EX-10.22 23 d624633dex1022.htm EX 10.22 - SHARE SUBSCRIPTION AGREEMENT DATED AUGUST 23, 2018 EXECUTION VERSION SHARE SUBSCRIPTION AGREEMENT Dated August 23, 2018 by and among TENCENT MUSIC ENTERTAINMENT GROUP THE CAYMANCO SHAREHOLDERS AND THE CAYMANCO...
Exhibit 10.22
EXECUTION VERSION
Dated August 23, 2018
by and among
TENCENT MUSIC ENTERTAINMENT GROUP
(騰訊音樂娛樂集團),
THE CAYMANCO SHAREHOLDERS AND THE CAYMANCO
SHAREHOLDER AFFILIATES LISTED ON SCHEDULE A-1
and
THE UEC OPTION HOLDERS AND THE UEC OPTION HOLDER
AFFILIATES LISTED ON SCHEDULE A-2
This SHARE SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered into on August 23, 2018 by and among:
(a) Tencent Music Entertainment Group (騰訊音樂娛樂集團), an exempted company with limited liability incorporated under the Laws of the Cayman Islands (the “Company”);
(b) the Persons listed on Schedule A-1 attached hereto (each, a “CaymanCo Shareholder” and collectively, the “CaymanCo Shareholders”);
(c) the respective affiliates of the CaymanCo Shareholders listed on Schedule A-1 attached hereto (each, a “CaymanCo Shareholder Affiliate” and collectively, the “CaymanCo Shareholder Affiliates”);
(d) the holders of UEC Options listed on Schedule A-2 attached hereto (each, a “UEC Option Holder” and collectively, the “UEC Option Holders”); and
(e) the respective affiliates of the UEC Option Holders listed on Schedule A-2 attached hereto (each, a “UEC Option Holder Affiliate” and collectively, the “UEC Option Holder Affiliates”).
A. | Each CaymanCo Shareholder is the record and beneficial owner of a certain number of ordinary shares, par value US$1 per share (the “CaymanCo Shares”), of United Music Entertainment Corporation, an exempted company with limited liability incorporated under the Laws of the Cayman Islands (“CaymanCo”); |
B. | The Company desires to issue and sell to each CaymanCo Shareholder a certain number of ordinary shares, par value US$0.000083 per share, of the Company (the “Company Shares”), in exchange for the CaymanCo Shares of the CaymanCo Shareholders, cash payments by the CaymanCo Shareholders and the transfer of the Onshore Investment Assets (as defined below), on the terms and conditions set forth in this Agreement; |
C. | Each UEC Option Holder is the record and beneficial owner of a certain number of UEC Options, and in exchange for the termination of all of the UEC Options at the Closing, the Company desires to issue a certain number of Company Shares and grant a certain number of Company Options to each UEC Option Holder, on the terms and conditions set forth in this Agreement; |
D. | Upon the Closing under this Agreement, the Company will become the record and beneficial owner of all of the CaymanCo Shares and there will not be any outstanding UEC Options; and |
E. | Prior to the execution of this Agreement, the Company, the CaymanCo Shareholders, UEC and the other parties thereto entered into a restructuring framework agreement dated as of July 25, 2018 (the “Restructuring Framework Agreement”), pursuant to which, among other things, (i) the CaymanCo Shareholders and the Company established CaymanCo, with each of the CaymanCo Shareholders and the Company holding the same percentage of equity interest in CaymanCo as its respective percentage of equity ownership in UEC; (ii) UEC transferred all of its assets, including all of the equity interest owned by UEC in Sino Music Group (HK) Limited 神州音樂集團(香港)有限公司, a private company limited by shares incorporated in Hong Kong (“Sino Music”), to CaymanCo; (iii) the shareholders of OpCo transferred all of the outstanding shares of OpCo held by them to Gu Dejun (顧德峻) and Yang Qihu (楊奇虎),who hold 50% and 50% of the outstanding shares in OpCo respectively; (iv) following the Closing under this Agreement, OpCo will purchase all of the assets relating to the operation of UEC’s business in the PRC and equity interests in certain PRC entities (collectively, the “Onshore Investment Assets”), pursuant to certain asset purchase agreement, equity transfer agreement and other agreements between Opco and the other parties thereto; and (v) following the Closing under this Agreement, CaymanCo will establish a variable interest entity structure to obtain effective control over OpCo with a series of contractual arrangements (collectively with the other transactions contemplated by the Restructuring Framework Agreement, the “Restructuring Transactions”). |
ARTICLE 1
“Action” means any litigation or arbitration proceeding.
“Affiliate” means, (i) with respect to a Person that is a natural person, such Person’s relatives and any other Person (other than natural persons) directly or indirectly Controlled by such Person, and (ii) with respect to a Person that is not a natural person, a Person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person; provided that for purposes of this Agreement, none of the Company or its Subsidiaries shall be deemed to be an Affiliate of any Purchaser or any of their respective Affiliates, and none of the Purchasers or their respective Affiliates shall be deemed to be an Affiliate of the Company or any of its Subsidiaries. For the purposes of this definition, “relative” of a Person means such Person’s spouse, parent, grandparent, child, grandchild, sibling, uncle, aunt, nephew, niece or great-grandparent or the spouse of such Person’s child, grandchild, sibling, uncle, aunt, nephew or niece.
“Agreement” has the meaning set forth in the preamble.
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“Applicable Basket” has the meaning set forth in Section 8.02(a).
“Applicable Cap” has the meaning set forth in Section 8.02(a).
“Approval” means any approval, consent, waiver, license or permit required to be obtained from, or any registration or qualification required to be filed with or delivered to, any Governmental Authority or any other Person.
“Arbitration Notice” has the meaning set forth in Section 10.13.
“Attorney” has the meaning set forth in Section 10.02(c).
“Bankruptcy and Equity Exception” has the meaning set forth in Section 3.03.
“Board” means the Board of Directors of the Company.
“Business Day” means a day (other than a Saturday or a Sunday) that the banks in New York, Hong Kong, the PRC, and the Cayman Islands are generally open for business.
“CaymanCo” has the meaning set forth in the recitals.
“CaymanCo Shares” has the meaning set forth in the recitals.
“CaymanCo Shareholder” and “CaymanCo Shareholders” have the meanings set forth in the recitals.
“CaymanCo Shareholder Affiliate” and “CaymanCo Shareholder Affiliates” have the meanings set forth in the recitals.
“Closing” has the meaning set forth in Section 2.02.
“Closing Date” has the meaning set forth in Section 2.02.
“Company” has the meaning set forth in the preamble.
“Company Indemnitee” has the meaning set forth in Section 8.02(b).
“Company Options” means the options to be granted by the Company hereunder to the UEC Option Holders to purchase the Company Shares at an exercise price of US$2.6909 per Company Share and subject to the terms of the 2017 Share Option Plan of the Company and any applicable award agreement thereunder between the Company and any UEC Option Holder.
“Company Shares” has the meaning set forth in the recitals.
“Control” means the possession, direct or indirect, of the power to direct, or cause the direction of, the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“De Minimis Claim Threshold” has the meaning set forth in Section 8.02(a).
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“Dispute” has the meaning set forth in Section 10.13.
“Dual-Class Structure and Re-Designation” has the meaning set forth in Section 10.02(a).
“Effective Event” has the meaning set forth in Section 10.02(a)(i).
“ESOP” means collectively, the 2014 Share Incentive Plan, the 2017 Share Option Plan and the 2017 Restricted Share Award Scheme of the Company.
“Existing Shareholder” means any Person that is a holder of Company Shares as of December 8, 2017.
“Fair Market Value” has the meaning set forth in Section 8.05(a)(i).
“Governmental Authorities” means any nation, government, province, state, or any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of any government or any political subdivision thereof, court, tribunal, arbitrator, the governing body of any securities exchange, and self-regulatory organization, in each case having competent jurisdiction (with each of such Governmental Authorities being referred to as a “Governmental Authority”).
“HKIAC” has the meaning set forth in Section 10.13.
“HKIAC Rules” has the meaning set forth in Section 10.13.
“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.
“Indemnified Party” has the meaning set forth in Section 8.03.
“Indemnifying Party” has the meaning set forth in Section 8.03.
“IPO” has the meaning set forth in Section 8.01.
“Law” means any law, rule, constitution, code, ordinance, statute, treaty, decree, regulation, common law, order, official policy, circular, provision, administrative order, interpretation, injunction, judgment, ruling, assessment, writ or other legislative measure, in each case of any Governmental Authority.
“Lien” means, with respect to any property or asset, any mortgage, charge, lien, pledge, charge, security interest or encumbrance in respect of such property or asset.
“Liquidated Damages” has the meaning set forth in Section 8.05(b).
“Losses” has the meaning set forth in Section 8.02(a).
“Onshore Investment Assets” has the meaning set forth in the recitals.
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“Order” means any injunction, judgment, order, decree, stipulation or determination by or with any Governmental Authority.
“OpCo” means 聯合文娛(深圳)有限公司, a company organized in the PRC.
“PAG” has the meaning set forth in Section 6.06(c).
“Parties” means the named parties to this Agreement and their respective successors and permitted assigns (with each of such Parties being referred to as a “Party”).
“Person” means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise, entity or legal person.
“PRC” means the People’s Republic of China and for purposes of this Agreement, excludes Hong Kong, Macao Special Administrative Region and Taiwan.
“Purchasers” means collectively the CaymanCo Shareholders, the CaymanCo Shareholder Affiliates, the UEC Option Holders and the UEC Option Holder Affiliates (with each of the Purchasers being referred to as a “Purchaser”).
“Purchaser Indemnitee” has the meaning set forth in Section 8.02(a).
“Purchaser Owned Shares” has the meaning set forth in Section 10.02(b)(iii).
“Recipient” has the meaning set forth in Section 6.03.
“Representatives” has the meaning set forth in Section 6.03(a).
“Restated Articles” means the Fourth Amended and Restated Memorandum and Articles of Association of the Company adopted on January 8, 2018.
“Restructuring Framework Agreement” has the meaning set forth in the recitals.
“Restructuring Transactions” has the meaning set forth in the recitals.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Selection Period” has the meaning set forth in Section 10.13.
“Shareholder” has the meaning ascribed to it in the Shareholders Agreement.
“Shareholders Agreement” means the Third Amended and Restated Shareholders Agreement of the Company entered into on January 8, 2018 by and among the Company and other parties named therein.
“Sino Music” has the meaning set forth in the recitals.
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“Subscription Shares” means, with respect to each Purchaser, the Company Shares to be issued and sold to such Purchaser at the Closing pursuant to Section 2.01.
“Subsidiary” means companies whose financial results are consolidated with those of the Company in accordance with the generally accepted accounting principles in the United States.
“Taxes” means (i) in the PRC: (a) any national, provincial, municipal or local taxes, charges, fees, levies or other assessments, (b) all interest, penalties or additional amounts imposed by any Governmental Authority having jurisdiction over the assessment, determination, collection or other imposition of any items described in clause (a) above in connection therewith, and (ii) in any jurisdiction other than the PRC: all similar liabilities as described in clause (i) above.
“Tencent” means Tencent Holdings Limited or any of its controlled Affiliates, which shall, for the avoidance of doubt, include Yangcheng Lake Investment Limited and Min River Investment Limited.
“Total Subscription Price” means, with respect to each Purchaser, the product of (i) US$2.6909 per Company Share and (ii) the number of Subscription Shares to be issued and sold to such Purchaser under Section 2.01.
“Transaction Documents” means this Agreement, the Restructuring Framework Agreement, the Shareholders Agreement (or any Joinder Agreement thereto, as applicable), the applicable option award agreement with respect to the Company Options to be granted to a UEC Option Holder, and any other agreement, document or instrument executed and delivered in connection with the transactions contemplated by this Agreement and the Restructuring Framework Agreement.
“Transfer” means (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer any Company Shares or other securities of the Company or any participation or interest therein, whether directly or indirectly (including pursuant to a derivative transaction or a transfer or new issuance of ownership interests in a direct or indirect holder of such Company Shares or other securities of the Company), or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of such Company Shares or other securities of the Company or any participation or interest therein or any agreement or commitment to do any of the foregoing.
“UEC” means United Entertainment Corporation, an exempted company with limited liability incorporated under the Laws of the Cayman Islands.
“UEC Option Holder” and “UEC Option Holders” have the meanings set forth in the recitals.
“UEC Option Holder Affiliate” and “UEC Option Holder Affiliates” have the meanings set forth in the recitals.
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“UEC Options” means the options to purchase UEC Shares under any employee stock option or compensation plan, option agreement or arrangement of UEC.
“US$” means United States Dollars, the lawful currency of the United States.
ARTICLE 2
(b) Each CaymanCo Shareholder hereby agrees that the Company’s obligation to issue Subscription Shares to such CaymanCo Shareholder at the Closing under Section 2.01(a) shall be satisfied by issuing (and each CaymanCo Shareholder hereby instructs and directs the Company to issue) its Subscription Shares to the applicable CaymanCo Shareholder Affiliate set forth opposite such CaymanCo Shareholder’s name on Schedule A-1 at the Closing. Each CaymanCo Shareholder and its CaymanCo Shareholder Affiliate hereby agree that such CaymanCo Shareholder has designated its CaymanCo Shareholder Affiliate as the Person subscribing for the Subscription Shares for the purposes of Section 1.7 of the Restructuring Framework Agreement.
(c) Subject to the terms and conditions of this Agreement, each UEC Option Holder agrees that at the Closing, all of the UEC Options of each UEC Option Holder then issued and outstanding shall terminate and become the right to receive Subscription Shares and Company Options in accordance with the terms of this Agreement, and the Company agrees to (i) issue and sell to each UEC Option Holder that number of Subscription Shares set forth opposite such UEC Option Holder’s name on Schedule A-2 at the Closing and (ii) grant each UEC Option Holder that number of Company Options set forth opposite such UEC Option Holder’s name on Schedule A-2 at or after the Closing.
(d) Each UEC Option Holder hereby agrees that the Company’s obligation to issue Subscription Shares to such UEC Option Holder at the Closing under Section 2.01(c)(i) shall be satisfied by issuing (and each UEC Option Holder hereby instructs and directs the Company to issue) the Subscription Shares to the applicable UEC Option Holder Affiliate set forth opposite such UEC Option Holder’s name on Schedule A-2 at the Closing.
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(i) if required, an instrument of transfer duly executed by such CaymanCo Shareholder with respect to all of the CaymanCo Shares of such CaymanCo Shareholder in favor of the Company, substantially in the form attached hereto as Exhibit A to this Agreement;
(ii) an extract of the register of members of CaymanCo evidencing the transfer of the CaymanCo Shares of such CaymanCo Shareholder to the Company, certified by the registered office provider of CaymanCo;
(iii) the applicable cash amount set forth on Schedule A-1 by wire transfer of immediately available funds in U.S. dollars to the Company’s bank account set forth in Schedule E hereto; and
(iv) if the CaymanCo Shareholder Affiliate of such CaymanCo Shareholder is not a “Shareholder” (as defined therein) under the Shareholders Agreement prior to the Closing, a copy of the Joinder Agreement to the Shareholders Agreement duly executed by the CaymanCo Shareholder Affiliate of such CaymanCo Shareholder.
(b) At the Closing, each UEC Option Holder shall deliver, or cause to be delivered, to the Company a copy of the Joinder Agreement to the Shareholders Agreement duly executed by the UEC Option Holder Affiliate of such UEC Option Holder, if the UEC Option Holder Affiliate of such UEC Option Holder is not a “Shareholder” (as defined therein) under the Shareholders Agreement prior to the Closing.
(c) At the Closing, the Company shall deliver to each Purchaser that is a CaymanCo Shareholder Affiliate or UEC Option Holder Affiliate a copy of an extract of the relevant portion of the updated register of members reflecting the issuance to such Purchaser of its Subscription Shares set forth on Schedule A-1 and Schedule A-2.
(d) As soon as reasonably practicable after the Closing, the Company will:
(i) provide a copy of an extract of the relevant portion of the updated register of members reflecting such issuance of the Subscription Shares, certified by the registered office provider of the Company; and
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(ii) if requested by such CaymanCo Shareholder or UEC Option Holder Affiliate, deliver to such CaymanCo Shareholder or UEC Option Holder Affiliate the original share certificate issued in its name representing its Subscription Shares.
(e) At such time at or after the Closing as determined by the Company (but no later than one (1) month after the Closing unless otherwise agreed by the Company and the relevant UEC Option Holder), the Company shall grant each UEC Option Holder that number of Company Options set forth opposite such UEC Option Holder’s name on Schedule A-2, subject to compliance with the terms of the 2017 Share Option Plan of the Company. In connection with such grant of Company Options, each UEC Option Holder agrees that he shall execute and deliver to the Company a copy of an option award agreement in such form as required under the 2017 Share Option Plan with respect to the applicable number of Company Options set forth opposite such UEC Option Holder’s name on Schedule A-2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser that as of the date of this Agreement and as of the Closing Date:
(b) The Company has neither filed, nor has had filed against it, any petition for its liquidation, dissolution, bankruptcy or winding-up, and is not insolvent under the Laws of its jurisdiction of organization.
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Section 3.04. Consents and Approvals. Assuming the accuracy of the representations made by each Purchaser in Article 4, except as expressly provided in this Agreement and the other Transaction Documents, no Approval is required to be obtained or made by or with respect to the Company in connection with the execution, delivery or performance by the Company of this Agreement and the other Transaction Documents to which the Company is a party, or the consummation of the transactions contemplated hereby or thereby by the Company, except for any such Approvals as to which the failure to obtain or make would not materially impair the Company’s ability to perform its obligations under the Transaction Documents or to consummate the transactions contemplated thereby.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EACH CAYMANCO SHAREHOLDER AND EACH CAYMANCO SHAREHOLDER AFFILIATE
Each CaymanCo Shareholder hereby, severally and not jointly, represents and warrants to the Company, in respect of itself and its CaymanCo Shareholder Affiliate, as of the date of this Agreement and as of the Closing Date, and each CaymanCo Shareholder Affiliate hereby, severally and not jointly, represents and warrants to the Company, on behalf of itself and its affiliated CaymanCo Shareholder, as of the date of this Agreement and as of the Closing Date:
(b) Each of such CaymanCo Shareholder and such CaymanCo Shareholder Affiliate has neither filed, nor has had filed against it, any petition for its liquidation, dissolution, bankruptcy or winding-up, and is not insolvent under the Laws of its jurisdiction of organization.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF EACH UEC OPTION HOLDER AND EACH UEC OPTION HOLDER AFFILIATE
Each UEC Option Holder hereby, severally and not jointly, represents and warrants to the Company, on behalf of himself and his UEC Option Holder Affiliate, as of the date of this Agreement and as of the Closing Date, and each UEC Option Holder Affiliate hereby, severally and not jointly, represents and warrants to the Company, on behalf of itself and its affiliated UEC Option Holder, as of the date of this Agreement and as of the Closing Date:
(b) Such UEC Option Holder Affiliate has not filed (or has had filed against it) any petition for its liquidation, dissolution, bankruptcy or winding-up, and is not insolvent under the Laws of its jurisdiction of organization.
(c) Such UEC Option Holder is the sole record and beneficial owner of all of the outstanding share capital, voting securities or equity interest of his UEC Option Holder Affiliate.
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ARTICLE 6
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(b) The provisions of this Section 6.03 shall be in addition to, and not in substitution for, the provisions of any separate nondisclosure agreement executed by any of the Parties with respect to the transactions contemplated hereby.
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(b) Each Purchaser, on behalf of itself and its Affiliates, hereby agrees that all balances, payables and other amounts due or outstanding between such Purchaser or any of its Affiliates, on the one hand, and UEC, CaymanCo, OpCo or their respective controlled Affiliates, on the other hand, shall be deemed settled and extinguished in full as of the Closing, except as arising under any Transaction Document. Each Purchaser hereby represents and warrants that, except as contemplated in the Transaction Documents, there will not be as of the Closing any balances, payables or other amounts due or outstanding between such Purchaser or any of its Affiliates, on the one hand, and UEC, CaymanCo, OpCo or their respective controlled Affiliates, on the other hand.
(c) Without limiting Section 6.06(a) and (b) above, ▇▇▇▇▇ Music Holding III Limited (“PAG”) hereby represents and warrants to the Company and the other Purchasers that the Nominee Agreement dated June 17, 2015 by and between PAG and UEC has duly terminated in accordance with its terms prior to the date of this Agreement without any penalty, cost or consideration to be payable or incurred by any of UEC, CaymanCo, OpCo or their respective controlled Affiliates.
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ARTICLE 7
(a) No Injunctions or Legal Prohibitions. No provision of applicable Laws, and no Order, shall prohibit the consummation of the Closing.
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(c) Approvals, Consents and Waivers. Each Purchaser and all of their respective Affiliates shall have obtained or made any and all Approvals necessary for the consummation of the transactions contemplated by this Agreement and the other Transaction Documents, each of which shall be in full force and effect as of the Closing, and in each case, in proper form and without imposing or proposing the imposition of any terms or conditions which, individually or in the aggregate, could be reasonably expected to materially impair the ability of any Purchaser or any of its Affiliates to consummate, or prevent or materially delay, the transactions contemplated by this Agreement and the other Transaction Documents.
ARTICLE 8
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(b) Effective at and after the Closing, subject to the other provisions of this Section 8.02(b) and Schedule C, each Purchaser shall indemnify and hold harmless the Company and its Affiliates (each, a “Company Indemnitee”) against any Losses actually suffered by such Company Indemnitee arising out of (i) any misrepresentation or breach of warranty made by such Purchaser in this Agreement (other than in the case of any breach of Section 4.04 or Section 5.04, as applicable, in which case Section 8.05 shall apply); and (ii) any breach or violation of, or failure to perform, any covenants or agreements made by or on behalf of, or to be performed by, such Purchaser in this Agreement; provided that no Purchaser shall be liable under this Section 8.02(b) to any Company Indemnitee (x) for any and all Losses arising out of any individual claim (or a series of claims arising from substantially identical facts or circumstances) where the Loss relating thereto is less than the De Minimis Claim Threshold, or (y) in respect of each individual claim where the Loss relating thereto is equal to or greater than the De Minimis Claim Threshold, unless the aggregate amount of all Losses by the Company Indemnitees in respect of claims that exceed the De Minimis Claim Threshold exceeds the Applicable Basket of such Purchaser and then only to the extent of such excess; provided further, that the maximum aggregate liability of any Purchaser under this Section 8.02(b) to all Company Indemnitees shall not exceed an amount equal to the Applicable Cap of such Purchaser.
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Section 8.05. Remedies for Breach of Section 4.04 or 5.04. (a) In the event that the Company reasonably believes that there is a breach by any Purchaser of any of its representations and warranties in Section 4.04 or 5.04, the Company may, at its option, provide a written notice to such Purchaser describing the basis for such belief of the Company. Each Purchaser hereby agrees that, upon delivery of such notice and unless such Purchaser has provided proof to the satisfaction of the Company that there is not and has not been any breach by such Purchaser of Section 4.04 or 5.04, the Company has the right to elect to, in its sole and absolute discretion and at any time:
(i) redeem all or a portion of the Subscription Shares of such Purchaser at a redemption price per Company Share equal to the lower of the Fair Market Value per Company Share or US$2.15272 (which represents a 20% discount to the per Company Share subscription price under this Agreement), as appropriately adjusted for any share dividends, combinations, reclassifications, splits or other similar events with respect to the Company Shares. For purposes of this Section 8.05(a)(i), “Fair Market Value” means (A) upon the Company’s IPO, the average reported closing price of a Company Share on their principal trading market for the three trading days immediately prior to the date of the redemption; or (B) prior to the Company’s IPO, the fair market value on the date of redemption as determined by the board of directors of the Company in good faith;
(ii) refuse to recognize any Transfer of the Purchaser Owned Shares of such Purchaser in the register of members of the Company without assigning any reason therefor; and/or
(iii) to the extent permitted by applicable Laws, refuse to (A) declare or pay any dividend or other distribution of the Company’s assets or otherwise recognize the economic interests or benefits in respect of the Purchaser Owned Shares of such Purchaser; and (B) treat such Purchaser or any of its Affiliates owning shares in the Company as a member or shareholder of the Company, recognize the vote by such Purchaser or any of its Affiliates, or count such Purchaser or any of its Affiliates in determining the total number of issued shares at any time, for purposes of the Restated Articles or the Shareholders Agreement or for any other purposes, in each case, in respect of any Purchaser Owned Shares of such Purchaser.
(b) Notwithstanding Section 8.05(a), in the event that the Company (x) reasonably believes that there is any breach by a Purchaser of any of its representations and warranties in Section 4.04 or 5.04, as applicable, and (y) determines that the actions which may be taken pursuant to clauses (i) through (iii) in Section 8.05(a) would not adequately compensate the Company compared to the harm caused by such Purchaser’s breach of Section 4.04 or 5.04, upon written notice by the Company, such Purchaser shall pay to the Company an amount equal to 100% of the Total Subscription Price of such Purchaser (the “Liquidated Damages”). The Parties intend that the Liquidated Damages constitute compensation, and not a penalty. The Parties acknowledge and agree that the Company’s harm caused by a breach of Section 4.04 or 5.04 would be impossible or very difficult to be accurately estimated at the time of the execution and delivery of this Agreement, and that the Liquidated Damages are a reasonable estimate of the anticipated or actual harm that might arise from such breach.
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ARTICLE 9
(a) by mutual written agreement of the Company and such Purchaser;
(b) by the Company or such Purchaser if the Closing in respect of such Purchaser shall not have been consummated on or before January 25, 2019; or
(c) upon the termination of the Restructuring Framework Agreement in accordance with the terms thereof.
The Party desiring to terminate this Agreement pursuant to Section 9.01(a) or Section 9.01(b) shall give notice of such termination to the other Party.
ARTICLE 10
Section 10.01. Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the Laws of Hong Kong without giving effect to any choice of law rule that would cause the application of the Laws of any jurisdiction other than the Laws of Hong Kong to the rights and duties of the Parties hereunder.
(i) the Company may, at any time at or prior to the completion of an IPO of the Company, adopt a dual-class share structure such that its share capital will include Class A ordinary shares and Class B ordinary shares upon the completion of the IPO (the “Effective Event”),
(ii) in connection with such adoption of a dual-class share structure, the Board may determine that:
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(A) the shares of the Company that are owned immediately prior to the Effective Event by any Person that is not an Existing Shareholder may, if determined by the Board, be designated as Class A ordinary shares;
(B) any shares of the Company that will be issued and sold in the IPO will be designated as Class A ordinary shares; and
(C) all of the shares of the Company that are owned by any Existing Shareholder or any of its Affiliates (whether as a result of any subscription of new shares by, or any Transfer by another holder of shares to, such Existing Shareholder or its Affiliates, or otherwise) immediately prior to the Effective Event will be designated as Class B ordinary shares;
(iii) each Class A ordinary share will be entitled to one (1) vote and each Class B ordinary share will be entitled to fifteen (15) votes on all matters to be voted upon by or otherwise requiring the consent of the Company’s shareholders;
(iv) Class B ordinary shares will automatically and immediately convert into an equal number of Class A ordinary shares upon the occurrence of any transfer of such Class B ordinary shares by the holder thereof or an Affiliate of such holder to any Person that is not an Affiliate of such holder, or any other event that may be designated by the Company; and
(v) any re-designation or conversion described in this Section 10.02 may be effected by way of a repurchase by the Company of all such shares to be re-designated or converted in exchange for the issuance by the Company to the relevant shareholder(s) in the Company of the relevant number of fully paid new shares in the Company, and each Purchaser, on behalf of itself and its Affiliates, hereby unconditionally and irrevocably agrees that such Purchaser’s execution of this Agreement shall constitute its consent to the repurchase of all of its shares in the Company in connection with the matters described in paragraphs (i) through (v) for the purposes of the Restated Articles of the Company, as may be amended from time to time.
The matters described in paragraphs (i) through (v) above shall be referred to as the “Dual-Class Structure and Re-Designation.”
(b) Each Purchaser, on behalf of itself and its Affiliates, hereby unconditionally and irrevocably:
(i) consents to the Dual-Class Structure and Re-Designation, including without limitation for all purposes under the Shareholders Agreement, as may be amended from time to time, and the Restated Articles, as may be amended from time to time;
(ii) waives any veto rights and all similar rights (whether arising at contract or in law or otherwise) in respect of the Dual-Class Structure and Re-Designation;
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(iii) agrees to vote, or cause to be voted, the Subscription Shares or any other shares in the Company that are owned by such Purchaser or its Affiliates from time to time and at any time after the date of this Agreement (the “Purchaser Owned Shares”), at every meeting (or in connection with any action by written consent) of the Company’s shareholders at which such matters are considered and at any adjournment or postponement thereof prior to the Effective Event, (A) in favor of, and (B) against any action, proposal, transaction or agreement that could reasonably be expected to impede, interfere with, delay, discourage, adversely affect or inhibit, the Dual-Class Structure and Re-Designation and the adoption of any amendment to the Articles of the Company to reflect the Dual-Class Structure and Re-Designation and other changes as necessary or appropriate to facilitate an IPO of the Company;
(iv) agrees to cause any director designated by such Purchaser and/or its Affiliates pursuant to the Shareholders Agreement to vote, at every meeting of the Company’s Board at which such matters are considered and at any adjournment or postponement thereof (or execute and deliver any unanimous written resolution of the Board), (A) in favor of, and (B) against any action, proposal, transaction or agreement that could reasonably be expected to impede, interfere with, delay, discourage, adversely affect or inhibit, the Dual-Class Structure and Re-Designation and the adoption of any amendment to the Articles of the Company to reflect the Dual-Class Structure and Re-Designation and other changes as necessary or appropriate to facilitate an IPO of the Company; and
(v) agrees to promptly execute, deliver or enter into any other agreement, document, consent, approval or instrument, and take any other actions, which may be reasonably necessary or advisable to effect the Dual-Class Structure and Re-Designation and the adoption of any amendment to the Articles of the Company to reflect the Dual-Class Structure and Re-Designation and other changes as necessary or appropriate to facilitate an IPO of the Company.
(c) Each Purchaser, on behalf of itself and its Affiliates, irrevocably makes, constitutes and appoints each of the Chairman of Board of Directors and the Chief Executive Officer of the Company from time to time a true and lawful proxy and attorney-in-fact (each, an “Attorney”) of such Purchaser and any of its Affiliates owning any Purchaser Owned Shares, with full power and authority, in the name and on behalf of such Purchaser and its Affiliates, (i) to exercise their voting rights with respect to all of the Purchaser Owned Shares in accordance with Subsections (b)(iii) and (b)(v) above in any vote of the Company’s shareholders or proposed action by written consent by the Company’s shareholders, and (ii) to make, execute and deliver all resolutions, consents and other writings and to do such things and to take such actions in each case to the extent the applicable Attorney considers necessary to exercise the voting rights of such Purchaser or any of its Affiliates pursuant to clause (i) above, as fully as could such Purchaser or its Affiliate, as applicable, if personally present and acting. The above proxy and power of attorney is given to secure the performance of the duties of each Purchaser and its Affiliates under Subsections (b) (iii) and (b)(v) above. Each Purchaser shall, and shall procure its Affiliates, take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy. The power of attorney granted by each Purchaser and its Affiliates herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of such Purchaser and any of its Affiliates. The above proxy and power of attorney from each Purchaser and its Affiliates to the Attorneys is coupled with an interest and is irrevocable and continuously effective during the period from the date hereof until the earlier of (i) the first date on which such Purchaser and its Affiliates no longer own any Purchaser Owned Shares or (ii) the Effective Event.
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(d) Each Purchaser further acknowledges and agrees that, prior to the Effective Event, unless otherwise requested or permitted by the Company in writing, (i) such Purchaser shall not, and shall procure that its Affiliates do not, in any way and for any purpose, (A) claim that any or all of the Purchaser Owned Shares, are of a separate class of shares in the Company, individually or collectively with any shares in the Company held by any other Person, from the other Company Shares; or (B) request that the Company acknowledge that the Purchaser Owned Shares are in a separate class of shares or seek its consent as a holder of a separate class of shares in the Company, individually or collectively with any shares in the Company held by any other Person, from the other Company Shares, in relation to any matter to be voted upon or otherwise requiring the consent of any of the Company’s shareholders; and (ii) such Purchaser shall not, and shall procure that its Affiliates do not, in any way and for any purpose vote or attempt to vote any or all of the Purchaser Owned Shares in a separate shareholder class meeting or by way of a written resolution of holder(s) of a separate class of shares, individually or collectively with any shares held by any other Person, from the other Company Shares, in respect of any matter to be voted upon or otherwise requiring the consent of any of the Company’s shareholders.
(e) For the avoidance of doubt, this Section 10.02 does not obligate the Company to implement a dual-class share structure on terms specified in Section 10.02(a). The Parties hereby acknowledge and agree that the final terms of any dual-class share structure adopted by the Company shall be as determined by the Board and as approved by the requisite shareholders under applicable Laws and any applicable provisions of the Restated Articles and the Shareholders Agreement, and such terms may be different from those specified in Section 10.02(a).
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Section 10.06. Parties in Interest. Except as expressly provided elsewhere in this Agreement, a person who is not a Party to this Agreement shall not have any rights under the Contracts (Right of Third Parties) Ordinance (Chapter 623, Laws of Hong Kong) to enforce any terms of this Agreement. This does not affect any right or remedy of a third party which exists, or is available, apart from the Contracts (Right of Third Parties) Ordinance.
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Section 10.13. Dispute Resolution. Any dispute, controversy or claim (each, a “Dispute”) arising out of or relating to this Agreement, or the interpretation, breach, termination, validity or invalidity thereof, shall be referred to arbitration upon the demand of either party to the dispute with notice (the “Arbitration Notice”) to the other. The Dispute shall be settled by arbitration in Hong Kong by the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules (the “HKIAC Rules”) in force at the time when the Arbitration Notice is submitted. The seat of arbitration shall be Hong Kong. There shall be three (3) arbitrators. The complainant and the respondent to such dispute shall each select one (1) arbitrator within thirty (30) days after giving or receiving the demand for arbitration (the “Selection Period”). Such arbitrators shall be freely selected, and the parties shall not be limited in their selection to any prescribed list. The chairman of the HKIAC shall select the third (3rd) arbitrator. If either party to the arbitration fails to appoint an arbitrator with the Selection Period, the relevant appointment shall be made by the chairman of the HKIAC. The arbitral proceedings shall be conducted in English. To the extent that the HKIAC Rules are in conflict with the provisions of this Section 10.13, including the provisions concerning the appointment of the arbitrators, this Section 10.13 shall prevail. Each party to the arbitration shall cooperate with each other party to the arbitration in making full disclosure of and providing complete access to all information and documents requested by such other party in connection with such arbitral proceedings, subject only to any confidentiality obligations binding on such party. The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award. 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 arbitral tribunal. During the course of the arbitral tribunal’s adjudication of the Dispute, this Agreement shall continue to be performed except with respect to the part in dispute and under adjudication.
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EXECUTED and DELIVERED |
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as a deed by and in the name of | ||||||
TENCENT MUSIC ENTERTAINMENT GROUP | ) | |||||
(騰訊音樂娛樂集團) | ) | |||||
by its duly authorised attorney | ) | |||||
in the presence of: | ) | |||||
) |
/s/ Zou Wenting | /s/ Cussion Pang | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: Zou Wenting Address: ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, P.R. China |
[Signature Page to Share Subscription Agreement]
EXECUTED and DELIVERED |
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as a deed by and in the name of | ||||||
YANGCHENG LAKE INVESTMENT LIMITED | ) | |||||
by its duly authorised attorney | ) | |||||
in the presence of: | ) | |||||
) |
/s/ Jiang Hong | /s/ ▇▇ ▇▇▇▇▇▇▇ | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: Jiang Hong |
[Signature Page to Share Subscription Agreement]
EXECUTED and DELIVERED |
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as a deed by and in the name of | ||||||
MIN RIVER INVESTMENT LIMITED | ) | |||||
by its duly authorised attorney | ) | |||||
in the presence of: | ) | |||||
) |
/s/ Jiang Hong | /s/ ▇▇ ▇▇▇▇▇▇▇ | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: Jiang Hong |
[Signature Page to Share Subscription Agreement]
EXECUTED and DELIVERED as a deed by and in the name of ▇▇▇▇▇ MUSIC HOLDING III LIMITED by its duly authorised attorney in the presence of: | ) ) ) |
| ||
) | ||||
/s/ ▇▇▇ ▇▇▇▇▇▇ | /s/ ▇▇▇▇ ▇▇▇ ▇▇▇ | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: ▇▇▇ ▇▇▇▇▇▇ | ||||
Address: Room 4701-05, Tower 2, Plaza 66, ▇▇.▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇), ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ |
[Signature Page to Share Subscription Agreement]
EXECUTED and DELIVERED as a deed by and in the name of ▇▇▇▇▇ MUSIC HOLDING II LIMITED by its duly authorised attorney in the presence of: | ) ) ) |
| ||
) | ||||
/s/ ▇▇▇ ▇▇▇▇▇▇ | /s/ ▇▇▇▇ ▇▇▇ ▇▇▇ | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: ▇▇▇ ▇▇▇▇▇▇ | ||||
Address: Room 4701-05, Tower 2, Plaza 66, ▇▇.▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇), ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ |
[Signature Page to Share Subscription Agreement]
EXECUTED and DELIVERED as a deed by and in the name of PROFIT GAIN ENTERPRISES GROUP LIMITED by its duly authorised attorney in the presence of: | ) ) ) ) |
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/s/ Ma Jie | /s/ Li Sha | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: Ma Jie | ||||
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ | For and on behalf of PROFIT GAIN ENTERPRISES GROUP LIMITED |
[Signature Page to Share Subscription Agreement]
EXECUTED and DELIVERED as a deed by and in the name of CICFH CULTURE ENTERTAINMENT GROUP by its duly authorised attorney in the presence of:
| ) ) ) ) |
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/s/ ▇▇▇ ▇▇ | /s/ Ma Jie | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: ▇▇▇ ▇▇ | ||||
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ | For and onbehalf of CICFH Culture Entertainment Group |
[Signature Page to Share Subscription Agreement]
SIGNED, SEALED and DELIVERED by |
) ) ) ) |
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/s/ ▇▇▇ ▇▇▇▇▇▇ | ||||
謝國民 | ||||
▇▇▇ ▇▇▇▇▇▇
in the presence of: | ||||
/s/ Ye Haoran | ||||
Signature of Witness | ||||
Name of Witness: Ye Haoran | ||||
Address: #1603, Tower ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ |
[Signature Page to Share Subscription Agreement]
SIGNED, SEALED and DELIVERED by |
) ) ) ) |
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/s/ ▇▇▇▇▇ ▇▇▇ | ||||
梁磊 | ||||
▇▇▇▇▇ ▇▇▇
in the presence of: | ||||
/s/ Ye Haoran | ||||
Signature of Witness | ||||
Name of Witness: Ye Haoran | ||||
Address: #1603, Tower ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ |
[Signature Page to Share Subscription Agreement]
EXECUTED and DELIVERED as a deed by and in the name of GUOMIN HOLDINGS LIMITED by its duly authorised attorney in the presence of:
| ) ) ) ) |
![]() | ||
/s/ Ye Haoran | /s/ ▇▇▇ ▇▇▇▇▇▇ | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: Ye Haoran | ||||
Address: #1603, Tower ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ |
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EXECUTED and DELIVERED as a deed by and in the name of CITYWAY INVESTMENTS LIMITED by its duly authorised attorney in the presence of:
| ) ) ) ) |
![]() | ||
/s/ Ye Haoran | /s/ Tai Lo | |||
Signature of Witness | Signature of authorised attorney | |||
Name of Witness: Ye Haoran | ||||
Address: #1603, Tower ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ |
[Signature Page to Share Subscription Agreement]