Item
1.01 Entry into a Material Definitive Agreement
Share
Purchase Agreement
As
previously announced, 8i Acquisition 2 Corp., a British Virgin Islands business company (“LAX”), entered into a Share
Purchase Agreement (the “SPA”) dated April 11, 2022, 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”). On May 30, 2022, the
parties amended the SPA (the “First Amendment”) to extend the time for LAX to complete its financial, operational
and legal due diligence review of EUDA Health from May 31, 2022 to June 15, 2022.
On
June 10, 2022, the parties to the SPA, as amended, entered into a second amendment of the SPA (the “Second Amendment”).
The
foregoing is a summary only and does not purport to be a complete description of all terms and provisions of the Second Amendment, and
is subject to and qualified in its entirety by reference to the full text of the Second Amendment, 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
Pursuant
to the Second Amendment, the initial consideration to be paid at closing (the “Closing”) of the Share Purchase (the
“Initial Consideration”) by LAX to Seller for the Share Purchase will be adjusted to an amount equal to $140,000,000.
The Initial Consideration will be payable in ordinary shares of LAX, no par value, (the “Purchaser Shares”) valued
at $10.00 per share. To secure Seller’s obligations under the indemnification provisions of the SPA, 1,400,000 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, and held by the Escrow Agent pursuant to an escrow agreement, by and
among LAX, Seller, and the Indemnified Party Representative.
Earnout
Payments
Pursuant
to the Second Amendment, in addition to the Initial Consideration, the Seller may also receive up to 4,000,000 additional Purchaser Shares
as an earnout payment (the “Earnout Shares”) if, during the period beginning on the date of Closing and ending on
December 31, 2024, the volume-weighted average price of Purchaser Shares (the “Purchaser Share Price”) equals or exceeds
any of four thresholds over any 20 trading days within a 30-day trading period under the terms and conditions set forth in the SPA and
related transaction documents:
●
The Seller will be issued 1,000,000 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 1,000,000 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);
●
The Seller will be issued 1,000,000 additional Purchaser Shares if the consolidated audited financial statements of EUDA Health for the
fiscal year commencing January 1, 2023 and ending December 31, 2023, reflect that EUDA Health has achieved both of the following financial
metrics for such fiscal year: (x) revenues of at least $20,100,000 and (y) net income attributable to EUDA Health of at least $3,600,000.
●
The Seller will be issued 1,000,000 additional Purchaser Shares if the consolidated audited financial statements of EUDA Health for the
fiscal year commencing January 1, 2024 and ending December 31, 2024, reflect that EUDA Health has achieved both of the following financial
metrics for such fiscal year: (x) revenues of at least $40,100,000 and (y) net income attributable to EUDA Health of at least $10,100,000.
Indemnification
The
Second Amendment expands the indemnification obligations of the Seller to indemnify each of LAX, EUDA Health and its subsidiaries and
affiliates, from certain losses, liabilities, damages, costs, payments and related fees. The expanded indemnification obligation includes
any failure by PT Bumi Lestori Melimpah, an Indonesian company, to pay Universal Gateway International Pt. Ltd., a subsidiary of EUDA
Health, Singapore Dollars $5,150,000 due under a mutual termination agreement dated March 1, 2021 and an addendum to such agreement dated
May 11, 2022. The expanded indemnification obligation of the Seller also indemnifies any failure by Kent Ridge Healthcare Singapore Limited
to keep insured for full insurable value in the joint names of Kent Ridge Healthcare Singapore and United Overseas Bank Limited certain
real and personal property against loss or damage by fire, lightening, burglary, riots and other risks determined by United Overseas
Bank Limited. The expanded indemnification obligations also includes any failure by EUDA Health and its subsidiaries to comply with Singapore
employment law. Finally, the expanded indemnification obligation of the Seller also includes any breach by either Kent Ridge Healthcare
Singapore Private Limited or Melana International Private Limited of their obligations under a Settlement Agreement dated May 23, 2022
with Jamie Fan Wei Zhi. The basket for certain indemnifications has also been reduced from $2,500,000 to $636,636.