Item 1.01 Entry into a Material Definitive
Agreement.
Unless otherwise stated
in herein, references to "S$" refer to the legal currency of Singapore and "US$" refer to the legal currency
of the United States.
On December 28, 2019,
Rebel Group, Inc. (the “Company”) entered into a Sale and Purchase Agreement (the
“Agreement”) with Rodrigues Gerard Anthony and Zuzarte Desmond Gerard, (each a
“Seller”, and collectively referred to as the “Sellers”). Prior to the transactions
contemplated by the Agreement, the Sellers, collectively, own 100% of the outstanding share capital in EXPO AV-Insync Pre.
Ltd., a private liability company incorporated in and under the laws of Singapore (the “Target Company”).
The Target Company is principally engaged in the supply of audio/lighting/LED projection, camera production and rigging
rental – staging services, technical layout and designs, two-dimension and three-dimension animation, three-dimension
video mapping, post production, content production and augmented reality and on-site project management.
Pursuant to the
Agreement, the Company has agreed to purchase and the Sellers have agreed to sell 100,000 ordinary shares of the Target
Company representing 100% of the outstanding ordinary shares of the Target Company for a total consideration of up to
US$6,000,000.00, payable in common stock, par value $0.0001 per share, of the Company (the “Consideration
Shares”) with each Consideration Share valued at US$1.50 (the “Transaction”). An aggregate of
3,500,000 Consideration Shares (the “Closing Shares”) will be issued to the Sellers upon the closing of
the Transaction (the “Closing”). After the Closing, the Sellers will have contingent right to receive
additional consideration from the Company based on the performance of the Target Company from the Closing until December 31,
2020 (the “2020 Earnout Period”) and from the Closing until December 31, 2021 (the “2021 Earnout
Period”). In the event that the Target Company achieves a profit of S$1,300,000.00 for the 2020 Earnout Period, the
Sellers shall be entitled to receive from the Company additional 250,000 Consideration Shares with each share valued at
US$1.50 (the “2020 Earnout Shares”). In the event that the Target Company achieves a profit of
S$2,600,000.00 for the 2021 Earnout Period, the Sellers shall be entitled to receive additional 250,000 Consideration Shares
with each share valued at US$1.50 (the “2021 Earnout Shares”, and collectively with the 2020 Earnout
Shares, the “Earnout Shares”). The Earnout Shares will be held in escrow, with an escrow agent to be
agreed upon by the Company and Sellers, and released to the Sellers in accordance with the provisions of the Agreement. The
Sellers will have the right to buy back the Target Company ordinary shares if the Company fails to list its common stock on
the Nasdaq Stock Market LLC within 9 months of the date of the Agreement.
The closing of the Transaction
is subject to satisfaction of the following conditions: (i) completion of due diligence of the Target Company by the Company; (ii)
the requisite shareholders’ and/or directors’ approval of the Transaction; (iii) receipt of all third party consents
and approvals as necessary; (iv) execution of service agreements between the Sellers and the Target Company on such terms
acceptable to the Company; (v) the Sellers’ undertaking that each shall remain as a Director of the Target Company for 36
months following the Closing and (vi) no material adverse change to the business operations, assets, financial condition, turnover
or prospects of the Target Company.
Each of the Sellers
agrees (i) not to dispose of any of the Closing Shares for a period of 12 months following the Closing; (ii) not to dispose
of a maximum of 50% of the Closing Shares and the Earnout Shares, if any, for a period of 12 months commencing on the first
anniversary of the Closing date, (iii) not to exercise any voting or other rights or receive dividends or distributions in
relation to the Earnout Shares before receiving them and (iv) not to create any encumbrance over the Earnout Shares.
Each
of the Sellers further covenants with the Company (i) to indemnify and to keep the Company fully indemnified from and against
any and all proceedings and claims against the Company in connection with any breach of the Agreement by the Sellers and any
taxation or other charges in respect of taxation, (ii) not to engage in or invest in any business the Target Company engages
in or ventures into within 36 months from the Closing date and (iii) not to solicit, any clients, customers or employees of
the Target Company within 36 months from the Closing date.
Either
party is entitled to, terminate the Agreement upon any material breach of the Agreement by the other party
that is not remediated within 30 days of notice.
The
Agreement is governed by Singapore laws and contains a number of representations and warranties customary for transactions
similar to the Transaction.
The foregoing description
of the Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Agreement,
which is filed herewith as Exhibit 10.1 and incorporated herein by reference.