UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

 

* Based on an aggregate of 3,746,890,087 ordinary shares (comprised of (i) 2,380,077,324 Class A ordinary shares, par value US$0.00001 per share (“Class A Shares”), and 659,561,893 Class B ordinary shares, par value US$0.00001 per share (“Class B Shares” and, together with Class A Shares, the “Ordinary Shares”) issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement, dated as of April 28, 2014 (the “Investment Agreement”), by and among the Issuer, 1Look Holdings Ltd., Ali YK Investment Holding Limited (“Ali YK”) and, solely for the purposes of Section 11.4, 11.5 and 11.16 therein, Alibaba Group Holding Limited and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, the percentage of the Ordinary Shares beneficially owned by Ali YK equals 19.2%.

 

2

 

 

 

* Based on an aggregate of 3,746,890,087 Ordinary Shares (comprised of (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, the percentage of the Ordinary Shares beneficially owned by Alibaba Investment Limited equals 19.2%.

 

 

3

 

 

 

* Based on an aggregate of 3,746,890,087 Ordinary Shares (comprised of (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, the percentage of the Ordinary Shares beneficially owned by Alibaba Group Holding Limited equals 19.2%.

 

 

4

 

 

 

* Based on an aggregate of 3,746,890,087 Ordinary Shares (comprised of (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, and pursuant to the closing (the “SPSA Closing”) of the transactions contemplated under the Amended and Restated Share Purchase and Shareholders Agreement, dated as of May 21, 2014 (the “SPSA”), by and among Ali YK, AIL and YF Venus Ltd (“YF Venus”), the percentage of the Ordinary Shares beneficially owned by YF Venus will equal 2.1%.  YF Venus is reporting its beneficial ownership of 77,959,008 Class A Shares as a result of a veto right to be held by YF Venus following the SPSA Closing with respect to any transfer by Ali YK of such 77,959,008 Class A Shares (subject to certain exceptions).  YF Venus does not and, following the SPSA Closing, will not have shared dispositive power with respect to any Class A Shares other than such 77,959,008 Class A Shares, and does not and, following the SPSA Closing, will not have sole dispositive power or sole or shared voting power with respect to any Class A Shares.  YF Venus expressly disclaims any beneficial ownership of any other Ordinary Shares beneficially owned by Ali YK, Alibaba Investment Limited or Alibaba Group Holding Limited.

 

5

 

 

 

* Based on an aggregate of 3,746,890,087 Ordinary Shares (comprised of (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, and pursuant to the SPSA Closing, the percentage of the Ordinary Shares beneficially owned by Yunfeng Fund II, L.P. will equal 2.1%.  Yunfeng Fund II, L.P. is reporting its beneficial ownership of 77,959,008 Class A Shares as a result of a veto right to be held by YF Venus following the SPSA Closing with respect to any transfer by Ali YK of such 77,959,008 Class A Shares (subject to certain exceptions).  Yunfeng Fund II, L.P. does not and, following the SPSA Closing, will not have shared dispositive power with respect to any Class A Shares other than such 77,959,008 Class A Shares, and does not and, following the SPSA Closing, will not have sole dispositive power or sole or shared voting power with respect to any Class A Shares.  Yunfeng Fund II, L.P. expressly disclaims any beneficial ownership of any other Ordinary Shares beneficially owned by Ali YK, Alibaba Investment Limited or Alibaba Group Holding Limited.

 

6

 

 

 

* Based on an aggregate of 3,746,890,087 Ordinary Shares (comprised of (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, and pursuant to the SPSA Closing, the percentage of the Ordinary Shares beneficially owned by Yunfeng Investment II, L.P. will equal 2.1%.  Yunfeng Investment II, L.P.  is reporting its beneficial ownership of 77,959,008 Class A Shares as a result of a veto right to be held by YF Venus following the SPSA Closing with respect to any transfer by Ali YK of such 77,959,008 Class A Shares (subject to certain exceptions).  Yunfeng Investment II, L.P. does not and, following the SPSA Closing, will not have shared dispositive power with respect to any Class A Shares other than such 77,959,008 Class A Shares, and does not and, following the SPSA Closing, will not have sole dispositive power or sole or shared voting power with respect to any Class A Shares.  Yunfeng Investment II, L.P. expressly disclaims any beneficial ownership of any other Ordinary Shares beneficially owned by Ali YK, Alibaba Investment Limited or Alibaba Group Holding Limited.

 

7

 

 

 

* Based on an aggregate of 3,746,890,087 Ordinary Shares (comprised of (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, and pursuant to the SPSA Closing, the percentage of the Ordinary Shares beneficially owned by Yunfeng Investment GP II, Ltd. will equal 2.1%.  Yunfeng Investment GP II, Ltd. is reporting its beneficial ownership of 77,959,008 Class A Shares as a result of a veto right to be held by YF Venus following the SPSA Closing with respect to any transfer by Ali YK of such 77,959,008 Class A Shares (subject to certain exceptions).  Yunfeng Investment GP II, Ltd. does not and, following the SPSA Closing, will not have shared dispositive power with respect to any Class A Shares other than such 77,959,008 Class A Shares, and does not and, following the SPSA Closing, will not have sole dispositive power or sole or shared voting power with respect to any Class A Shares.  Yunfeng Investment GP II, Ltd. expressly disclaims any beneficial ownership of any other Ordinary Shares beneficially owned by Ali YK, Alibaba Investment Limited or Alibaba Group Holding Limited.

 

8

 

 

 

* Based on an aggregate of 3,746,890,087 Ordinary Shares (comprised of (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement).  Each Class B Share is convertible at the option of the holder into one Class A Share, and Class A Shares are not convertible into Class B Shares.  Based on the foregoing, and pursuant to the SPSA Closing, the percentage of the Ordinary Shares beneficially owned by Yu Feng will equal 2.1%.  Yu Feng is reporting his beneficial ownership of 77,959,008 Class A Shares as a result of a veto right to be held by YF Venus following the SPSA Closing with respect to any transfer by Ali YK of such 77,959,008 Class A Shares (subject to certain exceptions).  Yu Feng does not and, following the SPSA Closing, will not have shared dispositive power with respect to any Class A Shares other than such 77,959,008 Class A Shares, and does not and, following the SPSA Closing, will not have sole dispositive power or sole or shared voting power with respect to any Class A Shares.  Yu Feng expressly disclaims any beneficial ownership of any other Ordinary Shares beneficially owned by Ali YK, Alibaba Investment Limited or Alibaba Group Holding Limited.

 

9

 

Item 1.                     Security and Issuer

 

This statement on Schedule 13D (this “Schedule 13D”) relates to the Class A ordinary shares, par value US$0.00001 per share (the “Class A Shares”), of Youku Tudou Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “Issuer”).  The Issuer’s principal place of business is 11/F SinoSteel Plaza, 8 Haidian Street Beijing 100080, People’s Republic of China.

 

Item 2.                     Identity and Background

 

This Schedule 13D is being filed jointly, pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by (a) Ali YK Investment Holding Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“Ali YK”), (b) Alibaba Investment Limited, a company organized under the laws of the British Virgin Islands (“AIL”), (c) Alibaba Group Holding Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“AGHL” and, together with Ali YK, AIL and other affiliates of AGHL, the “Alibaba Group”), (d) YF Venus Ltd, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“YF Venus”), (e) Yunfeng Fund II, L.P., an exempted limited partnership organized under the laws of the Cayman Islands (“Yunfeng Fund II”), (f) Yunfeng Investment II, L.P., an exempted limited partnership organized under the laws of the Cayman Islands (“Yunfeng Investment II”), (g) Yunfeng Investment GP II, Ltd. (“Yunfeng Investment GP II”), an exempted company with limited liability incorporated under the laws of the Cayman Islands, and (h) Yu Feng, a citizen of the People’s Republic of China.

 

The business address of Ali YK, AIL, and AGHL is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.  AGHL is a holding company of the Alibaba Group.  AIL is a wholly-owned subsidiary of AGHL and principally engages in investment activities on behalf of Alibaba Group.

 

Ali YK is a special purpose vehicle.  Immediately following the closing (the “Closing”) of the transactions contemplated by the Investment Agreement, dated as of April 28, 2014 (the “Investment Agreement”), by and among the Issuer, 1Look Holdings Ltd. (“1Look”), Ali YK and, solely for the purposes of Section 11.4, 11.5 and 11.16 therein, AGHL, Ali YK was owned 100% by AIL.  A copy of the Investment Agreement is attached hereto as Exhibit B, which Exhibit is incorporated herein by reference.  Immediately following the closing (the “SPSA Closing”) of the transactions contemplated by the Amended and Restated Share Purchase and Shareholders Agreement, dated as of May 21, 2014 (the “SPSA”), by and among Ali YK, AIL and YF Venus, Ali YK will be owned 89.19% by AIL and 10.81% by YF Venus.  A copy of the SPSA is attached hereto as Exhibit E, which Exhibit is incorporated herein by reference.

 

The business address of YF Venus, Yunfeng Fund II, Yunfeng Investment II, Yunfeng Investment GP II and Yu Feng is c/o Yunfeng Investment Management (HK) Limited, Suite 2201, 50 Connaught Road, Central, Hong Kong. Yunfeng Fund II is the sole shareholder of YF Venus. Yunfeng Investment II is the general partner of Yunfeng Fund II. Yunfeng Investment GP II is the general partner of Yunfeng Investment II. Yu Feng holds a controlling interest in Yunfeng Investment GP II.

 

10

 

Ali YK, AIL, AGHL, YF Venus, Yunfeng Fund II, Yunfeng Investment II, Yunfeng Investment GP II and Yu Feng are collectively referred to in this Schedule 13D as the “Reporting Persons.”

 

YF Venus is reporting its beneficial ownership of 77,959,008 Class A Shares as a result of a veto right to be held by YF Venus following the SPSA Closing with respect to any transfer by Ali YK of such 77,959,008 Class A Shares, subject to certain exceptions (as further described below under Item 6).  YF Venus does not and, following the SPSA Closing, will not have shared dispositive power with respect to any Class A Shares other than such 77,959,008 Class A Shares, and does not and, following the SPSA Closing, will not have sole dispositive power or sole or shared voting power with respect to any Class A Shares.  YF Venus expressly disclaims any beneficial ownership of any other Ordinary Shares (as defined below) beneficially owned by Ali YK, AIL or AGHL.

 

The name, business address, citizenship and present principal occupation or employment of each executive officer and each member of the board of directors of each Reporting Person are set forth on Schedules A-1, A-2, A-3, A-4 and A-5 hereto and are incorporated herein by reference.  Yunfeng Fund II and Yunfeng Investment II do not have executive officers or boards of directors, and are managed and controlled by their respective general partners.  Yu Feng’s present principal occupation or employment is Chairman of Yunfeng Investment Management (HK) Limited.

 

During the last five years, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any person named in Schedules A-1, A-2, A-3, A-4 and A-5 (a) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Item 3.                     Source and Amount of Funds or Other Consideration

 

Pursuant to the Investment Agreement, at the Closing on May 21, 2014, Ali YK acquired (a) 707,250,870 Class A Shares newly issued by the Issuer (the “Issued Shares”) for an aggregate purchase price of US$1,198,397,307.50, and (b) 13,869,990 Class B ordinary shares, par value US$0.00001 per share (“Class B Shares” and, together with Class A Shares, the “Ordinary Shares”) held by 1Look, which were automatically converted into 13,869,990 Class A Shares upon the Closing under the Investment Agreement pursuant to the Amended and Restated Memorandum and Articles of Association of the Issuer (the “Memorandum and Articles”), for an aggregate purchase price of US$23,501,927.50.

 

In connection with the Closing under the Investment Agreement, AIL funded to Ali YK the aggregate purchase price paid by Ali YK to the Issuer and 1Look under the Investment Agreement, using AIL’s and AGHL’s working capital.  Such funding by AIL to Ali YK was made in the form of an equity contribution in an aggregate amount equal to US$1,089,802,027.00 to Ali YK and a convertible note in an aggregate principal amount of US$132,097,208.00 issued by Ali YK to AIL, which will be repaid in full upon the SPSA Closing (or, at the option of AIL, may be converted into equity of Ali YK in the event that the SPSA Closing does not occur).  At the SPSA Closing, YF Venus will make an equity contribution to Ali YK in an aggregate amount equal to US$132,097,208.00, using funds provided by the partners of Yunfeng Fund II.

 

The information set forth or incorporated by reference in Item 5 of this Schedule 13D is hereby incorporated by reference in this Item 3.

 

11

 

Item 4.                     Purpose of Transaction

 

The information set forth or incorporated by reference in Items 3 and 6 of this Schedule 13D is hereby incorporated by reference in this Item 4.

 

The Reporting Persons acquired, or, with respect to YF Venus and the YF Persons (as defined below), upon the SPSA Closing will acquire, the securities covered by this Schedule 13D for investment and intend to review their investment in the Issuer on a continuous basis.

 

Board Representation

 

Pursuant to the Investor Rights Agreement, dated as of April 28, 2014, by and among the Issuer, Ali YK and, solely for the purposes of Section 7.1 and 7.2 and Article VIII therein, AGHL and YF Venus (the “Investor Rights Agreement”), for so long as Ali YK (together with any affiliates and permitted transferees (as specified in the Investor Rights Agreement)) beneficially owns a number of Class A Shares that, in aggregate, is equal to at least (i) 75% of the Ordinary Shares purchased by Ali YK at the Closing under the Investment Agreement (the “Investor Shares”) (as appropriately adjusted for share splits, reverse share splits, share dividends, share consolidations, recapitalizations and the like), and (ii) 10% of the total number of Ordinary Shares then outstanding, which shall be calculated without taking into account (a) any securities of the Issuer issued after April 28, 2014 pursuant to a New Issuance Exception (as defined in the Investor Rights Agreement) or (b) any securities of the Issuer issued after April 28, 2014 that are not Ordinary Shares or any Ordinary Shares issued upon the conversion, exchange or exercise of such securities (the “Minimum Ownership Percentage”), Ali YK will be entitled to designate one individual (the “Investor Director”) for appointment or election to the board of directors of the Issuer (the “Board”) and appoint the Investor Director as a non-voting observer to each committee of the Board.  Pursuant to Ali YK’s board representation rights above, Jonathan Lu, Chief Executive Officer of AGHL, was appointed to the Board at the Closing.  As a director of the Issuer, Mr. Lu may have influence over the corporate activities of the Issuer, including activities which may relate to transactions described in clauses (a) through (j) of Item 4 of Schedule 13D.

 

Depending upon various factors, including but not limited to the Reporting Persons’ and the Issuer’s business, prospects and financial conditions and other developments concerning the Reporting Persons and the Issuer, market conditions and other factors that the Reporting Persons may deem relevant to their investment decision, and subject to the terms of the Investment Agreement, the Investor Rights Agreement and the Shareholders Agreement, dated as of April 28, 2014, by and among Ali YK, 1Look and certain other persons listed therein (the “Shareholders Agreement”), and subject to compliance with applicable laws, rules and regulations, the Reporting Persons may in the future take actions with respect to their investment in the Issuer as they deem appropriate, including changing their current intentions or increasing or decreasing their investment in the Issuer, with respect to any or all matters required to be disclosed in this Schedule 13D.

 

Other than as set forth in this Schedule 13D, the Reporting Persons have no present plans or proposals which relate to or would result in any of the matters set forth in clauses (a) through (j) of Item 4 of Schedule 13D; provided that the Reporting Persons may, at any time, review or reconsider their position with respect to the Issuer and reserve the right to develop such plans or proposals.

 

12

 

Item 5.                     Interest in Securities of the Issuer

 

(a)-(b) The following disclosure is based on (i) 2,380,077,324 Class A Shares and 659,561,893 Class B Shares issued and outstanding as of April 28, 2014 as disclosed in the Investment Agreement and (ii) 707,250,870 Class A Shares newly issued by the Issuer to Ali YK under the Investment Agreement.  The information contained on the cover pages to this Schedule 13D and the information set forth or incorporated in Items 2, 3, 4 and 6 of this Schedule 13D are incorporated herein by reference.

 

Pursuant to Rule 13d-3 under the Exchange Act, Ali YK may be deemed to beneficially own 721,120,860 Class A Shares, representing 19.2% of the total outstanding Ordinary Shares and 23.4% of the total outstanding Class A Shares as of May 21, 2014.

 

Immediately following the Closing under the Investment Agreement, AIL owned 643,161,852 ordinary shares, par value US$0.00001, of Ali YK and held a convertible note in an aggregate principal amount equal to US$132,097,208.00 issued by Ali YK to AIL.  Pursuant to the SPSA, at the SPSA Closing, (a) AIL will exchange all of such ordinary shares in Ali YK for an aggregate of 643,161,852 Class A ordinary shares, par value US$0.00001 per share, of Ali YK, which shares will represent 89.19% of the then outstanding ordinary shares of Ali YK, (b) such convertible note will be repaid in full, and (c) YF Venus will purchase from Ali YK an aggregate of 77,959,008 Class B ordinary shares, par value US$0.00001 per share of Ali YK, which shares represent 10.81% of the then outstanding ordinary shares of Ali YK.  Pursuant to the terms of the SPSA and by virtue of its controlling interest in Ali YK, AIL may be deemed to beneficially own 721,120,860 Class A Shares, comprised of 721,120,860 Class A Shares in respect of which AIL may be deemed to possess shared voting power with Ali YK and AGHL, 643,161,852 Class A Shares in respect of which AIL may be deemed to possess shared dispositive power with Ali YK and AGHL and 77,959,008 Class A Shares in respect of which AIL may be deemed to possess shared dispositive power with Ali YK, AGHL and, following the SPSA Closing, YF Venus.

 

AGHL, by virtue of its controlling interest in AIL, may be deemed to beneficially own 721,120,860 Class A Shares, comprised of 721,120,860 Class A Shares in respect of which AGHL may be deemed to possess shared voting power with Ali YK and AIL, 643,161,852 Class A Shares in respect of which AGHL may be deemed to possess shared dispositive power with Ali YK and AIL and 77,959,008 Class A Shares in respect of which AGHL may be deemed to possess shared dispositive power with Ali YK, AIL and, following the SPSA Closing, YF Venus.

 

13

 

Pursuant to the terms of the SPSA, following the SPSA Closing, by virtue of its minority ownership interest to be acquired in Ali YK and as a result of a veto right to be held by YF Venus with respect to any transfer by Ali YK of such 77,959,008 Class A Shares subject to certain exceptions (which is set forth in the SPSA and further described below under Item 6), YF Venus may be deemed to beneficially own 77,959,008 Class A Shares in respect of which YF Venus may be deemed to possess shared dispositive power with Ali YK, AIL and AGHL.  YF Venus does not and, following the SPSA Closing, will not have shared dispositive power with respect to any Class A Shares other than such 77,959,008 Class A Shares, and does not and, following the SPSA Closing, will not have sole dispositive power or sole or shared voting power with respect to any Class A Shares.  YF Venus expressly disclaims any beneficial ownership of any other Ordinary Shares beneficially owned by Ali YK, AIL or AGHL.

 

Following the SPSA Closing, each of the following entities or person (each, a “YF Person”), as applicable, may be deemed to beneficially own 77,959,008 Class A Shares in respect of which such YF Person may be deemed to possess shared dispositive power with Ali YK, AIL, AGHL, YF Venus and each other YF Person: (i) Yunfeng Fund II, by virtue of its ownership of all share capital of YF Venus, (ii) Yunfeng Investment II, by virtue of being the general partner of Yunfeng Fund II, (iii) Yunfeng Investment GP II, by virtue of being the general partner of Yunfeng Investment II, and (iv) Yu Feng, by virtue of his controlling interest in Yunfeng Investment GP II.  Each YF Person expressly disclaims any beneficial ownership of any other Ordinary Shares beneficially owned by Ali YK, AIL or AGHL.

 

Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by any Reporting Person (other than Ali YK) that it is the beneficial owner of any Ordinary Shares for purposes of Section 13(d) of the Exchange Act, or for any other purpose, and such beneficial ownership is expressly disclaimed.

 

Except as described herein, no other person named in response to Item 2 may be deemed to beneficially own any Ordinary Shares.

 

(c) To the best knowledge of the Reporting Persons, except as described herein, none of the Reporting Persons has effected any transaction in the Ordinary Shares during the 60-day period prior to the filing of this Schedule 13D.

 

(d) To the best knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Class A Shares that are the subject of this Schedule 13D.

 

(e) Not applicable.

 

14

 

Item 6.                     Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

The information set forth in Items 3, 4 and 5 is hereby incorporated herein by reference.

 

Investment Agreement

 

The responses to Items 3 and 4 are incorporated herein by reference.  The description of the Investment Agreement contained in this Schedule 13D is qualified in its entirety by reference to Exhibit B, which Exhibit is incorporated herein by reference.

 

Investor Rights Agreement

 

The response to Item 4 is incorporated herein by reference.  The Investor Rights Agreement sets forth various rights, covenants and agreements of Ali YK, AGHL, YF Venus and the Issuer, including without limitation certain provisions summarized below.

 

Company Change of Control Transaction:  From the date of the Closing until the earlier of: (a) the eighth anniversary of the Closing and (b) the date upon which Ali YK (together with any affiliates and permitted transferees (as specified in the Investor Rights Agreement)) ceases to beneficially own a number of Class A Shares that, in aggregate, is equal to at least (i) 80% of the Investor Shares and (ii) the Minimum Ownership Percentage, if at any time the Board desires to authorize the Issuer to initiate or pursue a proposal, or recommend that the shareholders of the Issuer to approve a proposal, which could reasonably be expected to lead to a Company Change of Control Transaction (as defined in the Investor Rights Agreement), or the Issuer otherwise seeks to effect a Company Change of Control Transaction, the Issuer must provide a written proposal notice regarding such proposal or transaction to Ali YK and Ali YK has the right to offer to consummate the Company Change of Control Transaction at a stated price per share that is at least equal to that stated in the proposal notice, and on substantially the same material terms and conditions set forth in the proposal notice provided by the Issuer to Ali YK.  In the event that Ali YK fails to exercise or does not consummate such right of first offer, and the Issuer seeks to effect an alternative transaction, subject to terms and conditions set forth in the Investor Rights Agreement, the Issuer has the right to require Ali YK to consent to and vote in favor of such alternative transaction, waive dissenters’ and similar rights with respect to such alternative transaction and agree to sell a proportionate amount of its securities of the Issuer in such alternative transaction.

 

Transfer Restrictions:  During the period commencing on the date of the Closing and ending on the date of the first anniversary of the Closing (the “Lock-up Period”), subject to certain exceptions, Ali YK may not transfer any of the Investor Shares without the prior written consent of the Issuer.  In addition, subject to certain exceptions, Ali YK is subject to certain other transfer restrictions, relating to transfers to any specified competitor of the Issuer and, for a certain period of time, transfers to any person who beneficially owns Ordinary Shares of the Issuer representing 10% or more of the total voting power of the Ordinary Shares.  Ali YK has the right to transfer certain Ordinary Shares to YF Venus and its affiliates (subject to an aggregate cap specified in the Investor Rights Agreement) and, after the Lock-up Period, YF Venus and its affiliates may transfer any such Ordinary Shares to any person, in each case, subject to certain exceptions, free from any restrictions on transfer set forth in the Investor Rights Agreement.

 

15

 

Preemptive Rights:  For so long as Ali YK (together with any affiliates and permitted transferees) beneficially owns a number of Class A Shares that, in aggregate, is equal to at least 50% of the Investor Shares, Ali YK has certain preemptive rights to purchase its pro-rata portion of new securities issued by the Issuer, subject to certain exceptions.

 

Registration Rights:  At any time after the end of the Lock-up Period, Ali YK has certain demand, piggyback and shelf registration rights with respect to the Ordinary Shares owned by Ali YK or any of its affiliates, permitted transferees or permitted successors or assigns.

 

Standstill and Non-Solicitation:  Ali YK, AGHL and YF Venus and their respective controlled affiliates are subject to certain standstill restrictions with respect to future acquisitions of the Issuer’s securities and non-solicitation restrictions with respect to executive officers of the Issuer.  These restrictions apply from the Closing until the date on which Ali YK beneficially owns a number of Class A Shares equal to less than 5% of the Ordinary Shares on a fully-diluted basis or, in the case of the standstill restrictions, the first anniversary of the Closing (if earlier), and are subject to certain exceptions and termination triggers set forth in the Investor Rights Agreement, including termination of the standstill restrictions if certain transactions involving an acquisition of securities or assets have been commenced by any person or persons acting in concert or approved by the Issuer’s board of directors or if any specified competitor of the Issuer acquires a certain threshold amount of securities of the Issuer.

 

Additional Agreements:  From the Closing, for so long as Ali YK (together with any affiliates and permitted transferees) beneficially owns a number of Class A Shares that, in aggregate, is equal to at least (i) 80% of the Investor Shares and (ii) the Minimum Ownership Percentage, the Issuer is subject to certain restrictions on the grant of any board representation rights, preemptive rights, right of first offer and consent or veto right to any third party and certain requirements regarding the imposition of restrictions on transfer, standstill and non-solicitation restrictive covenants on third parties.

 

The description of the Investor Rights Agreement contained herein is qualified in its entirety by reference to Exhibit C, which Exhibit is incorporated herein by reference.

 

Shareholders Agreement

 

The response to Item 4 is incorporated herein by reference.  The Shareholders Agreement sets forth various rights, covenants and agreements of Ali YK, 1Verge Holdings Ltd. (“1Verge”), 1Look, Victor Wing Cheung Koo, Chengwei Partners, L.P., Chengwei Evergreen Capital, L.P. and Chengwei Ventures Evergreen Advisors Fund, LLC (each, a “1Verge Group Member” and collectively, the “1Verge Group”), including without limitation certain provisions summarized below.

 

16

 

Voting Restrictions:  For so long as Ali YK (together with any of its affiliates and permitted transferees) beneficially owns a number of Class A Shares that, in aggregate, is equal to at least (i) 75% of the Investor Shares and (ii) the Minimum Ownership Percentage, 1Verge and each 1Verge Group Member may not vote, execute consents or take any other action (and shall cause its directors on the Board of the Issuer not to vote, execute consents or take any other action) to (a) remove the Investor Director, (b) approve any amendment to the Memorandum and Articles that would (x) modify or eliminate the automatic conversion of the Class B Shares into Class A Shares upon any transfer of such Class B Shares by a holder thereof to any person which is not an affiliate of such holder or (y) modify in any respect the voting rights of any existing securities or create a new class of securities of the Issuer which is entitled to more votes per share than the Class A Shares, or (c) increase the size of the Board to be comprised of more than nine directors.

 

Ali YK Right of First Offer:  For so long as Ali YK (together with any affiliates and permitted transferees) beneficially owns a number of Class A Shares that, in aggregate, is equal to at least (i) 80% of the Investor Shares and (ii) the Minimum Ownership Percentage, Ali YK has a right of first offer, subject to certain exceptions set forth in the Shareholders Agreement, to purchase Ordinary Shares or securities of 1Verge or 1Look from the applicable member(s) of the 1Verge Group upon any transfer of Ordinary Shares by any 1Verge Group Member or any transfer or issuance of securities of 1Verge or 1Look.

 

1Verge Group Right of First Offer:  1Verge Group has a right of first offer, subject to certain exceptions set forth in the Shareholders Agreement, to purchase Ordinary Shares from Ali YK upon any transfer of Ordinary Shares by Ali YK or any transfer or issuance of securities of Ali YK.

 

Ali YK Tag-Along Right:  If any 1Verge Group Member seeks to transfer to any third parties (a) Ordinary Shares that would represent more than 50% of the Ordinary Shares beneficially owned by 1Verge Group or (b) securities of 1Verge or 1Look that would result in a change of control of 1Verge (as specified in the Shareholders Agreement), Ali YK has a tag-along right, subject to certain exceptions, to sell up to all of the Investor Shares to such third parties.

 

Agreement with Third Parties:  Each 1Verge Group Member is subject to certain restrictions, in connection with any privately negotiated sale of Ordinary Shares or securities of 1Verge to any third party, on granting to any third party rights of first offer, tag-along rights, negative voting or consent rights, negative covenants regarding 1Verge or other rights or preferences that are similar or superior to, or would conflict with or impair, those rights of Ali YK under the Shareholders Agreement.

 

The description of the Shareholders Agreement contained herein is qualified in its entirety by reference to Exhibit D, which Exhibit is incorporated herein by reference.

 

SPSA

 

The response to Item 5 is incorporated herein by reference.  The SPSA sets forth various rights, covenants and agreements among Ali YK, AIL and YF Venus, including without limitation certain provisions summarized below that will apply following the SPSA Closing.

 

YF Venus Veto Right Over Dispositions of Certain Ordinary Shares:   YF Venus will have a veto right with respect to any transfer by Ali YK of 77,959,008 Class A Shares, except as expressly provided in the SPSA or as may be required of Ali YK pursuant to the Investment Agreement or the Shareholders Agreement.

 

17

 

Transfer Restrictions:  Except as expressly provided in the SPSA, YF Venus may not transfer any securities of Ali YK to be acquired by YF Venus without the prior written consent of AIL.  Subject to certain requirements, in connection with a proposed transfer of securities of Ali YK owned by AIL, AIL has a drag-along right to require YF Venus to transfer a pro-rata portion of any securities of Ali YK then owned by YF Venus and YF Venus has certain tag-along rights with respect to securities of Ali YK then owned by YF Venus.

 

Exchange Right:  After the first anniversary of the SPSA Closing, subject to the purchase right of AIL described below, YF Venus will have the right to request Ali YK to redeem all of the securities of Ali YK then owned by YF Venus in exchange for the transfer of all of the Ordinary Shares held by Ali YK that are attributable to the securities of Ali YK then owned by YF Venus.

 

AIL Purchase Right:  If YF Venus desires to transfer any or all of the Ordinary Shares held by Ali YK that are attributable to the securities of Ali YK to be acquired by YF Venus or held by YF Venus through the exercise of its exchange right, AIL has the right to purchase all of such Ordinary Shares at a specified purchase price.

 

YF Venus Preemptive Rights and Right of First Offer:  YF Venus will have the right to require Ali YK to exercise preemptive rights under the Investor Rights Agreement with respect to issuances of certain securities by the Issuer, to the extent corresponding to the proportionate ownership of YF Venus of the Ordinary Shares to be indirectly owned by YF Venus through Ali YK.  In addition, if Ali YK determines to exercise its right of first offer pursuant to the Investor Rights Agreement, YF Venus may elect to participate to the extent corresponding to the proportionate ownership of YF Venus of the Ordinary Shares to be indirectly owned by YF Venues through Ali YK.

 

The description of the SPSA contained herein is qualified in its entirety by reference to Exhibit E, which Exhibit is incorporated herein by reference.

 

18

 

Item 7.                     Material to Be Filed as Exhibits

 

Exhibit		Description
A		Joint Filing Agreement, dated as of May 29, 2014, by and among the Reporting Persons.
B		Investment Agreement, dated as of April 28, 2014, by and among the Issuer, 1Look, Ali YK and, solely for the purposes of Section 11.4, 11.5 and 11.16 therein, AGHL.
C		Investor Rights Agreement, dated as of April 28, 2014, by and among the Issuer, Ali YK and solely for the purposes of Section 7.1 and 7.2 and Article VIII therein, AGHL and YF Venus.
D		Shareholders Agreement, dated as of April 28, 2014, by and among Ali YK, 1Verge, 1Look, Victor Wing Cheung Koo, Chengwei Partners, L.P., Chengwei Evergreen Capital, L.P. and Chengwei Ventures Evergreen Advisors Fund, LLC.
E		Amended and Restated Share Purchase and Shareholders Agreement, dated as of May 21, 2014, by and among Ali YK, AIL and YF Venus.

 

19

 

SIGNATURES

 

After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certify that the information set forth in this statement is true, complete and correct.

 

Dated:  May 29, 2014

 

	ALI YK INVESTMENT HOLDING LIMITED
	By:	/s/ Timothy A. Steinert
		Name: Timothy A. Steinert
		Title: Director
	ALIBABA INVESTMENT LIMITED
	By:	/s/ Timothy A. Steinert
		Name: Timothy A. Steinert
		Title: Director
	ALIBABA GROUP HOLDING LIMITED
	By:	/s/ Timothy A. Steinert
		Name: Timothy A. Steinert
		Title: Authorized Signatory

 

20

 

	YF VENUS LTD
	By:	/s/ Huang Xin
		Name: Huang Xin
		Title: Director
	YUNFENG FUND II, L.P.
	By:	YUNFENG INVESTMENT II, L.P.,
		its general partner
	By:	YUNFENG INVESTMENT GP II, LTD.,
		its general partner
	By:	/s/ Yu Feng
		Name: Yu Feng
		Title: Director
	YUNFENG INVESTMENT II, L.P.
	By:	YUNFENG INVESTMENT GP II, LTD.,
		its general partner
	By:	/s/ Yu Feng
		Name: Yu Feng
		Title: Director
	YUNFENG INVESTMENT GP II, LTD.
	By:	/s/ Yu Feng
		Name: Yu Feng
		Title: Director
	YU FENG
	/s/ Yu Feng

 

21

 

SCHEDULE A-1

 

Directors and Executive Officers of Ali YK Investment Holding Limited

 

The following table sets forth the names and present principal occupation of each director of Ali YK Investment Holding Limited (“Ali YK”).  Unless otherwise noted, the business address for each person listed below is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.  Ali YK does not have any executive officers.

 

Name/Citizenship		Present Principal Occupation
Timothy Alexander STEINERT, United States		Group General Counsel and Secretary of Alibaba Group Holding Limited (“AGHL”)
YEN Ping Ching Samuel, Canada		Vice President of Finance of AGHL
WU Wei (aka Maggie), People’s Republic of China		Chief Financial Officer of AGHL
HUANG Xin, People’s Republic of China* c/o Yunfeng Investment Management (HK) Limited, Suite 2201, 50 Connaught Road, Central, Hong Kong		Managing Director of Yunfeng Investment Management (HK) Limited

 

*Upon the SPSA Closing.

 

22

 

SCHEDULE A-2

 

Directors and Executive Officers of Alibaba Investment Limited

 

The following table sets forth the names and present principal occupation of each director of Alibaba Investment Limited (“AIL”).  Unless otherwise noted, the business address for each person listed below is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.  AIL does not have any executive officers.

 

Name/Citizenship		Present Principal Occupation
Timothy Alexander STEINERT, United States		Group General Counsel and Secretary of AGHL
YEN Ping Ching Samuel, Canada		Vice President of Finance of AGHL
WU Wei (aka Maggie), People’s Republic of China		Chief Financial Officer of AGHL

 

23

 

SCHEDULE A-3

 

Directors and Executive Officers of Alibaba Group Holding Limited

 

The following table sets forth the names, business addresses and present principal occupation of each director and executive officer of AGHL.  Unless otherwise noted, the business address for each director listed below is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.  Unless otherwise noted, the business address for each executive officer listed below is 969 West Wen Yi Road, Yu Hang District, Hangzhou 310013, People’s Republic of China.

 

Name/Citizenship		Present Principal Occupation
MA Yun, People’s Republic of China		Executive Chairman of AGHL
Joseph Chung TSAI, Canada		Executive Vice Chairman of AGHL
Masayoshi SON, Japan c/o SOFTBANK CORP. 1-9-1 Higashi-shimbashi Minato-ku, Tokyo, 105-7303 Japan		Director of AGHL; Chief Executive Officer of SoftBank Corp.
Jacqueline D. RESES, United States c/o Yahoo! Inc. 701 First Avenue Sunnyvale, CA 94089 U.S.A.		Director of AGHL; Chief Development Officer of Yahoo! Inc.
LU Zhaoxi (aka Jonathan), People’s Republic of China		Chief Executive Officer of AGHL
WU Wei (aka Maggie), People’s Republic of China c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong		Chief Financial Officer of AGHL
ZHANG Daniel, People’s Republic of China		Chief Operating Officer of AGHL
WANG Jian, People’s Republic of China		Chief Technology Officer of AGHL
Timothy Alexander STEINERT, United States c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong		Group General Counsel and Secretary of AGHL

 

24

 

SCHEDULE A-4

 

Directors and Executive Officers of YF Venus Ltd

 

The following table sets forth the names, business addresses and present principal occupation of each director of YF Venus Ltd. Unless otherwise noted, the business address for each director listed below is c/o Yunfeng Investment Management (HK) Limited, Suite 2201, 50 Connaught Road, Central, Hong Kong. YF Venus Ltd does not have any executive officers.

 

Name/Citizenship		Present Principal Occupation
HUANG Xin, People’s Republic of China		Managing Director of Yunfeng Investment Management (HK) Limited

 

25

 

SCHEDULE A-5

 

Directors and Executive Officers of Yunfeng Investment GP II, Ltd.

 

The following table sets forth the names, business addresses and present principal occupation of each director of Yunfeng Investment GP II, Ltd. Unless otherwise noted, the business address for each director listed below is c/o Yunfeng Investment Management (HK) Limited, Suite 2201, 50 Connaught Road, Central, Hong Kong. Yunfeng Investment GP II, Ltd. does not have any executive officers.

 

Name/Citizenship		Present Principal Occupation
YU Feng, People’s Republic of China		Chairman of Yunfeng Investment Management (HK) Limited

 

26

Exhibit 99.1

 

Exhibit A

 

AGREEMENT OF JOINT FILING

 

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby confirm the agreement by and between them to the joint filing on behalf of them of a Statement on Schedule 13D and any and all amendments thereto, with respect to the above referenced securities and that this agreement be included as an Exhibit to such filing. This agreement may be executed in any number of counterparts each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same instrument.

 

IN WITNESS WHEREOF, the undersigned hereby execute this agreement as of this 29th day of May 2014.

 

	ALI YK INVESTMENT HOLDING LIMITED
	By:	/s/ Timothy A. Steinert
		Name: Timothy A. Steinert
		Title: Director
	ALIBABA INVESTMENT LIMITED
	By:	/s/ Timothy A. Steinert
		Name: Timothy A. Steinert
		Title: Director
	ALIBABA GROUP HOLDING LIMITED
	By:	/s/ Timothy A. Steinert
		Name: Timothy A. Steinert
		Title: Authorized Signatory
	YF VENUS LTD
	By:	/s/ Huang Xin
		Name: Huang Xin
		Title: Director
	YUNFENG FUND II, L.P.
	By:	YUNFENG INVESTMENT II, L.P.,
		its general partner
	By:	YUNFENG INVESTMENT GP II, LTD.,
		its general partner
	By:	/s/ Yu Feng
		Name: Yu Feng
		Title: Director
	YUNFENG INVESTMENT II, L.P.
	By:	YUNFENG INVESTMENT GP II, LTD.,
		its general partner
	By:	/s/ Yu Feng
		Name: Yu Feng
		Title: Director
	YUNFENG INVESTMENT GP II, LTD.
	By:	/s/ Yu Feng
		Name: Yu Feng
		Title: Director
	YU FENG
	/s/ Yu Feng

 

 

Exhibit B

 

 

INVESTMENT AGREEMENT

 

dated as of April 28, 2014

 

by and between

 

YOUKU TUDOU INC.,

 

1LOOK HOLDINGS LTD.,

 

ALI YK INVESTMENT HOLDING LIMITED,

 

and

 

Solely for purposes of Sections 11.4, 11.5 and 11.16 hereof,

 

ALIBABA GROUP HOLDING LIMITED

 

 

TABLE OF CONTENTS

 

		Page
ARTICLE I DEFINITIONS AND INTERPRETATION		1
Section 1.1	Definitions	1
Section 1.2	Interpretation and Rules of Construction	6
ARTICLE II PURCHASE AND SALE OF SECURITIES		7
Section 2.1	Purchase of Purchaser Shares	7
Section 2.2	Purchase Price	7
Section 2.3	Closing	7
Section 2.4	Post-Closing Adjustment	8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER		9
Section 3.1	Organization	9
Section 3.2	Authorization; Enforcement; Validity	9
Section 3.3	No Conflicts	10
Section 3.4	Consents	10
Section 3.5	Litigation	10
Section 3.6	Status and Investment Intent of the Purchaser	11
Section 3.7	Sufficient Funds	11
Section 3.8	Brokers and Finders	11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY		12
Section 4.1	Organization and Qualification	12
Section 4.2	Subsidiaries	12
Section 4.3	Capitalization	12
Section 4.4	Authorization; Enforcement; Validity	14
Section 4.5	No Conflicts	14
Section 4.6	Consents	14
Section 4.7	Issuance of Issued Shares	14
Section 4.8	No General Solicitation	15
Section 4.9	No Integrated Offering	15
Section 4.10	Public Documents	15
Section 4.11	Financial Statements	15
Section 4.12	No Undisclosed Liabilities	16
Section 4.13	Internal Controls and Procedures	16

 

i

 

Section 4.14	Absence of Changes	16
Section 4.15	Contracts	17
Section 4.16	Litigation	18
Section 4.17	Permits; Compliance with Applicable Laws	19
Section 4.18	Tax Status	19
Section 4.19	Intellectual Property	20
Section 4.20	Variable Interest Entities	21
Section 4.21	Transactions With Affiliates and Employees	21
Section 4.22	Brokers and Finders	21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF 1LOOK		21
Section 5.1	Organization	22
Section 5.2	Authorization; Enforcement; Validity	22
Section 5.3	Title	22
Section 5.4	No Conflicts	22
Section 5.5	Consents	23
Section 5.6	Litigation	23
Section 5.7	Brokers and Finders	23
ARTICLE VI AGREEMENTS OF THE PARTIES		23
Section 6.1	Further Assurances	23
Section 6.2	Expenses	24
Section 6.3	Public Disclosure	24
Section 6.4	Compliance and Other Actions Prior to Closing	24
Section 6.5	Exclusivity	25
Section 6.6	Listing of Securities	25
Section 6.7	Reservation of Shares	25
Section 6.8	Board Representation Rights	25
Section 6.9	Use of Proceeds	25
Section 6.10	No Integrated Offering	25
ARTICLE VII CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL		25
Section 7.1	Investor Rights Agreement	25
Section 7.2	Representations and Warranties; Covenants	25
Section 7.3	No Stop Order	26
Section 7.4	No Action	26
Section 7.5	Officer’s Certificate	26
ARTICLE VIII CONDITIONS TO 1LOOK’S OBLIGATION TO SELL		26

 

ii

 

Section 8.1	Representations and Warranties; Covenants	26
Section 8.2	No Stop Order	27
Section 8.3	No Action	27
Section 8.4	Officer’s Certificate	27
ARTICLE IX CONDITIONS TO THE PURCHASER’S OBLIGATION TO PURCHASE		27
Section 9.1	Investor Rights Agreement	27
Section 9.2	Shareholders Agreement	27
Section 9.3	Company Representations and Warranties; Covenants	27
Section 9.4	1Look Representations and Warranties; Covenants	28
Section 9.5	No Stop Order	28
Section 9.6	No Action	28
Section 9.7	NYSE Approval	28
Section 9.8	Board Representation	28
Section 9.9	No Material Adverse Effect	28
Section 9.10	Company Officer’s Certificate	28
Section 9.11	1Look Officer’s Certificate	28
ARTICLE X TERMINATION		29
Section 10.1	Termination	29
Section 10.2	Effect of Termination	29
ARTICLE XI MISCELLANEOUS		30
Section 11.1	Survival	30
Section 11.2	Indemnification	30
Section 11.4	Governing Law	32
Section 11.5	Dispute Resolution	32
Section 11.6	Counterparts	33
Section 11.7	Severability	33
Section 11.8	Entire Agreement	33
Section 11.9	Notices	33
Section 11.10	No Third Party Beneficiaries	35
Section 11.11	Successors and Assigns	35
Section 11.12	Construction	35
Section 11.13	Further Assurances	35
Section 11.14	Adjustment of Share Numbers	35
Section 11.15	Specific Performance	35

 

iii

 

Section 11.16	Guaranty	36
Section 11.17	Amendment; Waiver	36

 

iv

 

INVESTMENT AGREEMENT

 

THIS INVESTMENT AGREEMENT (this “Agreement”), dated as of April 28, 2014, by and among Youku Tudou Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “Company”), 1Look Holdings Ltd., a company organized under the laws of the British Virgin Islands (“1Look”), Ali YK Investment Holding Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “Purchaser”), and, solely for the purposes of Sections 11.4, 11.5 and 11.16 hereof, Alibaba Group Holding Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“AGHL”).

 

RECITALS

 

A.                                    WHEREAS, the Company desires to issue, sell and deliver to the Purchaser and 1Look desires to sell and deliver to the Purchaser, and the Purchaser desires to purchase and acquire from the Company and 1Look (the “Investment”), upon the terms and conditions set forth in this Agreement, certain Ordinary Shares of the Company; and

 

B.                                    WHEREAS, as a condition and inducement to the Purchaser’s and the Company’s willingness to enter into this Agreement, the Purchaser and the Company have contemporaneously entered into the Investor Rights Agreement (the “Investor Rights Agreement”), a copy of which is attached hereto as Exhibit B.

 

NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows:

 

ARTICLE I
DEFINITIONS AND INTERPRETATION

 

Section 1.1                                    Definitions.  In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

 

“1Look” has the meaning set forth in the Preamble;

 

“1Look Shares” means 13,869,990 Class B Shares held by 1Look as of the date hereof, which shall automatically convert to an equal number of Class A Shares upon the Closing of the Investment pursuant to the Memorandum and Articles;

 

“1Look Shares Purchase Price” has the meaning set forth in Section 2.2(b);

 

“2006 Plan” has the meaning set forth in Section 4.3(a);

 

“2010 Plan” has the meaning set forth in Section 4.3(a);

 

“Additional Issued Shares” has the meaning set forth in Section 2.4(b);

 

1

 

“Additional Issued Shares Election Notice” has the meaning set forth in Section 2.4(b);

 

“Additional Issued Shares Purchase Price” has the meaning set forth in Section 2.4(b);

 

“ADS” means American Depositary Shares, each of which represents 18 Class A Shares, of the Company;

 

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person;

 

“Aggregate Purchase Price” has the meaning set forth in Section 2.2(b);

 

“AGHL” has the meaning set forth in the Preamble;

 

“Agreement” has the meaning set forth in the Preamble;

 

“Bankruptcy and Equity Exception” has the meaning set forth in Section 3.2;

 

“Board” means the board of directors of the Company;

 

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in Beijing, Hong Kong or New York;

 

“Class A Shares” means Class A ordinary shares, par value US$0.00001 per share, in the share capital of the Company;

 

“Class B Shares” means the Class B ordinary shares, par value US$0.00001 per share, in the share capital of the Company;

 

“Closing” has the meaning set forth in Section 2.1(b);

 

“Closing Date” has the meaning set forth in Section 2.3(a);

 

“Closing Date Shares” has the meaning set forth in Section 2.4(a);

 

“Closing Date Shares Notice” has the meaning set forth in Section 2.4(a);

 

“Company” has the meaning set forth in the Preamble;

 

“Company Share Plans” has the meaning set forth in Section 4.3(a);

 

“Contract” means any agreement, contract, lease, indenture, instrument, note, debenture, bond, mortgage or deed of trust or other agreement, commitment, arrangement or understanding;

 

“Control” (including the terms “Controlled by” and “under common Control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of

 

2

 

securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person or securities that represent a majority of the outstanding voting securities of such Person;

 

“Disclosure Letter” has the meaning set forth in Article IV;

 

“Encumbrance” means any security interest, pledge, mortgage, lien, charge, claim, hypothecation, title defect, right of first option or refusal, right of preemption, third-party right or interests, put or call right, lien, adverse claim of ownership or use, or other encumbrance of any kind;

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

 

“fully-diluted basis” means, with respect to any determination of a number or percentage of Ordinary Shares, the total number of Ordinary Shares then outstanding determined according to the treasury method under GAAP;

 

“Funds Account” has the meaning set forth in Section 2.3(b)(i);

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession that are in effect from time to time, as codified and described in FASB Statement No. 18, the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, and applied consistently throughout the periods involved;

 

“Governmental Authority” means any federal, national, foreign, supranational, state, provincial, local, municipal or other political subdivision or other government, governmental, regulatory or administrative authority, agency, board, bureau, department, instrumentality or commission or any court, tribunal, judicial or arbitral body of competent jurisdiction or stock exchange;

 

“ICC Rules” has the meaning set forth in Section 11.5;

 

“Indemnitees” has the meaning set forth in Section 11.2(a);

 

“Indemnified Liabilities” has the meaning set forth in Section 11.2(a);

 

“Intellectual Property” means any and all rights in any of the following: (a) trademarks and service marks, trade dress, trade names and other indications of origin, applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (b) inventions, discoveries, improvements, ideas, know-how, formula methodology, processes, technology, software (including rights in password unprotected interpretive code or source code, object code, development documentation, programming tools, drawings, specifications and data) and patent applications and patents in any jurisdiction pertaining to the foregoing, including re-

 

3

 

issues, continuations, divisions, continuations-in-part, renewals or extensions; (c) trade secrets, including confidential information and the right in any jurisdiction to limit the use or disclosure thereof; (d) copyrights in writings, designs software, mask works or other works, applications or registrations in any jurisdiction for the foregoing and all moral rights related thereto; (e) database rights; (f) rights in Internet Web sites, domain names and applications and registrations pertaining thereto; (g) books and records pertaining to the foregoing; and (h) claims or causes of action arising out of past, present or future infringement or misappropriation of any of the foregoing;

 

“Investment” has the meaning set forth in Recital A;

 

“Investor Rights Agreement” has the meaning set forth in Recital B;

 

“Issued Shares” means 707,250,870 Class A Shares to be newly issued by the Company on the Closing Date, subject to adjustment following the Closing to include any Additional Issued Shares pursuant to Section 2.4;

 

“Issued Shares Purchase Price” has the meaning set forth in Section 2.2(a);

 

“Judgment” has the meaning set forth in Section 3.5;

 

“knowledge” means, with respect to any party, the actual knowledge of such party’s executive officers (as defined in Rule 405 under the Securities Act) after due inquiry, including inquiry of such party’s counsel and other officers or employees of such party;

 

“Law” means any federal, national, foreign, supranational, state, provincial or local statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law), official policy, rule or interpretation of any Governmental Authority with jurisdiction over the Company or the Purchaser, as the case may be;

 

“Material Adverse Effect” means any event, circumstance, development, change or effect that, individually or in the aggregate, has or would reasonably be expected to have a material adverse effect on (a) the business, properties, assets, liabilities, operations, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, or (b) the authority or ability of the Company to perform its obligations under the Transaction Documents; provided, however, that for purposes of clause (a) above, in no event shall any of the following exceptions, alone or in combination with the other enumerated exceptions below, be deemed to constitute, nor shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (i) any effect resulting from compliance with the terms and conditions of, or from the announcement of the transactions contemplated by this Agreement and/or any other Transaction Document, (ii) any effect that results from changes affecting any of the industries in which the Company or its Subsidiaries operate generally or the economy generally, (iii) any effect that results from changes affecting general worldwide economic or capital market conditions, provided that any such changes in (ii) and (iii) do not disproportionately affect the Company in any material respect relative to other similarly situated participants in the industry in which they operate, (iv) any pandemic, earthquake, typhoon, tornado or other natural disaster or similar force majeure event, (v) any failure to meet any internal or public projections, forecasts, or guidance, provided that the underlying causes that

 

4

 

lead to any failure to meet any internal or public projections, forecasts, or guidance as set forth in (v) are not exceptions to a Material Adverse Effect, or (vi) any change in the Company’s stock price or trading volume, in and of itself, provided that the underlying causes that lead to any change in the Company’s stock price or trading volume as set forth in (vi) are not exceptions to a Material Adverse Effect;

 

“Material Contract” has the meaning set forth in Section 4.15;

 

“Memorandum and Articles” means the Amended and Restated Memorandum and Articles of Association of the Company in effect from time to time;

 

“NYSE” means the New York Stock Exchange;

 

“Ordinary Shares” mean the Class A Shares and Class B Shares, collectively;

 

“Permits” has the meaning set forth in Section 4.17;

 

“Person” means any individual, partnership, corporation, association, joint stock company, trust, joint venture, limited liability company, organization, entity or Governmental Authority;

 

“PRC” means the People’s Republic of China;

 

“Pro Rata Share” means, with respect to each of the Company and 1Look, a percentage obtained by dividing (a) the Issued Shares or the 1Look Shares, respectively, by (b) the total number of Purchaser Shares.

 

“Proceedings” has the meaning set forth in Section 3.5;

 

“Public Documents” has the meaning set forth in Section 4.10;

 

“Purchaser” has the meaning set forth in the preamble;

 

“Purchaser Director” means the one (1) individual whom the Purchaser is entitled to designate for appointment or election as a director of the Board;

 

“Purchaser Shares” means the 1Look Shares and the Issued Shares;

 

“Registered Intellectual Property” has the meaning set forth in Section 4.19(b);

 

“Returns” has the meaning set forth in Section 4.18;

 

“SEC” means the U.S. Securities and Exchange Commission;

 

“Securities” means any Ordinary Shares or any equity interest of, or shares of any class in the share capital (ordinary, preferred or otherwise) of, the Company and any convertible securities, options, warrants and any other type of equity or equity-linked securities convertible, exercisable or exchangeable for any such equity interest or shares of any class in the share capital of the Company;

 

5

 

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;

 

“Shareholders Agreement” means that certain Shareholders Agreement, dated as of the date of this Agreement, by and among the Purchaser and certain other parties thereto, a copy of which is attached hereto as Exhibit C;

 

“Subsidiary” of any Person means any corporation, partnership, limited liability company, joint stock company, joint venture or other organization or entity, whether incorporated or unincorporated, which is Controlled by such Person and, for the avoidance of doubt, the Subsidiaries of any Person shall include any variable interest entity over which such Person or any of its Subsidiaries effects Control pursuant to contractual arrangements and which is consolidated with such Person in accordance with generally accepted accounting principles applicable to such Person;

 

“Tax” has the meaning set forth in Section 4.18;

 

“Transaction Documents” mean this Agreement, the Investor Rights Agreement, and each of the other agreements and documents entered into or delivered by the parties hereto or their respective Affiliates in connection with the transactions contemplated by this Agreement;

 

“U.S.” or “United States” means the United States of America; and

 

“Voting Company Debt” has the meaning set forth in Section 4.3.

 

Section 1.2                                    Interpretation and Rules of Construction.  In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

 

(a)                                 when a reference is made in this Agreement to an Article or Section, such reference is to an Article or Section of this Agreement;

 

(b)                                 the headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

 

(c)                                  the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

 

(d)                                 all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;

 

(e)                                  the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

 

(f)                                   references to a Person are also to its successors and permitted assigns; and

 

(g)                                  the use of the term “or” is not intended to be exclusive.

 

6

 

ARTICLE II
PURCHASE AND SALE OF SECURITIES

 

Section 2.1                                    Purchase of Purchaser Shares.  Subject to the satisfaction or waiver of the conditions set forth in Articles VII, VIII and IX below, on the Closing Date, (a) the Company shall issue and sell to the Purchaser the Issued Shares, and 1Look shall sell to the Purchaser the 1Look Shares, and (b) the Purchaser shall purchase the Issued Shares and the 1Look Shares from the Company and 1Look, respectively (the “Closing”).

 

Section 2.2                                    Purchase Price.

 

(a)                                 Issued Shares Purchase Price.  The purchase price shall be US$30.50 per each 18 Issued Shares, and the aggregate purchase price for the Issued Shares (the “Issued Shares Purchase Price”) shall be US$1,198,397,307.50, subject to adjustment pursuant to Section 2.4.

 

(b)                                 1Look Shares Purchase Price.  The purchase price shall be US$30.50 per each 18 1Look Shares, and the aggregate purchase price for the 1Look Shares (the “1Look Shares Purchase Price” and together with the Issued Shares Purchase Price, the “Aggregate Purchase Price”) shall be US$23,501,927.50.

 

Section 2.3                                    Closing.

 

(a)                                 Date and Time.  The Closing shall take place at the offices of Simpson Thacher & Bartlett, ICBC Tower, 3 Garden Road, Central, Hong Kong, at 10:00 a.m. local time on (i) the later of (x) the third (3rd) Business Day following the satisfaction or waiver of the conditions to the Closing set forth in Articles VII, VIII and IX below (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) and (y) the thirteenth (13th) Business Day following the date of this Agreement, or (ii) such other date and time as may be mutually agreed in writing by the Company, 1Look and the Purchaser.  The date on which the Closing occurs is referred to herein as the “Closing Date.”

 

(b)                                 Payment and Delivery.  At the Closing:

 

(i)                                     the Purchaser shall pay the Issued Shares Purchase Price to the Company for the Issued Shares to be issued and sold to the Purchaser at the Closing, by electronic bank transfer of immediately available funds to a bank account (the “Funds Account”) designated in writing by the Company at least five (5) Business Days prior to the Closing Date;

 

(ii)                                  the Purchaser shall pay the 1Look Shares Purchase Price to 1Look for the 1Look Shares to be sold to the Purchaser at the Closing, by electronic bank transfer of immediately available funds to a bank account designated in writing by 1Look at least five (5) Business Days prior to the Closing Date;

 

(iii)                               the Company shall deliver to the Purchaser:

 

(A)                               a share certificate representing the Issued Shares, duly executed on behalf of the Company and registered in the name of the Purchaser;

 

7

 

(B)                               a certified copy of the register of members of the Company, reflecting the Purchaser’s ownership of the Purchaser Shares;

 

(C)                               a certified copy of the register of directors of the Company reflecting the appointment or election of the Purchaser Director to the Board and the size of the Board of no more than nine (9) directors;

 

(D)                               a certificate, executed on behalf of the Company by an authorized officer of the Company and dated as of the Closing Date, having attached thereto: (1) a certified copy of the Company’s Memorandum and Articles in effect at the Closing, (2) the board resolutions of the Company approving the entering into and execution of this Agreement, the issuance of the Issued Shares, the entering into and execution of the other Transaction Documents and the consummation of all transactions contemplated herein and therein and the appointment or election of the Purchaser Director, and (3) a certificate of good standing in respect of the Company issued by the Registrar of Companies in the Cayman Islands, dated a recent date before the Closing;

 

(E)                                an indemnification agreement in respect of the Purchaser Director, dated the Closing Date, duly executed on behalf of the Company, in the same form as the indemnification agreements to which the other directors of the Company are parties as of the Closing;

 

(F)                                 an opinion of Maples and Calder, Cayman Islands counsel to the Company, in the form attached hereto as Exhibit D; and

 

(G)                               an opinion of TransAsia Lawyers, PRC counsel to the Company, in the form attached hereto as Exhibit E.

 

(iv)                              1Look shall deliver to the Purchaser:

 

(A)                               a share certificate representing the Class A Shares converted from 1Look Shares upon the Closing, duly executed on behalf of the Company and registered in the name of the Purchaser; and

 

(B)                               a certificate, executed on behalf of 1Look by an authorized officer of 1Look and dated as of the Closing Date, having attached thereto: (1) a certified copy of 1Look’s Memorandum and Articles in effect at the Closing, (2) the board resolutions of 1Look approving the entering into and execution of this Agreement, the entering into and execution of the Shareholders Agreement, the sale of the 1Look Shares and the consummation of all transactions contemplated herein and therein, and (3) a certificate of good standing in respect of 1Look issued by the Registrar of Companies in the British Virgin Islands, dated a recent date before the Closing.

 

Section 2.4                                    Post-Closing Adjustment.

 

(a)                                 Within five (5) Business Days after the Closing Date, the Company shall deliver to the Purchaser a certificate, executed on behalf of the Company by an authorized officer of the Company, that sets forth the total number of Class A Shares (the “Closing Date Shares”) which,

 

8

 

in aggregate, represents eighteen and one-half percent (18.5%) of the total Ordinary Shares as of the Closing Date, as rounded up to the nearest multiple of eighteen (18), calculated on a fully-diluted basis (as defined herein) after giving effect to the issuance of Issued Shares to the Purchaser (the “Closing Date Shares Notice”).

 

(b)                                 If the total Closing Date Shares exceeds the Purchased Shares purchased by the Purchaser on the Closing Date, the Purchaser shall have the option, exercisable in its sole discretion by written notice to the Company (the “Additional Issued Shares Election Notice”) within five (5) Business Days from the receipt of the Closing Date Shares Notice, to purchase, and the Company shall issue and sell to the Purchaser, such number of additional Class A Shares (the “Additional Issued Shares”) specified by the Purchaser in the Additional Issued Shares Election Notice, which shall not exceed the difference between (i) the total Closing Date Shares, less (ii) the total Issued Shares purchased by the Purchaser on the Closing Date.  The purchase price shall be US$30.50 per each 18 Additional Issued Shares, and the aggregate purchase price for the Additional Issued Shares (the “Additional Issued Shares Purchase Price”) shall be that per share price multiplied by the total number of Additional Issued Shares elected to be acquired by the Purchaser

 

(c)                                  The closing of the issuance and sale by the Company, and the purchase by the Purchaser, of the Additional Issued Shares shall take place on the date specified by the Purchaser in the Additional Issued Shares Election Notice, which date shall be within twenty (20) days following the date of the Additional Issued Shares Election Notice.  At such closing:

 

(i)                                     the Purchaser shall pay the Additional Issued Shares Purchase Price to the Company for the Additional Issued Shares to be issued and sold to the Purchaser at such closing, by electronic bank transfer of immediately available funds to the Funds Account; and

 

(ii)                                  the Company shall deliver to the Purchaser (A) a share certificate representing the Additional Issued Shares, duly executed on behalf of the Company and registered in the name of the Purchaser, and (B) a certified copy of the register of members of the Company, reflecting the Purchaser’s ownership of the Additional Issued Shares (as well as the Purchaser Shares acquired by the Purchaser on the Closing Date).

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser represents and warrants to the Company and 1Look as of the date hereof and as of the Closing Date that:

 

Section 3.1                                    Organization.  The Purchaser is an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands and has the requisite corporate power and authorization to own, lease and operate its properties and to carry on its business as now being conducted.  The Purchaser is indirectly wholly owned by AGHL and YF Venus Ltd, an exempted company incorporated under the laws of the Cayman Islands.

 

Section 3.2                                    Authorization; Enforcement; Validity.  The Purchaser has the requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents and perform its obligations under this Agreement and the other Transaction

 

9

 

Documents in accordance with the terms hereof.  The execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action by the Purchaser and no other filing, consent or authorization on the part of the Purchaser is necessary to authorize or approve this Agreement or the other Transaction Documents or to consummate the transactions contemplated hereby or thereby.  This Agreement and the other Transaction Documents have been or will be duly executed and delivered by the Purchaser, and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles (the “Bankruptcy and Equity Exception”).

 

Section 3.3                                    No Conflicts.  The execution, delivery and performance by the Purchaser of this Agreement and the other Transaction Documents and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not (a) result in a violation of the organizational or constitutional documents of the Purchaser, (b) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Contract to which the Purchaser is a party, or (c) result in a violation of any Law applicable to the Purchaser or by which any property or asset of the Purchaser is bound or affected, except in the case of clauses (b) and (c) above, for such violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Purchaser to perform its obligations hereunder.

 

Section 3.4                                    Consents.  In connection with the entering into and performance of this Agreement and the other Transaction Documents, subject to the accuracy of the warranties of the Company in Section 4.6 and the accuracy of the warranties of 1Look in Section 5.5, the Purchaser is not required to obtain any consent, authorization or order of, or make any filing or registration with, (a) any Governmental Authority in order for it to execute, deliver or perform any of its obligations under or contemplated hereby or thereby or (b) any third party pursuant to any agreement, indenture or instrument to which the Purchaser is a party, in each case in accordance with the terms hereof or thereof other than such as have been made or obtained except, in each case, for such consents, authorizations, orders, filings or registrations that, if not obtains or made, would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Purchaser to perform its obligations hereunder.

 

Section 3.5                                    Litigation.  There are no pending or, to the Purchaser’s knowledge, threatened, legal, administrative, arbitral or other claims, suits, actions or proceedings or governmental or regulatory investigations (“Proceedings”) of any nature against the Purchaser or any of its Subsidiaries or any director or officer of the Purchaser or any of its Subsidiaries (in their capacity as directors and officers of the Purchaser or any of its Subsidiaries), which would, individually or in the aggregate, reasonably be expected to result in a material adverse effect on the Purchaser’s ability to perform its obligations hereunder, or any Proceedings that seek to restrain or enjoin the consummation of the transactions contemplated by the Transaction Documents.  There is no judgment, order, injunction or decree (“Judgment”) outstanding against the Purchaser, any of its equity interests, material properties or assets, or any of its

 

10

 

directors and officers (in their capacity as directors and officers), except for any Judgment which would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Purchaser.

 

Section 3.6                                    Status and Investment Intent of the Purchaser.

 

(a)                                 Not a U.S. Person.  The Purchaser is not a “U.S. person” within the meaning of Regulation S under the Securities Act.

 

(b)                                 Experience.  The Purchaser (i) has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks involved in purchasing the Purchaser Shares and (ii) is capable of bearing the economic risk of the Investment.

 

(c)                                  No Public Sale or Distribution.  The Purchaser is acquiring the Purchaser Shares for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act.  The Purchaser does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Purchaser Shares.  The Purchaser is not a broker-dealer registered with the SEC under the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

(d)                                 Restricted Securities.  The Purchaser acknowledges that the Purchaser Shares are “restricted securities” that have not been registered under the Securities Act or any applicable state securities law and may not be offered or sold except pursuant to registration or to an exemption from the registration statements of the Securities Act.

 

(e)                                  Information.  The Purchaser has been furnished access to all materials and information the Purchaser has requested from the Company relating to the Company and its Subsidiaries in order to evaluate whether to acquire the Purchaser Shares hereunder.  The Purchaser is relying solely on its own counsel and other advisors for legal, financial and other advice with respect to the Investment or the transactions contemplated by this Agreement and the other Transaction Documents.

 

(f)                                   Share Ownership.  The Purchaser does not beneficially own any Ordinary Shares or any other Securities of the Company.

 

Section 3.7                                    Sufficient Funds.  The Purchaser shall have on the Closing Date sufficient funds on hand to pay in full the Aggregate Purchase Price.

 

Section 3.8                                    Brokers and Finders.  Neither the Purchaser nor any of its Affiliates is a party to any agreement, arrangement or understanding with any Person that would give rise to any valid right, interest or claim against or upon 1Look, the Company or the Purchaser for any brokerage commission, finder’s fee or other similar compensation, as a result of the transactions contemplated by the Transaction Documents.

 

11

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Purchaser as of the date hereof and as of the Closing Date that, except (a) as set forth in the correspondingly numbered section of the disclosure letter delivered by the Company to the Purchaser in the form attached hereto as Exhibit A dated as of the date hereof (the “Disclosure Letter”) or as set forth in any other section of the Disclosure Letter where it is readily apparent on the face of such disclosure that such disclosure is intended to be an exception to such Section of this Article IV or (b) as set forth in its Public Documents filed prior to the date of this Agreement (without giving effect to any amendment thereto filed on or after the date of this Agreement) (excluding disclosures of non-specific risks faced by the Company included in any forward-looking statement, disclaimer, risk factor disclosure or other similarly non-specific statements that are predictive, general or forward-looking in nature):

 

Section 4.1                                    Organization and Qualification.  The Company is an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands, and has the requisite corporate power and authorization to own, lease and operate its properties and to carry on its business as now being conducted.  The Company is duly qualified or licensed to do business in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has heretofore furnished or otherwise made available to the Purchaser a complete and correct copy of the Memorandum and Articles, as amended to date and as furnished to the SEC on August 24, 2012.  The Memorandum and Articles are in full force and effect.  The Company is not in violation of any of the provisions of its Memorandum and Articles.

 

Section 4.2                                    Subsidiaries.  Each material Subsidiary of the Company has been duly organized, is validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of its jurisdiction of organization, and has the requisite corporate power and authorization to own, lease and operate its properties and to carry on its business as now being conducted.  Each Subsidiary of the Company is duly qualified or licensed to do business in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The constitutional documents of each of the Company’s material Subsidiaries are in full force and effect.  None of the Company’s material Subsidiaries is in violation of any of the provisions of its constitutional documents.

 

Section 4.3                                    Capitalization.

 

(a)                                 As of the date of this Agreement, the authorized share capital of the Company consists of 9,340,238,793 Class A Shares and 659,761,207 Class B Shares.  As of the date of this Agreement, (x)(i) 2,380,077,324 Class A Shares are issued and outstanding (including 4,629,275 Class A Shares that have been issued to the Company’s depositary and reserved for future grants under the Company Share Plans), (ii) 8,214,107 Class A Shares are reserved and available for

 

12

 

issuance pursuant to the Company’s 2006 Stock Option Scheme, as amended (the “2006 Plan”), and (iii) 61,190,251 Class A Shares are reserved and available for issuance pursuant to the Company’s Share Incentive Plan, as amended (the “2010 Plan”, and together with the 2006 Plan, the “Company Share Plans”) and (y) 659,561,893 Class B Shares are issued and outstanding.  As of the date of this Agreement, options to purchase 84,155,652 Class A Shares and restricted share units in respect of 94,201,506 Class A Shares have been granted and are outstanding under the Company Share Plans.  Except as set forth in this Section 4.3(a), as of the date of this Agreement, no Securities were issued, reserved for issuance or outstanding and no securities of any of its Subsidiaries convertible into or exchangeable or exercisable for any Securities were issued or are outstanding.  From the date of this Agreement to the Closing Date, (1) there will be no issuances by the Company of any Securities, other than issuances of Class A Shares pursuant to options or restricted share units (as each such term is defined in the Company Share Plans) outstanding on the date of this Agreement and (2) there will be no issuances by the Company of stock-based performance units, share appreciation rights or other rights to acquire Securities or voting interests in, the Company or other rights that give the holder thereof any economic interest of a nature accruing to the holders of the Ordinary Shares, other than issuances pursuant to the Company Share Plans in accordance with their terms.  All outstanding Ordinary Shares are, and all such shares that may be issued prior to the date hereof will be, when issued, duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights.  There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, Securities having the right to vote) on any matters on which holders of the Ordinary Shares may vote (“Voting Company Debt”).  Except for any obligations pursuant to this Agreement or as otherwise set forth above in this Section 4.3(a), as of the date of this Agreement, there are no Securities (including without limitation any shareholder rights plan or “poison pill”), stock-based performance units, share appreciation rights or other rights, Contracts or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which the Company is bound (A) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional Securities or any Voting Company Debt, (B) obligating the Company or any of its Subsidiaries to issue, grant or enter into any such Securities, stock-based performance units, share appreciation rights or other rights, Contracts or undertakings or (C) that give any Person the right to receive any economic interest of a nature accruing to the holders of the Ordinary Shares, including any stock-based performance unit, share appreciation right or similar right or interest based on shares of capital stock of the Company.  There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Securities, stock-based performance units, share appreciation rights or other rights, other than pursuant to the Company Share Plans or a share repurchase program of the Company that complies with Rule 10b-18 or Rule 10b5-1 under the Exchange Act.

 

(b)                                 All of the issued equity securities of each non-PRC Subsidiary of the Company are validly issued, fully paid and non-assessable, and were issued in compliance with the applicable registration and qualification requirements of applicable Laws.  The registered capital of each PRC Subsidiary of the Company was timely and fully contributed in accordance with its articles of association.  All the paid-in capital has been duly verified by a certified public accountant registered in the PRC and the accounting firm employing such accountant, the report of the certified public accountant evidencing such verification has been registered with the

 

13

 

relevant Governmental Authority, and such registered capital is free and clear of any Encumbrance.

 

Section 4.4                                    Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents and perform its obligations under this Agreement and the other Transaction Documents and to issue the Issued Shares in accordance with the terms hereof.  The Board of the Company has duly and validly authorized the execution, delivery and performance of this Agreement and the other Transaction Documents and approved the consummation of the transactions contemplated hereby and thereby.  No other filing, consent or authorization on the part of the Company is necessary to authorize or approve this Agreement or the other Transaction Documents or to consummate the transactions contemplated hereby or thereby, other than any required filing or notification with the SEC or the NYSE regarding the issuance of the Issued Shares or the listing of the ADSs representing the Purchaser Shares with the NYSE.  This Agreement and the other Transaction Documents have been or will be duly executed and delivered by the Company, and, assuming the due authorization, execution and delivery by the Purchaser, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Bankruptcy and Equity Exception.

 

Section 4.5                                    No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents and the consummation by the Company of the transactions contemplated hereby and thereby (including the issuance of the Issued Shares) will not (a) result in a violation of the Memorandum and Articles, (b) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Contract to which the Company or any of its Subsidiaries is a party, or (c) result in a violation of any Law applicable to the Company or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of clauses (b) and (c) above, for such conflicts, defaults, rights or violations which, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

Section 4.6                                    Consents.  In connection with the entering into and performance of this Agreement and the other Transaction Documents, subject to the accuracy of the warranties of the Purchaser in Section 3.4, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, (a) any Governmental Authority in order for it to execute, deliver or perform any of its obligations under or contemplated hereby or thereby or (b) any third party pursuant to any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, in each case in accordance with the terms hereof or thereof other than such as have been made or obtained, and except for (i) any required filing or notification with the SEC or the NYSE regarding the issuance of the Issued Shares or the listing of the ADSs representing the Purchaser Shares with the NYSE and (ii) such consents, authorizations, orders, filings or registrations that, if not obtained or made, would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

Section 4.7                                    Issuance of Issued Shares.  The Issued Shares are duly authorized, and, when issued and paid for in accordance with the terms hereof and entered in the register of members of the Company, shall be validly issued and non-assessable and free from all

 

14

 

preemptive or similar rights and Encumbrances and the Issued Shares shall be fully paid with the Purchaser being entitled to all rights accorded to a holder of the Class A Shares.  Assuming the accuracy of the representations and warranties set forth in Section 3.6 of this Agreement, the offer and issuance by the Company of the Issued Shares is exempt from registration under the Securities Act.

 

Section 4.8                                    No General Solicitation.  Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D promulgated under the Securities Act) in connection with the offer or sale of the Purchaser Shares.

 

Section 4.9                                    No Integrated Offering.  None of the Company, any of its Affiliates, or any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Issued Shares or the sale of any of the 1Look Shares under the Securities Act, whether through integration with prior offerings or otherwise.

 

Section 4.10                             Public Documents.  The Company has timely filed or furnished, as applicable, all reports, schedules, forms, statements and other documents required to be filed or furnished by it with the SEC pursuant to the Securities Act or the Exchange Act (all of the foregoing documents filed with or furnished to the SEC and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “Public Documents”).  As of their respective filing or furnishing dates, the Public Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder, as applicable, to the respective Public Documents, and, other than as corrected or clarified in a subsequent Public Document, none of the Public Documents, at the time they were filed or furnished, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  As of the date of this Agreement, there are no outstanding or unresolved comment letters received from the SEC or its staff.

 

Section 4.11                             Financial Statements.  As of their respective dates, the financial statements of the Company included in the Public Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.  The consolidated financial statements (including any related notes thereto) included or incorporated by reference in the Public Documents fairly presented in all material respects the consolidated financial position of the Company as of the dates indicated therein and the consolidated results of its operations, cash flows and changes in shareholders’ equity for the periods specified therein, other than as corrected or clarified in a subsequent Public Document.  Such financial statements were prepared in accordance with GAAP applied on a consistent basis (except (a) as may be otherwise indicated in such financial statements or the notes thereto, or (b) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed to summary statements).

 

15

 

Section 4.12                             No Undisclosed Liabilities.  Since December 31, 2013, the Company and its Subsidiaries do not have any liabilities or obligations other than (a) liabilities or obligations reflected on, reserved against, or disclosed in the Company’s balance sheet as of December 31, 2013 (excluding those discharged or paid in full prior to the date of this Agreement), (b) liabilities or obligations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (c) liabilities incurred since December 31, 2013 in the ordinary course of business consistent with past practices and any liabilities incurred pursuant to this Agreement.  There are no unconsolidated Subsidiaries of the Company or any off-balance sheet arrangements of any type (including any off-balance sheet arrangement required to be disclosed pursuant to Item 303(a)(4) of Regulation S-K promulgated under the Securities Act) that have not been so described in the Public Documents nor any obligations to enter into any such arrangements.

 

Section 4.13                             Internal Controls and Procedures.  The Company has established and maintains disclosure controls and procedures as such terms are defined in, and required by, Rule 13a-15 or Rule 15d-15 under the Exchange Act.  Such disclosure controls and procedures are effective to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.  The Company maintains a system of internal controls over financial reporting sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations and (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP.  The Company’s management has completed an assessment of the effectiveness of the Company’s system of internal controls over financial reporting for the fiscal year ended December 31, 2013 in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and such assessment concluded that such controls were effective and the Company’s independent registered accountant has issued (and not subsequently withdrawn or qualified) or will issue, as applicable, an attestation report concluding that the Company maintained effective internal control over financial reporting as of December 31, 2013.  To the knowledge of the Company, there is no reason that its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due.

 

Section 4.14                             Absence of Changes.  Except for the execution and performance of this Agreement and the discussions, negotiations and transactions related thereto, since December 31, 2013, the Company and its Subsidiaries have conducted their respective businesses in all material respects in the ordinary course of business consistent with past practice and there has not been:

 

(a)                                 any Material Adverse Effect;

 

(b)                                 (i) any declaration, setting aside or payment of any dividend or other distribution with respect to any share capital of the Company or any of its Subsidiaries (except for dividends or other distributions by any Subsidiary to the Company or to any of the Company’s wholly owned Subsidiaries or (ii) any redemption, repurchase or other acquisition of any share capital of the Company or any of its Subsidiaries;

 

16

 

(c)                                  any material change in any method of accounting or accounting practice by the Company or any of its Subsidiaries;

 

(d)                                 any making or revocation of any material Tax election, any settlement or compromise of any material Tax liability, or any change (or request to any taxing authority to change) in any material aspect of the method of accounting of the Company or any of its Subsidiaries for Tax purposes;

 

(e)                                  any incurrence of material indebtedness for borrowed money or any guarantee of such indebtedness for another Person or any issue or sale of debt securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries;

 

(f)                                   any adoption of resolution to approve or petition or similar proceeding or order in relation to a plan of complete or partial liquidation, dissolution, scheme of arrangement, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;

 

(g)                                  any receiver, trustee, administrator or other similar Person appointed in relation to the affairs of the Company or its property or any part thereof; or

 

(h)                                 any agreement to carry out any of the foregoing.

 

Section 4.15                             Contracts.  Except as set forth in the Disclosure Letter, neither the Company nor any of its Subsidiaries has any current or future rights, responsibilities, obligations or liabilities, in each case as of the date of this Agreement, under any of the following (each, a “Material Contract”):

 

(a)                                 any Contract relating to Intellectual Property that is material to the Company and its Subsidiaries, taken as a whole;

 

(b)                                 any Contract that would be required to be filed or furnished by the Company pursuant to Item 19 and paragraph 4 of the Instructions to Exhibits of Form 20-F under the Exchange Act;

 

(c)                                  any Contract involving payments by the Company or any of its Subsidiaries in excess of US$7 million in the aggregate under each such Contract;

 

(d)                                 any Contract, including any distribution agreements, containing covenants directly or explicitly limiting in any material respect the freedom of the Company and its Subsidiaries as a whole to compete in any geographic area, industry or line of business or with any Person or to offer any of its products or services, or any material exclusivity agreement relating to Intellectual Property, business opportunity or any resources or assets of the Company or any of its Subsidiaries;

 

(e)                                  any indenture, mortgage, promissory note, loan agreement, guaranty or other agreement or commitment for the borrowing of money or pledging or granting a security interest in respect of an aggregate amount of US$5 million or more;

 

17

 

(f)                                   share or stock redemption or purchase agreements or other agreements affecting or relating to the share capital of the Company or any of its Subsidiaries, including, without limitation, any agreement with any shareholder of the Company or any of its Subsidiaries which includes, without limitation, anti-dilution rights, voting arrangements or operating covenants;

 

(g)                                  any royalty or dividend arrangement that involves the payment by the Company of more than US$4 million annually based on the revenues or profits of the Company or any of its Subsidiaries or based on the revenues or profits derived from any material contract;

 

(h)                                 any material acquisition, merger, asset purchase or other similar agreement;

 

(i)                                     any Contract under which the Company or any of its Subsidiaries has granted any Person any registration rights, or any right of first refusal, first offer or first negotiation with respect to any Securities or securities of any Subsidiaries of the Company;

 

(j)                                    any Contract relating to the formation, creation, operation, management or control of any partnership, joint venture, limited liability company or similar arrangement; or

 

(k)                                 any Contract that contains a put, call or similar right pursuant to which the Company or any of its Subsidiaries could be required to purchase or sell, as applicable, any equity interests of any Person.

 

Each of the Material Contracts is valid and in full force and effect, is enforceable in accordance with its terms, subject to the Bankruptcy and Equity Exception.  Neither the Company nor any of its Subsidiaries has violated or breached, or committed any default under, any Material Contract, and, to the Company’s knowledge, no other Person has violated or breached, or committed any default under any Material Contract, except for violations, breaches or defaults which would not, individually or in the aggregate, in each case, reasonably be expected to have a Material Adverse Effect.  To the Company’s knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time or both) would reasonably be expected to: (A) result in a material violation or breach of any of the provisions of any Material Contract, (B) give any Person the right to declare a default or exercise any remedy under any Material Contract, (C) give any Person the right to accelerate the maturity or performance of any Material Contract or (D) give any Person the right to cancel, terminate or modify any Material Contract, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.

 

Section 4.16                             Litigation.  There are no pending or, to the Company’s knowledge, threatened, Proceedings of any nature against the Company or any of its Subsidiaries or any director or officer of the Company or any of its Subsidiaries (in their capacity as directors and officers of the Company or any of its Subsidiaries), which would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or any Proceedings that seek to restrain or enjoin the consummation of the transactions contemplated by the Transaction Documents.  There is no Judgment outstanding against Company, any of its Subsidiaries, any of their equity interests, material properties or assets, or any of their directors and officers (in their capacity as directors and officers), except for any Judgment which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

18

 

Section 4.17                             Permits; Compliance with Applicable Laws.  The Company and each of its Subsidiaries have conducted their businesses in compliance with all applicable PRC, U.S. and other national, federal, provincial, state and other Laws (including, without limitation, the U.S. Foreign Corrupt Practices Act, as amended, and PRC anti-bribery Law) and applicable requirements of the NYSE, except where the failure to be in compliance would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  The Company and each of its Subsidiaries have all permits, licenses, authorizations, consents, orders and approvals (collectively, “Permits”) of, and have made all filings, applications and registrations with, any Governmental Authority that are required in order to carry on their business as presently conducted, except where the failure to have such Permits or the failure to make such filings, applications and registrations, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; and all such Permits are in full force and effect and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened, and all such filings, applications and registrations are current, except where such absence, suspension or cancellation, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  The Company is not in violation of any listing requirements of the NYSE and has no knowledge of any facts that would reasonably be expected to lead to delisting or suspension of its ADSs from the NYSE in the foreseeable future.

 

Section 4.18                             Tax Status.  The Company and each of its Subsidiaries (a) has made or filed in a timely manner (within any applicable extension periods) and in the appropriate jurisdictions all material foreign, federal and state income and all other tax returns, reports, information statements and other documentation (including any additional or supporting materials) required to be filed or maintained in connection with the calculation, determination, assessment or collection of any and all federal, state, local, foreign and other taxes, levies, fees, imposts, duties, governmental fees and charges of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto), including, without limitation, taxes imposed on, or measured by, income, franchise, profits, gross income or gross receipts, and also ad valorem, value added, sales, use, service, real or personal property, capital stock, stock transfer, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, environmental, transfer and gains taxes and customs duties (each a “Tax”), including all amended returns required as a result of examination adjustments made by any Governmental Authority responsible for the imposition of any Tax (collectively, the “Returns”), and such Returns are true, correct and complete in all material respects, (b) has paid all material Taxes and other governmental assessments and charges shown or determined to be due on such Returns, except those being contested in good faith, not finally determined, and (c) has set aside on its books provision reasonably adequate for the payment of all material Taxes for periods subsequent to the periods to which such Returns apply.  Neither the Company nor any of its Subsidiaries has received notice regarding unpaid material Taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the Company is not aware of any reasonable basis for such claim.  No Returns filed by or on behalf of the Company or any of its Subsidiaries with respect to material Taxes are currently being audited or examined, and neither the Company nor any of its Subsidiaries has received notice of any such audit or examination.

 

19

 

Section 4.19                             Intellectual Property.

 

(a)                                 The Company and its Subsidiaries own or possess adequate rights or licenses to use all Intellectual Property necessary to the conduct of their businesses as now conducted, and such Intellectual Property represents all material intellectual property rights necessary to the conduct of their business as now conducted.  There are no infringements or other violations of any Intellectual Property owned by the Company or any of its Subsidiaries by any third party, except for such infringements and violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  The conduct of the business of the Company and its Subsidiaries as currently conducted does not infringe or otherwise violate any proprietary right or Intellectual Property of any third party, except for such infringements and other violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  There is no Proceeding pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary: (i) alleging any such infringement or other violation of any third party’s proprietary rights; or (ii) challenging the Company’s or any Subsidiary’s ownership or use of, or the validity or enforceability of any material Intellectual Property owned by the Company or its Subsidiaries, excluding any office action or other form of preliminary or final refusal of registration in the ordinary course of business.

 

(b)                                 A complete and current list of material registered Intellectual Property and pending applications for registration of material Intellectual Property anywhere in the world that are owned or filed by the Company or its Subsidiary (collectively, “Registered Intellectual Property”) and the owner of record, date of application or registration and relevant jurisdiction as to each has been previously provided to the Purchaser.  All Registered Intellectual Property is owned by the Company or its Subsidiaries, free and clear of Encumbrances of any nature.  All Registered Intellectual Property is subsisting, valid and enforceable, currently in compliance with any and all legal requirements necessary to maintain the validity and enforceability thereof and not subject to any outstanding Judgment materially and adversely affecting the Company’s use thereof or rights thereto or that would materially impair the validity or enforceability thereof.  To the Company’s knowledge, no material Registered Intellectual Property is the subject of any Proceeding before any governmental, registration or other authority in any jurisdiction, excluding any office action or other form of preliminary or final refusal of registration in the ordinary course of business.  The consummation of the transactions contemplated under the Transaction Documents will not alter or impair any material Intellectual Property that is owned by or used pursuant to a license by the Company or a Subsidiary.

 

(c)                                  The Company and its Subsidiaries have taken commercially reasonable measures to protect the secrecy, and confidentiality of all of their material trade secrets and, to the knowledge of the Company, there has been no unauthorized disclosure of any material data or information which, but for any such unauthorized disclosure, the Company would consider to be a material trade secret owned by the Company or any of its Subsidiaries.

 

(d)                                 Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each employee in research and development function who in the regular course of his employment may create programs, modifications, enhancements or other inventions, improvements, discoveries, methods or works of authorship have signed an assignment or similar agreement with or otherwise have a binding legal obligation to the Company or its Subsidiaries confirming the Company’s or its Subsidiaries’ ownership or, in the alternate, transferring and assigning to the Company or its Subsidiary all right, title and interest

 

20

 

in and to such programs, modifications, enhancements or other inventions including copyright and other Intellectual Property rights therein and (ii) to the knowledge of the Company, no employee of the Company and its Subsidiaries is in violation of any term of any patent or invention disclosure agreement or any patent or invention disclosure provisions in any employment agreement or other contract or agreement.

 

(e)                                  To the knowledge of the Company, the use of open source or public library software, including any version of any software licensed pursuant to any GNU General Public License or other public license, in the Company’s or any of its Subsidiary’s software, if any, as currently used does not materially adversely impact the Company’s or any of its Subsidiary’s ownership or use of, or the validity or enforceability or confidentiality of any material Intellectual Property (including rights in source code) owned or purported to be owned by the Company or any of its Subsidiaries.

 

Section 4.20                             Variable Interest Entities.  The Company controls its variable interest entities, 1Verge Information Technology (Beijing) Co., Ltd., Jiheyi Ad (Beijing) Co., Ltd., Beijing Miyu Cultural Diffusion Co., Ltd., Quan Toodou Network Science and Technology Co., Ltd., Shanghai Licheng Cultural Communications Co., Ltd., Shanghai Quan Toodou Cultural Communication Co., Ltd., Beijing Tixian Digital Science and Technology Co., Ltd. and Zhejiang Dongyang Tianshi Cultural Media Ltd., through a series of contractual arrangements, and there is no enforceable agreement or understanding to rescind, amend or change the nature of such captive structure or material terms of such contractual arrangements.

 

Section 4.21                             Transactions With Affiliates and Employees.  None of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, other than (a) for payment of salary or consulting fees for services rendered, (b) reimbursement for expenses incurred on behalf of the Company and (c) for other employee benefits, including stock option agreements under the Company Share Plans.

 

Section 4.22                             Brokers and Finders.  Neither the Company nor any of its Affiliates is a party to any agreement, arrangement or understanding with any Person that would give rise to any valid right, interest or claim against or upon 1Look, the Purchaser or the Company for any brokerage commission, finder’s fee or other similar compensation, as a result of the transactions contemplated by the Transaction Documents.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF 1LOOK

 

1Look represents and warrants to the Purchaser as of the date hereof and as of the Closing Date that:

 

21

 

Section 5.1                                    Organization.  1Look is a company duly organized, validly existing and in good standing under the Laws of the British Virgin Islands and has the requisite company power and authorization to own, lease and operate its properties and to carry on its business as now being conducted.

 

Section 5.2                                    Authorization; Enforcement; Validity.  1Look has the requisite company power and authority to execute and deliver this Agreement, the Shareholders Agreement and any other Transaction Documents to which it is a party and perform its obligations under this Agreement, the Shareholders Agreement and such other Transaction Documents in accordance with the terms hereof and thereof.  The execution, delivery and performance of this Agreement, the Shareholders Agreement and any other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action by 1Look and no other filing, consent or authorization on the part of 1Look is necessary to authorize or approve this Agreement, the Shareholders Agreement or any other Transaction Documents to which it is a party or to consummate the transactions contemplated hereby or thereby.  This Agreement, the Shareholders Agreement and any other Transaction Documents to which it is a party have been or will be duly executed and delivered by 1Look, and, assuming the due authorization, execution and delivery by the Purchaser, constitutes a legal, valid and binding obligation of 1Look, enforceable against 1Look in accordance with its terms, subject to the Bankruptcy and Equity Exception.

 

Section 5.3                                    Title.  1Look is the sole and exclusive record and beneficial owner of the 1Look Shares, free and clear of any and all Encumbrances other than those existing under the Company’s Memorandum and Articles in effect as of the date hereof.  Other than the Shareholders Agreement, 1Look is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any of the 1Look Shares, and other than this Agreement, the Shareholders Agreement and any other Transaction Documents to which it is a party, there are no outstanding Contracts or understandings to which 1Look is a party involving the purchase, sale or other acquisition or disposition of the 1Look Shares or any interest therein.  The transfer by 1Look of the 1Look Shares upon the Closing will result in the conversion of 1Look Shares into the Class A Shares in an amount that is equal to the number of 1Look Shares.  The delivery by 1Look of a certificate or certificates at the Closing representing the Class A Shares converted from 1Look Shares upon the Closing in the manner provided in Section 2.3(b)(iv) will transfer to the Purchaser good and valid title to the Class A Shares converted from the 1Look Shares, free and clear of all Encumbrances and restrictions on transfer (except for Encumbrances and restrictions on transfer created or imposed by the Transaction Documents and any restrictions on transfer under applicable securities Laws) and the Class A Shares converted from the 1Look Shares shall be fully paid with the Purchaser being entitled to all rights accorded to a holder of the Class A Shares.

 

Section 5.4                                    No Conflicts.  The execution, delivery and performance by 1Look of this Agreement, the Shareholders Agreement and any other Transaction Documents to which it is a party and the consummation by 1Look of the transactions contemplated hereby and thereby will not (a) result in a violation of the organizational or constitutional documents of 1Look, (b) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Contract to which 1Look is a party, or (c) result in a violation

 

22

 

of any Law applicable to 1Look or by which any property or asset of 1Look is bound or affected, except in the case of clauses (b) and (c) above, for such violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of 1Look to perform its obligations hereunder.

 

Section 5.5                                    Consents.  In connection with the entering into and performance of this Agreement, the Shareholders Agreement and any other Transaction Documents to which it is a party , subject to the accuracy of the warranties of the Purchaser in Section 3.4, 1Look is not required to obtain any consent, authorization or order of, or make any filing or registration with, (a) any Governmental Authority in order for it to execute, deliver or perform any of its obligations under or contemplated hereby or thereby or (b) any third party pursuant to any agreement, indenture or instrument to which 1Look is a party, in each case in accordance with the terms hereof or thereof other than such as have been made or obtained except, in each case, for such consents, authorizations, orders, filings or registrations that, if not obtains or made, would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of 1Look to perform its obligations hereunder.

 

Section 5.6                                    Litigation.  There are no pending or, to 1Look’s knowledge, threatened, Proceedings of any nature against 1Look or any director or officer of 1Look (in their capacity as directors and officers of 1Look), which would, individually or in the aggregate, reasonably be expected to result in a material adverse effect on 1Look’s ability to perform its obligations hereunder, or any Proceedings that seek to restrain or enjoin the consummation of the transactions contemplated by the Transaction Documents or the Shareholders Agreement.  There is no Judgment outstanding against 1Look, any of its equity interests, material properties or assets, or any of its directors and officers (in their capacity as directors and officers), except for any Judgment which would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on 1Look.

 

Section 5.7                                    Brokers and Finders.  Neither 1Look nor any of its Affiliates is a party to any agreement, arrangement or understanding with any Person that would give rise to any valid right, interest or claim against or upon 1Look, the Company or the Purchaser for any brokerage commission, finder’s fee or other similar compensation, as a result of the transactions contemplated by the Transaction Documents.

 

ARTICLE VI
AGREEMENTS OF THE PARTIES

 

Section 6.1                                    Further Assurances.  Each of the Purchaser, the Company and 1Look shall use its reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to the consummation of the transactions contemplated by this Agreement on a timely basis, including the execution and delivery of any documents, certificates, instruments or other papers that are reasonably required for the consummation of such transactions, and will cooperate and consult with the other and use its reasonable best efforts to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions, filings and other documents, and to obtain all necessary Permits of, or any exemption by, all Governmental Authorities, necessary or advisable to consummate the transactions contemplated by this Agreement.  During the period from the date of this Agreement through the Closing Date, except as required by applicable Law

 

23

 

or with the prior written consent of the other parties hereto, no party will take any action which, or fail to take any action the failure of which to be taken, would, or would reasonably be expected to (a) result in any of the representations and warranties set forth in Article III, IV or V on the part of the party taking or failing to take such action being or becoming untrue in any respect, (b) result in any conditions set forth in Article VII, VIII or IX not to be satisfied, or (c) result in any material violation of any provision of this Agreement.  After the Closing Date, each party shall execute and deliver such further certificates, agreements and other documents and take such other actions as the other party may reasonably request to consummate or implement such transactions or to evidence such events or matters.

 

Section 6.2                                    Expenses.  Except as otherwise provided in this Agreement and the other Transaction Documents, each party shall bear and pay its own costs, fees and expenses incurred by it in connection with the Transaction Documents and the transactions contemplated by the Transaction Documents.

 

Section 6.3                                    Public Disclosure.  Without limiting any other provision of this Agreement, the parties hereto, to the extent permitted by applicable Law, will consult with each other before issuance, and provide each other the opportunity to review, comment upon and concur with, and use all reasonable efforts to agree on any press release or public statement with respect to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby, and will not (to the extent practicable) issue any such press release or make any such public statement prior to such consultation and agreement, except as may be required by Law or any listing agreement with or requirement of the NYSE or any other applicable securities exchange, provided that the disclosing party shall, to the extent permitted by applicable Law or any listing agreement with or requirement of the NYSE or any other applicable securities exchange and if reasonably practicable, inform the other parties about the disclosure to be made pursuant to such requirements prior to the disclosure.

 

Section 6.4                                    Compliance and Other Actions Prior to Closing.  From the date hereof until the Closing, the Company shall, and shall cause each of its Subsidiaries to, comply in material respect with all applicable Laws imposed by all relevant Governmental Authorities in respect of the operation of its and their business as currently conducted and contemplated to be conducted, including without limitation, maintenance and compliance of all Permits required in connection with such businesses and shall use commercially reasonable efforts to ensure that its employees and agents to comply with all Permits.  From the date hereof until the Closing, the Company shall, and shall cause each of its Subsidiaries to, conduct its business and affairs in the ordinary course of business consistent with past practice and shall use its commercially reasonable efforts to preserve substantially intact its business organization, keep available the services of its current officers, key employees, and key consultants and contractors and preserve its current material relationships and goodwill with Governmental Authorities, key customers and suppliers, and any other persons with which the Company and its Subsidiaries have relations.  Without limitation of the foregoing, the Company agrees that, prior to the Closing, it shall not issue any New Securities (as defined in the Investor Rights Agreement) with respect to which the Purchaser would be entitled to exercise preemptive rights under the Investor Rights Agreement if such New Securities were issued following the Closing.

 

24

 

Section 6.5                                    Exclusivity.  Except as set forth in Section 6.5 of the Disclosure Letter, during the period from the date of this Agreement and continuing until the earliest of the termination of this Agreement pursuant to Section 10.1 hereof or the Closing, the Company agrees not to initiate, solicit, encourage or engage in any discussion or negotiation of any type with, provide any information to, accept any proposal from, or enter into any letter of intent, purchase contract or any other similar agreement, or consummate any transaction, with any Persons other than the Purchaser with respect to the issuance, sale, grant, transfer, purchase or other acquisition by any such Person of any Securities.

 

Section 6.6                                    Listing of Securities.  The Company shall (a) take all reasonable action necessary to continue the listing and trading of its ADSs on the NYSE and shall comply with the Company’s reporting, filing and other obligations under the rules of the NYSE, in each case, through the Closing, and (b) file with the NYSE the supplemental listing application in respect of the ADSs representing the Purchaser Shares.

 

Section 6.7                                    Reservation of Shares.  The Company shall ensure that it has sufficient number of duly authorized Ordinary Shares at the Closing to comply with its obligations to issue the Issued Shares.

 

Section 6.8                                    Board Representation Rights.  The Company shall, subject to applicable Law and the Memorandum and Articles, take all reasonably necessary or desirable actions as may be required under applicable Law to cause the individual designated by the Purchaser as the initial Purchaser Director to be appointed to the Board at the Closing.

 

Section 6.9                                    Use of Proceeds.  The Company intends to apply the proceeds from the Investment for general corporate purposes.

 

Section 6.10                             No Integrated Offering. The Company, shall not, and shall cause its Affiliates and any Person acting on its or their behalf not to, directly or indirectly, make any offers or sales of any security or solicit any offers to buy any security, under circumstances that would require registration of the issuance of any of the Purchaser Shares under the Securities Act whether through integration with prior offerings or otherwise.

 

ARTICLE VII
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL

 

The obligation of the Company hereunder to issue and sell the Issued Shares to the Purchaser at the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing Date, of each of the following conditions:

 

Section 7.1                                    Investor Rights Agreement.  The Purchaser and AGHL shall have performed, satisfied and complied in all material respects with the covenants and agreements contained in the Investor Rights Agreement through the Closing Date.

 

Section 7.2                                    Representations and Warranties; Covenants.  The representations and warranties of the Purchaser contained in Article III hereof shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or material adverse effect, which shall be true and correct to such extent) as of the date of this

 

25

 

 

Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct in all material respects as of such specified date); provided that each representation or warranty made by the Purchaser in Sections 3.1, 3.2 and 3.7 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct as of such specified date); and the Purchaser shall have performed, satisfied and complied in all material respects with the covenants and agreements required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Closing Date (including payment of the Issued Shares Purchase Price as required pursuant to Section 2.3(b)(i) hereof).

 

Section 7.3                                    No Stop Order.  No stop order suspending the qualification or exemption from qualification of the Issued Shares in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or shall be pending or threatened.

 

Section 7.4                                    No Action.  No Law or Judgment entered by or with any Governmental Authority with competent jurisdiction, shall be in effect that enjoins, prohibits or materially alters the terms of the transactions contemplated by the Transaction Documents, nor any Proceeding challenging any Transaction Document or the transactions contemplated hereby and thereby, or seeking to prohibit, alter, prevent or delay the Closing, shall have been instituted or being pending before any Governmental Authority.

 

Section 7.5                                    Officer’s Certificate.  The Purchaser shall have delivered to the Company a certificate, dated as of the Closing Date, executed by a duly authorized officer of the Purchaser, certifying to the fulfillment of the condition specified in Section 7.2 above.

 

ARTICLE VIII
CONDITIONS TO 1LOOK’S OBLIGATION TO SELL

 

The obligation of 1Look hereunder to issue and sell the 1Look Shares to the Purchaser at the Closing is subject to the satisfaction or waiver by 1Look, at or before the Closing Date, of each of the following conditions:

 

Section 8.1                                    Representations and Warranties; Covenants.  The representations and warranties of the Purchaser contained in Article III hereof shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or material adverse effect, which shall be true and correct to such extent) as of the date of this Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct in all material respects as of such specified date); provided that each representation or warranty made by the Purchaser in Sections 3.1, 3.2 and 3.7 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct as of such specified date); and the Purchaser shall have performed, satisfied and complied in all material respects with the covenants and agreements required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Closing Date (including payment of the 1Look Shares Purchase Price as required pursuant to Section 2.3(b)(ii) hereof).

 

26

 

Section 8.2                                    No Stop Order.  No stop order suspending the qualification or exemption from qualification of the 1Look Shares in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or shall be pending or threatened.

 

Section 8.3                                    No Action.  No Law or Judgment entered by or with any Governmental Authority with competent jurisdiction, shall be in effect that enjoins, prohibits or materially alters the terms of the transactions contemplated by the Transaction Documents, nor any Proceeding challenging any Transaction Document or the transactions contemplated hereby and thereby, or seeking to prohibit, alter, prevent or delay the Closing, shall have been instituted or being pending before any Governmental Authority.

 

Section 8.4                                    Officer’s Certificate.  The Purchaser shall have delivered to 1Look a certificate, dated as of the Closing Date, executed by a duly authorized officer of the Purchaser, certifying to the fulfillment of the condition specified in Section 8.1 above.

 

ARTICLE IX
CONDITIONS TO THE PURCHASER’S OBLIGATION TO PURCHASE

 

The obligation of the Purchaser hereunder to purchase the Purchaser Shares at the Closing is subject to the satisfaction or waiver by the Purchaser, at or before the Closing Date, of each of the following conditions:

 

Section 9.1                                    Investor Rights Agreement.  The Company shall have performed, satisfied and complied in all material respects with the covenants and agreements contained in the Investor Rights Agreement through the Closing Date.

 

Section 9.2                                    Shareholders Agreement.  The representations and warranties of the parties to the Shareholders Agreement (other than the Purchaser) contained in the Shareholders Agreement shall be true and correct in all material respects as of the Closing Date as though made at that date, and the parties to the Shareholders Agreement (other than the Purchaser) shall have performed, satisfied and complied in all material respects with the covenants and agreements contained in the Shareholders Agreement through the Closing Date.

 

Section 9.3                                    Company Representations and Warranties; Covenants.  The representations and warranties of the Company contained in Article IV hereof shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct to such extent) as of the date of this Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct in all material respects as of such specified date); provided that each representation or warranty made by the Company in this Agreement under Sections 4.1, 4.2, 4.3, 4.4 and 4.7 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct as of such specified date), and the Company shall have performed, satisfied and complied in all material respects with the covenants and agreements required by this Agreement to be performed, satisfied or complied with by the

 

27

 

Company at or prior to the Closing Date (including providing all deliverables required pursuant to Section 2.3(b)(iii) hereof).

 

Section 9.4                                    1Look Representations and Warranties; Covenants.  The representations and warranties of 1Look contained in Article V hereof shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or material adverse effect, which shall be true and correct to such extent) as of the date of this Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct in all material respects as of such specified date); provided that each representation or warranty made by 1Look in this Agreement under Sections 5.1, 5.2 and 5.3 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made at that date (except for those representations and warranties that speak as of a specific date, which shall be so true and correct as of such specified date), and 1Look shall have performed, satisfied and complied in all material respects with the covenants and agreements required by this Agreement to be performed, satisfied or complied with by 1Look at or prior to the Closing Date (including providing all deliverables required pursuant to Section 2.3(b)(iv) hereof).

 

Section 9.5                                    No Stop Order.  No stop order suspending the qualification or exemption from qualification of the Purchaser Shares in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or shall be pending or threatened.

 

Section 9.6                                    No Action.  No Law or Judgment entered by or with any Governmental Authority with competent jurisdiction, shall be in effect that enjoins, prohibits or materially alters the terms of the transactions contemplated by the Transaction Documents, nor any Proceeding challenging any Transaction Document or the Shareholders Agreement or the transactions contemplated hereby or thereby, or seeking to prohibit, alter, prevent or delay the Closing, shall have been instituted or being pending before any Governmental Authority.

 

Section 9.7                                    NYSE Approval.  The ADSs representing the Purchaser Shares shall have been approved for listing on the NYSE, subject only to official notice of issuance.

 

Section 9.8                                    Board Representation.  The Company shall have procured that the Purchaser Director be appointed or elected to the Board at the Closing.

 

Section 9.9                                    No Material Adverse Effect.  From and after the date hereof, there shall not have occurred and be continuing a Material Adverse Effect.

 

Section 9.10                             Company Officer’s Certificate.  The Company shall have delivered to the Purchaser a certificate, dated as of the Closing Date, executed by a duly authorized officer of the Company, certifying to the fulfillment of the conditions specified in Sections 9.3 and 9.9 above.

 

Section 9.11                             1Look Officer’s Certificate.  1Look shall have delivered to the Purchaser a certificate, dated as of the Closing Date, executed by a duly authorized officer of 1Look, certifying to the fulfillment of the conditions specified in Section 9.4 above.

 

28

 

ARTICLE X
TERMINATION

 

Section 10.1                             Termination.  Subject to Section 10.2 below, this Agreement may be terminated and the transactions contemplated by this Agreement abandoned at any time prior to the Closing:

 

(a)                                 by unanimous agreement of the Company, 1Look and the Purchaser;

 

(b)                                 by the Company, 1Look or the Purchaser if any Law, or any final, non-appealable injunction or order shall have been enacted, issued, promulgated, enforced or entered which is in effect and has the effect of prohibiting the sale and issuance of the Issued Shares or the sale of the 1Look Shares;

 

(c)                                  by the Purchaser if there has been a breach of any representation or warranty by the Company under this Agreement or any breach of any covenant or agreement by the Company under this Agreement that, in any case, would give rise to the failure of the condition set forth in Section 9.3, and such breach is not cured within ten (10) Business Days of receipt of written notice thereof from the Purchaser;

 

(d)                                 by the Purchaser if there has been a breach of any representation or warranty by 1Look under this Agreement or any breach of any covenant or agreement by 1Look under this Agreement that, in any case, would give rise to the failure of the condition set forth in Section 9.4, and such breach is not cured within ten (10) Business Days of receipt of written notice thereof from the Purchaser;

 

(e)                                  by the Company if there has been a material breach of any representation or warranty by Purchaser under this Agreement or any material breach of any covenant or agreement by the Purchaser under this Agreement that, in any case, would give rise to the failure of the condition set forth in Section 7.2, and such breach is not cured within ten (10) Business Days of receipt of written notice thereof from the Company; or

 

(f)                                   by 1Look if there has been a material breach of any representation or warranty by Purchaser under this Agreement or any material breach of any covenant or agreement by the Purchaser under this Agreement that, in any case, would give rise to the failure of the condition set forth in Section 8.1, and such breach is not cured within ten (10) Business Days of receipt of written notice thereof from 1Look; or

 

(g)                                  by the Company, 1Look or the Purchaser, upon written notice to the other parties if the Closing has not occurred within 45 days of the date hereof, provided, however, that the right to terminate this Agreement under this paragraph (g) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the principal cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date.

 

Section 10.2                             Effect of Termination.  In the event of termination of this Agreement as provided in Section 10.1 above, written notice thereof shall be given to the other parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become void and there shall be no liability or obligation on the part of the parties

 

29

 

hereto; provided that (a) nothing herein shall relieve any party hereto from liability for any breach of this Agreement that occurred before such termination and (b) the provisions of this Article X, Article XI and Section 6.3 shall remain in full force and effect and survive any termination of this Agreement pursuant to the terms of this Article X.

 

ARTICLE XI
MISCELLANEOUS

 

Section 11.1                             Survival.  Other than the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.7, 4.22, 5.1, 5.2, 5.3 and 5.7, which shall survive the Closing indefinitely, and the representations and warranties set forth in Sections 4.18, which shall survive the Closing until the date that is five (5) years after the Closing, the representations and warranties of the parties set forth in Articles III, IV and V of this Agreement shall survive the execution and delivery of this Agreement and the Closing until the date that is fifteen (15) months after the Closing.  All of the covenants or other agreements of the parties contained in this Agreement shall survive the Closing until fully performed in accordance with their terms.

 

Section 11.2                             Indemnification.

 

(a)                                 In consideration of the Purchaser’s execution and delivery of the Transaction Documents and acquiring the Issued Shares thereunder and in addition to all of the Company’s other obligations under this Agreement and the other Transaction Documents, the Company, from and after the Closing, shall defend, protect, indemnify and hold harmless the Purchaser and its Affiliates, shareholders, partners, members, officers, directors, employees, agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith, and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement or (ii) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the other Transaction Documents to which it is a party.

 

(b)                                 In consideration of the Purchaser’s execution and delivery of the Transaction Documents and acquiring the 1Look Shares thereunder and in addition to all of 1Look’s other obligations under this Agreement, the Shareholders Agreement and any other Transaction Documents to which it is a party, 1Look, from and after the Closing, shall defend, protect, indemnify and hold harmless the Indemnitees from and against any and all Indemnified Liabilities incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by 1Look in this Agreement or (ii) any breach of any covenant, agreement or obligation of 1Look contained in this Agreement, the Shareholders Agreement or any other Transaction Documents to which it is a party.

 

(c)                                  In calculating the amount of any Indemnified Liabilities of an Indemnitee hereunder, there shall be subtracted the amount of any insurance proceeds and third-party payments received by the Indemnitee with respect to such Indemnified Liabilities, if any.  To the

 

30

 

extent that the foregoing undertaking by the Company or 1Look may be unenforceable for any reason, the Company or 1Look shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable Law.

 

Section 11.3                             Limitation to Liability.  Notwithstanding anything to the contrary in this Agreement:

 

(a)                                 the Company shall have no liability to the Indemnitees under Section 11.2(a)(i) with respect to any misrepresentation or breach of any representation or warranty made by the Company in this Agreement unless the aggregate amount of Indemnified Liabilities suffered or incurred by the Indemnitees pursuant to Section 11.2(a)(i) or Section 11.2(b)(i)exceeds US$1,000,000, in which case the Company shall be liable for all Indemnified Liabilities pursuant to Section 11.2(a)(i); provided that, the limitation to the Company’s liabilities under this Section 11.3(a) shall not apply to any misrepresentation or breach of any representation or warranty made by the Company under Section 4.1, 4.2, 4.3, 4.4, 4.7, 4.18 or 4.22 hereof

 

(b)                                 the maximum aggregate liabilities of the Company in respect of Indemnified Liabilities pursuant to Section 11.2(a)(i) with respect to any misrepresentation or breach of representations and warranties made by the Company in this Agreement and Section 11.2(a)(ii) with respect to any breach of any covenant, agreement or obligation of the Company contained in this Agreement shall be subject to a cap equal to the Issued Shares Purchase Price; provided that, the cap under this Section 11.3(b) shall not apply to any misrepresentation or breach of any representation or warranty made by the Company under Section 4.1, 4.2, 4.3, 4.4, 4.7, 4.18 or 4.22 hereof;

 

(c)                                  1Look shall have no liability to the Indemnitees under Section 11.2(b)(i) with respect to any misrepresentation or breach of any of the representation or warranty made by 1Look in this Agreement unless the aggregate amount of Indemnified Liabilities suffered or incurred by the Indemnitees pursuant to Section 11.2(a)(i) or Section 11.2(b)(i) exceeds US$1,000,000, in which case 1Look shall be liable for all Indemnified Liabilities pursuant to Section 11.2(b)(i); provided that, the limitation to 1Look’s liabilities under this Section 11.3(c) shall not apply to any misrepresentation or breach of any representation or warranty made by 1Look under Section 5.1, 5.2, 5.3, or 5.7 hereof;

 

(d)                                 the maximum aggregate liabilities of 1Look in respect of Indemnified Liabilities pursuant to Section 11.2(b)(i) with respect to any misrepresentation or breach of representations and warranties made by 1Look in this Agreement and Section 11.2(b)(ii) with respect to any breach of any covenant, agreement or obligation of 1Look contained in this Agreement shall be subject to a cap equal to the 1Look Shares Purchase Price; provided that, the cap under this Section 11.3(d) shall not apply to any misrepresentation or breach of any representation or warranty made by 1Look under Section 5.1, 5.2, 5.3 or 5.7 hereof;

 

(e)                                  notwithstanding any other provision contained herein and except in the case of fraud, intentional misrepresentation and/or willful misconduct, from and after the Closing, this Section 11.3(a) shall be the sole and exclusive remedy of any of the Indemnitees for any claims against the Company, and this Section 11.3(c) shall be the sole and exclusive remedy of any of the Indemnitees for any claims against 1Look, in each case, arising out of or resulting from this

 

31