EX-10.12 15 d494918dex1012.htm EX-10.12 Execution Version SERIES B-2 PREFERRED SHARE SUBSCRIPTION AGREEMENT This SERIES B-2 PREFERRED SHARE SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered into on March 8, 2018 by and among: Each of the...
Exhibit 10.12
Execution Version
SERIES B-2 PREFERRED SHARE SUBSCRIPTION AGREEMENT
This SERIES B-2 PREFERRED SHARE SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered into on March 8, 2018 by and among:
1. | HUYA Inc., an exempted company incorporated under the Laws of the Cayman Islands with its registered office at Vistra (Cayman) Limited, X.X. Xxx 00000 Xxxxx Xxxxxxxx, Xxxxxxxx Way, 000 Xxxx Xxx Xxxx, Xxxxx Xxxxxx, XX0-0000 (the “Company”); |
2. | HUYA Limited, a company organized and existing under the Laws of Hong Kong (the “HK Company”); |
3. | Guangzhou Huya Technology Co., Ltd. (广州虎牙科技有限公司), a wholly foreign-owned enterprise organized and existing under the Laws of the PRC (the “WFOE”); |
4. | Guangzhou Huya Information Technology Co., Ltd. (广州虎牙信息科技有限公司), a company incorporated under the Laws of the PRC (the “Domestic Company”); |
5. | DONG Rongjie (董荣杰), a citizen of the PRC, with identification card number 330227197702176836 (“Xx. Xxxx”); |
6. | YY Inc., an exempted company incorporated with limited liability under the Laws of the Cayman Islands (“YY”); |
7. | Oriental Luck International Limited, a BVI business company limited by shares incorporated under the Laws of the British Virgin Islands; |
8. | All Worth Limited, a BVI business company limited by shares incorporated under the Laws of the British Virgin Islands (together with Oriental Luck International Limited, the “Dong SPVs”); and |
9. | Linen Investment Limited, a BVI business company limited by shares incorporated under the Laws of the British Virgin Islands with its registered office at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands (the “Investor”). |
Each of the parties to this Agreement is referred to herein individually as a “Party” and collectively as the “Parties”.
A. | The Group is engaged in the business of providing products and services relating to audio and video broadcast and live streaming of online games (the “Business”). |
B. | The Company holds 100% of the equity interest of the HK Company. The HK Company holds 100% of the equity interest of the WFOE. The WFOE Controls the Domestic Company through the Control Documents (as defined below). |
C. | The Company seeks expansion capital to grow the Business and, correspondingly, seeks to secure the investment from the Investor, on the terms and subject to the conditions set forth herein. |
Series B-2 Preferred Share Subscription Agreement
D. | The Parties desire to enter into this Agreement and make the respective representations, warranties, covenants and agreements set forth herein on the terms and conditions set forth herein. |
1. | Definitions. |
1.1 The following terms shall have the meanings ascribed to them below:
“Accounting Standards” means the generally accepted accounting principles and practices of the United States of America as in effect from time to time.
“Action” means any charge, claim, action, complaint, petition, investigation, appeal, suit, litigation, grievance, inquiry or other proceeding, whether administrative, civil, regulatory or criminal, whether at law or in equity, or otherwise under any applicable Law, and whether or not before any mediator, arbitrator or Governmental Authority (whether such proceedings are public or private).
“Affiliate” means, with respect to a Person, (i) any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person, and (ii) if such Person is a natural person, any Relative or spouse of such Person, or any spouse of such Relative; provided that none of the Group Companies, Xx. Xxxx, the Dong SPVs or YY shall be deemed to be an Affiliate of the Investor, and none of the Investor or its Affiliates shall be deemed to be an Affiliate of the Group Companies, Xx. Xxxx, the Dong SPVs or YY.
“Benefit Plan” means any employment Contract, deferred compensation Contract, bonus plan, incentive plan, profit sharing plan, mandatory provident scheme, occupational retirement scheme, retirement Contract or other employment compensation Contract or any other plan which provides or provided benefits for any past or present employee, officer, consultant, and/or director of a Person or with respect to which contributions are or have been made on account of any past or present employee, officer, consultant, and/or director of such a Person.
“Board” or “Board of Directors” means the board of directors of the Company.
“Business Day” means any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by law to be closed in the PRC, Hong Kong, the British Virgin Islands or the Cayman Islands and on which no tropical cyclone warning No. 8 or above and no “black” rainstorm warning signal is hoisted in Hong Kong at any time between 8:00 a.m. and 6:00 p.m. Hong Kong time.
“Charter Documents” means, with respect to a particular legal entity, the articles of incorporation, certificate of incorporation, formation or registration (including, if applicable, certificates of change of name), memorandum of association, articles of association, bylaws, articles of organization, limited liability company agreement, trust deed, trust instrument, operating agreement, joint venture agreement, business license, or similar or other constitutive, governing, or charter documents, or equivalent documents, of such entity.
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Series B-2 Preferred Share Subscription Agreement
“Circular 37” means the Circular on Foreign Exchange Administration of Offshore Investment, Financing and Return Investment by Domestic Residents Utilizing Special Purpose Vehicles (关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知 ) issued by SAFE with effect from July 14, 2014 and superseding the Circular 75 issued by SAFE on October 21, 2005, as amended from time to time.
“Class A Ordinary Shares” means the Class A Ordinary Shares of the Company, par value US$0.0001 each, and a holder shall be entitled to one vote for each Class A Ordinary Share held by it.
“Class B Ordinary Shares” means the Class B Ordinary Shares of the Company, par value US$0.0001 each, and a holder shall be entitled to ten votes for each Class B Ordinary Share held by it.
“Closing Date” means the date on which the Closing occurs, which shall be the date of this Agreement.
“Company Owned IP” means all Intellectual Property owned by, purported to be owned by, or exclusively licensed to, the Group Companies.
“Company Registered IP” means all Intellectual Property for which registrations are owned by or held in the name of, or for which applications have been made in the name of, any Group Company.
“Consent” means any consent, approval, authorization, release, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority.
“Contract” means a contract, agreement, indenture, note, bond, loan, instrument, lease, mortgage, franchise, license, commitment, purchase order, and other legally binding arrangement, whether written or oral.
“Control” of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing.
“Control Documents” means the agreements made from time to time that provide contractual control to WFOE over the Domestic Company and therefore allow the Company to consolidate the financial statements of the Domestic Company with those of the Company for financial reporting purposes, including the following contracts entered into by and among the WFOE, the Domestic Company and the equity holders of the Domestic Company: (i) Exclusive Business Cooperation Agreement (独家业务合作协议) entered into by and between the WFOE and the Domestic Company, (ii) Exclusive Purchase Option Agreement (独家购买权协议) entered into by and among the WFOE, the Domestic Company and the equity holders of the Domestic Company, (iii) Voting Rights Proxy Agreement (股东表决权委托协议) entered into by and among the WFOE, the Domestic Company and the equity holders of the Domestic Company, and (iv) Equity Pledge Agreement (股权质押协议) entered into by and among the WFOE, the Domestic Company and the equity holders of the Domestic Company.
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Series B-2 Preferred Share Subscription Agreement
“Conversion Shares” means the Class B Ordinary Shares issuable upon conversion of any Series B Preferred Shares.
“Director Indemnification Agreement” means the indemnification agreement to be entered into by and between the Company and the Investor’s nominee director, in form and substance reasonably satisfactory to the Investor.
“Environmental, Health and Safety Laws” means any and all applicable Laws that: (i) relate to the pollution or protection of the environment (including air; surface water; groundwater and water in pipe, drainage or sewerage systems; land surface or sub-surface strata); (ii) prohibit, regulate, or control any Hazardous Material or any Hazardous Material Activity; or (iii) relate to the health or safety of employees, workers, occupiers, invitees or other Persons.
“Equity Securities” means, with respect to any Person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such Person, and any right, warrant, option, call, commitment, conversion privilege, preemptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing.
“fully diluted basis” means, for the purpose of calculating share numbers, such calculation shall be made assuming that all outstanding options, warrants and other securities convertible into or exercisable or exchangeable for Shares (whether or not by their terms then currently convertible, exercisable or exchangeable), have been so converted, exercised or exchanged, and, in case of calculating the numbers of the Shares, giving effect to the Closing and the Ordinary Shares reserved for issuance under the ESOP.
“Fundamental Representations” means the representations and warranties made by the Warrantors to the Investor contained in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.9, and 3.29.
“Governmental Authority” means any government of any nation, federation, province or state or any other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental authority, agency, department, board, commission or instrumentality of the PRC or any other country, or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization.
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Series B-2 Preferred Share Subscription Agreement
“Governmental Order” means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority.
“Group Company” means each of the Company, the HK Company, the WFOE, the Domestic Company, together with each Subsidiary of any of the foregoing and each other Person Controlled by the Company, and “Group” refers to all of Group Companies collectively.
“Hazardous Material Activity” means the transportation, transfer, recycling, storage, use, labeling, treatment, manufacture, removal, disposal, remediation, Release, exposure of others to, sale, distribution, import, or export of any Hazardous Materials or any product containing Hazardous Materials.
“Hazardous Materials” means any radioactive, infectious, flammable, toxic or hazardous substance, chemical, material, waste, pollutant, or contaminant which poses a present or potential hazard to human health and safety or to the environment, including without limitation (i) those chemicals, substances, materials and wastes defined as “hazardous substances” or “hazardous waste” prohibited or regulated under any Environmental, Health and Safety Laws; and (ii) any petrochemical or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing polychlorinated biphenyls, radon gas, and toxic mold.
“Hong Kong” means the Hong Kong Special Administrative Region of the PRC.
“Indebtedness” of any Person means, without duplication, each of the following of such Person: (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced that are incurred in connection with the acquisition of properties, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all obligations that are capitalized (including capitalized lease obligations), (vii) all obligations under banker’s acceptance, letter of credit or similar facilities, (viii) all obligations to purchase, redeem, retire, defease or otherwise acquire for value any Equity Securities of such Person, (ix) all obligations in respect of any interest rate swap, hedge or cap agreement, (x) all guarantees issued in respect of the Indebtedness referred to in subsections (i) through (ix) above of any other Person, but only to the extent of the Indebtedness guaranteed, and (xi) any accrued and unpaid interest on any of the foregoing.
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Series B-2 Preferred Share Subscription Agreement
“Indemnifiable Loss” means, with respect to any Person, any Action, claim, cost, damage, deficiency, diminution in value, disbursement, expense, liability, loss, obligation, penalty or settlement of any kind or nature imposed on or otherwise incurred or suffered by such Person, including without limitation, reasonable legal, accounting and other professional fees and expenses incurred in the investigation, collection, prosecution and defense of claims and amounts paid in settlement and Taxes payable by such Person by reason of the indemnification.
“Intellectual Property” means any and all (i) patents, patent rights and applications therefor and reissues, reexaminations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (ii) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (iii) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, Software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (iv) URLs, web sites, web pages and any part thereof, (v) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (vi) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (vii) the goodwill symbolized or represented by the foregoing.
“Key Employee” means each of the Persons listed in Schedule III hereof.
“Knowledge” means, with respect to the Warrantors, the actual knowledge and that knowledge which should have been acquired after making such due inquiry and exercising such due diligence as a prudent business person would have made or exercised in the management of his or her business affairs, including but not limited to due inquiry of all officers, directors, employees, consultants and professional advisers (including attorneys, accountants and auditors) of the Group and of its Affiliates who could reasonably be expected to have knowledge of the matters in question, and where any statement in the representations and warranties hereunder is expressed to be given or made to a Person’s Knowledge, or so far as a party is aware, or is qualified in some other manner having a similar effect, the statement shall be deemed to be supplemented by the additional statement that such party has made such due inquiry and due diligence.
“Law” or “Laws” means any and all provisions of any applicable constitution, treaty, statute, law, regulation, ordinance, code, rule, or rule of common law, any governmental approval, concession, grant, franchise, license, agreement, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any formally issued written interpretation or administration of any of the foregoing by, any Governmental Authority, in each case as amended, and any and all applicable Governmental Orders.
“Liabilities” means, with respect to any Person, all debts, liabilities, obligations and commitments of such Person of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due and whether or not such liabilities would be required by the Accounting Standards to be reflected in the financial statements or disclosed in the notes thereto.
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Series B-2 Preferred Share Subscription Agreement
“Lien” means any claim, charge, pledge, mortgage, easement, encumbrance, lease, covenant, security interest, lien, option, pledge, rights of others, or restriction (whether on voting, sale, transfer, disposition or otherwise), whether imposed by Contract, understanding, law, equity or otherwise.
“Loan Documents” means (i) the loan agreement dated May 10, 2017 between China Ping An Insurance Overseas (Holdings) Limited and Jungle TT Limited, a BVI incorporated company wholly-owned by Xx. Xxxx; (ii) the loan assignment agreement dated July 13, 2017 between China Ping An Insurance Overseas (Holdings) Limited and D.I. Alpha Media Company Limited; (iii) the assignment consent letter dated July 21, 2017 from Jungle TT Limited to China Ping An Insurance Overseas (Holdings) Limited and D.I. Alpha Media Company Limited; and (iv) the deed of assignment and assumption dated November 20, 2017, among D.I. Alpha Media Company Limited, Jungle TT Limited and Oriental Luck International Limited.
“Material Adverse Change” means any material adverse change, and any change in circumstances, that have a Material Adverse Effect.
“Material Adverse Effect” means any (i) event, occurrence, fact, condition, change or development that has had, has, or could reasonably be expected to have, individually or together with other events, occurrences, facts, conditions, changes or developments, a material adverse effect on the business, properties, assets, employees, operations, results of operations, condition (financial or otherwise), prospects, assets or Liabilities of the Group taken as a whole, (ii) material impairment of the ability of any party (other than the Investor) to perform the material obligations of such party under any Transaction Documents, or (iii) material impairment of the validity or enforceability of this Agreement or any other Transaction Document against any Party hereto or thereto (other than the Investor).
“Memorandum and Articles” means the second amended and restated memorandum of association of the Company and the second amended and restated articles of association of the Company attached hereto as Exhibit A-1 and Exhibit A-2, respectively, to be adopted in accordance with applicable Law at the Closing.
“MOFCOM” means the Ministry of Commerce of the PRC or, with respect to any matter to be submitted for examination and approval by the Ministry of Commerce, any Governmental Authority which is delegated or authorized by the Ministry of Commerce to examine and approve such matter under the laws of the PRC.
“Ordinary Shares” means the Company’s ordinary shares, par value US$0.0001 each, which shall be re-designated as Class A Ordinary Shares and Class B Ordinary Shares at Closing.
“Permitted Liens” means (i) Liens for Taxes not yet delinquent or the validity of which are being contested in good faith and for which there are adequate reserves on the applicable financial statements, and (ii) Liens incurred in the ordinary course of business, which (x) do not individually or in the aggregate materially detract from the value, use, or transferability of the assets that are subject to such Liens, and (y) were not incurred in connection with the borrowing of money.
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Series B-2 Preferred Share Subscription Agreement
“Person” means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity.
“PRC” means the People’s Republic of China, but solely for the purposes of this Agreement and the other Transaction Documents, excluding Hong Kong, the Macau Special Administrative Region and the islands of Taiwan.
“Public Software” means any Software that contains, or is derived in any manner (in whole or in part) from, any Software that is distributed as free Software, open source Software (e.g., Linux) or similar licensing or distribution models, including, without limitation, Software licensed or distributed under any of the following licenses or distribution models, or licenses or distribution models similar to any of the following: (A) GNU’s General Public License (GPL) or Lesser/Library GPL (LGPL), (B) the Artistic License (e.g., PERL), (C) the Mozilla Public License, (D) the Netscape Public License, (E) the Sun Community Source License (SCSL), (F) the Sun Industry Standards License (SISL), (G) the BSD License, and (H) the Apache License.
“Purchase Price” means US$461,600,000.
“Related Party” means (i) any Affiliate, officer, director, supervisory board member, Key Employee, or holder of any Equity Security of any Group Company (other than the Investor and its Affiliates); and (ii) any of YY or YY’s Affiliates (other than the Group Companies).
“Relative” of a natural person means any spouse, parent, grandparent, child, grandchild, sibling, uncle, aunt, nephew, niece or great-grandparent of such person (whether by blood, marriage or adoption).
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, injecting, depositing, discharging, escaping, leaching, dumping or disposing into or through the environment, including ambient air, surface water, soil, sediment, groundwater, or sewage systems of any substance, material or waste (whether solid, liquid or gaseous), including the abandonment or discarding of barrels, containers, and other receptacles.
“Restructuring Agreement” means the asset restructuring agreement entered into by and among the Domestic Company, YY, the Affiliates of YY and other parties named thereto dated December 31, 2016.
“SAFE” means the State Administration of Foreign Exchange of the PRC.
“SAFE Rules and Regulations” means collectively, the Circular 37 and any other applicable SAFE rules and regulations.
“SAIC” means the State Administration of Industry and Commerce of the PRC or, with respect to the issuance of any business license or filing or registration to be effected by or with the State Administration of Industry and Commerce, any Governmental Authority which is similarly competent to issue such business license or accept such filing or registration under the Laws of the PRC.
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Series B-2 Preferred Share Subscription Agreement
“Securities Act” means the U.S. Securities Act of 1933, as amended and interpreted from time to time.
“Series A Investors” means New Wales Holding Limited, Legend Rank Ventures Limited, Jungle TT Limited, China Ping An Insurance Overseas (Holdings) Limited, Banyan Partners Fund II, L.P., Engage Capital Partners II Limited, Morningside China TMT Fund IV, L.P., Morningside China TMT Fund IV Co-Investment, L.P.
“Series A Preferred Shares” means the Series A Preferred Shares of the Company, par value US$0.0001 per share, which shall be re-designated as Series A-1 Preferred Shares and Series A-2 Preferred Shares at Closing.
“Series A-1 Preferred Shares” means the Series A-1 Preferred Shares of the Company, par value US$0.0001 per share, with the rights and privileges as set forth in the Memorandum and Articles.
“Series A-2 Preferred Shares” means the Series A-2 Preferred Shares of the Company, par value US$0.0001 per share, with the rights and privileges as set forth in the Memorandum and Articles.
“Series A Share Subscription Agreement” means the Series A Preferred Share Subscription Agreement dated May 16, 2017 entered into by and among the Parties to this Agreement (except for the WFOE), Xx. Xx Xueling and the Series A Investors.
“Series A Shareholders Agreement” means the Shareholders Agreement dated July 10, 2017 entered into by and among the Parties to this Agreement and the Series A Investors.
“Series B Preferred Shares” means the Series B-1 Preferred Shares and the Series B-2 Preferred Shares.
“Series B-1 Preferred Shares” means the Series B-1 Preferred Shares of the Company, par value US$0.0001 per share, with the rights and privileges as set forth in the Memorandum and Articles.
“Series B-2 Preferred Shares” means the Series B-2 Preferred Shares of the Company, par value US$0.0001 per share, with the rights and privileges as set forth in the Memorandum and Articles.
“Shareholders Agreement” means the Second Amended and Restated Shareholders Agreement to be entered into by and among the parties named therein at the Closing, which shall be in substantially the form attached hereto as Exhibit B.
“Shares” means the Ordinary Shares (which shall be re-designated as Class A Ordinary Shares and Class B Ordinary Shares at the Closing), the Series A Preferred Shares (which shall be re-designated as Series A-1 Preferred Shares and Series A-2 Preferred Shares at the Closing) and the Series B Preferred Shares.
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Series B-2 Preferred Share Subscription Agreement
“Social Insurance” means any form of social insurance required under applicable Laws, including without limitation, the PRC national and local contributions for pensions, medical insurance, unemployment insurance, work-related injury insurance, pregnancy benefits, and housing accumulation funds.
“Software” means any and all (A) computer programs, including any and all software implementations of algorithms, models and methodologies, including all source code and executable code, whether embodied in software, firmware or otherwise, documentation, development tools, designs, files, verilog files, RTL files, HDL, VHDL, net lists, records, data and mask works; and (B) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, and all rights therein.
“Subsidiary” means, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person. For the avoidance of doubt, (i) a branch of any Group Company shall be deemed a Subsidiary of such Group Company; and (ii) a “variable interest entity” Controlled by a Person shall be deemed to be a Subsidiary of such Person.
“Tax” or “Taxation” means (i) in the PRC: (a) any national, provincial, municipal, or local taxes, charges, fees, levies, or other assessments, including, without limitation, all net income (including enterprise income tax and individual income withholding tax), turnover (including value-added tax, business tax, and consumption tax), resource (including urban and township land use tax), special purpose (including land value-added tax, urban maintenance and construction tax, and additional education fees), property (including urban real estate tax and land use fees), documentation (including stamp duty and deed tax), filing, recording, social insurance (including pension, medical, unemployment, housing, and other social insurance withholding), tariffs (including import duty and import value-added tax), and estimated and provisional taxes, charges, fees, levies, or other assessments of any kind whatsoever, (b) all interest, penalties (administrative, civil or criminal), or additional amounts imposed by any Governmental Authority in connection with any item described in subsection (a) above, and (c) any form of transferee liability imposed by any Governmental Authority in connection with any item described in subsections (a) and (b) above and (ii) in any jurisdiction other than the PRC: all similar Liabilities as described in subsections (i)(a) and (i)(b) above.
“Tax Return” means any return, report or statement showing Taxes, used to pay Taxes, or required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto, and any amendment thereof), including any information return, claim for refund, amended return or declaration of estimated or provisional Tax.
“Tencent Business Cooperation Agreement” means the business cooperation agreement to be entered into among the Investor or its Affiliates and the Group Companies, which shall be in substantially the form attached hereto as Exhibit C.
“Transaction Documents” means this Agreement, the Shareholders Agreement, the Control Documents, the Memorandum and Articles, the Tencent Business Cooperation Agreement, the YY Business Cooperation Agreement, the Director Indemnification Agreement, the ESOP and each of the other agreements and documents otherwise required in connection with implementing the transactions contemplated by any of the foregoing as accepted and agreed by the relevant parties thereto and the Investor in the event the Investor is not a party to any of such agreement or document.
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Series B-2 Preferred Share Subscription Agreement
“Warrantors” means, collectively, the Group Companies that are parties to this Agreement, Xx. Xxxx and the Dong SPVs.
“YY Business Cooperation Agreement” means the business cooperation agreement to be entered into between 广州华多网络科技有限公司 and 广州虎牙信息科技有限公司, the form and substance of which is reasonably satisfactory to the Investor.
1.2 Other Defined Terms. The following terms shall have the meanings defined for such terms in the Sections set forth below:
Agreement | Preamble | |
Balance Sheet | Section 3.14 | |
Business | Recitals | |
Closing | Section 2.2(i) | |
Company | Preamble | |
Company Affiliate | Section 3.19(i) | |
Company IP | Section 3.22(i) | |
Disclosure Schedule | Section 3 | |
Dispute | Section 10.7(i) | |
Domestic Company | Preamble | |
Dong SPVs | Preamble | |
ESOP | Section 3.2(viii) | |
FCPA | Section 3.19(i) | |
Financing Terms | Section 8.2(i) | |
Financial Statements | Section 3.14 | |
Government Entity | Section 3.19(i) | |
Government Official | Section 3.19(i) | |
HK Company | Preamble | |
HKIAC | Section 10.7(i) | |
ICP License | Section 3.30 | |
Indemnification Cap | Section 8.3(iv) | |
Indemnified Party | Section 8.3(i) | |
Investor | Preamble | |
Lease | Section 3.20(ii) | |
Licenses | Section 3.22(v) | |
Management Accounts | Section 3.14 | |
Material Contracts | Section 3.18(i) | |
Money Laundering Laws | Section 3.19(iii) | |
Xx. Xxxx | Preamble | |
OFAC | Section 3.19(ii) | |
Party/Parties | Preamble | |
Required Governmental Consents | Section 3.9(ii) | |
Restricted List | Section 9.8 | |
Sanctions | Section 3.19(ii) | |
Statement Date | Section 3.14 | |
Subscribed Shares | Section 2.1 | |
Tencent | Section 8.4 | |
WFOE | Preamble |
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Series B-2 Preferred Share Subscription Agreement
2. | Subscription and Issuance of Series B-2 Preferred Shares. |
2.1 Subscription and Issuance of the Series B-2 Preferred Shares. Subject to the terms and conditions of this Agreement (including but not limited to Section 6), at the Closing (as defined below), the Investor agrees to subscribe for, and the Company agrees to issue and allot to the Investor, 64,488,235 Series B-2 Preferred Shares (the “Subscribed Shares”) at a price of US$7.15789477 per Series B-2 Preferred Share and the Investor agrees to pay the Purchase Price as consideration for the Subscribed Shares. The Subscribed Shares represent 31.58% of the issued share capital of the Company immediately after Closing on a fully-diluted basis (but before any increase of the ESOP pursuant to Section 3.2(viii)), and shall have the rights, privileges and restrictions set forth in the Memorandum and Articles.
2.2 Closing.
(i) Closing. The consummation of the sale and issuance of the Series B-2 Preferred Shares pursuant to Section 2.1 (the “Closing”) shall take place remotely via the exchange of documents and signatures on the Closing Date. The Parties intend that the signing of this Agreement and the Closing shall take place simultaneously on the date hereof, which shall be the Closing Date.
(ii) Deliveries by the Company at the Closing. At the Closing, in addition to any items specified in Section 6, the Company shall deliver to the Investor (a) the updated register of members of the Company, certified by the registered office provider of the Company, reflecting the issuance to the Investor of the Subscribed Shares, (b) the updated register of directors of the Company, certified by the registered office provider of the Company, reflecting the appointment of the director nominated by the Investor as a director of the Board, and (c) a copy of duly executed share certificate issued in the name of the Investor representing the Subscribed Shares, with original duly executed share certificate delivered to the Investor within ten (10) Business Days after the Closing.
(iii) Deliveries by the Investor at the Closing. At the Closing, the Investor shall pay the Purchase Price by wire transfer of immediately available funds in U.S. dollars to an account designated by the Company in writing at least five (5) Business Days prior to the date of this Agreement whereby the Investor is already satisfied that all conditions as set forth in the Section 6 hereof, have been fulfilled in a manner satisfactory to the Investor, including the receipt by the Investor on or before the date hereof of all the closing deliverables as set forth in the Section 6 hereof, in a manner satisfactory to the Investor.
2.3 Use of Proceeds.
(i) The Company shall use the Purchase Price for purpose of the business expansion, capital expenditures and general working capital needs in accordance with the budgets and business plans of the Group duly approved in accordance with Section 16 of the Shareholders Agreement. The Group Companies shall use the Purchase Price without violating any applicable Laws, including without limitation any SAFE Rules and Regulations. The Purchase Price shall not be used in the payment of any debts or obligations of any Group Company or its Subsidiaries or in the repurchase or cancellation of securities held by any shareholders of the Group Companies or for any other purpose without the prior consent of the Investor.
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(ii) The Company shall not directly or indirectly use the Purchase Price it receives pursuant to this Agreement, or lend, contribute or otherwise make available such Purchase Price to any Subsidiary, joint venture partner or other Person for the purpose of funding or facilitating any activities or business of or with any Person towards any sales or operations in Cuba, Iran, Libya, Syria, Sudan, the Democratic People’s Republic of Korea, Myanmar or any other country sanctioned by OFAC (as defined below) or for the purpose of funding any operations or financing any investments in, or make any payments to, any Person targeted by or subject to any Sanctions.
3.2 Capitalization and Voting Rights.
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(i) Company. The Company’s capital structure (including its authorized and issued share capital, and the holders thereof) as set forth on Schedule I is true, complete and accurate as of the time indicated therein.
(ii) Outstanding Security Holders of the Company. A complete and current list of all shareholders, option holders and other security holders of the Company as of the date hereof and immediately after the Closing indicating the type and number of shares, options or other securities held by each such shareholder, option holder or other security holder is set forth in Schedule I.
(iii) HK Company. The authorized share capital of the HK Company is and immediately following the Closing shall be US$10,000, divided into 10,000 shares of US$1.00 each, which is issued and outstanding and held by the Company.
(iv) WFOE. The registered capital of the WFOE is and immediately following the Closing shall be RMB70,000,000, none of which has been contributed. The HK Company owns 100% of the registered capital of the WFOE.
(vii) Issuance and Status. All presently outstanding Equity Securities of each Group Company were duly and validly issued (or subscribed for) in compliance with all applicable Laws, preemptive rights of any Person, and applicable Contracts (if any). All share capital or registered capital, as the case may be, of each Group Company have been duly and validly issued, are fully paid (or subscribed for) and non-assessable, and are and as of the Closing shall be free of any and all Liens and any third party rights (except for any restrictions on transfer under the Transaction Documents and applicable Laws). Except as contemplated under the Transaction Documents, there are no (a) resolutions pending to increase the share capital or registered capital of any Group Company or cause the liquidation, winding up, or dissolution of any Group Company, nor has any distress, execution or other process been levied against any Group Company, (b) dividends which have accrued or been declared but are unpaid by any Group Company, (c) obligations, contingent or otherwise, of any Group Company to repurchase, redeem, or otherwise acquire any Equity Securities, or (d) outstanding or authorized equity appreciation, phantom equity, equity plans or similar rights with respect to any Group Company. All dividends (if any) or distributions (if any) declared, made or paid by each Group Company, and all repurchases and redemptions of Equity Securities of each Group Company (if any), have been declared, made, paid, repurchased or redeemed, as applicable, in accordance with its Charter Documents and all applicable Laws.
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3.9 Compliance with Laws; Consents.
(i) Each Warrantor is, and has been, in compliance with all applicable Laws. No event has occurred and no circumstance exists that (with or without notice or lapse of time) (a) constitute or may constitute or result in a violation by any Warrantor of, or a failure on the part of such Warrantor to comply with, any applicable Laws, or (b) may give rise to any obligation on the part of any Warrantor to undertake, or to bear all or any portion of the cost of, any remedial action of any nature. None of the Warrantors has received any notice from any Governmental Authority regarding any of the foregoing. No Warrantor is under investigation, has received any Government Order, or is subject to any Action with respect to a violation of any Law.
(ii) To the knowledge of the Warrantors, all Consents from or with the relevant Governmental Authority required in respect of the due and proper establishment and operations of each Group Company as now conducted and all Consents relating to the conduction of the Business, including but not limited to the Consents from or with MOFCOM, SAIC, SAFE, the PRC Ministry of Industry and Information Technology, the PRC Ministry of Culture, Press and Publication Administration, any Tax bureau, customs authorities, product registration authorities, and health regulatory authorities and the local counterparts thereof, as applicable (or any predecessors thereof, as applicable) (collectively, the “Required Governmental Consents”), have been duly obtained or completed in accordance with all applicable Laws.
(iii) No Required Governmental Consent contains any burdensome restrictions or conditions, and each Required Governmental Consent is in full force and effect and will remain in full force and effect upon the consummation of the transactions contemplated hereby. None of the Group Companies is in default under any Required Governmental Consent or has exceeded the permitted scope of activities under any such Required Governmental Consent. To the Knowledge of the Warrantors, there is no reason to believe that any Required Governmental Consent which is subject to periodic renewal will not be granted or renewed. No Group Company has received any letter or other communication from any Governmental Authority threatening or providing notice of revocation of any Required Governmental Consent issued to any Group Company or the need for compliance or remedial actions in respect of the activities carried out directly or indirectly by any Group Company.
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(i) All Taxation of any nature whatsoever for which any Group Company is liable and which has fallen due for payment has been duly paid and without prejudice to the foregoing each Group Company has made all such deductions and retentions as it was obliged or entitled to make and all such payments as should have been made. In respect of any presence of a Group Company in the PRC, (i) all loss carry-forwards are valid and available under PRC Tax law to offset future taxable profits; and (ii) Tax registrations have been completed in all applicable locations in the PRC.
(ii) All notices, computations and Tax Returns which ought to have been given or made, have been properly and duly submitted by each Group Company to the relevant Taxation authorities and all information, notices, computations and returns submitted to such authorities are true, accurate and complete and are not the subject of any material dispute nor are likely to become the subject of any material dispute with such authorities. All records which any Group Company is required to keep for Taxation purposes or which would be needed to substantiate any claim made or position taken in relation to Taxation by the relevant Group Company, have been duly kept and are available for inspection at the premises of the relevant Group Company.
(iii) The amount of Taxation chargeable on any Group Company during the relevant statutory limitation period has not been affected to any extent by any concession, arrangements, agreement or other formal or informal arrangement with any Taxation authority (not being a concession, agreement or arrangement available to companies generally).
(iv) No Group Company has within the relevant statutory limitation period paid or become liable to pay, nor are there any circumstances by reason of which it is likely to become liable to pay any interest, penalty, surcharge or fine relating to Taxation.
(v) To the Knowledge of the Warrantors, no Group Company has within the past ten years or since incorporation, whichever is earlier, been subject to or is currently subject to any investigation, audit or visit by any Taxation or excise authority, and none of the Warrantors is aware of any such investigation, audit or visit planned for the next twelve months.
(vi) No Group Company is treated for any Taxation purpose as resident in a country other than the country of its incorporation and no Group Company has, or has had within the relevant statutory limitation period a branch, agency or permanent establishment in a country other than the country of its incorporation. Each Group Company is only subject to Taxation in the country of its incorporation, and each Group Company will conduct business in a manner such that it will not become subject to Taxation in any jurisdiction other than the country of its incorporation.
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(vii) The assessment of any additional Taxes with respect to the applicable Group Company for periods for which Tax Returns have been filed is not expected to exceed the recorded Liability therefor in the most recent balance sheet in the Financial Statements (as defined below). Since the Statement Date (as defined below), no Group Company has incurred any liability for Taxes outside the ordinary course of business or otherwise inconsistent with past custom and practice, and each Group Company has made adequate provisions on its books of account for all Taxes, assessments and governmental charges with respect to its business, properties and operations for such period, whether or not assessed or disputed as of the date of the applicable balance sheet.
(viii) No Group Company has been the subject of any Action by any Tax authority relating to the conduct of its business or the payment or withholding of Taxes that has not been resolved or is currently the subject of any examination or investigation by any Tax authority relating to the conduct of its business or the payment or withholding of Taxes. No Group Company is responsible for the Taxes of any other Person by reason of Contract, successor liability or otherwise, except for Taxes that are incurred in the ordinary course of business of such Group Company.
(ix) The Group Companies have been in compliance with all applicable Laws relating to all Tax credits and Tax holidays enjoyed by the Group Companies established under the Laws of the PRC or otherwise under applicable Laws which is not and will not be subject to any retroactive deduction or cancellation except as a result of retroactive effect of changes) in the applicable Laws.
(x) The Company and all Group Companies have conducted all Related Party transactions on an arm’s-length basis and on normal commercial terms.
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(i) any purchase, acquisition, sale, lease, disposal of or other transfer of any assets that are individually or in the aggregate material to its business, whether tangible or intangible, other than the purchase or sale of inventory in the ordinary course of business consistent with its past practice;
(ii) any acquisition (by merger, consolidation or other combination, or acquisition of stock or assets, or otherwise) of any business or other Person or division thereof, or any sale or disposition of any business or division thereof;
(iii) any waiver, termination, cancellation, settlement or compromise of a valuable right, debt or claim;
(iv) any incurrence, creation, assumption, repayment, satisfaction, or discharge of (1) any Lien (other than Permitted Liens) or (2) any Indebtedness or guarantee, or the making of any loan or advance (other than reasonable and normal advances to employees for bona fide expenses that are incurred in the ordinary course of business consistent with its past practice), or the making of any investment or capital contribution;
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(v) any amendment to or termination of any Material Contract (including any amendment or termination due to the Investor’s subscription of Series B-2 Preferred Shares), any entering of any new Contract that would have been a Material Contract if in effect on the date hereof, or any amendment to or waiver under any Charter Document;
(vi) any material change in any compensation arrangement or Contract with any employee, or adoption of any new Benefit Plan, or made any change in any existing Benefit Plan;
(vii) any declaration, setting aside, dividend payment or other distribution in respect of any Equity Securities of any Group Company, or any issuance, transfer, redemption, purchase or acquisition of any Equity Securities by any Group Company;
(viii) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the assets, properties, financial condition, operation or business of any Group Company;
(ix) any change in accounting methods or practices or any revaluation of any of its assets;
(x) any change in the approved or registered business scope of any Group Company established in the PRC or any change to any Consent held by such Group Company;
(xi) except in the ordinary course of business consistent with its past practice, entry into any closing agreement in respect of material Taxes, settlement of any claim or assessment in respect of any material Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of any material Taxes, entry or change of any material Tax election, change of any method of accounting resulting in a material amount of additional Tax or filing of any material amended Tax Return;
(xii) any commencement or settlement of any Action;
(xiii) any authorization, sale, issuance, transfer, pledge or other disposition of any Equity Securities of any Group Company;
(xiv) any resignation or termination of any Key Employee, any indication of a Key Employee’s intention to terminate his/her employment with any Group Company, or any resignation or termination of any group of employees of any Group Company;
(xv) any transaction with any Related Party; or
(xvi) any agreement or commitment to do any of the things described in the preceding paragraphs of this Section 3.15.
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(i) Section 3.18(i) of the Disclosure Schedule contains a complete and accurate list of all Material Contracts. “Material Contracts” means, collectively, each Contract (x) to which a Group Company or any of its properties or assets is bound or subject to, or (y) is related to the Business, that (a) involves obligations (contingent or otherwise) or payments in excess of RMB5,000,000 per annum or has an unexpired term in excess of one year after the date hereof, (b) licenses, transfers, assigns, sales, incurs any Lien on Intellectual Property that is material to a Group Company (other than generally-available “off-the-shelf” shrink-wrap software licenses obtained by the Group Companies on non-exclusive and non-negotiated terms), (c) restricts the ability of a Group Company to compete or to conduct or engage in any business or activity or in any jurisdiction, region or territory, (d) relates to the sale, issuance, grant, exercise, award, purchase, repurchase or redemption of any Equity Securities, (e) involves any provisions providing for exclusivity, “change in control”, “most favored nation”, rights of first refusal or first negotiation or similar rights, or grants a power of attorney, agency or similar authorities, (f) is with a Related Party, (g) involves Indebtedness, an extension of credit, a guaranty, surety or assumption of any obligation or any secondary or contingent Liabilities, deed of trust, or the grant of a Lien, (h) involves the lease, license, sale, use, disposition or acquisition of a material amount of assets or of a business other than the sale of inventory in the ordinary course of business of a Group Company, (i) involves the waiver, compromise, or settlement of any dispute, claim, litigation or arbitration, (j) involves the ownership or lease of, title to, use of, or any leasehold or other interest in, any real or personal property, including the Leases, (k) involves the establishment, contribution to, or operation of a partnership, joint venture, alliance or similar entity, or involving a sharing of profits or losses (including joint development and joint marketing Contracts), or any investment in, loan to or acquisition or sale of the securities, equity interests or assets of any Person, (l) is between the Domestic Company and another Group Company, (m) is with a Governmental Authority, state-owned enterprise, or sole-source supplier of material product or service (other than utilities), (n) is a Benefit Plan (other than the employment Contracts), or a collective bargaining agreement or is with any labor union or other representatives of the employees, (o) is a Control Document, (p) is a brokerage or finder’s agreement, or sales agency, marketing or distributorship Contract that is not in the ordinary course of business of a Group Company and inconsistent with such Group Company’s past practice, or (q) is otherwise material to a Group Company, or is one on which a Group Company is substantially dependent.
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(ii) A true, fully-executed copy of each Material Contract including all amendments and supplements thereto (and a written summary of all terms and conditions of each non-written Material Contract, if any) has been delivered to the Investor. Each Material Contract is a valid and binding agreement of the Group Company that is a party thereto, the performance of which does not and will not violate any applicable Law or Governmental Order (or cause a Material Adverse Effect to any Group Company as a result), and is in full force and effect and enforceable against the parties thereto, except (x) as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (y) as may be limited by Laws relating to the availability of specific performance, injunctive relief or other remedies in the nature of equitable remedies. Each Group Company has duly performed all of its obligations under each Material Contract in all material respect to the extent that such obligations to perform have accrued, and no breach or default, alleged breach or alleged default, or event which would (with the passage of time, notice or both) constitute a material breach or default thereunder by such Group Company or, to the Knowledge of the Warrantors, any other party or obligor with respect thereto, has occurred, or as a result of the execution, delivery, and performance of the Transaction Documents will occur. No Group Company has given notice (whether or not written) that it intends to terminate a Material Contract or that any other party thereto has breached, violated or defaulted under any Material Contract. No Group Company has received any notice (whether written or not) that it has breached, violated or defaulted under any Material Contract or that any other party thereto intends to terminate such Material Contract.
(iii) Other than the Transaction Agreements, there is no non-compete agreement or other similar commitment to which any Group Company is a party that would impose restrictions upon the Investor or its Affiliates.
3.19 Anti-Bribery, Anti-Corruption, Anti-Money Laundering and Sanctions; Absence of Government Interests.
(i) None of the Group Companies or any director, officer, agent, employee, affiliate or any other Person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”), is aware of or has taken any action, directly or indirectly, that would result in a violation of or has violated the U.S. Foreign Corrupt Practices Act, as amended (“FCPA”), the U.K. Bribery Act, as amended, or any other applicable anti-bribery or anti-corruption laws, including, without limitation, using any corporate funds for any unlawful contribution, gift, entertainment or other unlawful payments to any foreign or domestic governmental official or employee from corporate funds, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for any Government Entity, as defined below, to any political party or official thereof or to any candidate for political office (individually and collectively, a “Government Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:
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(a) influencing any act or decision of such Government Official in his official capacity;
(b) inducing such Government Official to do or omit to do any act in relation to his lawful duty;
(c) securing any improper advantage; or
(d) inducing such Government Official to influence or affect any act or decision of any Government Entity,
in order to assist any Group Company in obtaining or retaining business for or with, or directing business to such Group Company or in connection with receiving any approval of the transactions contemplated herein. None of the Company Affiliate has accepted anything of value for any of the purposes listed in subsections (a) through (d) of this section. As used in this Section 3.19, “Government Entity” means any government or any department, agency or instrumentality thereof, including any entity or enterprise owned or controlled by a government, or a public international organization.
(ii) None of (a) the Group Companies or (b) any officer, employee, director, agent, affiliate or Person acting on behalf of any Group Company, is owned or Controlled by a Person that is targeted by or the subject of any sanctions administered by the Office of Foreign Assets Control of the U.S. Department of Treasury (“OFAC”), or by the U.S. Department of State, or any sanctions imposed by the European Union (including under Council Regulation (EC) No. 194/2008), the United Nations Security Council, Her Majesty’s Treasury or any other relevant governmental entity or any activities which are sanctioned under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, as amended or the Iran Sanctions Act, as amended (collectively, the “Sanctions”).
(iii) The operations of the Group Companies are and have been conducted at all times in compliance with applicable anti-money laundering statutes of all jurisdictions, including, without limitation, all U.S. anti-money laundering laws, the rule and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving any Group Company with respect to the Money Laundering Laws is pending or, threatened.
(iv) The Group Companies have adopted and implemented (i) systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, OFAC, Money Laundering Laws or any other applicable anti-bribery or anti-corruption law, and (ii) anticorruption and export control policies.
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3.22 Intellectual Property Rights.
(i) Company IP. The Group Company owns, is licensed to use or otherwise has sufficient rights (including but not limited to the rights of development, maintenance, licensing and sale) to all Intellectual Property necessary and sufficient to conduct its business (including the Business), as currently conducted by such Group Company, and as contemplated to be conducted (“Company IP”) without any conflict with or infringement of the rights of any other Person. Section 3.22(i) of the Disclosure Schedule sets forth a complete and accurate list of all Company Registered IP for each Group Company, including for each the relevant name or description, registration/certification or application number, and filing, registration or issue date.
(ii) IP Ownership. All Company Registered IP is owned by and registered or applied for solely in the name of a Group Company, is valid and subsisting and has not been abandoned, and all necessary registration, maintenance and renewal fees with respect thereto and currently due have been satisfied. No Group Company or any of its employees, officers or directors has taken any actions or failed to take any actions that would cause any Company Owned IP to be invalid, unenforceable or not subsisting. No funding or facilities of a Governmental Authority or a university, college, other educational institution or research center was used in the development of any Company Owned IP. Except as contemplated under the Control Contracts, no Company Owned IP is the subject of any Lien, license or other Contract granting rights therein to any other Person. No Group Company is or has been a member or promoter of, or contributor to, any industry standards bodies, patent pooling organizations or similar organizations that could require or obligate a Group Company to grant or offer to any Person any license or right to any material Company Owned IP. No Company Owned IP is subject to any proceeding or outstanding Governmental Order or settlement agreement or stipulation that (a) restricts in any manner the use, transfer or licensing thereof, or the making, using, sale, or offering for sale of any Group Company’s products or services, by any Group Company or (b) may affect the validity, use or enforceability of such Company Owned IP. No Group Company has (i) transferred or assigned any material Company IP; (ii) authorized the joint ownership of, any Company IP; or (iii) permitted the rights of any Group Company in any Company IP to lapse or enter the public domain.
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(iii) Infringement, Misappropriation and Claims. No Group Company has misappropriated, or to the Knowledge of the Warrantors violated, or infringed any Intellectual Property of any other Person, nor has any Group Company received any written notice alleging any of the foregoing. To the Knowledge of the Warrantors, no Person has violated, infringed or misappropriated any Company IP of any Group Company, and no Group Company has given any written notice to any other Person alleging any of the foregoing. No Person has challenged the ownership or use of any Company IP by a Group Company. No Group Company has agreed to indemnify any Person for any infringement, violation or misappropriation of any Intellectual Property by such Person.
(iv) Assignments and Prior IP. All inventions and know-how conceived by employees of a Group Company related to the business of such Group Company are currently owned exclusively by a Group Company. All employees, contractors, agents and consultants of a Group Company who are or were involved in the creation of any Intellectual Property for such Group Company have executed an assignment of inventions agreement that vests in a Group Company exclusive ownership of all right, title and interest in and to such Intellectual Property, to the extent not already provided by Law. All employee inventors of Company Owned IP have received reasonable reward and remuneration from a Group Company for his/her service inventions or service technology achievements in accordance with the applicable PRC Laws. All employee assignment of invention Contracts contain provisions relating to employee technological achievements and inventions which comply with the applicable Laws of the PRC. It will not be necessary to utilize any Intellectual Property of any such Persons made prior to their employment by a Group Company, except for those that are exclusively owned by or licensed to a Group Company, and none of such Intellectual Property has been utilized by any Group Company. None of the employees, consultants or independent contractors, currently or previously employed or otherwise engaged by any Group Company, (a) is in violation of any current or prior confidentiality, non-competition or non-solicitation obligations to such Group Company or to any other Persons, including former employers, or (b) is obligated under any Contract, or subject to any Governmental Order, that would interfere with the use of his or her best efforts to promote the interests of the Group Companies or that would conflict with the business of such Group Company as presently conducted.
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(vi) Protection of IP. Each Group Company has taken reasonable and appropriate steps to protect, maintain and safeguard Company IP and made all applicable filings, registrations and payments of fees in connection with the foregoing. Without limiting the foregoing, all current and former officers, employees, consultants and independent contractors of any Group Company and all suppliers, customers, distributors, and other third parties having access to any Company IP have executed and delivered to such Group Company an agreement requiring the protection of such Company IP. To the extent that any Company IP has been developed or created independently or jointly by an independent contractor or other third party for any Group Company, or is incorporated into any products or services of any Group Company, such Group Company has a written agreement with such independent contractor or third party and has thereby obtained ownership of, and is the exclusive owner of all such independent contractor’s or third party’s Intellectual Property in such work, material or invention by operation of law or valid assignment.
3.23 Labor and Employment Matters.
(i) Each Group Company has complied with all applicable Laws related to labor or employment in all material respects, including provisions thereof relating to wages, hours, overtime working, working conditions, benefits, retirement, social welfare, housing fund contribution, equal opportunity and collective bargaining. Since the incorporation of the Group Companies, there has not been any Action, there is currently no pending Action, or to the Knowledge of the Warrantors, any threatened Action relating to any violation or alleged violation of any applicable Laws by any Group Company related to labor or employment, including any charge or complaint filed by an employee with any Governmental Authority or any Group Company. The Group Companies have caused all of their present officers and employees (including without limitation the Key Employees) to enter into standard employment agreements with the respective Group Companies.
(ii) Section 3.23(ii) of the Disclosure Schedule contains a true and complete list of each Benefit Plan, currently or previously adopted, maintained, or contributed to by any Group Company or under which any Group Company has any Liability or under which any employee or former employee of any Group Company has any present or future right to benefits. Except for required contributions or benefit accruals for the current plan year and salary compensation provided in the employment Contracts, no Liability has been or is expected to be incurred by any Group Companies under or pursuant to any applicable Laws relating to any Benefit Plan or individual employment compensation agreement, and, to the Knowledge of the Warrantors, no event, transaction or condition has occurred or exists that would result in any such Liability to any Group Companies. Each of the Benefit Plans listed in Section 3.23(ii) of the Disclosure Schedule is and has at all times been in compliance with all applicable Laws (including the SAFE Rules and Regulations, if applicable), and all contributions to, and payments for each such Benefit Plan have been timely made. There are no pending or threatened Actions involving any Benefit Plan listed in Section 3.23(ii) of the Disclosure Schedule. Each Group Company maintains, and has fully funded, each Benefit Plan and any other labor-related plans that it is required by Law or by Contract to maintain. Each Group Company is in compliance with all Laws and Contracts relating to its provision of any form of Social Insurance, and has paid, or made provision for the payment of, all Social Insurance contributions required under applicable Laws and Contracts.
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(iii) There has not been, and there is not now pending or, to the Knowledge of the Warrantors, threatened, any strike, union organization activity, lockout, slowdown, picketing, or work stoppage or any unfair labor practice charge against any Group Company.
(iv) Schedule III enumerates each Key Employee, along with each such individual’s title. Each such individual is currently devoting all of his or her business time to the conduct of the business of the applicable Group Company. No such individual is subject to any covenant restricting him/her from working for any Group Company. No such individual is obligated under, or in violation of any term of, any Contract or any Governmental Order relating to the right of any such individual to be employed by, or to contract with, such Group Company. No Group Company has received any notice alleging that any such violation has occurred. No such individual is currently working for, and to the Knowledge of the Warrantors, plans to work for any other Person that competes with any Group Company, whether or not such individual is or will be compensated by such Person. No such individual or any group of employees of any Group Company has given any notice of an intent to terminate their employment with any Group Company, nor does any Group Company have a present intention to terminate the employment of any such individual or any group of employees.
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(i) Each Group Company and each equity holder of the Domestic Company has the legal right, power and authority (corporate and other) to enter into and perform its obligations under each Control Document to which it is a party and has taken all necessary action (corporate and other) to authorize the execution, delivery and performance of, and has authorized, executed and delivered, each Control Document to which it is a party.
(ii) To the extent permitted by applicable Laws, each Control Document constitutes a valid and legally binding obligation of the parties named therein enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
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Series B-2 Preferred Share Subscription Agreement
(iii) No Consents are required to be obtained for the execution and delivery of the Control Documents, the performance by the parties to each Control Document of their respective obligations thereunder and the transactions contemplated under the Control Documents, other than those Consents which (a) have already been obtained or provided for under the Control Documents, (b) remain in full force and effect, (c) are required to register any share pledge to secure the Domestic Company’s obligations under the Control Documents and to make the transfer of profits from the Domestic Company to the HK Company, (d) are required for the transfer of equity interests in the Domestic Company upon exercise by the WFOE of its rights under the Exclusive Purchase Option Agreement (独家购买权协议) entered into by and among the WFOE, the Domestic Company and the equity holders of the Domestic Company, (e) do not impose any obligation, condition or restriction that would create a material burden on the parties to the Control Documents.
(iv) The execution and delivery by each party named in each Control Document, and the performance by such party of its obligations thereunder and the consummation by it of the transactions contemplated therein shall not (a) result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice, any provision of its constitutional documents as in effect at the date hereof, or any Material Contract to which a Group Company is a party or by which a Group Company is bound, (b) result in any violation of, be in conflict with, or constitute a default under, in any material respect, any Governmental Order or any applicable Law, (c) accelerate, or constitute an event entitling any Person to accelerate, the maturity of any Indebtedness or other liability of any Group Company or to increase the rate of interest presently in effect with respect to any Indebtedness of any Group Company, or (d) result in the creation of any Lien, claim, charge or encumbrance upon any of the properties or assets of any Group Company except for the pledge of the equity interests of the Domestic Company pursuant to Equity Pledge Agreement (股权质押协议).
(v) Each Control Document entered into is, and all such Control Documents taken as a whole are, legal, valid, enforceable and admissible as evidence under the Laws of the PRC, and constitute the legal and binding obligations of the relevant parties.
(vi) All shareholders of the Domestic Company are, to the best Knowledge of the Warrantors, acting in good faith and in the best interests of the Group Companies. There have been no disputes, disagreements, claims or any legal proceedings of any nature, raised by any Governmental Authority or any other party, pending or, to the best Knowledge of the Warrantors, threatened against or affecting any of the Domestic Company or the other Group Companies that (a) challenge the validity or enforceability of any part or all of the Control Documents taken as a whole, (b) challenge the structure of the Domestic Company and its ownership structure as set forth in the Control Documents, (c) claim any ownership, share, equity or interest in the Domestic Company or any other Group Companies, or claim any compensation for not being granted any ownership, share, equity or interest in the Domestic Company or any other Group Companies, or (d) claim any of the Control Documents or the ownership structure thereof or any arrangement or performance of or in accordance with the Control Documents was or is in violation of, or will violate any Laws of the PRC.
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Series B-2 Preferred Share Subscription Agreement
3.32 Environmental, Health and Safety Laws.
(i) Each Group Company is in compliance with all Environmental, Health and Safety Laws, which compliance includes the possession by each Group Company of all permits and other Governmental Authorizations required under applicable Environmental, Health and Safety Laws and compliance with the terms and conditions thereof, except where the failure to do so would not have a Material Adverse Effect. To the best Knowledge of the Warrantors, no Group Company has received, since their respective incorporation dates, any communication from a governmental authority that alleges that it is not in such full compliance.
(ii) There is no environmental Action pending or threatened against any Group Company and there are no pending Actions, activities or circumstances related to the Release, emission, discharge, or disposal of any Hazardous Material, in each case, which would have a Material Adverse Effect.
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Series B-2 Preferred Share Subscription Agreement
5. Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Warrantors that each of the following statements is true, correct, complete and not misleading as of the date hereof through the Closing. The Investor hereby acknowledges that the Warrantors are relying on the warranties made by it in this Section 5 in entering into this Agreement and proceeding to Closing. Each of the warranties made by the Investor in this Section 5 shall be construed as a separate and independent warranty and shall not be limited or restricted by reference to or inference from the terms of any other warranty or any other term of this Agreement (except where expressly provided to the contrary).
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Series B-2 Preferred Share Subscription Agreement
5.1 Authorization. The Investor has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All actions on the part of the Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance of all obligations of the Investor thereunder, have been taken. Each Transaction Document has been duly executed and delivered by the Investor (to the extent the Investor is a party) and constitutes valid and legally binding obligations of the Investor, enforceable against the Investor in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
5.2 Consents; No Conflicts. All Consents from or with any Governmental Authority or any other Person required in connection with the execution, delivery and performance of the Transaction Documents, and the consummation of the transactions contemplated by the Transaction Documents, in each case on the part of the Investor have been duly obtained or completed (as applicable) and are in full force and effect. The execution, delivery and performance of each Transaction Document by the Investor does not, and the consummation by each such party of the transactions contemplated thereby will not, with or without notice or lapse of time or both, (i) result in any violation of, be in conflict with, or constitute a default under any provision of any Charter Document of the Investor or its related Affiliates, (ii) result in any violation of, be in conflict with, or constitute a default under, in any material respect, any Governmental Order or any applicable Law, or (iii) result in any violation of, be in conflict with, or constitute a default under, or give rise to any right of termination, amendment, modification, acceleration or cancellation under, or give rise to any augmentation or acceleration of any Liability of the Investor or its related Affiliates under, any contract material to it.
5.3 Purchase for Own Account. The Subscribed Shares and the Conversion Shares are acquired for the Investor’s own account, not as a nominee or agent, and not with a view to or in connection with the sale or distribution of any part thereof.
5.4 Status of Investor. The Investor has the knowledge, sophistication and experience necessary to make an investment decision like that involved in the subscription of the Subscribed Shares and can bear the economic risk of its investment in the Series B-2 Preferred Shares.
5.5 Restricted Securities. The Investor understands that the Subscribed Shares and the Conversion Shares are restricted securities within the meaning of Rule 144 under the Securities Act and that the Subscribed Shares and the Conversion Shares are not registered or listed publicly and must be held indefinitely unless they are subsequently registered or listed publicly or an exemption from such registration or listing is available.
5.6 Not U.S. Person. The Investor is not a “U.S. person” as defined in Rule 902 of Regulation S under the Securities Act.
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Series B-2 Preferred Share Subscription Agreement
5.7 Offshore Transaction. The Investor has been advised and acknowledges that the issue of the Subscribed Shares by the Company is made in reliance upon the exemption from registration provided by Regulation S of the Securities Act. The Investor is acquiring the Subscribed Shares in an offshore transaction in reliance upon the exemption from registration provided by Regulation S under the Securities Act. The Investor further agrees that all offers and sales of the Subscribed Shares from the date hereof and through the expiration of any restricted period set forth in Rule 903 of Regulation S (as the same may be amended from time to time hereafter) shall not be made to U.S. Persons or for the account or benefit of U.S. Persons and shall otherwise be made in compliance with the provisions of Regulation S and any other applicable provisions of the Securities Act. The Investor acknowledges that the Company will refuse to register any transfer of any of the Subscribed Shares not made in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
5.8 U.S. legend. The Investor acknowledges and agrees that the certificate(s) representing the Subscribed Shares will bear a legend substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT. THE SHARES HAVE BEEN ISSUED IN AN OFFSHORE TRANSACTION BY HUYA INC., IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY REGULATION S. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED, EITHER DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED IN REGULATION S) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION OF HUYA INC. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
5.9 Xx. Xxxx. As of the date hereof, Xx. Xxxx legally owns all the outstanding Equity Securities of the Dong SPVs, free and clear of any Liens. The Dong SPVs are not engaged in any business or activities except the holding of Shares of the Company.
6. | Conditions of the Investor’s Obligations at the Closing. |
6.1 Conditions of the Investor’s Obligations. The obligations of the Investor to consummate the Closing under Section 2 of this Agreement on the date of this Agreement are subject to the fulfillment of the following conditions, all of which shall have been fulfilled on or prior to the date hereof:
(i) Representations and Warranties. Each of the representations and warranties of the Warrantors contained in Section 3 and the representations and warranties of YY contained in Section 4 are true and complete as of the date hereof through and including the Closing with the same effect as though such representations and warranties had been made on and as of the Closing, except for those representations and warranties that address matters only as of a particular date, which representations will have been true and complete as of such particular date, subject to changes contemplated by this Agreement.
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Series B-2 Preferred Share Subscription Agreement
(ii) Performance. Each of the parties to each of the Transaction Documents (other than the Investor) shall have performed and complied with all agreements, obligations and conditions contained in the Transaction Documents that are required to be performed or complied with by it on or before the Closing.
(iii) No Prohibition; Authorizations. No provision of any applicable Laws prohibits or shall prohibit the consummation of any transactions contemplated by the Transaction Documents. All Consents of any competent Governmental Authority or of any other Person that are required to be obtained by any Group Company in connection with the consummation of the transactions contemplated by the Transaction Documents (including but not limited to those related to the lawful issuance and sale of the Subscribed Shares and the Conversion Shares, and any waivers of notice requirements, rights of first refusal, preemptive rights, put or call rights), including necessary board and shareholder approvals of the Group Companies, shall have been duly obtained and effective as of the Closing, and evidence thereof shall have been delivered to the Investor.
(iv) Proceedings and Documents. All corporate and other proceedings in connection with the transactions to be completed at the Closing and all documents ancillary thereto, including without limitation, written approval from all of the then current holders of equity interests of each Group Company, as applicable, with respect to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby, shall have been completed in form and substance reasonably satisfactory to the Investor, and the Investor shall have received all such counterpart original or other copies of such documents as it may reasonably request.
(v) Re-designation of share capital. The Company shall have completed the re-designation of its share capital as set out in Part B of Schedule 1.
(vi) Memorandum and Articles. The Memorandum and Articles, in substantially the forms attached hereto as Exhibit A-1 and Exhibit A-2, respectively, shall have been duly adopted by all necessary action of the Board of Directors and the members of the Company, and such adoption shall have become effective and remain in full force and effect with no alternation or amendment as of the Closing, and reasonable evidence thereof shall have been delivered to the Investor. The Charter Documents of each of the other Group Companies shall be in form and substance reasonably satisfactory to the Investor.
(vii) Transaction Documents. Each of the parties to the Transaction Documents, other than the Investor, shall have executed and delivered the Transaction Documents to the Investor.
(viii) Tencent Business Cooperation Agreement. The Tencent Business Cooperation Agreement shall have been duly executed and delivered to the Investor and shall remain in full force and effect.
(ix) YY Business Cooperation Agreement. The YY Business Cooperation Agreement shall have been duly executed and delivered to the Investor and shall remain in full force and effect.
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Series B-2 Preferred Share Subscription Agreement
(x) YY Non-Compete Agreement. YY and the Company shall have caused their respective Affiliates to enter into a non-compete agreement reasonably satisfactory to the Investor.
(xi) Opinions of Counsels. The Investor shall have received the following legal opinions in form and substance acceptable to the Investor and dated as of the Closing Date: (a) a Cayman Islands legal opinion issued by Xxxxxx and Xxxxxx (Hong Kong) LLP, Cayman legal counsel to the Group Companies; and (b) a PRC legal opinion issued by Commerce & Finance Law Offices, PRC legal counsel to the Group Companies.
(xii) Control Documents. The Control Documents shall remain in full force and effect.
(xiii) Financial Statements. The Company shall have delivered the Financial Statements and the Management Accounts to the Investor.
(xiv) Employment and Related Agreements. The employment agreements, the confidentiality, non-compete, non-solicitation and invention assignment agreement or the employment agreement containing confidentiality, non-compete, non-solicitation and invention assignment provisions entered into by each Key Employee with the Group Company shall remain in full force and effect.
(xv) Board of Directors. The Company shall have taken all necessary corporate actions such that immediately following the Closing, the Board of Directors shall have no more than three (3) directors, and a director nominated by the Investor shall have been duly appointed to the Board of Directors.
(xvi) Director Indemnification Agreement. The Director Indemnification Agreement shall have been duly executed by the Company and delivered to the Investor.
(xvii) No Material Adverse Effect. There shall not have been any event or events which, individually or in the aggregate, has had or would reasonably been expected to have or result in a Material Adverse Effect on the Group Companies.
(xviii) Business Plan and Financial Budget. The Group Companies shall have delivered to the Investor a one-year business plan and financial budget for its business, in the form and substance satisfactory to the Investor.
(xix) Closing Certificate. The chief executive officer of the Company shall have executed and delivered to the Investor a certificate dated as of the Closing (i) stating that the conditions specified in this Section 6 have been fulfilled as of the Closing and there have been no Material Adverse Change in the business, affairs, prospects, operations, properties, assets or conditions of the Group Companies, and (ii) attaching thereto (a) the Charter Documents of the Group Companies as then in effect, (b) copies of all resolutions approved by the shareholders and boards of directors of each Group Company (as applicable) relating to the approval of (1) the entry by the Company into the Transaction Documents, (2) the transactions contemplated under the Transaction Documents, (3) the appointment of a person nominated by the Investor as a director of the Company, (4) the adoption of the Memorandum and Articles in substantially the forms attached hereto as Exhibit A-1 and Exhibit A-2, and (5) the issue of the Subscribed Shares to the Investor, free and clear of all Liens, and (c) with respect to the Group Companies which are incorporated under the Laws of the PRC, the valid business licenses of such entity.
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Series B-2 Preferred Share Subscription Agreement
7. Conditions of the Company’s Obligations at the Closing. The obligations of the Company owed to the Investor to consummate the Closing under Section 2 of this Agreement on the date this Agreement, unless otherwise waived in writing by the Company, are subject to the fulfillment of the following conditions:
7.1 Representations and Warranties. The representations and warranties of the Investor contained in Section 5 shall have been true and complete as of the date hereof through and including the Closing with the same effect as though such representations and warranties had been made on the Closing , except for those representations and warranties that address matters only as of a particular date, which representations will have been true and complete as of such particular date.
7.2 Performance. The Investor shall have performed and complied with all covenants, obligations and conditions contained in this Agreement that are required to be performed or complied with at Closing.
7.3 Execution of Transaction Documents. The Investor shall have executed and delivered to the Company the Transaction Documents that are required to be executed by it at Closing.
8. | Other Agreements. |
(ii) Press Releases. None of the Parties hereto (other than the Investor) shall issue a press release or make any public announcement or other public disclosure with respect to any of the transactions contemplated herein without obtaining the prior written consent of the Investor and the Company, or use the name of YY, 欢聚时代 or any of its Affiliates without obtaining in each instance the prior written consent of YY.
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Series B-2 Preferred Share Subscription Agreement
(ii) Tax Indemnity. Notwithstanding anything contained in the Disclosure Schedule (as amended, if applicable), each Warrantor shall jointly and severally indemnify and hold harmless each Indemnified Party from and against any Indemnifiable Losses attributable to (x) any Taxes of any Group Company for all taxable periods ending on or before the Closing and the portion through the end of the Closing for any taxable period that includes (but does not end on) the Closing, (y) all liability for any Taxes of any other person imposed by any Governmental Authority on any Group Company as a transferee, successor, withholding agent, or accomplice in connection with an event or transaction occurring before the Closing, and (z) all liability for Taxes attributable to any misrepresentation or breach of warranty made in Section 3.12 of this Agreement.
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Series B-2 Preferred Share Subscription Agreement
(iii) Special Indemnity. Other than with respect to matters expressly contained in the Disclosure Schedule (as amended, if applicable), (x) each Warrantor shall jointly and severally indemnify and hold harmless each Indemnified Party from and against any and all Indemnifiable Losses suffered by such Indemnified Party, directly or indirectly, as a result of, or based upon or arising from any activities, businesses and operations of any Group Company at any time from its establishment to the date of the Closing (including any non-compliance with any applicable Laws or Contracts, any dispute with a third party with respect to the Group’s Intellectual Properties, or the failure to timely obtain any Consent (including but not limited to the value-added telecommunication license) from the competent Governmental Authority in accordance with the applicable Laws, or the non-payment or underpayment of Social Insurance or housing fund contributions, or any action, suit, arbitration or other court proceeding, pending or threatened, due to the facts existing prior to the Closing even if the liability is actually incurred after the Closing), (y) YY shall indemnify at all times and hold harmless each Indemnified Party from and against any and all Indemnifiable Losses suffered by such Indemnified Party for any breach or violation of its representations, warranties, covenants and obligations under Sections 4, 8.1(b), and 9.8 of this Agreement to the extent that the Indemnifiable Losses of such Indemnified Party, in its capacity as a shareholder of any Group Company, have not otherwise been indemnified, compensated or remedied by YY; and (z) Xx. Xxxx and the Dong SPVs shall jointly and severally indemnify and hold harmless each Indemnified Party and each Group Company, from and against any and all Indemnifiable Losses suffered by such Indemnified Party or such Group Company, directly or indirectly, as a result of, or based upon any claim or Action that any of the Series A Investors may have against any of the Group Companies, in each case, arising out of or in connection with any of the representations, warranties, covenants and indemnities made by each of them under or in connection with or pursuant to (1) the Series A Share Subscription Agreement, (2) the Series A Shareholders Agreement and/or (3) the investment in the Group Companies by any Series A Investor. This Section 8.3(iii) shall automatically terminate and be of no further force or effect upon expiration of a term of twenty-four (24) months after the Closing; provided, however, this Section 8.3(iii) shall not terminate if any claim made with reasonable specificity by the party seeking to be indemnified under this Section 8.3(iii) exists at the expiration of such term, and this Section 8.3(iii) shall remain valid and in force until such claim is finally and fully resolved. Notwithstanding anything to the contrary provided in this Agreement, the aforementioned limitation on term of validity of this Section 8.3(iii) shall not apply in the event of any fraud, willful misconduct, gross negligence or willful default or willful misrepresentation on the part of any Warrantor or YY.
(iv) Indemnification Cap. Other than (a) a breach of any of the Fundamental Representations or (b) a breach of any of the covenants in Section 9 (other than Sections 9.2(ii) and 9.3), the maximum aggregate liability of the Warrantors (other than Xx. Xxxx) for indemnification to the Indemnified Parties under Sections 8.3(i), (ii) and (iii) shall be limited to the Purchase Price (the “Indemnification Cap”). Other than a breach of the covenants in Section 8.1(b)(ii) and Section 9.8, the maximum aggregate liability of YY for indemnification to the Indemnified Parties under Section 8.3(iii)(y) shall be limited to the Indemnification Cap. For the avoidance of doubt, (i) the Indemnification Cap shall not apply in the event of any fraud, willful misconduct, gross negligence or willful default or willful misrepresentation either (x) on the part of any Warrantor, in which case the Indemnification Cap shall remain applicable for YY’s liability for indemnification under Section 8.3(i), (ii) and (iii), or (y) on the part of YY, in which case the Indemnification Cap shall remain applicable for the Warrantors’ liability for indemnification under Section 8.3(iii)(y); and (ii) the maximum aggregate liability of Xx. Xxxx for indemnification to any Indemnified Party under Sections 8.3(i), (ii) and (iii) shall be the Indemnification Cap less any amounts which remain due and owing by Xx. Xxxx to D.I. Alpha Media Company Limited pursuant to the Loan Documents, on the date that such a claim is made by an Indemnified Party under this Section 8.3.
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Series B-2 Preferred Share Subscription Agreement
(vi) Survival of Warranties. The representations and warranties in Section 3, Section 4 and Section 5 of this Agreement shall survive for a term of twenty-four (24) months after the Closing (save for the Fundamental Representations which shall survive until the expiration of the applicable statutory limitation periods, and the tax representations set out in Section 3.12 which shall survive for a term of thirty-six (36) months after the Closing) and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of any Party hereof; provided, however, that any claim made with reasonable specificity by the party seeking to be indemnified within such survival period shall survive until such claim is finally and fully resolved. Notwithstanding anything to the contrary provided in this Agreement, the aforementioned limitation on survival period shall not apply in the event of any fraud, willful misconduct, gross negligence or willful default or willful misrepresentation on the part of any Party.
The Company agrees that it will not, without the prior written consent of the Investor or Tencent Holdings Limited (“Tencent”) (regardless of whether or not Tencent or its Affiliates are shareholders of the Company), in each instance, (a) use in advertising, publicity, or otherwise the name of Tencent, or any Affiliate of Tencent or any partner or employee of any Affiliate of Tencent nor any trade name, trademark, trade device, service xxxx, symbol or any abbreviation, contraction or simulation thereof owned by Tencent or its Affiliates (whether alone or in combination thereof), or (b) represent, directly or indirectly, that any product or any service provided by the Company has been approved or endorsed by Tencent or an Affiliate of Tencent. The Company further agrees that it shall obtain the written consent from Tencent prior to the Company’s issuance of any public statement detailing Tencent’s subscription of the Subscribed Shares pursuant to this Agreement.
(i) Each Group Company undertakes that it shall not, and shall not permit any of its Subsidiaries or Affiliates or any of its respective directors, officers, managers, employees, independent contractors, representatives or agents to, promise, authorize or make any payment to, or otherwise contribute any item of value, directly or indirectly, to any third party, including any Government Official, in each case, in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. Each Group Company further undertakes that it shall, and shall cause each of its Subsidiaries and Affiliates to, cease all of their respective activities, as well as remedy any actions taken by any Group Company, its Subsidiaries or Affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. Each Group Company further represents that it shall, and shall cause each of its Subsidiaries and Affiliates to, maintain systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law.
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Series B-2 Preferred Share Subscription Agreement
(ii) Each Group Company undertakes that it shall ensure that its operations and the operations of each of its Subsidiaries and Affiliates shall continue to be conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements and the Money Laundering Laws.
(iii) Each Group Company shall use its respective best efforts to comply with all applicable Laws, including but not limited to applicable PRC Laws relating to the Business, Intellectual Property, taxation, employment and social welfare and benefits. Without prejudicing the generality of the foregoing, after the Closing and upon the written request by the Investor, the relevant Group Company shall use best efforts to rectify any non-compliance with applicable Laws.
9.2 Key Employees’ Commitments to the Company. Xx. Xxxx hereby agrees to (i) devote, and (ii) cause each of the other Key Employees to devote, substantially all of his or her working time to the business and operations of the Group Companies and not devote any of their time to any (competitive or other) business.
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Series B-2 Preferred Share Subscription Agreement
9.7 Most Favored Nation. From the date hereof, if the Company proposes to issue any Equity Security to any Person, or any of the Warrantors enters into any agreement with any Person in connection with the subscription for Equity Securities in the Company by such Person, which, in the opinion of the Investor, is on terms or provides rights which are more favorable to such Person than those to the Investor contained in the Transaction Documents, the Warrantors shall promptly notify the Investor thereof and agree to, and shall cause all necessary third parties to, agree to such amendments to the Transaction Documents and/or enter into any other agreements with the Investor or any relevant Persons to ensure that those same terms or rights are provided to the Investor.
(i) YY shall procure its Affiliate 广州华多网络科技有限公司 to enter into a non-compete agreement with 广州虎牙信息科技有限公司, pursuant to which, from the Closing Date until the fourth anniversary of the Closing Date, all platform websites and platform software owned, controlled and operated by 广州华多网络科技有限公司 and/or its Subsidiaries to provide application software (including game software) access service for itself and third parties shall not, (a) livestream, promote or distribute any online game titles notified by 广州虎牙信息科技有限公司 to 广州华多网络科技有限公司 (the “Restricted List”), and (b) livestream, promote or distribute any online game titles operated by certain competitors to be mutually agreed by the Company, YY and the Investor.
(ii) The Restricted List may be updated by 广州虎牙信息科技有限公司 on a quarterly basis, and any updates to the Restricted List must be reviewed and approved in writing, and for as long as the Investor and its Affiliates collectively hold more than one-third (1/3) of the Series B Preferred Shares that the Investor acquired at the Closing, such approval shall be duly signed, by (a) the Director nominated by the Investor to the Board of Directors; or (b) such person designated in writing by the Investor to approve any updates to the Restricted List in the event the Investor no longer has the right to appoint a Director to the Board of Directors.
10. | Miscellaneous. |
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Series B-2 Preferred Share Subscription Agreement
10.5 Third Party Rights. Except as provided in Section 8.3, a Person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Ordinance (Chapter 623 of the Laws of Hong Kong) to enforce any term of, or enjoy any benefit under, this Agreement. Notwithstanding any benefits possibly conferred by this Agreement on any third party by virtue of the Contracts (Rights of Third Parties) Ordinance (Chapter 623 of the Laws of Hong Kong), the Parties may amend, vary, waive, terminate or rescind this Agreement at any time and in any way without the consent of such Person.
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Series B-2 Preferred Share Subscription Agreement
(i) Any dispute, controversy or, claim or difference of any kind whatsoever arising out of, relating to or in connection with this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof, the validity, scope and enforceability of this arbitration provision and any dispute regarding no-contractual obligations arising out of or relating to it (the “Dispute”) shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Center (the “HKIAC”) in accordance with the HKIAC Administered Arbitration Rules in force at the time of the commencement of the arbitration. However, if such rules are in conflict with the provisions of this Section 10.7, including the provisions concerning the appointment of arbitrators, the provisions of this Section 10.7 shall prevail.
(ii) The law of this arbitration section shall be Hong Kong law. The seat of arbitration shall be Hong Kong.
(iii) The number of arbitrators shall be three and the language of the arbitration proceedings and written decisions or correspondence shall be English.
(iv) Any party to the Dispute shall be entitled to seek preliminary injunctive relief, if possible, from any court of competent jurisdiction pending the constitution of the tribunal.
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Series B-2 Preferred Share Subscription Agreement
10.14 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.
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Series B-2 Preferred Share Subscription Agreement
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Series B-2 Preferred Share Subscription Agreement
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
COMPANY:
HUYA INC. | ||
By: | /s/ DONG Rongjie | |
Name: | DONG Rongjie (董荣杰) | |
Title: | Director |
Series B-2 Preferred Share Subscription Agreement
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
HK COMPANY:
HUYA LIMITED | ||
By: | /s/ XXXXX Xxxxxxx | |
Name: | XXXXX Xxxxxxx (张海峰) | |
Title: | Director |
Series B-2 Preferred Share Subscription Agreement
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
DOMESTIC COMPANY:
广州虎牙信息科技有限公司 | ||
(Guangzhou Huya Information Technology Co., Ltd.) (Company Seal) | ||
By: | /s/ DONG Rongjie | |
Name: | DONG Rongjie (董荣杰) | |
Title: | Legal Representative |
Series B-2 Preferred Share Subscription Agreement
WFOE:
广州虎牙科技有限公司 | ||
(Guangzhou Huya Technology Co., Ltd.) (Company Seal) | ||
By: | /s/ DONG Rongjie | |
Name: | DONG Rongjie | |
Title: | Legal Representative |
Series B-2 Preferred Share Subscription Agreement
The undersigned (a) understands that this Agreement imposes obligations on him, (b) understands English and has read and understands the terms of this Agreement or has had this Agreement translated and explained to him, and (c) has considered this Agreement with his own tax and legal advisors and has relied solely on such advisors for tax and legal advice and will be responsible for his own liabilities resulting from this Agreement.
签字人通晓英语,已阅读了本协议并且理解本协议的条款(或者已经请人提供了本协议的翻译件,并获得了逐条的讲解),理解签字人在本协议下的义务,已与其税务和法律顾问一起审查了本协议,没有依赖任何税务和法律顾问的建议(签字人自己的税务和法律顾问除外),会履行其在本协议下的所有义务,并支付其在本协议下所需缴纳的款项。
DONG Rongjie (董荣杰) | ||
By: | /s/ DONG Rongjie | |
Name: | DONG Rongjie (董荣杰) |
Series B-2 Preferred Share Subscription Agreement
YY:
YY INC. | ||
By: | /s/ LI Xueling | |
Name: | LI Xueling (李学凌) | |
Title: | Authorized Signatory |
Series B-2 Preferred Share Subscription Agreement
DONG SPV
ORIENTAL LUCK INTERNATIONAL LIMITED
By: | /s/ DONG Rongjie | |
Name: | DONG Rongjie (董荣杰) | |
Title: | Authorized Signatory |
Series B-2 Preferred Share Subscription Agreement
DONG SPV
ALL WORTH LIMITED | ||
By: | /s/ DONG Rongjie | |
Name: | DONG Rongjie (董荣杰) | |
Title: | Authorized Signatory |
Series B-2 Preferred Share Subscription Agreement
INVESTOR
LINEN INVESTMENT LIMITED | ||
By: | /s/ Huateng MA | |
Name: | Huateng MA | |
Title: | Authorized Signatory |
Series B-2 Preferred Share Subscription Agreement
EXHIBIT A-1
FORM OF AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION
Series B-2 Preferred Share Subscription Agreement
EXHIBIT A-2
FORM OF AMENDED AND RESTATED ARTICLES OF ASSOCIATION
Series B-2 Preferred Share Subscription Agreement
Execution Version
EXHIBIT B
SHAREHOLDERS AGREEMENT
Series B-2 Preferred Share Subscription Agreement
EXHIBIT C
TENCENT BUSINESS COOPERATION AGREEMENT
Series B-2 Preferred Share Subscription Agreement