Item
1.01 Entry into a Material Definitive Agreement
Share
Purchase Agreement
On
April 11, 2022, 8i Acquisition 2 Corp., a British Virgin Islands business company (“LAX”), entered into a Share Purchase
Agreement (the “SPA”) with Euda Health Limited, a British Virgin Islands business company (“EUDA Health”), Watermark
Developments Limited, a British Virgin Islands business company (the “Seller”) and Kwong Yeow Liew, acting as Representative
of the Indemnified Parties (the “Indemnified Party Representative”). Pursuant to the terms of the SPA, a business combination
between LAX and EUDA Health will be effected through the purchase by LAX of all of the issued and outstanding shares of EUDA Health from
the Seller (the “Share Purchase”).
The
board of directors of LAX have (i) approved and declared advisable the SPA, the Share Purchase and the other transactions contemplated
thereby, and (ii) resolved to recommend approval of the SPA and related transactions by the shareholders of LAX.
Mr.
Meng Dong (James) Tan, LAX’s Chief Executive Officer and Chairman of the LAX board of directors, owns 10% of the equity interests
of the Seller. LAX anticipates that it will receive a fairness opinion from EverEdge Global to the effect that the purchase price to
be paid by LAX for the shares of EUDA Health pursuant to the SPA is fair to LAX from a financial point of view (the “Fairness Opinion”).
In
connection with the closing of the transactions under the SPA the current officers and directors of EUDA Health will become the officers
and directors of LAX. LAX’s sponsor, 8i Holdings 2 Pte. Ltd. (the “Sponsor”), will have the right to nominate one director
to serve as an independent director on the post-closing board of directors.
The
foregoing is a summary only and does not purport to be a complete description of all of the terms, provisions, covenants, and agreements
contained in the SPA or related documents, and is subject to and qualified in its entirety by reference to the full text of the SPA,
which is filed herewith as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference.
Consideration
Initial
Consideration
The
initial consideration to be paid at Closing (the “Initial Consideration”) by LAX to Seller for the Share Purchase will be
an amount equal to $550,000,000. The Initial Consideration will be payable in ordinary shares of LAX, no par value (the “Purchaser
Shares”) valued at $10 per share. To secure Seller’s obligations under the indemnification provisions of the SPA, 5,500,000
Purchaser Shares (the “Indemnification Escrow Shares”) shall be withheld from the Purchaser Shares payable at Closing, and
be delivered to American Stock Transfer & Trust Company, as Escrow Agent, to be held by the Escrow Agent pursuant to an escrow agreement,
by and among LAX, Seller, and the Indemnified Party Representative.
Earnout
Payments
In
addition to the Initial Consideration, the Seller may also receive up to 9,000,000 additional Purchaser Shares as an earnout payments
(the “Earnout Shares”) if, within a 3-year period following the Closing, the volume-weighted average price of Purchaser Shares
equals or exceeds any of three thresholds over any 20 trading days within a 30-day trading period (each, a “Triggering Event”)
under the terms and conditions set forth in the SPA and related transaction documents:
●
The Seller will be issued 3,000,000 additional Purchaser Shares if during the period beginning on the Closing Date and ending
on the first anniversary of the Closing Date, the Purchaser Share Price is equal to or greater than Fifteen Dollars ($15.00) after
the Closing Date;
●
The Seller will be issued 3,000,000 additional Purchaser Shares if during the period beginning on the first anniversary of the
Closing Date and ending on the second anniversary of the Closing Date, the Purchaser Share Price is equal to or greater than Twenty
Dollars ($20.00); and
●
The Seller will be issued 3,000,000 additional Purchaser Shares if during the period beginning on the second anniversary of the
Closing Date and ending on the third anniversary of the Closing Date, the Purchaser Share Price is equal to or greater than Twenty-Five
Dollars ($25.00).
Representations
and Warranties
The
SPA contains representations and warranties of EUDA Health with respect to, among other things, (a) organization, good standing and qualification,
(b) capital structure; (c) corporate authority, approval and fairness, (d) governmental filings, (e) financial statements and
internal controls, (f) absence of certain changes, (g) liabilities, (h) litigation, (i) compliance with laws; permits; (j) employee benefits,
(k) labor matters, (l) environmental matters, (m) tax matters, (n) real and personal property, (o) intellectual property and IT
assets, (p) insurance, (q) company material contracts, (r) brokers and finders, (s) suppliers and customers; (t) proxy statement, (u)
compliance with privacy laws, privacy policies and certain contracts, (v) compliance with health care laws and certain contracts, and
(w) related party transactions.
The
SPA contains representations and warranties of Seller with respect to, among other things, (a) organization, good standing and
qualification, (b) capital structure; (c) corporate authority, approval and fairness, (d) governmental filings, (e) litigation and proceedings,
and (f) brokers and finders.
The SPA also contains representations
and warranties of LAX with respect to, among other things, (a) reports; internal controls, (b) trust fund, (c) business activities
and liabilities, (d) certain laws such as the Investment Company Act and the JOBS Act, (e) purchaser trust account, (f)
NASDAQ Stock Market Quotation, (g) brokers and finders, and (h) taxes.
The
representations and warranties generally survive closing for a period of 15 months.
Covenants
The
SPA includes covenants of the EUDA Health and LAX with respect to operation of their respective businesses prior to consummation of the
Share Purchase and efforts to satisfy conditions to consummation of the Share Purchase. The SPA also contains additional covenants of
EUDA Health, LAX, and Seller, including, among others, access to inspect the books and records, claims against LAX’s trust account,
cooperation in the preparation of the Proxy Statement (as each such term is defined in the SPA) required to be filed in connection with
the Share Purchase, the holding of the Special Meeting (as defined in the SPA), cooperation and efforts to consummate the Share Purchase,
delivery of and revisions to the EUDA Health disclosure letter, publicity, the delivery of the amended and restated registration rights
agreement, expenses, sharing in payment of any Extension Payment (as defined in the SPA) and cooperating with respect to the Minimum
Round Lot Holders (as defined in the SPA). LAX also has additional covenants, including among others, covenants relating to its
trust account, indemnification and directors’ and officers’ insurance, inspections, LAX’s Nasdaq listing, LAX’s
public filings, post-closing board of directors and officers, indemnification agreements, governing documents and shareholder litigation.
Indemnification
The
Seller has agreed to indemnify each of LAX, EUDA Health, affiliates of LAX and EUDA Health from losses, liabilities, damages, costs,
payments, demands and related fees that the foregoing persons may suffer or incur as a consequence of, among other things, any
breach or inaccuracy of the representations or warranties of EUDA Health or the Seller contained in the SPA; any breaches of the covenants
of EUDA Health or the Seller contained in the SPA; and any breaches of privacy laws by or on behalf of EUDA Health or any of its subsidiaries.
However, the first $2,500,000 of the losses, liabilities, damages and other items stated in the preceding sentence is not subject to
indemnification.
The
Indemnification Escrow Shares withheld from the initial consideration and delivered to the Escrow Agent at Closing constitutes the sole
source of payment for items for which the Seller is obligated to provide indemnification. Claims for indemnification for breaches or
inaccuracies in the representations and warranties of EUDA Health contained in the SPA must be asserted within the 15 month period after
closing in which such representations survive.
Restrictions
on Alternative Transactions
Each
of Seller and LAX has agreed that from the date of the SPA until the Closing, it will not, among other things, (i) initiate any
negotiations with any person concerning an Acquisition Proposal or Alternative Transaction (as such terms are defined in the SPA), (ii)
enter into any agreement, letter of intent, memorandum of understanding or agreement in principle relating to such Acquisition Proposal
or Alternative Transaction, (iii) grant any waiver, amendment or release under any confidentiality agreement or anti-takeover laws, or
(iv) otherwise knowingly facilitate any such inquiries, proposals, discussions, or negotiations or any effort or attempt by any person
to make an Acquisition Proposal or Alternative Transaction.
Conditions
to Closing
The
consummation of the Share Purchase is conditioned upon, among other things, (a) the approval of the SPA and Share Purchase by LAX and
Seller’s shareholders, (b) all regulatory approvals having been obtained, (c) no laws or governmental orders that would
restrain, enjoin, make illegal or otherwise prohibit the consummation of the Share Purchase, (d) the Proxy Statement shall have
been cleared by the SEC and mailed, (e) the Escrow Agreement shall have been executed and delivered, (f) related transaction documents
shall have been delivered and in full force and effect, and (g) on a pro forma basis immediately as of the Closing, LAX having at least
$5,000,000 of net tangible assets.
Solely
with respect to LAX, the consummation of the Share Purchase is conditioned upon, among other things, (a) the representations and warranties
made by EUDA Health and the Seller are true and correct, (b) EUDA Health and the Seller shall have performed or complied in all
material respects with each of its obligations, (c) the Seller shall have delivered the Seller Release (as defined in the SPA), (d) the
aggregate cash of EUDA Health and its subsidiaries should equal or exceed $10,000,000, (e) Seller shall have executed and delivered to
LAX a lock-up agreement, (f) EUDA Health and the Seller shall have executed and delivered each related transaction document to which
they each are a party, (g) LAX shall have completed its due diligence on or before May 31, 2022, and be satisfied with the results, and
if not, LAX would have the right to terminate the SPA, and (h) the letter agreement with certain creditors of EUDA Health shall
have been entered into.
Solely
with respect to the Seller, the consummation of the Share Purchase is conditioned upon, among other things, (a) the representations and
warranties made by LAX are true and correct, (b) LAX shall have performed or complied in all material respects with its obligations,
(c) the officers and directors of LAX shall have resigned, (d) the Purchaser Shares issuable to Seller pursuant to the SPA shall have
been authorized for listing on Nasdaq, (e) LAX shall have executed and delivered each related transaction document to which it is a party,
(f) LAX shall have received the Fairness Opinion, and (g) LAX shall have completed its due diligence on or before May 31, 2022, and be
satisfied with the results of such due diligence.
Termination
The
SPA may be terminated at any time prior to the Effective Time as follows:
(a)
by mutual written consent of LAX and Seller;
(b)
by either LAX or Seller if (i) the Share Purchase and related transactions are not consummated on or before November 24, 2022 (as such
date may be extended by LAX, the “Outside Date”) ; provided, however, that the right to terminate the SPA shall not be available
to any party that has breached in any material respect its obligations set forth in the SPA in any manner that shall have proximately
contributed to the occurrence of the failure of a condition to the consummation of the Share Purchase), (ii) any law or final, nonappealable
governmental order shall have been enacted, issued, promulgated, enforced or entered that permanently restrains, enjoins or otherwise
prohibits consummation of the Share Purchase; provided that the right to terminate the SPA shall not be available to any party that has
breached any material respect its obligations set forth in the SPA in any manner that shall have proximately contributed to the enactment,
issuance, promulgation, enforcement or entry of such law or governmental order, and (iii) the approval by LAX shareholders shall not
have been obtained at a LAX meeting of shareholders;
(c)
by LAX if (i) either EUDA Health or Seller has breached any of its covenants or representations and warranties such that closing conditions
would not be satisfied and such breach is not curable prior to the Outside Date, or if curable prior to the Outside Date, has not been
cured by the earlier of (A) thirty (30) days after LAX has given written notice of such breach to the Seller, (B) three (3) business
days prior to the Outside Date, or (iii) the results of the due diligence are not satisfactory to LAX, or (ii) the Seller’s shareholders
have not approved the SPA and the Share Purchase;
(d)
by Seller if (i) LAX has breached any of its covenants or representations and warranties such that closing conditions would not be satisfied
and such breach is not curable prior to the Outside Date, or if curable prior to the Outside Date, has not been cured by the earlier
of (A) thirty (30) days after EUDA Health has given written notice of such breach to LAX, (B) three (3) business days prior to the Outside
Date, or (iii) the results of the due diligence are not satisfactory to Seller, or (ii) the LAX board of directors shall have publicly
withdrawn, modified or changed, in any manner adverse to EUDA Health, its recommendation with respect to any proposals set forth in the
Proxy Statement.
The
SPA and other documents described below have been included to provide investors with information regarding their respective terms. They
are not intended to provide any other factual information about LAX, EUDA Health, the Indemnified Party Representative or the Seller.
In particular, the assertions embodied in the representations and warranties in the SPA were made as of a specified date, are modified
or qualified by information in one or more disclosure letters prepared in connection with the execution and delivery of the SPA, may
be subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been used
for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the SPA are not necessarily
characterizations of the actual state of facts about LAX, EUDA Health, the Indemnified Party Representative or the Seller at the time
they were made or otherwise and should only be read in conjunction with the other information that LAX makes publicly available in reports,
statements and other documents filed with the SEC. LAX and EUDA Health’s investors are not third-party beneficiaries under the
SPA.
Ancillary
Agreements to the SPA
Lock-Up
Agreement.
In
connection with the Closing, the Seller will, subject to certain customary exceptions, not (i) offer, sell contract to sell, pledge or
otherwise dispose of, directly or indirectly, any Lockup Shares (as defined below), (ii) enter into a transaction that would have the
same effect, (iii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences
of ownership of the Lock-Up Shares or otherwise or engage in any short sales or other arrangement with respect to the Lock-Up Shares
or (iv) publicly announce any intention to effect any transaction specified in clause (i) or (ii) until the date that is 18 months after
the Closing Date (the “Lock-up Period”). The term “Lockup Shares” mean the Purchaser Shares and the Earnout Shares,
if any, delivered as earnout payment, whether or not earned prior to the end of the Lock-up Period, and including any securities convertible
into, or exchangeable for, or representing the rights to receive ordinary shares of LAX after the Closing.
The foregoing is a summary
only and does not purport to be a complete description of all of the terms, provisions, covenants, and agreements contained in the Lock-Up
Agreement, and is subject to and qualified in its entirety by reference to the full text of the form of the Lock-Up Agreement, which
is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference.
Amended
and Restated Registration Rights Agreement.
At
the closing, LAX will enter into an amended and restated registration rights agreement (the “Amended and Restated Registration
Rights Agreement”) with certain existing stockholders of LAX and with the Seller with respect to their shares of LAX acquired before
or pursuant to the Share Purchase, and including the shares issuable on conversion of the warrants issued to the Sponsor in connection
with LAX’s initial public offering and any shares issuable on conversion of working capital loans from Sponsor to LAX (collectively,
the “Registrable Securities”). The agreement amends and restates the registration rights agreement LAX entered into on November
22, 2021 in connection with its initial public offering. No later than seven (7) calendar days from the closing, the Company will file
with the SEC a registration statement on Form S-3 covering the resale of all or such maximum portion of the Registrable Securities as
permitted by the SEC. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting
from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing
of any such registration statements.
The foregoing is a summary
only and does not purport to be a complete description of all of the terms, provisions, covenants, and agreements contained in the Amended
and Restated Registration Rights Agreement, and is subject to and qualified in its entirety by reference to the full text of the form
of the Amended and Restated Registration Rights Agreement, which is filed herewith as Exhibit 10.2 to this Current Report on Form 8-K
and is incorporated into this Item 1.01 by reference.
Seller
Release.
The
Seller has agreed to release LAX, EUDA Health, and all of their respective past and present officers, directors, managers, stockholders,
members, employees, agents, predecessors, subsidiaries, affiliates, estates, successors, assigns, partners and attorneys (each, a “Released
Party”) to the maximum extent permitted by law, from any and all claims, obligations, rights, liabilities or commitments of any
nature whatsoever against LAX, EUDA Health, or any of the Released Parties, arising at or prior to the Closing, or related to any act,
omission or event occurring, or condition existing, at or prior to the Closing. The Seller does not release LAX, EUDA Health, or any
of the Released Parties from claims arising after the date of the Seller Release, any of the other ancillary agreements to the SPA, or
any organizational or governing documents or, of any indemnification agreements with, LAX or any of its subsidiaries.
The foregoing
is a summary only and does not purport to be a complete description of all of the terms, provisions, covenants, and agreements contained
in the Seller Release, and is subject to and qualified in its entirety by reference to the full text of the form of the Seller Release,
which is filed herewith as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference.