at the 2020 Annual Meeting (other than proposals relating to the election of directors), Starboard shall be permitted to vote in accordance with the ISS or Glass Lewis recommendation. Starboard further agrees that it will appear in person or by proxy at any special meeting of the Company’s shareholders held during the Standstill Period and, to the extent any such special meeting includes the election of directors, vote all shares of Common Stock beneficially owned by Starboard at such special meeting in accordance with the Board’s recommendation on any proposal relating to the appointment, election or removal of directors.

			
	
			
				 
			(iv)Prior to the date of this Agreement, each Starboard Independent Appointee and prior to any appointment, each Starboard Replacement Director, shall be required to submit to the Company a fully completed copy of the Company’s standard director & officer questionnaire and other reasonable and customary director onboarding documentation applicable to directors of the Company.

			
	
			
				 
			(v)The Company agrees that the Board and all applicable committees of the Board shall, to the extent that the Board and such committees have such authority and are entitled to so determine, take all necessary actions, effective no later than immediately following the execution of this Agreement, to determine, in connection with their initial appointment as a director (as applicable) and/or nomination by the Company at the 2020 Annual Meeting, that each of the Independent Appointees will be deemed to be (A) a member of the “Incumbent Board” or “Continuing Director” (as such term may be defined in the definition of “Change in Control,” “Change of Control” (or any similar term) under the Company’s incentive plans, options plans, equity plans, deferred compensation plans, employment agreements, severance plans, retention plans, loan agreements, or indentures, including, without limitation, the Company’s Employment Agreements with its executive officers, 2018 Long Term Incentive Plan, 2006 Long Term Incentive Plan, Indemnification Agreements, Credit Agreements, or any other related plans or agreements that refer to any such plan, policy or agreement’s definition of “Change in Control” or any similar term) and (B) a member of the Board as of the beginning of any applicable measurement period for the purposes of the definition of “Change in Control” or any similar term under the Company’s incentive 

		 

		

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	plans, options plans, equity plans, deferred compensation plans, employment agreements, severance plans, retention plans, loan agreements, or indentures, including, without limitation, the Company’s Employment Agreements with its executive officers, 2018 Long Term Incentive Plan, 2006 Long Term Incentive Plan, Indemnification Agreements, and Credit Agreements. The Company further agrees that during the Standstill Period, the Company shall not adopt or enter into any incentive plan, option plan, equity plan, deferred compensation plan, employment agreement, severance plan or agreement, change in control plan or agreement, retention plan, loan agreement, indenture, credit agreement, or any other material contract or agreement (each a “Future Company Agreement” and collectively, the “Future Company Agreements”), if such Future Company Agreement includes language regarding the election, appointment or nomination of an individual pursuant to an actual or threatened election contest or any other actual or threatened solicitation of proxies as not being deemed a member of the “Incumbent Board” or a “Continuing Director” (or any similar term) as such terms may be defined in the definition of, or provisions governing, a “Change in Control” or “Change of Control” (or any similar term) in such Future Company Agreement or as not being deemed a member of the Board as of the beginning of any applicable measurement period for the purposes of the definition of, or provisions governing, a “Change in Control” or “Change of Control” (or any similar term) in such Future Company Agreement.

			
	
			
				
			

			
	
			
			2.Standstill Provisions.

			
	
			
				 
			(a)Starboard agrees that, from the date of this Agreement until the earlier of (x) the date that is fifteen (15) business days prior to the deadline for the submission of shareholder nominations for directors for the 2021 Annual Meeting pursuant to the Company’s Third Amended and Restated Bylaws or (y) the date that is one hundred (100) days prior to the first anniversary of the 2020 Annual Meeting (the “Standstill Period”), Starboard shall not, and shall cause each of its controlled Affiliates and Associates not to, in each case directly or indirectly, in any manner:

			
	
			
				 
			(i)engage in any solicitation of proxies or become a “participant” in a “solicitation” (as such terms are defined in Regulation 14A under the Exchange Act) of proxies (including, without limitation, any solicitation of consents that seeks to call a special meeting of shareholders), in each case, with respect to securities of the Company;

			
	
			
				 
			(ii)form, join or in any way knowingly participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the shares of the Common Stock (other than a “group” that includes all or some of the persons or entities identified on Exhibit A attached hereto, but does not include any other entities or persons not identified on Exhibit A as of the date hereof); provided,  however, that nothing herein shall limit the ability of an Affiliate of Starboard to join the “group” following the execution of this Agreement, so long as any such Affiliate agrees to be bound by the terms and conditions of this Agreement;

			
	
			
				 
			(iii)deposit any shares of Common Stock in any voting trust or subject any shares of Common Stock to any arrangement or agreement with respect to the voting of any shares of Common Stock, other than any such voting trust, arrangement or agreement solely among Starboard, its Affiliates or Associates and otherwise in accordance with this Agreement;

			
	
			
				 
			(iv)seek or submit, or knowingly encourage any person or entity to seek or submit, nomination(s) in furtherance of a “contested solicitation” for the appointment, election or removal of directors with respect to the Company or seek, or knowingly encourage or take any other action with respect to the appointment, election or removal of any directors, in each case in opposition to the recommendation of the Board; provided,  however, that nothing in this Agreement shall prevent Starboard or its Affiliates or Associates from taking actions in furtherance of identifying director candidates in connection with the 2021 Annual Meeting so long as such actions do not create a public disclosure obligation for Starboard or the 

		 

		

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	Company and are undertaken on a basis reasonably designed to be confidential and in accordance in all material respects with Starboard’s normal practices in the circumstances;

			
	
			
				 
			(v)(A) make any proposal for consideration by shareholders at any annual or special meeting of shareholders of the Company, (B) make any offer or proposal (with or without conditions) with respect to any merger, tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition or other business combination involving the Company or any of its subsidiaries, (C) affirmatively solicit a third party to make an offer or proposal (with or without conditions) with respect to any merger, tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition or other business combination involving the Company or any of its subsidiaries, or publicly encourage, initiate or support any third party in making such an offer or proposal, (D) publicly comment on any third party proposal regarding any merger, tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition, or other business combination with respect to the Company or any of its subsidiaries by such third party prior to such proposal becoming public or (E) call or seek to call a special meeting of shareholders;

			
	
			
				 
			(vi)seek, alone or in concert with others, representation on the Board, except as specifically permitted in Section 1;

			
	
			
				 
			(vii)advise, knowingly encourage, knowingly support or knowingly influence any person or entity with respect to the voting or disposition of any securities of the Company at any annual or special meeting of shareholders with respect to the appointment, election or removal of director(s), except in accordance with Section 1; or

			
	
			
				 
			 (viii)make any request or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company or the Board that would not be reasonably determined to trigger public disclosure obligations for any Party.

			
	
			
				 
			(b)Except as expressly provided in Section 1 or Section 2(a), Starboard shall be entitled to (i) vote any shares of Common Stock that it beneficially owns as Starboard determines in its sole discretion and (ii) disclose, publicly or otherwise, how it intends to vote or act with respect to any securities of the Company, any shareholder proposal or other matter to be voted on by the shareholders of the Company and the reasons therefor (in each case, subject to Section 1(c)(iii)).

			
	
			
				 
			(c)Nothing in Section 2(a) shall be deemed to limit the exercise in good faith by any Starboard Independent Appointee (or a Starboard Replacement Director, if applicable) of such person’s fiduciary duties solely in such person’s capacity as a director of the Company and in a manner consistent with such person’s and Starboard’s obligations under this Agreement.

			
	
			
				
			

			
	
			
			3.Representations and Warranties of the Company.

		
			The Company represents and warrants to Starboard that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, and assuming due execution by each counterparty hereto, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) as of the date of this Agreement, the Board is composed of ten (10) directors and (d) the execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the Company, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, 

		 

		

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amendment, acceleration or cancellation of, any organizational document or material agreement to which the Company is a party or by which it is bound. 
		

			
	
			
				
			

			
	
			
			4.Representations and Warranties of Starboard.

		
			Starboard represents and warrants to the Company that (a) the authorized signatory of Starboard set forth on the signature page hereto has the power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind Starboard thereto, (b) this Agreement has been duly authorized, executed and delivered by Starboard, and assuming due execution by each counterparty hereto, is a valid and binding obligation of Starboard, enforceable against Starboard in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of Starboard as currently in effect, (d) the execution, delivery and performance of this Agreement by Starboard does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to Starboard, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound, (e) as of the date of this Agreement, Starboard is deemed to beneficially own 4,841,860 shares of Common Stock, (f) as of the date hereof, and except as set forth in clause (e) above, Starboard does not currently have, and does not currently have any right to acquire, any interest in any securities or assets of the Company or its Affiliates (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or assets or any obligations measured by the price or value of any securities of the Company or any of its controlled Affiliates, including any swaps or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of shares of Common Stock or any other securities of the Company, whether or not any of the foregoing would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not to be settled by delivery of shares of Common Stock or any other class or series of the Company’s stock, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement) and (g) Starboard has not (except as disclosed in the Nomination Notice), directly or indirectly, compensated or agreed to compensate, and will not, directly or indirectly, compensate or agree to compensate, any of the Starboard Independent Appointees (or any Starboard Replacement Director, if applicable) for serving as a nominee or director of the Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement), or other form of compensation, directly or indirectly, related to the Company or its securities. For the avoidance of doubt, nothing herein shall prohibit Starboard for compensating or agreeing to compensate any person for his or her respective service as a nominee or director of any other company.
		

			
	
			
				
			

			
	
			
			5.Press Release.

		
			Promptly following the execution of this Agreement, the Company and Starboard shall jointly issue a mutually agreeable press release (the “Press Release”) announcing certain terms of this Agreement in the form attached hereto as Exhibit B. Prior to the issuance of the Press Release and subject to the terms of this Agreement, neither the Company (including the Board and any committee thereof) nor Starboard shall issue any press release or make public announcement regarding this Agreement or the matters contemplated hereby, except as required by law or the rules of any stock exchange, or with the prior written consent of 

		 

		

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the other Party. During the Standstill Period, neither the Company nor Starboard shall make any public announcement or statement that is inconsistent with or contrary to the terms of this Agreement, except as required by law or the rules of any stock exchange.
		

			
	
			
				
			

			
	
			
			6.Specific Performance.

		
			Each of Starboard, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages). It is accordingly agreed that Starboard, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, and each Party further agrees to waive any requirement for the security or posting of any bond in connection with such remedy, and the other Party will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. This Section 6 is not the exclusive remedy for any violation of this Agreement.
		

			
	
			
				
			

			
	
			
			7.Expenses.

		
			The Company shall reimburse Starboard for its reasonable, documented out-of-pocket fees and expenses (including legal expenses) incurred in connection with Starboard’s involvement at the Company through the date of this Agreement, including, but not limited to its Schedule 13D filings, its preparation and delivery of the Nomination Notice, and the negotiation and execution of this Agreement, provided that such reimbursement shall not exceed $575,000 in the aggregate.
		

			
	
			
				
			

			
	
			
			8.Severability.

		
			If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the Parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.
		

			
	
			
				
			

			
	
			
			9.Notices.

		
			Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon confirmation of receipt, when sent by email (provided such confirmation is not automatically generated); or (c) two (2) business days after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same. The addresses and facsimile numbers for such communications shall be:
		

		
			

		 

		

			9

		

		

			 

		

		

		
			If to the Company:
		

		
			Merit Medical Systems, Inc.
1600 West Merit Parkway
South Jordan, Utah 84095
Attention: Brian Lloyd
Email: Brian.Lloyd@merit.com
Facsimile: (801) 208-4302
		

		
			with a copy (which shall not constitute notice) to:
		

		
			Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001
Attention: Richard J. Grossman
Email: Richard.Grossman@skadden.com
Facsimile: (917) 777-2116
		

		
			If to Starboard or any member thereof:
		

		
			Starboard Value LP
777 Third Avenue, 18th Floor
New York, NY 10017
Attention: Jeffrey C. Smith
Peter A. Feld
Email: jsmith@starboardvalue.com
pfeld@starboardvalue.com 
		

		
			Facsimile: (212) 845-7989
		

		
			with a copy (which shall not constitute notice) to:
		

		
			Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, New York 10019
Attention: Steve Wolosky, Esq.
Andrew Freedman, Esq.
Email: swolosky@olshanlaw.com
afreedman@olshanlaw.com
		

		
			Facsimile: (212) 451-2222
		

			
	
			
				
			

			
	
			
			10.Applicable Law.

		
			This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without reference to the conflict of laws principles thereof that would result in the application of the law of another jurisdiction. Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and 

		 

		

			10

		

		

			 

		

unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each of the Parties hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable legal requirements, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. 
		

			
	
			
				
			

			
	
			
			11.Counterparts.

		
			This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Party (including by means of electronic delivery or facsimile). For the avoidance of doubt, neither Party shall be bound by any contractual obligation to the other Party (including by means of any oral agreement) until all counterparts to this Agreement have been duly executed by each of the Parties and delivered to the other Party (including by means of electronic delivery of facsimile).
		

			
	
			
				
			

			
	
			
			12.Mutual Non-Disparagement.

		
			Subject to applicable law, each of the Parties covenants and agrees that, during the Standstill Period, or if earlier, until such time as the other Party or any of its agents, subsidiaries, Affiliates, successors, assigns, officers, key employees or directors shall have breached this Section 12, neither it nor any of its respective agents, subsidiaries, Affiliates, successors, assigns, officers, key employees or directors shall in any way publicly criticize, disparage, call into disrepute or otherwise defame or slander the other Party or such other Party’s subsidiaries, affiliates, successors, assigns, officers (including any current officer of a Party or a Party’s subsidiaries who no longer serves in such capacity following the execution of this Agreement), directors (including any current officer or director of a Party or a Party’s subsidiaries who no longer serves in such capacity in connection with the execution of this Agreement), employees, shareholders, agents, attorneys or representatives, or any of their businesses, products or services, in any manner that would reasonably be expected to damage the business or reputation of such other Party, their businesses, products or services or their subsidiaries, Affiliates, successors, assigns, officers (or former officers), directors (or former directors), employees, shareholders, agents, attorneys or representatives.
		

			
	
			
				
			

			
	
			
			13.Securities Laws.

		
			Starboard acknowledges that it is aware, and will advise each of its representatives who are informed as to the matters that are the subject of this Agreement, that the United States securities laws may prohibit any person who directly or indirectly has received from an issuer material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
		

			
	
			
				
			

			
	
			
			14.Entire Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries; Term.

		
			This Agreement (including its exhibits) contains the entire understanding of the Parties with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties other than those expressly set forth herein. No modifications of this Agreement can be made except in writing signed by an authorized representative of each the Company and 

		 

		

			11

		

		

			 

		

Starboard. No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties and their respective successors, heirs, executors, legal representatives, and permitted assigns. No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to Starboard, the prior written consent of the Company, and with respect to the Company, the prior written consent of Starboard. This Agreement is solely for the benefit of the Parties and is not enforceable by any other persons or entities.  This Agreement shall terminate at the end of the Standstill Period, except provisions of Section 13 and Section 14, which shall survive such termination.
		

		
			 
		

		
			[The remainder of this page intentionally left blank]
		

		
			 

		

		
			 
		

		
			

		 

		

			12

		

		

			 

		

		

		
			IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.
		

		
			 
		

			
					
						 

				
	
					
						MERIT MEDICAL SYSTEMS, INC.

				
	
					
						By:/s/ Fred P. Lampropoulos

				
	
					
						              Name:Fred P. Lampropoulos

				
	
					
						              Title:Chairman and CEO

				

		
			 
		

		
			 
		

		
			
		

		

		 

		

			[Signature Page to Agreement]

		

	
					
						

					
						 

					
					
						 

				
	
					
						STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Value LP, its investment manager

				

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE AND OPPORTUNITY S LLC

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Value LP, its manager

				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE AND OPPORTUNITY C LP

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Value R LP, its general partner

				

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE R LP

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Value R GP LLC, its general partner

				

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE AND OPPORTUNITY MASTER FUND L LP

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Value L LP, its general partner

				

		
			 
		

		
			
		

		
			

		 

		

			[Signature Page to Agreement]

		

		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE L LP

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Value R GP LLC, its general partner

				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE LP

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By:

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Value GP LLC, its general partner

				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE GP LLC

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Principal Co LP, its member

				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD PRINCIPAL CO LP

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Starboard Principal Co GP LLC, its general partner

				

		
			 
		

		
			STARBOARD PRINCIPAL CO GP LLC
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STARBOARD VALUE R GP LLC

				
	
					
						 

					
					
						 

					
						/s/ Jeffrey C. Smith

				
	
					
						By: 

					
					
						Name: Jeffrey C. Smith

				
	
					
						 

					
					
						Title: Authorized Signatory

				

		
			 
		

		
			 
		

		
			 
		

		
			

		

		
			Exhibit A
		

		
			 
		

		
			Starboard Value and Opportunity Master Fund Ltd.
		

		
			Starboard Value and Opportunity S LLC
		

		
			Starboard Value and Opportunity C LP
		

		
			Starboard Value R LP
		

		
			Starboard Value and Opportunity Master Fund L LP
		

		
			Starboard Value L LP
		

		
			Starboard Value LP
		

		
			Starboard Value GP LLC
		

		
			Starboard Principal Co LP
		

		
			Starboard Principal Co GP LLC
		

		
			Starboard Value R GP LLC
		

		
			Jeffrey C. Smith
		

		
			Peter A. Feld
		

		 

		

			[Signature Page to Agreement]Exhibit 4.2

 

EXECUTION VERSION

 

FIRST SUPPLEMENTAL
INDENTURE

 

THIS FIRST SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”), dated as of May 20, 2020, among Zyla Life Sciences, a Delaware corporation
(formerly known as Egalet Corporation) (the “Issuer”), the Guarantors (as defined in the Indenture referred to herein),
Assertio Holdings, Inc. (f/k/a Alligator Zebra Holdings, Inc.), a Delaware corporation (“Holdings”), and Wilmington
Savings Fund Society, FSB (as successor to U.S. Bank National Association), as trustee under the indenture referred to below (in
such capacity, together with its successors and assigns in such capacity, the “Trustee”) and collateral agent under
the indenture referred to below (in such capacity, together with its successors and assigns in such capacity, the “Collateral
Agent”).

 

W I T N E S S E T H

 

WHEREAS, the Issuer
has heretofore executed and delivered to the Trustee and Collateral Agent an indenture (the “Indenture”), dated as
of January 31, 2019, providing for the issuance of 13% Senior Secured Notes due 2024 (the “Notes”);

 

WHEREAS, the Issuer
and the Guarantors propose to amend the Indenture, the Notes and the Collateral Agreement (the “Proposed Amendments”)
as contemplated hereby;

 

WHEREAS, pursuant to
Section 9.02 of the Indenture and Section 8.20 of the Collateral Agreement, the Issuer, the Guarantors, the Trustee and the Collateral
Agent may amend or supplement the Indenture, the Notes and the Collateral Agreement as contemplated hereby provided that the Holders
of the Notes then outstanding have consented;

 

WHEREAS, upon the terms
and conditions set forth therein, the Holders of the Notes currently outstanding have agreed to consent to the Proposed Amendments;

 

WHEREAS, pursuant to
that certain agreement and plan of merger, dated as of March 16, 2020, by and among Holdings, Assertio Therapeutics, Inc., a Delaware
corporation, Zebra Merger Sub, Inc., a Delaware corporation, Alligator Merger Sub, Inc., a Delaware corporation and the Issuer
(the “Merger Agreement”), a wholly-owned subsidiary of Holdings will merge with and into the Issuer (the “Merger”),
Holdings will become the owner of the equity of the Issuer and will expressly assume the obligations of the Issuer under the Indenture,
the Securities, the Intercreditor Agreements and the Security Documents as required by Section 5.01(a) of the Indenture;

 

WHEREAS, pursuant to
Section 9.02 of the Indenture and Section 8.20 of the Collateral Agreement, each of the Trustee and the Collateral Agent is authorized
to execute and deliver this Supplemental Indenture;

 

     

     

    

 

WHEREAS, the Issuer,
each Guarantor and Holdings have been authorized by a resolution of its respective board of directors, managers, managing members
or general partner, as applicable, to enter into this First Supplemental Indenture; and

 

WHEREAS, all other
acts and proceedings required by law, by the Indenture, and by the organizational documents of the Issuer, the Guarantors and Holdings
to make this First Supplemental Indenture a valid and binding agreement for the purposes expressed herein, in accordance with its
terms, have been duly done and performed.

 

NOW THEREFORE, in consideration
of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually
covenant and agree as follows:

 

ARTICLE 1

AMENDMENT OF INDENTURE, NOTES AND COLLATERAL AGREEMENT,

ASSUMPTION
and gUARANTEE

 

Following the execution
and delivery by the Issuer, the Guarantors, Holdings, the Collateral Agent and the Trustee of this Supplemental Indenture, the
terms hereof shall become operative on the initial date (the “Operative Date”) of the effective time of the Merger
pursuant to the Merger Agreement; provided that notwithstanding the foregoing or anything herein to the contrary or otherwise,
the Operative Date shall not occur until the payment by the Issuer of the reasonable invoiced fees and expenses of Paul, Weiss,
Rifkind, Wharton & Garrison LLP (“Paul, Weiss”) and Cooley LLP (“Cooley”), each as counsel to one
or more of the Holders consenting to this Supplemental Indenture; provided further that in the event that (x)
the Operative Date shall not occur on or prior to October 17, 2020 or (y) the Merger Agreement shall otherwise be terminated prior
to the consummation of the Merger, then the terms of this Supplemental Indenture (other than the provisions relating to reimbursement
of expenses) (but including the assumption of Holdings and guarantee by the Issuer provided for herein) shall be null and void
and the Indenture and Notes shall continue in full force and effect without any modification or amendment hereby. Effective as
of the Operative Date, (i) the Supplemental Indenture hereby amends the Indenture, the Notes and the Collateral Agreement, (ii)
Holdings expressly assumes the obligations of the Issuer under the Indenture, the Securities, the Intercreditor Agreements and
the Security Documents and the Issuer guarantees the Guaranteed Obligations, in each case, as provided for herein and (iii) from
and after the assumption of the Obligations by Holdings, the term “Issuer” under the Indenture shall refer to Holdings
and the Issuer shall be a Restricted Subsidiary and Subsidiary Guarantor for all purposes under the Indenture.

 

1.1             
Amendment of Section 1.01 of the Indenture. Pursuant to Section 9.02 of the Indenture, the following definitions
are hereby added to Section 1.01 in alphabetical order:

 

1.2             
““Assertio” means Assertio Therapeutics, Inc. (f/k/a Depomed Inc.).

 

    - 2 -

     

    

 

“Assertio Convertible
Debt” means the 2.50% Convertible Senior Notes due 2021 issued by Assertio (the “2021 Assertio Convertible Notes”)
and the 5.00% Convertible Senior Notes due 2024 issued by Assertio.

 

“Depo DR”
means Depo DR Sub, LLC, a Delaware limited liability company.

 

“Merger”
means the merger of a wholly-owned subsidiary of Holdings with and into the Issuer, pursuant to that certain agreement and plan
of merger, dated as of March 16, 2020, by and among Holdings, Assertio Therapeutics, Inc., a Delaware corporation, Zebra Merger
Sub, Inc., a Delaware corporation, Alligator Merger Sub, Inc., a Delaware corporation and the Issuer (as in effect on the date
of this Supplemental Indenture or as amended in a manner not adverse in any material respect to the Holders).

 

“Royalty Purchase
and Sale Agreement” means that certain Royalty Purchase and Sale Agreement, dated as of October 18, 2013, as amended by Amendment
No. 1 thereto dated as of August 2, 2018, among Assertio, Depo DR and PDL Investment Holdings, LLC (as assignee of PDL BioPharma,
Inc.).”

 

1.3             
Amendment of Section 1.01 of the Indenture. Pursuant to Section 9.02 of the Indenture, each of the following definitions
set forth in Section 1.01 of the Indenture is hereby amended as follows:

 

(a)              
The definitions of “Applicable Percentage” and “Net Sales” are hereby deleted.

 

(b)              
The definition of “Asset Sale” is hereby amended by amending and restating clauses (d), (e) and (h) of such
definition in their entirety as follows:

 

“(d)             any disposition
of assets or issuance or sale of Equity Interests of the Issuer or any Restricted Subsidiary, which assets or Equity Interests
so disposed or issued have an aggregate Fair Market Value (as determined in good faith by the Issuer) of less than $5,000,000 on
an individual basis and $10,000,000 in the aggregate; provided that any such disposition of assets or issuance or sale of Equity
Interests shall not be made to (i) Assertio or any of its Subsidiaries by any Person that is not Assertio or one of its Subsidiaries
or (ii) Depo DR;

 

(e)               any
disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary of the Issuer to the Issuer or by
the Issuer or a Restricted Subsidiary of the Issuer to a Restricted Subsidiary of the Issuer (or to an entity that contemporaneously
therewith becomes a Restricted Subsidiary); provided that any such disposition of property or assets or issuance of securities
shall not be made to (i) Assertio or any of its Subsidiaries by any Person that is not Assertio or one of its Subsidiaries or (ii)
Depo DR;

 

    - 3 -

     

    

 

(h)               the
disposition of the Equity Interests in Depo DR pursuant to the Royalty Purchase and Sale Agreement;”

 

(c)              
The definition of “Change of Control” is hereby amended by amending and restating the paragraph at the end of
the definition as follows:

 

“Notwithstanding the foregoing,
(i) the acquisition, directly or indirectly, of 100% of the total voting power of the issued and outstanding Voting Stock of the
Issuer by any Person who, immediately after such acquisition, has no material assets other than the Capital Stock of the Issuer
or its direct or indirect parent company will not, by itself, constitute a Change of Control and (ii) the Merger shall not constitute
a Change of Control.”

 

(d)              
The definition of “Excluded Assets” is hereby amended by replacing clause (v) thereof with the following:

 

“(v)             so long as the Royalty
Purchase and Sale Agreement remains in effect, the Equity Interests of Assertio in Depo DR;”

 

(e)              
The definition of “Investments” is hereby amended by adding the following proviso at the end of such definition:

 

“provided that the acquisition
of the Assertio Convertible Debt shall not constitute an Investment”

 

(f)               
The definition of “Investments” also is amended by adding the following additional sentence at the end of such
definition immediately after the proviso added pursuant to clause (d) above:

 

“Notwithstanding anything
herein to the contrary or otherwise, no Investments (including pursuant to Section 4.06 or the definition of “Permitted Investments”
or otherwise) shall be permitted to be made in (i) Assertio or any of its Subsidiaries by any Person that is not Assertio or one
of its Subsidiaries, except in reliance on clause (19) of the definition of “Permitted Investments”; provided that
the foregoing shall not prohibit Assertio or any of its Subsidiaries from entering into intercompany arrangements, including license
agreements, with a Person that is not Assertio or one of its Subsidiaries pursuant to which such Person may make royalty or similar
transfer pricing payments to Assertio or one of its Subsidiaries, and Assertio or one of its Subsidiaries may receive and retain
such payments, in the amount of the fair value of the assets sold pursuant to such arrangements or (ii) Depo DR.”

 

(g)              
The definition of “Permitted Investments” is hereby amended by amending and restating clause (19) of such definition
in its entirety as follows:

 

    - 4 -

     

    

 

“(19) Investments in (x) Restricted
Subsidiaries who are not Guarantors and (y) Assertio or any of its Subsidiaries (other than Depo DR) by any Person that is not
Assertio or one of its Subsidiaries in an aggregate amount pursuant to clause (x) and (y) not to exceed $2,500,000 at any one time
outstanding pursuant to this clause (19);”

 

(h)              
The definition of “Restricted Subsidiary” is hereby amended by adding the following additional sentence at the
end thereof:

 

Notwithstanding the foregoing, Depo
DR shall not constitute a “Restricted Subsidiary” of the Issuer.

 

1.4             
Amendment of Section 4.01 of the Indenture. Pursuant to Section 9.02 of the Indenture, Section 4.01(b) of the Indenture
is hereby amended and restated in its entirety as follows:

 

“(b)
On each Payment Date, commencing on November 1, 2020, or on the succeeding Business Day if any such date is not a Business Day
and ceasing upon the payment in full of the outstanding principal balance of the Securities, the Issuer shall pay an amount equal
to 5.00% of the original aggregate principal amount of the Securities. The Issuer shall deliver an Officers’ Certificate
to the Trustee stating the amount of such principal payment at least 10 days prior to the applicable Payment Date.”

 

1.5             
Amendment of Section 4.02(h) of the Indenture. Pursuant to Section 9.02 of the Indenture, Section 4.02(h) of
the Indenture is hereby amended and restated in its entirety as follows:

 

“(h)            Intentionally
omitted.”

 

1.6             
Amendment of Section 4.03 of the Indenture. Pursuant to Section 9.02 of the Indenture, the following paragraph shall
be added immediately after the final paragraph of Section 4.03 of the Indenture:

 

“Notwithstanding
the foregoing or anything herein to the contrary or otherwise, (i) Assertio may at any time have outstanding Assertio Convertible
Debt (or any Indebtedness or Disqualified Stock that serves to refund, refinance or defease such Assertio Convertible Debt); provided
that at all times Assertio has deposited in a blocked control account pledged as collateral in favor of the Trustee for the benefit
of the Holders an amount of cash at least equal to the principal amount of any 2021 Assertio Convertible Notes then outstanding;
provided, further, that Assertio shall be permitted to withdraw the cash in such blocked account only to repay, purchase
or redeem the 2021 Assertio Convertible Notes (whether such redemption is at maturity or pursuant to a tender offer or private
purchase) at a price not in excess of the principal amount thereof plus any accrued and unpaid interest thereon and (ii) Assertio
Convertible Indebtedness (or any Indebtedness or Disqualified Stock that serves to refund, refinance or defease such Assertio Convertible
Debt) may be incurred and outstanding only pursuant to the provisions of this paragraph and not pursuant to any other provision
or basket in Section 4.03(a) and 4.03(b).”

 

    - 5 -

     

    

 

1.7             
Amendment of Section 4.06 of the Indenture. Pursuant to Section 9.02 of the Indenture, Section 4.06(b) of the Indenture
is hereby amended by deleting the reference to “$10,000,000” and inserting in replacement thereof “$5,000,000.”

 

1.8             
Addition of Section 4.18 of the Indenture. Pursuant to Section 9.02 of the Indenture, a new Section 4.18 is added
to the Indenture, with such Section 4.18 reading as follows:

 

“SECTION
4.18.         Depo DR. At all times from and after the Operative Date, the Issuer and its Restricted Subsidiaries shall not direct
any aspect of the operation of Depo DR or permit the amendment, restatement, amendment and restatement, modification, supplement
or waiver of the Royalty Purchase and Sale Agreement (as in effect on the date hereof) in any manner that has the effect of resulting
in the Issuer and its Restricted Subsidiaries directing any aspect of the operation of Depo DR.”

 

1.9             
Amendment of Section 5.01(b) of the Indenture. Pursuant to Section 9.02 of the Indenture, Section 5.01(b) of the
Indenture is hereby amended by adding the following paragraph:

 

“Notwithstanding
the foregoing, (i) neither Assertio nor any of its Subsidiaries may be consolidated, amalgamated, or merged with the Issuer or
any Subsidiary of the Issuer other than Assertio or any of its Subsidiaries (other than Depo DR), and (ii) Depo DR may not be consolidated,
amalgamated or merged with the Issuer or any Subsidiary of the Issuer.”

 

1.10            
Amendment of Section 9.02 of the Indenture. Pursuant to Section 9.02 of the Indenture, Section 9.02(a)(iii) of the
Indenture is hereby amended and restated in its entirety as follows:

 

“(iii) reduce the principal
of any Security or change the Stated Maturity of any Security (or the due date in respect of the payment of any installment of
principal);”

 

1.11           
Amendment of Section 1(d) of the Notes. Pursuant to Section 9.02 of the Indenture, Section 1(d) of the Notes is hereby
amended and restated in its entirety as follows:

 

“(d)        This
Security is one of a series of Securities. On each Payment Date, commencing on November 1, 2020, or on the succeeding Business
Day if any such date is not a Business Day and ceasing upon the payment in full of the outstanding principal balance of the Securities,
the Issuer shall pay an amount equal to 5.00% of the original aggregate principal amount of the Securities. The Issuer shall deliver
an Officers’ Certificate to the Trustee stating the amount of such principal payment at least 10 days prior to the applicable
Payment Date.”

 

    - 6 -

     

    

 

1.12           
Amendment of Section 1 of the Notes. Pursuant to Section 9.02 of the Indenture, the definition of “Applicable
Percentage” set forth in Section 1 of the Notes is hereby deleted.

 

1.13            
Amendment of Section 5 of the Notes. Pursuant to Section 9.02 of the Indenture, the Redemption Price of “103.00%”
for the period from and including January 31, 2020 to and including January 30, 2021 shall be replaced with a Redemption Price
of “100.00%” for such period.

 

1.14            
Assumption by Holdings and Waiver. Holdings hereby expressly assumes the obligations of the Issuer under the Indenture,
the Securities, the Intercreditor Agreements and the Security Documents. Holdings is hereby substituted for, and may exercise every
right and power of, the Issuer under the Indenture with the same effect as if Holdings had been named as the Issuer in the Indenture.
Each Guarantor confirms that its Guarantee shall apply to Holdings’ obligations under the Indenture and the Securities. For
purposes of the Merger, the conditions set forth in Section 5.01(a)(ii) and (iii) of the Indenture shall not be applicable.

 

1.15           
Agreement to Guarantee. The Issuer, Assertio and each other Subsidiary of Holdings signatory hereto that is not a
Guarantor (other than Depo DR) hereby, jointly and severally with the Guarantors, irrevocably and unconditionally guarantees as
a primary obligor and not merely as a surety on a senior basis to each Holder and to the Trustee and its successors and assigns
the Guaranteed Obligations, on the terms and subject to the conditions set forth in Article 10 of the Indenture, and agrees to
be bound by all other applicable provisions of the Indenture and the Securities and to perform all of the obligations and agreements
of a Guarantor under the Indenture.

 

1.16            
Post-Closing Obligations. Notwithstanding anything to the contrary in the Collateral Agreement, the parties to this
Supplemental Indenture hereby agree that (other than with respect to any blocked control account containing funds in an amount
equal to the principal amount of the 2021 Assertio Convertible Notes then outstanding) the Issuer and its Restricted Subsidiaries
shall have a post-closing period of 45 days after the closing of the Merger to enter into any deposit account control agreements
required by the Indenture, the Securities and the Security Documents. In the event that this post-closing obligation has not been
satisfied by the end of the initial 45 day post-closing period, so long as the Issuer certifies in writing to the Trustee that
it has used and is continuing to use commercially reasonable efforts to satisfy such post-closing obligation, such post-closing
period shall be extended for up to two additional 30 day periods.

 

    - 7 -

     

    

 

ARTICLE 2 

 

MISCELLANEOUS
PROVISIONS

 

2.1             
Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the recitals hereto are
used herein as therein defined, except that the term “Holders” in this Supplemental Indenture shall refer to the term
 “Holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The
words “herein”, “hereof” and “hereby” and other words of similar import used in this Supplemental
Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

 

2.2             
Notices. All notices or other communications to Holdings shall be given as provided in Section 12.01 of the Indenture.

 

2.3             
Ratification of Indenture; Supplemental Indenture Part of Indenture. Except as expressly amended hereby, the Indenture
is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder shall be bound hereby.

 

2.4             
Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

 

2.5             
Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental
Indenture.

 

2.6             
Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement. The exchange of copies of this Supplemental Indenture and of
signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture
as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties
hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

2.7             
Effect of Headings. The Section headings herein are for convenience of reference only and shall not affect the construction
thereof.

 

2.8             
Reimbursement of Holder Counsel Fees. The Issuer has paid a stay ahead retainer in the amounts agreed to with Paul,
Weiss and Cooley, each as counsel to one or more of the Holders consenting to this Supplemental Indenture. Each of such stay ahead
retainers shall be applied to pay the reasonable invoiced fees and expenses of Paul, Weiss and Cooley, as applicable, from time
to time. Additionally, the Issuer covenants and agrees to pay any amounts in excess of the stay ahead retainer to Paul, Weiss and
Cooley, as applicable, in respect of their reasonable invoiced fees and expenses within thirty (30) days of receipt of such invoices
(or, if earlier, the Operative Date).

 

    - 8 -

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

 

ZYLA LIFE SCIENCES

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

ZYLA LIFE SCIENCES US INC.

 

By: __/s/ Todd N. Smith_______________

Name:

Title: Authorized Signatory

 

EGALET LIMITED

 

By: __/s/ Todd N. Smith_______________

Name:

Title: Director

 

ASSERTIO THERAPEUTICS, INC. (F/K/A
DEPOMED INC.)

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

ASSERTIO HOLDINGS, INC. (F/K/A ALLIGATOR
ZEBRA HOLDINGS, INC.)

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

[Signature Page – First Supplemental
Indenture]

 

     

     

    

 

ASSERTIO MANAGEMENT, LLC (F/K/A A-TO-Z
MANAGEMENT, LLC)

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

A-TO-Z DISTRIBUTION, LLC

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

ALLIGATOR IP, LLC

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

ZEBRA IP, LLC

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

DEPO NF SUB, LLC

 

By: __/s/ Todd N. Smith_______________

Name: Todd N. Smith

Title: President and Chief Executive
Officer

 

[Signature Page – First Supplemental
Indenture]

 

     

     

    

 

WILMINGTON SAVINGS FUND SOCIETY, FSB,

as Trustee

 

By: _______________________________

Name:

Title: Authorized Signatory

 

WILMINGTON SAVINGS FUND SOCIETY, FSB,

as Collateral Agent

 

By: _______________________________

Name:

Title: Authorized Signatory

 

[Signature Page – First Supplemental
Indenture]

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