Item
1.01 Entry into a Material Definitive Agreement
Merger
Agreement
On
November 8, 2022, Murphy Canyon Acquisition Corp., a Delaware corporation (“MURF”), entered into an agreement and
plan of merger (the “Merger Agreement”) by and among MURF, Conduit Pharmaceuticals Limited, a Cayman Islands exempted
company (“Conduit”) and Conduit Merger Sub, Inc., a Cayman Islands exempted company and a wholly owned subsidiary
of MURF (“Merger Sub”). MURF and Merger Sub are sometimes referred to collectively as the “MURF Parties.”
Pursuant to the Merger Agreement, a business combination between MURF and Conduit will be effected through the merger of Merger Sub with
and into Conduit, with Conduit surviving the merger as a wholly owned subsidiary of MURF (the “Merger”). Upon the
closing of the Merger (the “Closing”), it is anticipated that MURF will change its name to “Conduit Pharmaceuticals
Inc.” The board of directors of MURF has (i) approved and declared advisable the Merger Agreement, the Ancillary 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 MURF.
The
Merger is expected to be consummated in the first quarter of 2023, following the receipt of the required approval by the stockholders
of MURF and the shareholders of Conduit and the satisfaction of certain other customary closing conditions.
Merger
Consideration
The
total consideration to be paid at Closing (the “Merger Consideration”) by MURF to the Conduit shareholders will be
six hundred and fifty million dollars ($650,000,000) and will be payable in shares of Class A common stock, par value $0.0001 per share,
of MURF (“MURF Common Stock”). The number of shares of MURF Common Stock to be paid to the shareholders of Conduit
as Merger Consideration will be 65,000,000, with each share being valued at $10.00. All cash proceeds remaining in the trust will be
used to pay transaction costs and as growth capital for MURF.
At
the signing of the Merger Agreement, there were 2,000 ordinary shares, with a par value of GBP0.0001 per share (the “Conduit
Ordinary Shares”), issued and outstanding. Each Conduit Ordinary Share issued and outstanding, and all convertible debt issued
and outstanding, immediately prior to the consummation of the Merger (other than 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. The effective date
and time of the Merger is referred to in the Merger Agreement as the effective time (the “Effective Time”).
Representations
and Warranties
The
Merger Agreement contains customary representations and warranties of Conduit with respect to, among other things: (i) corporate existence
and power; (ii) organizational documents; (iii) capitalization; (iv) authorization to enter into the Merger Agreement and related transactions;
(v) no conflicts and non-contravention; (vi) permits and compliance; (vii) financial statements; (viii) no undisclosed liabilities; (ix)
absence of certain changes; (x) absence of litigation; (xi) employee benefit plans; (xii) labor matters; (xiii) real property and title
to assets; (xiv) intellectual property; (xv) taxes; (xvi) environmental matters; (xvii) material contracts; (xviii) customers and suppliers;
(xix) insurance; (xx) internal controls; (xxi) accuracy of statements; (xxii) COVID-19 matters; (xxiii) delivery of support agreement;
(xxiv) board approval; (xxv) brokers and finders’ fees; (xxvi) takeover laws; (xxvii) international trade matters and anti-bribery
compliance; (xxiii) that Conduit is not an investment company; (xxix) withholding; (xxx) exclusivity of representations and warranties;
and (xxxi) full disclosure.
The
Merger Agreement contains customary representations and warranties of the MURF Parties with respect to, among other things: (i) corporate
existence and power; (ii) organizational documents; (iii) capitalization; (iv) authorization to enter into the Merger Agreement and related
transactions; (v) no conflicts and non-contravention; (vi) compliance; (vii) MURF publicly filed documents and financial statements;
(viii) absence of certain changes; (ix) absence of litigation; (x) board approval; (xi) no prior operations of Merger Sub; (xii) amount
in the trust account; (xiii) employees; (xiv) taxes; (xv) listing of MURF securities; (xvi) that MURF is not an investment company; (xvii)
statements in public filings; (xviii) contracts; (xix) brokers and finders’ fees; (xx) delivery of support agreement; (xxi) MURF
and Merger Sub’s investigation and reliance; and (xxii) full disclosure.
All
representations and warranties by all parties terminate upon the Effective Time, and no representations, warranties, covenants, obligations
or other agreements contained in the Merger Agreement survive the Effective Time.
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 Registration Statement on Form
S-4 (the “Registration Statement”) 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 MURF’s stockholders. MURF 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 of MURF’s stockholders that will be called in order to approve the Merger and related transactions (the “MURF
Special Meeting”).
Conduct
between Signing and Closing
Each
of MURF and Merger Sub 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, take any action intended to facilitate an alternative transaction or approve, recommend or enter into
any agreement relating to an alternative transaction. MURF and Conduit also have agreed, subject to certain exceptions, to operate their
respective companies in the ordinary course through the Closing Date.
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) the Registration Statement
becoming effective under the Securities Act of 1933, as amended (the “Securities Act”); (iii) the approval by MURF’s
stockholders of the Merger and related transactions; (iv) the approval by Conduit’s shareholders of the Merger and related transactions;
(v) the aggregate cash available to MURF at the Closing (after giving effect to any redemptions by MURF’s stockholders and the
payment of all authorized transaction expenses) being at least $27,000,000; (vi) all Ancillary Agreements having been executed by all
parties thereto; and (vii) all required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other
governmental authority having been completed and cleared.
Solely
with respect to the MURF Parties, the consummation of the Merger is conditioned upon, among other things: (i) Conduit having duly performed
or complied with all of its obligations under the Merger Agreement in all material respects; (ii) the representations and warranties
of Conduit being true and correct in all material respects; (iii) no event having occurred that would result in a Company Material Adverse
Effect (as defined in the Merger Agreement); (iv) Conduit providing MURF a certificate from an authorized officer of Conduit as to the
accuracy of the foregoing conditions; (v) after giving effect to the Merger, MURF shall have at least $5,000,001 in net tangible assets
(as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act); (vi) MURF and Conduit having cooperated in good faith to negotiate
and execute new employment agreements with David Tapolczay and Adam Sragovicz, the current Chief Financial Officer and a director of
MURF; and (vii) certain intellectual property having been assigned to Conduit UK Management
Ltd, an entity that will be a wholly-owned subsidiary of Conduit as of the consummation of the Merger.
Solely
with respect to Conduit, the consummation of the Merger is conditioned upon, among other things: (i) the MURF Parties having duly performed
or complied with all of their obligations under the Merger Agreement in all material respects; (ii) the representations and warranties
of the MURF Parties being true and correct in all material respects; (iii) no event having occurred that would result in an Murphy Material
Adverse Effect (as defined in the Merger Agreement; and (iv) each of the MURF Parties providing Conduit a certificate from an authorized
officer as to the accuracy of the foregoing conditions.
Termination
The
Merger Agreement may be terminated as follows:
| |
(i) |
By
the mutual consent of MURF and Conduit;
|
| |
|
|
| |
(ii) |
by
MURF, if any of the representations or warranties of Conduit set forth in the Merger Agreement is not true and correct, or if Conduit
has failed to perform any covenant or agreement set forth in the Merger Agreement (including an obligation to consummate the Merger),
in each case such that the conditions to closing would not be satisfied and the breach or breaches causing such representations or
warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable, are not cured (or waived
by MURF) by the earlier of (i) the Outside Date (as defined below) or (ii) 20 days after written notice thereof is delivered to Conduit;
provided, however that MURF is not then in material breach of any representation, warranty, covenant, or obligation in the Merger
Agreement, which breach has not been cured; |
| |
|
|
| |
(iii) |
by
Conduit, if any of the representations or warranties of MURF or Merger Sub set forth in the Merger Agreement is not true and correct,
or if MURF or Merger Sub has failed to perform any covenant or agreement set forth in the Merger Agreement (including an obligation
to consummate the Merger), in each case such that the conditions to closing would not be satisfied and the breach or breaches causing
such representations or warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable,
are not cured (or waived by Conduit) by the earlier of (i) the Outside Date or (ii) 20 business days after written notice thereof
is delivered to MURF; provided, however that Conduit is not then in material breach of any representation, warranty, covenant, or
obligation in the Merger Agreement, which breach has not been cured; |
| |
|
|
| |
(iv) |
by
either MURF or Conduit: |
| |
|
|
| |
|
(A)
on or after May 31, 2023 (the “Outside Date”), if the Merger has not been consummated prior to the Outside Date;
provided, however, that this right to terminate the Merger Agreement will not be available to a party if the failure of the Merger
to have been consummated before the Outside Date was due to such party’s breach of or failure to perform any of its covenants
or agreements set forth in the Merger Agreement; or; |
| |
|
|
| |
|
(B)
if any applicable law or order that makes the transactions contemplated by the Merger Agreement illegal or otherwise prohibits consummation
of such transactions becomes final and non-appealable; |
| |
|
(C)
if MURF has not received approval from its stockholders of the Merger and related transactions at the MURF Special Meeting; |
| |
|
|
| |
(v) |
by
MURF if the Conduit shareholders’ written consent approving the Merger and related transactions have not have been obtained
within 10 business days after the date of the Merger Agreement; |
| |
|
|
| |
(vi) |
by
MURF if there is a Conduit Material Adverse Effect; and |
| |
|
|
| |
(vii) |
by
Conduit if there is a Murphy Material Adverse Effect. |
The
foregoing description of the Merger Agreement does not purport to be complete and 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 (this “Form 8-K”),
and incorporated herein by reference.
Certain
Related Agreements
Sponsor
Support Agreement
Concurrently
with the execution of the Merger Agreement, Murphy Canyon Acquisition Sponsor LLC (“Sponsor”) and MURF entered into
a certain Sponsor Support Agreement dated November 8, 2022 (the “Sponsor Support Agreement”), pursuant to which the
Sponsor agreed to vote all shares of MURF Common Stock beneficially owned by it, including any additional shares of MURF it acquires
ownership of or the power to vote, in favor of the Merger and related transactions.
The
foregoing description of the Sponsor Support Agreement is qualified in its entirety by reference to the full text of the Sponsor Support
Agreement, a copy of which is filed as Exhibit 10.3 to this Form 8-K, and the terms of which are incorporated herein by reference.
Shareholder
Support Agreement
Concurrently
with the execution of the Merger Agreement, MURF, Conduit, and certain shareholders of Conduit (the “Conduit Shareholders”)
entered into a certain Shareholder Support Agreement dated November 8, 2022 (the “Shareholder Support Agreement”),
pursuant to which the Conduit Shareholders agreed to vote all Conduit Ordinary Shares beneficially owned by them, including any additional
shares of Conduit they acquire ownership of or the power to vote, in favor of the Merger and related transactions.
The
foregoing description of the Shareholder Support Agreement is qualified in its entirety by reference to the full text of the Shareholder
Support Agreement, a copy of which is filed as Exhibit 10.4 to this Form 8-K, and the terms of which are incorporated herein by reference.
Subscription
Agreement
In
connection with the transactions contemplated by the Merger Agreement, MURF entered into a Subscription Agreement (the “Subscription
Agreement”) with an investor (the
“Private Placement Investor”). Pursuant to the Subscription Agreement, the Private Placement Investor has agreed to
purchase $27 million (the “Private Placement”) units of MURF (the “Units”), with each Unit consisting
of (i) one share of MURF Common Stock and (ii) one warrant to purchase one share of Class A Common Stock (each, a “Warrant”),
for a purchase price of $10.00 per Unit (the “Purchase Price”) in the Private Placement. The Subscription Agreement
contains registration rights, pursuant to which within fifteen (15) business days after the closing of the Private Placement, MURF will
use reasonable best efforts to file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement
registering the resale of shares of MURF Common Stock included in the Units and the shares of MURF Common Stock issued and issuable upon
exercise of the Warrants. The closing of the Private Placement is conditioned on there not being a suspension of the qualification of
MURF Common Stock for offering or sale or trading in any jurisdiction, or the initiation or threatening of any legal proceeding, no legal
prohibitions to consummate the Merger, and all conditions precedent to the closing of the Merger set forth in the Merger Agreement having
been satisfied or waived.
The
Warrant will be exercisable for a period of five years after the completion of the Merger and will have an exercise price of $11.50 per
share, subject to adjustment as set forth in the Warrant for stock splits, stock dividends, recapitalizations and similar customary adjustments.
The Private Placement Investor may exercise each Warrant on a cashless basis if the shares of MURF Common Stock underlying the Warrants
are not then registered pursuant to an effective registration statement. The Private Placement Investor have contractually agreed to
restrict its ability to exercise the Warrants such that the number of shares of the MURF Common Stock held by the Private Placement Investor
and its affiliates after such exercise does not exceed the beneficial ownership limitation set forth in the Warrant which may not exceed
4.99% of then issued and outstanding shares of MURF Common Stock.
The
foregoing descriptions of the Subscription Agreement and Warrant are qualified in their entirety by reference to the forms of the Subscription
Agreement and Warrant, copies of which are filed as Exhibit 10.1 and Exhibit 4.1, respectively, to this Form 8-K, and the terms of which
are incorporated herein by reference.
Lock-Up
Agreements
In
connection with the Merger Agreement, certain shareholders of Conduit entered into Lock-Up Agreements (the “Lock-Up Agreements”)
with MURF, pursuant to which, among other things, each agreed that it will not, and will cause any of its Permitted Transferees (as defined
therein) not to, transfer any Restricted Securities (as defined therein) during the Lock-Up Period (as defined therein).
The
foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by the by reference to
the full text of the form of Lock-Up Agreement, a copy of which is filed as Exhibit 10.2 to this Form 8-K, and the terms of which are
incorporated herein by reference.
Important
Information About the Proposed Business Combination and Where to Find It
This
Form 8-K relates to a proposed business combination transaction among the parties referred to above and herein as the Merger. A full
description of the terms of the Merger will be provided in the Registration Statement that MURF intends to file with the SEC that will
include a prospectus of MURF with respect to the securities to be issued in connection with the proposed Merger and a proxy statement
of MURF with respect to the solicitation of proxies for the special meeting of stockholders of MURF to vote on the Merger. Each of MURF
and Conduit urges its investors, stockholders and other interested persons to read, when available, the preliminary proxy statement/prospectus
as well as other documents filed with the SEC because these documents will contain important information about MURF, Conduit and the
Merger. After the Registration Statement is declared effective, the definitive proxy statement/prospectus to be included in the Registration
Statement will be mailed to stockholders of MURF as of a record date to be established for voting on the Merger. Once available, MURF
stockholders and other interested persons will also be able to obtain a copy of the Registration Statement, including the proxy statement/prospectus
included therein, and other documents filed with the SEC, without charge, on the SEC’s website at www.sec.gov or by directing a
request to Murphy Canyon Acquisition Corp., 4995 Murphy Canyon Road, Suite 300, San Diego, California, 92123.
Participants
in Solicitation
MURF,
Conduit and their respective directors and executive officers may be deemed participants in the solicitation of proxies of MURF’s
stockholders in respect of the proposed Merger. MURF’s stockholders and other interested persons may obtain more detailed information
about the names and interests of these directors and officers of MURF (and as applicable, Conduit) in the Merger as set forth in MURF’s
final prospectus relating to its initial public offering, dated February 2, 2022, which was filed with the SEC on February 4, 2022, and
in filings with the SEC, including when filed, the Registration Statement and the accompanying proxy statement/prospectus. These documents
can be obtained free of charge from the sources specified above and at the SEC’s web site at www.sec.gov.
This
communication does not contain all the information that should be considered concerning the Merger and is not intended to form the basis
of any investment decision or any other decision in respect of the Merger. Before making any voting or investment decision, investors
and security holders are urged to read the Registration Statement and accompanying proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC in connection with the proposed Merger as they become available because they will
contain important information about the proposed Merger.
No
Offer or Solicitation
This
Form 8-K is not a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Merger. This
Form 8-K is not an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any
states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities will be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act, as amended, or an exemption therefrom.
Forward-Looking
Statements
This
Form 8-K, exhibits hereto and information incorporated by reference herein, contains certain forward-looking statements within the meaning
of the federal securities laws with respect to the Merger. All statements other than statements of historical facts contained in this
Form 8-K, including statements regarding MURF’s or Conduit’s future results of operations and financial position, the amount
of cash expected to be available to Conduit after the closing and giving effect to any redemptions by the MURF’s stockholders,
Conduit’s business strategy, prospective product candidates, product approvals, research and development costs, timing and likelihood
of success, plans and objectives of management for future operations, future results of current and anticipated product candidates, and
expected use of proceeds, are forward-looking statements. These forward-looking statements generally are identified by words such as
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, but not limited
to, the following risks relating to the proposed transaction: the occurrence of any event, change or other circumstances that could give
rise to the termination of the BCA; the risk that the transaction may not be completed in a timely manner or at all, which may adversely
affect the price of MURF’s securities; the inability to complete the Merger and transactions contemplated thereby (the “Transactions”),
including due to failure to obtain approval of the stockholders of MURF or other conditions to closing in the BCA; the inability to obtain
or maintain the listing of MURF’s securities on Nasdaq following the Transactions; the risk that the Transactions disrupt current
plans and operations of Conduit as a result of the announcement and consummation of the Transactions; the ability to recognize the anticipated
benefits of the Transactions, which may be affected by, among other things, competition, the ability of the combined company to grow
and manage growth economically and hire and retain key employees; the risks that Conduit’s product candidates in development fail
clinical trials or are not approved by the U.S. Food and Drug Administration or other applicable authorities; costs related to the Transactions;
changes in applicable laws or regulations; the possibility that MURF or Conduit may be adversely affected by other economic, business,
and/or competitive factors; potential redemptions of MURF’s public stockholders; and other risks and uncertainties to be identified
in the Registration Statement and accompanying proxy statement/prospectus (when available) relating to the Transactions, including those
under the section titled “Risk Factors” therein, and in other filings with the SEC made by MURF. Moreover, MURF and Conduit
operate in very competitive and rapidly changing environments. Because forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified and some of which are beyond MURF’s and Conduit’s control,
you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements speak only as of
the date they are made. Investors are cautioned not to put undue reliance on forward-looking statements, and except as required by law.
MURF and Conduit assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of
new information, future events, or otherwise. Neither MURF nor Conduit gives any assurance that either MURF or Conduit or the combined
company will achieve its expectations.
