Document:

Exhibit 10.23
​
Project no. 849137 /33388 SCK/SAI
​
Funding Contract
​
concluded between
​
The Austrian Research Promotion Agency (FFG)
​
as Funding Agency
​
and
​
HOOKIPA Biotech AG
Helmut-Qualtinger-Gasse 2
1030 Vienna
​
Commercial register no. FN 365895g
​
as Funding Recipient.
​
Sec. 1 Granting funds
​
1.1      On the basis of the grant application “Development of innovative cancer immunotherapies based on Hookipa’s Vaxwave® technology,” which was received via eCall on 10/01/2014, and on the basis of the expert decision of the advisory board in the 12/03/2014 meeting, funding will be granted for the following project:
​
Project number: 849137
​
eCall number: 5040485
​
Project name (subject-matter of Contract):
​
Development of innovative cancer immunotherapies based on Hookipa’s Vaxwave® technology
​
Program:          General Program
​
	

	

	

	Österreichische
	Tel +43 (0)5 7755 — 0
	UniCredit Bank Austria AG

	Forschungsförderungsgesellschaft mbH
	Fax +43 (0)5 7755 — 97900
	Account no. 10216727200, Routing no. 12000

	Sensengasse 1
	www.ffg.at, office@ffg.at
	IBAN AT66 1200 0102 1672 7200

	1090 Vienna
	FN 252263a Commercial Court Vienna
	SWIFT BKAUATWW

​
Sec. 2 Project duration
​
2.1      The overall project duration starts on 10/01/2014 and ends on 03/31/2018.
​
2.2       FFG funding of the entire project depends on the results made apparent from the submitted reports, on further fulfilment of the evaluation and decision criteria, on the budget available to the Funding Agency, and on a renewed positive funding decision.
​
Sec. 3 Funding period
​
3.1       The funding period of this project begins on the approval date 10/01/2014 and ends on 09/30/2015.
​
​

Sec. 4 Funding nature and amount
​
4.1          Funding will be provided in the following form for the funding period specified in Sec. 3:
​
	

	​

	

	

	​

	​
	​
	Amount
	​

	Type of funding
	    
	up to max.
	​

	FFG subsidy
	​
	EUR
	581,100
	​

	FFG loan
	​
	EUR
	548,800
	​

​
​
	

	

	​

	Loan conditions
	    
	​

	​
	​
	​

	Interest rate
	​
	0.75% p.a. on a current-account basis

	Repayment date:
	​
	on 03/31/2023

	Repayment sum:
	​
	EUR 548,800

	Interest and loan collection:
	​
	as direct debit payments

	Interest payment request:
	​
	semi-annually in arrears or at loan due dates

​
4.2      The subsidized financing of the project amounts to 70% of the verifiable and eligible project costs. Remaining funding of the project costs shall be carried out by the Funding Recipient. Based on the planning data, the cash value of the grant is EUR 689,208 or 42.7% of the eligible project costs in accordance with Section 5.1.
​
4.3       The maximum eligible cash value under the applicable Community framework for State aid for R&D is 45%.
​
4.4       If the eligible project costs fall short, it will result in an aliquot reduction in funding.
​
4.5       The eligible project costs pursuant to Sec. 5 and the costs reported by way of interim or final accounts do not constitute an acknowledgement of costs on the part of FFG prior to their verification. The final amount of the total recognizable project costs and the funding will only be determined after project completion in the course of invoice verification.
​
Sec. 5 Eligible costs
​
5.1          The following eligible project costs form the basis of the funding:
​
	

	

	

	

	​

	Personnel expenses
	   
	EUR
	401,700
	​

	R&D infrastructure use
	​
	EUR
	15,500
	​

	Material costs
	​
	EUR
	171,200
	​

	Third-party services
	​
	EUR
	1,009,900
	​

	Travel expenses
	​
	EUR
	16,000
	​

	Total eligible costs
	​
	EUR
	1,614,300
	​

​
5.2      Eligible costs are all expenses and expenditures attributable to the project that are incurred directly, actually, and in addition to conventional operating expenses for the duration of the funded research activity. Additional supplementary provisions regarding eligible costs may be found in the FFG Guidelines for SMEs, the Cost Guidelines and Guide for Individual Projects of Experimental Development.
​
5.3      Significant changes to the cost structure require the FFG’s prior written approval.
​
5.4      The value added tax on the costs of the eligible service is not eligible for funding. If, however, it can be shown that this value added tax is borne verifiably in actual fact and without recourse by the Funding Recipient, thereby not making the Funding Recipient entitled to deduct input tax, it will be taken into account as an eligible cost component. The value added tax that can be reclaimed in whatever way is not eligible for funding even if the Funding Recipient does not actually get it back. Should a grant not be regarded as a grant by the tax office but as a contractual consideration because of the existence of a taxable service of the Funding Recipient to the Funding Agency that is liable to tax under the Value Added Tax Act 1994, Federal Law Gazette No. 663, and the Funding Recipient has to pay value added tax to the tax office in return, the contractual consideration shall be regarded as a gross remuneration. Additional, separate compensation of the value added tax—for whatever legal reason—is thus excluded.
​

2

5.5       If the amortization period of an item (Sec. 285 of the Austrian Civil Code, or ABGB) that was purchased for implementing the project exceeds the funding period, the depreciation costs can be funded in accordance with the method laid down in the Guide for Individual Projects of Experimental Development, and in the Cost Guidelines.
​
5.6       Funds of the Funding Agency may not be used to form reserves or provisions according to the Income Tax Act 1988, Federal Law Gazette No. 400. The funds are to be used only for the services and objectives described in the grant application.
​
5.7      Eligible costs that can be recognized in new applications are those incurred after receipt of the grant application. For renewal applications, the earliest date for cost recognition shall be the start of the funding period specified in Sec. 3.
​
5.8      The costs incurred by the Funding Recipient or its affiliates for preparing the Contract or bank transfer charges must be borne by it/them and are not eligible costs.
​
5.9      The Funding Agency reserves the right to postpone, reduce, or suspend the payment of a grant if and as long as circumstances exist that do not appear to guarantee the proper implementation of the funded project (e.g. proof of costs is not provided to the extent planned).
​
Sec. 6 Project-specific conditions and requirements
​
6.1     Project-specific special conditions and requirements
​
1.        The funding of further application possibilities of the Vaxwave technology platform is only provided after at least one field of application (infectious diseases or oncology) has been successfully completed.
​
2.        The costs for R&D infrastructure acquired before the funding period are included in the overhead of the personnel cost surcharge rate.
​
Sec. 7 Fund payment
​
7.1      The 1st instalment in the amount of 50% of the pledged funds will be paid after the Funding Contract has been concluded and the conditions and requirements agreed in Sec. 6 have been fulfilled.
​
The second instalment in the amount of 30% is paid after approval of an interim report and an interim statement, in which 50% of the approved total costs must be proved, and after the conditions and requirements under Sec. 6 have been fulfilled.
​
The final instalment in the amount of 20% of the total pledged funds will only be paid after all conditions and requirements (final accounting, final reports, etc.) have been fulfilled and after the FFG has verified and approved the where-used list.
​
7.2          The money will be transferred to the Funding Recipient’s account:
​
	

	​

	

	Account holder:
	​
	HOOKIPA Biotech AG

	Bank name:
	​
	RAIFFEISENLANDESBANK NIEDERÖSTERREICH-WIEN AG

	IBAN:
	​
	AT61 3200 0000 1511 6726

	BIC/SWIFT:
	​
	RLNWATWW

​
Sec. 8 Reporting obligation
​
8.1       According to clause 3 of the General Funding Conditions, the Funding Recipient must report to the FFG on the implementation of the funded project by submitting technical reports (interim and final reports) and billing statements. Reports and statements must be sent via eCall (https://ecall.ffg.at). Using the forms stored in eCall is mandatory. Further documents must be submitted to FFG upon request.
​
8.2       Where prototypes are funded, the Funding Recipient must report to FFG on the whereabouts or further use of the prototype.
​
Sec. 9 Amendments to the Contract
​
9.1       Amendments to this Contract may only be made expressly and in writing. This shall also apply to any departure from this provision.
​

3

9.2      Subsequent amendments to the agreed conditions and requirements may, if necessary, under special circumstances, be made by mutual agreement in the form of written additional agreements after a new advisory board decision has been taken.
​
Sec. 10 Liability
​
10.1    The Funding Recipient shall be unconditionally liable to the FFG for compliance with all contractual provisions. The Funding Recipient shall also be liable for the conduct of third parties for which it is responsible (e.g. owners, corporate officers, etc.). The Funding Recipient shall indemnify and hold FFG harmless against third-party claims.
​
Sec. 11 Severability clause
​
11.1    Should any provision of this Funding Contract be invalid, it shall not affect the validity of the remaining provisions of the Funding Contract. The contracting parties undertakes to replace an ineffective provision with one that comes closest to the purpose of this Funding Contract.
​
Sec. 12 Applicable law
​
12.1    This Contract and all of its Appendices shall be governed by Austrian law to the exclusion of the reference standards of the Austrian Private International Law (IPRG).
​
Sec. 13 Place of jurisdiction
​
13.1    The place of jurisdiction for all legal disputes arising from the grant shall be the competent court in Vienna. FFG reserves the right to take legal action against the Funding Recipient at its general place of jurisdiction.
​
Sec. 14 Contract components
​
14.1      The following documents constitute integral components of the Funding Contract:
​
·     the grant application (“Development of innovative cancer immunotherapies based on Hookipa’s Vaxwave® technology”) received via eCall in the version from 10/01/2014
​
·      General Funding Conditions for Funding Contracts as amended (version 1 from 2013)
​
·      Guide for Individual Projects of Experimental Development, version 2.0
​
·     Cost Guideline to treating project costs in grant applications and reports for projects with grant agreements according to the FTE Guidelines and the FFG Guidelines, version 1.4
​
14.2       The legal bases of this Funding Contract are, in particular:
​
·         The Austrian Research Promotion Agency Establishment Act (Forschungsförderungs-Strukturreformgesetz, Research Funding Structural Reform Law) as amended
​
·          the guidelines for the Austrian Research Promotion Agency FFG to promote research, technology, development, and innovation (FFG Guidelines no: BMVIT-609.986/0005-111/12/2008 and BMWA-98.310/0032-C1/10/2008) The extension to 06/30/2014 was approved by the European Commission on 01/30/2014.
The validity of the guidelines was extended until 12/31/2014 by the Federal Minister of Transport, Innovation and Technology on 03/12/2014 (No. BMVIT-609.986/0004-111/12/2014) i.e. by the Federal Minister of Science, Research and the Economy on 06/04/2014 (No. BMWFJ-98.310/0101-C1/10/2013) in accordance with the State aid regulations applicable as of 07/01/2014.
​
The Funding Recipient confirms knowledge of all contract components and fully accepts them.
​
It should be noted that the present grant offer is deemed to be withdrawn unless the Funding Recipient returns it to FFG signed within 3 months.
​
​

4

For the Funding Agency:
The Austrian Research Promotion Agency (FFG)
​
​
	Vienna, 12/09/2014
	    
	​

	​
	​
	​

	/s/ Dr. Henrietta Egerth-Stadlhuber
	​
	/s/ Dr. Klaus Pseiner

	Dr. Henrietta Egerth-Stadlhuber,
	​
	Dr. Klaus Pseiner

	Managing Director
	​
	Managing Director

	​
	​
	​

	​
	​
	​

	Funding Recipient
	​
	​

	​
	​
	​

	Vienna, Dec. 16. 2014
	​
	​

	​
	​
	​

	/s/ DR. KATHERINE COHEN
	​
	​

	DR. KATHERINE COHEN, CEO
	​
	​

​
Appendix:
​
Guidelines for the Austrian Research Promotion Agency FFG to promote research, technology, development, and innovation (FFG Guidelines) via link http://www.ffg.at/Allgemeine-Richtlinien
​
General Funding Conditions for Funding Contracts as amended (version 1 from 2013) Guide for Individual Projects of Experimental Development, version 2.0
​
Cost Guideline to treating project costs in grant applications and reports for projects with grant agreements according to the FTE Guidelines and the FFG Guidelines, version 1.4
​
​
​

5

​
Project no. 849137 /33388 SCK/SAI
​
Funding Contract
​
concluded between
​
The Austrian Research Promotion Agency (FFG)
​
as Funding Agency
​
and
​
HOOKIPA Biotech AG
Helmut-Qualtinger-Gasse 2
1030 Vienna
​
Commercial register no. FN 365895g
​
as Funding Recipient.
​
Sec. 1 Granting funds
​
1.1      On the basis of the grant application “Development of innovative cancer immunotherapies based on Hookipa’s Vaxwave® technology,” which was received via eCall on 10/01/2014, and on the basis of the expert decision of the advisory board in the 12/03/2014 meeting, funding will be granted for the following project:
​
Project number: 849137
​
eCall number: 5040485
​
Project name (subject-matter of Contract):
​
Development of innovative cancer immunotherapies based on Hookipa’s Vaxwave® technology
​
Program:    General Program
​
​
	

	

	

	Österreichische
	Tel +43 (0)5 7755 — 0
	UniCredit Bank Austria AG

	Forschungsförderungsgesellschaft mbH
	Fax +43 (0)5 7755 — 97900
	Account no. 10216727200, Routing no. 12000

	Sensengasse 1
	www.ffg.at, office@ffg.at
	IBAN AT66 1200 0102 1672 7200

	1090 Vienna
	FN 252263.a Commercial Court Vienna
	SWIFT BKAUATVVW

​
Sec. 2 Project duration
​
2.1      The overall project duration starts on 10/01/2014 and ends on 03/31/2018.
​
2.2      FFG funding of the entire project depends on the results made apparent from the submitted reports, on further fulfilment of the evaluation and decision criteria, on the budget available to the Funding Agency, and on a renewed positive funding decision.
​
Sec. 3 Funding period
​
3.1       The funding period of this project begins on the approval date 10/01/2014 and ends on 09/30/2015.
​
​

Sec. 4 Funding nature and amount
​
4.1          Funding will be provided in the following form for the funding period specified in Sec. 3:
​
	

	​

	

	

	​

	​
	    
	Amount
	​

	Type of funding
	​
	up to max.
	​

	FFG subsidy
	​
	EUR
	581,100
	​

	FFG loan
	​
	EUR
	548,800
	​

​
	

	

	​

	Loan conditions
	    
	​

	​
	​
	​

	Interest rate
	​
	0.75% p.a. on a current-account basis

	Repayment date:
	​
	on 03/31/2023

	Repayment sum:
	​
	EUR 548,800

	Interest and loan collection:
	​
	as direct debit payments

	Interest payment request:
	​
	semi-annually in arrears or at loan due dates

​
4.2      The subsidized financing of the project amounts to 70% of the verifiable and eligible project costs. Remaining funding of the project costs shall be carried out by the Funding Recipient. Based on the planning data, the cash value of the grant is EUR 689,208 or 42.7% of the eligible project costs in accordance with Section 5.1.
​
4.3      The maximum eligible cash value under the applicable Community framework for State aid for R&D is 45%.
​
4.4      If the eligible project costs fall short, it will result in an aliquot reduction in funding.
​
4.5      The eligible project costs pursuant to Sec. 5 and the costs reported by way of interim or final accounts do not constitute an acknowledgement of costs on the part of FFG prior to their verification. The final amount of the total recognizable project costs and the funding will only be determined after project completion in the course of invoice verification.
​
Sec. 5 Eligible costs
​
5.1         The following eligible project costs form the basis of the funding:
​
	

	

	

	

	​

	Personnel expenses
	    
	EUR
	401,700
	​

	R&D infrastructure use
	​
	EUR
	15,500
	​

	Material costs
	​
	EUR
	171,200
	​

	Third-party services
	​
	EUR
	1,009,900
	​

	Travel expenses
	​
	EUR
	16,000
	​

	Total eligible costs
	​
	EUR
	1,614,300
	​

​
5.2      Eligible costs are all expenses and expenditures attributable to the project that are incurred directly, actually, and in addition to conventional operating expenses for the duration of the funded research activity. Further supplementary provisions to the eligible costs may result from the FFG Guidelines, the Guide for Individual Projects of Experimental Development, and the Cost Guidelines.
​
5.3      Significant changes to the cost structure require the FFG’s prior written approval.
​
5.4      The value added tax on the costs of the eligible service is not eligible for funding. If, however, it can be shown that this value added tax is borne verifiably in actual fact and without recourse by the Funding Recipient, thereby not making the Funding Recipient entitled to deduct input tax, it will be taken into account as an eligible cost component. The value added tax that can be reclaimed in whatever way is not eligible for funding even if the Funding Recipient does not actually get it back. Should a grant not be regarded as a grant by the tax office but as a contractual consideration because of the existence of a taxable service of the Funding Recipient to the Funding Agency that is liable to tax under the Value Added Tax Act 1994, Federal Law Gazette No. 663, and the Funding Recipient has to pay value added tax to the tax office in return, the contractual consideration shall be regarded as a gross remuneration. Additional, separate compensation of the value added tax—for whatever legal reason—is thus excluded.
​

2

5.5      If the amortization period of an item (Sec. 285 of the Austrian Civil Code, or ABGB) that was purchased for implementing the project exceeds the funding period, the depreciation costs can be funded in accordance with the method laid down in the Guide for Individual Projects of Experimental Development, and in the Cost Guidelines.
​
5.6      Funds of the Funding Agency may not be used to form reserves or provisions according to the Income Tax Act 1988, Federal Law Gazette No. 400. The funds are to be used only for the services and objectives described in the grant application.
​
5.7      Eligible costs that can be recognized in new applications are those incurred after receipt of the grant application. For renewal applications, the earliest date for cost recognition shall be the start of the funding period specified in Sec. 3.
​
5.8      The costs incurred by the Funding Recipient or its affiliates for preparing the Contract or bank transfer charges must be borne by it/them and are not eligible costs.
​
5.9      The Funding Agency reserves the right to postpone, reduce, or suspend the payment of a grant if and as long as circumstances exist that do not appear to guarantee the proper implementation of the funded project (e.g. proof of costs is not provided to the extent planned).
​
Sec. 6 Project-specific conditions and requirements
​
6.1      Project-specific special conditions and requirements
​
1.       The funding of further application possibilities of the Vaxwave technology platform is only provided after at least one field of application (infectious diseases or oncology) has been successfully completed.
​
2.      The costs for R&D infrastructure acquired before the funding period are included in the overhead of the personnel cost surcharge rate.
​
Sec. 7 Fund payment
​
7.1       The 1st instalment in the amount of 50% of the pledged funds will be paid after the Funding Contract has been concluded and the conditions and requirements agreed in Sec. 6 have been fulfilled.
​
The second instalment in the amount of 30% is paid after approval of an interim report and an interim statement, in which 50% of the approved total costs must be proved, and after the conditions and requirements under Sec. 6 have been fulfilled.
​
The final instalment in the amount of 20% of the total pledged funds will only be paid after all conditions and requirements (final accounting, final reports, etc.) have been fulfilled and after the FFG has verified and approved the where-used list.
​
7.2         The money will be transferred to the Funding Recipient’s account:
​
	

	

	

	Account holder:
	    
	HOOKIPA Biotech AG

	Bank name:
	​
	RAIFFEISENLANDESBANK NIEDERÖSTERREICH-WIEN AG

	IBAN:
	​
	AT61 3200 0000 1511 6726

	BIC/SWIFT:
	​
	RLNWATWW

​
Sec. 8 Reporting obligation
​
8.1       According to clause 3 of the General Funding Conditions, the Funding Recipient must report to the FFG on the implementation of the funded project by submitting technical reports (interim and final reports) and billing statements. Reports and statements must be sent via eCall (https://ecall.ffg.at). Using the forms stored in eCall is mandatory. Further documents must be submitted to FFG upon request.
​
8.2       Where prototypes are funded, the Funding Recipient must report to FFG on the whereabouts or further use of the prototype.
​
Sec. 9 Amendments to the Contract
​
9.1       Amendments to this Contract may only be made expressly and in writing. This shall also apply to any departure from this provision.

3

9.2       Subsequent amendments to the agreed conditions and requirements may, if necessary, under special circumstances, be made by mutual agreement in the form of written additional agreements after a new advisory board decision has been taken.
​
Sec. 10 Liability
​
10.1    The Funding Recipient shall be unconditionally liable to the FFG for compliance with all contractual provisions. The Funding Recipient shall also be liable for the conduct of third parties for which it is responsible (e.g. owners, corporate officers, etc.). The Funding Recipient shall indemnify and hold FFG harmless against third-party claims.
​
Sec. 11 Severability clause
​
11.1    Should any provision of this Funding Contract be invalid, it shall not affect the validity of the remaining provisions of the Funding Contract. The contracting parties undertake to replace an ineffective provision with one that comes closest to the purpose of this Funding Contract.
​
Sec. 12 Applicable law
​
12.1    This Contract and all of its Appendices shall be governed by Austrian law to the exclusion of the reference standards of the Austrian Private International Law (IPRG).
​
Sec. 13 Place of jurisdiction
​
13.1     The place of jurisdiction for all legal disputes arising from the grant shall be the competent court in Vienna. FFG reserves the right to take legal action against the Funding Recipient at its general place of jurisdiction.
​
Sec. 14 Contract components
​
14.1    The following documents constitute integral components of the Funding Contract:
​
·          the grant application (“Development of innovative cancer immunotherapies based on Hookipa’s Vaxwave® technology”) received via eCall in the version from 10/01/2014
​
·          General Funding Conditions for Funding Contracts as amended (version 1 from 2013)
​
·          Guide for Individual Projects of Experimental Development, version 2.0
​
·          Cost Guideline to treating project costs in grant applications and reports for projects with grant agreements according to the FTE Guidelines and the FFG Guidelines, version 1.4
​
14.2   The legal bases of this Funding Contract are, in particular:
​
·         The Austrian Research Promotion Agency Establishment Act (Forschungsförderungs-Strukturreformgesetz, Research Funding Structural Reform Law) as amended
​
·          the guidelines for the Austrian Research Promotion Agency to promote research, technology, development, and innovation (FFG guidelines no: BMVIT-609.986/0005-111/12/2008 and BMWA-98.310/0032-C1/10/2008) The extension to 06/30/2014 was approved by the European Commission on 01/30/2014.
The validity of the guidelines was extended until 12/31/2014 by the Federal Minister of Transport, Innovation and Technology on 03/12/2014 (No. BMVIT-609.986/0004-111/12/2014) i.e. by the Federal Minister of Science, Research and the Economy on 06/04/2014 (No. BMWFJ-98.310/0101-C1/10/2013) in accordance with the State aid regulations applicable as of 07/01/2014.
​
The Funding Recipient confirms knowledge of all contract components and fully accepts them.
​
It should be noted that the present grant offer is deemed to be withdrawn unless the Funding Recipient returns it to FFG signed within 3 months.
​
​

4

For the Funding Agency:
The Austrian Research Promotion Agency (FFG)
​
Vienna, 12/09/2014
​
	/s/ Dr. Henrietta Egerth-Stadlhuber
	    
	/s/ Dr. Klaus Pseiner

	Dr. Henrietta Egerth-Stadlhuber,
	​
	Dr. Klaus Pseiner

	Managing Director
	​
	Managing Director

	​
	​
	​

	​
	​
	​

	Funding Recipient
	​
	​

	​
	​
	​

	Vienna, Dec. 16. 2014
	​
	​

	​
	​
	​

	/s/ DR. KATHERINE COHEN
	​
	​

	DR. KATHERINE COHEN, CEO
	​
	​

​

Appendix:
​
Guidelines for the Austrian Research Promotion Agency to promote research, technology, development, and innovation (FFG Guidelines) via link http://www.ffg.at/Allgemeine-Richtlinien
​
General Funding Conditions for Funding Contracts as amended (version 1 from 2013) Guide for Individual Projects of Experimental Development, version 2.0
​
Cost Guideline to treating project costs in grant applications and reports for projects with grant agreements according to the FTE Guidelines and the FFG Guidelines, version 1.4
​
​

5

​

Project no. 857224 /33388 MAB/SAH
​
Funding Contract
​
concluded between
​
The Austrian Research Promotion Agency (FFG)
​
as Funding Agency
​
and
​
HOOKIPA Biotech AG
Helmut-Qualtinger-Gasse 2
1030 Vienna
​
Commercial register no. FN 365895g
​
as Funding Recipient.
​
Sec. 1 Granting funds
​
1.1      On the basis of the grant application “Demonstration of the applicability of Hookipa’s arenaviral vector technologies for cancer immunotherapy development,” which was received via eCall on 05/31/2016, and on the basis of the expert decision of the advisory board in the 09/13/2016 meeting, funding will be granted for the following project:
​
Project number: 857224
​
eCall number: 8000616
​
Pre-project no: 849137
​
Project name (subject-matter of Contract):
​
Demonstration of the applicability of Hookipa’s arenaviral vector technologies for cancer immunotherapy development
​
Program:    General Program
​
	​

	​

	​

	​
	​
	​

	Österreichische
	Tel.: +43 (0) 5 7755 — 0
	UniCredit Bank Austria AG

	Forschungsförderungsgesellschaft mbH
	Fax +43 (0)5 7755 — 97900
	Account no. 1021672700, Routing no. 12000

	Sensengasse 1
	www.ffg.at, office@ffg.at
	IBAN AT 66 1200 0102 1672 7200

	1090 Vienna
	FN 252263a Commercial Court Vienna
	SWIFT BKAUATWW

​
Sec. 2 Project duration
​
2.1       The overall project duration starts on 10/01/2014 and ends on 12/31/2018.
​
2.2       FFG funding of the entire project depends on the results made apparent from the submitted reports, on further fulfilment of the evaluation and decision criteria, on the budget available to the Funding Agency, and on a renewed positive funding decision.
​
Sec. 3 Funding period
​
3.1       The funding period of this project begins on the approval date 03/01/2016 and ends on 02/28/2017.
​
​

​

Sec. 4 Funding nature and amount
​
4.1          Funding will be provided in the following form for the funding period specified in Sec. 3:
​
	

	​

	

	

	​

	Type of funding
	    
	Amount
up to max.
	​

	FFG subsidy
	​
	EUR
	1,964,000
	​

	FFG loan
	​
	EUR
	2,202,100
	​

​
	

	

	​

	Loan conditions
	    
	​

	​
	​
	​

	Interest rate
	​
	0.75% p.a. on a current-account basis

	Repayment date:
	​
	on 03/31/2024

	Repayment sum:
	​
	EUR 2,202,100

	Interest and loan collection:
	​
	as direct debit payments

	Interest payment request:
	​
	semi-annually in arrears or at loan due dates

​
​
4.2      The rate of finance of the project amounts to 70.0% of the verifiable and eligible project costs. Remaining funding of the project costs shall be carried out by the Funding Recipient. Based on the planning data, the cash value of the grant is EUR 2,311,959 or 38.8% of the eligible project costs in accordance with Section 5.1.
​
4.3      The maximum funding cash value under the current Union framework for State aid for research, development and innovation is 45%.
​
4.4       If the eligible project costs fall short, it will result in an aliquot reduction in funding.
​
4.5       The eligible project costs pursuant to Sec. 5 and the costs reported by way of interim or final accounts do not constitute an acknowledgement of costs on the part of FFG prior to their verification. The final amount of the total recognizable project costs and the funding will only be determined after project completion in the course of invoice verification.
​
Sec. 5 Eligible costs
​
5.1         The following eligible project costs form the basis of the funding:
​
	

	

	

	

	​

	Personnel expenses
	    
	EUR
	1,846,636
	​

	Material costs
	​
	EUR
	926,028
	​

	Third-party services
	​
	EUR
	3,135,253
	​

	Travel expenses
	​
	EUR
	43,750
	​

	Total eligible costs
	​
	EUR
	5,951,667
	​

​
5.2      All costs attributable to the project that are incurred directly, actually, and additionally (to conventional operating expenses) for the funding period according to Sec. 3 are eligible. Additional supplementary provisions regarding eligible costs may be found in the FFG Guidelines for SMEs, the Cost Guidelines and Guide for Individual Projects of Experimental Development (in each case in the version mentioned under 14.1).
​
5.3       Significant changes to the cost structure require the FFG’s prior written approval.
​
5.4      The value added tax on the costs of the eligible service is not eligible for funding. If, however, it can be shown that this value added tax is borne verifiably in actual fact and without recourse by the Funding Recipient, thereby not making the Funding Recipient entitled to deduct input tax, it will be taken into account as an eligible cost component.
​
The Funding Agency’s funding is a genuine grant that is not subject to value added tax because there is no exchange of services but a public interest in carrying out the research project.
The grant amount is a gross amount. Additional, separate compensation of fees and taxes by FFG—for whatever legal reason—is excluded.
The loan interest/the liability fees are subject to an exemption from value added tax under Sec. 6(1)(8) of the Value Added Tax Act.
​

2

​

5.5     If the amortization period of an item (Sec. 285 of the Austrian Civil Code, or ABGB) that was purchased for implementing the project exceeds the funding period, the depreciation costs are fundable in accordance with the method laid down in the Cost Guidelines and Guide for Individual Projects of Experimental Development (in each case in the version mentioned under 14.1).
​
5.6     Funds of the Funding Agency may not be used to form reserves or provisions according to the Income Tax Act 1988, Federal Law Gazette No. 400/1988. The funds are to be used only for the services and objectives described in the grant application.
​
5.7     The costs incurred by the Funding Recipient or its affiliates for preparing the Contract or bank transfer charges must be borne by it/them and are not eligible costs.
​
5.8     The Funding Agency reserves the right to postpone, reduce, or suspend the payment of a grant if and as long as circumstances exist that do not appear to guarantee the proper implementation of the funded project (e.g. proof of costs is not provided to the extent planned).
​
5.9       Grants awarded by FFG for the direct promotion of science and research as compensation for expenses or expenditures come from public funds and are tax-free pursuant to Sec. 3(1)(3)(c) of the Income Tax Act (EStG) in connection with Sec. 3(4)(3) EStG.
​
Sec. 6 Conditions and requirements
​
6.1       Project-specific special conditions and requirements
​
1.        The planned costs for the CSO position in the amount of €109,371.25 can only be charged for activities of one CSO. These costs can neither be reclassified nor used as part of other personnel costs.
​
2.        The costs of the evaluation license, storage and shipments are covered by the overhead flat rate.
​
3.        Travel expenses for quality audits and reaudits are not eligible.
​
4.        The funding of further application possibilities of the Vaxwave technology platform is only provided after at least one field of application (infectious diseases or oncology) has been successfully completed.
​
6.2       The originally signed Funding Contract must be returned to the Funding Agency no later than 4 weeks after receipt.
​
6.3       By signing this Funding Contract, the Funding Recipient undertakes to inform the Funding Agency—in the course of the planned reports at the latest—of all applied for and/or approved public grants that directly or indirectly concern the project.
​
Sec. 7 Fund payment
​
7.1       The 1st instalment in the amount of 50% of the pledged funds will be paid after the Funding Contract has been concluded and the conditions and requirements agreed in Sec. 6 have been fulfilled.
​
The second instalment in the amount of 30% is paid after approval of an interim report, in which 50% of the approved total costs must be proved, and after the conditions and requirements under Sec. 6 have been fulfilled.
​
The final instalment in the amount of 20% of the total pledged funds will only be paid after all conditions and requirements (final accounting, final reports, etc.) have been fulfilled and after the FFG has verified and approved the where-used list.
​
7.2       The funds will be transferred to the Funding Recipient’s account:
​
	

	

	

	Account holder:
	    
	HOOKIPA Biotech AG

	Bank name:
	​
	RAIFFEISENLANDESBANK NIEDERÖSTERREICH-WIEN AG

	IBAN:
	​
	AT61 3200 0000 1511 6726

	BIC/SWIFT:
	​
	RLNWATWW

​
​
​

3

​

Sec. 8 Reporting obligation
​
8.1       According to clause 3 of the General Funding Conditions, the Funding Recipient must report to the FFG on the implementation of the funded project by submitting technical reports (interim and final reports) and billing statements.
​
Reports and statements must be sent via eCall (https://ecall.ffg.at). Using the forms stored in eCall is mandatory. Further documents must be submitted to FFG upon request.
​
8.2       Where prototypes are funded, the Funding Recipient must report to FFG on the whereabouts or further use of the prototype.
​
Sec. 9 Amendments to the Contract
​
9.1       Amendments to this Contract may only be made expressly and in writing. This shall also apply to any departure from this provision.
​
9.2       Subsequent amendments to the agreed conditions and requirements may, if necessary, under special circumstances, be made by mutual agreement in the form of written additional agreements after a new advisory board decision has been taken.
​
Sec. 10 Liability
​
10.1    The Funding Recipient shall be unconditionally liable to the FFG for compliance with all contractual provisions. The Funding Recipient shall also be liable for the conduct of third parties for which it is responsible (e.g. owners, corporate officers, etc.). The Funding Recipient shall indemnify and hold FFG harmless against third-party claims.
​
Sec. 11 Severability clause
​
11.1    Should any provision of this Funding Contract be invalid, it shall not affect the validity of the remaining provisions of the Funding Contract. The contracting parties undertake to replace an ineffective provision with one that comes closest to the purpose of this Funding Contract.
​
Sec. 12 Applicable law
​
12.1    This Contract and all of its Appendices shall be governed by Austrian law to the exclusion of the reference standards of the Austrian Private International Law (IPRG).
​
Sec. 13 Place of jurisdiction
​
13.1    The place of jurisdiction for all legal disputes arising from the grant shall be the competent court in Vienna. FFG reserves the right to take legal action against the Funding Recipient at its general place of jurisdiction.
​
Sec. 14 Contract components
​
14.1     The following documents constitute integral components of the Funding Contract:
​
·         The grant application (“Demonstration of the applicability of Hookipa’s arenaviral vector technologies for cancer immunotherapy development”) submitted via eCall in the version from 07/07/2016.
​
·          General Funding Conditions for Funding Contracts as amended (version 2015)
​
·          Guide for Individual Projects of Experimental Development, version 3.1
​
·          Cost Guideline version 2.0
​
14.2     The legal bases of this Funding Contract are, in particular:
​
·          The Austrian Research Promotion Agency Establishment Act (Forschungsförderungs-Strukturreformgesetz, Research Funding Structural Reform Law) as amended
​
·          Union framework for State aid for research, development and innovation (Official Journal C 198 from 06/27/2014)

4

​

·          Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty on the functioning of the European Union (TFEU 2014).
​
·          Guideline for the Austrian Research Promotion Agency FFG to promote the applied research, development, and innovation (FFG Guideline for SMEs no: BMVIT-609.986/0012-111/12/2014 and BMWFW-98.310/0102-C1/10/2014)—These Guidelines were filed for exemption with the European Commission on the basis of the TFEU 2014.
​
The Funding Recipient confirms knowledge of all contract components and fully accepts them and notes that non-compliance with the above contractual provisions may lead to the funds being reclaimed.
​
The Funding Recipient confirms that no open reclaim order by the European Commission exists and that rescission, if any, of an incompatible funding is completed.
​
The Funding Recipient agrees that the data listed in Art. 9(1) of the TFEU (EU Regulation No. 651/2014) Appendix III may be used to publish the information if the cash value of the grant (gross subsidy equivalent) exceeds €500,000.
​
For the Funding Agency:
The Austrian Research Promotion Agency (FFG)
​
Vienna, 09/15/2016
​
	

	

	

	/s/ Dr. Henrietta Egerth-Stadlhuber
	    
	/s/ Dr. Klaus Pseiner

	Dr. Henrietta Egerth-Stadlhuber
	​
	Dr. Klaus Pseiner

	Managing Director
	​
	Managing Director

	​
	​
	​

	Funding Recipient
	​
	​

	​
	​
	​

	Vienna, 10/04/2016
	​
	​

	​
	​
	​

	/s/ JÖRN ALDAG
	​
	​

	JÖRN ALDAG, CEO
	​
	​

​
Appendix:
​
Guideline for the Austrian Research Promotion Agency FFG to promote the applied
research, development, and innovation (FFG Guideline for SMEs)
via link https://www.ffg.at/recht-finanzen/rechtsgrundlagen
General Funding Conditions for Funding Contracts as amended (version 2015)
Guide for Individual Projects of Experimental Development, version 3.1
Cost Guideline version 2.0
​
​
​
​

5

​

​
​
Project no. 865401 /33388 MAB/SAH
​
Funding Contract
​
concluded between
​
The Austrian Research Promotion Agency (FFG)
​
as Funding Agency
​
and
​
HOOKIPA Biotech AG
Helmut-Qualtinger-Gasse 2
1030 Vienna
​
Commercial register no. FN 365895g
​
as Funding Recipient.
​
1 Granting funds
​
1.1       On the basis of the grant application “Demonstration of the applicability of Hookipa’s arenaviral vector technologies for cancer immunotherapy development,” which was received via eCall on 09/29/2017, and on the basis of the expert decision of the advisory board in the 01/31/2018 meeting, funding will be granted for the following project:
​
Project number: 865401
​
eCall number: 14249646
​
Pre-project no: 857224
​
Project name (subject-matter of Contract):
​
Demonstration of the applicability of Hookipa’s arenaviral vector technologies for cancer immunotherapy development
​
Program:   General Program
​
	Österreichische
	Tel +43 (0)5 7755 — 0
	UniCredit Bank Austria AG 

	Forschungsförderungsgesellschaft mbH
	Fax +43 (0)5 7755 — 97900
	Account no. 10216727200, Routing no. 12000

	Sensengasse 1
	www.ffg.at, office@ffg.at
	IBAN AT66 1200 0102 1672 7200

	1090 Vienna
	FH 252263a Commercial Court Vienna
	SWIFT BKAUATWW

​
Sec. 2 Project duration
​
2.1       The overall project duration starts on 10/01/2014 and ends on 12/31/2018.
​
2.2       FFG funding of the entire project depends on the results made apparent from the submitted reports, on further fulfilment of the evaluation and decision criteria, on the budget available to the Funding Agency, and on a renewed positive funding decision.
​
Sec. 3 Funding period
​
3.1        The funding period of this project begins on the approval date 07/01/2017 and ends on 06/30/2018.
​
​

​

Sec. 4 Funding nature and amount
​
4.1       Funding will be provided in the following form for the funding period specified in Sec. 3:
​
	

	​

	

	

	​

	​
	    
	Amount
	​

	Type of funding
	​
	up to max.
	​

	FFG subsidy
	​
	EUR
	2,152,900
	​

​
4.2       The rate of finance of the project amounts to 28.0% of the verifiable and eligible project costs. Remaining funding of the project costs shall be carried out by the Funding Recipient. Based on the planning data, the cash value of the grant is EUR 2,152,900 or 28.0% of the eligible project costs in accordance with Section 5.1.
​
4.3       The maximum funding cash value under the current Union framework for State aid for research, development and innovation is 45%.
​
4.4       If the eligible project costs fall short, it will result in an aliquot reduction in funding.
​
4.5       The eligible project costs pursuant to Sec. 5 and the costs reported by way of interim or final accounts do not constitute an acknowledgement of costs on the part of FFG prior to their verification. The final amount of the total recognizable project costs and the funding will only be determined after project completion in the course of invoice verification.
​
Sec. 5 Eligible costs
​
5.1       The following eligible project costs form the basis of the funding:
​
	

	

	

	

	​

	Personnel expenses
	    
	EUR
	2,326,743
	​

	R&D Infrastructure use 
	​
	EUR
	75,232
	​

	Material costs 
	​
	EUR
	1,367,588
	​

	Third-party services
	​
	EUR
	3,844,564
	​

	Travel expenses
	​
	EUR
	75,000
	​

	​
	​
	​
	​
	​

	Total eligible costs
	​
	EUR
	7,689,127
	​

​
5.2       All costs attributable to the project that are incurred directly, actually, and additionally (to conventional operating expenses) for the funding period according to Sec. 3 are eligible. Additional supplementary provisions regarding eligible costs may be found in the FFG Guidelines for SMEs, the Cost Guidelines and Guide for Individual Projects of Experimental Development (in each case in the version mentioned under 14.1).
​
5.3       Significant changes to the cost structure require the FFG’s prior written approval.
​
5.4       The value added tax on the costs of the eligible service is not eligible for funding. If, however, it can be shown that this value added tax is borne verifiably in actual fact and without recourse by the Funding Recipient, thereby not making the Funding Recipient entitled to deduct input tax, it will be taken into account as an eligible cost component.
​
The Funding Agency’s funding is a genuine grant that is not subject to value added tax because there is no exchange of services but a public interest in carrying out the research project.
The grant amount is a gross amount. Additional, separate compensation of fees and taxes by FFG—for whatever legal reason—is excluded.
​
5.5       If the amortization period of an item (Sec. 285 of the Austrian Civil Code, or ABGB) that was purchased for implementing the project exceeds the funding period, the depreciation costs are fundable in accordance with the method laid down in the Cost Guidelines and Guide for Individual Projects of Experimental Development (in each case in the version mentioned under 14.1).
​
5.6       Funds of the Funding Agency may not be used to form reserves or provisions according to the Income Tax Act 1988, Federal Law Gazette No. 400/1988. The funds are to be used only for the services and objectives described in the grant application.
​
5.7       The costs incurred by the Funding Recipient or its affiliates for preparing the Contract or bank transfer charges must be borne by it/them and are not eligible costs.
​

2

​

5.8       The Funding Agency reserves the right to postpone, reduce, or suspend the payment of a grant if and as long as circumstances exist that do not appear to guarantee the proper implementation of the funded project (e.g. proof of costs is not provided to the extent planned).
​
5.9       Grants awarded by FFG for the direct promotion of science and research as compensation for expenses or expenditures come from public funds and are tax-free pursuant to Sec. 3(1)(3)(c) of the Income Tax Act (EStG) in connection with Sec. 3(4)(3) EStG.
​
Sec. 6 Conditions and requirements
​
6.1       Project-specific special conditions and requirements 
none
​
6.2       The originally signed Funding Contract must be returned to the Funding Agency no later than 4 weeks after receipt.
​
6.3      By signing this Funding Contract, the Funding Recipient undertakes to inform the Funding Agency—in the course of the planned reports at the latest—of all applied for and/or approved public grants that directly or indirectly concern the project.
​
Sec. 7 Fund payment
​
7.1      The 1st instalment in the amount of 50% of the pledged funds will be paid after the Funding Contract has been concluded and the conditions and requirements agreed in Sec. 6 have been fulfilled.
​
The second instalment in the amount of 30% is paid after approval of an interim report, in which 50% of the approved total costs must be proved, and after the conditions and requirements under Sec. 6 have been fulfilled.
​
The final instalment in the amount of 20% of the total pledged funds will only be paid after all conditions and requirements (final accounting, final reports, etc.) have been fulfilled and after the FFG has verified and approved the where-used list.
​
7.2       The funds will be transferred to the Funding Recipient’s account:
​
	

	

	

	Account holder:
	    
	HOOKIPA Biotech AG

	Bank name:
	​
	RAIFFEISENLANDESBANK NIEDERÖSTERREICH-WIEN AG

	IBAN:
	​
	AT61 3200 0000 1511 6726

	BIC/SWIFT:
	​
	RLNWATWW

​
Sec. 8 Reporting obligation
​
8.1       According to clause 3 of the General Funding Conditions, the Funding Recipient must report to the FFG on the implementation of the funded project by submitting technical reports (interim and final reports) and billing statements.
Reports and statements must be sent via eCall (https://ecall.ffg.at). Using the forms stored in eCall is mandatory. Further documents must be submitted to FFG upon request.
​
8.2       Where prototypes are funded, the Funding Recipient must report to FFG on the whereabouts or further use of the prototype.
​
Sec. 9 Amendments to the Contract
​
9.1       Amendments to this Contract may only be made expressly and in writing. This shall also apply to any departure from this provision.
​
9.2       Subsequent amendments to the agreed conditions and requirements may, if necessary, under special circumstances, be made by mutual agreement in the form of written additional agreements after a new advisory board decision has been taken.
​
Sec. 10 Liability
​
10.1     The Funding Recipient shall be unconditionally liable to the FFG for compliance with all contractual provisions. The Funding Recipient shall also be liable for the conduct of third parties for which it is responsible (e.g. owners, corporate officers, etc.). The Funding Recipient shall indemnify and hold FFG harmless against third-party claims.
​

3

​

Sec. 11 Severability clause
​
11.1    Should any provision of this Funding Contract be invalid, it shall not affect the validity of the remaining provisions of the Funding Contract. The contracting parties undertake to replace an ineffective provision with one that comes closest to the purpose of this Funding Contract.
​
Sec. 12 Applicable law
​
12.1    This Contract and all of its Appendices shall be governed by Austrian law to the exclusion of the reference standards of the Austrian Private International Law (IPRG).
​
Sec. 13 Place of jurisdiction
​
13.1    The place of jurisdiction for all legal disputes arising from the grant shall be the competent court in Vienna. FFG reserves the right to take legal action against the Funding Recipient at its general place of jurisdiction.
​
Sec. 14 Contract components
​
14.1     The following documents constitute integral components of the Funding Contract:
​
·          The grant application (“Demonstration of the applicability of Hookipa’s arenaviral vector technologies for cancer immunotherapy development”) submitted via eCall in the version from 12/21/2017
​
·          General Funding Conditions for Funding Contracts as amended (version 2015)
​
·          Guide for Individual Projects of Experimental Development, version 3.3
​
·          Cost Guideline 2.1
​
14.2      The legal bases of this Funding Contract are, in particular:
​
·         The Austrian Research Promotion Agency Establishment Act (Forschungsförderungs-Strukturreformgesetz, Research Funding Structural Reform Law) as amended
​
·          Union framework for State aid for research, development and innovation (Official Journal C 198 from 06/27/2014)
​
·          Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty on the functioning of the European Union (TFEU 2014).
​
·          Guideline for the Austrian Research Promotion Agency FFG to promote the applied research, development, and innovation (FFG Guideline for SMEs no: BMVIT-609.986/0012-111/12/2014 and BMWFW-98.310/0102-C1/10/2014)—These Guidelines were filed for exemption with the European Commission on the basis of the TFEU 2014.
​
The Funding Recipient confirms knowledge of all contract components and fully accepts them and notes that non-compliance with the above contractual provisions may lead to the funds being reclaimed.
​
The Funding Recipient confirms that no open reclaim order by the European Commission exists and that rescission, if any, of an incompatible funding is completed.
​
The Funding Recipient agrees that the data listed in Art. 9(1) of the TFEU (EU Regulation No. 651/2014) Appendix III may be used to publish the information if the cash value of the grant (gross subsidy equivalent) exceeds €500,000.
​

4

​

For the Funding Agency:
The Austrian Research Promotion Agency (FFG)
​
Vienna, 02/12/2018
​
​
	

	

	

	/s/ Dr. Henrietta Egerth-Stadlhuber
	    
	/s/ Dr. Klaus Pseiner

	Dr. Henrietta Egerth-Stadlhuber
	​
	Dr. Klaus Pseiner

	Managing Director
	​
	Managing Director

	​
	​
	​

	Funding Recipient
	​
	​

	​
	​
	​

	Vienna, 02/27/2018
	​
	​

	​
	​
	​

	/s/ REINHARD KANDERA
	​
	​

	REINHARD KANDERA, CFO
	​
	​

​
Appendix:
​
Guideline for the Austrian Research Promotion Agency FFG to promote the applied
research, development, and innovation (FFG Guideline for SMEs)
via link https://www.ffg.at/recht-finanzen/rechtsgrundlagen
General Funding Conditions for Funding Contracts as amended (version 2015)
Guide for Individual Projects of Experimental Development, version 3.3
Cost Guideline 2.1
​
​
​

5

​

HOOIKIPA Biotech Gmbh
attn Dr Vera Baumgartl-Strasser Helmut-Qualtinger-Gasse 2
1030 Vienna
​
AIP
DW – 1206
​
Vienna, 25 October 2019
​
Project 865401, 857224, 850420, 849137, 844309, 836998
Your application to waive reclamation
​
Dear Dr Baumgartl-Strasser,
​
During the meeting of 23 October 2019, the Advisory Board of the FFG Basic Programmes discussed your application of 26 September to waive the reclamation of the subsidies paid out for the above-mentioned projects and approved your application under the following conditions:
​
A)    Postponement of the repayment dates as proposed in your application:
-      Project 836998: early repayment by 31.12.2019 in the amount of € 752,168.00
-      Project 844309: early repayment by 31.03.2020 in the amount of € 1,140,021.00
-      Project 857224: early repayment of 50% of the loan by 30.06.2023 in the amount of
€ 1,059,900.00 and repayment by 31.03.2024 in the amount of € 1,059,941.00.
B)    Letter of intent (as proposed) from Hookipa lnc. regarding the liabilities of Hookipa Biotech GmbH to FFG
C)    Guarantee of employment of at least the present number (76 employees) until at least 31.03.2024
D)    Guarantee of location including operational activities until at least 31.03.2024
​
Please submit signed company documents for conditions B, C and D by 30.11.2019 at the latest. Furthermore, the discussion concluded that further funding is only possible after a successful Phase II study as well as a further substantial repayment of outstanding loans.
​
Yours sincerely,
​
	(one signature in handwriting)
	(one signature in handwriting)

	​
	​

	Dr Alexander Reiterer
	Mag. Harald Polak

	Division Management Deputy
	Programme director

	Basic Programmes
	Basic programmes

​aei_ex101

 

 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.

 

 

1

 

 

 

 

(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

 

 

2

 

 

 

 

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.

 

 

3

 

 

 

 

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.

 

 

4

 

 

 

 

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.

 

4.9               

Accredited Investor Status.
The Seller is an
“accredited investor” as that term is defined in Rule
501(a) of Regulation
D.

5. 

REPRESENTATIONS
AND WARRANTIES FROM LVD, APB AND TP HOLDCO Each of LVD, APB
and TP Holdco hereby, severally but not jointly, warrants and
represents to the Purchaser and its successors that, except as set
forth on the Schedule of Exceptions delivered by the LVD, APB or TP
Holdco to the Purchaser; and it being further understood that the
Schedule of Exceptions will be updated from time to time for events
that occur between execution of this Agreement and Closing and a
final copy of the Schedule of Exceptions will be delivered to the
Purchaser prior to the Closing:

 

5.1          

Corporate
Organization and Capacity. Each of LVD, APB and TP Holdco is
a company duly organized and validly existing under the laws of
Singapore, Texas and Hong Kong, respectively, and has all the
requisite corporate power and lawful authority to enter into this
Transaction. Each of LVD, APB and TP Holdco has full legal right,
power and all authority and approvals required to enter into
exercise its respective rights and perform or comply with its
respective obligations under this Agreement which, when fully
executed, will constitute valid and legally binding obligations on
LVD, APB and TP Holdco, enforceable against them in accordance with
terns of this Agreement.

 

5.2          

Compliance.
LVD and APB’s entry into, exercise of its rights and/or
performance of or compliance with its obligations under this
Agreement do not and will not violate, or exceed any power or
restriction granted or imposed by:

 

(i)            

any law,
regulation, authorization, directive or order (whether or not
having the force of law) to which it is subject in Singapore and
the United States, as may be applicable; or

(ii)          

any agreement,
instrument or document to which it is a party or which is binding
on in Singapore or the United States, as may be
applicable.

 

5.3          

Board
Approval. Each of LVD and APB has obtained the approval of
its respective board of directors for the Transactions contemplated
under this Agreement.

 

5.4          

Articles of
Incorporation and Bylaws. Each of LVD and APB has heretofore
furnished or otherwise made available to Purchaser a complete and
correct copy of their respective articles of incorporation (the
“Articles of Incorporation”) and bylaws (the
“Bylaws”) as in effect on the date hereof and all
minutes of their respective board of directors since January 1,
2020. Each set of Articles of Incorporation and Bylaws of each of
LVD and APB are in full force and effect and no other
organizational documents are applicable to or binding upon each of
LVD and APB.

 

 

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:
ronald@alsetinternational.com

 

	

Seller
and TP Holdco:

	
 

	

Heng
Fai Ambrose Chan

Address:
7 Temasek Blvd., # 29-01B, Suntec Tower One, Singapore
038987

Email:
fai@alsetinternational.com

 

	

LVD:

	
 

	

LiquidValue
Development Pte Ltd.

Attn:
Danny Lim

Address:
7 Temasek Blvd., #29-01B, Suntec Tower One, Singapore
038987

Email:
danny@alsetinternational.com

	
 

	
 

	
 

	

APB:

	
 

	

American
Pacific Bancorp, Inc.

Attention:
Rongguo Wei

Address:
4800 Montgomery Lane, Suite 210

Bethesda,
Maryland 20814

Email:
ronald@alsetinternational.com

 

 

Any
such notice, communication or demand shall be deemed to have been
duly served (if given or made by electronic mail) immediately on
such transmission or (if given or made by letter) two days after
posting and in proving the same, it shall be sufficient to produce
the email.

 

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

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