Item 1.01 Entry into a Material Definitive
Agreement
Merger Agreement
On February 11, 2022,
SPK Acquisition Corp., a Delaware corporation (“SPK”), entered into a Merger Agreement (the “Merger
Agreement”) by and among Varian Biopharmaceuticals, Inc., a Florida corporation (“Varian”), SPK, and
SPK Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of SPK (“Merger Sub”). Pursuant to
the terms of the Merger Agreement, a business combination between SPK and Varian will be effected through the merger of Merger
Sub with and into Varian with Varian surviving the merger as a wholly owned subsidiary of SPK (the “Merger”).
The board of directors of SPK has (i) approved and declared advisable the Merger Agreement, the Additional Agreements (as defined
in the Merger Agreement) and the transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement
and related transactions by the stockholders of SPK.
The Merger is expected
to be consummated after obtaining the required approval by the stockholders of SPK and Varian and the satisfaction of certain other
customary closing conditions.
Merger Consideration; Treatment of Varian Securities
The total consideration
to be paid at Closing (the “Merger Consideration”) by SPK to Varian stockholders will be an amount equal to
$45 million payable in 4,500,000 shares of common stock, $0.0001 par value, of SPK (“SPK Common Stock”).
At the signing of
the Merger Agreement, Varian has only one class of stock, common stock, $0.0001 per share (the “Varian Common Stock”).
Each share of Varian Common Stock, if any, that is owned by SPK or Merger Sub (or any other Subsidiary of SPK) or Varian (or any
of its Subsidiaries) (as treasury stock or otherwise), will automatically be cancelled and retired without any conversion thereof
and will cease to exist, and no consideration will be delivered in exchange therefor. Each share of Varian Common Stock, if any,
held immediately prior to the consummation of the Merger by Varian as treasury stock shall be automatically canceled and extinguished,
and no consideration shall be paid with respect thereto. Each share of Varian Common Stock issued and outstanding immediately prior
to the consummation of the Merger (other than any such shares of Varian Common Stock cancelled pursuant to the first sentence of
this paragraph and any Dissenting Shares) shall be exchanged for and otherwise converted into the right to receive the applicable
Merger Consideration per share pursuant to the Merger Agreement.
Representations and Warranties
The Merger Agreement
contains customary representations and warranties of the parties thereto with respect to, among other things: (a) corporate
existence and power; (b) authorization to enter into the Merger Agreement and related transactions; (c) governmental
authorization; (d) non-contravention; (e) capitalization; (f) finders’ fees; (g) related party transactions;
(h) litigation; (i) compliance with laws; (j) absence of certain changes; (k) tax matters; and (l) certain
representations related to securities law and activity. Varian has additional representations and warranties, including (a) corporate
records; (b) subsidiaries; (c) consents; (d) financial statements; (e) books and records; (f) internal
accounting controls; (g) properties; title to assets; (h) contracts; (i) licenses and permits; (j) compliance
with health care laws and certain contracts; (k) intellectual property; (l) accounts payable; affiliate loans; (m) employee
matters and benefits; (n) real property; (o) environmental laws; (p) powers of attorney, suretyships and bank accounts;
(q) directors and officers; (r) anti-money laundering laws; and (s) insurance. SPK has additional representations
and warranties, including (a) issuance of shares; (b) trust fund; (c) listing; (d) board approval; (e) SEC
documents and financial statements; and (f) expenses, indebtedness and other liabilities.
Covenants
The Merger Agreement
includes customary covenants of the parties with respect to operation of their respective businesses prior to consummation of the
Merger and efforts to satisfy conditions to consummation of the Merger. The Merger Agreement also contains additional covenants
of the parties, including, among others, access to information, cooperation in the preparation of the Form S-4 and Proxy Statement
(as each such term is defined in the Merger Agreement) required to be filed in connection with the Merger and to obtain all requisite
approvals of each party’s respective stockholders. SPK has also agreed to include in the Proxy Statement the recommendation
of its board that its stockholders approve all of the proposals to be presented at the special meeting.
Exclusivity
Each of SPK and Varian
has agreed that from the date of the Merger Agreement until the Closing Date or, if earlier, the valid termination of the Merger
Agreement in accordance with its terms, it will not initiate, encourage or engage in any negotiations with any party relating to
an Alternative Transaction (as defined in the Merger Agreement), take any action intended to facilitate an Alternative Transaction
or approve, recommend or enter into any agreement relating to an Alternative Transaction. Each of SPK and Varian has also agreed
to be responsible for any acts or omissions of any of its respective representatives that, if they were the acts or omissions of
SPK and Varian, as applicable, would be deemed a breach of such party’s obligations with respect to these non-solicitation
restrictions.
Conditions to Closing
The consummation
of the Merger is conditioned upon, among other things, (i) the absence of any applicable law or order that makes the transactions
contemplated by the Merger Agreement illegal or otherwise prohibits consummation of such transactions; (ii) receipt of any consent,
approval or authorization required by any Authority (as defined in the Merger Agreement); (iii) SPK having at least $5,000,001
of net tangible assets upon consummation of the Merger; (iv) approval by Varian’s stockholders of the Merger and related
transactions; (vi) approval by SPK’s stockholders of the Merger and related transactions; (v) the conditional approval for
listing by the Nasdaq Stock Market of the shares of SPK Common Stock to be issued in connection with the transactions contemplated
by the Merger Agreement and the Additional Agreements and satisfaction of initial and continued listing requirements; and (vi)
the Form S-4 becoming effective in accordance with the provisions of the Securities Act of 1933, as amended (“Securities
Act”).
Solely with respect
to SPK and Merger Sub, the consummation of the Merger is conditioned upon, among other things: (i) Varian having duly performed
or complied with all of its obligations under the Merger Agreement in all material respects; (ii) the representations and
warranties of Varian, other than certain fundamental representations as set forth in the Merger Agreement, being true and correct
in all respects unless failure to be true and correct would not have or reasonably be expected to have a Material Adverse Effect
(as defined in the Merger Agreement) on Varian’s ability to consummate the Merger and related transactions; (iii) certain
fundamental representations, as set forth in the Merger Agreement, being true and correct in all respects, other than de minimis
inaccuracies; (iv) no event having occurred that would result in a Material Adverse Effect on Varian or any of its subsidiaries;
(v) Varian providing SPK a certificate from the chief executive officer of Varian as to the accuracy of the foregoing conditions;
(vi) Varian providing SPK a certificate from the secretary which has attached true and complete copies of (a) Varian’s
certified articles of incorporation, (b) Varian’s bylaws, (c) Varian’s board resolutions approving the Merger
Agreement, the Additional Agreements and the transactions contemplated thereby, and (d) Varian’s certified certificate
of good standing; (vii) Varian’s stockholders shall have executed and delivered to SPK each Additional Agreement to
which they are each a party; (viii) Varian providing a certificate to SPK conforming to certain tax-related regulations and
delivering a notice to the United States Internal Revenue Service as required under certain tax-related regulations; (ix) not
more than five percent (5%) of the issued and outstanding shares of Varian Common Stock constituting Dissenting Shares (as such
term is defined in the Merger Agreement); (x) Varian having delivered executed resignations of certain Varian directors as
set forth in the Merger Agreement; (xi) Varian having delivered financial statements required to be included in any filings
with the SEC; and (xii) cumulative Indebtedness of Varian, excluding (a) accounts payable to Person(s) un-Affiliated
with Varian for goods and services incurred in the ordinary course of business consistent with past practices and (b) Indebtedness
secured by Permitted Liens, shall be less than or equal to $5,000,000.
Solely with respect
to Varian, the consummation of the Merger is conditioned upon, among other things: (i) SPK and Merger Sub having duly performed
or complied with all of their respective obligations under the Merger Agreement in all material respects; (ii) the representations
and warranties of SPK, other than certain fundamental representations as set forth in the Merger Agreement, being true and correct
in all respects unless failure would not have or reasonably be expected to have a Material Adverse Effect on SPK or Merger Sub;
(iii) certain fundamental representations, as set forth in the Merger Agreement, being true and correct in all respects other
than de minimis inaccuracies; (iv) no event having occurred that would result in a Material Adverse Effect on SPK or Merger
Sub; (v) SPK providing Varian a certificate from the chief executive officer of SPK as to the accuracy of the foregoing conditions;
(vi) SPK having filed its Amended Parent Charter (as defined in the Merger Agreement) and such Amended Parent Charter being
declared effective by, the Delaware Secretary of State; (vii) SPK providing Varian a certificate from the secretary of SPK
which has attached true and complete copies of (a) SPK’s certified articles of incorporation, (b) SPK’s bylaws,
(c) SPK’s board resolutions approving the Merger Agreement, the Additional Agreements and the transactions contemplated
thereby, and (d) SPK’s certified certificate of good standing; (viii) Merger Sub providing Varian a certificate
from the secretary of Merger Sub which as attached true and complete copies of (a) Merger Sub’s board resolutions approving
the Merger Agreement, the Additional Agreements and the transactions contemplated thereby and (b) Merger Sub’s certified
certificate of good standing; (ix) SPK, SPK Ventures I, LLC (the “Sponsor”), and any other stockholder
of SPK, shall have executed and delivered to Varian each Additional Agreement to which they each are a party; (x) the size
and composition of the post-closing board of directors of SPK shall have been constituted as set forth in the Merger Agreement;
(xi) SPK having delivered executed resignations of certain SPK directors as set forth in the Merger Agreement, and (xii) cumulative
Indebtedness of SPK, excluding (a) accounts payable to Person(s) un-Affiliated with SPK for goods and services incurred in
the ordinary course of business consistent with past practices and (b) Indebtedness secured by Permitted Liens shall be less
than or equal to $2,000,000.
Termination
The Merger Agreement
may be terminated as follows:
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(i) |
In the event that the Closing of the transactions contemplated hereunder has not occurred by the 12-month anniversary of the date of the Merger Agreement (as may be extended as provided in the immediately following proviso, the “Outside Closing Date”) (provided that, if the SEC has not declared the Proxy Statement/Form S-4 effective on or prior to the four (4)-month anniversary of the date of the Merger Agreement, the Outside Closing Date shall be automatically extended by one (1) month), then SPK and Varian shall each have the right, in its sole discretion, to terminate the Merger Agreement; provided that the material breach of any representation, warranty, covenant or obligation under the Merger Agreement by the party (i.e., SPK or the Merger Sub, on one hand, or Varian, on the other hand) seeking to terminate the Merger Agreement pursuant to this Section 10.1(a) was not the cause of, or did not result in, the failure of the Closing to occur on or before the Outside Closing Date. Such right may be exercised by SPK or Varian, as the case may be, giving written notice to the other at any time after the Outside Closing Date but not after the Closing has occurred; |
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(ii) |
In the event an Authority shall have issued an order or enacted a law, having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order or law is final and non-appealable, SPK or Varian shall each have the right, in its sole discretion, to terminate the Merger Agreement without liability to the other party; |
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(iii) |
SPK and Varian shall each have the right, in its sole discretion, to terminate the Merger Agreement if, at the Parent Stockholder Meeting (as defined in the Merger Agreement) (including any postponements or adjournments thereof), the Parent Proposals (as defined in the Merger Agreement) shall fail to be approved by the affirmative vote of SPK stockholders required under SPK’s organizational documents and applicable law; |
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(iv) |
by mutual written consent of SPK and Varian duly authorized by each of their respective boards of directors; |
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(v) |
by either SPK or Varian, if the other party has breached any of its covenants or representations and warranties such that it would be impossible or would reasonably be expected to be impossible to satisfy any of its closing conditions and such breach is incapable of being cured or is not cured by the earlier of (A) the Outside Closing Date and (B) five days following receipt by the breaching party of a written notice of the breach; provided that the terminating party is not then in breach of the Merger Agreement so as to prevent the satisfaction of its closing conditions; and |
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(vi) |
by SPK if Varian has not received approval from Varian’s stockholders of the Merger and related transactions by the Company Stockholder Written Consent Deadline (as defined in the Merger Agreement), provided that SPK is not then in breach of the Merger Agreement so as to prevent the satisfaction of its closing conditions, further provided that upon Varian receiving such stockholder approval, SPK will no longer have any right to so terminate the Merger Agreement. |
Effect of Termination and Termination Fees
If the Merger Agreement
is terminated in accordance with its terms, the Merger Agreement will become void and of no further force and effect without liability
of any party, except for liability arising out of any party’s breach of the Merger Agreement, intentional fraud or willful
misconduct. In the event the merger agreement is terminated due to breach by either party, a termination fee shall be payable from
the breaching party to the non-breaching party of $2,200,000 within two days of such termination.
The foregoing description of the Merger
Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit
2.1 to this Current Report on Form 8-K, and incorporated herein by reference.
Certain Related Agreements
Parent Stockholder Support Agreement
In connection with
the execution of the Merger Agreement, SPK, Varian and certain stockholders of SPK entered into those certain Parent Stockholder
Support Agreements dated February 11, 2022 (the “Parent Stockholder Support Agreements”) pursuant to which those
certain SPK stockholders who are parties thereto agreed to vote all shares of SPK Common Stock beneficially owned by them, including
any additional shares of SPK they acquire ownership of or the power to vote, in favor of the Merger and related transactions.
The foregoing description
of the Parent Stockholder Support Agreement is qualified in its entirety by reference to the full text of the Parent Stockholder
Support Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein by reference.
Company Stockholder Support Agreement
In connection with
the execution of the Merger Agreement, SPK, Varian and certain stockholders of Varian entered into those certain Company Stockholder
Support Agreements dated February 11, 2022 (the “Company Stockholder Support Agreements”), pursuant to which
those certain Varian stockholders parties thereto agreed to vote all Varian Common Stock beneficially owned by them, including
any additional shares of Varian they acquire ownership of or the power to vote, in favor of the Merger and related transactions.
The foregoing description
of the Company Stockholder Support Agreement is qualified in its entirety by reference to the full text of the Company Stockholder
Support Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K, and incorporated herein by reference.
Company Lock-Up Agreement
In connection with
the execution of the Merger Agreement, SPK and certain Varian stockholders entered into a lock-up agreement dated February 11,
2022 (the “Company Lock-Up Agreement”), pursuant to which those certain Varian stockholders parties thereto
agreed, subject to certain customary exceptions, not to (i) sell, offer to sell, contract or agree to sell, pledge or otherwise
dispose of, directly or indirectly, any shares of SPK Common Stock held by them (such shares, together with any securities convertible
into or exchangeable for or representing the rights to receive shares of Common Stock if any, acquired during the Company Lock-Up
Period (as defined below), the “Company Lock-Up Shares”), (ii) enter into a transaction that would have the
same effect, (iii) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Company Lock-Up Shares or otherwise, or engage in any short sales or other arrangement with respect
to the Company Lock-Up Shares or (iv) publicly announce any intention to effect any transaction specified in clause (i) or (ii)
until the date that is 6 months after the Closing Date (the period from the date of the Company Lock-Up Agreement until such date,
the “Company Lock-Up Period”).
The foregoing description
of the Company Lock-Up Agreement is qualified in its entirety by reference to the full text of the form of Company Lock-Up Agreement,
, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K, and incorporated herein by reference.
Voting Agreement
In connection with
the execution of the Merger Agreement, SPK, the Sponsor, Varian and certain holders of SPK Common Stock entered into a voting agreement
(the “Voting Agreement”), pursuant to which such holders of SPK Common Stock, including any additional shares
of SPK Common Stock they acquire after the signing of the Merger Agreement, vote or agree to vote in favor of certain matters relating
to the nomination and election of the Board of Directors of SPK and Varian after closing of the Merger Agreement (as described
in the Voting Agreement).
The foregoing description
of the Voting Agreement is qualified in its entirety by reference to the full text of the form of Voting Agreement, a copy of which
is included as Exhibit C to the Merger Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K, and incorporated herein
by reference.
Agreements to be Executed at Closing
Employment Agreements
Upon closing of
the Merger, SPK, on the one hand, and each of Jeffrey Davis (the CEO of Varian) and Jonathan Lewis (the CMO of Varian), on the
other hand, will enter into employment agreements pursuant to which each such person extends the terms of their existing employment
agreements and includes other terms regarding such employees’ employment by SPK.
The foregoing description
of the employment agreements is qualified in its entirety by reference to the full texts of each of the forms of employment agreements,
copies of which are included as Exhibits E and F to the Merger Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K,
and are incorporated herein by reference.
Restrictive Covenant Agreements
Upon closing of
the Merger, SPK, on the one hand, and each of Jeffrey Davis (the CEO of Varian) and Jonathan Lewis (the CMO of Varian), on the
other hand, will enter into Restrictive Covenant Agreements pursuant to which each such person agrees to certain confidentiality,
non-disparagement and other restrictive covenants with respect to SPK.
The foregoing description
of the Restrictive Covenant Agreements is qualified in its entirety by reference to the full text of the form of Restrictive Covenant
Agreement, a copy of which is included as Exhibit G to the Merger Agreement, filed as Exhibit 2.1 to this Current Report on Form
8-K, and incorporated herein by reference.