Document:

Exhibit 4.35

 

INVESTOR RIGHTS AGREEMENT

 

dated as of June 20, 2016

 

among

 

JD.COM, INC.

 

and

 

NEWHEIGHT HOLDINGS LTD.

 

 

TABLE OF CONTENTS

 

	
ARTICLE 1 DEFINITIONS
    	
1
    
	
 
    	
 
    
	
Section 1.1   . Definitions
    	
1
    
	
Section 1.2   . Other Definitional and Interpretative Provisions
    	
5
    
	
 
    	
 
    
	
ARTICLE 2 OBSERVATION   RIGHT
    	
6
    
	
 
    	
 
    
	
Section 2.1   . Observation Right
    	
6
    
	
 
    	
 
    
	
ARTICLE 3 REGISTRATION   RIGHTS
    	
6
    
	
 
    	
 
    
	
Section 3.1 . Registration Rights
    	
6
    
	
 
    	
 
    
	
ARTICLE 4 PRE-EMPTIVE   RIGHTS
    	
6
    
	
 
    	
 
    
	
Section 4.1 . Pre-Emptive Rights
    	
6
    
	
 
    	
 
    
	
ARTICLE 5 TRANSFER   RESTRICTIONS; FURTHER INVESTMENT
    	
8
    
	
 
    	
 
    
	
Section 5.1   Lock-up
    	
8
    
	
Section 5.2   Standstill
    	
8
    
	
Section 5.3   No Transfer to Adverse Person
    	
9
    
	
Section 5.4   Rights of First Refusal
    	
9
    
	
Section 5.5   Additional Matters
    	
11
    
	
Section 5.6   Avoidance of Restrictions
    	
12
    
	
 
    	
 
    
	
ARTICLE 6 MISCELLANEOUS
    	
12
    
	
 
    	
 
    
	
Section 6.1 . Binding Effect; Assignability; Benefit
    	
12
    
	
Section 6.2   . Notices
    	
12
    
	
Section 6.3   . Severability
    	
13
    
	
Section 6.4   . Entire Agreement
    	
14
    
	
Section 6.5   . Counterparts
    	
14
    
	
Section 6.6   . Headings
    	
14
    
	
Section 6.7   . Amendment; Termination
    	
14
    
	
Section 6.8   . Governing Law
    	
14
    
	
Section 6.9   . Arbitration
    	
14
    
	
Section 6.10   . Further Assurances
    	
15
    
	
Section 6.11   . Depositary Arrangement
    	
15
    
	
 
    	
 
    
	
SCHEDULE 1 REGISTRATION RIGHTS
    	
1
    

 

i

 

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of June 20, 2016 (the “Effective Date”), by and among JD.com, Inc., a company incorporated under the laws of the Cayman Islands (the “Company”) and Newheight Holdings Ltd., a company incorporated under the laws of the Cayman Islands (the “Investor”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to a subscription agreement, dated as of the date hereof (collectively, the “Subscription Agreement”), between the Company and the Investor, the Investor has agreed to acquire certain Class A Ordinary Shares (as defined below); and

 

WHEREAS, in connection with and as a condition to the consummation of the transactions contemplated by the Subscription Agreement, the parties hereto desire to enter into this Agreement to govern certain of their rights, duties and obligations after consummation of the transactions contemplated by the Subscription Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE 1
  DEFINITIONS

 

Section 1.1.  Definitions

 

(a)         As used in this Agreement, the following terms have the following meanings:

 

“ADSs” means the American depositary shares of the Company, each one of which represents two (2) Class A Ordinary Shares of the Company.

 

“Adverse Person” means such Persons to be mutually agreed in writing by the parties hereto from time to time, and including such Persons’ Affiliates.

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by the subject Person or together with the subject Person is jointly controlled by any third party. “control” (including, its correlative meanings “controlled by”) means a Person directly or indirectly owns at least 50% of the equity interests or voting rights of such subject Person, or directly or indirectly has an actual discretion or controlling power over the operation of such subject Person by entry into contractual arrangements or by other means. With respect to any Person, its “Affiliates” includes the Subsidiaries, whether directly or indirectly owned, that are controlled by it (including the PRC domestic affiliate companies controlled by such Person through a variable interest entity structure). Notwithstanding any other provisions hereunder, for the purposes of this Agreement, none of Dada Nexus Limited, an exempted company registered under the laws of the Cayman Islands, and its controlled Affiliates shall be deemed as Affiliate of the Company.

 

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“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

 

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

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in China, Hong Kong or New York are required or authorized by Applicable Law or executive order to be closed or on which a tropical cyclone warning no. 8 or above or a “black” rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m. Hong Kong time.

 

“Class A Ordinary Shares” means class A ordinary shares of the Company, with par value being US$0.00002 per share.

 

“Closing Date” has the meaning given to such term in the Subscription Agreement.

 

“Company Securities” means (i) Ordinary Shares, (ii) securities convertible into or exercisable or exchangeable for Ordinary Shares, (iii) any options, warrants or other rights to acquire Ordinary Shares and (iv) any ADSs, depository receipts or similar instruments issued in respect of Ordinary Shares.

 

“Encumbrance” means any mortgage, lien, pledge, charge, deed of trust, security interest, title defect, claim, lease, option, right of first refusal, easement, servitude, proxy, voting trust, preemptive or similar right, agreement and transfer restriction under any agreement or other encumbrance.

 

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

 

“Excluded Securities” means the issuance by the Company of any of the following after the date hereof: (i) Company Securities issued or issuable pursuant to any present or future employee, director or consultant benefit plans or programs duly adopted by the Company and the issuance of any Ordinary Shares issuable upon exercise of such equity awards under any such plans, (ii) the issuance of Class A Ordinary Shares upon conversion of the Class B Ordinary Shares, (iii) Company Securities issued or issuable upon a stock split, stock dividend or any subdivision of the Ordinary Shares, (iv) the issuance of Ordinary Shares upon the conversion, exercise or exchange of any outstanding Company Securities as of the date hereof, (v) Company Securities issued or issuable pursuant to an acquisition, merger, business combination or similar transaction of or with another corporation by the Company approved by the Board, (vi) Company Securities issued or issuable pursuant to equipment lease and bank financing arrangements approved by the Board, (vii) Company Securities issued or issuable in joint venture or other strategic transactions that are not primarily for the purpose of fundraising, as determined by the Board, (viii) Company Securities issued or issuable to suppliers of goods or services pursuant to transactions approved by the Board, or (ix) Company Securities issued or issuable in any public offering of the Company.

 

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“Fully-Diluted (by Treasury Method)” means calculated in accordance with the methodology set forth on Schedule 2 hereto.

 

“Governmental Entity” means any federal, national, state, provincial or local, whether domestic or foreign, government or any court of competent jurisdiction, administrative agency or commission or other governmental, regulatory, self-regulatory or enforcement authority or instrumentality, whether domestic, foreign or supranational.

 

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

 

“New Securities” means Ordinary Shares, or securities convertible into or exchangeable for Ordinary Shares, issued by the Company after the date hereof, other than any Excluded Securities.

 

“Ordinary Shares” means class A and class B ordinary shares of the Company, with par value being US$0.00002 per share, and any other security into which such Ordinary Shares may hereafter be converted or changed.

 

“Person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, or unincorporated organization, or any Governmental Entity, officer, department, commission, board, bureau, or instrumentality thereof.

 

“PRC” means the People’s Republic of China, but, for the purposes of this Agreement, shall not include Hong Kong, the Macau Special Administrative Region or Taiwan for the purposes of this Agreement.

 

“Qualified Walmart Subsidiary” means any entity which (i) is and continues to be a 100% directly or indirectly owned Subsidiary of Walmart, (ii) holds net assets no less than  the Value of the Company Securities of the Company Securities to be assigned to such entity, for which the Company has the right to request reasonable evidence (including a relevant balance sheet), and (iii) has executed and delivered to the Company certain documents (including relevant deed of joinder) assuming the obligations (including any agreements and covenants) of the Investor hereunder with respect to the Company Securities transferred to it, to the reasonable satisfaction of the Company, and has taken such other actions as may be necessary for it to be jointly and severally liable for obligations (including any agreements and covenants) of the Investor hereunder and under any other Transaction Agreements upon and after such Transfer, and such Transfer shall not be effective and shall not be recognized until such documents are so executed and delivered.

 

“Reference Price” means (i) if any ADSs, an amount equal to the average of the volume weighted average sales prices per ADS on the Nasdaq Global Select Market during the twenty (20) consecutive trading days ending on the Business Day to be reasonably agreed on by the parties hereto prior to the date of the applicable Transfer, and (ii) if any Ordinary Shares, an amount equal to 50% (subject to adjustment according to any change in the Ordinary Share — ADS ratio) of the average of the volume weighted average sales prices per ADS on the Nasdaq Global Select Market during such period.

 

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

 

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“Subsidiary” with respect to any Person, means any other Person, whether or not existing on the date hereof, in which the specified Person directly or indirectly through subsidiaries or otherwise, beneficially owns at least fifty percent (50%) of either the equity interest or voting power of or in such other Person or otherwise controls such other Person, whether through contract or otherwise (including, for the avoidance of doubt, any variable interest entities that are consolidated into the financial statements of such Person in accordance with the generally accepted accounting principles applicable to such Person).

 

“Transaction Agreements” has the meaning given to such term in the Subscription Agreement.

 

“Transfer” means directly or indirectly, offer, sell, contract to sell, pledge, transfer, assign, give, hypothecate, encumber, grant a security interest in, convey in trust, gift, devise or descent, or otherwise dispose of, or suffer to exist (whether by operation of law of otherwise) any Encumbrance on, any Company Securities or any right, title or interest therein or thereto, or enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any Company Securities, whether any such aforementioned transaction is to be settled by delivery of the Ordinary Shares, ADSs or such other securities, in cash or otherwise, or publicly disclose the intention to make any such disposition or to enter into any such transaction, swap, hedge or other arrangement, including transfers pursuant to divorce or legal separation, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, of any Company Securities. “Transfer” shall not include any transfers to a Qualified Walmart Subsidiary.

 

“United States Dollars” means the lawful currency of the U.S.

 

“U.S.” means the United States of America.

 

“Value of the Company Securities” means value of relevant Company Securities calculated using the Reference Price.

 

“Walmart” means Wal-Mart Stores, Inc., a Delaware corporation.

 

(b)           Each of the following terms is defined in the Section set forth opposite such term:

 

	
Term
    	
 
    	
Section
    
	
“Agreement”
    	
 
    	
Preamble
    
	
“Beneficial Ownership”
    	
 
    	
5.2(b)
    
	
“Company”
    	
 
    	
Preamble
    
	
“Dispute”
    	
 
    	
6.9
    
	
“Effective Date”
    	
 
    	
Preamble
    
	
“Investor”
    	
 
    	
Preamble
    
	
“Issue Notice”
    	
 
    	
4.1(a)
    
	
“Lock-Up Period”
    	
 
    	
5.1
    
	
“New Securities”
    	
 
    	
4.1(a)
    
	
“Observer”
    	
 
    	
2.1
    
	
“Offered Shares”
    	
 
    	
5.4(a)
    
	
“Option Period”
    	
 
    	
5.4(b)
    

 

4

 

	
“Subscription Agreement”
    	
 
    	
Preamble
    
	
“Transfer Notice”
    	
 
    	
5.4(a)
    

 

Section 1.2.  Other Definitional and Interpretative Provisions.

 

The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Articles, Sections, Clauses, Annexes, Exhibits and Schedules are to Articles, Sections, Clauses, Exhibits and Schedules of this Agreement unless otherwise specified.  All Annexes, Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import.  “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  References to “law,” “laws” or to a particular statute or law shall be deemed also to include any and all Applicable Law.  References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder.  References to “dollars” or “$” shall refer to U.S. dollars.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

 

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ARTICLE 2
  OBSERVATION RIGHT

 

Section 2.1.  Observation Right.

 

For as long as the Investor, together with any Qualified Walmart Subsidiary, holds no less than 289,053,746 shares of Class A Ordinary Shares (or ADSs representing such number of shares of Class A Ordinary Shares), as adjusted in connection with share splits or share consolidation, reclassification or other similar event, the Company shall permit the Investor to designate one (1) senior executive of Walmart as a representative to attend all meetings of the Board in a nonvoting observer capacity (the “Observer”) and, in this respect, shall give such Observer notice of such meetings and copies of all meeting materials when such materials are distributed to the members of the Board; provided, that (i) the Observer shall have no voting rights, (ii) the Observer shall agree to hold in confidence and trust with respect to all information provided at or with respect to any meetings of the Board, and (iii) the Company reserves the right to withhold any information and materials and to exclude the Observer from any meeting or portion thereof if, upon the advice of counsel (including any internal counsel), access to such information or materials or attendance at such meeting could adversely affect the attorney-client privilege between the Company (or its applicable Subsidiary) and its counsel or result in a conflict of interest or if the chairman of the Board, at his or her discretion, believes in good faith that excluding the Observer from such information or materials or such meetings is reasonably appropriate or necessary.

 

ARTICLE 3
  REGISTRATION RIGHTS

 

Section 3.1.  Registration Rights.

 

The Investor shall have the rights, and the Company shall have the obligations, set forth in Schedule 1 hereto.

 

ARTICLE 4
  PRE-EMPTIVE RIGHTS

 

Section 4.1.  Pre-Emptive Rights.

 

(a)           Within the first twenty-four (24) months after the Closing Date and, thereafter, for so long as the Investor holds at least 10% of the Company’s then outstanding share capital on a Fully-Diluted (by Treasury Method) basis, if the Company proposes to issue any New Securities, the Company shall notify the Investor in writing of such proposal (an “Issue Notice”) not less than ten (10) days prior to any such issuance. The Issue Notice shall specify the number and type of New Securities to be offered by the Company and the material terms of the proposed offer (including the proposed price or range of prices per New Security and other material conditions).

 

(b)           The Investor (or its designated Qualified Walmart Subsidiary) shall have the right to purchase such number of New Securities at its election, so as to enable the Investor to hold, after the issuance of the New Securities which are the subject to the Issue Notice, a pro rata portion of the New Securities equal to the percentage of the Company’s outstanding share capital (on a Fully-Diluted (by Treasury Method) basis) then held by the Investor prior to the issuance of the New Securities, upon the same terms and conditions set

 

6

 

forth in the Issue Notice, by giving written notice to the Company of the exercise of this right within ten (10) days of the Investor’s receipt of the Issue Notice. If such notice is not given by the Investor within such ten (10)-day period thereof, the Investor shall be deemed to have elected not to exercise its rights under this Article 4 with respect to the issuance described in that specific Issue Notice.

 

(c)           If the Investor exercises its rights provided in this Article 4, the closing of the purchase of the New Securities with respect to which such right has been exercised shall take place concurrently with the closing of the relevant offering of the Company. The Company and the Investor will use commercially reasonable efforts to secure any regulatory or shareholder approvals or other consents, and to comply with any Applicable Law necessary in connection with the offer, sale and purchase of, such New Securities.

 

(d)           In the event that the Investor fails to exercise its right provided in this Article 4 within such ten (10)-day period, or in the event that the Investor fails to consummate its transaction within the requisite period set forth in subsection (c) above, the Company shall thereafter be entitled to issue and sell within ninety (90) days the New Securities not elected to be purchased pursuant to this Article 4 by the Investor at a price no less than that offered to the Investor, and otherwise upon terms and conditions no more favorable to any third-party purchasers of such securities than were specified in the Issue Notice. Notwithstanding the foregoing, if such issuance or sale is subject to the receipt of any regulatory or shareholder approval or consent or the expiration of any waiting period, the time period during which such issuance or sale may be consummated by the Company shall be extended until the expiration of ten (10) Business Days after all such approvals or consents have been obtained or waiting periods expired. In the event the Company has not issued and sold the New Securities within such ninety (90)-day period (as such period may be extended in the manner described in the preceding sentence), the Company shall not thereafter offer, issue or sell such or any other New Securities without first offering such securities to the Investor in the manner provided in this Article 4.

 

(e)           In the case of the offering of New Securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board.

 

7

 

ARTICLE 5
  TRANSFER RESTRICTIONS; FURTHER INVESTMENT

 

Section 5.1  Lock-up.  Unless the Company materially breaches its obligations in Section 2.1 and fails to cure such breach within thirty (30) Business Days after receiving written notice from the Investor specifying the nature of such breach, in which case this Section 5.1 shall not apply, the Investor shall not, during the Lock-Up Period (as defined below), Transfer any Company Securities or any interest therein without the prior written consent of the Company. As used herein, the “Lock-Up Period” with respect to any Company Securities will commence on the Closing Date and continue until and include the date that is sixty (60) months after the Closing Date. During the Lock-Up Period, each of the Investor and its assignees covenants that any assignee of the Investor will continue to be a Qualified Walmart Subsidiary.

 

Section 5.2  Standstill.

 

(a)       The Investor covenants to and agrees with the Company that,

 

(x)         as long as the Investor (together with any of its Affiliates) directly or indirectly holds or Beneficially Owns (as defined below) or

 

(y)         to the extent any of the following actions would result in the Investor (together with any of its Affiliates) directly or indirectly holding or Beneficially Owning,

 

more than 10% of the Company’s outstanding share capital on a Fully-Diluted (by Treasury Method) basis (the “Standstill Period”), without the Company’s prior written consent, neither the Investor nor any of its Affiliates will, directly or indirectly:

 

(i)            in any way acquire, offer or propose to acquire or agree to acquire legal title to or Beneficial Ownership of any Company Securities;

 

(ii)           make any public announcement with respect to, or submit to the Company or any of its directors, officers, representatives, trustees, employees, attorneys, advisors, agents or Affiliates, any proposal for the acquisition of any Company Securities or with respect to any merger, consolidation, business combination, restructuring, recapitalization or purchase of any substantial portion of the assets of the Company or any of its Subsidiaries, in which the Investor and its Affiliates are involved, and whether or not such proposal might require the making of a public announcement by the Company, in each case unless the Company shall have made a prior written request to the Investor to submit such a proposal;

 

(iii)          seek or propose to influence, advise, change or control the management, the board of directors of the Company, governing instruments or policies or affairs of the Company by way of any public communication or communication with any Person other than the Company, or make, or in any way participate in, any “solicitation” of “proxies” (as such terms are defined or used in Regulation 14A under the Exchange Act) to vote any Company Securities or become a “participant” in any “election contest” (as such terms are defined and used in Rule 14a 11 under the Exchange Act) with respect to Company Securities; provided, however, that nothing in this clause (iii) shall prevent the Investor or its Affiliates from (x) voting in any manner any Company Securities over which the Investor or

 

8

 

such Affiliates has Beneficial Ownership or (y) communicating privately with shareholders of the Company to the extent such communication does not constitute a “solicitation” of “proxies,” as such terms are defined or used in Regulation 14A under the Exchange Act, and the number of persons with whom the Investor communicates is fewer than ten (10); or

 

(iv)          make a request to amend or waive any provision of this Section 5.2(a).

 

Notwithstanding the above provisions under this Section 5.2(a), with respect to each case under items (i) — (iii) above, if at any time the Company issues any Company Securities (subject to certain exceptions provided in Section 4.1), the Investor shall have the right to exercise its pre-emptive right pursuant to Article 4 to acquire such number of Company Securities in order to maintain the same percentage ownership it owns in the Company prior to such issuance or sale of such Company Securities (as applicable).

 

(b)       For purposes of this Agreement, a Person shall be deemed to have “Beneficial Ownership” of any securities in respect of which such Person or any such Person’s Affiliates is considered to be a “Beneficial Owner” under Rule 13d-3 under the Exchange Act as in effect on the date hereof.

 

Section 5.3 No Transfer to Adverse Person.

 

Notwithstanding any other provision of this Agreement or any other Transaction Agreement, without the prior written consent of the Company, the Investor shall not, directly or indirectly, (i) Transfer or permit any Transfer of, through one or a series of transactions, or (ii) grant any proxy on or permit any proxy to be granted on, any Company Securities or any interest therein to any Adverse Person. Any Transfer of any Company Securities made in violation of this Article 5 shall be null and void ab initio and shall not be recorded on the books and records of the Company. For the avoidance of doubt, the restrictions of this Section 5.3 shall not apply to any transfer or other disposition of shares by the Investor on the open market.

 

Section 5.4 Rights of First Refusal.

 

(a)           Transfer Notice. Subject to provisions under above Section 5.1 to Section 5.3, if the Investor proposes to accept one or more bona fide offers from any Persons to Transfer any Company Securities or any interest therein, the Investor shall give the Company written notice of the Investor’s intention to make the Transfer (the “Transfer Notice”), which shall include (i) a description of the Company Securities to be transferred (the “Offered Shares”), (ii) the identity and address of the prospective transferee and (iii) the consideration and the material terms and conditions of such offer(s) upon which the proposed Transfer is to be made. In the event that the proposed consideration for the proposed Transfer includes consideration other than cash, the Transfer Notice shall include a calculation of the fair market value of such consideration and an explanation of the basis for such calculation. The Transfer Notice shall include a copy of the relevant offer(s) and any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer.

 

(b)           Right of First Refusal of the Company. The Company shall have an option of right of first refusal for a period of twenty (20) days following receipt of the Transfer Notice (the “Option Period”) to elect to purchase all or any portion of the Offered Shares at the same price and subject to the same terms and conditions (or terms and

 

9

 

conditions as similar as reasonably possible) as described in the Transfer Notice, by notifying the Investor in writing before expiration of the Option Period as to the number of such Offered Shares that it wishes to purchase.

 

(c)           Procedure. If the Company gives the Investor notice during such twenty (20) day period that it desires to purchase all or any portion of the Offered Shares, then payment for the Offered Shares to be purchased shall be made by the Company to the Investor by check or by wire transfer in immediately available funds of the appropriate currency, against delivery of such Offered Shares to be purchased by way of delivery of certificate(s) representing the Offered Shares to be purchased, accompanied by a duly signed instrument of transfer and the requisite taxes and fees (if any), at the principal executive offices of the Company or another place agreed to by the Company and the Investor and no earlier than the twenty-fifth (25th) Business Day after the Company’s receipt of the Transfer Notice, unless such notice contemplated a later closing date with the prospective third party transferee or unless the value of the purchase price has not yet been established pursuant to Section 5.4(d), in which case the closing shall be on such later date or as provided in Section 5.4(d)(iv). Such Offered Shares shall be free and clear of any Encumbrance (other than Encumbrances arising hereunder), and the Investor shall so represent and warrant and shall further represent and warrant that it is the beneficial and record owner of such Offered Shares. At such closing, all of the parties to the transaction shall execute such additional documents as may be necessary or appropriate to effect the sale of the Offered Shares to the Company. Any stamp duty or transfer taxes or fees payable on the transfer of any Offered Shares shall be borne and paid by the Investor. The Company will update its register of members upon the consummation of any such Transfer.

 

(d)           Valuation of Property.

 

(i)            Should the purchase price specified in the Transfer Notice be payable in property other than cash or evidences of indebtedness, the Company shall have the right to pay the purchase price in the form of cash equal in amount to the fair market value of such property.

 

(ii)           If the Investor and the Company cannot agree on such cash value within the Option Period, the valuation shall be made by an appraiser of internationally recognized standing jointly selected by the Investor and the Company or, if they cannot agree on an appraiser within the Option Period, each of the Investor and the Company shall select an appraiser of internationally recognized standing and such appraisers shall designate another appraiser of internationally recognized standing, whose appraisal shall be determinative of such value.

 

(iii)          The cost of such appraisal shall be shared equally by the Investor and the Company.

 

(iv)          If the value of the purchase price offered by the prospective transferee is not determined before the twenty-fifth (25th) Business Day after the Company’s receipt of the Transfer Notice, the closing of the purchase of Offered Shares by the Company shall be held on or prior to the fifth (5th) Business Day after such valuation shall have been made pursuant to this Section 5.4(d).

 

(e)           Non-Exercise of Rights.

 

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(i)            If the Company does not elect to purchase all of the Offered Shares in accordance with this Section 5.4, then, the Investor shall have a period of sixty (60) days from the expiration of the Option Period in which to sell the remaining Offered Shares to the third party transferee identified in the Transfer Notice upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, so long as any such sale is effected in accordance with this Agreement and all Applicable Laws. The Investor agrees that each such transferee, prior to and as a condition to the consummation of any Transfer, shall execute and deliver to the Company certain documents assuming the obligations of the Investor hereunder with respect to the Offered Shares, to the reasonable satisfaction of the Company, and shall take such other actions as may be necessary for the transferee to be bound by the obligations of the Investor hereunder upon and after such transfer, and the transfer shall not be effective and shall not be recognized until such documents are so executed and delivered.

 

(ii)           In the event the Investor does not consummate the sale of such Offered Shares to the third party transferee identified in the Transfer Notice within the sixty (60) days period, the rights of the Company under this Section 5.4 shall be re-invoked and shall be applicable to each subsequent disposition of such Offered Shares by the Investor.

 

(iii)          The exercise or non-exercise of the rights of the Company under this Section 5.4 to purchase Company Securities from the Investor shall not adversely affect its rights to any subsequent exercise of its rights under this Section 5.4.

 

(iv)          The Investor agrees and acknowledges that any Transfer of Company Securities without going through the procedures provided under this Section 5.4 or otherwise not made in compliance with this Agreement shall be null and void ab initio and shall not be recorded on the books and records of the Company.

 

Section 5.5 Additional Matters. The parties hereto hereby agree as set forth in Schedule 5.5.

 

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Section 5.6 Avoidance of Restrictions.

 

The parties hereto agree that the Transfer restrictions in this Agreement shall not be capable of being avoided by the holding of Company Securities indirectly through a company or other entity that can itself be sold in order to dispose of an interest in Company Securities free of such restrictions, or any trust, derivative contract or other economic  arrangement transferring the benefits of ownership of any Company Securities. The Investor undertakes that it shall not take any action intended to avoid such restrictions in any manner. Any Transfer or other disposal of any shares (or other interest) resulting in any change in the control of the Investor or of any company (or other entity) having control over the Investor shall be treated as being a Transfer of the Company Securities held by the Investor, and the provisions of this Agreement that apply in respect of the Transfer of Company Securities shall thereupon apply in respect of the Company Securities so held. Any Transfer in violation of this Section 5.6 shall be null and void ab initio and have no force or effect whatsoever. The parties hereto agree that in the event that the Investor materially breaches its obligations in this Article 5 or the non-compete agreement between the parties hereto as of the date hereof, then Article 2, Article 3 (including Schedule 1 hereto), Article 4 and Section 5.5 (including Schedule 5.5 hereto) of this Agreement shall immediately terminate and be of no further force and effect.

 

ARTICLE 6
  MISCELLANEOUS

 

Section 6.1.  Binding Effect; Assignability; Benefit.

 

(a)           This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns.

 

(b)           Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party without the prior written consent of the other parties hereto.

 

(c)           Except as otherwise provided herein, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

Section 6.2.  Notices.

 

All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given to a party at the address set forth below (a) if in writing and served by personal delivery upon the party for whom it is intended, on the date of such delivery; (b) if delivered by certified mail, registered mail or courier service, return-receipt received, on the date of such delivery; or (c) if delivered by email, upon confirmation of receipt by a non-automated response:

 

If to the Company, at:

 

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Address:
    	
 
    	
21/F, Building A, No.18 Kechuang 11th Street,   Yizhuang Economic and Technological Development Zone, Daxing District,   Beijing 101111, PRC
    
	
Attn.:
    	
 
    	
Legal Department (Mergers and Acquisitions Group)
    
	
E-mail:
    	
 
    	
legalnotice@jd.com
    
	
 
    	
 
    	
 
    
	
with a copy (which shall not constitute notice) to:
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
20/F, Building A, No. 18 Kechuang 11th Street,   Yizhuang Economic and Technological Development Zone, Daxing District,   Beijing 101111, PRC
    
	
Attn.:
    	
 
    	
Corporate Development Department (Strategy and   Investment Department)
    
	
E-mail:
    	
 
    	
qyfz@jd.com
    
	
 
    	
 
    	
 
    
	
With a copy (which shall not constitute notice) to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Orrick, Herrington & Sutcliffe LLP
    
	
 
    	
 
    	
 
    	
47/F PARK PLACE
    
	
 
    	
 
    	
 
    	
1601 NANJING ROAD WEST
    
	
 
    	
 
    	
 
    	
SHANGHAI 200040 CHINA
    
	
 
    	
 
    	
 
    	
Email: Jeffrey.sun@orrick.com
    
	
 
    	
 
    	
 
    	
Attn: Jie SUN (Jeffrey)
    
	
 
    	
 
    	
 
    	
 
    
	
If to the Investor, at:
    	
 
    	
 
    	
c/o Walmart eCommerce
    
	
 
    	
 
    	
 
    	
850 Cherry Avenue
    
	
 
    	
 
    	
 
    	
San Bruno, CA 94066
    
	
 
    	
 
    	
 
    	
Attn: CEO
    
	
 
    	
 
    	
 
    	
 
    
	
With a copy (which shall not constitute notice) to:
    
	
 
    	
 
    	
 
    	
Morrison & Foerster LLP
    
	
 
    	
 
    	
 
    	
755 Page Mill Road
    
	
 
    	
 
    	
 
    	
Palo Alto, CA 94304
    
	
 
    	
 
    	
 
    	
Email: ccomey@mofo.com
    
	
 
    	
 
    	
 
    	
Attn: Charles C. Comey
    

 

Any party may change its address for purposes of this Section 6.2 by giving the other parties hereto written notice of the new address in the manner set forth above.

 

Section 6.3.  Severability.

 

If any provisions of this Agreement shall be adjudicated to be illegal, invalid or unenforceable in any action or proceeding whether in its entirety or in any portion, then such provision shall be deemed amended, if possible, or deleted, as the case may be, from the Agreement in order to render the remainder of the Agreement and any provision thereof both valid and enforceable, and all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as

 

13

 

possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

Section 6.4.  Entire Agreement.

 

This Agreement and the other Transaction Agreements (together with the schedules and exhibits hereto and thereto) together constitute the entire understanding and agreement between the parties hereto with respect to the matters covered hereby and thereby, and all prior agreements and understandings, oral or in writing, if any, between the parties hereto with respect to the matters covered hereby and thereby are superseded by this Agreement and the other Transaction Agreements.

 

Section 6.5.  Counterparts.

 

For the convenience of the parties hereto and to facilitate execution, this Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.  Signatures in the form of facsimile or electronically imaged “PDF” shall be deemed to be original signatures for all purposes hereunder.

 

Section 6.6.  Headings.

 

The headings of the various articles and sections of this Agreement are inserted merely for the purpose of convenience and do not expressly or by implication limit, define or extend the specific terms of the section so designated.

 

Section 6.7.  Amendment; Termination.

 

(a)           The provisions of this Agreement may be amended or modified only upon the prior written consent of all parties hereto.  The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

(b)           This Agreement shall terminate and be of no further force and effect upon the Investor ceasing to own any Company Securities; provided that the provisions of this Article 6 shall survive any termination of this Agreement.

 

Section 6.8.  Governing Law.

 

This Agreement, the rights and obligations of the parties hereto, and all claims or disputes relating hereto, shall be governed by and construed in accordance with the laws of New York State, U.S., without regard to the conflicts of law rules thereunder.

 

Section 6.9.  Arbitration.

 

Any dispute arising out of or relating to this Agreement, including any question regarding its existence, construction, interpretation, validity, termination or implementation (“Dispute”) shall be referred to and finally resolved by arbitration at the Hong Kong International Arbitration Centre in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules then in force.  There shall be three arbitrators.  The Company shall have the right to appoint one arbitrator, the Purchaser shall

 

14

 

have the right to appoint one arbitrator, and the third arbitrator shall be appointed by the Hong Kong International Arbitration Centre.  The law of this arbitration clause shall be New York law.  The arbitration proceedings shall be conducted in English.  Each of the parties hereto irrevocably waives any immunity to jurisdiction to which it may be entitled or become entitled (including without limitation sovereign immunity, immunity to pre-award attachment, post-award attachment or otherwise) in any arbitration proceedings and/or enforcement proceedings against it arising out of or based on this Agreement or the transactions contemplated hereby.  Notwithstanding the foregoing, either party hereto may seek immediate injunctive relief or other interim relief from any court of competent jurisdiction as necessary to enforce the provisions of this Agreement.

 

Section 6.10.  Further Assurances.

 

From time to time following the date hereof, the parties hereto shall execute and deliver such other instruments of assignment, transfer and delivery and shall take such other actions as the other party hereto reasonably may request in order to consummate, complete and carry out the transactions contemplated by this Agreement.

 

Section 6.11. Depositary Arrangement.

 

The Company shall use its commercially reasonable efforts to facilitate and consent to the prompt deposit of any or all of the Ordinary Shares acquired by the Investor pursuant to the Subscription Agreements (as may be reasonably requested by the Investor in writing) with the depositary for the issuance of ADSs in accordance with the Deposit Agreement, dated May 21, 2014, among the Company, Deutsche Bank Trust Company Americas as depositary, and all holders and beneficial owners of ADSs issued thereunder (as may be amended or replaced from time to time), when the relevant Ordinary Shares are no longer subject to any restrictions on Transfer under any Transaction Agreements; provided that any fees and expenses incurred in connection with such deposit (including any ADS issuance fees charged by the depositary) shall be borne by the Investor.

 

[Signature Pages Follow]

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

 

	
 
    	
JD.COM, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
  /s/ Qiangdong Liu
    
	
 
    	
 
    	
Name:
    	
Qiangdong Liu
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

[Signature Page to Investor Rights Agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

 

	
 
    	
NEWHEIGHT HOLDINGS LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
  /s/ Lu Wang
    
	
 
    	
 
    	
Name:
    	
Lu Wang
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

[Signature Page to Investor Rights Agreement]

 

 

SCHEDULE 1
 REGISTRATION RIGHTS

 

Section 1.            Applicability of Rights.

 

Notwithstanding any other provisions in this Agreement (including this Schedule 1), only after the expiration of a period of sixty (60) months after the Closing Date, the Holders (as defined below) will be entitled to the following rights in this Schedule 1 with respect to any proposed public offering of the Company’s Ordinary Shares in the United States and will be entitled to reasonably equivalent or analogous rights with respect to any other offering of the Company’s securities in Hong Kong or any other jurisdiction in which the Company undertakes to publicly offer or list such Company Securities or other securities for trading on a recognized securities exchange; provided that nothing herein shall result in any breach or violation by the Company of any provision under the Thirteenth Amended and Restated Shareholders Agreement between the Company and other parties thereto dated March 10, 2014.  For purposes of this Agreement, reference to registration of securities under the Securities Act and the Exchange Act shall be deemed to mean the equivalent registration in a jurisdiction other than the United States, it being understood and agreed that in each such case all references in this Agreement to the Securities Act, the Exchange Act and rules, forms of registration statements and registration of securities thereunder, U.S. law and the SEC (as defined below), shall be deemed to refer, to the equivalent statutes, rules, forms of registration statements, registration of securities and laws of and equivalent government authority in the applicable non-U.S. jurisdiction.  In addition, “Form F-3” shall be deemed to refer to Form S-3 or any comparable form under the U.S. securities laws if the Company is not at that time eligible to use Form F-3.

 

Section 2.            Definitions.

 

For purposes of this Schedule 1:

 

(a)         “Form F-3” means such respective form under the Securities Act as is in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(b)         “Holder” means any person owning or having the rights to acquire Registrable Securities or any permitted assignee of record of such Registrable Securities to whom rights under this Schedule 1 have been duly assigned in accordance with this Agreement.

 

(c)         “Registrable Securities” means: (i) any Ordinary Shares of the Company issued under the Subscription Agreement, and (ii) any Ordinary Shares issued (or issuable upon the conversion or exercise of any warrant, right or other security which is issued) as a dividend or other distribution with respect to, or in exchange for or in replacement of, any shares of the Company described in the foregoing clause (i). Notwithstanding the foregoing, “Registrable Securities” shall exclude any Registrable Securities sold by a person in a transaction in which rights under this Schedule 1 are not validly assigned in accordance with this Agreement and any Registrable Securities which are sold in a registered public offering under the Securities Act or analogous statute of another jurisdiction, or sold pursuant to Rule 144 promulgated under the Securities Act or analogous rule of another jurisdiction.

 

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(d)         The number of shares of “Registrable Securities then Outstanding” shall mean the number of Ordinary Shares of the Company that are Registrable Securities and are then issued and outstanding, or issuable upon conversion or exercise of any warrant, right or other security then outstanding.

 

(e)         Registration. The terms “register,” “registered,” and “registration” refer to a registration effected by filing a registration statement which is in a form which complies with, and is declared effective by the SEC in accordance with, the Securities Act.

 

(f)          “Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 3, 4 and 5 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements of one counsel for all the Holders (to be selected by all the Holders), “blue sky” fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

 

(g)         “SEC” means the U.S. Securities and Exchange Commission.

 

(h)         “Selling Expenses” shall mean all underwriting discounts and selling commissions and ADS issuance fees charged by the depositary bank of the Company applicable to the sale of Registrable Securities pursuant to Sections 3, 4 and 5 hereof.

 

Section 3.            Demand Registration.

 

(a)           Request by Holders. If the Company shall, at any time after the Effective Date hereof, receive a written request from the Holders of at least fifty percent (50%) of the Registrable Securities then Outstanding that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities pursuant to this Section 3; and provided that (i) the Registrable Securities to be registered would exceed fifty percent (50%) of the total Registrable Securities then Outstanding and (ii) the anticipated aggregate gross proceeds of such registration would exceed US$20,000,000, then the Company shall, within ten (10) Business Days of the receipt of such written request, give written notice of such request (“Request Notice”) to all Holders, and use its best efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities ‘that the Holders request to be registered and included in such registration by written notice given by such Holders to the Company within twenty (20) days after receipt of the Request Notice, subject only to the limitations of this Section 3; provided that the Company shall not be obligated to effect any such registration if the Company has, within the six (6) month period preceding the date of such request, already effected a registration under the Securities Act pursuant to this Section 3 or Section 5 or in which the Holders had an opportunity to participate pursuant to the provisions of Section 4, other than a registration from which the Registrable Securities of the Holders have been excluded (with respect to all or any portion of the Registrable Securities the Holders requested be included in such registration) pursuant to the provisions of Section 4(b). The Company shall be obligated to effect no more than two (2) registrations pursuant to this Section 3.

 

(b)           Underwriting. If the Holders initiating the registration request under this Section 3 (the “Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request made pursuant to this Section 3 and the Company shall include such

 

2

 

information in the Request Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such other Holders) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Holders of a majority of the voting power of the Registrable Securities being registered and reasonably acceptable to the Company. Notwithstanding any other provision of this Section 3, if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten, then the Company shall so advise all Holders of Registrable Securities which would otherwise be registered and underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of shares of Registrable Securities then held by each such Holder, and second, to the Company and holders of other securities of the Company (as applicable); provided, however, that the right of the underwriter(s) to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that all shares that are not Registrable Securities and are held by any person (other than any Holder), including, without limitation, any person who is an employee, officer or director of the Company (or any subsidiary of the Company) shall first be excluded from such registration and underwriting before any Registrable Securities are so excluded. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

 

(c)           Deferral. Notwithstanding the foregoing, the Company shall not be required to effect a registration pursuant to this Section 3:

 

(i)            during the period starting with the date sixty (60) Business Days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) Business Days following the effective date of, a Company-initiated registration subject to Section 4 below, provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective;

 

(ii)           if the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form S-3 or Form F-3 pursuant to Section 5 hereof; or

 

(iii)          if the Company shall furnish to Holders requesting registration pursuant to this Section 3, a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such registration statement to be filed at such time, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders;

 

3

 

provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; provided, further, that the Company shall not register any other of its shares during such ninety (90) day period; and provided, further, that a demand right shall not be deemed to have been exercised until such deferred registration shall have been effected.

 

Section 4.            Piggyback Registrations.

 

(a)           The Company shall notify all Holders of Registrable Securities in writing at least ten (10) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding (A) a registration relating solely to the sale of securities to employees of the Company pursuant to an employee benefit plan of the Company; (B) a registration relating to a corporate reorganization or other transaction under Rule 145 of the Securities Act (or comparable provision under Applicable Laws of another jurisdiction, as applicable); (C) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (D) a registration in which the only Ordinary Shares being registered are Ordinary Shares issuable upon conversion of debt securities that are also being registered), and shall afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall within five (5) days after receipt of the above described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 4 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

 

(b)           Underwriting. If a registration statement under which the Company gives notice under this Section 4 is for an underwritten offering, then the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder’s Registrable Securities to be included in a registration pursuant to this Section 4 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Agreement, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company, second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of

 

4

 

shares of Registrable Securities then held by each such Holder, and third, to holders of other securities of the Company; provided, however, that the right of the underwriter(s) to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that all shares that are not Registrable Securities and are held by any person (other than any Holder), including, without limitation, any person who is an employee, officer or director of the Company (or any subsidiary of the Company) shall first be excluded from such registration and underwriting before any Registrable Securities are so excluded. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

 

(c)           Not Demand Registration. Registration pursuant to this Section 4 shall not be deemed to be a demand registration as described in Section 3 above. There shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 4.

 

Section 5.            Form F-3.

 

In case the Company shall receive from Holders of at least fifty percent (50%) of the Registrable Securities then Outstanding a written request or requests that the Company effect a registration on Form F-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holders, then the Company will, so long as the Company is qualified to use Form F-3:

 

(a)           Notice. Promptly give written notice of the proposed registration and such Holders’ request therefor, and any related qualification or compliance, to all other Holders of Registrable Securities; and

 

(b)           Registration. As soon as practicable, effect such registration and any related qualification or compliance as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within twenty (20) days after the Company provides the notice contemplated by Section 5(a); provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 5:

 

(i)            if Form F-3 is not available for such offering by the Holders;

 

(ii)           if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than US$5,000,000;

 

(iii)          if the Company shall furnish to the Holders a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such Form F-3 registration to be effected at such time, in which event the

 

5

 

Company shall have the right to defer the filing of the Form F-3 registration statement no more than once during any twelve (12) month period for a period of not more than ninety (90) days after receipt of the request of the Holders under this Section 5;

 

(iv)          if the Company has, within the six (6) month period preceding the date of such request, already effected a registration under the Securities Act other than a registration from which the Registrable Securities of Holders have been excluded (with respect to all or any portion of the Registrable Securities the Holders requested be included in such registration) pursuant to the provisions of Sections 3(b) and 4(b);

 

(v)           in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or

 

(vi)          if the Company has already effected no less than two (2) registrations pursuant to this Section 5 in any 12-month period.

 

Subject to the foregoing, the Company shall file a Form F-3 registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request of the Holders.

 

(c)             Not Demand Registration. Subject to Section 6 below, Form F-3 registrations shall not be deemed to be demand registrations as described in Section 3 above.

 

Section 6.            Expenses.

 

All Registration Expenses incurred in connection with any registration pursuant to Sections 3, 4 or 5 (but excluding Selling Expenses) shall be borne by the Company. Each Holder participating in a registration pursuant to Sections 3, 4 or 5 shall bear such Holder’s proportionate share (based on the total number of shares sold in such registration other than for the account of the Company) of all Selling Expenses or other amounts payable to underwriter(s) or brokers, in connection with such offering by the Holders. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered, unless the Holders of a majority of the Registrable Securities then outstanding agree that such registration constitutes the use by the Holders of one (1) demand registration pursuant to Section 3; provided further, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business, or prospects of the Company not known to the Holders at the time of their request for such registration and have withdrawn their request for registration with reasonable promptness after learning of such material adverse change, then the Holders shall not be required to pay any of such expenses and such registration shall not constitute the use of a demand registration pursuant to Section 3.

 

Section 7.            Obligations of the Company.

 

Whenever required to effect the registration of any Registrable Securities under this Agreement the Company shall, as expeditiously as reasonably possible:

 

6

 

(a)           Registration Statement. Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to ninety (90) days or, in the case of Registrable Securities registered under Form F-3 in accordance with Rule 415 under the Securities Act or a successor rule, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such ninety (90) day period shall be extended for a period of time equal to the period any Holder refrains from selling any securities included in such registration at the request of the underwriter(s), and (ii) in the case of any registration of Registrable Securities on Form F-3 which are intended to be offered on a continuous or delayed basis, such ninety (90) day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold.

 

(b)           Amendments and Supplements. Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.

 

(c)           Prospectuses. Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration.

 

(d)           Blue Sky. Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or “blue sky” laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service of process in such jurisdiction and except as may be required by the Securities Act.

 

(e)           Underwriting. In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

 

(f)            Notification. Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of (i) when such registration statement, the prospectus or any amendment or supplement thereto has been filed with the SEC and when such registration statement or any post-effective amendment thereto has become effective; (ii) of any request by the SEC for amendments or supplements to such registration statement or the prospectus included therein or for additional information; (iii) the issuance of any stop order by the SEC in respect of such registration statement, or (iv) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be

 

7

 

stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

(g)           Opinion and Comfort Letter. Furnish, at the request of any Holder requesting registration of Registrable Securities, on the date that such Registrable Securities are delivered to the underwriter(s) for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to the Holders of a majority of the Registrable Securities registered thereunder, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) letters dated as of (x) the effective date of the registration statement covering such Registrable Securities and (y) the closing date of the offering, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to the Holders of a majority of the Registrable Securities registered thereunder, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.

 

(h)           Other Obligations.

 

(i)            Use its commercially reasonable efforts to cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange or quotation system on which the Ordinary Shares issued by the Company are then listed or traded.

 

(ii)           Use its commercially reasonable efforts to obtain the withdrawal of any stop order issued by the SEC suspending the effectiveness of the relevant registration statement at the earliest possible time.

 

Section 8.            Furnish Information.

 

It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 3, 4 or 5 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to timely effect the registration of their Registrable Securities.

 

Section 9.            Indemnification.

 

In the event any Registrable Securities are included in a registration statement under Sections 3, 4 or 5:

 

(a)           By the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Holder, its partners, officers, directors, legal counsel, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, or other United States federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in

 

8

 

respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”):

 

(i)            any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto;

 

(ii)           the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or

 

(iii)          any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any United States federal or state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any United States federal or state securities law in connection with the offering covered by such registration statement;

 

and the Company will reimburse each such Holder, its partner, officer, director, legal counsel, underwriter or controlling person for any legal or other expenses reasonably incurred by them, as such expenses are incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon (A) a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, legal counsel, underwriter or controlling person of such Holder or (B) delivery of a prospectus by a Holder who has received notice from the Company that the registration statement relating thereto contains an untrue statement of a material fact or an omission of a material fact.

 

(b)           By Selling Holders. To the extent permitted by law, each selling Holder will, if Registrable Securities held by Holder are included in the securities as to which such registration, qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its employees, advisors, agents and directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other holder selling securities under such registration statement or any of such other holder’s partners, directors, officers, legal counsel or any person who controls such holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such employee, advisor, agent, director, officer, legal counsel, controlling person, underwriter or other such holder, partner or director, officer or controlling person of such other holder may become subject under the Securities Act, the Exchange Act or other United States federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder

 

9

 

or its partners, officers, directors, employees, advisors, agents, underwriters or controlling persons expressly for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such employee, advisor, agent, director, officer, controlling person, underwriter or other holder, partner, officer, director or controlling person of such other holder in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further, that except for liability for willful fraud or misrepresentation, in no event shall any indemnity under this subsection 9(b) exceed the net proceeds received by such Holder in the registered offering out of which the applicable Violation arises.

 

(c)           Notice. Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of liability to the indemnified party under this Section 9 to the extent the indemnifying party is prejudiced as a result thereof, but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 9.

 

(d)           Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any indemnified party makes a claim for indemnification pursuant to this Section 9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party in circumstances for which indemnification is provided under this Section 9; then, and in each such case, the indemnified party and the indemnifying party will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that a Holder (together with its related persons) is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by and sold under the registration statement bears to the public offering price of all securities offered by and sold under such registration statement, and the Company and other selling holders are responsible for the remaining portion. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified

 

10

 

party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case: (A) except for liability for willful fraud or misrepresentation, no Holder will be required to contribute any amount in excess of the net proceeds to such Holder from the sale of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

 

(e)           Survival; Consents to Judgments and Settlements. The obligations of the Company and Holders under this Section 9 shall survive the completion of any offering of Registrable Securities in a registration statement, regardless of the expiration of any statutes of limitation or extensions of such statutes. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

Section 10.          Termination of the Company’s Obligations.

 

The Company shall have no obligations pursuant to Sections 3, 4 and 5 with respect to any Registrable Securities proposed to be sold by a Holder in a registration pursuant to Sections 3, 4 or 5 more than two (2) years after the expiration of a period of sixty (60) months after the Closing Date, or, if, in the opinion of counsel to the Company, all such Registrable Securities proposed to be sold by a Holder may then be sold without registration in any ninety (90) day period pursuant to Rule 144 promulgated under the Securities Act.

 

Section 11.          Rule 144 Reporting.

 

With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration or pursuant to a registration on Form F-3, the Company agrees to:

 

(a)           Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;

 

(b)           File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

 

(c)           So long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, or its qualification as a registrant whose securities may be resold pursuant to Form F-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to Form F-3.

 

11Exhibit 4.36

 

FRAMEWORK AGREEMENT

 

by and among

 

JD.COM, INC.,

 

JD.COM INTERNATIONAL LIMITED,

 

宿迁翼同信息技术有限公司

(SUQIAN YITONG INFORMATION TECHNOLOGY CO., LTD.),

 

宿迁利贸东弘投资管理有限公司

(SUQIAN LIMAO DONGHONG INVESTMENT MANAGEMENT CO., LTD.),

 

北京京东金融科技控股有限公司

(BEIJING JINGDONG FINANCIAL TECHNOLOGY HOLDING CO., LTD.),

 

宿迁东辉朝旭咨询有限公司

(SUQIAN DONGHUI ZHAOXU CONSULTING CO., LTD.),

 

宿迁领航方圆股权投资中心

(SUQIAN LINGHANG FANGYUAN EQUITY INVESTMENT CENTER),

 

and

 

宿迁东泰锦荣投资管理中心

(SUQIAN DONGTAI JINRONG INVESTMENT MANAGEMENT CENTER)

 

Dated as of March 1, 2017

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE I
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEFINITIONS AND   TERMS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 1.1
    	
General
    	
3
    
	
Section 1.2
    	
Cross-Reference of Other   Definitions
    	
10
    
	
Section 1.3
    	
Construction
    	
12
    
	
Section 1.4
    	
Schedules, Annexes and   Exhibits
    	
13
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE II
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TRANSACTION
    	
 
    
	
 
    	
 
    	
 
    
	
Section 2.1
    	
Transactions
    	
13
    
	
Section 2.2
    	
Issuance of Equity   Securities of JD Finance
    	
13
    
	
Section 2.3
    	
Liquidity Event Payment
    	
15
    
	
Section 2.4
    	
Timing and Method of   Payments
    	
18
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE III
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CLOSING
    	
 
    
	
 
    	
 
    	
 
    
	
Section 3.1
    	
Closing
    	
19
    
	
Section 3.2
    	
Closing Deliverables
    	
19
    
	
Section 3.3
    	
Withholding Rights
    	
20
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE IV
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
REPRESENTATIONS   AND WARRANTIES OF JD GROUP
    	
 
    
	
 
    	
 
    	
 
    
	
Section 4.1
    	
Organization and   Qualification; Subsidiaries
    	
20
    
	
Section 4.2
    	
Authority; Binding   Effect
    	
20
    
	
Section 4.3
    	
No Conflicts; Required   Filings and Consents
    	
21
    
	
Section 4.4
    	
Exclusivity of   Representations
    	
22
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE V
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
REPRESENTATIONS   AND WARRANTIES OF JD FINANCE
    	
 
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
Organization and   Qualification
    	
22
    
	
Section 5.2
    	
Authority; Binding   Effect
    	
22
    
	
Section 5.3
    	
No Conflicts; Required   Filings and Consents
    	
23
    
	
Section 5.4
    	
Capitalization
    	
23
    

 

i

 

	
Section 5.5
    	
Exclusivity of Representations
    	
23
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE VI
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
REPRESENTATIONS   AND WARRANTIES OF SUQIAN LIMAO
    	
 
    
	
 
    	
 
    	
 
    
	
Section 6.1
    	
Organization and   Qualification
    	
24
    
	
Section 6.2
    	
Authority; Binding   Effect
    	
24
    
	
Section 6.3
    	
No Conflicts; Required   Filings and Consents
    	
24
    
	
Section 6.4
    	
Exclusivity of   Representations
    	
25
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE VII
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
REPRESENTATIONS   AND WARRANTIES OF FOUNDER HOLDCOS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 7.1
    	
Organization and Qualification
    	
25
    
	
Section 7.2
    	
Authority; Binding   Effect
    	
25
    
	
Section 7.3
    	
No Conflicts; Required   Filings and Consents
    	
26
    
	
Section 7.4
    	
Exclusivity of   Representations
    	
26
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE VIII
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
COVENANTS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 8.1
    	
Confidentiality
    	
26
    
	
Section 8.2
    	
Appropriate Action;   Consents; Filings
    	
27
    
	
Section 8.3
    	
Notification of Certain   Matters
    	
28
    
	
Section 8.4
    	
Public Announcement and   Filings
    	
28
    
	
Section 8.5
    	
Conduct of Business   Pending the Closing
    	
29
    
	
Section 8.6
    	
Escrow Agreements
    	
29
    
	
Section 8.7
    	
Capital Injection into   JD Finance Sub
    	
29
    
	
Section 8.8
    	
Suqian Yitong Equity   Transfer and Payment into Escrow Accounts
    	
29
    
	
Section 8.9
    	
Regulatory Approvals
    	
29
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE IX
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CONDITIONS TO   CLOSING
    	
 
    
	
 
    	
 
    	
 
    
	
Section 9.1
    	
General Conditions
    	
30
    
	
Section 9.2
    	
Conditions to   Obligations of the JD Group Parties
    	
30
    
	
Section 9.3
    	
Conditions to   Obligations of JD Finance
    	
31
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE X
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ADDITIONAL   COVENANTS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 10.1
    	
Board Representation of   JD Group
    	
32
    
	
Section 10.2
    	
Information Rights
    	
33
    

 

ii

 

	
Section 10.3
    	
Preemptive Rights
    	
35
    
	
Section 10.4
    	
Certain Transactions
    	
37
    
	
Section 10.5
    	
Transfer Restrictions
    	
37
    
	
Section 10.6
    	
IPO
    	
39
    
	
Section 10.7
    	
Business Scope
    	
41
    
	
Section 10.8
    	
JD Group Audit   Committee
    	
42
    
	
Section 10.9
    	
Further Assurances
    	
42
    
	
Section 10.10
    	
Dividends
    	
42
    
	
Section 10.11
    	
Further Covenants
    	
42
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE XI
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TERMINATION
    	
 
    
	
 
    	
 
    	
 
    
	
Section 11.1
    	
Termination of   Transactions
    	
43
    
	
Section 11.2
    	
Effect of Termination
    	
44
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE XII
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INDEMNIFICATION
    	
 
    
	
 
    	
 
    	
 
    
	
Section 12.1
    	
Indemnification by JD   Group
    	
44
    
	
Section 12.2
    	
Indemnification by JD   Finance
    	
44
    
	
Section 12.3
    	
Indemnification by   Suqian Limao
    	
44
    
	
Section 12.4
    	
Indemnification by   Founder Holdcos
    	
45
    
	
Section 12.5
    	
Procedures
    	
45
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE XIII
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MISCELLANEOUS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 13.1
    	
Certain IPs
    	
46
    
	
Section 13.2
    	
Notices
    	
46
    
	
Section 13.3
    	
Amendment; Waiver; Etc.
    	
48
    
	
Section 13.4
    	
Assignment
    	
48
    
	
Section 13.5
    	
Entire Agreement
    	
49
    
	
Section 13.6
    	
Parties in Interest
    	
49
    
	
Section 13.7
    	
Expenses
    	
49
    
	
Section 13.8
    	
Governing Laws
    	
49
    
	
Section 13.9
    	
Arbitration
    	
49
    
	
Section 13.10
    	
Severability
    	
51
    
	
Section 13.11
    	
Counterparts
    	
52
    
	
Section 13.12
    	
Rules of   Construction
    	
52
    

 

iii

 

FRAMEWORK AGREEMENT

 

THIS FRAMEWORK AGREEMENT (this “Agreement”), dated as of March 1, 2017, is entered into by and among:

 

(1)                                 JD.com, Inc., an exempted company with limited liability organized under the Laws of the Cayman Islands (“JD Group”);

 

(2)                                 JD.com International Limited, a limited liability company organized under the Laws of Hong Kong (“JD HK Company”);

 

(3)                                 宿迁翼同信息技术有限公司(Suqian Yitong Information Technology Co., Ltd.), a limited liability company organized under the Laws of the PRC and a wholly owned Subsidiary of JD HK Company (“Suqian Yitong” and collectively with JD Group and JD HK Company, the “JD Group Parties”);

 

(4)                                 宿迁利贸东弘投资管理有限公司 (Suqian Limao Donghong Investment Management Co., Ltd.), a limited liability company organized under the Laws of the PRC (“Suqian Limao”);

 

(5)                                 北京京东金融科技控股有限公司 (Beijing Jingdong Financial Technology Holding Co., Ltd.), a limited liability company organized under the Laws of the PRC (“JD Finance”);

 

(6)                                 宿迁东辉朝旭咨询有限公司 (Suqian Donghui Zhaoxu Consulting Co., Ltd.), a limited liability company organized under the laws of the PRC that is wholly owned by JD Finance (“JD Finance Sub”);

 

(7)                                 宿迁领航方圆股权投资中心 (Suqian Linghang Fangyuan Equity Investment Center), a limited partnership organized under the laws of the PRC and controlled by Qiangdong Liu (the “Founder” and such partnership, “Founder Holding Entity”); and

 

(8)                                 宿迁东泰锦荣投资管理中心 (Suqian Dongtai Jinrong Investment Management Center), a limited partnership organized under the Laws of the PRC and controlled by the Founder (“Founder ESOP Partnership” and, together with Founder Holding Entity, “Founder Holdcos” and each, a “Founder Holdco”).

 

The parties hereto are referred to collectively as the “Parties.”

 

RECITALS

 

WHEREAS, this Agreement contemplates the termination of the VIE Structure of Suqian Limao and the transfer of all Equity Securities of Suqian Yitong to JD Finance Sub at the Closing, as a result of which JD Group will deconsolidate Suqian Limao and JD Finance;

 

 

WHEREAS, this Agreement contemplates certain payments, as specified herein, to be made by JD Finance Sub and Suqian Limao, which payments serve as consideration in part for the restructuring of JD Finance resulting in the deconsolidation of JD Finance by JD Group;

 

WHEREAS, concurrently herewith and as a condition and inducement to the willingness of JD Group and JD Finance to enter into this Agreement, JD Group and JD Finance have entered into an Intellectual Property License and Software Technology Services Agreement (the “IPLA”), effective as of the Closing, pursuant to which JD Group will license certain Intellectual Property (as defined below) provide certain services to JD Finance and receive the right to certain payments from JD Finance as specified therein;

 

WHEREAS, concurrently herewith, JD Finance, Suqian Limao and other existing holders of JD Finance Equity have entered into a framework agreement entitled “投资安排总体协议” in Chinese (the “JD Finance Reorganization and Subscription Framework Agreement”) with Founder Holdcos and other investor parties thereto (collectively with Founder Holdcos, the “JD Finance New Investors”), pursuant to which, among others, (i) the parties thereto have reached agreement on the reorganization of JD Finance, including the funds flow and other aspects of the reorganization of JD Finance, (ii) JD Finance has agreed to issue and sell to certain JD Finance New Investors, and such JD Finance New Investors have agreed to subscribe for and purchase from JD Finance, certain Equity Securities of JD Finance on the terms set forth therein, (iii) Suqian Limao has agreed to transfer and sell to a JD Finance New Investor and Founder Holding Entity, and each of such JD Finance New Investor and Founder Holding Entity has agreed to purchase from Suqian Limao, certain Equity Securities of JD Finance on the terms set forth therein, and (iv) the parties thereto have agreed to certain amendments  (the “Amendment to Series A Capital Increase Agreement”) to the Capital Increase Agreement relating to JD Finance, dated as of January 8, 2016 (the “Series A Capital Increase Agreement”), pursuant to which the Series A Capital Increase Agreement will be amended, and that certain Letter of Undertaking executed and delivered by JD Group on January 25, 2016 in connection with the closing under the Series A Capital Increase Agreement will be terminated on the terms set forth therein;

 

WHEREAS, concurrently herewith, Suqian Limao and other existing holders of JD Finance Equity have adopted unanimous written resolutions (the “JD Finance Shareholder Resolutions”), whereby the holders of JD Finance Equity approved that, among others, (i) the capital reserve fund of JD Finance shall be used to increase the registered capital of JD Finance held by all the existing holders of JD Finance Equity, while Suqian Limao has waived its right to receive such increased registered capital, such that immediately after such increase of the registered capital, Suqian Limao and the other existing holders of JD Finance Equity of JD Finance (other than Suqian Limao and Founder ESOP Partnership) hold 9.54% and 29.44% of JD Finance Equity on a fully diluted basis, and in the event that the closing contemplated under the JD Finance Reorganization and Subscription Framework Agreement does not occur, JD Finance shall use its capital reserve fund to increase the registered capital of JD Finance held by Suqian Limao such that Suqian Limao shall hold 68.6% of JD Finance on a fully diluted basis, and (ii) JD Finance will issue and sell to the JD Finance New Investors certain Equity Securities of JD Finance at the closing contemplated under and pursuant to the terms of the JD Finance Reorganization and Subscription Framework Agreement;

 

2

 

WHEREAS, the Parties desire to provide for the affairs of the Parties and the rights and obligations of the Parties on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS AND TERMS

 

Section 1.1            General. As used herein, the following terms shall have the following meanings:

 

“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person.  For the avoidance of doubt, the Affiliates of a Person shall include the Subsidiaries of such Person.

 

“Beneficial Owner” of any security means any Person who, directly or indirectly, through any Contract, arrangement, understanding, relationship or otherwise has or shares (i) voting power, which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power which includes the power to dispose, or to direct the disposition of, such security. “Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.

 

“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions located in Beijing, Hong Kong or New York are authorized or obligated by Laws to close.

 

“Business Scope Period” means the period commencing on the date of the Closing and terminating upon the first date upon which JD Group and JD Finance cease to be under common Control of the Founder.

 

“Confidential Information” means information delivered by or on behalf of a Party to another Party or its Representatives pursuant to, in connection with, or related to this Agreement or any of the transactions, rights or obligations contemplated by this Agreement; provided, that such term does not include information that (a) was publicly known prior to the time of such disclosure; (b) was otherwise known to such receiving Party and not subject to a duty to keep such information confidential prior to the time of such disclosure; (c) subsequently becomes publicly known through no act or omission by such receiving Party or any of its Representatives in breach of this Agreement; or (d) otherwise becomes known to such receiving Party other than through disclosure by the delivering Party or any Person that such receiving Party knows to have a duty to keep such information confidential.

 

“Contingent Consideration” means the aggregate value of any purchase price adjustment, earnout or other contingent consideration in respect of a Liquidity Event paid to JD Finance or any Beneficial Owner of Equity Securities of JD Finance, when paid.

 

3

 

“Contract” means any loan or credit agreement, bond, debenture, note, mortgage, indenture, lease, supply agreement, license agreement, development agreement or other contract, agreement, obligation, commitment or instrument, including all amendments thereto.

 

“Control” (including with correlative meanings, the terms “Controlled by” and “under common Control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract or otherwise.

 

“Encumbrance” means any charge, claim, mortgage, lien, option, pledge, title defect, security interest or other restriction or limitation of any kind (other than those created under applicable securities Laws).

 

“Equity Securities” means, with respect to any entity, any equity interests of such entity, however described or whether voting or nonvoting, and any securities convertible or exchangeable into, and options, warrants or other rights to acquire, any equity interests or equity-linked interests of such entity, including, for the avoidance of doubt, JD Finance Equity where the subject entity is JD Finance.

 

“Escrow Accounts” means the one or more bank accounts of JD Finance Sub maintained by the Escrow Agents in accordance with the Escrow Agreements.

 

“Escrow Agents” means one or more banks mutually agreed to by JD Group and JD Finance.

 

“Family Member” means, with respect to any Person, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a person, and shall include adoptive relationships of the same type.

 

“GAAP” means U.S. GAAP, IFRS or PRC GAAP, in each case, applied on a consistent basis.

 

“Governmental Approval” means any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, certificate, exemption, Order, registration, declaration, filing, report or notice of any Governmental Authority.

 

“Governmental Authority” means any instrumentality, subdivision, court, administrative agency, commission, official or other authority of any country, state, province, prefect, municipality, locality or other government or political subdivision thereof, or any stock or securities exchange, or any multi-national, quasi-governmental or self-regulatory or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority.

 

“Highly Sensitive Information” means any competitively sensitive business, marketing, technical and other information that JD Finance does not otherwise intend to publicly disclose other than information as to which JD Group certifies, through a certificate duly executed by an authorized executive officer of JD Group that it requires such information in order to comply

 

4

 

with public reporting requirements under the applicable securities Laws and rules of the NASDAQ Global Select Market or any other stock exchange on which the Equity Securities of JD Group are admitted to trading or for the purpose of complying with applicable Law.

 

“IFRS” means International Financial Reporting Standards.

 

“Income Share Buyout Amount” means the Income Share Buyout Amount payable by JD Finance to JD Group or a Subsidiary of JD Group as may be designated by JD Group under Section 5.6 of the IPLA in the relevant circumstance, net of any Taxes arising therefrom.

 

“Intellectual Property” means:

 

(a)           patents, patent applications and patent disclosures, including all provisionals, reissuances, continuations, continuations-in-part, divisions, revisions, extensions, reexaminations and counterparts thereof, inventions (whether patentable or unpatentable and whether or not reduced to practice) and all improvements thereto;

 

(b)           trademarks, service marks, trade dress, logos, brand names, trade names, domain names and corporate names, and all goodwill associated therewith and all applications, registrations and renewals in connection therewith;

 

(c)           copyrights, works of authorship and copyrightable works, including software, data and databases, website and other content and documentation, and all applications, registrations and renewals in connection therewith; and

 

(d)           trade secrets, know-how, information and/or technology of any kind (including processes, procedures, research and development, ideas, concepts, formulas, algorithms, compositions, production processes and techniques, technical data, designs, drawings, specifications, research records and records of inventions).

 

“Interest Rate” means (i) if the payments to be made to JD Group pursuant to Section 2.3 are made in U.S. Dollars, two percent (2%) plus the two (2)-year U.S. Treasury rate as published in The Wall Street Journal New York edition on the date in the United States that the Initial Liquidity Event Payment is made or if such rate ceases to be available or is not published, the most closely comparable rate, or (ii) if the payments to be made to JD Group pursuant to Section 2.3 are made in Renminbi, one percent (1%) plus the People’s Bank of China’s benchmark two (2)-year lending rate applicable on the date that the Initial Liquidity Event Payment is made or if such rate ceases to be available or is not published, the most closely comparable rate.

 

“IPO” means an initial public offering.

 

“Issuance” means each issuance of Ownership Interests in JD Finance pursuant to Section 2.2, each of which (i) shall be made to JD Group or a Subsidiary of JD Group designated by JD Group, (ii) shall be of an Ownership Interest in JD Finance representing, on a fully-diluted basis, as of immediately following such issuance together with all prior Issuances, a percentage of the aggregate Ownership Interests in JD Finance equal to the Maximum Issuance Interest (or such lesser percentage as is permitted by the Issuance Approvals), and (iii) shall be free and clear of any Encumbrances whatsoever.

 

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“Issuance Percentage” means the ratio, expressed as a percentage, of the Ownership Interests in JD Finance issued with respect to all Issuances to the Maximum Issuance Interest; provided that the Issuance Percentage shall not exceed 100%.

 

“JD Finance Business” means financial, financial derivative and other finance-related businesses operated by JD Finance and its Subsidiaries from time to time, including consumer finance, supply chain finance, third-party payment, factoring, insurance brokerage and agency, crowd funding (including product and equity crowd funding), wealth management, securities brokerage, banking, financial leasing, asset management and credit reference businesses.

 

“JD Finance Equity” means (a) if JD Finance is in the form of a limited liability company, registered capital of JD Finance; or (b) if JD Finance is in a form of a company limited by shares, shares of JD Finance.

 

“JD Group Audit Committee” means the audit committee of the board of directors of JD Group.

 

“JD Group Business” means the e-commerce business operated by JD Group and its Subsidiaries from time to time (together with any and all logical extensions of the e-commerce business of JD Group and its Subsidiaries).

 

“Law” means (a) any federal, state, territorial, foreign or local law, common law, statute, ordinance, rule, regulation, code, measure, notice, circular, opinion or Order of any Governmental Authority, including any rules promulgated by a stock exchange or regulatory body or (b) any applicable widely adopted industry standard rules and regulations (such as the Payment Card Industry Data Security Standard or PCIDSS).

 

“Liabilities” means any and all liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable.

 

“Liens” means any mortgage, deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement or rights of preemption of any kind of nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

 

“Liquidity Event” means the earliest to occur of:

 

(a)           a Qualified IPO;

 

(b)           a merger, amalgamation, arrangement, consolidation or scheme of arrangement with or into another Person,  or acquisition by any Person or related group of Persons of beneficial ownership of Equity Securities of JD Finance, or other reorganization or transaction, whether in a single transaction or in a series of transactions (whether related or unrelated), following which the Founder, JD Group and their controlled Affiliates do not continue to hold more than fifty percent (50%) of the

 

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combined voting power or economic interest of the Equity Securities of JD Finance or the surviving entity, as applicable;

 

(c)           an issuance or sale of the Securities of JD Finance to a Person or a group of Persons (other than the Founder (or his successor in the case of death or incapacity), JD Group and their controlled Affiliates, directly or indirectly), pursuant to one or more bona fide arms-length negotiated agreements, pursuant to which such Person or group of Persons acquires forty percent (40%) or more of the Securities of JD Finance, with such percentage determined on a fully-diluted basis, using the treasury stock method, with respect to either voting or economic rights, whether in a single transaction or in a series of transactions (whether related or unrelated);

 

(d)           a bona fide sale and exit from the JD Finance Business through a sale of all or substantially all of the assets of JD Finance (including, for the avoidance of doubt, shares or assets of JD Finance’s Subsidiaries), to  a Person or a group of Persons (other than the Founder (or his successor in the case of death or incapacity), JD Group and their controlled Affiliates, directly or indirectly), whether in a single transaction or in a series of transactions (whether related or unrelated), pursuant to one or more bona fide arms-length negotiated agreements; and

 

(e)           any liquidation, dissolution or winding up of JD Finance, whether voluntary or involuntary.

 

“Maximum Issuance Interest” means (x) prior to a Qualified IPO, forty percent (40%), (y) following a Qualified IPO, the product of forty percent (40%) multiplied by the ratio of outstanding Ownership Interests of JD Finance immediately prior to the Qualified IPO to the outstanding Ownership Interests of JD Finance immediately following the Qualified IPO, or (z) following any Third-Party Issuance or Non-Pro Rata Share Repurchase either prior to or subsequent to a Qualified IPO, the product of the percentage that would have been calculated as the Maximum Issuance Interest immediately prior to such Third-Party Issuance or Non-Pro Rata Share Repurchase, multiplied by the ratio of outstanding Ownership Interests of JD Finance immediately prior to the Third-Party Issuance or Non-Pro Rata Share Repurchase to the outstanding Ownership Interests of JD Finance immediately following the Third-Party Issuance or Non-Pro Rata Share Repurchase; provided, however, that at no time shall the Maximum Issuance Interest exceed forty percent (40%).

 

“MOFCOM” means the Ministry of Commerce of the PRC and any duly authorized provincial or local office of the Ministry of Commerce of the PRC.

 

“Non-Pro Rata Share Repurchase” means any acquisition or redemption by JD Finance of then outstanding Ownership Interests of JD Finance other than an acquisition or redemption by JD Finance of its Ownership Interests pro rata from all holders of such Ownership Interests.

 

“Order” means any judgment, order, writ, preliminary or permanent injunction, instruction or decree of any Governmental Authority or any arbitration award.

 

“Ownership Interest” of any Person in any entity organized under the laws of the PRC means, as of any time: (a) if such entity is in the form of a limited liability company, the quotient

 

7

 

of the amount of the registered capital of such entity directly or indirectly owned by such Person divided by the total amount of the registered capital of such entity at such time; (b) if such entity is in a form of a company limited by shares, the quotient of the amount of the total shares of such entity directly or indirectly owned by such Person divided by the total amount of the shares of such entity issued and outstanding at such time; or (c) if such entity is in any other form, the quotient of the amount of the capital investment of such entity directly or indirectly owned by such person divided by the total amount of the capital investment contributed by all the shareholders of such entity, or the quotient of the total capital investment amount of such entity otherwise agreed in writing by all the shareholders of such entity.

 

“PBOC” means the headquarters of the People’s Bank of China located in Beijing and any duly authorized provincial or local office of the People’s Bank of China.

 

“Person” means an individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization, a group, a Governmental Authority or any other type of legal entity.

 

“PRC” means the People’s Republic of China (for the purpose of this Agreement, not including Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan).

 

“PRC Person” means (a) an individual with PRC nationality pursuant to the Nationality Law of the PRC, (b) a company organized under the Laws of the PRC that (i) is not a WFOE, (ii) is not otherwise foreign owned or foreign invested under the Laws of the PRC, and (iii) is not controlled or (in whole or in part) Beneficially Owned by any WFOE, VIE Structure, foreign invested enterprise under the Laws of the PRC, individual without PRC nationality, or Person organized under the Laws of a territory other than the PRC, or (c) a PRC Governmental Authority.

 

“Proceeding” means any action, suit, claim, hearing, proceeding, arbitration, mediation, audit, inquiry or investigation (whether civil, criminal, administrative or otherwise) by any Person or Governmental Authority.

 

“Qualified IPO” means “合格上市” as defined under the JD Finance Reorganization and Subscription Framework Agreement.

 

“Recognized Stock Exchange” means any recognized stock exchange inside and outside China, including the New York Stock Exchange, NASDAQ, London Stock Exchange, Hong Kong Stock Exchange, Shenzhen Stock Exchange or Shanghai Stock Exchange, consented to by the board of directors of JD Finance.

 

“Related Party” means:

 

(a)           any Person who, individually or as part of a group, Beneficially Owns more than five percent (5%) of the Securities of such Person, determined on a fully-diluted basis, using the treasury stock method;

 

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(b)           any officer or director, or individual performing an equivalent function, of such Person or any Person named in clause (a);

 

(c)           any Family Member of any such Person or any Person named in clause (a) or (b); or

 

(d)           any other Person in which any Person named in clauses (a), (b) or (c) Beneficially Owns more than twenty percent (20%) of the Securities of such Person, determined on a fully-diluted basis, using the treasury stock method.

 

“Renminbi” or “RMB” means lawful money of the PRC.

 

“Representatives” means a Person’s Affiliates, directors, managers, officers, employees, agents, attorneys, consultants, advisors or other representatives.

 

“SAIC” means the State Administration for Industry and Commerce of the PRC and any duly authorized provincial or local office of the State Administration for Industry and Commerce of the PRC.

 

“Subsidiary” means, with respect to any Person, each other Person in which the first Person (a) Beneficially Owns, directly or indirectly, share capital or other equity interests representing more than fifty percent (50%) of the outstanding voting stock or other equity interests; (b) holds the rights to more than fifty percent (50%) of the economic interest of such other Person, including interests held through a VIE Structure or other contractual arrangements; or (c) has a relationship such that the financial statements of the other Person may be consolidated into the financial statements of the first Person under applicable accounting conventions.  For the avoidance of doubt, following the Closing, none of JD Finance or its Subsidiaries shall be deemed to be Subsidiaries of JD Group or any of its Subsidiaries.

 

“Suqian Limao Control Agreements” means a series of agreements by and among Suqian Yitong, Suqian Limao and the shareholders of Suqian Limao, pursuant to which Suqian Yitong has effective control over Suqian Limao, including an equity pledge agreement, powers of attorney, spousal consents, an exclusive technology consulting and service agreement, a business operations agreement and an exclusive purchase option agreement.

 

“Tax” or “Taxes” means any federal, state, county, national, provincial, local or foreign tax (including transfer taxes), charge, fee, levy, impost, duty or other assessment, including income, gross receipts, excise, employment, sales, use, transfer, recording, license, payroll, franchise, severance, documentary, stamp, occupation, windfall profits, environmental, highway use, commercial rent, customs duty, capital stock, paid-up capital, profits, withholding, social security, single business, unemployment, disability, real property, personal property, registration, ad valorem, value added, alternative or add-on minimum, estimated or other tax or governmental fee of any kind whatsoever, imposed or required to be withheld by any Governmental Authority, including any estimated payments relating thereto, any interest, penalties and additions imposed thereon or with respect thereto.

 

“Third-Party Issuance” means (i) any bona fide sale for cash by JD Finance of any of its Equity Securities to a third party (other than JD Group or any of its Subsidiaries or any

 

9

 

Subsidiary of JD Finance) in a new equity financing, or (ii) any issuance by JD Finance of any of its Equity Securities to Founder ESOP Partnership or other entity established by JD Finance to increase its pool of Equity Securities reserved for the purpose of its employee benefits plan.

 

“Transactions” means the transactions contemplated by the Transaction Documents.

 

“Transaction Documents” means this Agreement, the IPLA, the Escrow Agreements, the JD Finance Reorganization and Subscription Framework Agreement, the JD Finance Shareholders Resolutions, the Suqian Limao VIE Termination Agreement, and the Suqian Yitong Equity Transfer Agreement, and other agreements or documents required to executed and/or delivered by any party in connection with the consummation of the transactions by the foregoing agreements and documents.

 

“Transfer” means and includes any direct or indirect sale, assignment, Encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, including transfers to receivers, levying creditors, trustees or receivers in bankruptcy Proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of Law, or by forward or reverse merger.

 

“United States” means the United States of America.

 

“U.S. Dollars” and “US$” shall each mean lawful money of the United States.

 

“VIE Structure” means the investment structure in which a PRC-domiciled operating entity and its PRC shareholders enter into a number of Contracts with a non-PRC investor (or a foreign-invested enterprise incorporated in the PRC invested by the non-PRC investor) pursuant to which the non-PRC investor achieves control of the PRC-domiciled operating entity and also consolidates the financials of the PRC-domiciled entity with those of the non-PRC investor.

 

“WFOE” means a wholly foreign-owned enterprise formed under the Laws of the PRC.

 

Section 1.2            Cross-Reference of Other Definitions. Each capitalized term listed below is defined in the corresponding Section of this Agreement:

 

	
Term
    	
 
    	
Section
    
	
Additional Securities
    	
 
    	
Section 10.3(a)(i)
    
	
Additional Securities Purchase Price
    	
 
    	
Section 10.3(b)
    
	
Agreement
    	
 
    	
Preamble
    
	
Amount of Suqian Limao Debt
    	
 
    	
Section 2.1(c)
    
	
Amendment to Series A Capital Increase   Agreement
    	
 
    	
Recitals
    
	
Claimant
    	
 
    	
Section 13.9(b)
    
	
Closing
    	
 
    	
Section 3.1
    
	
Closing Transferred Equity
    	
 
    	
Section 8.8
    
	
Disclosure Schedules
    	
 
    	
Article VII
    
	
Escrow Agreements
    	
 
    	
Section 8.6
    
	
Founder
    	
 
    	
Preamble
    
	
Founder ESOP Partnership
    	
 
    	
Preamble
    
	
Founder Holdco
    	
 
    	
Preamble
    

 

10

 

	
Founder Holdco Disclosure Schedules
    	
 
    	
Article VII
    
	
Founder Holdcos
    	
 
    	
Preamble
    
	
Founder Holding Entity
    	
 
    	
Preamble
    
	
HKIAC
    	
 
    	
Section 13.9(a)
    
	
Indemnified Party
    	
 
    	
Section 12.5(a)
    
	
Indemnifying Party
    	
 
    	
Section 12.5(a)
    
	
Initial Liquidity Event Payment
    	
 
    	
Section 2.3(c)(ii)
    
	
IPLA
    	
 
    	
Recitals
    
	
Issuance Approvals
    	
 
    	
Section 2.2(a)
    
	
Issuance Event
    	
 
    	
Section 2.2(b)
    
	
JD Finance
    	
 
    	
Preamble
    
	
JD Finance Disclosure Schedules
    	
 
    	
Article V
    
	
JD Finance Equity Transferor
    	
 
    	
Section 10.5(a)
    
	
JD Finance Equityholder
    	
 
    	
Section 10.5(a)
    
	
JD Finance New Investors
    	
 
    	
Recitals
    
	
JD Finance Reorganization and Subscription Framework   Agreement
    	
 
    	
Recitals
    
	
JD Finance Shareholder Resolutions
    	
 
    	
Recitals
    
	
JD Finance Sub
    	
 
    	
Preamble
    
	
JD Finance Subject Equities
    	
 
    	
Section 10.5(b)(i)
    
	
JD Group
    	
 
    	
Preamble
    
	
JD Group Audit Committee
    	
 
    	
Section 10.8
    
	
JD Group Disclosure Schedules
    	
 
    	
Article IV
    
	
JD Group Parties
    	
 
    	
Preamble
    
	
JD HK Company
    	
 
    	
Preamble
    
	
JD HK Company Bank Accounts
    	
 
    	
Section 2.1(b)
    
	
Jointly Appointed Director
    	
 
    	
Section 10.1(a)(i)
    
	
Jointly Appointed Director Ownership Period
    	
 
    	
Section 10.1(a)(i)
    
	
Liquidity Event Payment
    	
 
    	
Section 2.3(a)
    
	
Liquidity Event Taxes
    	
 
    	
Section 2.3(e)
    
	
Losses
    	
 
    	
Section 12.1
    
	
Offer Notice
    	
 
    	
Section 10.5(b)(i)
    
	
Offer Price
    	
 
    	
Section 10.5(b)(i)
    
	
Offeree
    	
 
    	
Section 10.5(b)(i)
    
	
Parties
    	
 
    	
Preamble
    
	
Post-QIPO Issuance Event
    	
 
    	
Section 2.2(b)
    
	
PRC Closing Opinion
    	
 
    	
Section 9.1(c)
    
	
Preemptive Amount of Securities
    	
 
    	
Section 10.3(a)(iii)
    
	
Preemptive Rights
    	
 
    	
Section 10.3(a)(i)
    
	
Pre-QIPO Issuance Event
    	
 
    	
Section 2.2(a)
    
	
Proposed Transferee
    	
 
    	
Section 10.5(b)(i)
    
	
Regulatory Approvals
    	
 
    	
Section 4.3(a)
    
	
Request
    	
 
    	
Section 13.9(b)
    
	
Respondent
    	
 
    	
Section 13.9(b)
    
	
Series A Capital Increase Agreement
    	
 
    	
Recitals
    
	
Settlement of Suqian Limao Debt
    	
 
    	
Section 2.1(c)
    
	
Suqian Limao
    	
 
    	
Preamble
    

 

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Suqian Limao Disclosure Schedules
    	
 
    	
Article VI
    
	
Suqian Limao VIE Termination Agreement
    	
 
    	
Section 2.1(a)
    
	
Suqian Yitong
    	
 
    	
Preamble
    
	
Suqian Yitong Equity Transfer
    	
 
    	
Section 2.1(b)
    
	
Suqian Yitong Equity Transfer Agreement
    	
 
    	
Section 8.8
    
	
Suqian Yitong Equity Transfer Consideration
    	
 
    	
Section 2.1(b)
    
	
Suqian Yitong Equity Transfer Tax
    	
 
    	
Section 2.1(b)
    
	
Termination of Suqian Limao VIE
    	
 
    	
Section 2.1(a)
    
	
Third-Party Claim
    	
 
    	
Section 12.5(a)
    
	
Transaction Expenses
    	
 
    	
Section 2.4(c)(i)
    

 

Section 1.3            Construction. In this Agreement, unless the context otherwise requires:

 

(a)           references in this Agreement to “writing” or comparable expressions includes a reference to facsimile transmission or comparable means of communication (but excluding email communications);

 

(b)           words expressed in the singular number shall include the plural and vice versa, and words expressed in the masculine shall include the feminine and neutral genders and vice versa;

 

(c)           references to Articles, Sections, Exhibits, Schedules and Recitals are references to articles, sections, exhibits, schedules and recitals of this Agreement;

 

(d)           references to “day” or “days” are to calendar days;

 

(e)           references to this Agreement or any other agreement or document shall be construed as references to this Agreement or such other agreement or document, as the case may be, as the same may have been, or may from time to time be, amended, varied, novated or supplemented from time to time;

 

(f)            a reference to a subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions;

 

(g)           the table of contents to this Agreement and all section titles or captions contained in this Agreement or in any Schedule or Exhibit annexed hereto or referred to herein are for convenience only and shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement;

 

(h)           “include,” “includes” and “including” are deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import;

 

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

 

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(j)            references to a Person are also to its permitted successors and assigns and, in the case of an individual, to his or her heirs and estate, as applicable.

 

Section 1.4            Schedules, Annexes and Exhibits. The Schedules, Annexes and Exhibits to this Agreement are incorporated into and form an integral part of this Agreement. If an Annex or Exhibit is a form of agreement, such agreement, when executed and delivered by the parties thereto, shall constitute a document independent of this Agreement.

 

ARTICLE II

 

TRANSACTION

 

Section 2.1            Transactions.

 

(a)           Termination of Suqian Limao VIE. At the Closing, subject to the Closing conditions and other terms and conditions set forth in this Agreement, Suqian Yitong and Suqian Limao shall cause all parties to the Suqian Limao Control Agreements to execute and deliver a termination agreement (the “Suqian Limao VIE Termination Agreement”), pursuant to which the Suqian Limao Control Agreements will be terminated in their entirety (the “Termination of Suqian Limao VIE”).

 

(b)           Payment of Consideration for Suqian Yitong Equity Transfer. At the Closing, subject to the Closing conditions and other terms and conditions set forth in this Agreement, JD Finance Sub shall instruct each of the Escrow Agents in accordance with the relevant Escrow Agreement to release to JD HK Company (or another Person designated by JD HK Company) an aggregate amount equal to RMB12,134,941,558 (the “Suqian Yitong Equity Transfer Consideration”) minus the amount of Tax that is applicable to the Suqian Yitong Equity Transfer and that is payable by JD HK Company and required to be withheld by JD Finance Sub (the “Suqian Yitong Equity Transfer Tax”), by wire transfer of immediately available funds to one or more bank accounts of JD HK Company (or another Person designated by JD HK Company) designated by JD Group, information of which bank accounts shall have been provided to JD Finance Sub by JD Group at least five (5) Business Days prior to the Closing (the “JD HK Company Bank Accounts”).

 

(c)           Settlement of Suqian Limao Debt. At the Closing, subject to the Closing conditions and other terms and conditions set forth in this Agreement, Suqian Limao shall, and Founder Holding Entity shall cause Suqian Limao to, immediately pay to JD Group (or another Person designated by JD Group) RMB2,163,022,000 (the “Amount of Suqian Limao Debt”) by wire transfer of immediately available funds in Renminbi to a bank account designated by JD Group, to satisfy certain debt obligations that Suqian Limao previously owed to JD Group or the applicable Subsidiary of JD Group (such payment, the “Settlement of Suqian Limao Debt”).

 

Section 2.2            Issuance of Equity Securities of JD Finance.

 

(a)           Pre-QIPO Issuance.  At any time and from time to time following the Closing and before the consummation of any Qualified IPO, if JD Finance, in its sole discretion, and not pursuant to any obligation hereunder, has elected to apply for and has received the Governmental Approvals that are required for such Issuance under applicable Law (the “Issuance

 

13

 

Approvals”) and necessary internal approvals, and no Liquidity Event Payment shall be payable or have been paid pursuant to Section 2.3 (a “Pre-QIPO Issuance Event”), then JD Finance shall promptly (and, in any event, within two (2) Business Days) notify JD Group of its receipt of the Issuance Approvals and, within five (5) Business Days following such notice, JD Finance shall effect an Issuance in consideration of an amount in cash to be equal to the Income Share Buyout Amount.

 

(b)           Post-QIPO Issuance. If at any time and from time to time following the consummation of any Qualified IPO, the Liquidity Event Payment is not payable and has not been paid pursuant to Section 2.3, and all of the Issuance Approvals are obtained under applicable Law (a “Post-QIPO Issuance Event” and either of a Pre-QIPO Issuance Event and Post-QIPO Issuance Event, an “Issuance Event”), then JD Finance shall promptly (and, in any event, within two (2) Business Days) notify JD Group of its receipt of the Issuance Approvals and, as soon as possible but in no event later than the deadline stipulated by the applicable Issuance Approval, JD Finance shall effect an Issuance in consideration of an amount in cash to be equal to the Income Share Buyout Amount.

 

(c)           Subsequent Issuances.  For the avoidance of doubt, Sections 2.2(a) and (b) contemplate and shall apply to additional Issuances in the event that the Issuance Percentage is less than 100%.

 

(d)           Valid Issuance.  None of the JD Finance Equity to be issued in any Issuance will be subject to any outstanding option, warrant, call or similar right of any other Person to acquire the same, to any equityholders, voting or similar agreement other than this Agreement and the other Transaction Documents, or to any restriction on transfer thereof except for restrictions imposed by applicable Laws or by the express terms of this Agreement or the other Transaction Documents.  All of the JD Finance Equity to be issued in any Issuance will be fully paid in compliance with the requirements of applicable Laws.

 

(e)           Issuance Closing Deliveries of JD Finance. Upon the completion of any Issuance Event pursuant to this Section 2.2, JD Finance shall deliver to JD Group:

 

(i)            an investment certificate or share certificate, as applicable, given the corporate form of JD Finance, issued by JD Finance, certifying that JD Group is the holder of the Ownership Interest issued to JD Group in the Issuance Event;

 

(ii)           a copy of the shareholder registry of JD Finance certifying that JD Group is a shareholder of JD Finance holding the Ownership Interest transferred to JD Group in the Issuance;

 

(iii)          certified copies of the Issuance Approvals;

 

(iv)          if the Person that acquires Ownership Interests in JD Finance is not a PRC-domiciled entity, a counterpart to a shareholder’s agreement or a joint venture contract (as the case may be) of JD Finance incorporating the matters set forth in Article X hereof, duly executed by JD Finance;

 

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(v)           if JD Finance is a limited liability company at the time of the Issuance Event, consents of the shareholders of JD Finance waiving their preemptive rights with respect to the Issuance;

 

(vi)          a certified copy of the amended articles of association of JD Finance, incorporating the matters set forth in Sections 10.1 through 10.4 and 10.10;

 

(vii)         a PRC legal opinion to the effect that all approvals by Governmental Authorities of the PRC that are required in connection with, and for the consummation of, the Issuance have been obtained, which opinion shall be in form and substance to the satisfaction of JD Group; and

 

(viii)        counterparts to such other agreements as may be required or appropriate under applicable Laws of the PRC in order to effect the Issuance, in each case duly executed by JD Finance.

 

(f)            Issuance Closing Deliveries of JD Group.  Upon the completion of any Issuance Event pursuant to this Section 2.2, JD Group shall deliver to JD Finance:

 

(i)            if the Person that acquires Ownership Interests in JD Finance is not a PRC-domiciled entity, a counterpart to a shareholder’s agreement or a joint venture contract (as the case may be) of JD Finance incorporating the matters set forth in Article X hereof, duly executed by such Person; and

 

(ii)           counterparts to such other agreements as may be required or appropriate under applicable Laws of the PRC in order to effect the Issuance, in each case duly executed by JD Group or the appropriate Subsidiary of JD Group.

 

(g)           Certain Efforts.  If, following the date of this Agreement but prior to the initial Issuance, applicable Law permits foreign equity investment in the JD Finance Business, then JD Finance shall exercise reasonable best efforts to obtain the Issuance Approvals as promptly as reasonably practicable, and shall keep JD Group reasonably apprised of such efforts.

 

(h)           Payment by Transfer of IP. JD Group and JD Finance agree that JD Group has the right to elect to transfer certain Intellectual Property to JD Finance as a portion or all of the consideration for any Issuance upon an Issuance Event in lieu of cash payment contemplated under Section 2.2(a) or Section 2.2(b), and upon such election by JD Group, JD Group and JD Finance will discuss in good faith the Intellectual Property to be transferred to JD Finance and make necessary adjustment to the Income Share Buyout Amount and other related mechanism contemplated by this Agreement and under the IPLA.

 

Section 2.3            Liquidity Event Payment.

 

(a)

 

(i)            In connection with a Qualified IPO (a Liquidity Event described by clause (a) of the definition thereof), at the election of JD Group, JD Finance will use its reasonable best efforts (with JD Group’s reasonable cooperation) to obtain any required

 

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consents or approvals of Governmental Authorities, make any required filings or notifications, and cause any waiting periods to expire, in each case, as may be required under applicable Laws in connection with the payment of the Income Share (as defined in the IPLA) pursuant to the IPLA following the Qualified IPO.  If JD Group does not so elect, or if despite such efforts, the payment of the Income Share is not permitted following the Qualified IPO under applicable Laws, then upon the occurrence of a Qualified IPO, if Issuances have not then occurred such that the Issuance Percentage is 100%, JD Finance shall immediately become obligated, at the times and in the manner provided for herein, to pay to JD Group an amount (as adjusted herein, the “Liquidity Event Payment”) equal to the product of (x) the Maximum Issuance Interest applicable  immediately prior to the Qualified IPO multiplied by the equity value of JD Finance as determined immediately prior to the Qualified IPO, and (y) 100% minus the Issuance Percentage.

 

(ii)           Upon the occurrence of a Liquidity Event other than that described by clause (a) or (e) of the definition thereof, if Issuances have not then occurred such that the Issuance Percentage is 100%, at the election of JD Group, JD Group shall continue to receive the payment of the Income Share (as defined in the IPLA) pursuant to the IPLA following such Liquidity Event. If JD Group does not so elect, then upon the occurrence of such Liquidity Event, if Issuances have not then occurred such that the Issuance Percentage is 100%, JD Finance shall immediately become obligated, at the times and in the manner provided for herein, to pay to JD Group the Liquidity Event Payment equal to the product of (x) the Maximum Issuance Interest applicable immediately prior to the Liquidity Event multiplied by the equity value of JD Finance as determined immediately prior to the Liquidity Event, and (y) 100% minus the Issuance Percentage. Notwithstanding the foregoing sentences under this paragraph, upon the occurrence of a Liquidity Event described by clause (b) of the definition thereof and triggered pursuant to Section 10.2 of the JD Finance Reorganization and Subscription Framework Agreement, and if Issuances have not then occurred such that the Issuance Percentage is 100%, JD Finance shall immediately become obligated, at the times and in the manner provided for herein, to pay to JD Group the Liquidity Event Payment in the amount referenced in the immediately preceding sentence, and  JD Group agrees that only upon such occurrence, (a) JD Group shall participate in the distribution of the proceeds from such Liquidity Event with respect to the Liquidity Event Payment payable to it and the JD Finance Equity held by it at the time, only after the other shareholders of JD Finance (other than the Founder ESOP Partnership) have received their distribution in full pursuant to Section 10.2 of the JD Finance Reorganization and Subscription Framework Agreement, and (b) if there are any remaining assets after the other shareholders of JD Finance (other than the Founder ESOP Partnership) have received their distribution in full pursuant to Section 10.2 of the JD Finance Reorganization and Subscription Framework Agreement, such remaining assets shall be distributed to JD Group before the Founder ESOP Partnership until JD Group receives the full amount of Liquidity Event Payment, and (c) if there are any remaining assets after JD Group has received the full amount of Liquidity Event pursuant to the preceding sub-clause (b), such remaining assets shall be distributed to JD Group and the Founder ESOP Partnership based on the relative proportion of the JD Finance Equity held by JD Group (if any) and the Founder ESOP partnership.

 

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(iii)          Upon the occurrence of a Liquidity Event described by clause (e) of the definition thereof, if Issuances have not then occurred such that the Issuance Percentage is 100%, JD Finance shall immediately become obligated, at the times and in the manner provided for herein and consistent with applicable Law, to pay to JD Group the Liquidity Event Payment equal to the product of (x) the Maximum Issuance Interest applicable immediately prior to the Liquidity Event multiplied by the equity value of JD Finance as determined immediately prior to the Liquidity Event, and (y) 100% minus the Issuance Percentage, provided, however, upon the occurrence of a Liquidity Event triggered pursuant to Section 10.2 of the JD Finance Reorganization and Subscription Framework Agreement and only upon such occurrence, (a) JD Group agrees that JD Group shall participate in the distribution of JD Finance’s assets with respect to the Liquidity Event Payment payable to it and the JD Finance Equity held by it at the time, only after the other shareholders of JD Finance (other than the Founder ESOP Partnership) have received their distribution in full pursuant to Section 10.2 of the JD Finance Reorganization and Subscription Framework Agreement, and (b) if there are any remaining assets after the other shareholders of JD Finance (other than the Founder ESOP Partnership) have received their distribution in full pursuant to Section 10.2 of the JD Finance Reorganization and Subscription Framework Agreement, such remaining assets shall be distributed to JD Group before the Founder ESOP Partnership until JD Group receives the full amount of Liquidity Event Payment, and (c) if there are any remaining assets after JD Group has received the full amount of Liquidity Event pursuant to the preceding sub-clause (b), such remaining assets shall be distributed to JD Group and the Founder ESOP Partnership based on the relative proportion of the JD Finance Equity held by JD Group (if any) and the Founder ESOP partnership.

 

(iv)          For the avoidance of doubt, JD Finance shall not be required to pay the Liquidity Event Payment more than once.

 

(b)

 

(i)            In the event of a Liquidity Event the proceeds of which (net of all expenses incurred in connection with the Liquidity Event, including underwriting fees as applicable, provided that such expenses are customary and within a reasonable range (“Transaction Expenses”) and applicable taxes payable by JD Finance) are in excess of or equal to the Liquidity Event Payment amount, JD Finance will pay the Liquidity Event Payment to JD Group as soon as reasonably practicable and in any event within ninety (90) days following the consummation of such Liquidity Event; provided, that any portion of the Liquidity Event Payment arising due to any Contingent Consideration shall be paid by JD Finance to JD Group as soon as reasonably practicable following the payment of such Contingent Consideration and in any event within ninety (90) days of the payment of such Contingent Consideration.

 

(ii)           In the event of a Liquidity Event the proceeds of which (net of Transaction Expenses and applicable taxes payable by JD Finance) are less than the Liquidity Event Payment amount, JD Finance will pay all of the proceeds of the Liquidity Event (net of Transaction Expenses and applicable taxes payable by JD Finance) to JD Group (the “Initial Liquidity Event Payment”) as soon as reasonably practicable and in

 

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any event within ninety (90) days following the consummation of such Liquidity Event, with the remainder of the Liquidity Event Payment, after giving effect to the Initial Liquidity Event Payment to be paid in three (3) equal installments due twelve (12), eighteen (18) and twenty-four (24) months after the date of such Liquidity Event; provided, that any portion of the Initial Liquidity Event Payment and the remainder of the Liquidity Event Payment arising in each case due to any Contingent Consideration shall be paid by JD Finance to JD Group as soon as reasonably practicable following the payment of such Contingent Consideration and in any event within ninety (90) days of the payment of such Contingent Consideration.

 

(iii)          Following a Liquidity Event, interest shall (A) accrue daily at an annual rate equal to the Interest Rate on the aggregate unpaid amount of the Liquidity Event Payment, (B) compound monthly (provided, that the monthly rate will be calculated so that the effective annual rate remains the rate set forth in clause (A)), (C) be paid by JD Finance in arrears on each date on which payment is made, and (D) be computed on the basis of a three hundred sixty (360)-day year comprised of twelve (12) thirty (30)-day months.

 

(c)           All payments to be made to JD Group pursuant to this Section 2.3, shall be made (x) to JD Group or, if permitted by Law, one or more of JD Group’s designated Subsidiaries, at JD Group’s direction, in U.S. Dollars, or (y) as otherwise mutually agreed upon in writing by JD Group and JD Finance.

 

(d)           If the total Taxes required by any Laws to be deducted, withheld, paid, or incurred by any Person, in connection with any payment to be made to JD Group or any of its Subsidiaries pursuant to this Section 2.3 (“Liquidity Event Taxes”) exceed the Taxes under PRC Law that would have been imposed if such payment had been paid by JD Finance directly to JD Group and subject to Tax at the then-applicable withholding, income or similar Tax rate on capital gains with respect to sales of equity in PRC companies by foreign investors, then the payment shall be increased so that JD Group receives (and is entitled to retain), after deduction, withholding or payment for or on account of such Liquidity Event Taxes as the case may be (including deduction, withholding or payment applicable to additional sums payable under this sentence), the full amount of the payment that would have been received if such payment had been paid by JD Finance directly to JD Group and subject to Tax under PRC Law at the then-applicable withholding, income, or similar Tax rate on capital gains with respect to sales of equity in PRC companies by foreign investors.

 

Section 2.4            Timing and Method of Payments.

 

(a)           All payments to be made by a payor Party to a payee Party pursuant to Article II, Section 10.3 or the IPLA may be made by wire transfer of immediately available funds to the account specified by the payee at least three (3) Business Days prior to such payment (which account, once specified, will be used for all future payments to such payee Party unless notice of a new account is given by the payee at least three (3) Business Days prior to any payment to be made to such new account), and/or may be set off against any other payment then due and payable by such payee Party to such payor Party pursuant to Article II, Section 10.3 or the IPLA, to the extent permitted by applicable Laws.

 

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ARTICLE III

 

CLOSING

 

Section 3.1            Closing. The closing of the Transactions (the “Closing”) shall take place at 10:00 a.m. (New York time) on the fifth (5th) Business Day following satisfaction or waiver of the conditions set forth in Article IX (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time). The Closing shall be held at the offices of Skadden, Arps, Slate, Meagher & Flom located at 42/F Edinburgh Tower, The Landmark, 15 Queen’s Road Central, Hong Kong.  Notwithstanding the foregoing, the Closing may take place at such other date, time or place as the Parties may agree to in writing.

 

Section 3.2            Closing Deliverables.

 

(a)           JD Group Deliverables. At the Closing, JD Group shall deliver, or cause to be delivered, to JD Finance:

 

(i)            counterparts to the Suqian Limao VIE Termination Agreement with respect to the Termination of Suqian Limao VIE, duly executed by Suqian Yitong; and

 

(ii)           counterparts to such other agreements as may be required or appropriate under applicable Laws of the PRC in order to effect the Transactions, in each case duly executed by JD Group or the applicable Subsidiary of JD Group.

 

(b)           Suqian Limao Deliverables.  At the Closing, Suqian Limao shall deliver, or cause to be delivered, to JD Group:

 

(i)            the Amount of Suqian Limao Debt by wire transfer of immediately available funds pursuant to Section 2.1(c);

 

(ii)           counterparts to the Suqian Limao VIE Termination Agreement with respect to the Termination of Suqian Limao VIE, duly executed by Suqian Limao, and each of the shareholders of Suqian Limao immediately prior to the Closing; and

 

(iii)          counterparts to and such other agreements as may be required or appropriate under applicable Laws of the PRC in order to effect the Transactions, in each case duly executed by Suqian Limao.

 

(c)           JD Finance Deliverables. At the Closing, JD Finance shall deliver, or cause to be delivered, to JD Group:

 

(i)            the PRC Closing Opinion;

 

(ii)           counterparts to such other agreements as may be required or appropriate under applicable Laws of the PRC in order to effect the Transactions, in each case duly executed by JD Finance or the applicable Subsidiary of JD Finance; and

 

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(iii)          any and all company chop(s) and other things of JD Finance Sub, the specimen of which have been filed with each of the Escrow Agents on record and which are required to instruct such Escrow Agent to release any fund from the relevant Escrow Account in accordance with relevant Escrow Agreement and/or other requirements of such Escrow Agent.

 

Section 3.3            Withholding Rights.  Except as may be otherwise expressly provided in the Transaction Documents, each Party shall be entitled to deduct and withhold from any payments to be made pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under applicable Laws relating to taxes, customs, tariffs, imposts, levies, duties, fees or other like assessments or charges of any kind imposed by a Governmental Authority (or interest, penalties and additions imposed with respect thereto).  Amounts so withheld and paid over to the appropriate taxing Governmental Authority shall be treated for all purposes of this Agreement as having been paid to the applicable recipient of the payment in respect of which such deduction or withholding was made.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF JD GROUP

 

Except as set forth in the disclosure schedules of JD Group attached hereto (the “JD Group Disclosure Schedules”), JD Group hereby, on behalf of JD Group Parties, makes the representations and warranties set forth in this Article IV to JD Finance.

 

Section 4.1            Organization and Qualification; Subsidiaries.  Each of the JD Group Parties (a) is a corporation or legal entity duly organized or formed and validly existing under the Laws of its jurisdiction of organization or formation, (b) has the requisite corporate or similar entity power and authority to conduct and carry on its business as it is now being conducted and to own, lease and operate its properties and assets, and (c) is duly qualified to do business in each jurisdiction where the character of the property owned, leased or operated by it or the nature of its activities makes such qualification necessary.

 

Section 4.2            Authority; Binding Effect.  Each of the JD Group Parties has all requisite corporate or entity power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is party and to perform its obligations hereunder and thereunder.  The execution and delivery by each of the JD Group Parties of this Agreement and the other Transaction Documents to which it is party, and the performance of its obligations hereunder and thereunder, have been duly authorized by all requisite corporate, entity or other action.  This Agreement has been duly and validly executed and delivered by each of the JD Group Parties and, assuming the due authorization, execution and delivery by each of the other Parties hereto, this Agreement constitutes a legal, valid and binding obligation of each of the JD Group Parties, enforceable against each of the JD Group Parties in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles).  The Transaction Documents, when executed and delivered by each of the JD Group Parties that is party to the Transaction

 

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Documents, assuming due execution and delivery hereof by each of the other parties hereto and thereto, shall constitute valid and binding obligations of each of the JD Group Parties party to the Transaction Documents and are enforceable against each of the JD Group Parties party to the Transaction Documents in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency or reorganization Laws.

 

Section 4.3            No Conflicts; Required Filings and Consents.

 

(a)           The execution and delivery by each of the JD Group Parties of this Agreement does not, and the other Transaction Documents and any other instrument required hereby or thereby to be executed and delivered at the Closing will not, and the performance by any of the JD Group Parties of its obligations under this Agreement and the other Transaction Documents will not, require any consent, approval, Order, license, authorization, registration, declaration or permit of, or filing with or notification to, any Governmental Authority, except (i) for compliance with applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (including the furnishing of a Form 6-K), (ii) for compliance with the rules and regulations of the NASDAQ Global Select Market or any other relevant securities exchange; (iii) such approvals, filings and notifications as may be required under applicable Law with respect to Suqian Yitong Equity Transfer, including such approvals, filings and notifications as may be required under applicable regulations of MOFCOM and the SAIC; (iv) the Tax filings and procedures as may be required to be made with the appropriate PRC taxing Governmental Authority in connection with the Suqian Yitong Equity Transfer Tax and any transfer of Equity Securities of JD Finance; (v) such approvals, filings and notifications as may be required under applicable regulations of the SAIC with respect to any change in shareholders, registered capital or equity pledge of PRC domestic companies; (vi) such filings and notifications as may be required under applicable regulations by the State Administration on Foreign Exchange with respect to foreign currency payment obligations or obligations to pay Renminbi offshore; and (vii) such filings and notifications as may be required under applicable Intellectual Property-related Laws and regulations and the requirements thereunder with respect to registration, filing and approval by the PRC State Intellectual Property Office, the China Trademark Office and the National Copyright Administration and any other Laws (collectively, to the extent required, the “Regulatory Approvals”).

 

(b)           The execution and delivery by each of the JD Group Parties of this Agreement does not, and the other Transaction Documents and any other instrument required hereby or thereby to be executed and delivered by each of the JD Group Parties at the Closing will not, and the performance by each of the JD Group Parties of its obligations under this Agreement and the other Transaction Documents will not, (i) conflict with or result in any breach of any provision of its articles of incorporation or by-laws (or any similar organizational documents), (ii) violate, conflict with, require consent pursuant to, result in a breach of, constitute a default (with or without due notice or lapse of time or both) under, or give rise to a right of, or result in, the termination, cancellation, modification, acceleration or the loss of a benefit under, or result in the creation of any Encumbrance upon the Closing Transferred Equity or any of the terms, conditions or provisions of any Contract to which any of the Parties is a party or by which any of the Parties is bound or to which the Closing Transferred Equity is

 

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subject, or (iii) violate any Order or Law applicable to any of the JD Group Parties or any of their properties or assets.

 

Section 4.4            Exclusivity of Representations. The representations and warranties made by JD Group in this Article IV are the exclusive representations and warranties made by JD Group with respect to this Agreement and the transactions contemplated hereby. Notwithstanding anything to the contrary in this Agreement, JD Group is not, directly or indirectly, making any representations or warranties regarding any financial information, financial projections or other forward-looking statements with respect to JD Group or the Closing Transferred Equity.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF JD FINANCE

 

Except as set forth in the disclosure schedules of JD Finance attached hereto (the “JD Finance Disclosure Schedules”), JD Finance hereby makes the representations and warranties set forth in this Article V to JD Group.

 

Section 5.1            Organization and Qualification. JD Finance (a) is a limited liability company duly organized and is validly existing under the Laws of the PRC, (b) has all necessary entity power and authority to own, lease and operate its properties and assets and to conduct and carry on its business as currently conducted and (c) is duly qualified to do business in each jurisdiction where the character of the property owned, leased or operated by it or the nature of its activities makes such qualification necessary.

 

Section 5.2            Authority; Binding Effect.  JD Finance has all requisite power and authority to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations hereunder and thereunder. The execution and delivery by JD Finance of this Agreement and the other Transaction Documents, and the performance by JD Finance of its respective obligations hereunder and thereunder, have been duly authorized by all requisite action on the part of JD Finance. JD Finance has duly executed this Agreement and each of the other Transaction Documents to which it is a party. This Agreement has been duly and validly executed and delivered by JD Finance and, assuming the due authorization, execution and delivery by each of the other Parties hereto, this Agreement constitutes a legal, valid and binding obligation of JD Finance, enforceable against JD Finance in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). The Transaction Documents, when executed and delivered by JD Finance, assuming due execution and delivery hereof by each of the other parties hereto and thereto, shall constitute valid and binding obligations of JD Finance enforceable against JD Finance in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency or reorganization Laws.

 

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Section 5.3            No Conflicts; Required Filings and Consents.

 

(a)           The execution and delivery by JD Finance of this Agreement does not, and the other Transaction Documents and any other instrument required hereby or thereby to be executed and delivered at the Closing will not, and the performance by JD Finance of its obligations under this Agreement and the other Transaction Documents will not, require any consent, approval, Order, license, authorization, registration, declaration or permit of, or filing with or notification to, any Governmental Authority, except the Regulatory Approvals.

 

(b)           The execution and delivery by JD Finance of this Agreement does not, and the other Transaction Documents and any other instrument required hereby or thereby to be executed and delivered by JD Finance at the Closing will not, and the performance by JD Finance of its obligations under this Agreement and the other Transaction Documents will not, (i) conflict with or result in any breach of any provision of the organizational or charter documents of JD Finance, (ii) violate, conflict with, require consent pursuant to, result in a breach of, constitute a default (with or without due notice or lapse of time or both) under, or give rise to a right of, or result in, the termination, cancellation, modification, acceleration or the loss of a benefit under, or result in the creation of any Encumbrance upon JD Finance’s Equity Securities or any of the terms, conditions or provisions of any Contract to which JD Finance is a party or by which JD Finance is bound or to which any of JD Finance’s Equity Securities are subject or (iii) violate any Order or Law applicable to JD Finance or any of its properties or assets.

 

Section 5.4            Capitalization. Schedule 5.4 of the JD Finance Disclosure Schedules sets forth a true and complete schedule of the outstanding Equity Securities of JD Finance as of the date hereof, including the total amount of registered capital or the number of shares or other Equity Securities, as applicable, and the names of the owners of record of such Equity Securities.  JD Finance has no issued and outstanding Equity Securities other than as shown on such Schedule, and there are no Contracts, commitments, understandings or arrangements by which JD Finance is bound to issue additional JD Finance Equity or other Equity Securities, and the JD Finance Equity is not subject to any outstanding option, warrant, call or similar right of any other Person to acquire the same.  No direct or indirect Ownership Interest in JD Finance is currently owned by any Person other than a PRC Person.

 

Section 5.5            Exclusivity of Representations. The representations and warranties made by JD Finance in this Article V are the exclusive representations and warranties made by JD Finance with respect to this Agreement and the transactions contemplated hereby. Notwithstanding anything to the contrary in this Agreement, JD Finance is not, directly or indirectly, making any representations or warranties regarding any financial information, financial projections or other forward-looking statements with respect to JD Finance.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES OF SUQIAN LIMAO

 

Except as set forth in the disclosure schedules of Suqian Limao attached hereto (the “Suqian Limao Disclosure Schedules”), Suqian Limao hereby makes the representations and warranties set forth in this Article VI to JD Group:

 

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Section 6.1            Organization and Qualification.  Suqian Limao (a) is a limited liability company duly organized and is validly existing under the Laws of the PRC, (b) has all necessary entity power and authority to own, lease and operate its properties and assets and to conduct and carry on its business as currently conducted and (c) is duly qualified to do business in each jurisdiction where the character of the property owned, leased or operated by it or the nature of its activities makes such qualification necessary.

 

Section 6.2            Authority; Binding Effect.  Suqian Limao has all requisite power and authority to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations hereunder and thereunder. The execution and delivery by Suqian Limao of this Agreement and the other Transaction Documents, and the performance by Suqian Limao of its respective obligations hereunder and thereunder, have been duly authorized by all requisite action on the part of Suqian Limao.  Suqian Limao has duly executed this Agreement and each of the other Transaction Documents to which it is a party.  This Agreement has been duly and validly executed and delivered by Suqian Limao and, assuming the due authorization, execution and delivery by each of the other Parties hereto, this Agreement constitutes a legal, valid and binding obligation of Suqian Limao, enforceable against Suqian Limao in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). The Transaction Documents, when executed and delivered by Suqian Limao, assuming due execution and delivery hereof by each of the other parties hereto and thereto, shall constitute valid and binding obligations of Suqian Limao enforceable against Suqian Limao in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency or reorganization Laws.

 

Section 6.3            No Conflicts; Required Filings and Consents.

 

(a)           The execution and delivery by Suqian Limao of this Agreement does not, and the other Transaction Documents and any other instrument required hereby or thereby to be executed and delivered at the Closing will not, and the performance by Suqian Limao of its obligations under this Agreement and the other Transaction Documents will not, require any consent, approval, Order, license, authorization, registration, declaration or permit of, or filing with or notification to, any Governmental Authority, except the Regulatory Approvals.

 

(b)           The execution and delivery by Suqian Limao of this Agreement does not, and the other Transaction Documents and any other instrument required hereby or thereby to be executed and delivered by Suqian Limao at the Closing will not, and the performance by Suqian Limao of its obligations under this Agreement and the other Transaction Documents will not, (i) conflict with or result in any breach of any provision of the organizational or charter documents of Suqian Limao, (ii) violate, conflict with, require consent pursuant to, result in a breach of, constitute a default (with or without due notice or lapse of time or both) under, or give rise to a right of, or result in, the termination, cancellation, modification, acceleration or the loss of a benefit under, or result in the creation of any Encumbrance upon Suqian Limao’s Equity Securities or any of the terms, conditions or provisions of any Contract to which JD Finance is a party or by which Suqian Limao is bound or to which any of Suqian Limao’s Equity Securities

 

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are subject or (iii) violate any Order or Law applicable to Suqian Limao or any of its properties or assets.

 

Section 6.4            Exclusivity of Representations. The representations and warranties made by Suqian Limao in this Article VI are the exclusive representations and warranties made by Suqian Limao with respect to this Agreement and the transactions contemplated hereby. Notwithstanding anything to the contrary in this Agreement, Suqian Limao is not, directly or indirectly, making any representations or warranties regarding any financial information, financial projections or other forward-looking statements with respect to Suqian Limao.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES OF FOUNDER HOLDCOS

 

Except as set forth in the disclosure schedules of Founder Holdcos attached hereto (the “Founder Holdco Disclosure Schedules,” and together with the JD Group Disclosure Schedules, the JD Finance Disclosure Schedules and the Suqian Limao Disclosure Schedules, the “Disclosure Schedules”), each Founder Holdco, severally and not jointly, hereby makes the representations and warranties set forth in this Article VII to JD Group.

 

Section 7.1            Organization and Qualification.  Such Founder Holdco (a) is a limited partnership duly organized and is validly existing under the Laws of the PRC, (b) has all necessary power and authority to own, lease and operate its properties and assets and to conduct and carry on its business as currently conducted and (c) is duly qualified to do business in each jurisdiction where the character of the property owned, leased or operated by it or the nature of its activities makes such qualification necessary.

 

Section 7.2            Authority; Binding Effect.  Such Founder Holdco has all requisite power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder.  The execution and delivery by such Founder Holdco of this Agreement and the other Transaction Documents to which it is a party, and the performance by such Founder Holdco of its obligations hereunder and thereunder, have been duly authorized by all requisite action on the part of such Founder Holdco.  Such Founder Holdco has duly executed this Agreement and each of the other Transaction Documents to which it is a party.  This Agreement has been duly and validly executed and delivered by such Founder Holdco and, assuming the due authorization, execution and delivery by each of the other Parties hereto, this Agreement constitutes a legal, valid and binding obligation of such Founder Holdco, enforceable against such Founder Holdco in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles).  The Transaction Documents to which such Founder Holdco is a party, when executed and delivered by such Founder Holdco, assuming due execution and delivery hereof by each of the other parties hereto and thereto, shall constitute valid and binding obligations of such Founder Holdco enforceable against such Founder Holdco in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency or reorganization Laws.

 

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Section 7.3            No Conflicts; Required Filings and Consents.

 

(a)           The execution and delivery by such Founder Holdco of this Agreement does not, and the other Transaction Documents to which it is a party and any other instrument required hereby or thereby to be executed and delivered at the Closing will not, and the performance by such Founder Holdco of its obligations under this Agreement and the other Transaction Documents to which it is a party will not, require any consent, approval, Order, license, authorization, registration, declaration or permit of, or filing with or notification to, any Governmental Authority, except the Regulatory Approvals.

 

(b)           The execution and delivery by such Founder Holdco of this Agreement does not, and the other Transaction Documents to which it is a party and any other instrument required hereby or thereby to be executed and delivered by such Founder Holdco at the Closing will not, and the performance by such Founder Holdco of its obligations under this Agreement and the other Transaction Documents to which it is a party will not, (i) conflict with or result in any breach of any provision of the organizational or charter documents of such Founder Holdco, (ii) violate, conflict with, require consent pursuant to, result in a breach of, constitute a default (with or without due notice or lapse of time or both) under, or give rise to a right of, or result in, the termination, cancellation, modification, acceleration or the loss of a benefit under, any of the terms, conditions or provisions of any Contract to which such Founder Holdco is a party or by which Founder Holdco is bound or (iii) violate any Order or Law applicable to such Founder Holdco or any of its properties or assets.

 

Section 7.4            Exclusivity of Representations. The representations and warranties made by each Founder Holdco in this Article VII are the exclusive representations and warranties made by such Founder Holdco with respect to this Agreement and the transactions contemplated hereby.

 

ARTICLE VIII

 

COVENANTS

 

Section 8.1            Confidentiality. Each Party, and each Party’s Representatives who receive Confidential Information as permitted hereunder, shall maintain the confidentiality of Confidential Information in accordance with the procedures adopted by such Party in good faith to protect confidential information of third parties generally delivered to such Party; provided, that such Party may deliver or disclose Confidential Information to:

 

(a)           such Party’s Representatives, and Persons related thereto who are informed of the confidentiality obligations of this Section 8.1; provided, that such Party shall be responsible for any violation of such Party’s applicable procedures made by any such Person;

 

(b)           any Governmental Authority having jurisdiction over such Party to the extent required by applicable Laws;

 

(c)           any other Person to which such delivery or disclosure may be required (i) to effect compliance with any Law applicable to such Party, or (ii) in response to any subpoena or other legal process; or

 

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(d)           as permitted under Section 8.4;

 

provided, that, in the cases of clauses (b) and (c) of this Section 8.1, the disclosing Party shall provide each other Party with prompt written notice thereof so that the appropriate Party may seek (with the cooperation and reasonable efforts of the disclosing party) a protective Order, confidential treatment or other appropriate remedy, and in any event shall furnish only that portion of the information which is reasonably necessary for the purpose at hand and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such information to the extent reasonably requested by any other Party.

 

Section 8.2            Appropriate Action; Consents; Filings.

 

(a)           Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties hereto shall use its reasonable best efforts to take, or cause to be taken, all actions, and use its reasonable best efforts to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things consistent with applicable Laws and reasonably necessary, proper or advisable to consummate, as promptly as practicable, the Transactions, and none of the Parties shall take any action or omit to take any action that would or would reasonably be expected to prevent, impair, make illegal or materially delay the Closing unless such action or omission is required by applicable Laws.  Without limiting the foregoing, each of the Parties agrees to use its respective reasonable best efforts to:

 

(i)            cause the Closing conditions set forth in Article IX to be satisfied as promptly as practicable,

 

(ii)           obtain all necessary Regulatory Approvals,

 

(iii)          obtain all necessary licenses, consents, approvals, registrations, qualifications, Orders, waivers, finding of suitability and authorizations of, actions or nonactions by, any Governmental Authority or any third party necessary in connection with the consummation of the transactions contemplated by this Agreement,

 

(iv)          make all necessary applications, registrations, declarations and filings with, and notices to, any Governmental Authorities and take all reasonable steps as may be necessary to obtain all approvals from, or to avoid any suit, action, Proceeding or investigation by, any Governmental Authority or other Persons necessary in connection with the consummation of the transactions contemplated by this Agreement,

 

(v)           to the extent named as a defendant, defend any lawsuits or other legal Proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated by this Agreement,

 

(vi)          in the case of JD Group, JD Finance, Suqian Limao and their respective Subsidiaries only, have vacated, lifted, reversed or overturned any Order, decree, ruling, judgment, injunction or other action (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, conditions, makes illegal or otherwise restricts or prohibits the consummation of the transactions contemplated by this Agreement; provided, that in no event shall JD Group, JD Finance, Suqian Limao or any

 

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of their Subsidiaries be required to pay or to commit to, prior to the Closing, any fee, penalty or other consideration to obtain any consent, approval, Order, waiver or authorization in connection with the transactions contemplated by this Agreement under any Contract other than filing fees required and de minimis amounts and customary filing fees payable to Governmental Authorities; and

 

(vii)         execute and deliver any additional instruments and/or separate agreements necessary to consummate the Transactions to be performed or consummated by such Party in accordance with the terms of this Agreement and to carry out fully the purposes of this Agreement.

 

(b)           Subject to applicable Laws, each of the Parties hereto shall furnish to each other such necessary information and reasonable assistance as the other may request in connection with the preparation of any required filings or submissions with any Governmental Authority and will reasonably cooperate in responding to any inquiry from a Governmental Authority, including promptly informing the other party of such inquiry, consulting in advance before making any presentations or submissions to a Governmental Authority, and supplying each other with copies of all material correspondence, filings or communications with any Governmental Authority with respect to this Agreement (other than private or personal information pertaining to any individual applicants which may remain confidential).  No Party shall have any material communication or meeting (telephonic or in-person) regarding the Transactions with a Governmental Authority without giving JD Finance and JD Group a reasonable opportunity to attend in person or by phone (unless the Governmental Authority prohibits such participation or attendance in the communication or meeting).

 

Section 8.3            Notification of Certain Matters.  JD Group shall give prompt notice to JD Finance and Suqian Limao, and each of JD Finance and Suqian Limao shall give prompt notice to JD Group, upon receiving knowledge of (a) any notice, complaint, investigation or hearing (or communications indicating that the same may be contemplated) from (i) any Governmental Authority in connection with this Agreement or the Transactions or the other actions contemplated hereby, or (ii) any other Person, in each case alleging that the consent of such Person is or may be required in connection with the Transactions or the other actions contemplated hereby and (b) any actions, suits, claims, investigations or Proceedings commenced or, to such Party’s knowledge, threatened in writing against, relating to or involving or otherwise affecting such Party or any of its Subsidiaries which relate to this Agreement, the Transactions or the other actions contemplated hereby.

 

Section 8.4            Public Announcement and Filings.  The initial press release(s) announcing the execution of this Agreement shall be in a form mutually agreed upon by JD Group and JD Finance.  JD Group shall require consent by JD Finance, and each of JD Finance and Suqian Limao shall require consent by JD Group, before issuing, and, to the extent practicable, give each other a reasonable opportunity to review and comment on, any other press release or other public announcement with respect to this Agreement, the Transactions or the other actions contemplated hereby.  None of JD Group, JD Finance and Suqian Limao shall issue any such press release or make any such public announcement prior to obtaining such consent required under the immediately preceding sentence, except as may be required by applicable Laws, court

 

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process or the rules and regulations of any national securities exchange or national securities quotation system.

 

Section 8.5            Conduct of Business Pending the Closing.  Until the earlier of the Closing and the date, if any, on which this Agreement is terminated pursuant to Section 11.1, JD Group shall and shall cause its Subsidiaries to operate Suqian Yitong and Suqian Limao in the ordinary course of business consistent with past practice.

 

Section 8.6            Escrow Agreements. As soon as possible after the date of this Agreement and in any event prior to the Closing, JD Finance Sub shall, and JD Finance shall cause JD Finance Sub to, enter into an escrow agreement with JD HK Company (or another Person designated by JD HK Company) and each of the Escrow Agents, with terms and conditions mutually agreed to by the parties thereto (the “Escrow Agreements”). The Parties agree that JD Finance shall be entitled to receive any and all interest that shall have accrued on the amount deposited in each of the Escrow Accounts prior to the date of Closing, and JD Group shall be entitled to receive any and all interest that shall have accrued on the amount deposited in each of the Escrow Accounts on and from the date of Closing to the date on which the deposited amount is released to a JD HK Company Bank Account pursuant to Section 10.11(b).

 

Section 8.7            Capital Injection into JD Finance Sub. As soon as possible after JD Finance receives payments by the JD Finance New Investors in an aggregate amount of the Suqian Yitong Equity Transfer Consideration in immediately available funds pursuant to the closing under the JD Finance Reorganization and Subscription Framework Agreement, JD Finance shall inject such amount into JD Finance Sub as the registered capital.

 

Section 8.8            Suqian Yitong Equity Transfer and Payment into Escrow Accounts. (i) As soon as possible after the completion of actions set forth under Section 8.6 and Section 8.7 above, JD Finance Sub shall pay an aggregate amount equal to the difference between the Suqian Yitong Equity Transfer Consideration and the Suqian Yitong Equity Transfer Tax in immediately available funds to the Escrow Accounts, with the allocation between the Escrow Accounts and the specific amount to be deposited to each of the Escrow Accounts determined by JD Group in its sole direction, and (ii) concurrent with the completion of the action set forth in the foregoing sub-clause (i), (a) JD HK Company and JD Finance Sub shall enter into an equity transfer agreement, substantially in the form attached as Exhibit A hereto (the “Suqian Yitong Equity Transfer Agreement”), pursuant to which JD HK Company shall convey, assign and transfer registered capital of Suqian Yitong, constituting a one hundred percent (100%) Ownership Interest in Suqian Yitong (the “Closing Transferred Equity”), free and clear of any Encumbrances whatsoever, to JD Finance Sub, and JD Finance Sub shall acquire and accept such Closing Transferred Equity (such transfer, the “Suqian Yitong Equity Transfer”), (b) JD HK Company, Suqian Yitong and JD Finance Sub shall prepare and execute documents that are required to effect such approvals, filings and notifications as may be required under applicable Law with respect to the Suqian Yitong Equity Transfer.

 

Section 8.9            Regulatory Approvals. As soon as possible after the completion of actions set forth under Section 8.8, (i) each of the Parties shall cooperate and use their respective reasonable best efforts to (i) obtain all necessary Regulatory Approvals required for Suqian Yitong Equity Transfer, including such approvals, filings and notifications as may be required

 

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under applicable regulations of MOFCOM and the SAIC, and (ii) JD Finance Sub shall complete all necessary Tax filings and procedures with the appropriate PRC taxing Governmental Authority in connection with the Suqian Yitong Equity Transfer Tax, and shall use funds in its accounts other than the Escrow Accounts to pay the Suqian Yitong Equity Transfer Tax to the appropriate PRC taxing Governmental Authority, and shall provide JD HK Company with a tax payment receipt issued by the appropriate PRC taxing Governmental Authority evidencing that any and all Suqian Yitong Equity Transfer Tax required to be paid has been paid in full.

 

ARTICLE IX

 

CONDITIONS TO CLOSING

 

Section 9.1            General Conditions. The respective obligations of the Parties to consummate the Transactions shall be subject to the fulfillment, at or prior to the Closing, of the following conditions, which may, to the extent permitted by applicable Laws, be waived in a writing signed by all Parties, in the sole discretion of each Party:

 

(a)           No Injunction or Prohibition. No Governmental Authority shall have, after the date hereof, enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, makes illegal or otherwise prohibits the consummation of the Transactions.

 

(b)           Regulatory Approvals. All such approvals, filings and notifications as may be required under applicable Law with respect to Suqian Yitong Equity Transfer, including such approvals, filings and notifications as may be required under applicable regulations of MOFCOM and the SAIC, shall have been completed or obtained.

 

(c)           Legal Opinion.  JD Finance and JD Group shall have received from Jingtian & Gongcheng an enforceability opinion substantially in the form attached as Exhibit B (the “PRC Closing Opinion”); provided that the PRC Closing Opinion may differ from the form attached as Exhibit B solely to the extent that such differences (x) result from changes in Law between the date of this Agreement and the Closing or (y) have been approved in writing by both JD Finance and JD Group.

 

Section 9.2            Conditions to Obligations of the JD Group Parties.  The obligations of the JD Group Parties to consummate the Transactions shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which, to the extent permitted by applicable Laws, may be waived in writing by JD Group (with the prior written approval of the JD Group Audit Committee) in its sole discretion:

 

(a)           Representations and Warranties. The representations and warranties of JD Finance, Suqian Limao and Founder Holdcos contained in this Agreement shall be true and correct as of the date hereof and as of the date of the Closing as if made on such date (unless made as of a specified date, in which case, as of such date);

 

(b)           Pre-Closing Covenants.  Each of the Parties other than the JD Group Parties shall have performed and complied with, in all material respects, all obligations and

 

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agreements required by this Agreement to be performed or complied with by it prior to or at the Closing;

 

(c)           Transaction Documents.  Each Transaction Document shall have been validly executed and delivered by the applicable parties thereto (other than the JD Group Parties) and shall be in full force and effect;

 

(d)           Receipt of Payments by JD Finance.  JD Finance (i) shall have received prior to the Closing payments by the JD Finance New Investors in an aggregate amount equal to the Suqian Yitong Equity Transfer Consideration in immediately available funds pursuant to the closing under the JD Finance Reorganization and Subscription Framework Agreement, and (ii) JD Finance shall have prior to the Closing completed the capital injection of the Suqian Yitong Equity Transfer Consideration into JD Finance Sub as registered capital;

 

(e)           Receipt of Payments by Suqian Limao. Suqian Limao shall have received at or prior to the Closing payments by Founder Holding Entity and one of the JD Finance New Investors in an aggregate amount of the Amount of Suqian Limao Debt in immediately available funds, in consideration for Founder Holding Entity’s and such JD Finance New Investor’s purchases of certain Equity Securities of JD Finance held by Suqian Limao;

 

(f)            Payment into Escrow Accounts. JD Finance Sub shall have prior to the Closing deposit an aggregate amount equal to the difference between the Suqian Yitong Equity Transfer Consideration and the Suqian Yitong Equity Transfer Tax into the Escrow Accounts in accordance with Section 8.8; and

 

(g)           Payment of Suqian Yitong Equity Transfer Tax. At or prior to the Closing, JD Finance Sub shall have paid the Suqian Yitong Equity Transfer Tax to the appropriate PRC taxing Governmental Authority using funds in its accounts other than the Escrow Accounts, and shall have provided JD HK Company with a tax payment receipt issued by the appropriate PRC taxing Governmental Authority evidencing that any and all Suqian Yitong Equity Transfer Tax required to be paid has been paid in full.

 

Section 9.3            Conditions to Obligations of JD Finance.  The obligations of JD Finance to consummate the Transactions shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which, to the extent permitted by applicable Laws, may be waived in writing by JD Finance in its sole discretion:

 

(a)           Representations and Warranties. The representations and warranties of JD Group contained in this Agreement shall be true and correct as of the date hereof and as of the date of the Closing as if made as of such date (unless made as of a specified date, in which case, as of such date);

 

(b)           Pre-Closing Covenants. Each of the Parties other than JD Finance and JD Finance Sub shall have performed and complied with, in all material respects, all obligations and agreements required by this Agreement to be performed or complied with by it prior to or at the Closing; and

 

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(c)           Transaction Documents.  Each Transaction Document shall have been validly executed and delivered by the applicable parties thereto (other than JD Finance and JD Finance Sub) and shall be in full force and effect.

 

ARTICLE X

 

ADDITIONAL COVENANTS

 

Section 10.1          Board Representation of JD Group.

 

(a)           Jointly Appointed Director.

 

(i)            During the Jointly Appointed Director Ownership Period, JD Group and JD Finance shall mutually agree to recommend one person to JD Finance, who JD Finance shall nominate for election as a director of JD Finance board of directors (the “Jointly Appointed Director”); provided, that neither any Person that is an officer or employee of JD Finance nor the Founder may be designated as the Jointly Appointed Director.  The Parties shall agree on the initial Jointly Appointed Director as promptly as practicable, and in any event prior to the date of the Closing.  The “Jointly Appointed Director Ownership Period” shall commence on the date of the Closing and shall terminate upon the first date following the first occurrence of any Issuance on which JD Group and its Subsidiaries do not collectively own at least fifty percent (50%) of the aggregate Ownership Interests in JD Finance issued, on or prior to such date, to JD Group and its Subsidiaries collectively pursuant to this Agreement; provided, that if JD Group and/or any of its Subsidiaries is required by Law to sell or otherwise transfer or dispose of JD Finance Equity or equivalent equity interests of JD Finance, such sale shall not terminate the Jointly Appointed Director Ownership Period unless JD Group and/or any of its Subsidiaries subsequently voluntarily sells any JD Finance Equity or equivalent equity interests of JD Finance and immediately following such sale JD Group and its Subsidiaries collectively own less than fifty percent (50%) of the aggregate Ownership Interests in JD Finance issued, on or prior to the date of such sale, to JD Finance and its Subsidiaries collectively pursuant to this Agreement.

 

(ii)           During the Jointly Appointed Director Ownership Period, JD Finance shall use reasonable best efforts, and JD Group and other Parties shall cooperate with JD Finance, to elect or cause the election of such Jointly Appointed Director to the board of directors of JD Finance and otherwise effect the provisions of this Section 10.1 and any determination or resolution of the board of directors of JD Finance under this Section 10.1, including (prior to any initial public offering) amending the organizational documents to increase or decrease the numbers of directors on the board of directors of JD Finance and electing or removing directors and (following any initial public offering), nominating the Jointly Appointed Director for election to the board of directors of JD Finance and recommending and soliciting proxies for the Jointly Appointed Director to the same extent as JD Finance does for any of its other nominees to its board of directors. Without limiting the foregoing, at all times during the Jointly Appointed Director Ownership Period, JD Finance shall use its reasonable best efforts to cause the holders of JD Finance Equity entitled to elect the directors on the board of directors of JD Finance

 

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to vote, and each Founder Holdco shall vote, their respective JD Finance Equity in favor of the election of the duly designated Jointly Appointed Director to JD Finance board of directors.

 

(b)           Committee Representation. During the Jointly Appointed Director Ownership Period, the audit committee of the board of directors of JD Finance shall include the Jointly Appointed Director and JD Finance shall cause the Jointly Appointed Director to be elected or appointed to such committee, in each case subject to applicable Laws.

 

(c)           Jointly Appointed Director Vacancy.  Subject to Section 10.1(a), upon the death, disability, resignation, retirement, disqualification, removal or other expiration or termination of service of the Jointly Appointed Director during the Jointly Appointed Director Ownership Period, to the extent permitted by applicable Laws, upon the approval of the JD Group Audit Committee, JD Group shall have the right to designate any replacement for the Jointly Appointed Director, which replacement shall satisfy all requirements under Section 10.1(a) and Section 10.1(b).  JD Finance shall use its reasonable best efforts to take all action required to fill the vacancy on its board of directors and its audit committee resulting therefrom with such person.  For the avoidance of doubt, removal and replacement of the Jointly Appointed Director (and the failure to re-appoint such director at the end of any term) shall require the same approvals as appointment of the Jointly Appointed Director and the last sentence of Section 10.1(a)(ii) shall apply to any replacement Jointly Appointed Director designated pursuant to this Section 10.1(c).

 

Section 10.2          Information Rights.

 

(a)           JD Finance shall, and shall cause each Subsidiary to, maintain true books and records of account in which full and correct entries shall be made of all its business transactions pursuant to a system of accounting established and administered in accordance with GAAP, and shall set aside on its books all such proper accruals and reserves as shall be required under GAAP.  During the period commencing on the date of the Closing and ending upon payment in full of the Liquidity Event Payment and for so long as the Maximum Issuance Interest is no less than 1.614%, JD Finance shall deliver to JD Group the following financial information:

 

(i)            Not later than twenty (20) days after the end of each of the quarterly accounting periods or, after the Qualified IPO, not later than the date on which JD Finance publicly discloses them, the unaudited consolidated balance sheets of JD Finance and its Subsidiaries as of the end of each such period, the related unaudited consolidated statements of operations, equity and cash flows of JD Finance and its Subsidiaries for such quarterly period and for the period from the beginning of such fiscal year to the end of such quarterly period.  All such financial statements shall be prepared in accordance with GAAP applied on a consistent basis and be certified by JD Finance’s Chief Financial Officer (and Chief Accounting Officer after such Chief Accounting Officer is appointed).  For the avoidance of doubt, if such financial statements are prepared in accordance with IFRS or PRC GAAP, JD Finance shall provide a reconciliation of such financial statements to U.S. GAAP, and shall cause such

 

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reconciliation to be reviewed by the firm serving as JD Finance’s independent public accountants at such time.

 

(ii)           As soon as available but in any event not later than thirty (30) days after the end of each fiscal year of JD Finance, the unaudited consolidated balance sheets of JD Finance and its Subsidiaries as of the end of fiscal year and the related consolidated statements of operations, equity and cash flows of JD Finance and its Subsidiaries for the fourth quarterly period of such fiscal year.  All such financial statements shall be prepared in accordance with GAAP applied on a consistent basis and be certified by JD Finance’s Chief Financial Officer (and Chief Accounting Officer after such Chief Accounting Officer is appointed).  For the avoidance of doubt, if such financial statements are prepared in accordance with IFRS or PRC GAAP, JD Finance shall provide a reconciliation of such financial statements to U.S. GAAP, and shall cause such reconciliation to be reviewed by the firm serving as JD Finance’s independent public accountants at such time.

 

(iii)          As soon as available, but in any event no later than ninety (90) days after the end of each fiscal year of JD Finance, a copy of the audited consolidated balance sheets of JD Finance and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of operations, equity and cash flows of JD Finance and its Subsidiaries stating in comparative form the figures as of the end of and for the previous fiscal year certified by one of the “big four” accounting firms selected by JD Finance and approved by the JD Finance’s equityholders.  All such financial statements shall be prepared in accordance with GAAP applied on a consistent basis and be certified by JD Finance’s Chief Financial Officer (and Chief Accounting Officer after such Chief Accounting Officer is appointed).  For the avoidance of doubt, if such financial statements are prepared in accordance with IFRS or PRC GAAP, JD Finance shall provide a reconciliation of such financial statements to U.S. GAAP, and shall cause such reconciliation to be reviewed by the firm serving as JD Finance’s independent public accountants at such time.

 

(iv)          Upon JD Group’s request and as soon as available but in any event not later than sixty (60) days after the end of each quarterly accounting period, (A) explanations for any significant movements from the prior quarter in each of the unaudited consolidated balance sheets and statements of income, equity and cash flows in conjunction with this Section 10.2, and (B) operating metrics relevant to JD Finance’s businesses and used by JD Finance’s management for decision-making purposes (excluding any Highly Sensitive Information).

 

(b)           All access to information provided for in this Section 10.2 shall be during normal business hours following reasonable advance notice to JD Finance, and in a manner that does not unreasonably interfere with JD Finance’s business operations.  Nothing in this Section 10.2 shall require JD Finance to disclose to JD Group or the JD Group Audit Committee, or to permit any auditor to disclose to JD Group or the JD Group Audit Committee, (i) any Highly Sensitive Information; (ii) any information to the extent such disclosure of such information would violate applicable Laws; (iii) any information to the extent that disclosure thereof would

 

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constitute a breach of an agreement with a third party; or (iv) any information whose disclosure would result in a waiver of any attorney-client privilege.

 

Section 10.3          Preemptive Rights for JD Finance Securities.

 

(a)           Preemptive Rights.

 

(i)            Following any Issuance arising from a Pre-QIPO Issuance Event and until, but not including, the time of the Qualified IPO, if JD Finance proposes to sell any Equity Securities of JD Finance (the “Additional Securities”), JD Finance shall, no later than thirty (30) days prior to issuing such Additional Securities (or in the case of any marketed offering prior to the Qualified IPO, no later than the earlier of thirty (30) days prior to issuing such Additional Securities and ten (10) days prior to the printing of the preliminary prospectus in connection with such offering), notify JD Group in writing of such proposed issuance (which notice shall specify, to the extent practicable, the purchase price or a range for the purchase price, if any, for, and the terms and conditions of, such Additional Securities) and shall offer to sell such Additional Securities to JD Group in the amounts set forth in Section 10.3(a)(iii) or Section 10.3(a)(iv), as applicable, and subject to Section 10.3(c), upon the terms and conditions set forth in the notice and at the Additional Securities Purchase Price as provided in Section 10.3(b) (the “Preemptive Rights”).

 

(ii)           If JD Group wishes to subscribe for a number of Additional Securities equal to or less than the number to which they are entitled under this Section 10.3(a), JD Group may do so (by itself or by causing such Person(s) to which it would be permitted to Transfer Equity Securities pursuant to Section 10.5 to subscribe for all or a portion of such Additional Securities) and shall, in the written notice of exercise of the offer, specify the number of Additional Securities that it (or each of such Person(s)) wishes to purchase.

 

(iii)          With respect to Additional Securities that are JD Finance Equity or equivalent equity interests of JD Finance, JD Finance shall offer to JD Group a number of such Additional Securities, such that, after giving effect to the proposed issuance (including the issuance to JD Group pursuant to the Preemptive Rights), JD Group’s Ownership Interest in JD Finance after such issuance would equal JD Group’s Ownership Interest in JD Finance immediately prior to such issuance, such number of Additional Securities set forth in this Section 10.3(a)(iii) to constitute the “Preemptive Amount of Securities” for JD Group for purposes of any exercise of its Preemptive Rights.  If, at the time of the determination of any Preemptive Amount of Securities under this Section 10.3(a)(iii), any other Person has preemptive or other equity purchase rights similar to the Preemptive Rights, such Preemptive Amount of Securities shall be recalculated to take into account the amount in RMB or the number of equivalent equity interests reflecting the Ownership Interest in JD Finance of such Persons that such Persons have committed to purchase, rounding down such Preemptive Amount of Securities to the nearest whole such security of JD Finance that is proposed for sale.

 

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(iv)          With respect to Additional Securities that are Equity Securities and not JD Finance Equity nor equivalent equity interests of JD Finance, JD Finance shall offer to JD Group, all or any portion specified by JD Group, of a number of such securities equal to the total number of such Additional Securities proposed to be sold, multiplied by JD Group’s Ownership Interest in JD Finance at such time (which number shall constitute the Preemptive Amount of Securities for purposes of any exercise of Preemptive Rights to which this Section 10.3(a)(iv) applies).  If, at the time of the determination of any Preemptive Amount of Securities under this Section 10.3(a)(iv), any other Person has preemptive or other equity purchase rights similar to the Preemptive Rights, such Preemptive Amount of Securities shall be recalculated to take into account the number of such securities such Persons have committed to purchase, rounding down such Preemptive Amount of Securities to the nearest whole such security of JD Finance that is proposed for sale.

 

(b)           Purchase Price.  The “Additional Securities Purchase Price” for the Additional Securities to be issued pursuant to the exercise of the Preemptive Rights shall be payable only in cash (unless otherwise unanimously agreed by JD Group and JD Finance), and shall equal per Additional Security the per security issuance price for the Additional Securities giving rise to such Preemptive Right.

 

(c)           Exercise Period. The Preemptive Rights set forth in this Section 10.3 must be exercised by acceptance in writing of any offer referred to in Section 10.3(a)(i), (i) within thirty (30) days following the receipt of the notice from JD Finance of its intention to sell Equity Securities, and (ii) in connection with any marketed offering (prior to the Qualified IPO), at least five (5) Business Days prior to the printing of the preliminary prospectus in connection with such offering; provided, that, in the case of clauses (i) and (ii), such acceptance shall indicate a willingness to purchase at the same per equity interest price at which such securities are sold to the public (less underwriting fees and discounts, which difference shall be shared equally by JD Group and JD Finance) and may specify a maximum and/or minimum per equity interest price that such offeree is willing to pay for such Equity Securities.  The closing of any purchase of Additional Securities pursuant to the exercise by JD Group of its Preemptive Rights hereunder shall occur within sixty (60) days after delivery of the notice by JD Finance as provided in Section 10.3(a)(i), subject to the receipt of any necessary Governmental Approvals to which the issuance of the Additional Securities is subject; provided, that such sixty (60)-day period shall be extended automatically as necessary to apply for and obtain any Governmental Approvals that are required to consummate such purchase, so long as JD Group is making good faith efforts to obtain such Governmental Approvals as soon as practicable in accordance with applicable Laws.  If there is any such extension, the relevant period will end on the fifth (5th) Business Day following the receipt of such Governmental Approvals.

 

(d)           Termination of Rights. The Preemptive Rights shall not be exercisable with respect to the Qualified IPO, and shall terminate (if not already terminated pursuant to the following sentence) upon, and be of no force and effect from and after, the completion of the Qualified IPO.

 

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Section 10.4          Certain Transactions.

 

(a)           Prior to the occurrence of Issuances resulting, in the aggregate, in an Issuance Percentage of 100%, without the prior consent of the JD Group Audit Committee:

 

(i)            JD Finance will not issue any Equity Securities other than in a Qualified IPO, unless the pre-money valuation of JD Finance on a consolidated basis implied by such issuance of Equity Securities is not less than the valuation of JD Finance on a consolidated basis implied by the issuance of Equity Securities contemplated by the JD Finance Reorganization and Subscription Framework Agreement;

 

(ii)           JD Finance will not undertake or consummate, and each Founder Holdco will not otherwise permit, any IPO of JD Finance other than a Qualified IPO;

 

(iii)          JD Finance will not undertake or consummate, and each Founder Holdco will not otherwise permit, any Liquidity Event involving a Related Party as a counter-party; and

 

(b)           Following the earliest occurrence of any Issuance, without the prior consent of the JD Group Audit Committee, JD Group shall not, and shall not permit any of its Subsidiaries (which, for the avoidance of doubt, shall not include JD Finance or any of its Subsidiaries) to:

 

(i)            elect not to exercise, or fail to exercise, wholly or in part, its Preemptive Rights pursuant to Section 10.3;

 

(ii)           voluntarily Transfer any Equity Securities of JD Finance directly or indirectly held by JD Group.

 

Section 10.5          Transfer Restrictions.  Following the Closing, neither of JD Group nor any Founder Holdco shall Transfer any Equity Securities of JD Finance Beneficially Owned by it except pursuant to one of the following provisions:

 

(a)           Transfers to Subsidiaries.  At any time, JD Group (or its Subsidiaries) and Founder Holdcos (or their Subsidiaries) (each, to the extent that it owns Equity Securities of JD Finance, a “JD Finance Equityholder” and “JD Finance Equity Transferor”) may transfer their Equity Securities of JD Finance to any wholly-owned Subsidiary of such JD Finance Equityholder; provided, however, that such transferee shall at all times continue to be a wholly-owned Subsidiary and that such transferee becomes a party to this Agreement pursuant to an instrument satisfactory to JD Group’s and each Founder Holdco’s Representative; and provided, further, that if, at any time, such transferee ceases to be a wholly-owned Subsidiary of such JD Finance Equityholder, it shall immediately return all of the Equity Securities of JD Finance received under this Section 10.5(a) to such JD Finance Equityholder.  For the avoidance of doubt, no transfer of Equity Securities of JD Group shall be deemed to be a Transfer of Equity Securities of JD Finance.

 

(b)           Right of First Refusal.

 

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(i)            If, from time to time, a JD Finance Equityholder proposes to Transfer any Equity Securities owned by that JD Finance Equityholder to a specific Person other than the other JD Finance Equityholder (a “Proposed Transferee”), then prior to consummating such Transfer, the JD Finance Equity Transferor shall deliver a written notice (the “Offer Notice”) to the other JD Finance Equityholder (the “Offeree”), setting forth the identity of the Proposed Transferee, its bona fide intention to Transfer Equity Securities of JD Finance to such Proposed Transferee, the number and type of Equity Securities of JD Finance to be Transferred (the “JD Finance Subject Equities”), the total consideration (including the amount and form thereof) for which such Proposed Transferee has offered to acquire, or such JD Finance Equityholder has offered to sell to such Proposed Transferee the JD Finance Subject Equities (the “Offer Price”), and any other terms of the proposed Transfer.

 

(ii)           The Offer Notice shall constitute, for a period of fifteen (15) days from the date on which it shall have been deemed given, an irrevocable and exclusive offer to sell to the Offeree (or any direct or indirect wholly-owned Subsidiary designated by the Offeree), at the Offer Price, all or a portion of the JD Finance Subject Equities.

 

(iii)          The Offeree (or a designated direct or indirect wholly-owned Subsidiary thereof) may accept the offer set forth in an Offer Notice by giving notice to the JD Finance Equity Transferor, prior to the expiration of such offer, specifying the number of the JD Finance Subject Equities that the Offeree wishes to purchase.  The Offeree may exercise the right to purchase all or a portion of the JD Finance Subject Equities pursuant to this Section 10.5(b) by causing such Person(s) to which the Offeree would be permitted to Transfer Equity Securities of JD Finance pursuant to Section 10.5(a) to purchase all or portion of the JD Finance Subject Equities directly from the JD Finance Equity Transferor, if so specified in the notice given to the JD Finance Equity Transferor pursuant to this Section 10.5(b)(iii).

 

(iv)          If the Offeree agrees to purchase any or all of the JD Finance Subject Equities pursuant to this Section 10.5(b), it shall pay in cash or immediately available funds for, and the JD Finance Equity Transferor shall deliver valid title, free and clear of any Encumbrance, to, such JD Finance Subject Equities, subject to receipt of any necessary or advisable third-party approvals or any Governmental Approvals, within fifteen (15) days following completion of the procedures set forth in Section 10.5(b)(ii) or such longer period as is required to obtain any necessary or advisable third-party approvals or Governmental Approvals.

 

(v)           If the offers made by the JD Finance Equity Transferor to the Offeree pursuant to Section 10.5(b)(ii) expire without an agreement by the Offeree to purchase all of the JD Finance Subject Equities, the JD Finance Equity Transferor shall have thirty (30) days following such expiry to enter into a definitive agreement with the Proposed Transferee with respect to such Transfer and, if such agreement is timely entered into, sixty (60) days following the date of that agreement to effect the Transfer of the balance of the JD Finance Subject Equities to the Proposed Transferee, for cash, at a price not less than the Offer Price, and upon terms not otherwise more favorable to the transferee or transferees than those specified in the Offer Notice, subject to the execution

 

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and delivery by such third party of an assignment and assumption agreement, in form and substance satisfactory to the other JD Finance Equityholders, pursuant to which such third party shall assume all of the obligations of a party pursuant to or under this Agreement.  In the event that the JD Finance Equity Transferor has not entered into a definitive agreement with the Proposed Transferee within such thirty (30)-day period or such Transfer is not consummated within such sixty (60)-day period, the JD Finance Equity Transferor shall not be permitted to sell its JD Finance Equity Securities pursuant to this Section 10.5(b) without again complying with each of the requirements of this Section 10.5(b); provided, that such sixty (60)-day period should be extended automatically as necessary to apply for and obtain any Governmental Approvals that are required to consummate such Transfer, so long as the JD Finance Equity Transferor is making good faith efforts to obtain such Governmental Approvals as soon as practicable in accordance with applicable Laws.  If there is such extension, the relevant period will end on the fifth (5th) Business Day following the receipt of such Governmental Approvals.

 

(vi)          The right of first refusal held by JD Group pursuant to this Section 10.5(b) shall be freely assignable, in connection with any specific Transfer, to the extent that JD Group could not exercise such right without exceeding any applicable regulatory threshold.  The right of first refusal held by such Founder Holdco shall be freely assignable to any Person that is controlled by the Founder.

 

(vii)         The provisions of this Section 10.5(b) shall not be exercisable with respect to, and shall terminate upon, and be of no force and effect from and after, the completion of the Qualified IPO.

 

(c)           Transfers to Non-PRC Persons. Prior to the occurrence of Issuances resulting, in the aggregate, in an Issuance Percentage of 100%, neither any Founder Holdco nor JD Finance shall, and JD Finance shall cause each holder of Equity Securities of JD Finance not to, enter into, effect or give effect to any Transfer of Equity Securities of JD Finance or other transaction if, to his or its knowledge after due inquiry, immediately following such transaction, any Person other than a PRC Person would acquire Beneficial Ownership of Equity Securities of JD Finance, it being understood that the applicable proposed Transferor party shall have satisfied his or its obligation of due inquiry if each Transferee party in such transaction has given an enforceable representation and warranty to each Transferor party to the effect that it is a PRC Person. Actions taken and agreements made by JD Finance, Founder Holdcos or any holder of Equity Securities of JD Finance not consistent with this Section 10.5 shall be null and void ab initio.

 

Section 10.6          IPO.

 

(a)           Restructuring.  Following the earliest occurrence of any Issuance, if, for any reason, a restructuring of JD Finance’s Equity Securities, including any stock split or reverse stock split, share exchange, merger or share or equity interest conversion, or of JD Finance and its Subsidiaries is required in order to effect the Qualified IPO, such restructuring shall be conducted in a manner that results in JD Group and its Subsidiaries holding equity interests of the entity that is to issue equity interests in the Qualified IPO (and equity interests of any other

 

39

 

entity that is not a Subsidiary of such entity succeeding to or acquiring any material assets or operations of JD Finance in such restructuring) having equivalent value and voting power as the Equity Securities of JD Finance held by JD Group and its Subsidiaries immediately prior to such restructuring.

 

(b)           Participation Right. Following the earliest occurrence of any Issuance, if JD Finance proposes to effect the Qualified IPO, JD Finance shall give JD Group written notice of its intent to do so as soon as reasonably practicable, at a time leaving JD Group a reasonable opportunity to comply with any applicable Laws in connection with its exercise of the right described in this Section 10.6(b), and in any event not less than thirty (30) Business Days prior to the contemplated publication or public filing of the prospectus for such offering.  Within fifteen (15) Business Days following the delivery of such notice and subject to applicable Law, JD Group may, at the sole discretion of the JD Group Audit Committee, by notice to JD Finance, irrevocably commit to sell a number of equity interests of JD Finance up to the number of equity interests JD Group and its Subsidiaries own directly in JD Finance, and JD Finance shall include in the Qualified IPO such number of equity interests as specified in such notice; provided, that if the managing underwriter of such Qualified IPO in good faith shall have advised JD Finance that, in its opinion, the inclusion in the offering of the number of equity interests committed to be sold by JD Group in accordance with this Section 10.6(b) would adversely affect the price or success of the offering, JD Finance shall include in the offering only such number of equity interests as JD Finance is advised can be sold in such offering without such an effect provided that any reduction in equity interests to be included in the offering shall be effected in the following order of priority: (i) first, equity interests that the JD Finance proposes to offer for its own account; (ii) second, equity interests that JD Group and its Subsidiaries have committed to sell in the offering; and (iii) third, any equity interests that other equityholders have requested to be sold in such offering.

 

(c)           Cooperation.  If requested by the managing underwriter in a Qualified IPO, following the earliest occurrence of any Issuance, JD Group shall, and shall cause its Subsidiaries to, agree not to effect any transfer of Equity Securities of JD Finance other than as part of the Qualified IPO during a lock-up period for the longer of (i) any statutory lock-up period and (ii) a period that the managing underwriter reasonably determines to be customary for major stockholders in a large initial public offering after consultation with JD Group; provided, that in the case of clause (ii), such lock-up period is not longer than, and shall expire no later than the expiration of, any lock-up period required to be agreed to by any other seller of Equity Securities of JD Finance in the offering (including any management seller) that is expected to sell shares constituting more than 20% of the aggregate shares to be offered in the offering.  If JD Group or any of its Subsidiaries is selling equity interests in the Qualified IPO, JD Group and such Subsidiaries shall enter into customary underwriting and other agreements and documentation in connection with such offering on terms substantially similar to those applicable to JD Finance, and furnish to JD Finance such information regarding JD Group and its intended method of distribution of the equity interests to be sold as JD Finance may from time to time reasonably request in order to comply with JD Finance’s obligations under all applicable securities and other Laws and to ensure that the prospectus or other offering documents conform to applicable securities and other Laws.  If JD Group or any of its Subsidiaries is selling equity interests in the Qualified IPO, JD Finance shall fully cooperate with the marketing of the equity interests to be sold in the offering, including the equity interests to be sold by JD Group and its

 

40

 

Subsidiaries, including, at the recommendation or request of the managing underwriter, making its officers available to participate in “road show,” “one on one” and other customary marketing activities in such locations as recommended by the managing underwriter.

 

Section 10.7          Business Scope.

 

(a)           JD Finance.

 

(i)            Competing Business Investments. During the Business Scope Period, JD Finance shall, and shall cause its Subsidiaries not to, without the prior written consent of JD Group, directly or indirectly engage in, enter into, or participate in the JD Group Business as an owner, partner or principal (including by means of any arrangements that function similarly to equity interests), or otherwise compete with JD Group in the JD Group Business; provided, that JD Finance and its Subsidiaries shall be permitted to make passive investment (including in Equity Securities and/or debt securities or instruments), from time to time, regardless of whether the invested company competes with the JD Group Business, provided, further that JD Finance and its Subsidiaries shall not Control the invested company.

 

(ii)           No Exit Obligation. If JD Finance first engages in, enters into, participates in, or invests in any of the businesses at a time when it is not prohibited from doing so pursuant to the other provisions of this Section 10.7(a), JD Finance shall be permitted to continue to engage or participate in such businesses notwithstanding any such prohibition arising after such time, including as a result of subsequent changes to the scope of the JD Group Business.

 

(b)           JD Group.  During the Business Scope Period, JD Group shall, and shall cause its Subsidiaries not to, without the prior written consent of JD Finance, directly or indirectly engage in, enter into, or participate in the JD Finance Business as an owner, partner or principal (including by means of any arrangements that function similarly to equity interests), or otherwise compete with JD Finance in the JD Finance Business; provided, that JD Group and its Subsidiaries shall be permitted to engage in activities and make investments as provided in clauses (i) through (iii) below.

 

(i)            Shared Businesses.  JD Group and its Subsidiaries may, from time to time, directly or indirectly, engage in or participate in the businesses set forth on Section 10.7 of the JD Group Disclosure Schedules.

 

(ii)           Competing Business Investments.  JD Group and its Subsidiaries may, from time to time, make passive investment (including in Equity Securities and/or debt securities or instruments) regardless of whether the invested company competes with the JD Finance Business, provided, that JD Group and its Subsidiaries shall not Control the invested company, provided, further, that in the event that any applicable Law enjoins or prohibits JD Group and its Subsidiaries from making any of such passive investments, JD Group and JD Finance shall negotiate in good faith on the disposal or sale of the relevant investment to JD Finance or a third party.

 

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(iii)          Non-Exclusivity. JD Group and its Subsidiaries may, from time to time, enter into and perform contracts and agreements with third Persons for the provision or procurement of payment services and other financial services and products, including sharing of data and traffic support.

 

Section 10.8          JD Group Audit Committee.  Any consents, determinations or decisions of the JD Group Audit Committee referred to herein shall be made in accordance with the charter of the JD Group Audit Committee, as effective from time to time, or, in the event that such charter does not provide for the manner in which such consents, determinations or decisions shall be made, by majority vote.

 

Section 10.9          Further Assurances.

 

(a)           Following an Issuance, in the event that, as a result of any change in Law or any action taken by any Governmental Authority, JD Group or a Subsidiary thereof is required to divest, or is prohibited from owning, any or all of the Equity Securities of JD Finance acquired by it pursuant to this Agreement, then JD Finance and JD Group shall, as soon as practicable, negotiate in good faith and use their respective reasonable best efforts to agree on contractual or other alternative arrangements providing, to the extent permitted by applicable Laws, JD Group with economic rights and other rights and benefits equivalent to the rights and benefits of ownership of the Equity Securities of JD Finance that JD Group or its Subsidiary is required to divest or is prohibited from owning.  Such contractual or alternative arrangements may include, to the extent agreed by JD Finance and JD Group in good faith, profit sharing, mandatory liquidity event payments and other arrangements similar to those provided for in this Agreement.

 

(b)           If Issuances resulting, in the aggregate, in an Issuance Percentage of 100% do not occur prior to the Qualified IPO, but no Liquidity Event Payment is payable under Section 2.3(a), then (i) JD Finance shall not permit in connection with any Post-QIPO Issuance Event any Issuance resulting, in the aggregate, in JD Group having Beneficial Ownership of 30% or more of the aggregate Ownership Interests in JD Finance absent the prior written consent of JD Group, (ii) if the foregoing clause (i) prevents the Issuance Percentage from reaching 100%, the Parties shall discuss in good faith a process for effecting Issuances resulting, in the aggregate, in an Issuance Percentage of 100% without triggering a mandatory tender offer under the Laws of the PRC and (iii) the Parties shall ensure that any Post-QIPO Issuance Event complies with applicable Laws.

 

Section 10.10       Dividends.  Prior to the earlier of (i) an Qualified IPO, and (ii) the time when JD Group receives from JD Finance the first payment of the JD Finance Royalty and Software Technology Services Fee (as defined under the IPLA) in accordance with Sections 5.1 and 5.2 of the IPLA, neither JD Finance nor any non-wholly owned Subsidiary of JD Finance shall declare or pay any dividends.

 

Section 10.11       Further Covenants.

 

(a)           Maintenance of Existence; Compliance.  Until the earlier of: (a) the date on which the Issuance Percentage is 100% and (b) all obligations and liabilities of JD Finance to pay any Liquidity Event Payment and interest and tax-related payments under this Agreement,

 

42

 

and all obligations and liabilities of JD Finance to make payments under the IPLA are satisfied and discharged in full, JD Finance shall take all reasonable action to (i) preserve, renew and keep in full force and effect its organizational existence, (ii) maintain all rights, privileges, business licenses and franchises, and comply with all Contracts, in each case as is necessary or desirable in the normal conduct of its business, and (iii) comply in all material respects with all Laws and judgments, orders and decrees of any Governmental Authority.

 

(b)           Release from Escrow Accounts.  Each of the Parties hereto shall use its reasonable best efforts to take, or cause to be taken, all actions, and use its reasonable best efforts to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things consistent with applicable Laws and necessary, proper or advisable to release an aggregate amount equal to the difference between the Suqian Yitong Equity Transfer Consideration and the Suqian Yitong Equity Transfer Tax from the Escrow Accounts and pay such amount by wire transfer of immediately available funds to the JD HK Company Bank Accounts, as soon as practicable after the Closing, and none of the Parties shall take any action or omit to take any action that would or would reasonably be expected to prevent, impair, make illegal or materially delay such release.

 

ARTICLE XI

 

TERMINATION

 

Section 11.1          Termination of Transactions. The provisions of this Agreement relating to (and only to the extent relating to) the consummation of the Transactions may be terminated at any time prior to the Closing:

 

(a)           by mutual written consent of JD Group and JD Finance;

 

(b)           by either JD Group or JD Finance if any court of competent jurisdiction shall have issued an Order, decree or ruling or taken any other action restraining, enjoining, making illegal or otherwise prohibiting the consummation of any of the Transactions and such Order, decree, ruling or other action shall have become final and nonappealable; provided, that the Party so requesting termination shall have used its reasonable best efforts in accordance with Section 8.2(a) to have such Order, decree, ruling or other action vacated;

 

(c)           by JD Finance in the event of a failure of JD Group’s representations, as set forth in Article IV, to be true and correct or a material breach by JD Group, JD HK Company or Suqian Yitong of its obligations or agreements hereunder, in each case that would cause a condition set forth in Section 9.1 or Section 9.3 not to be satisfied, which failure or breach remains uncured for sixty (60) days following written notice thereof by JD Finance to JD Group;

 

(d)           by JD Group in the event of a failure of JD Finance’s representations, as set forth in Article V or Founder Holdco’s representations, as set forth in Article VII (other than Section 7.4), to be true and correct or a material breach by JD Finance of its obligations or agreements hereunder, in each case that would cause a condition set forth in Section 9.1 or Section 9.2 not to be satisfied, which failure or breach remains uncured for sixty (60) days following written notice thereof by JD Group to JD Finance; or

 

43

 

(e)           by either JD Group or JD Finance if the Closing has not occurred by the 180th day following the date hereof; provided, that the Party so requesting termination shall not have breached any provision of this Agreement in a manner that primarily caused the failure of the Closing to occur by such date.

 

The Party seeking to terminate such provisions of this Agreement pursuant to this Section 11.1 (other than Section 11.1(a)) shall give prompt written notice of such termination to each other Party.

 

Section 11.2          Effect of Termination. In the event of termination of certain provisions of this Agreement as provided in Section 11.1, such provisions of this Agreement shall forthwith become void and there shall be no Liability on the part of any Party with respect thereto. The remaining provisions of this Agreement shall remain in full force and effect.

 

ARTICLE XII

 

INDEMNIFICATION

 

Section 12.1          Indemnification by JD Group.  JD Group shall save, defend, indemnify and hold harmless JD Finance and its respective officers, directors, employees, agents, successors and assigns from and against any and all losses, damages, Liabilities, deficiencies, claims, interest, awards, judgments, penalties, costs and expenses (including reasonable attorneys’ fees, costs and other out-of-pocket expenses incurred in investigating, preparing or defending the foregoing) (hereinafter, collectively, “Losses”) to the extent arising out of or resulting from (i) any failure of any representation or warranty set forth in Article IV to be true and correct as of the date hereof and as of the date of the Closing as if made on such date (unless made as of a specified date, in which case, as of such date), or (ii) any breach of or failure to perform or comply with the covenants or agreements of the JD Group Parties contained in this Agreement.

 

Section 12.2          Indemnification by JD Finance.  JD Finance shall save, defend, indemnify and hold harmless each of the JD Group Parties, their Affiliates (other than JD Finance and its Subsidiaries) and their respective officers, directors, employees, agents, successors and assigns from and against any and all Losses to the extent arising out of or resulting from (i) any failure of any representation or warranty set forth in Article V to be true and correct as of the date hereof and as of the date of the Closing as if made on such date (unless made as of a specified date, in which case, as of such date), or (ii) any breach of or failure to perform or comply with the covenants or agreements of JD Finance contained in this Agreement.

 

Section 12.3          Indemnification by Suqian Limao.  Suqian Limao shall save, defend, indemnify and hold harmless each of the JD Group Parties, their Affiliates (other than JD Finance and its Subsidiaries) and their respective officers, directors, employees, agents, successors and assigns from and against any and all Losses to the extent arising out of or resulting from (i) any failure of any representation or warranty set forth in Article VI to be true and correct as of the date hereof and as of the date of the Closing as if made on such date (unless made as of a specified date, in which case, as of such date), or (ii) any breach of or failure to perform or comply with the covenants or agreements of Suqian Limao contained in this Agreement.

 

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Section 12.4                             Indemnification by Founder Holdcos.  Founder Holdcos, jointly and severally, shall save, defend, indemnify and hold harmless each of the JD Group Parties, their Affiliates (other than JD Finance and its Subsidiaries) and their respective officers, directors, employees, agents, successors and assigns from and against any and all Losses to the extent arising out of or resulting from (i) any failure of any representation or warranty set forth in Article VII to be true and correct as of the date hereof and as of the date of the Closing as if made on such date (unless made as of a specified date, in which case, as of such date), or (ii) any breach of or failure to perform or comply with the covenants or agreements of Founder Holdcos contained in this Agreement.

 

Section 12.5                             Procedures.

 

(a)                                 In order for a JD Finance Indemnified Party or a JD Group Indemnified Party (each, an “Indemnified Party”) to be entitled to any indemnification provided for under this Agreement as a result of a Loss or a claim or demand made by any third Person against the Indemnified Party (a “Third-Party Claim”), such Indemnified Party shall deliver notice thereof to JD Group or JD Finance, as the case may be, (the “Indemnifying Party”), promptly after receipt by such Indemnified Party of written notice of the Third-Party Claim, describing in reasonable detail the facts giving rise to any claim for indemnification hereunder, the amount or method of computation of the amount of such claim (if known) and such other information with respect thereto as the Indemnifying Party may reasonably request. The failure to provide such notice, however, shall not release the Indemnifying Party from any of its obligations under this Article XII, except to the extent that the Indemnifying Party is actually prejudiced by such failure.

 

(b)                                 An Indemnifying Party shall have the right, upon written notice to the Indemnified Party within thirty (30) days after receipt of notice from the Indemnified Party of the commencement of such Third-Party Claim, to assume the defense thereof at the expense of the Indemnifying Party with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes the defense of such Third-Party Claim, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party; provided, that, if, in the reasonable opinion of counsel for the Indemnified Party, there is a conflict of interest between the Indemnified Party and the Indemnifying Party, the Indemnifying Party shall be responsible for the reasonable fees and expenses of one counsel to such Indemnified Party in connection with such defense. If the Indemnifying Party assumes the defense of any Third-Party Claim, the Indemnified Party shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party such witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. If the Indemnifying Party assumes the defense of any Third-Party Claim, the Indemnifying Party shall not settle, compromise or discharge such Third-Party Claim without the prior written consent of the Indemnified Party, unless such settlement, compromise or discharge of such Third-Party Claim by its terms obligates the Indemnifying Party to pay the full amount of the Liability in connection with such Third-Party Claim, and releases the Indemnified Party completely in connection with such Third-Party Claim. Whether or not the Indemnifying Party assumes the defense of a Third-Party Claim, the Indemnified Party shall not admit any Liability with respect to, or settle, compromise or

 

45

 

discharge, or offer to settle, compromise or discharge, such Third-Party Claim without the Indemnifying Party’s prior written consent.

 

(c)                                  In the event any Indemnified Party should have a claim against an Indemnifying Party hereunder that does not involve a Third-Party Claim being asserted against or sought to be collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim promptly to the Indemnifying Party, describing in reasonable detail the facts giving rise to any claim for indemnification hereunder, the amount or method of computation of the amount of such claim (if known) and such other information with respect thereto as the Indemnifying Party may reasonably request. The failure to provide such notice, however, shall not release the Indemnifying Party from any of its obligations under this Article XII except to the extent that the Indemnifying Party is prejudiced by such failure. The Indemnified Party shall reasonably cooperate and assist the Indemnifying Party in determining the validity of any claim for indemnity by the Indemnified Party and in otherwise resolving such matters. Such assistance and cooperation shall include providing reasonable access to and copies of information, records and documents relating to such matters, furnishing employees to assist in the investigation, defense and resolution of such matters and providing legal and business assistance with respect to such matters, in each case, to the extent reasonably required by the Indemnifying Party.

 

ARTICLE XIII

 

MISCELLANEOUS

 

Section 13.1                             Certain IPs. As soon as practicable after the payment of Liquidity Event Payment by JD Finance to JD Group in accordance with Section 2.3 hereof, JD Group shall transfer or license to JD Finance certain Intellectual Property as mutually agreed to by the Parties permanently and free of charge.

 

Section 13.2                             Notices. All notices and other communications hereunder shall be in writing, shall be made by personal delivery, internationally recognized courier service, facsimile or electronic mail and shall be deemed received (i) on the date of delivery if delivered personally, (ii) on the date of confirmation of receipt if delivered by an internationally recognized courier service (or the first Business Day following such receipt if (a) the date is not a Business Day or (b) receipt occurs after 5:00 p.m., local time of the recipient) or (iii) on the date of receipt of transmission by facsimile or electronic mail (or the first Business Day following such receipt if (a) the date is not a Business Day or (b) receipt occurs after 5:00 p.m., local time of the recipient), to the Parties at the following addresses, facsimile numbers or email addresses (or at such other address, facsimile number or email address for a Party as shall be specified by like notice):

 

To JD Group, JD HK Company or Suqian Yitong:

 

	
JD.com, Inc.
    
	
20th Floor,   Building A, No. 18 Kechuang 11 Street
    
	
Yizhuang   Economic and Technological Development Zone
    
	
Daxing District,   Beijing 101111
    
	
People’s   Republic of China
    
	
Attention:                                       Sidney   Xuande Huang, Chief Financial Officer
    

 

46

 

	
E-mail:        sidney.huang@jd.com
    
	
 
    	
 
    	
 
    
	
with a copy   (which shall not constitute notice) to:
    
	
 
    	
 
    	
 
    
	
Skadden, Arps,   Slate, Meagher & Flom LLP
    
	
c/o 42/F   Edinburgh Tower, The Landmark
    
	
15 Queen’s Road   Central
    
	
Hong Kong
    
	
Attention:                                         Z.   Julie Gao
    
	
Facsimile No.:                   +852 3910   4863
    
	
Email:                                                            julie.gao@skadden.com
    
	
 
    	
 
    	
 
    
	
To Suqian Limao:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
21st Floor, Building A,   No. 18 Kechuang 11 Street
    
	
Yizhuang Economic and   Technological Development Zone
    
	
Daxing District,   Beijing 101111
    
	
People’s Republic of   China
    
	
Attention:                                         Jiao   JIAO
    
	
E-mail:                                                        jiaojiao@jd.com
    
	
 
    	
 
    	
 
    
	
To JD Finance and JD   Finance Sub:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
14th Floor, Building A,   No. 18 Kechuang 11 Street
    
	
Yizhuang Economic and   Technological Development Zone
    
	
Daxing District,   Beijing 101111
    
	
People’s Republic of   China
    
	
Attention:                                         Zhijian   LIU
    
	
E-mail:                                                        liuzhijian@jd.com
    
	
 
    	
 
    	
 
    
	
To Founder Holding   Entity:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Room 416-429 Hengtong   Building, No. 19 Hongze Lake East Road
    
	
Suyu District, Suqian,   Jiangsu Province
    
	
People’s Republic of   China
    
	
Attention:                                         Jie   WU
    
	
E-mail:                                                        sqwujie@jd.com
    
	
 
    	
 
    	
 
    
	
To Founder ESOP   Partnership:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
12th Floor, Building A,   No. 18 Kechuang 11 Street
    
	
Yizhuang Economic and   Technological Development Zone
    
	
Daxing District,   Beijing 101111
    
	
People’s Republic of   China
    
	
Attention:                                         Yan   CHEN
    
	
E-mail:                                                        cwchenyan@jd.com
    

 

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with a copy to:
    
	
 
    
	
21st Floor, Building A,   No. 18 Kechuang 11 Street
    
	
Yizhuang Economic and   Technological Development Zone
    
	
Daxing District,   Beijing 101111
    
	
People’s Republic of   China
    
	
Attention:                                         Liying   ZHANG
    
	
E-mail:                                                        zhangliyinghr@jd.com
    

 

Section 13.3                             Amendment; Waiver; Etc.

 

(a)                                 Any provision of this Agreement may be amended, waived or modified if, and only if, such amendment, waiver or modification is in writing and signed, (x) in the case of an amendment or waiver of any provision of Article II, Section 10.7 or this Section 13.3 of this Agreement or of any provision that by its terms requires or contemplates the approval of or otherwise refers to the JD Group Audit Committee, by JD Finance, and by JD Group after obtaining consent of the JD Group Audit Committee, (y) in the case of an amendment of any other provision of this Agreement, by (i) JD Group and JD Finance and (ii) any Party other than JD Finance and the JD Group Parties that is adversely and directly affected by such amendment, or (z) in the case of a waiver of any other provision of this Agreement, by the Party against whom the waiver is to be effective.  No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

(b)                                 JD Group and JD Finance agree to negotiate in good faith and reach agreement on the termination of any provision of Section 10.1(a), Section 10.3 or Section 10.4, which termination shall be subject to the condition that the Qualified IPO be completed within a certain period of time and other conditions mutually agreed to by the parties at the time, before JD Finance applies for a Qualified IPO, if JD Group’s rights under such provision of Section 10.1(a), Section 10.3 or Section 10.4 are not permitted by, and not capable of being preserved (through preferred stock or otherwise) under, applicable Laws or applicable listing rules; provided, that JD Finance shall have used its reasonable best efforts to cause such rights to be permitted and preserved, including by seeking an exemption under applicable stock exchange rules that would permit or otherwise allow such rights to be preserved.

 

(c)                                  All material actions, consents, determinations, and approvals, including in connection with amendments and waivers under Section 13.3(a) and the agreement on termination under Section 13.3(b), to be taken or made by JD Group or its controlled Affiliates under or in connection with any Transaction Document (other than any such matters that require the approval of the JD Group Audit Committee) shall be taken or made solely with prior approval of the JD Group Audit Committee or any person to whom the JD Group Audit Committee delegates such matters.

 

Section 13.4                             Assignment. With the exception of the right of first refusal held by JD Group pursuant to Section 10.5(b), no Party to this Agreement may assign any of its rights or

 

48

 

obligations under this Agreement without the prior written consent of JD Finance and JD Group; provided that the assignor shall remain liable for its obligations under this Agreement. Any assignment without such prior written consent shall be null and void.

 

Section 13.5                             Entire Agreement. This Agreement (including all Schedules and Exhibits), the Disclosure Letters and the other Transaction Documents contain the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters. To the extent there is any inconsistency between (i) a provision of another Transaction Document and (ii) a provision of this Agreement that is more specific or detailed with respect to the subject matter of such other Transaction Document, then the provision of this Agreement shall govern and control. Otherwise, the provision of the other Transaction Document shall govern. In the case of any other inconsistency between this Agreement and any other Transaction Document, this Agreement shall govern.

 

Section 13.6                             Parties in Interest. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns in accordance with this Agreement.  Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Parties, or their successors or permitted assigns, any rights or remedies under or by reason of this Agreement.  Founder Holdco shall be party to this Agreement solely with respect to Article VII, this Article XIII, and Sections 8.1, 8.2, 9.2(a), 10.1(a)(ii), 10.5, 11.1, and 12.4 and 12.5.

 

Section 13.7                             Expenses. Except as otherwise expressly provided in this Agreement, all costs and expenses incurred by the Parties in connection with the negotiation and execution of the Transaction Documents shall be borne by the Person incurring such expenses.

 

Section 13.8                             Governing Laws. THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 13.9                             Arbitration.

 

(a)                                 Any dispute, controversy, difference or claim arising out of, relating to or in connection with this Agreement and/or the other Transaction Documents, or the transactions contemplated hereby or thereby, including the existence, validity, interpretation, performance, breach or termination hereof or thereof or any dispute regarding non-contractual obligations arising out of, relating to or in connection with this Agreement and/or the other Transaction Documents shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted, except as they may be modified by mutual agreement of the parties.  The seat of arbitration shall be Hong Kong; provided, that the arbitrators may hold hearings in such other locations as the arbitrators determine to be most convenient and efficient for all of the parties to such arbitration under the circumstances.  The arbitration shall be conducted in the English language.

 

49

 

(b)                                 The arbitration shall be conducted by three (3) arbitrators.  The Party (or the Parties, acting jointly, if there is more than one (1)) initiating arbitration (the “Claimant”) shall appoint an arbitrator in its request for arbitration (the “Request”).  The other Party (or the other Parties, acting jointly, if there is more than one (1)) to the arbitration (the “Respondent”) shall appoint an arbitrator within thirty (30) days of receipt of the Request and shall notify the Claimant of such appointment in writing.  If, within thirty (30) days of receipt of the Request by the Respondent, either Party has not appointed an arbitrator, then that arbitrator shall be appointed by the HKIAC.  The first two (2) arbitrators appointed in accordance with this provision shall appoint a third arbitrator within thirty (30) days after the Respondent has notified Claimant of the appointment of the Respondent’s arbitrator or, in the event of a failure by a Party to appoint, within thirty (30) days after the HKIAC has notified the Parties and any arbitrator already appointed of the appointment of an arbitrator on behalf of the Party failing to appoint.  When the third (3rd) arbitrator has accepted the appointment, the two (2) arbitrators making the appointment shall promptly notify the Parties of the appointment.  If the first two arbitrators appointed fail to appoint a third arbitrator or so to notify the Parties within the time period prescribed above, then the HKIAC shall appoint the third (3rd) arbitrator and shall promptly notify the Parties of the appointment.  The third (3rd) arbitrator shall act as chair of the tribunal.

 

(c)                                  The arbitral award shall be in writing, state the reasons for the award, and be final and binding on the parties.  The award may include an award of costs, including reasonable attorneys’ fees and disbursements.  In addition to monetary damages, the arbitral tribunal shall be empowered to award equitable relief, including an injunction and specific performance of any obligation under this Agreement.  The arbitral tribunal is not empowered to award damages in excess of compensatory damages, and each Party hereby irrevocably waives any right to recover punitive, exemplary or similar damages with respect to any dispute, except insofar as a claim is for indemnification for an award of punitive damages awarded against a Party in an action brought against it by an independent third party.  The arbitral tribunal shall be authorized in its discretion to grant pre-award and post-award interest at commercial rates.  Any costs, fees or Taxes incident to enforcing the award shall, to the maximum extent permitted by Laws, be charged against the Party resisting such enforcement.  Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party or its assets.

 

(d)                                 In order to facilitate the comprehensive resolution of related disputes, and upon request of any Party to the arbitration Proceeding, the arbitration tribunal may, within ninety (90) days of its appointment, consolidate the arbitration Proceeding with any other arbitration Proceeding involving any of the Parties relating to the Transaction Documents. The arbitration tribunal shall not consolidate such arbitrations unless it determines that (i) there are issues of fact or law common to the Proceedings, so that a consolidated Proceeding would be more efficient than separate Proceedings, and (ii) no Party would be prejudiced as a result of such consolidation through undue delay or otherwise. In the event of different rulings on this question by the arbitration tribunal constituted hereunder and any tribunal constituted under these Transaction Documents, the ruling of the tribunal constituted under this Agreement shall govern, and that tribunal shall decide all disputes in the consolidated Proceeding.

 

(e)                                  The Parties agree that the arbitration shall be kept confidential and that the existence of the Proceeding and any element of it (including any pleadings, briefs or other

 

50

 

documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall not be disclosed beyond the tribunal, the HKIAC, the parties, their counsel and any person necessary to the conduct of the Proceeding, except as may be lawfully required in judicial Proceedings relating to the arbitration or otherwise, or as required by NASDAQ rules or the rules of any other quotation system or exchange on which the disclosing Party’s Equity Securities are listed or applicable Laws.

 

(f)                                   The costs of arbitration shall be borne by the losing Party unless otherwise determined by the arbitration award.

 

(g)                                  All payments made pursuant to the arbitration decision or award and any judgment entered thereon shall be made in U.S. Dollars (or, if a payment in U.S. Dollars is not permitted by Law and if mutually agreed upon by the Parties, in Renminbi), free from any deduction, offset or withholding for Taxes.

 

(h)                                 Notwithstanding this Section 13.9 or any other provision to the contrary in this Agreement, no Party shall be obligated to follow the foregoing arbitration procedures where such Party intends to apply to any court of competent jurisdiction for an interim injunction or similar equitable relief against any other Party; provided, that there is no unreasonable delay in the prosecution of that application. None of the Parties shall institute a proceeding in any court or administrative agency to resolve a dispute arising out of, relating to or in connection with this Agreement or the other Transaction Documents, except for a court proceeding to compel arbitration or otherwise enforce this agreement to arbitrate, to enforce an order or award of the arbitration tribunal or petition for the provisional or emergency remedies provided for herein. The Parties waive objection to venue and consent to the nonexclusive personal jurisdiction of the courts of Singapore in any action to enforce this arbitration agreement, any order or award of the arbitration tribunal or the provisional or emergency remedies provided for herein. In any such permitted court action, the Parties agree that delivery of the complaint or petition by international courier, with proof of delivery, shall constitute valid and sufficient service, and they individually and collectively waive any objection to such service.

 

Section 13.10                      Severability. Each provision of this Agreement shall be deemed a material and integral part hereof. Except as otherwise provided in this paragraph, in the event of a final determination of invalidity, illegality or unenforceability of any provision of this Agreement, the Parties shall negotiate in good faith to amend this Agreement (and any other Transaction Documents, as applicable) or to enter into new agreements to replace such invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provisions providing the Parties with benefits, rights and obligations that are equivalent in all material respects as provided by this Agreement (and any other Transaction Documents, as applicable) as if the invalid, illegal or unenforceable provision(s) had been valid, legal and enforceable.  In the event the Parties are not able to reach agreement on such amendments or new agreements, then the arbitrators (pursuant to the procedures set forth in Section 13.9) shall determine, as part of their arbitral award, such amendments or new agreements such to provide the Parties with benefits, rights and obligations that are equivalent in all material respect as provided by the Agreement as if the stricken provision(s) had been valid, legal and enforceable.  No Party shall, or shall permit any of its Related Parties or Representatives to, directly or indirectly assert that any provision of any Transaction Document is invalid, illegal or unenforceable.

 

51

 

Section 13.11                      Counterparts. This Agreement may be executed in two or more counterparts and such counterparts may be delivered in electronic format (including by email), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.

 

Section 13.12                      Rules of Construction. Each Party represents and acknowledges that, in the negotiation and drafting of this Agreement and the other instruments and documents required or contemplated hereby, it has been represented by and has relied upon the advice of counsel of its choice. Each Party hereby affirms that its counsel has had a substantial role in the drafting and negotiation of this Agreement and such other instruments and documents. Therefore, each Party agrees that no rule of construction to the effect that any ambiguities are to be resolved against the drafter shall be employed in the interpretation of this Agreement and such other instruments and documents and in the event an ambiguity or question of intent or interpretation arises, the Agreement shall be construed as if drafted jointly by the Parties.

 

[Remainder of Page Intentionally Left Blank]

 

52

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

 

	
 
    	
JD.COM, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ JD.COM, INC.
    
	
 
    	
(Seal of JD.COM, INC.)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sidney Xuande Huang
    
	
 
    	
 
    	
Name: Sidney Xuande Huang
    
	
 
    	
 
    	
Title: Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
JD.COM INTERNATIONAL LIMITED
    
	
 
    	
 
    
	
 
    	
/s/ JD.COM INTERNATIONAL LIMITED
    
	
 
    	
(Seal of JD.COM INTERNATIONAL 
    
	
 
    	
LIMITED)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pang Zhang
    
	
 
    	
 
    	
Name: Pang Zhang
    
	
 
    	
 
    	
Title: Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
宿迁翼同信息技术有限公司
    
	
 
    	
(Suqian Yitong Information Technology Co., 
    
	
 
    	
Ltd.)
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Suqian Yitong   Information Technology Co., Ltd.
    
	
 
    	
(Seal of Suqian Yitong   Information Technology Co., Ltd.)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pang Zhang
    
	
 
    	
 
    	
Name: Pang Zhang
    
	
 
    	
 
    	
Title: Legal Representative
    

 

[Signature Page to Framework Agreement]

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

 

	
 
    	
宿迁利贸东弘投资管理有限公司
    
	
 
    	
(Suqian Limao Donghong Investment 
    
	
 
    	
Management Co., Ltd.)
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Suqian Limao Donghong Investment Management   Co., Ltd.
    
	
 
    	
(Seal of Suqian Limao Donghong Investment Management   Co., Ltd.)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pang Zhang
    
	
 
    	
 
    	
Name: Pang Zhang
    
	
 
    	
 
    	
Title: Legal Representative
    
	
 
    	
 
    	
 
    

 

[Signature Page to Framework Agreement]

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

 

	
 
    	
北京京东金融科技控股有限公司
    
	
 
    	
(Beijing Jingdong Financial Technology 
    
	
 
    	
Holding Co., Ltd.)
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Beijing Jingdong Financial Technology Holding   Co., Ltd.
    
	
 
    	
(Seal of Beijing Jingdong Financial Technology Holding   Co., Ltd.)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Qiangdong Liu
    
	
 
    	
 
    	
Name: Qiangdong Liu
    
	
 
    	
 
    	
Title: Legal Representative
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
宿迁东辉朝旭咨询有限公司
    
	
 
    	
(Suqian Donghui Zhaoxu Consulting Co., 
    
	
 
    	
Ltd.)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pang Zhang
    
	
 
    	
 
    	
Name: Pang Zhang
    
	
 
    	
Title: Legal Representative
    

 

[Signature Page to Framework Agreement]

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

 

	
 
    	
宿迁领航方圆股权投资中心
    
	
 
    	
(Suqian Linghang Fangyuan Equity 
    
	
 
    	
Investment Center)
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Suqian Linghang Fangyuan Equity Investment Center
    
	
 
    	
(Seal of Suqian Linghang Fangyuan Equity Investment Center)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Qiangdong Liu
    
	
 
    	
 
    	
Name: Qiangdong Liu
    
	
 
    	
 
    	
Title: Legal Representative
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
宿迁东泰锦荣投资管理中心
    
	
 
    	
(Suqian Dongtai Jinrong Investment 
    
	
 
    	
Management Center)
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Suqian Dongtai Jinrong Investment Management   Center
    
	
 
    	
(Seal of Suqian Dongtai Jinrong Investment Management   Center)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pang Zhang
    
	
 
    	
 
    	
Name: Pang Zhang
    
	
 
    	
 
    	
Title: Legal Representative
    

 

[Signature Page to Framework Agreement]

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