UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 31, 2019
Zyla Life Sciences
(Exact name of Registrant as specified in its charter)
Delaware |
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001-36295 |
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46-3575334 |
(State or Other Jurisdiction |
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(Commission |
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(I.R.S. Employer |
600 Lee Road, Suite 100
Wayne, Pennsylvania 19087
(610) 833-4200
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants Principal Executive
Offices)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which registered: |
Common Stock, par value $0.001 per share |
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ZCOR |
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OTCQX |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Item 1.01 Entry into a Material Definitive Agreement
On May 31, 2019, Zyla Life Sciences (formerly known as Egalet Corporation) (the Company) entered into Amendment No. 3 (the Third Amendment) to the Asset Purchase Agreement, dated as of October 30, 2018, by and among Iroko Pharmaceuticals, Inc. (Iroko), Zyla Life Sciences US Inc. (formerly Egalet US Inc.) (together with the Company, the Buyer), and the Company, as amended (the Asset Purchase Agreement).
Under the Asset Purchase Agreement, the Buyer was required to make certain payments to Iroko to compensate Iroko for certain underlying royalty and milestone obligations to third party recipients with respect to payments or proceeds arising from a Naproxen product, Tivorbex product and/or Zorvolex product. The Third Amendment memorializes the Companys agreement to fund Irokos payoff of these underlying obligations in order to eliminate the Companys ongoing obligation to compensate Iroko for the underlying royalty and milestone obligations, to delete the related provisions of the Asset Purchase Agreement, and to obligate the Company to continue to satisfy any remaining underlying royalty and milestone obligations to these recipients to the extent not so paid off.
The foregoing description of the Third Amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the Third Amendment, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and the information contained therein is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On June 5, 2019, Luke Dűster notified the Company of his resignation from the Board of Directors of the Company (the Board). Mr. Dűsters resignation is expressly conditioned upon the Boards election of Gary M. Phillips, M.D. to fill the resulting vacancy. Mr. Dűsters resignation from the Board is not due to a disagreement with the Board or management of the Company on any matter relating to the Companys operations, policies or procedures.
Under the Companys Stockholders Agreement, dated as of January 31, 2019, among the Company and Iroko Pharmaceuticals, Inc. and certain of its affiliates (collectively, the Iroko Stockholders), the Iroko Stockholders have the right to nominate a successor director to fill the resulting vacancy left by Mr. Dűsters resignation. On June 5, 2019, the Iroko Stockholders notified the Board of their nomination of Dr. Phillips to fill that vacancy and serve as a director of the Company. The Board will consider Dr. Phillips nomination in accordance with the Companys governance policies and obligations under the Stockholders Agreement.
Item 5.03 Amendments to Articles of Incorporation or ByLaws; Change in Fiscal Year
Effective June 3, 2019, the Company changed its name to Zyla Life Sciences by filing an amendment to its Certificate of Incorporation. A copy of the Certificate of Incorporation is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description is qualified in its entirety thereby. In addition, the By-laws of the Company were also amended to reflect the name change to Zyla Life Sciences and to expressly permit communication between and among stockholders and directors of the Company by means of electronic transmission. A copy of the By-laws, as amended, is attached hereto as Exhibit 3.2 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description is qualified in its entirety thereby.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit Number |
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Description |
2.1* |
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Amendment No. 3 to Asset Purchase Agreement, dated as of May 31, 2019 |
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3.1 |
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3.2 |
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First Amendment to Second Amended and Restated Bylaws of Zyla Life Sciences |
* All exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated under the Securities Act of 1933, as amended. The Company will furnish the omitted exhibits and schedules to the Securities and Exchange Commission upon its request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: June 6, 2019 |
Zyla Life Sciences | |
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By: |
/s/ Robert S. Radie |
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Name: Robert S. Radie |
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Title: President and Chief Executive Officer |
EXECUTION VERSION
AMENDMENT NO. 3 TO ASSET PURCHASE AGREEMENT
This Amendment No. 3, dated as of May 31, 2019 (this Amendment) to the Asset Purchase Agreement (the APA), dated as of October 30, 2018, by and among Iroko Pharmaceuticals Inc., a business company incorporated in the British Virgin Islands (registration number 1732699) (the Company), Egalet US Inc., a Delaware corporation (NewCo), and Egalet Corporation, a Delaware corporation (Buyer Parent), as amended by Amendment No. 1, dated as of January 30, 2019, and by Amendment No. 2, dated as of January 31, 2019 (together with the APA and Amendment No. 1, the Original Agreement), is entered into by and among the Company, Newco and Buyer Parent. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Original Agreement.
RECITALS
WHEREAS, the Company and/or its Affiliates are obligated under a purchase agreement with certain third parties (the Royalty Holders) with respect to royalty and milestone payments (the Underlying Royalty and Milestone Payments) with respect to payments or proceeds arising from a Naproxen Product, Tivorbex Product and/or Zorvolex Product;
WHEREAS, pursuant to Section 4.26(a) of the APA, the Buyer is required to make certain payments to the Company (or a designated Subsidiary of the Company) to compensate the Company for the Underlying Royalty and Milestone Payments and, to the extent these Underlying Royalty and Milestone Payments are terminated or discharged, then the Buyers obligations under Section 4.26 are to be accordingly terminated or discharged, as applicable;
WHEREAS, Buyer Parent has agreed to fund the Companys purchase, acquisition and extinguishment (the Royalty and Milestone Purchase) of the Underlying Royalty and Milestone Payments by paying up to an aggregate amount equal to US $833,333.33 (the Payoff Amount) in satisfaction of the Underlying Royalty and Milestone Payments;
WHEREAS, the Company, NewCo and Buyer Parent desire to amend the Original Purchase Agreement as hereinafter provided to reflect the Royalty and Milestone Purchase to the extent the Underlying Royalty and Milestone Payments are so extinguished; and
WHEREAS, Section 8.10 of the Original Agreement provides that the Original Agreement may be amended upon the written approval of the Company, NewCo and Buyer Parent.
NOW, THEREFORE, intending to be legally bound and in consideration of the mutual agreements, provisions, and covenants set forth in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Royalty Purchase. The Company acknowledges and agrees that the complete terms of the Royalty and Milestone Purchase are set forth in an amendment to the original agreement (the Royalty Purchase Amendment) between an Affiliate of the Company and the Royalty Holders and that the complete terms of the amendment and the original agreement have been made
available to Buyer Parent prior to the date of this Amendment. The Company further acknowledges and agrees that the Payoff Amount to be paid by Buyer Parent hereunder is intended to fund the Royalty and Milestone Purchase to the recipients (collectively, the Royalty Recipients) in the respective amounts as set forth on Schedule A hereto in full satisfaction of all obligations with respect to the Underlying Royalty and Milestone Payments. Promptly following the execution of this Amendment, Buyer Parent shall deliver, or cause to be delivered, the Payoff Amount to the Company by wire transfer of immediately available funds, to an account specified in writing by the Company to Buyer Parent. Upon receipt of the Payoff Amount from Buyer Parent, the Company shall furnish the applicable portion of the Payoff Amount to each Royalty Recipient in accordance with Schedule A, less applicable tax withholding in the case of amounts paid to the individual Royalty Recipients (which withheld amounts the Company shall submit to the appropriate taxing authority), by issuing a check (marked as provided in full satisfaction of the Underlying Royalty and Milestone Payments and requiring the check to be cashed within 90 days) (or otherwise transferring funds or offsetting payments against amounts owed to the Company) to the Royalty Recipient together with a written explanation that the Royalty and Milestone Purchase and the applicable portion of the Payoff Amount extinguish any obligations to such Royalty Recipient with respect to the Underlying Royalty and Milestone Payments. The Company shall notify the Buyer Parent in writing promptly (and in any event within five (5) Business Days) of any response from the Royalty Recipient to the receipt of the check (or transferred amount, as applicable); in addition, the Company shall notify the Buyer Parent in writing, within forty-five (45) to ninety (90) days after the transmission of the checks, of all checks cashed by the Royalty Recipients. The Company and the Buyer Parent agree that, to the extent any Royalty Recipient either responds to the receipt of the check (or transferred amount, as applicable) that it does not accept such payment (the Non-Accepted Payment Amount) in satisfaction of the obligations with respect to the Underlying Royalty and Milestone Payments, fails to cash the check, if any, within ninety (90) days of its transmission, or continues to claim a right to receive payments pursuant to the Underlying Royalty and Milestone Payments notwithstanding such Royalty Recipients receipt of its applicable portion of the Payoff Amount (it being the intent that such obligations shall be deemed to be extinguished immediately upon such Royalty Recipients acceptance of its applicable portion of the Payoff Amount (including by cashing the check, if any)), then (i) the Company shall provide to the Buyer Parent any additional information in its possession reasonably requested by the Buyer Parent with respect to the Underlying Royalty and Milestone Payments made or owed to such Royalty Recipient(s), (ii) the Buyer Parent or its designated Subsidiary shall be responsible for paying to each such Royalty Recipient (or, at the Companys request, reimbursing the Company for) its applicable portion of Underlying Royalty and Milestone Payments unless and until otherwise extinguished or discharged; it being the intent that such obligations shall be deemed to be extinguished immediately upon such Royalty Recipients acceptance of its applicable portion of the Payoff Amount (including by cashing the check, if any), and (iii) within one hundred and five (105) days after transmission of the checks, the Company shall repay to Buyer Parent any Non-Accepted Payment Amount(s); provided that, by itself, the failure of a Royalty Recipient to cash a check that has been delivered to such Royalty Recipient shall not be considered a Non-Accepted Payment Amount until the expiration of the ninety (90) day period following the transmission of the checks.
2. Amendment to Section 4.26 of APA. Effective as of the date of this Amendment, Section 4.26 of the Original Agreement is hereby deleted and replaced in its entirety with the following:
4.26 [Intentionally Omitted.]
3. Tax Matters. As additional good and valuable consideration for the Royalty and Milestone Purchase, Buyer shall indemnify and hold harmless the Company and its Affiliates from and against, and pay as incurred on behalf of (or reimburse), any and all Taxes imposed on the Company and its Affiliates as a direct result of the Royalty and Milestone Purchase and/or the transactions contemplated in this Amendment, including Buyer Parents obligation under paragraph 1 hereto to fund the Payoff Amount (provided, for clarity, this provision is not intended to cover Taxes arising from ongoing payments to Royalty Recipients (if any) following the Royalty and Milestone Purchase or claims arising therefrom) (Tax Matters), up to an aggregate amount of US $250,000.00; provided, that the Company and its Affiliates shall use commercially reasonable efforts to mitigate any such Taxes. The Company and its Affiliates shall promptly forward to Buyer all written notifications and other communications from any Taxing Authority received by the Company relating to Tax Matters and, pursuant to and subject to the limitations set forth in Section 4.2(c) of the Original Agreement, shall afford Buyer and its Representatives reasonable access to those books and records of the Company and its Affiliates to the extent relating to Tax Matters. If Buyer is required to make any payment under this paragraph 3, and the payment or event giving rise to such payment results in a U.S. federal, state, local or foreign Tax benefit to the Company or its Affiliates, then (a) any amount to be paid under this paragraph 3 shall be reduced to the extent such Tax benefit is actually realized by the Company or its Affiliates (through a reduction in cash Tax liability, or a credit in lieu of such refund) prior to such payment, net of Taxes actually payable by the Company or its Affiliates with respect to the receipt of such payment and (b) to the extent such Tax benefit is actually realized (through a reduction in cash Tax liability) after Buyer pays the Company or its Affiliates such payment under this paragraph 3, the Company shall pay Buyer the amount of such Tax benefit that is actually realized (through a reduction in cash Tax liability, or a credit in lieu of such refund), net of Taxes actually payable by the Company and its Affiliates with respect to the receipt of such payment, within fifteen (15) days after the Company or its Affiliates actually realize such Tax benefit (through a reduction in cash Tax liability, or a credit in lieu of such refund) or become entitled to actually realize such Tax benefit (through a reduction in cash Tax liability, or a credit in lieu of such refund), provided that if an applicable Taxing Authority subsequently disallows any of the Tax benefits described in clause (a) or clause (b) of this sentence, Buyer shall promptly repay to the Company the amount of such disallowed Tax benefit. The Company shall provide to Buyer reasonable participation rights with respect to any controversy regarding any Tax Matter. The Company shall not and shall cause its Affiliates not to enter into any settlement of, or otherwise compromise, any such Tax Matter without the prior written consent of Buyer, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary herein or in the Original Agreement, the Buyers obligations under this paragraph 3 shall not be considered an Excluded Liability under the APA.
4. Legal Expenses Buyer shall reimburse the Company for its reasonable and documented (to Buyers reasonable satisfaction) legal fees and expenses incurred by it with respect to the drafting, negotiation and consummation of the Royalty and Milestone Purchase and this Amendment, including the drafting and negotiation of this Amendment, the Royalty Purchase Amendment and Buyer Parents obligation under paragraph 1 hereto to fund the Payoff Amount (provided, for clarity, this provision is not intended to cover fees and expenses arising from
ongoing payments to Royalty Recipients (if any) following the Royalty and Milestone Purchase or claims arising therefrom).
5. Continuing Effect of Original Agreement This Amendment shall only serve to amend and modify the Original Agreement, including the exhibits and schedules relating thereto, to the extent specifically provided herein. All terms, conditions, provisions and references of and to the Original Agreement which are not specifically modified and/or amended herein shall remain in full force and effect and shall not be altered by any provisions herein contained. On and after the date of this Amendment, each reference in the Original Agreement to this Agreement, hereunder, hereof, herein or words of like import, and each reference to the Original Agreement, including the exhibits and schedules relating thereto, in any other agreements, documents or instruments executed and delivered pursuant to the Original Agreement, shall mean and be a reference to the Original Agreement, as amended by this Amendment; provided that references to the date of this Agreement, the date hereof, and other similar references in the Original Agreement shall continue to refer to the date of the Original Agreement and not to the date of this Amendment.
6. Miscellaneous. This Amendment shall be subject to the general provisions contained in Sections 8.3, 8.4, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11 and 8.12 of the Original Agreement, which are incorporated by reference herein, in each case, mutatis mutandis.
[Signature page follows]
IN WITNESS WHEREOF, the Company, NewCo and Buyer Parent have caused this Amendment No. 3 to the Asset Purchase Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.
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IROKO PHARMACEUTICALS INC. | |
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By: |
/s/ Mark Murphy |
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Name: |
Mark Murphy |
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Title: |
Senior Vice President Finance & Controller |
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EGALET US INC. | |
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By: |
/s/ Mark Strobeck |
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Name: |
Mark Strobeck |
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Title: |
COO |
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EGALET CORPORATION | |
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By: |
/s/ Mark Strobeck |
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Name: |
Mark Strobeck |
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Title: |
COO |
CERTIFICATE OF AMENDMENT
TO THE
FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EGALET CORPORATION
EGALET CORPORATION, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the Corporation),
DOES HEREBY CERTIFY THAT:
FIRST: That, upon action of the Board of Directors (the Board) of the Corporation by unanimous written consent of all of the members of the Board in lieu of a meeting on May 15, 2019, the following resolutions were duly adopted, declaring advisable and approving the following amendment (the Amendment) to the Fourth Amended and Restated Certificate of Incorporation of the Corporation:
WHEREAS, Section 9.5 of the Second Amended and Restated Bylaws (the Bylaws) of Egalet Corporation, a Delaware corporation (the Corporation), provides that any amendment to the Bylaws or the Fourth Amended and Restated Certificate of Incorporation (the Certificate of Incorporation) of the Corporation must be approved by (1) Iroko (as defined in the Bylaws) and (2) prior to the first annual meeting of stockholders following January 31, 2019, two out of three of the following: the Secured Director, the Convertible Director and the Joint Director (each as defined in the Bylaws);
WHEREAS, Iroko previously approved the Certificate of Amendment (as defined below);
WHEREAS, Sections 242(a)(1) and 242(b)(1) of the General Corporation Law of the State of Delaware provide that the board of directors of a corporation may amend its certificate of incorporation after receipt of payment for its capital stock to change its corporate name without submitting such amendment to a vote of its stockholders; and
WHEREAS, the Board of Directors (the Board) of the Corporation, including each of the Secured Director, the Convertible Director and the Joint Director, declares it advisable and in the best interest of the Corporation and its stockholders to change the name of the Corporation from Egalet Corporation to Zyla Life Sciences (the Corporate Name Change), which Corporate Name Change shall be effective as of the filing of a certificate of amendment to the Corporations Certificate of Incorporation with the Secretary of State of the State of Delaware (the Effective Time).
NOW, THEREFORE, BE IT:
RESOLVED, that the Corporate Name Change is hereby approved, effective as of the Effective Time.
RESOLVED, at the Effective Time, Article I of the Certificate of Incorporation shall be deleted and replaced in its entirety with the following:
ARTICLE I NAME
The name of the corporation is Zyla Life Sciences (the Corporation).
RESOLVED, that, at such time as any authorized officer of the Corporation shall deem advisable, the authorized officers of the Corporation be, and each of them hereby is, authorized, empowered to execute and file, or cause to be filed, a Certificate of Amendment (the Certificate of Amendment) to the Certificate of Incorporation with the Secretary of State of the State of Delaware and to take all other actions necessary or appropriate in connection therewith to effect the Corporate Name Change.
SECOND: That the aforesaid Amendment was duly adopted in accordance with the applicable provisions of Sections 242(a)(1) and 242(b)(1) of the General Corporation Law of the State of Delaware without a meeting or vote of the Corporations stockholders.
THIRD: The Corporation, in accordance with Section 102(a) of General Corporation Law of the State of Delaware, hereby acknowledges that, as of the effectiveness of the filing of this Certificate of Amendment, its total assets, as defined in Section 503(i) of Title 8 of the General Corporation Law of the State of Delaware, are not less than $10,000,000.
FOURTH: That this Certificate of Amendment to the Restated Certificate of Incorporation shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment as of the 3rd day of June, 2019.
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EGALET CORPORATION |
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/s/ Robert S. Radie |
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By: Robert S. Radie |
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Title: President and CEO |
[Signature Page to Certificate of Amendment Egalet Corporation]
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED BYLAWS
OF EGALET CORPORATION
ARTICLE I: The following amendments are hereby made to the Second Amended and Restated Bylaws (the Bylaws) of Egalet Corporation, a Delaware corporation (the Corporation):
ARTICLE II: Amendments.
(a) All references to Egalet Corporation in the Bylaws are hereby deleted in their entirety and replaced with Zyla Life Sciences and all references to Egalet US Inc. in the Bylaws are hereby deleted in their entirety and replaced with Zyla Life Sciences US Inc.; provided that no change shall be made to the definition of Plan in the Bylaws, including the reference to Egalet Corp.
(b) Article VIII of the Bylaws are hereby amended by adding Section 8.11 to the end thereto:
Section 8.11 Electronic Transmission. As used in Section 2.3, Section 2.4, Section 3.7, Section 3.9, Section 4.15, Section 6.1, Section 6.2 and Section 7.4 of these Bylaws, to the extent permitted by applicable law, references to written or in writing shall be deemed to include communication by electronic transmission (including email).
ARTICLE III: Except as amended herein, the Bylaws shall remain in full force and effect.
Effective Date: June 3, 2019