OTHER
INFORMATION
SEC
Periodic Reports and Additional Information
The
Company is subject to the information and reporting requirements of the Exchange Act, and in accordance with the Exchange Act,
the Company files reports, documents and other information with the SEC. These reports and other information filed with the SEC
by the Company may be inspected and are available for copying at the public reference facilities maintained by the SEC at 100
F Street, N.E. Washington, D.C. 20549. Copies may be obtained at prescribed rates from the Public Reference Section of the SEC
at its principal office in Washington, D.C. The SEC also maintains an internet website that contains periodic and other reports,
proxy and information statements and other information regarding registrants, including the Company, that file electronically
with the SEC. The address of the SEC’s website is http://www.sec.gov.
The
Company’s Quarterly Reports on Form 10-Q can be accessed through the SEC’s website or are available from the Company,
without charge, by first-class mail or other equally prompt means of delivery following receipt of a written or oral request directed
to our Corporate Secretary, at ALSET EHOME INTERNATIONAL INC., 4800 Montgomery Lane, Suite 210, Bethesda, Maryland 20814, telephone:
(301) 971-3940.
Householding
of Materials
The
SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for
proxy materials with respect to two or more stockholders sharing the same address by delivering a single set of proxy materials
addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means
extra convenience for stockholders and cost savings for companies.
Some
banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements
and annual reports. This means that only one copy of our Information Statement may have been sent to multiple Company stockholders
in each household unless otherwise instructed by such Company stockholders. We will deliver promptly a separate copy of the Information
Statement to any Company stockholder upon written or oral request to our Corporate Secretary, at Alset EHome International Inc.,
4800 Montgomery Lane, Suite 210, Bethesda, Maryland 20814, telephone: (301) 971-3940. Any Company stockholder wishing to receive
separate copies of our proxy statement or annual report to Company stockholders in the future, or any Company stockholder who
is receiving multiple copies and would like to receive only one copy per household, should contact the Company stockholder’s
bank, broker, or other nominee record holder, or the Company stockholder may contact us at the above address and phone number.
Distribution
of the Information Statement
We
will make arrangements with brokerage firms and other custodians, nominees and fiduciaries who are record holders of our common
stock for the forwarding of this Information Statement to the beneficial owners of our common stock. We will reimburse these brokers,
custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of
the Information Statement.
Unaudited
Pro Forma Combined Financial Information
The
accompanying unaudited pro forma combined financial information have been prepared to present the balance sheets and statements
of operations of the Company to indicate how the consolidated financial statements of the Company might have looked like if the
acquisition of the control interest in APB and the transaction related thereto had occurred as of the beginning of the period
presented.
The
unaudited pro forma condensed combined balance sheet as of December 31, 2020 and statements of operations, for the twelve months
ended December 31, 2020 and 2019 are presented as if the acquisition of the control interest in APB had occurred on December 31,
2020. The unaudited combined pro forma financial statements of the Company for the years ended December 31, 2020 and 2019 are
included herein as Annex G.
These
pro forma condensed financial statements are presented for illustrative purposes only and are not intended to be indicative of
actual consolidated financial position and consolidated results of operations had the acquisition been in effect during the periods
presented, or of consolidated financial condition or consolidated results of operations that may be reported in the future.
Audited
Combined Financial Statements of APB
The
accompanying audited combined financial statements of APB have been prepared to present APB’s balance sheets as of December
31, 2020 and 2019 and statements of operations for the twelve months ended December 31, 2020 and 2019, respectively. The audited
financial statements of APB are included herein as Annex H.
DISCLOSURE
REGARDING FORWARD LOOKING STATEMENTS
This
Information Statement and the documents incorporated by reference into this Information Statement contain forward-looking statements
that are subject to risks and uncertainties. All statements other than statements of historical fact contained in this Information
Statement and the materials accompanying this Information Statement are forward-looking statements.
Frequently,
but not always, forward-looking statements are identified by the use of the future tense and by words such as ‘believes,”
“expects,” “anticipates,” “intends,” “will,” “may,” “could,”
“would,” “projects,” “continues,” “estimates,” or similar expressions. Forward-looking
statements are not guarantees of future performance and actual results could differ materially from those indicated by the forward-looking
statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our company
or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by the forward-looking statements.
The
forward-looking statements contained or incorporated by reference in this Information Statement are forward-looking statements
and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations
regarding our plans, intentions, beliefs or current expectations.
The
forward-looking statements included in this Information Statement are made only as of the date of this Information Statement.
The forward-looking statements are based on the beliefs of management, as well as assumptions made by and information currently
available to management and are subject to certain risks and uncertainties that could cause actual results to differ materially
from historical results of those anticipated. These uncertainties and other risk factors include, but are not limited to: the
possibility that we may fail to preserve our expertise in medical therapy and product research and development; that existing
and potential partners may opt to work with, or favor the products of, competitors if our competitors offer more favorable products
or pricing terms; that we may be unable to maintain or grow sources of revenue; that we may be unable to attain and maintain profitability;
that we may be unable to attract and retain key personnel; that we may not be able to effectively manage, or to increase, our
relationships with customers; that we may have unexpected increases in costs and expenses; and what effect the current COVID-19
pandemic may have on the Company. There is no guarantee that the Company will consummate the SPA on the desired terms as set forth
in the Proposal, in a timely manner or at all.
We
further caution investors that other factors might, in the future, prove to be important in affecting our results of operations.
New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the
impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements.
Forward-looking
statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in
this document are made as of the date of this document and we do not undertake any obligation to update forward-looking statements
to reflect new information, subsequent events or otherwise, except as required by law.
THE
ACTIONS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THE ACTIONS NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS INFORMATION STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
PLEASE
NOTE THAT THIS IS NEITHER A REQUEST FOR YOUR VOTE NOR A PROXY STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM
YOU OF THE ACTIONS THAT HAS BEEN APPROVED AND TO PROVIDE YOU WITH INFORMATION ABOUT THE ACTIONS AND OTHER RELEVANT BACKGROUND
INFORMATION.
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Sincerely,
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ALSET
EHOME INTERNATIONAL INC.
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By:
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/s/
Chan Heng Fai
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Name:
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Chan
Heng Fai
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Title:
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Chief
Executive Officer
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Annex
A
SECURITIES
PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
Heng Fai Ambrose Chan,
(Seller)
LiquidValue Development Pte Ltd.,
(LVD)
True Partners International Limited,
(TP
Holdco)
American Pacific Bancorp, Inc.
(APB)
AND
Alset EHome International Inc.
(formerly known as “HF
Enterprises Inc.”)
(Purchaser)
THIS SECURITIES PURCHASE/EXCHANGE AGREEMENT is made on the
12th day
of March, 2021.
BY AND AMONG:
(1)
Alset EHome International Inc. (fka,
HF Enterprises Inc.), a
Delaware company, the common stock of which is listed on the Nasdaq
Stock Market, having its primary office at 4800 Montgomery Lane,
Suite 210, Bethesda, Maryland 20814 (the “Purchaser”);
(2)
Heng Fai Ambrose Chan, a Singaporean
individual, with his primary residence at 8 Cuscaden Walk, #19-01,
Four Seasons Park, Singapore 249692 (the “Seller”);
(3)
True Partners International Limited
(“TP
Holdco”), a
company registered in Hong Kong with its primary office at 7 Floor,
Skyway Centre, 23 Queen's Road West Sheung Wan, Hong Kong , and
wholly-owned by the Seller;
(4)
LiquidValue Development Pte Ltd.
(“LVD”), a company registered in Singapore with
its primary office at 7 Temasek Blvd., #29-01B, Suntec Tower One,
Singapore 038987, and wholly-owned by the Seller; and
(5)
American Pacific Bancorp, Inc. a bank
holding corporation formed under the laws of the State of Texas
(the “APB”),
with its primary office at 4800 Montgomery Lane, Suite 210,
Bethesda, Maryland, USA 20814.
The
Purchaser, Seller, LVD and APB shall hereinafter be collectively
referred to as the “Parties”, and each a
“Party”.
WHEREAS:
(A)
At the date of this
Agreement, the Seller owns, directly and indirectly, 1,195,139,494
shares of Alset International Limited (“Alset”), a company formed under
the laws of Singapore and the common stock of which is listed on
the Singapore Catalist Exchange, stock code 40V and warrants to
purchase 1,576,925,000 shares of Alset’s common stock
(“2017
Warrants”).
(B)
Alset is a global
enterprise involved in real estate development, biomedical
business, and property and asset management in the United States
and Australia.
(C)
The Seller intends
to sell part of his 2017 Warrants to purchase 1,500,000,000 shares
(the “Sale
Warrants”) of
Alset’s common stock.
(D)
At the date of this
Agreement, the Seller owns 1,000,000 shares of LVD’s common
stock (the “LVD
Shares”), par value $ 1.00 SGD per share, which
constituted all of the issued and outstanding equity securities of
LVD.
(E)
At the date of this
Agreement, the Seller owns, directly and through his wholly-owned
subsidiary TP Holdco, an aggregate of 62,122,908 shares (the
“True Partners
Shares”) of common stock, no par value, of True
Partners Capital Holding Limited (“True Partners”), a fund management
company formed under the laws of Hong Kong, which manages its
customers’ accounts on a discretionary basis using a
proprietary trading platform. True Partners is incorporated under
the laws of the Cayman Islands with limited liability, which is
listed on the Growth Emerging Market (“GEM”) of the Stock Exchange of
Hong Kong, stock code 8657.
(F)
At the date of this
Agreement, the Seller owns 4,775,523 shares of the Class B common
stock of APB (the “APB
Shares”), par value $ 0.01 USD per share, and APB is a
bank holding company focused on acquiring positions in various
commercial banks in the United States and digitalizing the banks
with blockchain technologies.
(G)
Subject to and on
the terms of the conditions set forth under this Agreement, the
Seller has offered to sell, and the Purchaser has agreed to
purchase the Sale Warrants, LVD Shares, True Partners Shares, and
APB Shares for the respective considerations.
NOW IT IS AGREED as follows:
1.1
In this Agreement,
unless the context otherwise requires, the following words or
expressions shall have the following meaning:
“Agreement” means this Agreement
and schedules attached hereto, and include all variations and
supplements to the dame as may be agreed in writing between the
Parties from time to time;
“Business Day” means a day on which
commercial banks are open for business in the State of New York,
U.S. (other than Saturdays, Sundays, or public
holidays);
“Closing” means the completion of
the sale and purchase of the Sale Warrants, LVD Shares, True
Partners Shares and APB Shares (collectively, the
“Sale
Securities”);
“Closing Date” means the date of
this Agreement;
“Consideration” means the
consideration for the purchase of the Sale Securities, which is the
aggregate of the Alset CPN, LVD CPN, True Partners CPN and APB
CPN;
“Costs and Expenses” means all
costs and expenses related to the transactions contemplated under
this Agreement, including but not limited to legal costs incurred
in the preparation of this Agreement and the professional fees in
relation to the transactions contemplated under this
Agreement;
“GST” means goods and services tax
charged under the Goods and Services Tax Act, Chapter 117A of
Singapore;
“Nasdaq” means The Nasdaq Stock
Market;
“SGX-ST” means the Singapore
Exchange Securities Trading Limited;
“Singapore Dollars”,
“S$,”
“Cents” and
“SGD” mean the
lawful currency of Singapore;
“USD” means the lawful currency of
the United States.
“Taxation” means all forms of
taxation and statutory, government, state, provincial, local
governmental or municipal impositions, duties, contributions, and
levels, including any goods and services tax or other form of value
added tax and stamp duty in each case, whether of Singapore or
elsewhere in the world whenever imposed and whether chargeable
directly or primarily against or attributable directly or primarily
to each of Seller, LVD and APB, or any other person and all
penalties, charges, costs and interest relating thereto;
and
1.2
Any reference to a
statutory provision shall include such provision and any
regulations made in pursuance thereof as from time to time modified
or re-enacted whether before or after the date of this Agreement so
far as such modification or re-enactment applies or is capable of
applying to any transactions entered into prior to Closing and (so
far as liability hereunder may exist or can arise) shall include
also any past statutory provisions or regulations (as from time to
time modified or re-enacted) which such provisions or regulations
have directly or indirectly replaced.
1.3
References to
“Recitals” and
“Sections” are
to the recitals and the clauses of this Agreement.
1.4
Any reference to
include or including shall be deemed to be followed by without limitation or but
not limited to whether or not they are followed by such
phrases or words of like import.
1.5
Unless the context
otherwise requires, word (including words defined in this
Agreement) denoting the singular number only shall include the
plural and vice versa;
words denoting natural persons shall include bodies corporate, and
words denoting any gender shall include all genders;
and
1.6
The headings in
this Agreement are for convenience only and shall not affect the
construction of any provision in the Agreement.
1.7
Unless otherwise
expressly provided, all covenants, warranties, representations,
undertakings and indemnities given or made by each Party in this
Agreement are given or made severally.
2.1
Subject to the
terms and conditions contained in this Agreement, and in
consideration of the payment of the Warrant Purchase Price (as
defined below) to the Seller, the Seller, as beneficial owner of
Sale Warrants, shall sell and transfer to the Purchaser and the
Purchaser shall purchase from the Seller the Sale Warrants,
including all rights, dividends, entitlements and distributions
declared, made or paid on the Closing Date with respect to the Sale
Warrants. The Sale Warrants to purchase 1,500,000,000 shares of
Alset’s common stock were issued on March 22, 2017 to the
Seller, have the exercise price of $0.048 SGD per share, and shall
expire on March 21, 2022. The total purchase price for the Sale
Warrants (“Warrant Purchase
Price”) shall be the lower of i) the valuation of the
Sale Warrants appraised by a third party or ii) $28,363,966.42 USD,
payable on the Closing Date by the Purchaser, in a convertible
promissory note (“Alset
CPN”) attached as Exhibit A hereto, which,
subject to the terms and conditions of the Alset CPN and
Purchaser’s shareholder approval, shall be convertible into
shares of the Purchaser’s common stock (“AEI Common Stock”), par value
$0.001 per share, at the conversion price of AEI Stock Market
Price. AEI Stock Market Price shall be $5.59 per share, equivalent to the
average of the five closing per share prices of AEI Common Stock
preceding January 4, 2021 as quoted by Bloomberg L.P.
2.2
Subject to the
terms and conditions contained in this Agreement, and in
consideration of the payment of the LVD Share Purchase Price (as
defined below) to the Seller, the Seller, as beneficial owner of
the LVD Shares, shall sell and transfer to the Purchaser and the
Purchaser shall purchase from the Seller the LVD Shares, including
all rights, dividends, entitlements and distributions declared,
made or paid on the Closing Date with respect to the LVD Shares. On
the Closing Date, the Purchaser shall pay the Seller the total
purchase price (the “LVD
Share Purchase Price”) for the LVD Shares in the value
of $173,394.87 USD in a convertible promissory note
(“LVD CPN”)
attached as Exhibit
B hereto, which, subject to the terms and conditions of the
LVD CPN and Purchaser’s shareholder approval, shall be
convertible into shares of AEI Common Stock at the conversion price
of AEI Stock Market Price as set forth in Section 2.1.
2.3
Subject to the
terms and conditions contained in this Agreement, and in
consideration of the payment of the True Partners Share Purchase
Price (as defined below), the Seller shall sell and transfer to the
Purchaser all of the equity shares in TP Holdco, which holds
44,808,908 shares of True Partners, and simultaneously the Seller
shall sell and transfer to the Purchaser 17,314,000 shares of True
Partners, together with 44,808,908 shares of True Partners held by
TP Holdco constituting approximately 15.53% of the total
outstanding equity securities of True Partners based on 400,000,000
True Partners Shares issued and outstanding, including all rights,
dividends, entitlements and distributions declared, made or paid on
the Closing Date with respect to the True Partners Shares. True
Partners Stock Market Price was HKD 0.84 per share, equivalent to
the average of the closing per share prices during the five trading
days preceding January 4, 2021 as quoted by Bloomberg L.P. The
total consideration for the True Partner Shares is HKD52,183,242.72
or $6,729,629.29 (based on an exchange rate of $1 to HKD7.75425 as
of December 31, 2020). On the Closing Date, the Purchaser shall pay
the Seller the total purchase price (the “True Partners Share Purchase Price”) for the
True Partners Shares in the value of $6,729,629.29 USD in a
convertible promissory note (“True Partners CPN”) attached as
Exhibit C hereto,
which, subject to the terms and conditions of the True Partners CPN
and Purchaser’s shareholder approval, shall be convertible
into shares of AEI Common Stock at the conversion price of AEI
Stock Market Price.
2.4
Subject to the
terms and conditions contained in this Agreement, and in
consideration of the payment of the APB Share Purchase Price (as
defined below) to the Seller, the Seller, as beneficial owner of
the APB Shares, shall sell and transfer to the Purchaser and the
Purchaser shall purchase from the Seller the APB Shares,
representing 86.44% of the total issued and outstanding common
stock of APB, including all rights, dividends, entitlements and
distributions declared, made or paid on the Closing Date with
respect to the APB Shares. On the Closing Date, the Purchaser shall
pay the Seller the total purchase price (the “APB Share Purchase Price”) for the APB
Shares in the value equivalent to the lower of $28,653,138.00 USD
or the valuation of the APB Shares made by a third party, payable
in a convertible promissory note (“APB CPN”) attached as Exhibit D hereto, which,
subject to the terms and conditions of the APB CPN and
Purchaser’s shareholder approval, shall be convertible into
shares of AEI Common Stock at the conversion price of AEI Stock
Market Price.
2.5
The Seller and TP
Holdco agree and undertake to consummate the transfers and sales in
respect of the True Partner Shares, and the Seller has agreed to
procure from True Partners, as may be necessary before Closing,
irrevocable waiver of any such restrictions on transfer or sale of
True Partners Shares.
2.6
For the purposes of
this Agreement, each transaction (each, a “Transaction” and collectively, the
“Transactions”)
set forth in Sections 2.1-2.4 is independent from each other and
shall not be construed as conditions of any kind to another
Transaction under any circumstance. In the event that one or more
Transactions are terminated pursuant to Article 9 or are decided
illegal by a court of proper jurisdiction, the remaining
Transactions of the Agreement shall not in any way be affected or
impaired. The Parties shall implement and close the remaining
unaffected Transactions under this Agreement.
2.7
Subject to the
terms and conditions contained in this Agreement, on the Closing
Date, the Purchaser shall deliver to the Seller and TP Holdco the
sum of the Warrant Purchase Price, LVD Share Purchase Price, True
Partners Share Purchase Price, and APB Share Purchase Price in the
form of convertible promissory notes as set forth
above.
3.1
The obligations of
the Parties under this Agreement are conditional upon, and Closing
shall not take place until, all of the following conditions have
been fulfilled or waived on or prior to the Closing
Date:
(i)
The Seller
obtaining the necessary approval(s) from the board of directors of
LVD regarding the sale of LVD Shares as contemplated herein, if
required by LVD’s charter documents;
(ii)
The Seller
obtaining the necessary approval(s) and consents from the board of
directors of APB and relevant banking regulatory authorities
regarding the sale of APB Shares as contemplated
herein;
(iii)
The Purchaser
obtaining all relevant approvals from its board of directors,
shareholders and the Nasdaq in connection with this Agreement and
the transactions contemplated therein as may be
necessary;
(iv)
The Parties
executing the share transfer forms in relation to the Sale
Warrants, LVD Shares, True Partners Shares and APB Shares in favor
of the Purchaser and/or its designated parties;
(v)
Each of the
warranties and representations set forth in this Agreement
remaining true and not misleading in any material respect at
Closing, as if repeated at Closing and at all times between the
date of this Agreement and Closing; and
(vi)
All necessary third
party, governmental and regulatory consents, approvals and waivers,
including approvals, waivers and clearance from the Singapore Stock
Exchange and Nasdaq, where required for the transactions
contemplated hereunder having been obtained by each of the Parties,
and such consents, approvals and waivers not having been amended or
revoked before Closing Date, and if any such consents, approvals or
waivers are subject to conditions, such conditions being acceptable
to the Purchaser.
3.2
At any time on or
before the Closing Date, a Party may waive any of the above
conditions precedent by written notice to the other Parties (as the
case may be) to the extent that such waiver does not violate any
applicable laws, rules, or regulations.
4.
REPRESENTATIONS
AND WARRANTIES FROM THE SELLER
The
Seller hereby warrants and represents to the Purchaser and its
successors that, except as set forth on the Schedule of Exceptions
delivered by the Seller to the Purchaser; and it being further
understood that the Schedule of Exceptions will be updated from
time to time for events that occur between execution of this
Agreement and Closing and a final copy of the Schedule of
Exceptions will be delivered to the Purchaser prior to the
Closing:
4.1
Capacity.
The Seller has full legal right, power and all authority and
approvals required to enter into exercise its respective rights and
perform or comply with its respective obligations under this
Agreement which, when fully executed, will constitute valid and
legally binding obligations on the Seller, enforceable against them
in accordance with terns of this Agreement.
4.2
Compliance.
Except as set forth in Section 4.2 of the Schedule of Exceptions,
the Seller’s entry into, exercise of its rights and/or
performance of or compliance with its obligations under this
Agreement do not and will not violate, or exceed any power or
restriction granted or imposed by:
(i)
any law,
regulation, authorization, directive or order (whether or not
having the force of law) to which it is subject in Singapore and
the United States, as may be applicable; or
(ii)
any agreement,
instrument or document to which it is a party or which is binding
on in Singapore, the Hong Kong Special Administrative Region of the
People’s Republic of China (“Hong Kong”) or the
United States, as may be applicable.
4.3
Good Title.
As of the date of this Agreement, Seller, either directly or
through TP Holdco, is the sole beneficial owner of the Sale
Warrants, LVD Shares, True Partners Shares, and APB Shares, free
and clear of liens, and with full rights and authority to assign,
sell and transfer all of the same.
4.4
Absence of
Litigation and Bankruptcy. Except as set forth on Section
4.4 of the Schedule of Exceptions, there are no suits, claims,
actions, proceedings, arbitrations, mediations or, to the Knowledge
of Seller, governmental investigations (“Seller
Proceedings”) pending or, to the Knowledge of Seller,
threatened against Seller, other than any Seller Proceeding that
would not, or would not reasonably be expected to, individually or
in the aggregate, have a Material Adverse Effect on Seller. Neither
Seller nor any of its properties is or are subject to any order,
writ, judgment, injunction, decree or award except for those that
would not, or would not reasonably be expected to, individually or
in the aggregate, have a Material Adverse Effect on the
transactions contemplated herein. As of the date hereof and Closing
Date, the Seller shall not be subject to any bankruptcy,
insolvency, reorganization or liquidation proceedings or other
similar proceedings, commenced voluntarily or
involuntarily.
4.5
Investment
Experience. The Seller acknowledges that it can bear the
economic risk and complete loss of its investment in the AEI Common
Stock and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and
risks of the investment contemplated hereby.
4.6
Disclosure of
Information. The Seller and its advisors, if any, have been
furnished with all materials relating to the business, finances and
operations of the Purchaser and materials relating to the shares of
AEI Common Stock that have been requested by the Seller. The Seller
understands that its investment in the shares of AEI Common Stock
involves a high degree of risk. The Seller has sought such
accounting, legal and tax advice as he has considered necessary to
make an informed investment decision with respect to its
acquisition of the shares of AEI Common Stock.
4.7
Restricted
Securities. The Seller understands that the shares of AEI
Common Stock to be issued upon conversion of any of the Alset CPN,
LVD CPN, True Partners CPN, and APB CPN (collectively, the
“CPNs”) in
connection with the Transactions are characterized as
“restricted securities” under the U.S. federal
securities laws inasmuch as they are being acquired from the
Purchaser in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may be
resold without registration under the Securities Act only in
certain limited circumstances. The Seller understands that the
shares of AEI Common Stock are being offered and sold to it in
reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the
Purchaser is relying in part upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understanding of Purchaser set forth herein in order to determine
the availability of such exemptions and the eligibility of Seller
to acquire such securities.
4.8
Legends. It
is understood that, except as provided below, certificates
evidencing the shares of AEI Common Stock may bear the following or
any similar legend:
(a)
“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED
BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT.”
(b)
If required by the authorities of any state in connection with the
issuance of sale of the shares of AEI Common Stock, the legend
required by such state authority.
4.9
Accredited Investor Status.
The Seller is an
“accredited investor” as that term is defined in Rule
501(a) of Regulation
D.
5.
REPRESENTATIONS
AND WARRANTIES FROM LVD, APB AND TP HOLDCO Each of LVD, APB
and TP Holdco hereby, severally but not jointly, warrants and
represents to the Purchaser and its successors that, except as set
forth on the Schedule of Exceptions delivered by the LVD, APB or TP
Holdco to the Purchaser; and it being further understood that the
Schedule of Exceptions will be updated from time to time for events
that occur between execution of this Agreement and Closing and a
final copy of the Schedule of Exceptions will be delivered to the
Purchaser prior to the Closing:
5.1
Corporate
Organization and Capacity. Each of LVD, APB and TP Holdco is
a company duly organized and validly existing under the laws of
Singapore, Texas and Hong Kong, respectively, and has all the
requisite corporate power and lawful authority to enter into this
Transaction. Each of LVD, APB and TP Holdco has full legal right,
power and all authority and approvals required to enter into
exercise its respective rights and perform or comply with its
respective obligations under this Agreement which, when fully
executed, will constitute valid and legally binding obligations on
LVD, APB and TP Holdco, enforceable against them in accordance with
terns of this Agreement.
5.2
Compliance.
LVD and APB’s entry into, exercise of its rights and/or
performance of or compliance with its obligations under this
Agreement do not and will not violate, or exceed any power or
restriction granted or imposed by:
(i)
any law,
regulation, authorization, directive or order (whether or not
having the force of law) to which it is subject in Singapore and
the United States, as may be applicable; or
(ii)
any agreement,
instrument or document to which it is a party or which is binding
on in Singapore or the United States, as may be
applicable.
5.3
Board
Approval. Each of LVD and APB has obtained the approval of
its respective board of directors for the Transactions contemplated
under this Agreement.
5.4
Articles of
Incorporation and Bylaws. Each of LVD and APB has heretofore
furnished or otherwise made available to Purchaser a complete and
correct copy of their respective articles of incorporation (the
“Articles of Incorporation”) and bylaws (the
“Bylaws”) as in effect on the date hereof and all
minutes of their respective board of directors since January 1,
2020. Each set of Articles of Incorporation and Bylaws of each of
LVD and APB are in full force and effect and no other
organizational documents are applicable to or binding upon each of
LVD and APB.
5.5
Capitalization.
The authorized capital stock of LVD consists of 1,000,000 shares of
common stock, par value $1.00 SGD per share. As of the date of this
Agreement: (i) 1,000,000 shares of LVD’s common stock were
issued and outstanding, all of which were validly issued, fully
paid and non-assessable and were issued free of preemptive rights,
(ii) none of LVD’s common shares were reserved for issuance
upon or otherwise deliverable in connection with the grant of
equity-based awards or the exercise of outstanding options or
warrants to purchase LVD Shares or other rights to receive any
LVD’s common shares.
The
authorized capital stock of APB consists of 100,000,000 shares of
Class A common stock, par value $0.01 USD per share; 100,000,000
shares of Class B common stock, par value $0.01 USD per share; and
100,000,000 shares of preferred stock, par value $0.01 USD per
share. As of the date of this Agreement: (i) 491,665 of APB’s
Class A common shares, 5,033,123 of APB’s class B common
shares and 491,665 APB’s preferred shares were issued and
outstanding, all of which were validly issued, fully paid and
non-assessable and were issued free of preemptive rights, (ii) none
of APB’s common shares were reserved for issuance upon or
otherwise deliverable in connection with the grant of equity-based
awards or the exercise of outstanding options or warrants to
purchase APB’s common shares or other rights to receive any
APB’s common shares.
The
authorized capital stock of TP Holdco consists of 10,000 shares of
common stock, par value HKD1 per share. As of the date of this
Agreement: (i) one (1) share of TP Holdco’s common stock were
issued and outstanding, all of which were validly issued, fully
paid and non-assessable and were issued free of preemptive
rights.
5.6
Financial
Statements. Each of LVD and APB
shall promptly provide to the Purchaser its audited consolidated
financial statements (including any related notes thereto) for the
fiscal years ended December 31, 2020 and 2019 (the “LVD
Audited Financial Statements” and “APB Audited
Financial Statements” respectively) which have been prepared
in accordance with GAAP and Regulation S-X for interim financial
statements in all material respects applied on a consistent basis
throughout the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the
consolidated financial position of each of LVD and APB at the
respective dates thereof and the consolidated statements of
operations, cash flows and changes in stockholders’ equity
for the periods indicated therein. LVD’s and APB’s
Interim Financial Statements, to be provided to the Purchaser, will
have been prepared in accordance with GAAP and Regulation S-X for
interim financial statements in all material respects applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and will fairly present in all
material respects the consolidated financial position of each of
LVD and APB as of the respective dates thereof and the consolidated
statements of operations and cash flows for the periods indicated
therein (subject to normal period-end adjustments). Prior to and
after the Closing, each of LVD and APB shall coordinate with the
Purchaser to prepare the LVD Audited Financial Statements and APB
Audited Financial Statements, as applicable, and the respective
Interim Financial Statements to meet the Purchaser’s
obligations under Regulation S-X,
5.7
Absence of
Litigation. Except as set forth on Section 5.7 of the
Schedule of Exceptions, there are no suits, claims, actions,
proceedings, arbitrations, mediations or, to the Knowledge of LVD
or APB, as applicable, governmental investigations (“LVD
Proceedings” or “APB Proceedings” respectively)
pending or, to the Knowledge of LVD or APB, threatened against each
of LVD or APB, as applicable, or any of its respective
Subsidiaries, other than any LVD Proceeding or APB Proceeding that
would not, or would not reasonably be expected to, individually or
in the aggregate, have a Material Adverse Effect. Neither LVD nor
APB (including their respective Subsidiaries) is subject to any
order, writ, judgment, injunction, decree or award except for those
that would not, or would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse
Effect.
5.8
Properties.
Section 5.8 of the Disclosure Schedule contains a complete and
correct list of all real property owned or leased by each of LVD
and APB and their respective Subsidiaries (the “LVD
Property” and “APB Property” respectively). Each
of LVD and APB and their respective Subsidiaries have good and
valid leasehold interests in all of their respective Property owned
and leased. With respect to all leased properties of each of LVD
and APB, there is not, under any of such leases, any existing
default by each of LVD or APB, as applicable, or any of their
Subsidiaries or, to the Knowledge of each of LVD or APB, as
applicable, the counterparties thereto, or event which, with notice
or lapse of time or both, would become a material default by either
LVD or APB, or any of their respective Subsidiaries or, to the
Knowledge of each of LVD and APB, the counterparties thereto. All
of the LVD Properties and APB Properties are maintained in a state
of repair and condition that is consistent with the normal conduct
of the business operations of each of LVD and APB.
5.9
Intellectual
Property. Except as set forth in Section 5.9 of the Schedule
of Exceptions, to the Knowledge of each of LVD and APB, each of LVD
and APB or one of their respective Subsidiaries (as specifically
identified on Schedule 5.9) is the sole and exclusive (as to any
third party) owner or assignee of the entire right, title and
interest in and to the Intellectual Property set forth on Section
5.9(a) of the Disclosure Schedule and all other Intellectual
Property material to and used in their respective businesses, and
is licensed perpetually and without royalty or other payment
obligations to third parties to the Intellectual Property set forth
on Section 5.9(b) of the Disclosure Schedule. Each of LVD and APB
or such Subsidiary owns or has the rights to use, free and clear of
any security interests, liens, claims, pledges, agreements,
limitations in voting rights, charges or other encumbrances of any
nature whatsoever (“Liens”), but subject to any
existing licenses or other grants of rights to third parties (to
the extent set forth in the Disclosure Schedule), all material
Intellectual Property as is necessary and sufficient (i) for its
businesses as currently conducted and (ii) for the services
provided respectively by each of LVD and APB and their Subsidiaries
(collectively, the “LVD Intellectual Property Rights”
and “APB Intellectual Property Rights”). As used in
this Agreement, “Intellectual Property” means all
patents, inventions, copyrights, software, trademarks, service
marks, domain names, trade dress, trade secrets and all other
intellectual property and intellectual property rights of any kind
or nature. For purposes of this Agreement, the term
“patents” means United States and non-U.S. patents
(utility or design, as applicable), provisional patent
applications, non-provisional patent applications, continuations,
continuations-in-part, divisions, any such patents resulting from
reissue, reexamination, renewal or extension (including any
supplementary protection certificate) of any patent, patent
disclosures, substitute applications, and any confirmation patent
or registration patent or patent of addition based on any such
patent, and all foreign counterparts of any of the
foregoing.
5.10
Contracts.
Except as set forth otherwise in this Agreement, as of the date of
this Agreement, Section 5.10 of Disclosure Schedule lists all of
the Material Contracts to which each of LVD and APB, as applicable,
or any of their respective Subsidiaries thereof is a party. Each of
the Material Contracts is valid and binding on either LVD or APB,
as applicable, or the applicable Subsidiary, as the case may be,
and, to the Knowledge of each of LVD and APB, as the case may be,
each other party thereto and is in full force and effect, except
for such failures to be valid and binding or to be in full force
and effect as would not, or would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on
either LVD or APB. There is no default under any Material Contract
and no event has occurred that with the lapse of time or the giving
of notice or both would constitute a default thereunder by either
LVD or APB or any of their respective Subsidiaries, in each case
except as would not, or would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse
Effect.
6.
REPRESENTATIONS
AND WARRANTIES FROM THE PURCHASER
6.1
Corporate
Organization and Capacity. The Purchaser is a company duly
organized and validly existing under the laws of the State of
Delaware and has all the requisite corporate power and lawful
authority to enter into this Transaction. When fully, this
Agreement will constitute valid and legally binding obligations on
the Purchaser, enforceable against them in accordance with terns of
this Agreement.
6.2
Compliance.
Except as set forth in Section 6.2 of the Schedule of Exceptions,
the Purchaser’s entry into, exercise of its rights and/or
performance of or compliance with its obligations under this
Agreement do not and will not violate, or exceed any power or
restriction granted or imposed by:
(i)
any law,
regulation, authorization, directive or order (whether or not
having the force of law) to which it is subject in Singapore and
the United States, as may be applicable; or
(ii)
any agreement,
instrument or document to which it is a party or on which is
binding in the United States, as may be applicable.
6.3
Board
Approval. Subject to its shareholder approval, the Purchaser
has obtained the approval of its board of directors for the
transactions contemplated under this Agreement.
6.4
Capitalization.
(a) The authorized capital stock of Purchaser consists of
25,000,000 shares, of which 20,000,000 shares are common stock, par
value $0.001 per share (the “Purchaser Common Stock”),
and 5,000,000 shares are preferred stock, par value $0.001 per
share (the “Purchaser Preferred Stock”). As of December
29, 2020, the Purchaser had (i) 8,570,000 shares of Purchaser
Common Stock issued and outstanding, all of which were validly
issued, fully paid and non-assessable and were issued free of
preemptive rights, (ii) 0 share of Parent Common Stock reserved for
issuance upon or otherwise deliverable in connection with the grant
of equity-based awards or the exercise of outstanding options and
warrants to purchase Parent Common Stock, and (iii) 0 share of
Purchaser Preferred Stock issued and outstanding.
6.5
SEC Filings;
Financial Statements. Purchaser has filed or otherwise
transmitted all forms, reports, statements, certifications and
other documents (including all exhibits, amendments and supplements
thereto) required to be filed or otherwise transmitted by it with
the SEC) during the past twelve months. As of their respective
dates, each of the SEC Reports complied as to form in all material
respects with the applicable requirements of the Securities Act and
the rules and regulations promulgated thereunder and the Exchange
Act and the rules and regulations promulgated thereunder, each as
in effect on the date so filed. Except to the extent amended or
superseded by a subsequent filing with the SEC made prior to the
date hereof, as of their respective dates (and if so amended or
superseded, then on the date of such subsequent filing), none of
the SEC Reports contained any untrue statement of a material fact
or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
The
audited consolidated financial statements of Purchaser (including
any related notes thereto) included in Purchaser’s
Registration Statement on Form S-1, as amended, for the fiscal
years ended December 31, 2019 and 2018 filed with the SEC have been
prepared in accordance with GAAP in all material respects applied
on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Purchaser
at the respective dates thereof and the consolidated statements of
operations, cash flows and changes in stockholders’ equity
for the periods indicated therein. The unaudited consolidated
financial statements of Purchaser (including any related notes
thereto) for all interim periods included in Purchaser’s
Registration Statement and quarterly report on Form 10-Q filed with
the SEC on December 29, 2020 have been prepared in accordance with
GAAP in all material respects applied on a consistent basis
throughout the periods involved (except as may be indicated in the
notes thereto or may be permitted by the SEC under the Exchange
Act) and fairly present in all material respects the consolidated
financial position of Purchaser as of the respective dates thereof
and the consolidated statements of operations and cash flows for
the periods indicated therein (subject to normal period-end
adjustments).
7.
UNDERTAKING,
ACKNOWLEDGEMENT AND CONFIRMATION BY THE PARTIES
The
Parties further irrevocably undertake, acknowledge, confirm and
agree that
(i)
Subsequent to
Closing, the Purchaser shall procure each of APB and LVD to provide
full and prompt cooperation and assistance to the Seller and its
auditors and/or internal auditors with any audit, consolidation
and/or accounting matters of the Seller by the Seller’s
auditors and/or internal auditors; and
(ii)
From the date of
this Agreement to Closing, each of LVD and APB covenants and agrees
that, except as contemplated by this Agreement, as set forth in the
Schedule of Exceptions or as required by Law, or unless Purchaser
shall otherwise consent in writing (such consent not to be
unreasonably conditioned, withheld or delayed), the business of
each of LVD and APB and their respective Subsidiaries shall be
conducted in its ordinary course of business and, to the extent
consistent with and not in violation of any other provisions of
this Section 7, each of LVD and APB shall use commercially
reasonable efforts to preserve substantially intact their and their
respective Subsidiaries’ business organization, and to
preserve their and their respective Subsidiaries’ present
relationships with customers, suppliers, employees, licensees,
licensors, partners and other Persons with which each of LVD and
APB or any of their respective Subsidiaries has significant
business relations. To the extent out of each of LVD’s and
APB’s ordinary course of business and subject to the
foregoing, from the date of this Agreement to Closing the Seller is
not required to advance any additional capital to fund the
expansion of each of LVD’s and APB’s businesses,
provided that each of LVD and APB can conduct their respective
businesses in an ordinary manner without such funding from
Seller.
8.1
Subject to Section
3.1, Closing shall take place at such other place as the Parties
may agree.
8.2
On Closing, the
Seller, LVD and APB shall deliver to the Purchaser:
(i)
Valid securities
certificates in respect of the Sale Warrants, LVD Shares, True
Partners Shares (including through TP Holdco), and APB Shares in
the name of the Seller;
(ii)
Duly certified
copies of board resolution of each of LVD and APB,
approving:
(a)
the transfer of LVD
Shares and APB Shares, as applicable, subject to the same being
duly stamped if necessary;
(b)
the affixation of
the LVD’s common seal and APB’s seal, as the case may
be(where required);
(c)
the issue of new
securities certificates in respect of each of LVD Shares and APB
Shares, as applicable, in favor of the Purchaser; and
(d)
updating the
shareholder or member registration of each of LVD and APB, as the
case may be.
(iii)
Such waivers or
consents as may be necessary to enable the Purchaser or its
nominees to be registered as holder of any and all of the Sale
Warrants, LVD Shares, True Partners Shares (including through TP
Holdco) and APB Shares (collectively, the “Sale
Securities”);
(iv)
Filing with local
Singapore agency, Hong Kong agency and the Secretary of the State
of Texas regarding the Transaction and change of ownership of the
Sale Securities, if applicable;
(v)
Stock power or
transfer documents in that nature from the Seller to transfer the
Sale Securities to the Purchaser; and
(vi)
Such other
customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to
Purchaser, as may be required to give effect to this
Agreement.
8.3
On Closing,
Purchaser shall deliver to the Seller:
(i)
the payment of
Warrant Purchase Price, LVD Share Purchase Price, True Partners
Share Purchase Price and APB Share Purchase Price in the form of
respective convertible promissory notes as set forth in Article
2;
(ii)
Purchaser’s
board resolution approving the Transactions contemplated in this
Agreement; and
(iii)
such other
customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to Seller,
LVD and APB, as may be required to give effect to this
Agreement.
9.1
Rescission. This Agreement may be
terminated or rescinded by the following Parties by written notice
to the other Parties within ninety (90) days after Closing as
follows:
(i)
At the election of
the Seller, if the Purchaser has breached any representation,
warranty, covenant or agreement contained in this Agreement;
or
(ii)
At the election of
the Purchaser, if the Seller, LVD or APB has breached any
representation, warranty, covenant or agreement contained in this
Agreement.
9.2
Effect of
Rescission. In the event of the termination or rescission of
this Agreement pursuant to Section 9.1, this Agreement shall
forthwith become void and there shall be no liability or obligation
on the part of any party hereto, except with respect to Articles
10- 20, which shall survive such rescission; provided, however, that nothing herein
shall relieve or release any party from liabilities or damages arising out of fraud or its
material and intentional breach of any provision of this
Agreement.
10.1
Each Party shall
keep strictly confidential the negotiations relating to this
Agreement, the existence of this Agreement and its contents, and
each Party shall not disclose the same to any other person without
the prior written consent of the other Party, other than to its
holding company, its directors, key employees and advisers and the
directors, employees and advisers of its holding company on a
strictly need to know basis or when required under the rules and
regulations of the SGX-ST, Nasdaq and other applicable laws or
regulations of Singapore, the United States, and Hong
Kong.
10.2
Save as provided in
this Article 9, no press release or public announcement relating to
any matter in this Agreement shall be issued or made by or on
behalf of any Party without the written consent of the other
Parties, save for any press release or public announcement required
under the rules and regulations of the SGX-ST and Nasdaq and other
applicable laws or regulations of Singapore and the United
States.
10.3
All communication
among the Parties, all information and other material supplied to
or received by any of them from the other which is either
designated confidential or by its nature intended to be
confidential, and all information concerning the business
transactions or the financial arrangements of the Parties shall be
kept confidential by the recipient unless or until it is or part of
it is in the public domain (save where such information has become
known to the public by reason of any willful or negligent act or
omission of the recipient Party or its representatives), whereupon
to the extent that it is publicly available, the obligation under
this clause shall cease.
10.4
The Parties
acknowledge that they shall be entitled to make press releases and
announcements on the SGX-ST or Nasdaq relating to the subject
matter of the Agreement upon the execution of this
Agreement.
10.5
Nothing herein
shall in any way restrict or prohibit the Parties from complying
with any disclosure obligation prescribed by any relevant
applicable law.
None of
the Parties may assign or transfer all or part of its rights or
obligations under this Agreement without the prior written consent
of the other Parties.
Any
time or period mentioned in any provision of this Agreement may be
extended by mutual agreement between the Parties in writing hereto
but as regards any time, date or period originally fixed or any
time, date or period so extended as aforesaid, time shall be of the
essence.
13.1
Each Party shall
bear and be responsible for its respective Costs and Expenses
incurred in relation to the negotiation, preparation and
implementation of this Agreement.
13.2
Notwithstanding
Section 13.1 above, any stamp duty payable on the sale and purchase
of the Sale Securities shall be borne by the
Purchaser.
13.3
Notwithstanding
Section 13.1 above, in the event that Taxation is chargeable
pursuant to any of the Transactions contemplated under this
Agreement and/or any internal restructuring undertaken by the
Target prior to the transactions contemplated under this Agreement,
the Taxation shall be borne by the Seller together with any penalty
or interest incurred for late payment of such
Taxation.
Any
notice, communication or demand required to be given, made or
served under this Agreement shall be in writing in the English
language and delivered by hard or sent by prepaid registered post
or by fax or telex to the intended recipient thereof at the
following address or fax number or to such other address or fax
number as may from time to time be notified (in accordance with
this clause) by the relevant Party to the other Party:
|
Purchaser:
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Alset
EHome International Inc.
Attention:
Rongguo Wei
Address:
4800 Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Email:
ronald@alsetinternational.com
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Seller
and TP Holdco:
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Heng
Fai Ambrose Chan
Address:
7 Temasek Blvd., # 29-01B, Suntec Tower One, Singapore
038987
Email:
fai@alsetinternational.com
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LVD:
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LiquidValue
Development Pte Ltd.
Attn:
Danny Lim
Address:
7 Temasek Blvd., #29-01B, Suntec Tower One, Singapore
038987
Email:
danny@alsetinternational.com
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|
|
|
|
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APB:
|
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American
Pacific Bancorp, Inc.
Attention:
Rongguo Wei
Address:
4800 Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Email:
ronald@alsetinternational.com
|
Any
such notice, communication or demand shall be deemed to have been
duly served (if given or made by electronic mail) immediately on
such transmission or (if given or made by letter) two days after
posting and in proving the same, it shall be sufficient to produce
the email.
The
Parties shall execute and do and procure all other persons if
necessary, to execute and do all such further deeds, assurances,
acts and things as may be reasonably required whether before or
after Closing so that full effect may be given to the terms and
conditions of this Agreement.
The
illegality, invalidity or unenforceability of any provision of this
Agreement under the law of any jurisdiction shall not affect its
legality, validity or enforceability under the law of any other
jurisdiction nor the legality, validity or enforceability of any
other provision.
This
Agreement may be entered into by the Parties in separate
counterparts, each of which when so executed shall be an original,
but all counterparts shall together constitute one and the same
document. Signatures may be exchanged by facsimile or by electronic
mail, in which case it shall be given at the time it left the
e-mail gateway of the server of the notice. Each Party agrees to be
bound by its own facsimile or email and that it accepts the
facsimile or email signature of the other Party.
18.
ENTIRE
AGREEMENT AND MODIFICATIONS
18.1
This Agreement
constitutes the entire agreement between the Parties with respect
to the transactions contemplated in this Agreement and supersedes
all prior oral and written agreements, term sheets, memoranda,
understandings, undertakings, representations and warranties
between the Parties relating to the subject matter of this
Agreement.
18.2
Each Party
acknowledges to the other (and shall execute this Agreement and any
documents in the agreed form in reliance on such acknowledgement)
that it has not been induced to enter into any such documents by
nor relied on any representation or warranty other than the
representations and/or warranties as contracted
herein.
18.3
No amendment or
variation of this Agreement shall be effective unless so amended or
varied in writing and signed by or on behalf of each of the
Parties.
Nothing
in this Agreement is intended to grant to any third party any right
to enforce any term of this Agreement or to confer on any third
party any benefits under this Agreement.
20.
GOVERNING
LAW AND JURISDICTION
20.1
This Agreement
shall be governed by and construed in accordance with the law of
the State of New York, the United States.
20.2
Subject to Section
20.3 below, in relation to any legal action or proceeding arising
out of or in connection with this Agreement (“Proceedings”), the Parties hereby
irrevocably submit to the non-exclusive jurisdiction of the courts
in the State of Maryland and waive any objection to Proceedings in
any such court on the grounds of venue or on the grounds that the
Proceedings have been brought in an inconvenient
forum.
20.3
Notwithstanding
Section 20.2 above, submission shall not affect the right of the
Purchaser to take Proceedings in any jurisdiction nor shall the
taking of Proceedings in any jurisdiction preclude the Purchaser
from take Proceedings in any other jurisdiction.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE
PAGE TO THE SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective
officers thereunto duly authorized.
THE PURCHASER
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Alset EHome International Inc.
(fka, HF
Enterprises Inc.)
|
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By: /s/ Ang Hay
Kim
Name: Ang Hay
Kim
Title: Director
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THE SELLER
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Heng Fai Ambrose Chan
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By: /s/ Heng Fai
Ambrose Chan
Name: Heng Fai Ambrose
Chan
Title: Individual
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True Partners International Limited
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By: /s/ Heng Fai
Ambrose Chan
Name: Heng Fai Ambrose
Chan
Title: Sole
Shareholder
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LiquidValue Development Pte Ltd.
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By: /s/ Heng Fai
Ambrose
Chan
Name: Heng Fai Ambrose
Chan
Title: Director
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American Pacific Bancorp, Inc.
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By: /s/ Heng Fai
Ambrose Chan
Name: Heng Fai Ambrose
Chan
Title: Chairman of the
Board
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Disclosure Schedule
Section
5.8 LVD’s and APB’s Real Estate
LVD:
Owned:
None
Leased:
None
APB:
Owned:
None
Leased:
None
Section
5.9 LVD’s and APB’s Intellectual
Properties
LVD:
(b)
Exclusively
licensed: None
APB:
(b)
Exclusively
licensed: None
Section
5.10 LVD’s and APB’s Material Contracts
LVD:
Not Applicable
APB:
Not Applicable
Schedule of Exceptions
Section
4.2 Seller’s Compliance
Not
Applicable
Section
4.4 Seller’s Litigation
Not
Applicable
Section
5.7 LVD’s and APB’s Litigation
LVD:
Not Applicable
APB:
Not Applicable
Section
5.9 LVD’s and APB’s Intellectual Properties with
Restrictions
LVD:
Not Applicable
APB:
Not Applicable
Section
6.2 Purchaser’s Compliance
Not
Applicable
Annex
B
Convertible
Promissory Note for Purchase of 2017 Warrants
Alset EHome International Inc.
(fka, HF Enterprises Inc.)
2% conditional convertible Promissory Note
|
Principal Amount: $28,363,966.42 U.S. Dollars
|
Issuance
Date: March 12, 2021
|
|
|
|
|
|
FOR VALUE RECEIVED,
(1) Alset EHome International Inc. (fka, HF
Enterprises Inc.), a Delaware company (the “Company”), hereby promise to pay
to the order of Heng Fai Ambrose Chan, a Singaporean individual,
with his primary residence at 8 Cuscaden Walk, #19-01, Four Seasons
Park, Singapore 249692 or his assignee(s) (“Holder”) the amount set out above
as the Principal Amount (the “Principal”) when due, in
accordance with the terms hereof, and to pay interest
(“Interest”) on
any outstanding Principal at the applicable Interest Rate (as
defined below) accrued from the date set out above as the Issuance
Date (the “Issuance Date”) until this convertible
promissory note has been paid in full. This convertible promissory
note, including all promissory notes issued in exchange, transfer
or replacement hereof, is referred to as this “Note”. This Note is delivered
pursuant to the terms of that certain Stock Purchase Agreement (the
“SPA”) dated as
of the Issuance Date by and among the Holder, the Company and
certain other entities thereof for the Company’s purchase of
Sale Warrants. Certain capitalized terms used herein are defined in
Section 21 hereof or the SPA.
1. PAYMENTS
OF PRINCIPAL. Subject to the conversion of the Note as
described in Section 5, the Principal Amount and accrued Interest
outstanding hereunder shall be payable in full to the Holder on the
Maturity Date.
2.
INTEREST; INTEREST
RATE. Interest shall accrue on the unpaid principal balance
of this Note at the rate of two percent (2%) per annum (the
“Interest
Rate”). Interest shall be calculated from and include
the Issuance Date and shall be calculated on an actual/365-day
basis. All unpaid interest and Principal Amount shall be due and
payable on the Maturity Date.
3.
DEFAULT.
(a) Event
of Default. Each of the following events shall constitute an
“Event of
Default”:
(i) the
Company’s bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for the relief of
debtors shall be instituted by or against the by a third party,
shall not be dismissed within thirty (30) days of their
initiation;
(ii) the
commencement by the Company of a voluntary case or proceeding under
any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other
similar document in respect of the Company in an involuntary case
or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal,
state or foreign law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of
their properties, or the making by it of an assignment for the
benefit of creditors, or the execution of a composition of debts,
or the occurrence of any other similar federal, state or foreign
proceeding, or the admission by it in writing of its inability to
pay its debts generally as they become due, the taking of corporate
action by the Company in furtherance of any such action or the
taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal,
state or foreign law; or
(iii) the
entry by a court of (i) a decree, order, judgment or other similar
document in respect of the Company of a voluntary or involuntary
case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or (ii)
a decree, order, judgment or other similar document adjudging the
as bankrupt or insolvent, or approving as properly filed a petition
seeking liquidation, reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
federal, state or foreign law or (iii) a decree, order, judgment or
other similar document appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of their
property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree, order, judgment or other
similar document or any such other decree, order, judgment or other
similar document unstayed and in effect for a period of thirty (30)
consecutive days.
(b) Notice
of an Event of Default. As soon as possible and in any event
within seven (7) days after the Company becomes aware that an Event
of Default as set forth in Section 3(a)(ii)-(iv) has occurred and
has not been cured, the Company shall notify the Holder in writing
of the nature, extent and time of and the facts surrounding such
Event of Default, and the action, if any, that the Company proposes
to take with respect to such Event of Default.
4. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not
by amendment of its respective Certificate of Incorporation, or
through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Note, and
will at all times in good faith carry out all of the provisions of
this Note and take all action as may be required to protect the
rights of the Holder of this Note.
5.
PREPAYMENT;
CONVERSION.
(a)
Voluntary
Prepayment. The Company may prepay the outstanding Principal
and accrued but unpaid Interest of this Note at any time before the
Maturity Date, in whole or in part, without penalty or
prepayment.
(b)
Conversion. Upon
the Company’s shareholders’ approval of the conversion
of this Note (the “Shareholder Approval”), at any time
before the Maturity Date, the Holder may convert the unpaid and
outstanding Principal plus any accrued and unpaid Interest into
shares of the Company’s common stock (the “Common Stock”) at a conversion
price (the “Conversion
Price”) of $5.59 per share, subject to certain
adjustments as set forth in Section 5(d). For clarification
purposes, prior to or without the Shareholder Approval, this Note
is and shall remain non-convertible and will be due and payable in
cash by the Company on the Maturity Date if the Company has not
obtained the Shareholder Approval by the Maturity
Date.
(c)
Mechanics of
Conversion.
i.
Delivery of Conversion Stock Upon
Conversion. Not later than seven (7) Business Days (the
“Share Delivery
Date”) after receiving a conversion notice
substantially in a form attached herein as Exhibit 1, the Company shall
deliver, or cause to be delivered, to the Holder a certificate or
certificates representing the Conversion Stock or a share report of
the Holder reflecting the issuance of Conversion Stock being
acquired upon the conversion of this Note, in whole or in
part.
ii.
Fractional Shares.
No fractional shares or scrip representing fractional shares shall
be issued upon the conversion of this Note. As to any fraction of a
share which the Holder would otherwise be entitled to receive upon
such conversion, the Company shall at its election, either pay a
cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Conversion Price or round
up to the next whole share.
(d)
Certain
Adjustments.
i. Stock
Splits. If the Company, at any time while this Note is
outstanding: (i) subdivides outstanding shares of Common Stock into
a larger number of shares, (ii) combines (including by way of a
reverse stock split) outstanding shares of Common Stock into a
smaller number of shares or (iii) issues, in the event of a
reclassification of shares of the Common Stock, any shares of
capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding any treasury shares of the
Company) outstanding immediately before such event, and of which
the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to this Section 5(d) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
ii. Notice
of Adjustment to Conversion Price. Whenever the Conversion
Price is adjusted pursuant to this Section 5(d), the Company or the
Company shall promptly deliver to each Holder a notice setting
forth the new Conversion Price with three (3) Business Days after
such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Failure to provide such notice shall not
constitute an Event of Default.
6.
COVENANTS. Until so long as no
Principal or accrued but unpaid Interest remains
outstanding:
(a) Preservation
of Existence. The Company shall maintain and preserve
its existence, rights and privileges, and become or remain duly
qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by the Company or in
which the transaction of its business makes such qualification
necessary.
(b)
Public Filings. The
Company shall use its best efforts to maintain its periodic filings
required by the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)
and keep its Common Stock listed on the Nasdaq Stock Market or
another United States stock exchange market.
7. BENEFICIAL
OWNERSHIP. In the event that the Holder’s Beneficial
Ownership (as defined below) of the Company’s Common Stock
reaches 5.00% or more, as a result of the Conversion or others, the
Holder has agreed to coordinate with the Company to file certain
disclosure documents as required by Section 13(d) of the 1934
Securities Exchange Act, as amended. For purposes of this
Section 7, the Holder’s Beneficial Ownership shall mean the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates, as defined and calculated in accordance with
Section 13(d) of the 1934 Securities Exchange Act and the rules and
regulations promulgated thereunder.
8.
AMENDMENTS. No modification,
amendment or waiver of any provision of this Note shall be
effective unless in writing and approved by the Company and the
Holder.
9. RESTRICTIONS
ON TRANSFER.
This Note may not be offered, sold, assigned or transferred by the
Holder without the explicit written consent of the Company, which
may be granted or withheld at the sole discretion of the
Company.
10. REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred with the Company’s approval
as provided in Section 9, the Holder shall surrender this Note to
the Company, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Note (in accordance with Section
10(c)), registered as the Holder may request, representing the
outstanding Principal being transferred by the Holder and, if less
than the entire outstanding Principal is being transferred, a new
Note (in accordance with Section 10(c)) to the Holder representing
the outstanding Principal not being transferred. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that,
by reason of prepayment or conversion of any portion of this Note,
the outstanding Principal represented by this Note may be less than
the Principal stated on the face of this Note.
(b)
Lost, Stolen
or Mutilated Note. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written
certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in
accordance with Section 10(c)) representing the outstanding
Principal.
(c) Issuance
of New Notes. Whenever the Company is required to issue a
new Note pursuant to the terms of this Note, such new Note (i)
shall be of like tenor with this Note, (ii) shall represent, as
indicated on the face of such new Note, the Principal remaining
outstanding (or in the case of a new Note being issued pursuant to
Section 10(a), the Principal designated by the Holder which, when
added to the principal represented by the other new Notes issued in
connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such
issuance of new Notes), (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the
Issuance Date of this Note, (iv) shall have the same rights and
conditions as this Note, and (v) shall represent accrued and unpaid
Interest, from the Issuance Date.
11. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under
this Note and any of the other Transaction Documents at law or in
equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for
any failure by the Company to comply with the terms of this
Note.
12. LEGEND.
The Holder understands and agrees that the Conversion Stock upon
issuance shall be restrictive and, if represented by a
certificate(s), shall bear substantially the following legend until
(i) such Conversion Stock shall have been registered under the
Securities Act and effectively disposed of in accordance with a
registration statement that has been declared effective or (ii) in
the opinion of counsel acceptable to the Company, such Conversion
Stock may be sold in reliance on an available exemption without
registration under the Securities Act, as well as any applicable
“blue sky” or state securities laws:
“THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED
FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION COVERING SUCH SHARES UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
13.
CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by
the Company and the Holder and shall not be construed against any
Person as the drafter hereof. The headings of this Note are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Note. Terms used in this Note but defined
in the other Transaction Documents shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction
Documents unless otherwise consented to in writing by the
Holder.
14. FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or
privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving
party.
15. NOTICES;
CURRENCY; PAYMENTS.
(a) Notices.
Any notice or other communication required or permitted to be given
hereunder shall be in writing sent by mail, facsimile with printed
confirmation, nationally recognized overnight carrier or personal
delivery and shall be effective upon actual receipt of such notice,
to the following addresses until notice is received that any such
address or contact information has been changed:
To the
Company:
Alset EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda, Maryland
20814
Attn:
Rongguo Wei
With
another copy
(which
shall not constitute
Notice)
to:
Sichenzia Ross Ference LLP
1185
Avenue of the Americas, 37th Floor
New
York, NY 10036
Facsimile:
212-930-9725
Attn:
Darrin M. Ocasio
To
Holder:
Heng Fai Ambrose Chan
7
Temasek Blvd., # 29-01B
Suntec
Tower One
Singapore
038987
Attention: Heng Fai
Ambrose Chan
(b) Currency.
All dollar amounts referred to in this Note are in United States
Dollars (“U.S.
Dollars”), and all amounts owing under this Note shall
be paid in U.S. Dollars.
(c) Payments.
The Company will make all payments of Principal and Interest under
this Note by wire transfer of immediately available funds to the
bank account specified by the Holder in written notice delivered to
the Company on or before the Maturity Date.
16.
CANCELLATION. After
all Principal, accrued Interest, and other amounts at any time owed
on this Note have been paid in full or converted in full, this Note
shall automatically be deemed canceled, shall be surrendered to the
Company for cancellation and shall not be reissued.
17.
WAIVER
OF JURY TRIAL. Each party
hereby waives its right to a jury trial in connection with any
suit, action or proceeding in connection with any matter relating
to this Note.
18.
GOVERNING LAW. This
Note shall be governed by and construed in accordance with the laws
of the State of New York, without giving effect to its principles
regarding conflicts of law.
19.
ATTORNEY FEES AND COSTS OF
COLLECTION. With respect to any dispute relating to this
Note, or in the event that a suit, action, arbitration, or other
proceeding of any nature whatsoever is instituted to collect the
amounts due under the Note or to interpret or enforce the
provisions of this Agreement, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues
peculiar to federal bankruptcy law or any action, suit,
arbitration, or other proceeding seeking a declaration of rights or
rescission, the prevailing party will be entitled to recover from
the losing party its reasonable attorney fees, paralegal fees,
expert fees, and all other fees, costs, and expenses, including
costs of collection, actually incurred and reasonably necessary in
connection therewith, as determined by the judge or arbitrator at
trial, arbitration, or other proceeding, or on any appeal or
review, in addition to all other amounts provided by
law.
20. MAXIMUM
PAYMENTS. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other
charges in excess of the maximum permitted by applicable law. In
the event that the rate of interest required to be paid or other
charges hereunder exceed the maximum permitted by such law, any
payments in excess of such maximum shall be credited against
amounts owed by the Company to the Holder and thus refunded to the
Company.
21. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms
shall have the following meanings:
(a) “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405
under the Securities Act.
(b) “Business
Day” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
(c) “Maturity Date”
shall mean three (3) years from the Issuance Date.
(d) “Person”
means “person” as such term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, including any individual, corporation, limited liability
company, partnership, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any
other entity or any group of persons.
(e) “Securities
Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
(f) “Transaction
Documents” means,
collectively, the Note, the SPA and any other agreements and
instruments entered into or delivered by any of the parties hereto
in connection with the transactions contemplated by the SPA, as may
be amended from time to time.
[signature
page follows]
[SIGNATURE PAGE TO
THE CONVERTIBLE PROMISSORY NOTE]
IN
WITNESS WHEREOF, the Company have caused this Note to be duly
executed as of the Issuance Date set out above.
|
COMPANY:
Alset EHome International Inc.
a Delaware corporation
|
|
By: /s/ Ang Hay
Kim
Name: Ang Hay
Kim
Title: Director
|
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EXHIBIT
1
Form
of Conversion Notice
Alset
EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Attn: [
]
The
undersigned hereby elects to convert certain outstanding amount as
set forth below of the Convertible Promissory Note of Alset EHome
International Inc., a Delaware corporation (the
“Company”), issuance date
March [ ], 2021, into shares of common stock (the
“Common
Stock”) of the Company, according to the conditions
hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions
as reasonably requested by the Company and Company in accordance
therewith. No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.
The
undersigned agrees to comply with the delivery requirements under
the applicable securities laws in connection with any transfer of
the aforesaid shares of Common Stock.
Conversion
calculations:
Principal Amount of
Note to be Converted: $[ ]
USD
The
Amount of Interest of the Note to be Converted:
$[ ] USD
Conversion Price
per Share after adjustment: $[ ]
USD
Number
of Shares of Common Stock to be Issued upon Conversion:
________
Signature:
Name
(Print):
Mailing
Address:
Phone
number:
Email:
Date:
Annex
C
Convertible
Promissory Note for Purchase of LVD Shares
Alset EHome International Inc.
(fka, HF Enterprises Inc.)
2% conditional convertible Promissory Note
|
Principal Amount: $173,394.87 U.S. Dollars
|
Issuance
Date: March 12, 2021
|
|
|
|
|
|
FOR VALUE RECEIVED,
(1) Alset EHome International Inc. (fka, HF Enterprises
Inc.), a Delaware company (the “Company”), hereby promise to pay
to the order of Heng Fai Ambrose Chan, a Singaporean individual,
with his primary residence at 8 Cuscaden Walk, #19-01, Four Seasons
Park, Singapore 249692 or his assignee(s) (“Holder”) the amount set out above
as the Principal Amount (the “Principal”) when due, in
accordance with the terms hereof, and to pay interest
(“Interest”) on
any outstanding Principal at the applicable Interest Rate (as
defined below) accrued from the date set out above as the Issuance
Date (the “Issuance Date”) until this convertible
promissory note has been paid in full. This convertible promissory
note, including all promissory notes issued in exchange, transfer
or replacement hereof, is referred to as this “Note”. This Note is delivered
pursuant to the terms of that certain Stock Purchase Agreement (the
“SPA”) dated as
of the Issuance Date by and among the Holder, the Company and
certain other entities thereof for the Company’s purchase of
LVD Shares. Certain capitalized terms used herein are defined in
Section 21 hereof or the SPA.
1.
PAYMENTS OF
PRINCIPAL. Subject to the conversion of the Note as
described in Section 5, the Principal Amount and accrued Interest
outstanding hereunder shall be payable in full to the Holder on the
Maturity Date.
2.
INTEREST; INTEREST
RATE. Interest shall accrue on the unpaid principal balance
of this Note at the rate of two percent (2%) per annum (the
“Interest
Rate”). Interest shall be calculated from and include
the Issuance Date and shall be calculated on an actual/365-day
basis. All unpaid interest and Principal Amount shall be due and
payable on the Maturity Date.
3. DEFAULT.
(a) Event
of Default. Each of the following events shall constitute an
“Event of
Default”:
(i) the
Company’s bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for the relief of
debtors shall be instituted by or against the by a third party,
shall not be dismissed within thirty (30) days of their
initiation;
(ii) the
commencement by the Company of a voluntary case or proceeding under
any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other
similar document in respect of the Company in an involuntary case
or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal,
state or foreign law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of
their properties, or the making by it of an assignment for the
benefit of creditors, or the execution of a composition of debts,
or the occurrence of any other similar federal, state or foreign
proceeding, or the admission by it in writing of its inability to
pay its debts generally as they become due, the taking of corporate
action by the Company in furtherance of any such action or the
taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal,
state or foreign law; or
(iii) the
entry by a court of (i) a decree, order, judgment or other similar
document in respect of the Company of a voluntary or involuntary
case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or (ii)
a decree, order, judgment or other similar document adjudging the
as bankrupt or insolvent, or approving as properly filed a petition
seeking liquidation, reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
federal, state or foreign law or (iii) a decree, order, judgment or
other similar document appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of their
property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree, order, judgment or other
similar document or any such other decree, order, judgment or other
similar document unstayed and in effect for a period of thirty (30)
consecutive days.
(b) Notice
of an Event of Default. As soon as possible and in any event
within seven (7) days after the Company becomes aware that an Event
of Default as set forth in Section 3(a)(ii)-(iv) has occurred and
has not been cured, the Company shall notify the Holder in writing
of the nature, extent and time of and the facts surrounding such
Event of Default, and the action, if any, that the Company proposes
to take with respect to such Event of Default.
4. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not
by amendment of its respective Certificate of Incorporation, or
through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Note, and
will at all times in good faith carry out all of the provisions of
this Note and take all action as may be required to protect the
rights of the Holder of this Note.
5.
PREPAYMENT;
CONVERSION.
(a)
Voluntary
Prepayment. The Company may prepay the outstanding Principal
and accrued but unpaid Interest of this Note at any time before the
Maturity Date, in whole or in part, without penalty or
prepayment.
(b)
Conversion. Upon
the Company’s shareholders’ approval of the conversion
of this Note (the “Shareholder Approval”), at any time
before the Maturity Date, the Holder may convert the unpaid and
outstanding Principal plus any accrued and unpaid Interest into
shares of the Company’s common stock (the “Common Stock”) at a conversion
price (the “Conversion
Price”) of $5.59 per share, subject to certain
adjustments as set forth in Section 5(d). For clarification
purposes, prior to or without the Shareholder Approval, this Note
is and shall remain non-convertible and will be due and payable in
cash by the Company on the Maturity Date if the Company has not
obtained the Shareholder Approval by the Maturity
Date.
(c)
Mechanics of
Conversion.
i. Delivery
of Conversion Stock Upon Conversion. Not later than seven
(7) Business Days (the “Share
Delivery Date”) after receiving a conversion notice
substantially in a form attached herein as Exhibit 1, the Company shall
deliver, or cause to be delivered, to the Holder a certificate or
certificates representing the Conversion Stock or a share report of
the Holder reflecting the issuance of Conversion Stock being
acquired upon the conversion of this Note, in whole or in
part.
ii.
Fractional Shares. No
fractional shares or scrip representing fractional shares shall be
issued upon the conversion of this Note. As to any fraction of a
share which the Holder would otherwise be entitled to receive upon
such conversion, the Company shall at its election, either pay a
cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Conversion Price or round
up to the next whole share.
(d)
Certain
Adjustments.
i. Stock
Splits. If the Company, at any time while this Note is
outstanding: (i) subdivides outstanding shares of Common Stock into
a larger number of shares, (ii) combines (including by way of a
reverse stock split) outstanding shares of Common Stock into a
smaller number of shares or (iii) issues, in the event of a
reclassification of shares of the Common Stock, any shares of
capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding any treasury shares of the
Company) outstanding immediately before such event, and of which
the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to this Section 5(d) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
ii. Notice
of Adjustment to Conversion Price. Whenever the Conversion
Price is adjusted pursuant to this Section 5(d), the Company or the
Company shall promptly deliver to each Holder a notice setting
forth the new Conversion Price with three (3) Business Days after
such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Failure to provide such notice shall not
constitute an Event of Default.
6.
COVENANTS. Until so long as no
Principal or accrued but unpaid Interest remains
outstanding:
(a) Preservation
of Existence. The Company shall maintain and preserve
its existence, rights and privileges, and become or remain duly
qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by the Company or in
which the transaction of its business makes such qualification
necessary.
(b)
Public Filings. The
Company shall use its best efforts to maintain its periodic filings
required by the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)
and keep its Common Stock listed on the Nasdaq Stock Market or
another United States stock exchange market.
7.
BENEFICIAL
OWNERSHIP. In the event that the Holder’s Beneficial
Ownership (as defined below) of the Company’s Common Stock
reaches 5.00% or more, as a result of the Conversion or others, the
Holder has agreed to coordinate with the Company to file certain
disclosure documents as required by Section 13(d) of the 1934
Securities Exchange Act, as amended. For purposes of this
Section 7, the Holder’s Beneficial Ownership shall mean the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates, as defined and calculated in accordance with
Section 13(d) of the 1934 Securities Exchange Act and the rules and
regulations promulgated thereunder.
8.
AMENDMENTS. No modification,
amendment or waiver of any provision of this Note shall be
effective unless in writing and approved by the Company and the
Holder.
9. RESTRICTIONS
ON TRANSFER.
This Note may not be offered, sold, assigned or transferred by the
Holder without the explicit written consent of the Company, which
may be granted or withheld at the sole discretion of the
Company.
10. REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred with the Company’s approval
as provided in Section 9, the Holder shall surrender this Note to
the Company, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Note (in accordance with Section
10(c)), registered as the Holder may request, representing the
outstanding Principal being transferred by the Holder and, if less
than the entire outstanding Principal is being transferred, a new
Note (in accordance with Section 10(c)) to the Holder representing
the outstanding Principal not being transferred. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that,
by reason of prepayment or conversion of any portion of this Note,
the outstanding Principal represented by this Note may be less than
the Principal stated on the face of this Note.
(b) Lost,
Stolen or Mutilated Note. Upon receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written
certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in
accordance with Section 10(c)) representing the outstanding
Principal.
(c) Issuance
of New Notes. Whenever the Company is required to issue a
new Note pursuant to the terms of this Note, such new Note (i)
shall be of like tenor with this Note, (ii) shall represent, as
indicated on the face of such new Note, the Principal remaining
outstanding (or in the case of a new Note being issued pursuant to
Section 10(a), the Principal designated by the Holder which, when
added to the principal represented by the other new Notes issued in
connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such
issuance of new Notes), (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the
Issuance Date of this Note, (iv) shall have the same rights and
conditions as this Note, and (v) shall represent accrued and unpaid
Interest, from the Issuance Date.
11. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under
this Note and any of the other Transaction Documents at law or in
equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for
any failure by the Company to comply with the terms of this
Note.
12. LEGEND.
The Holder understands and agrees that the Conversion Stock upon
issuance shall be restrictive and, if represented by a
certificate(s), shall bear substantially the following legend until
(i) such Conversion Stock shall have been registered under the
Securities Act and effectively disposed of in accordance with a
registration statement that has been declared effective or (ii) in
the opinion of counsel acceptable to the Company, such Conversion
Stock may be sold in reliance on an available exemption without
registration under the Securities Act, as well as any applicable
“blue sky” or state securities laws:
“THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED
FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION COVERING SUCH SHARES UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
13.
CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by
the Company and the Holder and shall not be construed against any
Person as the drafter hereof. The headings of this Note are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Note. Terms used in this Note but defined
in the other Transaction Documents shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction
Documents unless otherwise consented to in writing by the
Holder.
14. FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or
privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving
party.
15. NOTICES;
CURRENCY; PAYMENTS.
(a) Notices.
Any notice or other communication required or permitted to be given
hereunder shall be in writing sent by mail, facsimile with printed
confirmation, nationally recognized overnight carrier or personal
delivery and shall be effective upon actual receipt of such notice,
to the following addresses until notice is received that any such
address or contact information has been changed:
To the
Company:
Alset EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda, Maryland
20814
Attn:
Rongguo Wei
With
another copy
(which
shall not constitute
Notice)
to:
Sichenzia Ross Ference LLP
1185
Avenue of the Americas, 37th Floor
New
York, NY 10036
Facsimile:
212-930-9725
Attn:
Darrin M. Ocasio
To
Holder:
Heng Fai Ambrose Chan
7
Temasek Blvd., # 29-01B
Suntec
Tower One
Singapore
038987
Attention: Heng Fai
Ambrose Chan
(b) Currency.
All dollar amounts referred to in this Note are in United States
Dollars (“U.S.
Dollars”), and all amounts owing under this Note shall
be paid in U.S. Dollars.
(c) Payments.
The Company will make all payments of Principal and Interest under
this Note by wire transfer of immediately available funds to the
bank account specified by the Holder in written notice delivered to
the Company on or before the Maturity Date.
16. CANCELLATION.
After all Principal, accrued Interest, and other amounts at any
time owed on this Note have been paid in full or converted in full,
this Note shall automatically be deemed canceled, shall be
surrendered to the Company for cancellation and shall not be
reissued.
17. WAIVER
OF JURY TRIAL. Each party
hereby waives its right to a jury trial in connection with any
suit, action or proceeding in connection with any matter relating
to this Note.
18. GOVERNING
LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to its principles regarding conflicts of
law.
19.
ATTORNEY FEES AND COSTS OF
COLLECTION. With respect to any dispute relating to this
Note, or in the event that a suit, action, arbitration, or other
proceeding of any nature whatsoever is instituted to collect the
amounts due under the Note or to interpret or enforce the
provisions of this Agreement, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues
peculiar to federal bankruptcy law or any action, suit,
arbitration, or other proceeding seeking a declaration of rights or
rescission, the prevailing party will be entitled to recover from
the losing party its reasonable attorney fees, paralegal fees,
expert fees, and all other fees, costs, and expenses, including
costs of collection, actually incurred and reasonably necessary in
connection therewith, as determined by the judge or arbitrator at
trial, arbitration, or other proceeding, or on any appeal or
review, in addition to all other amounts provided by
law.
20. MAXIMUM
PAYMENTS. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other
charges in excess of the maximum permitted by applicable law. In
the event that the rate of interest required to be paid or other
charges hereunder exceed the maximum permitted by such law, any
payments in excess of such maximum shall be credited against
amounts owed by the Company to the Holder and thus refunded to the
Company.
21. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms
shall have the following meanings:
(a) “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405
under the Securities Act.
(b) “Business
Day” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
(c) “Maturity Date”
shall mean three (3) years from the Issuance Date.
(d) “Person”
means “person” as such term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, including any individual, corporation, limited liability
company, partnership, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any
other entity or any group of persons.
(e) “Securities
Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
(f) “Transaction
Documents” means,
collectively, the Note, the SPA and any other agreements and
instruments entered into or delivered by any of the parties hereto
in connection with the transactions contemplated by the SPA, as may
be amended from time to time.
[signature
page follows]
[SIGNATURE PAGE TO
THE CONVERTIBLE PROMISSORY NOTE]
IN
WITNESS WHEREOF, the Company have caused this Note to be duly
executed as of the Issuance Date set out above.
|
COMPANY:
Alset EHome International Inc.
a Delaware corporation
|
|
By: /s/ Ang Hay
Kim
Name: Ang Hay
Kim
Title: Director
|
|
|
EXHIBIT
1
Form
of Conversion Notice
Alset
EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Attn: [
]
The
undersigned hereby elects to convert certain outstanding amount as
set forth below of the Convertible Promissory Note of Alset EHome
International Inc., a Delaware corporation (the
“Company”), issuance date
March [ ], 2021, into shares of common stock (the
“Common
Stock”) of the Company, according to the conditions
hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions
as reasonably requested by the Company and Company in accordance
therewith. No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.
The
undersigned agrees to comply with the delivery requirements under
the applicable securities laws in connection with any transfer of
the aforesaid shares of Common Stock.
Conversion
calculations:
Principal Amount of
Note to be Converted: $[ ]
USD
The
Amount of Interest of the Note to be Converted:
$[ ] USD
Conversion Price
per Share after adjustment: $[ ]
USD
Number
of Shares of Common Stock to be Issued upon Conversion:
________
Signature:
Name
(Print):
Mailing
Address:
Phone
number:
Email:
Date:
Annex
D
Convertible
Promissory Note for Purchase of True Partners Shares
Alset EHome International Inc.
(fka, HF Enterprises Inc.)
2% conditional convertible Promissory Note
|
Principal Amount: $6,729,629.29 U.S. Dollars
|
Issuance
Date: March 12, 2021
|
|
|
|
|
|
FOR VALUE RECEIVED,
(1) Alset EHome International Inc. (fka, HF
Enterprises Inc.), a Delaware company (the “Company”), hereby promise to pay
to the order of Heng Fai Ambrose Chan, a Singaporean individual,
with his primary residence at 8 Cuscaden Walk, #19-01, Four Seasons
Park, Singapore 249692 or his assignee(s) (“Holder”) the amount set out above
as the Principal Amount (the “Principal”) when due, in
accordance with the terms hereof, and to pay interest
(“Interest”) on
any outstanding Principal at the applicable Interest Rate (as
defined below) accrued from the date set out above as the Issuance
Date (the “Issuance Date”) until this convertible
promissory note has been paid in full. This convertible promissory
note, including all promissory notes issued in exchange, transfer
or replacement hereof, is referred to as this “Note”. This Note is delivered
pursuant to the terms of that certain Stock Purchase Agreement (the
“SPA”) dated as
of the Issuance Date by and among the Holder, the Company and
certain other entities thereof for the Company’s purchase of
True Partners Shares. Certain capitalized terms used herein are
defined in Section 21 hereof or the SPA.
1.
PAYMENTS OF PRINCIPAL. Subject
to the conversion of the Note as described in Section 5, the
Principal Amount and accrued Interest outstanding hereunder shall
be payable in full to the Holder on the Maturity Date.
2.
INTEREST; INTEREST RATE.
Interest shall accrue on the unpaid principal balance of this Note
at the rate of two percent (2%) per annum (the “Interest Rate”). Interest shall be
calculated from and include the Issuance Date and shall be
calculated on an actual/365-day basis. All unpaid interest and
Principal Amount shall be due and payable on the Maturity
Date.
3.
DEFAULT.
(a) Event
of Default. Each of the following events shall constitute an
“Event of
Default”:
(i) the
Company’s bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for the relief of
debtors shall be instituted by or against the by a third party,
shall not be dismissed within thirty (30) days of their
initiation;
(ii) the
commencement by the Company of a voluntary case or proceeding under
any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other
similar document in respect of the Company in an involuntary case
or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal,
state or foreign law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of
their properties, or the making by it of an assignment for the
benefit of creditors, or the execution of a composition of debts,
or the occurrence of any other similar federal, state or foreign
proceeding, or the admission by it in writing of its inability to
pay its debts generally as they become due, the taking of corporate
action by the Company in furtherance of any such action or the
taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal,
state or foreign law; or
(iii) the
entry by a court of (i) a decree, order, judgment or other similar
document in respect of the Company of a voluntary or involuntary
case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or (ii)
a decree, order, judgment or other similar document adjudging the
as bankrupt or insolvent, or approving as properly filed a petition
seeking liquidation, reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
federal, state or foreign law or (iii) a decree, order, judgment or
other similar document appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of their
property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree, order, judgment or other
similar document or any such other decree, order, judgment or other
similar document unstayed and in effect for a period of thirty (30)
consecutive days.
(b) Notice
of an Event of Default. As soon as possible and in any event
within seven (7) days after the Company becomes aware that an Event
of Default as set forth in Section 3(a)(ii)-(iv) has occurred and
has not been cured, the Company shall notify the Holder in writing
of the nature, extent and time of and the facts surrounding such
Event of Default, and the action, if any, that the Company proposes
to take with respect to such Event of Default.
4. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not
by amendment of its respective Certificate of Incorporation, or
through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Note, and
will at all times in good faith carry out all of the provisions of
this Note and take all action as may be required to protect the
rights of the Holder of this Note.
5. PREPAYMENT;
CONVERSION.
(a)
Voluntary
Prepayment. The Company may prepay the outstanding Principal
and accrued but unpaid Interest of this Note at any time before the
Maturity Date, in whole or in part, without penalty or
prepayment.
(b)
Conversion. Upon
the Company’s shareholders’ approval of the conversion
of this Note (the “Shareholder Approval”), at any time
before the Maturity Date, the Holder may convert the unpaid and
outstanding Principal plus any accrued and unpaid Interest into
shares of the Company’s common stock (the “Common Stock”) at a conversion
price (the “Conversion
Price”) of $5.59 per share, subject to certain
adjustments as set forth in Section 5(d). For clarification
purposes, prior to or without the Shareholder Approval, this Note
is and shall remain non-convertible and will be due and payable in
cash by the Company on the Maturity Date if the Company has not
obtained the Shareholder Approval by the Maturity
Date.
(c)
Mechanics of
Conversion.
i. Delivery
of Conversion Stock Upon Conversion. Not later than seven
(7) Business Days (the “Share
Delivery Date”) after receiving a conversion notice
substantially in a form attached herein as Exhibit 1, the Company shall
deliver, or cause to be delivered, to the Holder a certificate or
certificates representing the Conversion Stock or a share report of
the Holder reflecting the issuance of Conversion Stock being
acquired upon the conversion of this Note, in whole or in
part.
ii.
Fractional Shares. No
fractional shares or scrip representing fractional shares shall be
issued upon the conversion of this Note. As to any fraction of a
share which the Holder would otherwise be entitled to receive upon
such conversion, the Company shall at its election, either pay a
cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Conversion Price or round
up to the next whole share.
(d)
Certain
Adjustments.
i. Stock
Splits. If the Company, at any time while this Note is
outstanding: (i) subdivides outstanding shares of Common Stock into
a larger number of shares, (ii) combines (including by way of a
reverse stock split) outstanding shares of Common Stock into a
smaller number of shares or (iii) issues, in the event of a
reclassification of shares of the Common Stock, any shares of
capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding any treasury shares of the
Company) outstanding immediately before such event, and of which
the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to this Section 5(d) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
ii. Notice
of Adjustment to Conversion Price. Whenever the Conversion
Price is adjusted pursuant to this Section 5(d), the Company or the
Company shall promptly deliver to each Holder a notice setting
forth the new Conversion Price with three (3) Business Days after
such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Failure to provide such notice shall not
constitute an Event of Default.
6.
COVENANTS. Until so long as no
Principal or accrued but unpaid Interest remains
outstanding:
(a) Preservation
of Existence. The Company shall maintain and preserve
its existence, rights and privileges, and become or remain duly
qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by the Company or in
which the transaction of its business makes such qualification
necessary.
(b)
Public Filings. The
Company shall use its best efforts to maintain its periodic filings
required by the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)
and keep its Common Stock listed on the Nasdaq Stock Market or
another United States stock exchange market.
7. BENEFICIAL
OWNERSHIP. In the event that the Holder’s Beneficial
Ownership (as defined below) of the Company’s Common Stock
reaches 5.00% or more, as a result of the Conversion or others, the
Holder has agreed to coordinate with the Company to file certain
disclosure documents as required by Section 13(d) of the 1934
Securities Exchange Act, as amended. For purposes of this
Section 7, the Holder’s Beneficial Ownership shall mean the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates, as defined and calculated in accordance with
Section 13(d) of the 1934 Securities Exchange Act and the rules and
regulations promulgated thereunder.
8.
AMENDMENTS. No modification,
amendment or waiver of any provision of this Note shall be
effective unless in writing and approved by the Company and the
Holder.
9. RESTRICTIONS
ON TRANSFER.
This Note may not be offered, sold, assigned or transferred by the
Holder without the explicit written consent of the Company, which
may be granted or withheld at the sole discretion of the
Company.
10. REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred with the Company’s approval
as provided in Section 9, the Holder shall surrender this Note to
the Company, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Note (in accordance with Section
10(c)), registered as the Holder may request, representing the
outstanding Principal being transferred by the Holder and, if less
than the entire outstanding Principal is being transferred, a new
Note (in accordance with Section 10(c)) to the Holder representing
the outstanding Principal not being transferred. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that,
by reason of prepayment or conversion of any portion of this Note,
the outstanding Principal represented by this Note may be less than
the Principal stated on the face of this Note.
(b) Lost,
Stolen or Mutilated Note. Upon receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written
certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in
accordance with Section 10(c)) representing the outstanding
Principal.
(c) Issuance
of New Notes. Whenever the Company is required to issue a
new Note pursuant to the terms of this Note, such new Note (i)
shall be of like tenor with this Note, (ii) shall represent, as
indicated on the face of such new Note, the Principal remaining
outstanding (or in the case of a new Note being issued pursuant to
Section 10(a), the Principal designated by the Holder which, when
added to the principal represented by the other new Notes issued in
connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such
issuance of new Notes), (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the
Issuance Date of this Note, (iv) shall have the same rights and
conditions as this Note, and (v) shall represent accrued and unpaid
Interest, from the Issuance Date.
11. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under
this Note and any of the other Transaction Documents at law or in
equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for
any failure by the Company to comply with the terms of this
Note.
12. LEGEND.
The Holder understands and agrees that the Conversion Stock upon
issuance shall be restrictive and, if represented by a
certificate(s), shall bear substantially the following legend until
(i) such Conversion Stock shall have been registered under the
Securities Act and effectively disposed of in accordance with a
registration statement that has been declared effective or (ii) in
the opinion of counsel acceptable to the Company, such Conversion
Stock may be sold in reliance on an available exemption without
registration under the Securities Act, as well as any applicable
“blue sky” or state securities laws:
“THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED
FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION COVERING SUCH SHARES UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
13.
CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by
the Company and the Holder and shall not be construed against any
Person as the drafter hereof. The headings of this Note are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Note. Terms used in this Note but defined
in the other Transaction Documents shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction
Documents unless otherwise consented to in writing by the
Holder.
14. FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or
privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving
party.
15. NOTICES;
CURRENCY; PAYMENTS.
(a) Notices.
Any notice or other communication required or permitted to be given
hereunder shall be in writing sent by mail, facsimile with printed
confirmation, nationally recognized overnight carrier or personal
delivery and shall be effective upon actual receipt of such notice,
to the following addresses until notice is received that any such
address or contact information has been changed:
To the
Company:
Alset EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda, Maryland
20814
Attn:
Rongguo Wei
With
another copy
(which
shall not constitute
Notice)
to:
Sichenzia Ross Ference LLP
1185
Avenue of the Americas, 37th Floor
New
York, NY 10036
Facsimile:
212-930-9725
Attn:
Darrin M. Ocasio
To
Holder:
Heng Fai Ambrose Chan
7
Temasek Blvd., # 29-01B
Suntec
Tower One
Singapore
038987
Attention: Heng Fai
Ambrose Chan
(b) Currency.
All dollar amounts referred to in this Note are in United States
Dollars (“U.S.
Dollars”), and all amounts owing under this Note shall
be paid in U.S. Dollars.
(c) Payments.
The Company will make all payments of Principal and Interest under
this Note by wire transfer of immediately available funds to the
bank account specified by the Holder in written notice delivered to
the Company on or before the Maturity Date.
16.
CANCELLATION. After
all Principal, accrued Interest, and other amounts at any time owed
on this Note have been paid in full or converted in full, this Note
shall automatically be deemed canceled, shall be surrendered to the
Company for cancellation and shall not be reissued.
17. WAIVER
OF JURY TRIAL. Each party
hereby waives its right to a jury trial in connection with any
suit, action or proceeding in connection with any matter relating
to this Note.
18. GOVERNING
LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to its principles regarding conflicts of
law.
19.
ATTORNEY FEES AND COSTS OF
COLLECTION. With respect to any dispute relating to this
Note, or in the event that a suit, action, arbitration, or other
proceeding of any nature whatsoever is instituted to collect the
amounts due under the Note or to interpret or enforce the
provisions of this Agreement, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues
peculiar to federal bankruptcy law or any action, suit,
arbitration, or other proceeding seeking a declaration of rights or
rescission, the prevailing party will be entitled to recover from
the losing party its reasonable attorney fees, paralegal fees,
expert fees, and all other fees, costs, and expenses, including
costs of collection, actually incurred and reasonably necessary in
connection therewith, as determined by the judge or arbitrator at
trial, arbitration, or other proceeding, or on any appeal or
review, in addition to all other amounts provided by
law.
20.
MAXIMUM PAYMENTS.
Nothing contained herein shall be deemed to establish or require
the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the
maximum permitted by such law, any payments in excess of such
maximum shall be credited against amounts owed by the Company to
the Holder and thus refunded to the Company.
21. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms
shall have the following meanings:
(a) “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405
under the Securities Act.
(b) “Business
Day” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
(c) “Maturity Date”
shall mean three (3) years from the Issuance Date.
(d) “Person”
means “person” as such term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, including any individual, corporation, limited liability
company, partnership, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any
other entity or any group of persons.
(e) “Securities
Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
(f) “Transaction
Documents” means,
collectively, the Note, the SPA and any other agreements and
instruments entered into or delivered by any of the parties hereto
in connection with the transactions contemplated by the SPA, as may
be amended from time to time.
[signature
page follows]
[SIGNATURE
PAGE TO THE CONVERTIBLE PROMISSORY NOTE]
IN
WITNESS WHEREOF, the Company have caused this Note to be duly
executed as of the Issuance Date set out above.
|
COMPANY:
Alset EHome International Inc.
a Delaware corporation
|
|
By: /s/ Ang Hay
Kim
Name: Ang Hay
Kim
Title: Director
|
|
|
EXHIBIT
1
Form of
Conversion
Notice
Alset
EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Attn: [
]
The
undersigned hereby elects to convert certain outstanding amount as
set forth below of the Convertible Promissory Note of Alset EHome
International Inc., a Delaware corporation (the
“Company”), issuance date
March [ ], 2021, into shares of common stock (the
“Common
Stock”) of the Company, according to the conditions
hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions
as reasonably requested by the Company and Company in accordance
therewith. No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.
The
undersigned agrees to comply with the delivery requirements under
the applicable securities laws in connection with any transfer of
the aforesaid shares of Common Stock.
Conversion
calculations:
Principal Amount of
Note to be Converted: $[ ]
USD
The
Amount of Interest of the Note to be Converted:
$[ ] USD
Conversion Price
per Share after adjustment: $[ ]
USD
Number
of Shares of Common Stock to be Issued upon Conversion:
________
Signature:
Name
(Print):
Mailing
Address:
Phone
number:
Email:
Date:
Annex
E
Convertible
Promissory Note for Purchase of APB Shares
Alset EHome International Inc.
(fka, HF Enterprises Inc.)
2% conditional convertible Promissory Note
|
Principal Amount: $28,653,138.00 U.S. Dollars
|
Issuance
Date: March 12, 2021
|
|
|
|
|
|
FOR VALUE RECEIVED, (1)
Alset EHome International Inc. (fka, HF Enterprises Inc.), a
Delaware company (the “Company”), hereby promise to pay
to the order of Heng Fai Ambrose Chan, a Singaporean individual,
with his primary residence at 8 Cuscaden Walk, #19-01, Four Seasons
Park, Singapore 249692 or his assignee(s) (“Holder”) the amount set out above
as the Principal Amount (the “Principal”) when due, in
accordance with the terms hereof, and to pay interest
(“Interest”) on
any outstanding Principal at the applicable Interest Rate (as
defined below) accrued from the date set out above as the Issuance
Date (the “Issuance Date”) until this convertible
promissory note has been paid in full. This convertible promissory
note, including all promissory notes issued in exchange, transfer
or replacement hereof, is referred to as this “Note”. This Note is delivered
pursuant to the terms of that certain Stock Purchase Agreement (the
“SPA”) dated as
of the Issuance Date by and among the Holder, the Company and
certain other entities thereof for the Company’s purchase of
APB Shares. Certain capitalized terms used herein are defined in
Section 21 hereof or the SPA.
1. PAYMENTS
OF PRINCIPAL. Subject to the conversion of the Note as
described in Section 5, the Principal Amount and accrued Interest
outstanding hereunder shall be payable in full to the Holder on the
Maturity Date.
2.
INTEREST;
INTEREST RATE. Interest shall accrue on the unpaid principal
balance of this Note at the rate of two percent (2%) per annum (the
“Interest
Rate”). Interest shall be calculated from and include
the Issuance Date and shall be calculated on an actual/365-day
basis. All unpaid interest and Principal Amount shall be due and
payable on the Maturity Date.
3.
DEFAULT.
(a) Event
of Default. Each of the following events shall constitute an
“Event of
Default”:
(i) the
Company’s bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for the relief of
debtors shall be instituted by or against the by a third party,
shall not be dismissed within thirty (30) days of their
initiation;
(ii) the
commencement by the Company of a voluntary case or proceeding under
any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other
similar document in respect of the Company in an involuntary case
or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal,
state or foreign law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of
their properties, or the making by it of an assignment for the
benefit of creditors, or the execution of a composition of debts,
or the occurrence of any other similar federal, state or foreign
proceeding, or the admission by it in writing of its inability to
pay its debts generally as they become due, the taking of corporate
action by the Company in furtherance of any such action or the
taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal,
state or foreign law; or
(iii) the
entry by a court of (i) a decree, order, judgment or other similar
document in respect of the Company of a voluntary or involuntary
case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or (ii)
a decree, order, judgment or other similar document adjudging the
as bankrupt or insolvent, or approving as properly filed a petition
seeking liquidation, reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
federal, state or foreign law or (iii) a decree, order, judgment or
other similar document appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of their
property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree, order, judgment or other
similar document or any such other decree, order, judgment or other
similar document unstayed and in effect for a period of thirty (30)
consecutive days.
(b) Notice
of an Event of Default. As soon as possible and in any event
within seven (7) days after the Company becomes aware that an Event
of Default as set forth in Section 3(a)(ii)-(iv) has occurred and
has not been cured, the Company shall notify the Holder in writing
of the nature, extent and time of and the facts surrounding such
Event of Default, and the action, if any, that the Company proposes
to take with respect to such Event of Default.
4. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not
by amendment of its respective Certificate of Incorporation, or
through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Note, and
will at all times in good faith carry out all of the provisions of
this Note and take all action as may be required to protect the
rights of the Holder of this Note.
5.
PREPAYMENT;
CONVERSION.
(a)
Voluntary
Prepayment. The Company may prepay the outstanding Principal
and accrued but unpaid Interest of this Note at any time before the
Maturity Date, in whole or in part, without penalty or
prepayment.
(b)
Conversion. Upon
the Company’s shareholders’ approval of the conversion
of this Note (the “Shareholder Approval”), at any time
before the Maturity Date, the Holder may convert the unpaid and
outstanding Principal plus any accrued and unpaid Interest into
shares of the Company’s common stock (the “Common Stock”) at a conversion
price (the “Conversion
Price”) of $5.59 per share, subject to certain
adjustments as set forth in Section 5(d). For clarification
purposes, prior to or without the Shareholder Approval, this Note
is and shall remain non-convertible and will be due and payable in
cash by the Company on the Maturity Date if the Company has not
obtained the Shareholder Approval by the Maturity
Date.
(c)
Mechanics of
Conversion.
i. Delivery
of Conversion Stock Upon Conversion. Not later than seven
(7) Business Days (the “Share
Delivery Date”) after receiving a conversion notice
substantially in a form attached herein as Exhibit 1, the Company shall
deliver, or cause to be delivered, to the Holder a certificate or
certificates representing the Conversion Stock or a share report of
the Holder reflecting the issuance of Conversion Stock being
acquired upon the conversion of this Note, in whole or in
part.
ii.
Fractional Shares.
No fractional shares or scrip representing fractional shares shall
be issued upon the conversion of this Note. As to any fraction of a
share which the Holder would otherwise be entitled to receive upon
such conversion, the Company shall at its election, either pay a
cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Conversion Price or round
up to the next whole share.
(d)
Certain
Adjustments.
i. Stock
Splits. If the Company, at any time while this Note is
outstanding: (i) subdivides outstanding shares of Common Stock into
a larger number of shares, (ii) combines (including by way of a
reverse stock split) outstanding shares of Common Stock into a
smaller number of shares or (iii) issues, in the event of a
reclassification of shares of the Common Stock, any shares of
capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding any treasury shares of the
Company) outstanding immediately before such event, and of which
the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to this Section 5(d) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
ii. Notice
of Adjustment to Conversion Price. Whenever the Conversion
Price is adjusted pursuant to this Section 5(d), the Company or the
Company shall promptly deliver to each Holder a notice setting
forth the new Conversion Price with three (3) Business Days after
such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Failure to provide such notice shall not
constitute an Event of Default.
6.
COVENANTS. Until so long as no
Principal or accrued but unpaid Interest remains
outstanding:
(a) Preservation
of Existence. The Company shall maintain and preserve
its existence, rights and privileges, and become or remain duly
qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by the Company or in
which the transaction of its business makes such qualification
necessary.
(b)
Public Filings. The
Company shall use its best efforts to maintain its periodic filings
required by the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)
and keep its Common Stock listed on the Nasdaq Stock Market or
another United States stock exchange market.
7. BENEFICIAL
OWNERSHIP. In the event that the Holder’s Beneficial
Ownership (as defined below) of the Company’s Common Stock
reaches 5.00% or more, as a result of the Conversion or others, the
Holder has agreed to coordinate with the Company to file certain
disclosure documents as required by Section 13(d) of the 1934
Securities Exchange Act, as amended. For purposes of this
Section 7, the Holder’s Beneficial Ownership shall mean the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates, as defined and calculated in accordance with
Section 13(d) of the 1934 Securities Exchange Act and the rules and
regulations promulgated thereunder.
8.
AMENDMENTS. No
modification, amendment or waiver of any provision of this Note
shall be effective unless in writing and approved by the Company
and the Holder.
9. RESTRICTIONS
ON TRANSFER.
This Note may not be offered, sold, assigned or transferred by the
Holder without the explicit written consent of the Company, which
may be granted or withheld at the sole discretion of the
Company.
10. REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred with the Company’s approval
as provided in Section 9, the Holder shall surrender this Note to
the Company, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Note (in accordance with Section
10(c)), registered as the Holder may request, representing the
outstanding Principal being transferred by the Holder and, if less
than the entire outstanding Principal is being transferred, a new
Note (in accordance with Section 10(c)) to the Holder representing
the outstanding Principal not being transferred. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that,
by reason of prepayment or conversion of any portion of this Note,
the outstanding Principal represented by this Note may be less than
the Principal stated on the face of this Note.
(b) Lost,
Stolen or Mutilated Note. Upon receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written
certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in
accordance with Section 10(c)) representing the outstanding
Principal.
(c) Issuance
of New Notes. Whenever the Company is required to issue a
new Note pursuant to the terms of this Note, such new Note (i)
shall be of like tenor with this Note, (ii) shall represent, as
indicated on the face of such new Note, the Principal remaining
outstanding (or in the case of a new Note being issued pursuant to
Section 10(a), the Principal designated by the Holder which, when
added to the principal represented by the other new Notes issued in
connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such
issuance of new Notes), (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the
Issuance Date of this Note, (iv) shall have the same rights and
conditions as this Note, and (v) shall represent accrued and unpaid
Interest, from the Issuance Date.
11. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under
this Note and any of the other Transaction Documents at law or in
equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for
any failure by the Company to comply with the terms of this
Note.
12. LEGEND.
The Holder understands and agrees that the Conversion Stock upon
issuance shall be restrictive and, if represented by a
certificate(s), shall bear substantially the following legend until
(i) such Conversion Stock shall have been registered under the
Securities Act and effectively disposed of in accordance with a
registration statement that has been declared effective or (ii) in
the opinion of counsel acceptable to the Company, such Conversion
Stock may be sold in reliance on an available exemption without
registration under the Securities Act, as well as any applicable
“blue sky” or state securities laws:
“THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED
FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION COVERING SUCH SHARES UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
13. CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by
the Company and the Holder and shall not be construed against any
Person as the drafter hereof. The headings of this Note are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Note. Terms used in this Note but defined
in the other Transaction Documents shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction
Documents unless otherwise consented to in writing by the
Holder.
14. FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or
privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving
party.
15. NOTICES;
CURRENCY; PAYMENTS.
(a) Notices.
Any notice or other communication required or permitted to be given
hereunder shall be in writing sent by mail, facsimile with printed
confirmation, nationally recognized overnight carrier or personal
delivery and shall be effective upon actual receipt of such notice,
to the following addresses until notice is received that any such
address or contact information has been changed:
To the
Company:
Alset EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda, Maryland
20814
Attn:
Rongguo Wei
With
another copy
(which
shall not constitute
Notice)
to:
Sichenzia Ross Ference LLP
1185
Avenue of the Americas, 37th Floor
New
York, NY 10036
Facsimile:
212-930-9725
Attn:
Darrin M. Ocasio
To
Holder:
Heng Fai Ambrose Chan
7
Temasek Blvd., # 29-01B
Suntec
Tower One
Singapore
038987
Attention: Heng Fai
Ambrose Chan
(b) Currency.
All dollar amounts referred to in this Note are in United States
Dollars (“U.S.
Dollars”), and all amounts owing under this Note shall
be paid in U.S. Dollars.
(c) Payments.
The Company will make all payments of Principal and Interest under
this Note by wire transfer of immediately available funds to the
bank account specified by the Holder in written notice delivered to
the Company on or before the Maturity Date.
16.
CANCELLATION. After
all Principal, accrued Interest, and other amounts at any time owed
on this Note have been paid in full or converted in full, this Note
shall automatically be deemed canceled, shall be surrendered to the
Company for cancellation and shall not be reissued.
17. WAIVER
OF JURY TRIAL. Each party
hereby waives its right to a jury trial in connection with any
suit, action or proceeding in connection with any matter relating
to this Note.
18. GOVERNING
LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to its principles regarding conflicts of
law.
19.
ATTORNEY
FEES AND COSTS OF COLLECTION. With respect to any dispute
relating to this Note, or in the event that a suit, action,
arbitration, or other proceeding of any nature whatsoever is
instituted to collect the amounts due under the Note or to
interpret or enforce the provisions of this Agreement, including,
without limitation, any proceeding under the U.S. Bankruptcy Code
and involving issues peculiar to federal bankruptcy law or any
action, suit, arbitration, or other proceeding seeking a
declaration of rights or rescission, the prevailing party will be
entitled to recover from the losing party its reasonable attorney
fees, paralegal fees, expert fees, and all other fees, costs, and
expenses, including costs of collection, actually incurred and
reasonably necessary in connection therewith, as determined by the
judge or arbitrator at trial, arbitration, or other proceeding, or
on any appeal or review, in addition to all other amounts provided
by law.
20. MAXIMUM
PAYMENTS. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other
charges in excess of the maximum permitted by applicable law. In
the event that the rate of interest required to be paid or other
charges hereunder exceed the maximum permitted by such law, any
payments in excess of such maximum shall be credited against
amounts owed by the Company to the Holder and thus refunded to the
Company.
21. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms
shall have the following meanings:
(a) “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405
under the Securities Act.
(b) “Business
Day” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
(c) “Maturity Date”
shall mean three (3) years from the Issuance Date.
(d) “Person”
means “person” as such term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, including any individual, corporation, limited liability
company, partnership, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any
other entity or any group of persons.
(e) “Securities
Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
(f) “Transaction
Documents” means,
collectively, the Note, the SPA and any other agreements and
instruments entered into or delivered by any of the parties hereto
in connection with the transactions contemplated by the SPA, as may
be amended from time to time.
[signature
page follows]
[SIGNATURE PAGE TO
THE CONVERTIBLE PROMISSORY NOTE]
IN
WITNESS WHEREOF, the Company have caused this Note to be duly
executed as of the Issuance Date set out above.
|
COMPANY:
Alset EHome International Inc.
a Delaware corporation
|
|
By: /s/ Ang Hay
Kim
Name: Ang Hay
Kim
Title: Director
|
|
|
EXHIBIT
1
Form
of Conversion Notice
Alset
EHome International Inc.
4800
Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Attn: [
]
The
undersigned hereby elects to convert certain outstanding amount as
set forth below of the Convertible Promissory Note of Alset EHome
International Inc., a Delaware corporation (the
“Company”), issuance date
March [ ], 2021, into shares of common stock (the
“Common
Stock”) of the Company, according to the conditions
hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions
as reasonably requested by the Company and Company in accordance
therewith. No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.
The
undersigned agrees to comply with the delivery requirements under
the applicable securities laws in connection with any transfer of
the aforesaid shares of Common Stock.
Conversion
calculations:
Principal Amount of
Note to be Converted: $[ ]
USD
The
Amount of Interest of the Note to be Converted:
$[ ] USD
Conversion Price
per Share after adjustment: $[ ]
USD
Number
of Shares of Common Stock to be Issued upon Conversion:
________
Signature:
Name
(Print):
Mailing
Address:
Phone
number:
Email:
Date:
Annex
F
Amendment
to the Third Amended and Restated Certificate of Incorporation
CERTIFICATE
OF AMENDMENT TO THE THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ALSET EHOME INTERNATIONAL INC.
Alset
EHome International Inc. (the “Corporation”), a corporation organized and existing under the General Corporation
Law of the State of Delaware, hereby certifies as follows:
1. This Certificate of Amendment (the “Certificate of Amendment”) amends the provisions of the Corporation’s Third Amended and Restated Certificate of Incorporation originally filed with the Secretary of State on July 7, 2020 (the “Amended and Restated Certificate of Incorporation”).
2. Article IV, Section 4.1 of the Amended and Restated Certificate of Incorporation is hereby amended and restated in its entirety as follows:
4.1
Authorized Capital Stock. The aggregate number of shares of capital stock that the Corporation
is authorized to issue is Two Hundred and Seventy-Five Million (275,000,000), of which Two Hundred and Fifty Million (250,000,000)
shares are common stock having a par value of $0.001 per share (the “Common
Stock”), and Twenty-Five Million
(25,000,000) shares are preferred stock having a par value of $0.001 per share (the “Preferred Stock”).
3. This amendment was duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.
4. All other provisions of the Amended and Restated Certificate of Incorporation shall remain in full force and effect.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by the undersigned on this [*] day of [*],
2021.
|
|
By
|
|
|
|
|
Chan Heng Fai
Chief Executive Officer and Chairman of the Board
|
Annex
G
Unaudited
Pro Forma Combined Financial Statements of Alset EHome International Inc. for the years ended December 31, 2020 and December 31
2019
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On March 12, 2021, the Company entered into a Securities Purchase
Agreement (the “SPA”) with Chan Heng Fai, the founder,
Chairman and Chief Executive Officer of the Company, for four
proposed transactions, consisting of (i) purchase of certain
warrants (the “Warrants”) to purchase 1,500,000,000
shares of Alset International Limited (“Alset
International”), which was valued at $28,363,966; (ii)
purchase of all of the issued and outstanding stock of LiquidValue
Development Pte Ltd. (“LVD”), which was valued at
$173,395; (iii) purchase of 62,122,908 ordinary shares in True
Partners Capital Holding Limited (HKG: 8657) (“True
Partners”), which was valued at $6,729,629; and (iv) purchase
of 4,775,523 shares of the common stock of American Pacific Bancorp
Inc. (“APB”), which was valued at $28,653,138. The
total amount of above four transactions was $63,920,129, payable on
the Closing Date by the Company, in four convertible promissory
notes (collectively, the “Alset CPNs”). Subject to the
approval of the Company’s shareholders, the Alset CPNs shall
be convertible into shares of the Company’s common stock, par
value $0.001 per share, at a conversion price equal of $5.59 per
share. This conversion price is equivalent to the average of the
five closing share prices of the Company’s common stock
preceding January 4, 2021, as quoted by Bloomberg L.P.
The following unaudited pro forma combined financial statements
were prepared by applying certain pro forma adjustments to the
historical financial statements of the Company. The pro forma
adjustments give effect to the four transactions described
above.
The unaudited pro forma combined statements of operations for our
fiscal years ended December 31, 2020 and 2019, respectively, give
effect to the four transactions as if they had occurred on January
1st of each year.
We determined that the four transactions described above were
transactions between entities under common control, similar to a
pooling of interest under APB Opinion 16. FASB ASC Topic 805,
Business Combinations (“ASC 805”) provides guidance to
present financial statements.
These unaudited pro forma consolidated financial statements do not
purport to represent what our results of operations or financial
condition would have been had the four transactions actually
occurred on the assumed dates, nor do they purport to project our
results of operations or financial condition for any future period
or future date. You should read these unaudited pro forma combined
financial statements in conjunction with the historical financial statements, including the
related notes.
Unaudited
Pro Forma Consolidated Statements of Operations and Other
Comprehensive Loss
For the Years Ended December 31, 2020 and 2019
(Expressed in U.S. Dollars, except number of shares)
|
|
Alset EHome International 2020
|
American Pacific Bancorp 2020
|
|
|
Alset EHome International 2019
|
American Pacific Bancorp 2019
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Property
Sales
|
$13,643,689
|
$-
|
|
$13,643,689
|
$22,855,446
|
$-
|
|
$22,855,446
|
|
Biohealth
Product Sales
|
2,594,511
|
-
|
|
2,594,511
|
1,371,298
|
-
|
|
1,371,298
|
|
Others
|
-
|
-
|
|
-
|
31,209
|
-
|
|
31,209
|
|
Total
Revenue
|
16,238,200
|
-
|
|
16,238,200
|
24,257,953
|
-
|
|
24,257,953
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
12,085,574
|
-
|
|
12,085,574
|
19,968,757
|
-
|
|
19,968,757
|
|
General and
Administrative
|
5,843,067
|
369,882
|
261,739
|
6,474,688
|
5,860,144
|
347,489
|
232,266
|
6,439,899
|
|
Inventory
Written Off
|
-
|
-
|
|
-
|
141,265
|
-
|
|
141,265
|
|
Impairment of
Real Estate
|
-
|
-
|
|
-
|
5,230,828
|
-
|
|
5,230,828
|
|
Other
Operating Expenses
|
-
|
-
|
600,270
|
600,270
|
-
|
-
|
327,477
|
327,477
|
|
Total
Operating Expenses
|
17,928,641
|
369,882
|
|
19,160,532
|
31,200,994
|
347,489
|
|
32,108,226
|
|
|
|
|
|
-
|
|
|
|
|
|
Operating
Losses From Continuing Operations
|
(1,690,441)
|
(369,882)
|
|
(2,922,332)
|
(6,943,041)
|
(347,489)
|
|
(7,850,273)
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
16,321
|
49,020
|
|
65,341
|
52,145
|
48,582
|
|
100,727
|
|
Interest
Expense
|
(147,640)
|
-
|
|
(147,640)
|
(372,902)
|
-
|
|
(372,902)
|
|
Gain on
Disposal of Subsidiary
|
-
|
-
|
|
-
|
299,255
|
-
|
|
299,255
|
|
Net Gain in
the Unconsolidated Period
|
61,346
|
-
|
|
61,346
|
-
|
-
|
|
-
|
|
Foreign
Exchange Transaction Loss
|
(354,392)
|
-
|
|
(354,392)
|
(341,415)
|
-
|
|
(341,415)
|
|
Unrealized
Gain (Loss) on Securities Investment
|
(1,750,454)
|
55,788
|
(1,978,434)
|
(3,673,100)
|
320,032
|
(123,663)
|
|
196,369
|
|
Realized Gain
on Securities Investment
|
1,115
|
-
|
|
1,115
|
7,944
|
-
|
|
7,944
|
|
Loss on
Investment on Security by Equity Method
|
(227,643)
|
-
|
|
(227,643)
|
-
|
-
|
|
-
|
|
Other
Expense
|
|
(73,041)
|
|
(73,041)
|
-
|
-
|
|
-
|
|
Other
Income
|
119,334
|
2,581
|
543,490
|
665,405
|
17,414
|
1,490
|
115
|
19,019
|
|
Total
Other Income (Expense), Net
|
(2,282,013)
|
34,348
|
|
(3,682,609)
|
(17,527)
|
(73,591)
|
|
(91,003)
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss from
Continuing Operations Before Income Taxes
|
(3,972,454)
|
(335,534)
|
|
(6,604,941)
|
(6,960,568)
|
(421,080)
|
|
(7,941,276)
|
|
|
|
|
|
-
|
|
|
|
|
|
Income Tax
Expense from Continuing Operations
|
(8,543)
|
-
|
|
(8,543)
|
(431,388)
|
-
|
|
(431,388)
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Income from Continuing Operations
|
(3,980,997)
|
(335,534)
|
|
(6,613,484)
|
(7,391,956)
|
(421,080)
|
|
(8,372,664)
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Discontinued Operations, Net of Tax
|
(417,438)
|
-
|
|
(417,438)
|
(661,472)
|
-
|
|
(661,472)
|
|
Net
Loss
|
(4,398,435)
|
(335,534)
|
|
(7,030,922)
|
(8,053,428)
|
(421,080)
|
|
(9,034,136)
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Non-Controlling Interest
|
(1,881,559)
|
|
(45,498)
|
(1,927,057)
|
(2,822,963)
|
|
(57,098)
|
(2,880,061)
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Income Attributable to Common Stockholders
|
$(2,516,876)
|
|
|
$(5,103,865)
|
$(5,230,465)
|
|
|
$(6,154,075)
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income (Loss), Net
|
|
|
|
|
|
|
|
|
|
Unrealized
Gain on Securities Investment
|
19,486
|
|
|
19,486
|
(55,213)
|
|
|
(55,213)
|
|
Foreign
Currency Translation Adjustment
|
1,148,898
|
|
|
1,148,898
|
10,028
|
|
|
10,028
|
|
Comprehensive
Loss
|
(3,230,051)
|
|
|
(5,862,538)
|
(8,098,613)
|
|
|
(9,079,321)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Loss Attributable to Non-controlling Interests
|
(1,314,761)
|
|
(45,498)
|
(1,360,259)
|
(2,836,998)
|
|
(57,098)
|
(2,894,096)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Loss Attributable to Common Stockholders
|
$(1,915,290)
|
|
|
$(4,502,279)
|
$(5,261,615)
|
|
|
$(6,185,225)
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Per Share - Basic and Diluted
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$(0.27)
|
|
|
$(0.57)
|
$(0.47)
|
|
|
$(0.57)
|
|
Discontinued
Operations
|
$(0.03)
|
|
|
$(0.04)
|
$(0.05)
|
|
|
$(0.05)
|
|
Net Loss Per
Common Share
|
$(0.30)
|
|
|
$(0.61)
|
$(0.52)
|
|
|
$(0.61)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Basic and
Diluted
|
8,352,425
|
|
|
8,352,425
|
10,001,000
|
|
|
10,001,000
|
Unaudited Pro Forma Consolidated Balance
Sheets
|
|
Alset EHome International as Reported December 31,
2020
|
American Pacific Bancorp as Reported December 31, 2020
(1)
|
|
Pro Forma December 31, 2020
|
Alset EHome International as Reported December 31,
2019
|
American Pacific Bancorp as Reported December 31, 2019
(1)
|
|
Pro Forma December 31, 2019
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
$22,124,491
|
$1,848,455
|
$492,977
|
$24,465,923
|
$2,774,587
|
$449,115
|
$257,437
|
$3,481,139
|
|
Restricted
Cash
|
6,769,533
|
-
|
|
6,769,533
|
4,447,678
|
-
|
|
4,447,678
|
|
Account
Receivables, Net
|
1,366,194
|
-
|
|
1,366,194
|
170,442
|
-
|
|
170,442
|
|
Other
Receivables
|
270,222
|
279,177
|
95,177
|
644,576
|
681,677
|
256,140
|
|
937,817
|
|
Note
Receivables - Related Parties
|
624,986
|
24,583
|
|
649,569
|
-
|
-
|
|
-
|
|
Prepaid
Expenses
|
1,470,680
|
-
|
|
1,470,680
|
145,186
|
-
|
|
145,186
|
|
Inventory
|
90,068
|
-
|
|
90,068
|
116,698
|
-
|
|
116,698
|
|
Investment
in Securities at Fair Value
|
48,857,483
|
313,343
|
6,652,477
|
55,823,303
|
3,015,698
|
257,555
|
10,803,192
|
14,076,445
|
|
Investment
in Securities at Cost
|
280,516
|
-
|
|
280,516
|
200,128
|
-
|
|
200,128
|
|
Deposits
|
47,019
|
-
|
|
47,019
|
70,208
|
-
|
|
70,208
|
|
Current
Assets from Discontinued Operations
|
-
|
-
|
|
-
|
139,431
|
-
|
|
139,431
|
|
Total
Current Assets
|
81,901,192
|
2,465,558
|
|
91,607,381
|
11,761,733
|
962,810
|
|
23,785,172
|
|
|
|
|
|
|
|
|
|
|
|
Real
Estate
|
|
|
|
|
|
|
|
|
|
Properties
under Development
|
20,505,591
|
-
|
|
20,505,591
|
23,884,704
|
-
|
|
23,884,704
|
|
Operating
Lease Right-Of-Use Asset
|
574,754
|
-
|
|
574,754
|
146,058
|
-
|
|
146,058
|
|
Deposit
|
249,676
|
-
|
|
249,676
|
-
|
-
|
|
-
|
|
Loan
Receivable
|
-
|
840,000
|
|
840,000
|
-
|
-
|
|
-
|
|
Property and
Equipment, Net
|
85,365
|
-
|
|
85,365
|
80,285
|
-
|
|
80,285
|
|
Total
Assets
|
$103,316,578
|
$3,305,558
|
|
$113,862,767
|
$35,872,780
|
$962,810
|
|
$47,896,219
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity:
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
Payable and Accrued Expenses
|
$1,553,132
|
$117,188
|
|
$1,670,320
|
$3,995,001
|
$49,397
|
$2,972
|
$4,047,370
|
|
Accrued
Interest - Related Parties
|
-
|
-
|
|
-
|
834,536
|
-
|
|
834,536
|
|
Deferred
Revenue
|
2,867,226
|
-
|
|
2,867,226
|
258,594
|
-
|
|
258,594
|
|
Builder
Deposits
|
1,262,336
|
-
|
|
1,262,336
|
890,069
|
-
|
|
890,069
|
|
Operating
Lease Liability
|
381,412
|
-
|
|
381,412
|
58,865
|
-
|
|
58,865
|
|
Notes
Payable
|
172,706
|
-
|
|
172,706
|
157,105
|
-
|
|
157,105
|
|
Notes
Payable - Related Parties
|
1,526,208
|
-
|
64,743,952
|
66,270,160
|
410,000
|
-
|
66,185,213
|
66,595,213
|
|
Income
Tax Payable
|
-
|
-
|
|
-
|
420,327
|
-
|
|
420,327
|
|
Current
Liabilities from Discontinued Operations
|
-
|
-
|
|
-
|
7,021
|
-
|
|
7,021
|
|
Total
Current Liabilities
|
7,763,020
|
117,188
|
|
72,624,160
|
7,031,518
|
49,397
|
|
73,269,100
|
|
Long-Term
Liabilities:
|
|
|
|
|
|
|
|
|
|
Builder
Deposits
|
-
|
-
|
|
-
|
1,555,200
|
-
|
|
1,555,200
|
|
Operating
Lease Liability
|
193,342
|
-
|
|
193,342
|
91,330
|
-
|
|
91,330
|
|
Note
Payable, Net of Discount
|
636,362
|
-
|
|
636,362
|
-
|
-
|
|
-
|
|
Notes
Payable - Related Parties
|
-
|
-
|
|
-
|
4,971,401
|
-
|
|
4,971,401
|
|
Total
Liabilities
|
8,592,724
|
117,188
|
|
73,453,864
|
13,649,449
|
49,397
|
|
79,887,031
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
-
|
4,917
|
(4,917)
|
-**
|
-
|
-
|
|
|
|
Common
Stock
|
8,570
|
55,248
|
(55,248)
|
8,570**
|
10,001
|
50,331
|
(50,331)
|
10,001
|
|
Additional
Paid In Capital
|
97,950,440
|
4,142,448
|
(55,057,499)
|
47,035,389
|
54,263,717
|
1,541,791
|
(54,726,709)
|
1,078,799
|
|
Accumulated
Deficit
|
(43,010,991)
|
(1,014,243)
|
(2,733,485)
|
(46,758,719)
|
(40,494,115)
|
(678,709)
|
(469,780)
|
(41,642,604)
|
|
Accumulated
Other Comprehensive Income
|
2,153,318
|
-
|
(9,980)
|
2,143,338
|
1,468,269
|
-
|
(4,593)
|
1,463,676
|
|
Equity
Attributable to Stockholders of the Company
|
57,101,337
|
3,188,370
|
|
2,428,578
|
15,247,872
|
913,413
|
|
(39,090,128)
|
|
Non-controlling
Interests
|
37,622,517
|
-
|
357,808
|
37,980,325
|
6,975,459
|
-
|
123,857
|
7,099,316
|
|
Total
Stockholders' Equity
|
94,723,854
|
3,188,370
|
|
40,408,903
|
22,223,331
|
913,413
|
|
(31,990,812)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
$103,316,578
|
$3,305,558
|
|
$113,862,767
|
$35,872,780
|
$962,810
|
|
$47,896,219
|
*Proforma Adjustments:
(1)
4,775,523
common shares of APB represented 86.4% of APB’s total
outstanding shares as of March 12, 2021, the date the PSA was
entered with Mr. Chan Heng Fai. In the Unaudited Proforma Financial
Statements, we assume the same ownership in the years of 2020 and
2019 and as of December 31, 2020 and 2019. We adjusted
non-controlling interest of APB in both Unaudited Pro Forma
Consolidated Balance Sheets and Unaudited Pro Forma Consolidated
Statements of Operations and Other Comprehensive Loss.
(2)
True
Partners Capital Holding Limited (HKG: 8657) started trading on
Hong Kong Stock Exchange at October 16, 2020. We assume the fair
value of 62,122,908 ordinary shares of Ture Partners was $8,629,280
on January 1, 2020 and 2019, the fair value on October 16, 2020,
which was calculated under the closing market price on that
day.
(3)
The Company started trading on November 24, 2020.
We assumed the market share price of the Company was $5.59 per
share or less, the conversion price on the four promissory notes,
as of January 1, 2020 and 2019. Based on this assumption, no
Beneficiary Conversion Feature (“BCF”) was recorded in
the pro forma financial statements. However, BCF may be recorded in
the future actual financial statements under ASU
2020-06, Debt—Debt with
Conversion and Other Options (Subtopic 470-20) and Derivatives and
Hedging—Contracts in Entity’s Own Equity (Subtopic
815-40): Accounting for Convertible Instruments and Contracts in an
Entity’s Own Equity and may have huge impact on the
future actual financial statements. Based on the Company’s stock price on March
12, 2021, the agreement date as the commitment date of BCF, the BCF
intrinsic value is approximately $50 million, which will be
recorded as debt discount and amortized on a monthly basis until
the expiration date of the promissory notes or the conversion date,
whichever is earlier.
**Preferred Stock and Common Stock
In
both Unaudited Pro Forma Consolidated Balance Sheets and Unaudited
Pro Forma Consolidated Statements of Operations and Other
Comprehensive Loss, we do not include the transaction that Mr. Chan
Heng Fai exchanged his common stock to preferred stock on May 3,
2021. The management expects that he will convert the preferred
stock back to common stock in a short period.
Annex
H
Audited
Financial Statements of American Pacific Bancorp, Inc. for the years ended December 31, 2020 and December 31, 2019
American
Pacific Bancorp, Inc.