| Item 1.01 | Entry into a Material Definitive Agreement. |
Business Combination Agreement
On October 17, 2022, European Biotech Acquisition
Corp., a Cayman Islands exempted company (“EBAC”), entered into a Business Combination Agreement (as
it may be amended and/or restated from time to time, the “Business Combination Agreement”) with Oculis SA, a
public limited liability company (société anonyme) incorporated and existing under the laws of Switzerland (“Oculis”).
Capitalized terms used in this Current Report on Form 8-K but not otherwise defined herein have the meanings given to them in the Business
Combination Agreement.
Upon the terms and subject to the conditions of
the Business Combination Agreement and in accordance with applicable law, as soon as practicable following the date hereof, (i) EBAC will
form, or cause to be formed, (a) Oculis Holding AG, a public limited liability company incorporated and existing under the laws of Switzerland
and that will be a direct wholly owned subsidiary of EBAC (“New Parent”), (b) a new Cayman Islands exempted company
that will be a direct wholly owned subsidiary of New Parent (“Merger Sub 1”), (c) another new Cayman Islands exempted
company that will be a direct wholly owned subsidiary of New Parent (“Merger Sub 2”) and (d) a new limited liability
company (Gesellschaft mit beschränkter Haftung) incorporated and existing under the laws of Switzerland that will be a direct
wholly owned subsidiary of New Parent (“Merger Sub 3”) and (ii) EBAC will cause New Parent, Merger Sub 1, Merger Sub
2 and Merger Sub 3 to become a party to the Business Combination Agreement.
In connection with the transactions contemplated
by the Business Combination Agreement, among other things, (i) Merger Sub 1 will merge with and into EBAC, with EBAC surviving such merger
as a wholly owned subsidiary of New Parent (the “First Merger”), (ii) as a result of the First Merger, (a) each issued
and outstanding share of EBAC Common Stock will automatically convert into one class of ordinary shares of the surviving company in the
First Merger (“Surviving EBAC Shares”), (b) each issued and outstanding warrant issued by EBAC to purchase Class A
Common Stock of EBAC will be automatically converted into warrants of the surviving company in the First Merger (“Surviving EBAC
Warrants”), and (c) EBAC will deposit or cause to be deposited with the Exchange Agent the Surviving EBAC Shares and Surviving
EBAC Warrants, (iii) following the First Merger Effective Time but prior to the Second Merger Effective Time, the Exchange Agent will
contribute the Surviving EBAC Shares and Surviving EBAC Warrants to New Parent in exchange for New Parent Class A ordinary shares, nominal
value CHF 0.01 per share (the “New Parent Shares”) and a right to acquire New Parent Shares (each, a “New
Parent Warrant”), with both New Parent Shares and New Parent Warrants to be held by the Exchange Agent solely on behalf of the
holders of Surviving EBAC Shares and Surviving EBAC Warrants (the “New Parent Interests Consideration, (iv) prior to the
Second Merger Effective Time, the Exchange Agent will undertake to (a) distribute the New Parent Shares as part of the New Parent Interests
Consideration to the holders of Surviving EBAC Shares and (b) distribute the New Parent Warrants as part of the New Parent Interests Consideration
to the holders of Surviving EBAC Warrants, (v) after the First Merger Effective Time and following the completion of the Exchange Agent
Contribution Actions, EBAC will merge with and into Merger Sub 2, with Merger Sub 2 as the surviving company and remaining a wholly owned
subsidiary of New Parent, (vi) consenting Oculis shareholders executing the Company Shareholders Support Agreements will contribute their
shares of Oculis to New Parent in exchange for New Parent Shares and (vii) approximately 30 days after the Acquisition Closing Date, Oculis
will merge with and into Merger Sub 3, with Merger Sub 3 as the surviving company.
The Business Combination Agreement and the transactions
contemplated thereby were approved by the boards of directors of each of EBAC and Oculis.
Merger Consideration
The consideration payable to current Oculis equityholders
in connection with the transactions will be comprised of New Parent Shares. Each New Parent Share shall entitle the holder thereof to
one vote and such holder will be entitled to receive dividends if and when declared. The aggregate value of the consideration of New Parent
Shares payable to existing Oculis equityholders, without considering any Earnout Shares (as defined below) equals $208,000,000 (subject
to certain adjustments) (valuing each New Parent Share at $10 per share). Additionally, all unexercised Oculis options will be assumed
by New Parent and converted into options to purchase New Parent Shares.
In addition to the consideration described above,
existing equityholders of Oculis will also be entitled to receive at the Acquisition Closing additional consideration in the form of 4,000,000
newly issued shares of New Parent (the “Earnout Shares”), which will initially be unvested and will be subject to forfeiture,
on the terms and subject to the conditions set forth in the Business Combination Agreement. The Earnout Shares will be issued in three
tranches of (i) 1,500,000 shares, (ii) 1,500,000 shares, and (iii) 1,000,000 shares, vesting based on achievement of post-closing share
price targets of New Parent of $15.00, $20.00 and $25.00, respectively, in each case for any 20 trading days within any 30 trading day
period commencing on the Acquisition Closing Date and ending on the five-year anniversary thereafter (the “Vesting Period”).
The achievement metrics described above are also deemed to be achieved if there is a Change of Control (to the extent an applicable share
price target has not already occurred) during the Vesting Period. The Earnout Shares shall not be entitled to vote on matters submitted
to the holders of New Parent Shares for approval or be entitled to receive dividends or distributions in respect of the New Parent Shares,
if any, until such Earnout Shares vest. The Earnout Shares that have not vested by the end of the Vesting Period shall, automatically
be forfeited and cancelled for no consideration.
The Sponsor has forfeited 727,096 of its
shares of EBAC Class B Common Stock for no consideration, contingent upon the consummation of the Acquisition Closing. Furthermore,
if as of the Acquisition Closing Date, (i) the amount of cash available in the Trust Account following the EBAC Shareholders’
Meeting (after deducting the amount required to satisfy the EBAC Share Redemption Amount but before payment of any Company
Transaction Expenses or EBAC Transaction Expenses), plus (ii) the PIPE Investment Amount actually received by New Parent (or other
financing, including through a convertible loan, in connection with the Acquisition Transactions) prior to or substantially
concurrently with the Acquisition Closing from a PIPE Investor or other investor that in either case has been introduced to the
Company following the date hereof by the Sponsor, is less than $25,500,000, then the Sponsor will forfeit for no consideration an
additional number of EBAC Class B Common Stock (the “Additional At-Risk Shares”) proportional to the available
cash relative to the $25,500,000 threshold (up to a maximum of 1,594,348 Additional At-Risk Shares forfeited); provided that such
amount may be reduced by the number of Additional At-Risk Shares transferred by the Sponsor to EBAC Shareholders in connection with
executing a Non-Redemption Agreement or similar arrangement after the date hereof; provided further that, the number of shares
transferred to any such shareholder does not exceed 10% of the number of EBAC Class A Common Stock owned by such shareholder as of
the date of such Non-Redemption Agreement or similar arrangement.
Covenants of the Parties
Pursuant to the terms and conditions set forth
in the Business Combination Agreement, among other customary covenants, each of EBAC, New Parent, Merger Sub 1, Merger Sub 2, Merger Sub
3 and Oculis have agreed to use its respective commercially reasonable efforts to take all actions reasonably necessary or advisable to
consummate and make effective as soon as practicable the closing of the Business Combination (the “Closing”), including
using commercially reasonable efforts to obtain all material Governmental Authorizations to effect the Closing. The Business Combination
Agreement also contains certain customary covenants by EBAC and Oculis during the period between the signing of the Business Combination
Agreement and the Closing, including, among other things, the conduct of their respective businesses, publicity, provision of information,
maintenance of books and records, notification of certain matters, terminating affiliate contracts, some of which may continue after the
termination of the Business Combination Agreement. Each of EBAC and Oculis also agreed not to solicit or enter into any alternative competing
transactions during the period from the date of the Business Combination Agreement and the Closing. EBAC and New Parent also agreed to
cause New Parent Shares issuable in accordance with the Business Combination Agreement to be approved for listing on the Nasdaq as promptly
as practicable after the date hereof. EBAC has also agreed to seek an extension (via shareholder approval) to amend its governing documents
to extend the time period necessary for EBAC to consummate a business combination if EBAC and Oculis determine in good faith that it is
probable the Closing will not occur prior to March 18, 2023 (the “Termination Date”).
Directors of New Parent
The parties agreed in the Business Combination
Agreement to take all actions necessary or appropriate to cause the board of directors of New Parent as of the Closing to consist of up
to seven directors, of which two individuals will be designated by the Sponsor and up to five individuals designated by Oculis, one whom
shall be the chief executive of Oculis and at least three of whom, who in each case will be subject to the prior approval of the Sponsor
(not to be unreasonably withheld), will qualify as independent directors under applicable SEC and Nasdaq listing rules.
Closing Conditions
The obligations of the parties to complete the
Closing are subject to various conditions, including customary conditions of each party and the following mutual conditions of the parties
unless waived:
| · | the New Parent Shares and New Parent Warrants contemplated
to be listed pursuant to the Business Combination Agreement shall have been approved for listing on Nasdaq; |
| · | there will not be in force any applicable Law or Governmental Order enjoining, prohibiting, or making illegal the Acquisition Transactions;
provided that the Governmental Authority issuing such Governmental Order has jurisdiction over the parties to the Business Combination
Agreement; |
| · | the approval of the EBAC shareholders with respect to the transaction proposals identified in the Business Combination Agreement shall
have been obtained; |
| · | the registration statement on Form F-4 (as such filing is amended or supplemented, and including the proxy statement/prospectus contained
therein, the “Registration Statement”) shall have become effective, no stop order shall have been issued by the SEC
with respect to the Registration Statement and no action seeking such stop order shall have been threatened or initiated by the SEC and
not withdrawn; |
| · | EBAC shall have net tangible assets (as determined in accordance
with Rule 3a51-1(g)(1) of the Exchange Act (as defined below)) of at least $5,000,001; and |
| · | the (i) amount of cash available in the account established
by EBAC for the benefit of its public shareholders, pursuant to the Management Trust Agreement, dated March 15, 2021 by and between EBAC
and Continental Stock Transfer & Trust Company following the EBAC Shareholders’ Meeting (after deducting the amount required
to satisfy the EBAC Share Redemption Amount and payment of any Company Transaction Expenses or EBAC Transaction Expenses); plus (ii)
(A) the cash actually received by New Parent pursuant to the Convertible Loan Agreement from the respective lender parties thereto and
(B) the PIPE Investment Amount actually received by New Parent (or other financing in connection with the Acquisition Transactions) prior
to or substantially concurrently with the Acquisition Closing being equal to or greater than $100 million. |
Termination
The Business Combination Agreement may be terminated
under certain customary and limited circumstances, including:
| · | by the mutual written consent of EBAC and Oculis; |
| · | by either EBAC or Oculis if: (i) the representations, warranties, covenants or agreements of the other party, as set forth in the
Business Combination Agreement, are breached such that there is a failure of the related closing condition at the Acquisition Closing
(subject to a 45-day cure period); (ii) the Closing has not occurred by the Termination Date; provided, that if a proposal to amend EBAC’s
governing documents to extend the time period necessary for EBAC to consummate a business combination is approved at an Extension Shareholders’
Meeting (if necessary), then the Termination Date will extend to the last day of such extended time period, (iii) any Governmental Authority
shall have enacted, issued, promulgated, enforced or entered any Governmental Order which has become final and nonappealable and has the
effect of making consummation of any of the Acquisition Transactions illegal or otherwise preventing or prohibiting consummation of any
of the Acquisition Transactions or if there shall be adopted any Law that permanently makes consummation of any of the |
Acquisition Transactions illegal or otherwise prohibited;
or (iv) the EBAC Shareholder Approval is not obtained upon a vote duly taken thereon at the relevant EBAC shareholders’ meeting
(subject to any permitted adjournment or postponement thereof); or
| · | by Oculis in the event of a Modification in Recommendation. |
Other General
The Business Combination Agreement contains representations,
warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The
assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties
and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The
Business Combination Agreement has been filed to provide investors with information regarding its terms. It is not intended to provide
any other factual information about EBAC, Oculis or any other party to the Business Combination Agreement. In particular, the representations,
warranties, covenants and agreements contained in the Business Combination Agreement, which were made only for purposes of such agreement
and as of specific dates, were solely for the benefit of the parties to the Business Combination Agreement (or any entity that may become
a party thereto after the date hereof), may be subject to limitations agreed upon by the contracting parties (including being qualified
by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Business Combination Agreement
instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that
differ from those applicable to investors and reports and documents filed with the SEC. Investors should not rely on the representations,
warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any
party (or future party) to the Business Combination Agreement. In addition, the representations, warranties, covenants and agreements
and other terms of the Business Combination Agreement may be subject to subsequent waiver or modification. Moreover, information concerning
the subject matter of the representations and warranties and other terms may change after the date of the Business Combination Agreement,
which subsequent information may or may not be fully reflected in EBAC’s public disclosures.
The foregoing description of the Business Combination
Agreement is not complete and is qualified in its entirety by reference to the Business Combination Agreement, which is attached as Exhibit
2.1 to this Current Report and incorporated herein by reference.
PIPE Subscription Agreements
In connection with the execution of the Business
Combination Agreement, EBAC entered into subscription agreements (the “PIPE Subscription Agreements”) with certain
investors, including an affiliate of the Sponsor and certain existing equity holders of Oculis (the “PIPE Investors”).
Pursuant to the PIPE Subscription Agreements, the PIPE Investors agreed to subscribe for and purchase, and EBAC agreed to issue and sell
to such investors, on the Acquisition Closing Date, an aggregate of 6,330,391 EBAC ordinary shares for a purchase price of $10.00 per
share, for aggregate gross proceeds of $63,303,910 (the “PIPE Financing”).
The foregoing description of the PIPE Subscription
Agreements is subject to and qualified in its entirety by reference to the full text of the form of Subscription Agreement, a copy of
which is included as Exhibit 10.1 hereto, and the terms of which are incorporated by reference.
Convertible Loan Agreement
In connection with the execution of the Business
Combination Agreement, Oculis entered into a convertible loan agreement (the “Convertible Loan Agreement”) with certain
of its existing equity holders (the “Lenders”). Pursuant to the Convertible Loan Agreement, the Lenders grant Oculis
a right to receive a convertible loan with certain conversion rights, in an aggregate amount of $12,670,000. Following the Second Merger
Effective Time, it is the intent of the parties thereto that New Parent shall assume the Convertible Loan Agreement, and that immediately
after such assumption but before the Company Share Contribution, the Lenders will exercise their conversion rights in exchange for New
Parent Shares at $10 per share.
The foregoing description of the Convertible Loan
Agreements is subject to and qualified in its entirety by reference to the full text of the form of Convertible Loan Agreement, a copy
of which is included as Exhibit 10.2 hereto, and the terms of which are incorporated by reference.
Non-Redemption Agreements
Concurrently with the execution of the Business
Combination Agreement, certain shareholders of EBAC (the “EBAC Voting Shareholders”) entered into non-redemption agreements
(the “Non-Redemption Agreements”) with EBAC and Sponsor.
Pursuant to the Non-Redemption Agreements, each
EBAC Voting Shareholder agreed for the benefit of EBAC to not redeem and to vote all of their EBAC ordinary shares now owned or hereafter
acquired (the “Subject EBAC Equity Securities”), representing 700,789 EBAC ordinary shares in the aggregate, in favor
of the transaction proposals. In connection with these commitments from the EBAC Voting Shareholders, Sponsor has agreed to transfer to
each Investor one New Parent Share for every ten EBAC ordinary shares owned by such investor, on or promptly following the Acquisition
Closing Date. The EBAC Voting Shareholders also each agreed to a lock-up to not transfer any Subject EBAC Equity Securities for a period
of 90 calendar days after the Acquisition Closing Date.
The foregoing description
of the Non-Redemption Agreement is subject to and qualified in its entirety by reference to the full text of the form of Subscription
Agreement, a copy of which is included as Exhibit 10.3 hereto, and the terms of which are incorporated by reference.
Oculis Shareholder Support Agreements
Concurrently with the execution of the Business
Combination Agreement, certain equityholders of Oculis (the “Oculis Supporting Members”) entered into a support agreement
(the “Oculis Shareholder Support Agreement”) in favor of EBAC and Oculis and their respective successors.
In the Oculis Shareholder Support Agreement, the
Oculis Supporting Members agreed to, among other things (i) vote to adopt the Business Combination Agreement and approve and consent to
the consummation of the Transactions, (ii) waive any rights of appraisal or dissenter’s rights and (iii) provide a release of claims
against Oculis and its Subsidiaries.
The foregoing description of the Oculis Shareholder
Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Oculis Shareholder
Support Agreement, the form of which is filed as Exhibit 10.4 hereto and is incorporated herein by reference.
Sponsor Letter Agreement
Concurrently with the execution of the Business
Combination Agreement, the Sponsor entered into a letter agreement (the “Sponsor Letter Agreement”) with EBAC and Oculis
pursuant to which the Sponsor agreed, among other things, to (i) vote all of the EBAC Common Stock it beneficially owns in favor of the
Business Combination and related transactions and to take certain other actions in support of the Business Combination Agreement and related
transactions, (ii) not transfer its shares of EBAC Common Stock and EBAC Warrants, in each case until the consummation of the Acquisition
Closing (subject to certain customary exceptions), (iii) waive certain anti-dilution adjustments and (iv) waive certain redemption rights.
The foregoing description of the Sponsor Letter
Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Sponsor Letter Agreement,
a copy of which is filed as Exhibit 10.5 hereto and is incorporated herein by reference.
Amended and Restated Registration Rights and Lock-Up
Agreement
On the Acquisition Closing Date, the Sponsor and
certain shareholders of Oculis (the “Holders”) and New Parent will enter into an amended and restated registration
rights agreement and lock-up agreement (the “Amended and Restated Registration Rights and Lock-Up Agreement”) pursuant
to which, among other
things,
certain shareholders of New Parent will be granted certain customary demand and “piggy-back” registration rights with respect
to their respective New Parent Shares.
The Amended and Restated Registration Rights and
Lock-Up Agreement will contain certain restrictions on transfer of New Parent Shares and other Registrable Securities (as defined therein)
to be held by the Holders immediately following the Acquisition Closing (the “Lock-up Securities”). Such restrictions
begin on the Acquisition Closing Date and end on the earlier of (x) (i) for the Sponsor the 270 days after the Acquisition Closing Date
and (ii) for the rest of the Holders 180 days from the Acquisition Closing Date and (y) the last reported trading price of the New Parent
Shares on Nasdaq exceeds $15.00 for 20 trading days within any 30 trading day period commencing at least 150 days after the Acquisition
Closing Date.
The foregoing description of the Amended and Restated
Registration Rights and Lock-Up Agreement is subject to and qualified in its entirety by reference to the full text of the form of Subscription
Agreement, a copy of which is included as Exhibit 10.6 hereto, and the terms of which are incorporated by reference.
