Form 8-K Alset EHome Internationa For: Mar 12
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): March 12,
2021
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ALSET EHOME INTERNATIONAL INC.
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(Exact
name of registrant as specified in its charter)
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Delaware
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001-39732
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83-1079861
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(State
of incorporation or organization)
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(Commission
File
Number)
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(IRS
Employer Identification No.)
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4800 Montgomery Lane, Suite 210
Bethesda, Maryland 20814
(Address of principal executive offices) (Zip
Code)
Registrant’s
telephone number, including area code (301) 971-3940
N/A
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common
Stock, $0.001 par value
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AEI
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The
Nasdaq Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01
Entry
into a Material Definitive Agreement.
Effective
as of March 12, 2021, Alset EHome International Inc. (the
“Company”) entered into a Securities Purchase Agreement
(the “Securities Purchase Agreement”) with Mr. Chan
Heng Fai, the founder, Chairman and Chief Executive Officer of the
Company, True Partners International Limited, LiquidValue
Development Pte Ltd. (“LVD”) and American Pacific
Bancorp, Inc. (“APB”), pursuant to which the Company
purchased from Chan Heng Fai (i) warrants (the
“Warrants”) to purchase 1,500,000,000 shares of Alset
International Limited (“Alset International”); (ii)
1,000,000 shares of LVD’s common stock, constituting all of
the issued and outstanding stock of LVD; (iii) 62,122,908 ordinary
shares in True Partners Capital Holding Limited (“True
Partner”); and (iv) 4,775,523 shares of APB’s Class B
common stock, representing 86.44% of the total issued and
outstanding common stock of APB.
The
four acquisitions set forth in the Securities Purchase Agreement
closed on March 12, 2021. The Company has issued four convertible
notes to Chan Heng Fai as follows: (i) a convertible note in the
amount of $28,363,966.42 for warrants to purchase 1,500,000,000
shares of Alset International; (ii) a convertible note in the
amount of $173,394.87 to acquire all of the outstanding capital
stock of LVD; (iii) a convertible note in the amount of
$6,729,629.29 to acquire 62,122,908 ordinary shares of True
Partners; and (iv) a convertible note in the amount of $28,653,138
for 4,775,523 Class B shares of APB. Such four notes will only
become convertible into shares of the Company’s common stock
following the approval of the Company’s shareholders. Subject
to such shareholder approval, each note shall be convertible into
shares of the Company’s common stock at a conversion price
equal to $5.59 per share (equivalent to the average five closing
per share prices of the Company’s common stock preceding
January 4, 2021). Each convertible note matures in three years, has
an interest rate of 2% per annum and the principal amount and
accrued but unpaid interest shall be payable on the maturity date,
subject to the conversion of each convertible note.
Mr.
Chan recused himself from any deliberation or vote regarding any of
the four transactions described herein. The Audit Committee of the
Company’s Board of Directors reviewed, approved and
determined that it is advisable and in the best interests of the
Company to complete the four proposed transactions described above
in connection with the Term Sheet (the “Term Sheet”)
related to such transactions set forth in the Securities Purchase
Agreement. The Company’s Board of Directors approved the Term
Sheet for such transactions on January 6, 2021, and approved the
Securities Purchase Agreement and the transactions in connection
therewith on March 12, 2021.
The
four acquisitions set forth in the Securities Purchase Agreement
closed on March 12, 2021. All of these assets were acquired from
Chan Heng Fai or entities owned by Chan Heng Fai, the
Company’s Chairman and Chief Executive Officer. Mr. Chan is
also an officer and director of each of Alset International, LVD
and APB.
Alset International Limited
Incorporated
in September 2009 and listed on the Singapore Exchange in July
2010, Alset International operates as a global enterprise involved
in (i) property development and investments, primarily in the U.S.
and Western Australia; (ii) development, research, testing,
manufacturing, licensing and distribution of biomedical products;
(iii) asset management with a primary focus medical and residential
real estate in the US; (iv) direct sales of a growing variety of
health and wellness products; and (v) information technology
businesses, including blockchain technology. The Company has
acquired warrants to purchase 1,500,000,000 shares of Alset
International with an exercise price of SGD $0.048 per share. The
Company currently owns 57.07% of Alset International. If the
Company exercises all of the Alset International warrants acquired
in this transaction, the Company’s ownership of Alset
International will increase to 76.75%.
Mr.
Chan Heng Fai is both Chairman of the Board and the Chief Executive
Officer of the Company and the Chairman and Chief Executive Officer
of its subsidiary Alset International, as well as a significant
shareholder of both the Company and Alset International. Mr. Chan
owns 186,246,600 shares of Alset International, representing
approximately 10.5% of the outstanding shares of Alset
International.
LiquidValue Development Pte Ltd.
LVD
operates in the asset management field and will be leveraged by the
Company to establish an actively managed open-ended exchange-traded
fund (“ETF”) in the U.S. focused on disruptive
investment opportunities with long-term exponential growth
potential. The Company has acquired all of the issued and
outstanding stock of LVD.
True Partner Capital Holding Limited
True
Partners operates as a fund management company in the U.S. and Hong
Kong. True Partners manages funds and provides managed accounts on
a discretionary basis using a proprietary trading platform,
offering investment management and consultancy services. True
Partners also develops and supports its trading platform and
related proprietary software and provides management services for a
portfolio of securities and futures contracts. Its fund investors
and managed accounts are primarily professional investors,
including family offices, pension funds, high-net worth
individuals, endowments/foundations, and financial institutions.
True Partners was founded in 2010 and is headquartered in Hong
Kong. True Partners is currently listed on the Hong Kong Stock
Exchange (HKSE), with over USD $1.6 billion assets under management
(AUM). Pursuant to the Securities Purchase Agreement, the Company
has acquired 62,122,908 ordinary shares in True Partners (HKG:
8657). The Company now owns 15.5% of True Partners.
American Pacific Bancorp Inc.
APB is
a bank holding company that invests in commercial banks in the U.S.
APB’s plans include injecting digital banking capabilities
into banks to provide global banking services to clients worldwide,
with the goal to increase its profitability. The Company acquired
4,775,523 shares of the Class B common stock of APB, representing
approximately 86.4% of the total common stock of APB. The Company
plans to leverage APB's infrastructure to capitalize on the growth
opportunities with Special Purpose Acquisition Companies (SPACs).
The Company intends to work with APB to form a synergistic home
financing capability that will further support the Company’s
long-term business objectives.
The
foregoing description of the Securities Purchase Agreement and the
four convertible promissory notes does not purport to be complete
and is qualified in its entirety by reference to the complete text
of the Securities Purchase Agreement and each of the convertible
promissory notes, a copy of which are filed herein as exhibits to
this Current Report on Form 8-K.
Item
2.01
Completion
of Acquisition or Disposition of Assets.
The
disclosures set forth in Item 1.01 of this Current Report are
incorporated by reference herein.
Item
3.02
Unregistered
Sales of Equity Securities.
The
disclosures set forth in Item 1.01 of this Current Report are
incorporated by reference herein.
Item
7.01
Regulation
FD Disclosure.
On
March 15, 2021, the Company issued a press release (the
“Press Release”) announcing the closing of the four
transactions described above.
A copy
of the Press Release is being furnished as Exhibit 99.1 to this
Current Report on Form 8-K. The information contained in the Press
Release shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or incorporated by reference in any
filing under the Securities Act of 1933, as amended (the
“Securities Act”) or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing. The
furnishing of the information in the Press Release is not intended
to, and does not, constitute a representation that such furnishing
is required by Regulation FD or that the information contained in
the Press Release constitutes material investor information that is
not otherwise publicly available.
This
Current Report on Form 8-K and exhibits may contain these types of
statements, which are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, and which involve risks, uncertainties and reflect the
Registrant’s judgment as of the date of this Current Report
on Form 8-K. Forward-looking statements may relate to, among other
things, operating results and are indicated by words or phrases
such as “expects,” “should,”
“will,” and similar words or phrases. These statements
are subject to inherent uncertainties and risks that could cause
actual results to differ materially from those anticipated at the
date of this Current Report on Form 8-K. The Company disclaims any
obligation to, and will not, update any forward-looking statements
to reflect events or circumstances after the date hereof. Investors
are cautioned not to rely unduly on forward-looking statements when
evaluating the information presented within.
Item
9.01
Financial
Statements and Exhibits.
(a) Financial Statements of Business Acquired
The
Company plans to file the required financial statements of APB, on
or before May 27, 2021 on a Form 8-K/A.
(b) Pro Forma Financial Information
The
Company plans to file the required pro forma financial information
on or before May 27, 2021 on a Form 8-K/A.
(d) Exhibits.
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Exhibit
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Number
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Exhibit
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Securities
Purchase Agreement By and Among Alset EHome International Inc.,
Chan Heng Fai Ambrose, True Partners International Limited,
LiquidValue Development Pte Ltd. and American Pacific Bancorp, Inc.
dated March 12, 2021.
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2%
Conditional Convertible Promissory Note dated March 12, 2021, in
the principal amount of $28,363,966.42.
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2%
Conditional Convertible Promissory Note dated March 12, 2021, in
the principal amount of $173,394.87.
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2%
Conditional Convertible Promissory Note dated March 12, 2021, in
the principal amount of $6,729,629.29.
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2%
Conditional Convertible Promissory Note dated March 12, 2021, in
the principal amount of $28,653,138.00.
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Press
Release dated March 15, 2021.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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ALSET EHOME INTERNATIONAL INC.
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Date:
March 18, 2021
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By:
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/s/ Rongguo Wei
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Name:
Rongguo Wei
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Title:
Co-Chief Financial Officer
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Exhibit 10.1
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.
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(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.
DEFINITIONS
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
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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.
THE
TRANSACTIONS
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.
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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.
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3.
CONDITIONS
PRECEDENT
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:
5
(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:
6
(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.
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.
7
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.
8
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.
9
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.
10
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.
CLOSING
DELIVERABLES
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;
11
(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.
RESCISSION
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.
CONFIDENTIALITY
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.
12
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.
11.
NO
ASSISGNMENT
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.
12.
TIME
OF ESSENCE
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.
COSTS
AND TAXATION
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.
13
14.
NOTICES
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:
|
|
Alset
EHome International Inc.
Attention:
Rongguo Wei
Address:
4800 Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Email:
[email protected]
|
|
Seller
and TP Holdco:
|
|
Heng
Fai Ambrose Chan
Address:
7 Temasek Blvd., # 29-01B, Suntec Tower One, Singapore
038987
Email:
[email protected]
|
|
LVD:
|
|
LiquidValue
Development Pte Ltd.
Attn:
Danny Lim
Address:
7 Temasek Blvd., #29-01B, Suntec Tower One, Singapore
038987
Email:
[email protected]
|
|
|
|
|
|
APB:
|
|
American
Pacific Bancorp, Inc.
Attention:
Rongguo Wei
Address:
4800 Montgomery Lane, Suite 210
Bethesda,
Maryland 20814
Email:
[email protected]
|
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.
15.
FURTHER
ASSURANCE
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.
16.
SEVERABILITY
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.
14
17.
COUNTERPARTS
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.
19.
CONTRACTS
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]
15
[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
|
Alset EHome International Inc.
(fka, HF
Enterprises Inc.)
|
|
By: /s/ Ang Hay
Kim
Name: Ang Hay
Kim
Title: Director
|
|
THE SELLER
|
|
Heng Fai Ambrose Chan
|
|
By: /s/ Heng Fai
Ambrose Chan
Name: Heng Fai Ambrose
Chan
Title: Individual
|
|
|
|
True Partners International Limited
|
|
By: /s/ Heng Fai
Ambrose Chan
Name: Heng Fai Ambrose
Chan
Title: Sole
Shareholder
|
|
|
|
LiquidValue Development Pte Ltd.
|
|
|
|
By: /s/ Heng Fai
Ambrose
Chan
Name: Heng Fai Ambrose
Chan
Title: Director
|
|
American Pacific Bancorp, Inc.
|
|
By: /s/ Heng Fai
Ambrose Chan
Name: Heng Fai Ambrose
Chan
Title: Chairman of the
Board
|
|
|
16
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:
(a)
Owned:
None
(b)
Exclusively
licensed: None
APB:
(a)
Owned:
None
(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
17
Exhibit
10.2
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;
1
(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.
2
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.
3
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.
4
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.
5
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
6
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
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.
7
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]
8
[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
|
|
|
9
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:
10
Exhibit 10.3
Alset EHome International Inc.
(fka, HF Enterprises Inc.)
2% conditional convertible Promissory Note
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Principal Amount: $173,394.87 U.S. Dollars
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Issuance
Date: March 12, 2021
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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;
1
(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.
2
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.
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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.
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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.
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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
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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.
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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]
8
[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.
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COMPANY:
Alset EHome International Inc.
a Delaware corporation
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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:
10
Exhibit
10.4
Alset EHome International Inc.
(fka, HF Enterprises Inc.)
2% conditional convertible Promissory Note
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Principal Amount: $6,729,629.29 U.S. Dollars
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Issuance
Date: March 12, 2021
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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;
1
(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.
2
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.
3
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.
4
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.
5
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
6
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.
7
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]
8
[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
|
|
|
9
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:
10
Exhibit
10.5
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;
1
(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.
2
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.
3
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.
4
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.
5
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
6
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.
7
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]
8
[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
|
|
|
9
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:
10
Exhibit 99.1
Alset EHome International Completes Previously Announced
Investments in Alset International, LiquidValue Development, True
Partners Capital, and American Pacific Bancorp
BETHESDA, MD – March 15, 2021 –
Alset EHome International
Inc. (NASDAQ: AEI) (the "Company"), a diversified holding company
principally engaged through its subsidiaries in EHome development
and digital transformation technology, today announced that it has
closed on its previously announced transactions, acquiring warrants
to purchase shares in Alset International Limited (“Alset
International”), and acquiring shares of LiquidValue
Development Pte Ltd ("LVD"), True Partners Capital Holding Limited
(HKG: 8657) ("True Partners"), and American Pacific Bancorp Inc.
("APB").
“Through these transactions, Alset EHome International has
acquired assets that provide a strong foundation for future growth
and contribute to building an ecosystem for a sustainable healthy
living system,” stated Chan Heng Fai, the Company’s
Executive Chairman.
Alset International Limited
Incorporated in September 2009 and listed on the Singapore Exchange
in July 2010, Alset International operates as a global enterprise
involved in (i) property development and investments, primarily in
the U.S. and Western Australia; (ii) development, research,
testing, manufacturing, licensing and distribution of biomedical
products; (iii) asset management with a primary focus medical and
residential real estate in the US; (iv) direct sales of a growing
variety of health and wellness products; and (v) information
technology businesses, including blockchain technology. The Company
has acquired warrants to purchase 1,500,000,000 shares of Alset
International with an exercise price of SGD $0.048 per share. The
Company currently owns 57.1% of Alset International. If the Company
exercises all of the Alset International warrants acquired in this
transaction, the Company’s ownership of Alset International
will increase to 76.75%.
LiquidValue Development Pte Ltd
LVD operates in the asset management field and will be leveraged by
the Company to establish an actively managed open-ended
exchange-traded fund (“ETF”) in the US focused on
disruptive investment opportunities with long-term exponential
growth potential. The Company has acquired all of the issued and
outstanding stock of LVD.
True Partners Capital Holding Limited
True Partners operates as a fund management company in the U.S. and
Hong Kong. True Partners manages funds and provides managed
accounts on a discretionary basis using a proprietary trading
platform, offering investment management and consultancy services.
True Partners also develops and supports its trading platform and
related proprietary software and provides management services for a
portfolio of securities and futures contracts. Its fund investors
and managed accounts are primarily professional investors,
including family offices, pension funds, high-net worth
individuals, endowments/foundations, and financial institutions.
True Partners was founded in 2010 and is headquartered in Hong
Kong. True Partners is currently listed on the Hong Kong Stock
Exchange (HKSE), with over USD $1.6 billion assets under management
(AUM). The Company has acquired 62,122,908 ordinary shares in True
Partners Capital Holding Limited (HKG: 8657). The Company now owns
15.5% of True Partners with an unrealized gain from the acquisition
of approximately US$3.28 million based on the closing price of True
Partners on the Hong Kong Stock Exchange (HKG: 8657) as of March
12, 2021.
American Pacific Bancorp Inc.
APB is a bank holding company that invests in commercial banks in
the US. APB’s plans include injecting digital banking
capabilities into banks to provide global banking services to
clients worldwide, increasing profitability. The Company acquired
4,775,523 shares of the Class B common stock of APB, representing
approximately 86.4% of the total common stock of APB. The Company
plans to leverage APB's infrastructure to capitalize on growing
opportunities with Special Purpose Acquisition Companies (SPACs).
The Company intends to work with APB to form a synergistic home
financing capability that will further support the Company’s
long-term business objectives.
Consideration
The Company has issued four convertible notes to Chan Heng Fai, the
seller of these investments, as follows: (i) a convertible note in
the amount of $28,363,966.42 for warrants to purchase 1,500,000,000
shares of Alset International; (ii) a convertible note in the
amount of $173,394.87 to acquire all of the outstanding capital
stock of LVD; (iii) a convertible note in the amount of
$6,729,629.29 to acquire 62,122,908 shares of True Partners; and
(iv) a convertible note in the amount of $28,653,138 for 4,775,523
Class B shares of APB. Such four notes will only become convertible
into shares of the Company’s common stock following the
approval of the Company’s shareholders. Subject to such
shareholder approval, each note shall be convertible into shares of
the Company’s common stock at a conversion price equal to
$5.59 per share (equivalent to the average five closing per share
prices of the Company’s common stock preceding January 4,
2021). Each convertible note matures in three years and has an
interest rate of 2% per annum.
About Alset EHome International Inc.
Alset EHome International Inc. is a diversified holding company
principally engaged through its subsidiaries in EHome development
and digital transformation technology with operations in the United
States, Singapore, Hong Kong, Australia and South Korea. The
Company's vision is to accelerate sustainable healthy living. The
Company's mission is to provide a healthy living ecosystem,
encompassing housing, transport, energy alternative healthy food
and impact health products.
For more information, please visit: www.alsetehomeintl.com.
Investor Contact:
Dave Gentry, CEO
RedChip Companies Inc.
407-491-4498
Forward-Looking Statement Disclaimer
Statements in this press release contain "forward-looking
statements" that are subject to substantial risks and
uncertainties. All statements, other than statements of historical
fact, contained in this press release are forward-looking
statements. Forward-looking statements contained in this press
release may be identified by the use of words such as "anticipate,"
"believe," "contemplate," "could," "estimate," "expect," "intend,"
"seek," "may," "might," "plan," "potential," "predict," "project,"
"target," "aim," "should," "will" "would," or the negative of these
words or other similar expressions, although not all
forward-looking statements contain these words. Forward-looking
statements are based on Alset EHome International Inc.'s current
expectations and are subject to inherent uncertainties, risks and
assumptions that are difficult to predict. Consequently, actual
results may differ materially from those expressed or implied by
such forward-looking statements. Further, certain forward-looking
statements are based on assumptions as to future events that may
not prove to be accurate. These and other risks and uncertainties
are described more fully in the section titled "Risk Factors" in
the final prospectus related to its initial public offering filed
with the SEC. Forward-looking statements contained in this
announcement are made as of this date, and Alset EHome
International Inc. undertakes no duty to update such information
except as required under applicable law.
SOURCE: Alset EHome International Inc.
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