Item 1.01 Entry into a Material Definitive Agreement
Share Purchase Agreement
On April 11, 2022, 8i Acquisition 2 Corp., a British Virgin Islands business
company ("LAX"), entered into a Share Purchase Agreement (the "SPA") with Euda
Health Limited, a British Virgin Islands business company ("EUDA Health"),
Watermark Developments Limited, a British Virgin Islands business company (the
"Seller") and Kwong Yeow Liew, acting as Representative of the Indemnified
Parties (the "Indemnified Party Representative"). Pursuant to the terms of the
SPA, a business combination between LAX and EUDA Health will be effected through
the purchase by LAX of all of the issued and outstanding shares of EUDA Health
from the Seller (the "Share Purchase").
The board of directors of LAX have (i) approved and declared advisable the SPA,
the Share Purchase and the other transactions contemplated thereby, and (ii)
resolved to recommend approval of the SPA and related transactions by the
shareholders of LAX.
Mr. Meng Dong (James) Tan, LAX's Chief Executive Officer and Chairman of the LAX
board of directors, owns 10% of the equity interests of the Seller. LAX
anticipates that it will receive a fairness opinion from EverEdge Global to the
effect that the purchase price to be paid by LAX for the shares of EUDA Health
pursuant to the SPA is fair to LAX from a financial point of view (the "Fairness
Opinion").
In connection with the closing of the transactions under the SPA the current
officers and directors of EUDA Health will become the officers and directors of
LAX. LAX's sponsor, 8i Holdings 2 Pte. Ltd. (the "Sponsor"), will have the right
to nominate one director to serve as an independent director on the post-closing
board of directors.
The foregoing is a summary only and does not purport to be a complete
description of all of the terms, provisions, covenants, and agreements contained
in the SPA or related documents, and is subject to and qualified in its entirety
by reference to the full text of the SPA, which is filed herewith as Exhibit 2.1
to this Current Report on Form 8-K and is incorporated into this Item 1.01 by
reference.
Consideration
Initial Consideration
The initial consideration to be paid at Closing (the "Initial Consideration") by
LAX to Seller for the Share Purchase will be an amount equal to $550,000,000.
The Initial Consideration will be payable in ordinary shares of LAX, no par
value (the "Purchaser Shares") valued at $10 per share. To secure Seller's
obligations under the indemnification provisions of the SPA, 5,500,000 Purchaser
Shares (the "Indemnification Escrow Shares") shall be withheld from the
Purchaser Shares payable at Closing, and be delivered to American Stock Transfer
& Trust Company, as Escrow Agent, to be held by the Escrow Agent pursuant to an
escrow agreement, by and among LAX, Seller, and the Indemnified Party
Representative.
Earnout Payments
In addition to the Initial Consideration, the Seller may also receive up to
9,000,000 additional Purchaser Shares as an earnout payments (the "Earnout
Shares") if, within a 3-year period following the Closing, the volume-weighted
average price of Purchaser Shares equals or exceeds any of three thresholds over
any 20 trading days within a 30-day trading period (each, a "Triggering Event")
under the terms and conditions set forth in the SPA and related transaction
documents:
? The Seller will be issued 3,000,000 additional Purchaser Shares if during the
period beginning on the Closing Date and ending on the first anniversary of the
Closing Date, the Purchaser Share Price is equal to or greater than Fifteen
Dollars ($15.00) after the Closing Date;
? The Seller will be issued 3,000,000 additional Purchaser Shares if during the
period beginning on the first anniversary of the Closing Date and ending on the
second anniversary of the Closing Date, the Purchaser Share Price is equal to or
greater than Twenty Dollars ($20.00); and
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? The Seller will be issued 3,000,000 additional Purchaser Shares if during the
period beginning on the second anniversary of the Closing Date and ending on the
third anniversary of the Closing Date, the Purchaser Share Price is equal to or
greater than Twenty-Five Dollars ($25.00).
Representations and Warranties
The SPA contains representations and warranties of EUDA Health with respect to,
among other things, (a) organization, good standing and qualification, (b)
capital structure; (c) corporate authority, approval and fairness, (d)
governmental filings, (e) financial statements and internal controls, (f)
absence of certain changes, (g) liabilities, (h) litigation, (i) compliance with
laws; permits; (j) employee benefits, (k) labor matters, (l) environmental
matters, (m) tax matters, (n) real and personal property, (o) intellectual
property and IT assets, (p) insurance, (q) company material contracts, (r)
brokers and finders, (s) suppliers and customers; (t) proxy statement, (u)
compliance with privacy laws, privacy policies and certain contracts, (v)
compliance with health care laws and certain contracts, and (w) related party
transactions.
The SPA contains representations and warranties of Seller with respect to, among
other things, (a) organization, good standing and qualification, (b) capital
structure; (c) corporate authority, approval and fairness, (d) governmental
filings, (e) litigation and proceedings, and (f) brokers and finders.
The SPA also contains representations and warranties of LAX with respect to,
among other things, (a) reports; internal controls, (b) trust fund, (c) business
activities and liabilities, (d) certain laws such as the Investment Company Act
and the JOBS Act, (e) purchaser trust account, (f) NASDAQ Stock Market
Quotation, (g) brokers and finders, and (h) taxes.
The representations and warranties generally survive closing for a period of 15
months.
Covenants
The SPA includes covenants of the EUDA Health and LAX with respect to operation
of their respective businesses prior to consummation of the Share Purchase and
efforts to satisfy conditions to consummation of the Share Purchase. The SPA
also contains additional covenants of EUDA Health, LAX, and Seller, including,
among others, access to inspect the books and records, claims against LAX's
trust account, cooperation in the preparation of the Proxy Statement (as each
such term is defined in the SPA) required to be filed in connection with the
Share Purchase, the holding of the Special Meeting (as defined in the SPA),
cooperation and efforts to consummate the Share Purchase, delivery of and
revisions to the EUDA Health disclosure letter, publicity, the delivery of the
amended and restated registration rights agreement, expenses, sharing in payment
of any Extension Payment (as defined in the SPA) and cooperating with respect to
the Minimum Round Lot Holders (as defined in the SPA). LAX also has additional
covenants, including among others, covenants relating to its trust account,
indemnification and directors' and officers' insurance, inspections, LAX's
Nasdaq listing, LAX's public filings, post-closing board of directors and
officers, indemnification agreements, governing documents and shareholder
litigation.
Indemnification
The Seller has agreed to indemnify each of LAX, EUDA Health, affiliates of LAX
and EUDA Health from losses, liabilities, damages, costs, payments, demands and
related fees that the foregoing persons may suffer or incur as a consequence of,
among other things, any breach or inaccuracy of the representations or
warranties of EUDA Health or the Seller contained in the SPA; any breaches of
the covenants of EUDA Health or the Seller contained in the SPA; and any
breaches of privacy laws by or on behalf of EUDA Health or any of its
subsidiaries. However, the first $2,500,000 of the losses, liabilities, damages
and other items stated in the preceding sentence is not subject to
indemnification.
The Indemnification Escrow Shares withheld from the initial consideration and
delivered to the Escrow Agent at Closing constitutes the sole source of payment
for items for which the Seller is obligated to provide indemnification. Claims
for indemnification for breaches or inaccuracies in the representations and
warranties of EUDA Health contained in the SPA must be asserted within the 15
month period after closing in which such representations survive.
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Restrictions on Alternative Transactions
Each of Seller and LAX has agreed that from the date of the SPA until the
Closing, it will not, among other things, (i) initiate any negotiations with any
person concerning an Acquisition Proposal or Alternative Transaction (as such
terms are defined in the SPA), (ii) enter into any agreement, letter of intent,
memorandum of understanding or agreement in principle relating to such
Acquisition Proposal or Alternative Transaction, (iii) grant any waiver,
amendment or release under any confidentiality agreement or anti-takeover laws,
or (iv) otherwise knowingly facilitate any such inquiries, proposals,
discussions, or negotiations or any effort or attempt by any person to make an
Acquisition Proposal or Alternative Transaction.
Conditions to Closing
The consummation of the Share Purchase is conditioned upon, among other things,
(a) the approval of the SPA and Share Purchase by LAX and Seller's shareholders,
(b) all regulatory approvals having been obtained, (c) no laws or governmental
orders that would restrain, enjoin, make illegal or otherwise prohibit the
consummation of the Share Purchase, (d) the Proxy Statement shall have been
cleared by the SEC and mailed, (e) the Escrow Agreement shall have been executed
. . .
Item 7.01 Regulation FD Disclosure.
On April 12, 2022, LAX and EUDA Health issued a joint press release announcing
the execution of the SPA and related matters. A copy of the press release is
furnished hereto as Exhibit 99.1.
Furnished as Exhibit 99.2 is the investor presentation, and Exhibit 99.3 is the
executive summary of the investor presentation that will be used by LAX and EUDA
Health in connection with the Share Purchase and related matters.
The information in this Item 7.01 and Exhibits 99.1, 99.2 and 99.3 attached
hereto shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, except as expressly set forth by
specific reference in such filing.
Important Information for Investors and Stockholders
This document relates to a proposed transaction between LAX and EUDA Health.
This document does not constitute an offer to sell or exchange, or the
solicitation of an offer to buy or exchange, any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer, sale or exchange
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. LAX intends to file a proxy statement with the
SEC. A proxy statement will be sent to all LAX shareholders. LAX also will file
other documents regarding the proposed transaction with the SEC. Before making
any voting decision, investors and security holders of LAX are urged to read the
proxy statement and all other relevant documents filed or that will be filed
with the SEC in connection with the proposed transaction as they become
available because they will contain important information about the proposed
transaction.
Investors and security holders will be able to obtain free copies of the proxy
statement and all other relevant documents filed or that will be filed with the
SEC by LAX through the website maintained by the SEC at www.sec.gov.
Forward Looking Statements
Certain statements included in this Current Report on Form 8-K are not
historical facts but are forward-looking statements. Forward-looking statements
generally are accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would," "plan,"
"future," "outlook," and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters, but the
absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements include, but are not limited to, statements
regarding estimates and forecasts of other performance metrics and projections
of market opportunity. These statements are based on various assumptions,
whether or not identified in this Current Report on Form 8-K and on the current
expectations of LAX's and EUDA Health's respective management and are not
predictions of actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as, and must not be
relied on by any investor as, a guarantee, an assurance, a prediction or a
definitive statement of fact or probability. Actual events and circumstances are
difficult or impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of LAX and EUDA Health. Some
important factors that could cause actual results to differ materially from
those in any forward-looking statements could include changes in domestic and
foreign business, market, financial, political and legal conditions.
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These forward-looking statements are subject to a number of risks and
uncertainties. These risks and uncertainties include, but are not limited to,
those factors described in the section entitled "Risk Factors" in the prospectus
filed by LAX in connection with its initial public offering on November 22,
2021. Important factors, among others, that may affect actual results or
outcomes include: the inability of the parties to successfully or timely
consummate the Share Purchase, including the risk that any required regulatory
approvals are not obtained, are delayed or are subject to unanticipated
conditions that could adversely affect EUDA Health or the expected benefits of
the Share Purchase, if not obtained; the failure to realize the anticipated
benefits of the business combination; matters discovered by the parties as they
complete their respective due diligence investigation of the other parties; the
ability of LAX prior to the Share Purchase, and EUDA Health following the Share
Purchase, to maintain the listing of LAX's shares on NASDAQ; costs related to
the business combination; the failure to satisfy the conditions to the
consummation of the Share Purchase, including the approval of the SPA by the
shareholders of LAX, the satisfaction of the minimum cash requirements of the
SPA following any redemptions by LAX's shareholders; the risk that the Share
Purchase may not be completed by the stated deadline and the potential failure
to obtain an extension of the stated deadline; and the outcome of any legal
proceedings that may be instituted against LAX or EUDA Health related to the
business combination. Important factors that could cause the combined company's
actual results or outcomes to differ materially from those discussed in the
forward-looking statements include: EUDA Health's limited operating history and
history of net losses; EUDA Health's ability to manage growth; EUDA Health's
ability to execute its business plan; EUDA Health's estimates of the size of the
markets for its products; the rate and degree of market acceptance of EUDA
Health's products; EUDA Health's ability to identify and integrate acquisitions;
potential litigation involving the Company or EUDA Health or the validity or
enforceability of EUDA Health's intellectual property; and general economic and
market conditions impacting demand for EUDA Health's products and services.
If any of these risks materialize or our assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. There may be additional risks that neither LAX nor
EUDA Health presently know, or that LAX and EUDA Health currently believe are
immaterial that could also cause actual results to differ from those contained
in the forward-looking statements. In addition, forward-looking statements
reflect LAX and EUDA Health's current expectations, plans and forecasts of
future events and views as of the date hereof. Nothing in this Current Report on
Form 8-K and the attachments hereto should be regarded as a representation by
any person that the forward-looking statements set forth herein will be achieved
or that any of the contemplated results of such forward-looking statements will
be achieved. You should not place undue reliance on forward-looking statements
in this Current Report on Form 8-K and the attachments hereto, which speak only
as of the date they are made and are qualified in their entirety by reference to
the cautionary statements herein and the risk factors of LAX and EUDA Health
described above. LAX and EUDA Health anticipate that subsequent events and
developments will cause their assessments to change. However, while LAX and EUDA
Health may elect to update these forward-looking statements at some point in the
future, they each specifically disclaim any obligation to do so, except as
required by law. These forward-looking statements should not be relied upon as
representing LAX or EUDA Health's assessments as of any date subsequent to the
date of this Current Report. Accordingly, undue reliance should not be placed
upon the forward-looking statements.
Participants in the Solicitation
LAX and its directors and executive officers and other persons may be deemed to
be participants in the solicitation of proxies from LAX's shareholders with
respect to the proposed transaction. Information regarding LAX's directors and
executive officers is available in its prospectus filed in connection with its
initial public offering on November 22, 2021. Additional information regarding
the participants in the proxy solicitation relating to the proposed transaction
and a description of their direct and indirect interests will be contained in
the proxy statement when it becomes available.
EUDA Health and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the shareholders of LAX in
connection with the proposed transaction. A list of the names of such directors
and executive officers and information regarding their interests in the proposed
transaction will be included in the proxy statement for the proposed transaction
when available. You may obtain free copies of these documents as described in
the second paragraph under the above section entitled "Important Information for
Investors and Stockholders."
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This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of any securities in any state or jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such other jurisdiction. No offering
of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act, or an exemption therefrom.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Description
2.1* Share Purchase Agreement, dated as of April 11, 2022, by and among
Euda Health Limited, Watermark Developments Limited, 8i Acquisition 2
Corp., and Kwong Yeow Liew.
10.1 Form of Lock-Up Agreement
10.2 Form of Amended and Restated Registration Rights Agreement.
10.3 Form of Seller Release
99.1 Press Release issued by LAX and EUDA Health, dated April 12, 2022
99.2 Investor Presentation dated April 12, 2022
99.3 Executive Summary of Investor Presentation dated April 12, 2022
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
* Certain schedules to this Exhibit have been omitted in accordance with
Regulation S-K Item 601(b)(5). LAX agrees to furnish supplementally a copy of
all omitted exhibits and schedules to the Securities and Exchange Commission
upon its request.
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