Document:

Exhibit 4.3

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
PARTIES
    	
 
    	
1
    
	
RECITALS
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.
    	
Certain   Definitions
    	
 
    
	
(a)
    	
ADR Register
    	
1
    
	
(b)
    	
ADRs; Direct Registration ADRs
    	
1
    
	
(c)
    	
ADS
    	
1
    
	
(d)
    	
Custodian
    	
1
    
	
(e)
    	
Deliver, execute, issue et   al.
    	
1
    
	
(f)
    	
Delivery Order
    	
1
    
	
(g)
    	
Deposited Securities
    	
2
    
	
(h)
    	
Direct Registration System
    	
2
    
	
(i)
    	
Holder
    	
2
    
	
(j)
    	
Securities Act of 1933
    	
2
    
	
(k)
    	
Securities Exchange Act of 1934
    	
2
    
	
(l)
    	
Shares
    	
2
    
	
(m)
    	
Transfer Office
    	
2
    
	
(n)
    	
Withdrawal Order
    	
2
    
	
Section 2.
    	
ADRs
    	
2
    
	
Section 3.
    	
Deposit   of Shares
    	
3
    
	
Section 4.
    	
Issue   of ADRs
    	
3
    
	
Section 5.
    	
Distributions   on Deposited Securities
    	
3
    
	
Section 6.
    	
Withdrawal   of Deposited Securities
    	
4
    
	
Section 7.
    	
Substitution   of ADRs
    	
4
    
	
Section 8.
    	
Cancellation   and Destruction of ADRs
    	
4
    
	
Section 9.
    	
The   Custodian
    	
4
    
	
Section 10.
    	
Lists   of Holders
    	
5
    
	
Section 11.
    	
Depositary’s   Agents
    	
5
    
	
Section 12.
    	
Successor   Depositary
    	
5
    
	
Section 13.
    	
Reports
    	
6
    
	
Section 14.
    	
Additional   Shares
    	
6
    
	
Section 15.
    	
Indemnification
    	
7
    
	
Section 16.
    	
Notices
    	
8
    
	
Section 17.
    	
Miscellaneous
    	
8
    
	
Section 18.
    	
Consent   to Jurisdiction
    	
8
    
	
TESTIMONIUM
    	
13
    
	
SIGNATURES
    	
13
    

 

i

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
EXHIBIT A
    
	
 
    
	
FORM OF FACE OF ADR
    	
A-1
    
	
 
    	
 
    
	
Introductory Paragraph
    	
A-1
    
	
 
    	
 
    	
 
    
	
(1)
    	
Issuance   and Pre-Release of ADSs
    	
A-2
    
	
(2)
    	
Withdrawal   of Deposited Securities
    	
A-3
    
	
(3)
    	
Transfers   of ADRs
    	
A-3
    
	
(4)
    	
Certain   Limitations
    	
A-4
    
	
(5)
    	
Taxes
    	
A-5
    
	
(6)
    	
Disclosure   of Interests
    	
A-6
    
	
(7)
    	
Charges   of Depositary
    	
A-6
    
	
(8)
    	
Available   Information
    	
A-8
    
	
(9)
    	
Execution
    	
A-8
    
	
 
    	
 
    	
 
    
	
Signature of Depositary
    	
A-8
    
	
 
    	
 
    
	
Address of Depositary’s Office
    	
A-8
    
	
 
    	
 
    
	
FORM OF REVERSE OF ADR
    	
A-9
    
	
 
    	
 
    	
 
    
	
(10)
    	
Distributions   on Deposited Securities
    	
A-9
    
	
(11)
    	
Record   Dates
    	
A-10
    
	
(12)
    	
Voting   of Deposited Securities
    	
A-10
    
	
(13)
    	
Changes   Affecting Deposited Securities
    	
A-11
    
	
(14)
    	
Exoneration
    	
A-12
    
	
(15)
    	
Resignation   and Removal of Depositary; the Custodian
    	
A-14
    
	
(16)
    	
Amendment
    	
A-14
    
	
(17)
    	
Termination
    	
A-15
    
	
(18)
    	
Appointment
    	
A-16
    
	
(19)
    	
Waiver
    	
A-16
    
				

 

ii

 

DEPOSIT AGREEMENT dated as of [DATE]  , 2014 (the “Deposit Agreement”) among LEJU HOLDINGS LIMITED and its successors (the “Company”), JPMORGAN CHASE BANK, N.A., as depositary hereunder (the “Depositary”), and all holders from time to time of American Depositary Receipts issued hereunder (“ADRs”) evidencing American Depositary Shares (“ADSs”) representing deposited Shares (defined below).  The Company hereby appoints the Depositary as depositary for the Deposited Securities and hereby authorizes and directs the Depositary to act in accordance with the terms set forth in this Deposit Agreement.  All capitalized terms used herein have the meanings ascribed to them in Section 1 or elsewhere in this Deposit Agreement. The parties hereto agree as follows:

 

1.  Certain Definitions.

 

(a)                                 “ADR Register” is defined in paragraph (3) of the form of ADR.

 

(b)                                 “ADRs” mean the American Depositary Receipts executed and delivered hereunder. ADRs may be either in physical certificated form or Direct Registration ADRs (as hereinafter defined).  ADRs in physical certificated form, and the terms and conditions governing the Direct Registration ADRs, shall be substantially in the form of Exhibit A annexed hereto (the “form of ADR”).  The term “Direct Registration ADR” means an ADR, the ownership of which is recorded on the Direct Registration System. References to “ADRs” shall include certificated ADRs and Direct Registration ADRs, unless the context otherwise requires. The form of ADR is hereby incorporated herein and made a part hereof; the provisions of the form of ADR shall be binding upon the parties hereto.

 

(c)                                  Subject to paragraph (13) of the form of ADR, each “ADS” evidenced by an ADR represents the right to receive one Share and a pro rata share in any other Deposited Securities.

 

(d)                                 “Custodian” means the agent or agents of the Depositary (singly or collectively, as the context requires) and any additional or substitute Custodian appointed pursuant to Section 9.

 

(e)                                  The terms “deliver”, “execute”, “issue”, “register”, “surrender”, “transfer” or “cancel”, when used with respect to Direct Registration ADRs, shall refer to an entry or entries or an electronic transfer or transfers in the Direct Registration System, and, when used with respect to ADRs in physical certificated form, shall refer to the physical delivery, execution, issuance, registration, surrender, transfer or cancellation of certificates representing the ADRs.

 

(f)                                   “Delivery Order” is defined in Section 3.

 

1

 

(g)                                  “Deposited Securities” as of any time means all Shares at such time deposited under this Deposit Agreement and any and all other shares, securities, property and cash at such time held by the Depositary or the Custodian in respect or in lieu of such deposited Shares and other shares, securities, property and cash.

 

(h)                                 “Direct Registration System” means the system for the uncertificated registration of ownership of securities established by The Depository Trust Company (“DTC”) and utilized by the Depositary pursuant to which the Depositary may record the ownership of ADRs without the issuance of a certificate, which ownership shall be evidenced by periodic statements issued by the Depositary to the Holders entitled thereto. For purposes hereof, the Direct Registration System shall include access to the Profile Modification System maintained by DTC which provides for automated transfer of ownership between DTC and the Depositary.

 

(i)                                     “Holder” means the person or persons in whose name an ADR is registered on the ADR Register.

 

(j)                                    “Securities Act of 1933” means the United States Securities Act of 1933, as from time to time amended.

 

(k)                                 “Securities Exchange Act of 1934” means the United States Securities Exchange Act of 1934, as from time to time amended.

 

(l)                                     “Shares” mean the ordinary shares of the Company, and shall include the rights to receive Shares specified in paragraph (1) of the form of ADR.

 

(m)                             “Transfer Office” is defined in paragraph (3) of the form of ADR.

 

(n)                                 “Withdrawal Order” is defined in Section 6.

 

2.  ADRs.  (a)  ADRs in certificated form shall be engraved, printed or otherwise reproduced at the discretion of the Depositary in accordance with its customary practices in its American depositary receipt business, or at the request of the Company typewritten and photocopied on plain or safety paper, and shall be substantially in the form set forth in the form of ADR, with such changes as may be required by the Depositary or the Company to comply with their obligations hereunder, any applicable law, regulation or usage or to indicate any special limitations or restrictions to which any particular ADRs are subject.  ADRs may be issued in denominations of any number of ADSs.  ADRs in certificated form shall be executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary.  ADRs in certificated form bearing the facsimile signature of anyone who was at the time of execution a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased to hold such

 

2

 

office prior to the delivery of such ADRs.

 

(b)  Direct Registration ADRs. Notwithstanding anything in this Deposit Agreement or in the form of ADR to the contrary, ADSs shall be evidenced by Direct Registration ADRs, unless certificated ADRs are specifically requested by the Holder.

 

(c)  Holders shall be bound by the terms and conditions of this Deposit Agreement and of the form of ADR, regardless of whether their ADRs are Direct Registration ADRs or certificated ADRs.

 

3.  Deposit of Shares.  In connection with the deposit of Shares hereunder, the Depositary or the Custodian shall require a written order, in a form satisfactory to the Depositary, directing the Depositary to issue to, or upon the written order of, the person or persons designated in such order a Direct Registration ADR or ADRs evidencing the number of ADSs representing such deposited Shares (a “Delivery Order”). Shares presented for deposit shall, at the time of such deposit, be registered in the name of JPMorgan Chase Bank, N.A., as depositary for the benefit of holders of ADRs or in such other name as the Depositary shall direct.  Deposited Securities shall be held by the Custodian for the account and to the order of the Depositary for the benefit of Holders of ADRs (to the extent not prohibited by law) at such place or places and in such manner as the Depositary shall determine.  Deposited Securities may be delivered by the Custodian to any person only under the circumstances expressly contemplated in this Deposit Agreement. To the extent that the provisions of or governing the Shares make delivery of certificates therefor impracticable, Shares may be deposited hereunder by such delivery thereof as the Depositary or the Custodian may reasonably accept, including, without limitation, by causing them to be credited to an account maintained by the Custodian for such purpose with the Company or an accredited intermediary, such as a bank, acting as a registrar for the Shares, together with delivery of the documents, payments and Delivery Order referred to herein to the Custodian or the Depositary.

 

4.  Issue of ADRs.  After any such deposit of Shares, the Custodian shall notify the Depositary of such deposit and of the information contained in any related Delivery Order by letter, first class airmail postage prepaid, or, at the request, risk and expense of the person making the deposit, by SWIFT, cable, telex or facsimile transmission.  After receiving such notice from the Custodian, the Depositary, subject to this Deposit Agreement, shall properly issue at the Transfer Office, to or upon the order of any person named in such notice, an ADR or ADRs registered as requested and evidencing the aggregate ADSs to which such person is entitled.

 

5.  Distributions on Deposited Securities.  To the extent that the Depositary determines in its discretion that any distribution pursuant to paragraph (10) of the form of ADR is not practicable with respect to any Holder, the Depositary may make such distribution as it so deems practicable, including the distribution of foreign

 

 

currency, securities or property (or appropriate documents evidencing the right to receive foreign currency, securities or property) or the retention thereof as Deposited Securities with respect to such Holder’s ADRs (without liability for interest thereon or the investment thereof).

 

6.  Withdrawal of Deposited Securities.  In connection with any surrender of an ADR for withdrawal of the Deposited Securities represented by the ADSs evidenced thereby, the Depositary may require proper endorsement in blank of such ADR (or duly executed instruments of transfer thereof in blank) and the Holder’s written order directing the Depositary to cause the Deposited Securities represented by the ADSs evidenced by such ADR to be withdrawn and delivered to, or upon the written order of, any person designated in such order (a “Withdrawal Order”). Directions from the Depositary to the Custodian to deliver Deposited Securities shall be given by letter, first class airmail postage prepaid, or, at the request, risk and expense of the Holder, by SWIFT, cable, telex or facsimile transmission.  Delivery of Deposited Securities may be made by the delivery of certificates (which, if required by law, shall be properly endorsed or accompanied by properly executed instruments of transfer or, if such certificates may be registered, registered in the name of such Holder or as ordered by such Holder in any Withdrawal Order) or by such other means as the Depositary may deem practicable, including, without limitation, by transfer of record ownership thereof to an account designated in the Withdrawal Order maintained either by the Company or an accredited intermediary, such as a bank, acting as a registrar for the Deposited Securities.

 

7.  Substitution of ADRs.  The Depositary shall execute and deliver a new Direct Registration ADR in exchange and substitution for any mutilated certificated ADR upon cancellation thereof or in lieu of and in substitution for such destroyed, lost or stolen certificated ADR, unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, upon the Holder thereof filing with the Depositary a request for such execution and delivery and a sufficient indemnity bond and satisfying any other reasonable requirements imposed by the Depositary.

 

8.  Cancellation and Destruction of ADRs.  All ADRs surrendered to the Depositary shall be cancelled by the Depositary.  The Depositary is authorized to destroy ADRs in certificated form so cancelled in accordance with its customary practices.

 

9.  The Custodian.  Any Custodian in acting hereunder shall be subject to the directions of the Depositary and shall be responsible solely to it.  The Depositary reserves the right to add, replace or remove a Custodian.  The Depositary will give prompt notice of any such action, which will be advance notice if practicable.

 

Any Custodian may resign from its duties hereunder by at least 30 days written notice to the Depositary.  The Depositary may discharge any Custodian at any time

 

 

upon notice to the Custodian being discharged.  Any Custodian ceasing to act hereunder as Custodian shall deliver, upon the instruction of the Depositary, all Deposited Securities held by it to a Custodian continuing to act. Notwithstanding anything to the contrary contained in this Deposit Agreement (including the ADRs) and subject to the penultimate sentence of paragraph (14) of the form of ADR, the Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, any act or omission to act on the part of the Custodian except to the extent that the Custodian has (i) committed fraud or willful misconduct in the provision of custodial services to the Depositary or (ii) failed to use reasonable care in the provision of custodial services to the Depositary as determined in accordance with the standards prevailing in the jurisdiction in which the Custodian is located.

 

10.  Lists of Holders.  The Company shall have the right to inspect transfer records of the Depositary and its agents and the ADR Register, take copies thereof and require the Depositary and its agents to supply copies of such portions of such records as the Company may request.  The Depositary or its agent shall furnish to the Company promptly upon the written request of the Company, a list of the names, addresses and holdings of ADSs by all Holders as of a date within seven days of the Depositary’s receipt of such request.

 

11.  Depositary’s Agents.  The Depositary may perform its obligations under this Deposit Agreement through any agent appointed by it, provided that the Depositary shall notify the Company of such appointment and shall remain responsible for the performance of such obligations as if no agent were appointed, subject to paragraph (14) of the form of ADR.

 

12.  Successor Depositary.  The Depositary may at any time resign as Depositary hereunder by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.  The Depositary may at any time be removed by the Company by providing no less than 120 days prior written notice of such removal to the Depositary, such removal to take effect the later of (i) the 120th day after such notice of removal is first provided and (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. Notwithstanding the foregoing, if upon the resignation or removal of the Depositary a successor depositary is not appointed within the applicable 60-day period (in the case of resignation) or 120-day period (in the case of removal) as specified in paragraph (17) of the form of ADR, then the Depositary may elect to terminate this Deposit Agreement and the ADR and the provisions of said paragraph (17) shall thereafter govern the Depositary’s obligations hereunder.  In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York.  Every successor depositary shall execute and deliver to its predecessor and to the Company an

 

 

instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor.  The predecessor depositary, only upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than its rights to indemnification and fees owing, each of which shall survive any such removal and/or resignation), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADRs.  Any such successor depositary shall promptly mail notice of its appointment to such Holders.   Any bank or trust company into or with which the Depositary may be merged or consolidated, or to which the Depositary shall transfer substantially all its American depositary receipt business, shall be the successor of the Depositary without the execution or filing of any document or any further act.

 

13.  Reports.  On or before the first date on which the Company makes any communication available to holders of Deposited Securities or any securities regulatory authority or stock exchange, by publication or otherwise, the Company shall transmit to the Depositary a copy thereof in English or with an English translation or summary.  The Company has delivered to the Depositary, the Custodian and any Transfer Office, a copy of all provisions of or governing the Shares and any other Deposited Securities issued by the Company or any affiliate of the Company and, promptly upon any change thereto, the Company shall deliver to the Depositary, the Custodian and any Transfer Office, a copy (in English or with an English translation) of such provisions as so changed.  The Depositary and its agents may rely upon the Company’s delivery of all such communications, information and provisions for all purposes of this Deposit Agreement and the Depositary shall have no liability for the accuracy or completeness of any thereof.

 

14.  Additional Shares.  The Company agrees with the Depositary that neither the Company nor any company controlling, controlled by or under common control with the Company shall issue additional Shares, rights to subscribe for Shares, securities convertible into or exchangeable for Shares or rights to subscribe for any such securities or shall deposit any Shares under this Deposit Agreement, except under circumstances complying in all respects with the Securities Act of 1933. At the reasonable request of the Depositary where it deems necessary in the case of any such issuance, subscription, conversion, exchange or deposit, the Company will furnish the Depositary with legal opinions, in forms and from counsels reasonably acceptable to the Depositary, dealing with such issues requested by the Depositary.  The Depositary will use reasonable efforts to comply with written instructions of the Company not to accept for deposit hereunder any Shares identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with

 

 

securities laws in the United States.

 

15.  Indemnification. The Company shall indemnify, defend and save harmless each of the Depositary, the Custodian and their respective directors, officers, employees, agents and affiliates against any loss, liability or expense (including reasonable fees and expenses of counsel) which may arise out of acts performed or omitted, in connection with the provisions of this Deposit Agreement and of the ADRs, as the same may be amended, modified or supplemented from time to time in accordance herewith (i) by either the Depositary or a Custodian or their respective directors, officers, employees, agents and affiliates, except for any liability or expense directly arising out of the negligence or willful misconduct of the Depositary or its directors, officers or affiliates acting in their capacities as such hereunder, or (ii) by the Company or any of its directors, officers, employees, agents and affiliates.

 

The indemnities set forth in the preceding paragraph shall also apply to any liability or expense which may arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary placement memorandum) relating to the offer or sale of ADSs, except to the extent any such liability or expense arises out of (i) information relating to the Depositary or its agents (other than the Company), as applicable, furnished in writing by the Depositary and not changed or altered by the Company expressly for use in any of the foregoing documents or (ii) if such information is provided, the failure to state a material fact necessary to make the information provided not misleading.

 

Except as provided in the next succeeding paragraph or contemplated in Section 9 hereof, the Depositary shall indemnify, defend and save harmless the Company against any direct loss, liability or expense (including reasonable fees and expenses of counsel) incurred by the Company in respect of this Deposit Agreement to the extent such loss, liability or expense is due to the negligence or willful misconduct of the Depositary or its agents acting in their capacities as such hereunder.

 

Notwithstanding any other provision of this Deposit Agreement or the ADRs to the contrary, neither the Company nor the Depositary, nor any of their agents shall be liable to the other for any indirect, special, punitive or consequential damages (including, without limitation, lost profits but excluding legal fees and expenses) (collectively “Special Damages”) of any form incurred by any of them or any other person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought; provided, however, that to the extent Special Damages arise from or out of a claim brought by a third party (including, without limitation, Holders) against the Depositary or any of its agents acting under the Deposit Agreement, the Depositary and its agents shall be entitled to full indemnification from the Company for all such Special Damages, unless such Special

 

 

Damages are found to have been a direct result of the gross negligence or willful misconduct of the Depositary.

 

The obligations set forth in this Section 15 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

 

16.  Notices.  Notice to any Holder shall be deemed given when first mailed, first class postage prepaid, to the address of such Holder on the ADR Register or received by such Holder. Failure to notify a Holder or any defect in the notification to a Holder shall not affect the sufficiency of notification to other Holders or to the beneficial owners of ADSs held by such other Holders.  Notice to the Depositary or the Company shall be deemed given when first received by it at the address or facsimile transmission number set forth in (a) or (b), respectively, or at such other address or facsimile transmission number as either may specify to the other by written notice:

 

(a)                                 JPMorgan Chase Bank, N.A.

1 Chase Manhattan Plaza, Floor 58
 New York, New York, 10005-1401

Attention:  Depositary Receipts Group

Fax: (212) 552-2614

 

(b)                                 Leju Holdings Limited

15/F Floor, Shoudong International Plaza, No. 5 Building, 

Guangqu Home

Dongcheng District, Beijing 100022

People’s Republic of China

Attention: Chief Financial Officer

Facsimile: + 86 (10) 8722 4920

 

17.  Miscellaneous.  This Deposit Agreement is for the exclusive benefit of the Company, the Depositary, the Holders, and their respective successors hereunder, and shall not give any legal or equitable right, remedy or claim whatsoever to any other person.  The Holders and owners of ADRs from time to time shall be parties to this Deposit Agreement and shall be bound by all of the provisions hereof.  If any such provision is invalid, illegal or unenforceable in any respect, the remaining provisions shall in no way be affected thereby.  This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one instrument.

 

18.  Consent to Jurisdiction.  (a) The Company irrevocably agrees that any legal suit, action or proceeding against the Company brought by the Depositary or any Holder, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may be instituted in any state or federal court in New York, New York, and irrevocably waives any objection which it may now or hereafter have

 

 

to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company also irrevocably agrees that any legal suit, action or proceeding against the Depositary brought by the Company, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may only be instituted in a state or federal court in New York, New York. Notwithstanding the foregoing, any action against the Company based on this Deposit Agreement or the transactions contemplated hereby may be instituted by the Depositary in any competent court in the Cayman Islands, Hong Kong, the People’s Republic of China and/or the United States, or through the commencement of an arbitration pursuant to Section 18(b) of this Deposit Agreement.  The Company has appointed Law Debenture Corporate Services Inc., 400 Madison Avenue, 4th Floor, New York, New York, 10017as its authorized agent (the “Authorized Agent”) upon which process may be served in any such action or proceeding arising out of or based on this Deposit Agreement or the transactions contemplated hereby which may be instituted in any state or federal court in New York, New York by the Depositary or any Holder, and waives any other requirements of or objections to personal jurisdiction with respect thereto. Subject to the Company’s right to replace the Authorized Agent, such appointment shall be irrevocable. The Company represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid.  The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Authorized Agent (whether or not the appointment of such Authorized Agent shall for any reason prove to be ineffective or such Authorized Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 16(b) hereof. The Company agrees that the failure of the Authorized Agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment or award rendered in any action or proceeding based thereon.  If, for any reason, the Authorized Agent named above or its successor shall no longer serve as agent of the Company to receive service of process, notice or papers, the Company shall promptly appoint a successor that is a legal entity with offices in New York, New York, to serve as Authorized Agent hereunder, which successor shall be acceptable to the Depositary, and will promptly advise the Depositary thereof.  In the event the Company fails to continue such designation and appointment in full force and effect as aforesaid, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.

 

 

(b)                                           Optional Arbitration.  Notwithstanding anything in this Deposit Agreement to the contrary, each of the parties hereto (i.e. the Company, the Depositary and all Holders from time to time of ADRs issued hereunder (and any persons holding interests in ADSs)) agrees that: (i) the Depositary may, in its sole discretion, elect to institute any action, controversy, claim or dispute directly or indirectly based on, arising out of or relating to this Deposit Agreement or the ADRs or the transactions contemplated hereby or thereby, including without limitation any question regarding its or their existence, validity, interpretation, performance or termination (a “Dispute”) against any other party or parties hereto (including, without limitation, Disputes brought against Holders and owners of interests in ADSs), by having the Dispute referred to and finally resolved by an arbitration conducted under the terms set out below, and (ii) the Depositary may in its sole discretion require, by written notice to the relevant party or parties, that any Dispute, legal suit, action or proceeding brought by any party or parties hereto (including, without limitation, Disputes, legal suits, actions or proceedings brought by Holders and owners of interests in ADSs) against the Depositary shall be referred to and finally settled by an arbitration conducted under the terms set out below. Any such arbitration shall at the Depositary’s election be conducted either in New York, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association or in Hong Kong following the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) with the Hong Kong International Arbitration Centre serving as the appointing authority, and the language of any such arbitration shall be English.  A notice of arbitration may be mailed to the Company at its address last specified for notices under this Deposit Agreement, and, if applicable, to any Holders at their addresses on the ADR Register.  In any case where the Depositary exercises its right to arbitrate hereunder, arbitration of the Dispute shall be mandatory and any pending litigation arising out of or related to such Dispute shall be stayed. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  The number of arbitrators shall be three, each of whom shall be disinterested in the dispute or controversy, shall have no connection with any party thereto, and shall be an attorney experienced in international securities transactions. Each of the Company and the Depositary shall appoint one arbitrator and the two arbitrators shall select a third arbitrator who shall serve as chairperson of the tribunal. If a Dispute shall involve more than two parties, the parties shall attempt to align themselves in two sides (i.e., claimant and respondent), each of which shall appoint one arbitrator as if there were only two parties to such Dispute. If either or both parties fail to select an arbitrator, or if such alignment (in the event there are more than two parties) shall not have occurred, within thirty (30) calendar days after the Depositary serves the arbitration demand or the two arbitrators fail to select a third arbitrator within thirty (30) calendar days of the selection of the second arbitrator, the American Arbitration Association in the case of an arbitration in New York, or the Hong Kong International Arbitration Centre in the case of an arbitration in Hong Kong, shall appoint the remaining arbitrator or arbitrators in accordance with its rules. The parties and the American Arbitration

 

 

Association and/or the Hong Kong International Arbitration Centre, as the case may be, may appoint the arbitrators from among the nationals of any country, whether or not the appointing party or any other party to the arbitration is a national of that country.  The arbitrators shall have no authority to award damages against any party not measured by the prevailing party’s actual damages and shall have no authority to award any consequential, special or punitive damages against any party and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Deposit Agreement. In all cases, the fees of the arbitrators and other costs incurred by the parties in connection with such arbitration shall be paid by the party (or parties) that is (or are) unsuccessful in such arbitration. No party hereto shall be entitled to join or consolidate disputes by or against others in any arbitration, or to include in any arbitration any dispute as a representative or member of a class, or act in any arbitration in the interest of the general public or in a private attorney general capacity.

 

(c)                                            Actions by Holders etc.         By holding an ADS or an interest therein, Holders and owners of ADSs each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may only be instituted in a state or federal court in New York, New York, and by holding an ADS or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

 

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter be entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding (including any arbitration), from the giving of any relief in respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment or arbitral award, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or other matters under or arising out of or in connection with the Shares or Deposited Securities, the ADSs, the ADRs or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

 

(d)                                           Waiver.                                            EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY

 

 

DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).

 

 

IN WITNESS WHEREOF, LEJU HOLDINGS LIMITED and JPMORGAN CHASE BANK, N.A. have duly executed this Deposit Agreement as of the day and year first above set forth and all holders of ADRs shall become parties hereto upon acceptance by them of ADRs issued in accordance with the terms hereof.

 

	
 
    	
LEJU   HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    	
Executive   Director
    
				

 

13

 

EXHIBIT A

ANNEXED TO AND INCORPORATED IN

DEPOSIT AGREEMENT

 

[FORM OF FACE OF ADR]

 

	
 
    	
 
    	
No.   of ADSs:
    
	
Number
    

 

	
 
    	
 
    
	
 
    	
Each   ADS represents
    
	
 
    	
One   Share
    
	
 
    	
 
    
	
 
    	
CUSIP:
    

 

AMERICAN DEPOSITARY RECEIPT

 

evidencing

 

AMERICAN DEPOSITARY SHARES

 

representing

 

ORDINARY SHARES

 

of

 

LEJU HOLDINGS LIMITED

 

(Incorporated under the laws of the Cayman Islands)

 

JPMORGAN CHASE BANK, N.A., a national banking association organized under the laws of the United States of America, as depositary hereunder (the “Depositary”), hereby certifies that               is the registered owner (a “Holder”) of              American Depositary Shares (“ADSs”), each (subject to paragraph (13)) representing one ordinary share (including the rights to receive Shares described in paragraph (1), “Shares” and, together with any other securities, cash or property from time to time held by the Depositary in respect or in lieu of deposited Shares, the “Deposited Securities”), of Leju Holdings Limited, a corporation organized under the laws of the Cayman Islands (the “Company”), deposited under the Deposit Agreement dated as of [DATE]  , 2014 (as amended from time to time, the “Deposit Agreement”) among the Company, the Depositary and all Holders from time to time of American Depositary Receipts issued thereunder (“ADRs”), each of whom by accepting an ADR becomes a party thereto.  The Deposit Agreement and this ADR (which includes the provisions set

 

A-1

 

forth on the reverse hereof) shall be governed by and construed in accordance with the laws of the State of New York.

 

(1)  Issuance and Pre-Release of ADSs.  This ADR is one of the ADRs issued under the Deposit Agreement.  Subject to the other provisions hereof, the Depositary may so issue ADRs for delivery at the Transfer Office (as hereinafter defined) only against deposit of:  (a) Shares in a form satisfactory to the Custodian; (b) rights to receive Shares from the Company or any registrar, transfer agent, clearing agent or other entity recording Share ownership or transactions; or (c) in accordance with the next paragraph hereof.

 

In its capacity as Depositary, the Depositary shall not lend Shares or ADSs; provided, however, that the Depositary may issue ADSs prior to the receipt of Shares (each such transaction a “Pre-Release”). The Depositary may receive ADSs in lieu of Shares under the preceding sentence (which ADSs will promptly be canceled by the Depositary upon receipt by the Depositary). Each such Pre-Release will be subject to a written agreement whereby the person or entity (the “Applicant”) to whom ADSs or Shares are to be delivered (a) represents that at the time of the Pre-Release the Applicant or its customer owns the Shares or ADSs that are to be delivered by the Applicant under such Pre-Release, (b) agrees to indicate the Depositary as owner of such Shares or ADSs in its records and to hold such Shares or ADSs in trust for the Depositary until such Shares or ADSs are delivered to the Depositary or the Custodian, (c) unconditionally guarantees to deliver to the Depositary or the Custodian, as applicable, such Shares or ADSs, and (d) agrees to any additional restrictions or requirements that the Depositary deems appropriate. Each such Pre-Release will be at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary deems appropriate, terminable by the Depositary on not more than five (5) business days’ notice and subject to such further indemnities and credit regulations as the Depositary deems appropriate. The Depositary will normally limit the number of ADSs and Shares involved in such Pre-Release at any one time to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under Pre-Release transactions), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate. The Depositary may also set limits with respect to the number of ADSs and Shares involved in Pre-Release with any one person on a case-by-case basis as it deems appropriate. The Depositary may retain for its own account any compensation received by it in conjunction with the foregoing. Collateral provided in connection with Pre-Release transactions, but not the earnings thereon, shall be held for the benefit of the Holders (other than the Applicant).

 

Every person depositing Shares under the Deposit Agreement represents and warrants that (a) such Shares and the certificates therefor are duly authorized, validly issued and outstanding, fully paid, nonassessable and legally obtained by such person

 

A-2

 

(b) all pre-emptive and comparable rights, if any, with respect to such Shares have been validly waived or exercised, (c) the person making such deposit is duly authorized so to do, (d) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim and (e) such Shares (A) are not “restricted securities” as such term is defined in Rule 144 under the Securities Act of 1933 (“Restricted Securities”) unless at the time of deposit the requirements of paragraphs (c), (e), (f) and (h) of Rule 144 shall not apply and such Shares may be freely transferred and may otherwise be offered and sold freely in the United States or (B) have been registered under the Securities Act of 1933. To the extent the person depositing Shares is an “affiliate” of the Company as such term is defined in Rule 144, the person also represents and warrants that upon the sale of the ADSs, all of the provisions of Rule 144 which enable the Shares to be freely sold (in the form of ADSs) will be fully complied with and, as a result thereof, all of the ADSs issued in respect of such Shares will not be on the sale thereof, Restricted Securities.  Such representations and warranties shall survive the deposit and withdrawal of Shares and the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs.  The Depositary will not knowingly accept for deposit under the Deposit Agreement any Shares required to be registered under the Securities Act of 1933 and not so registered; the Depositary may refuse to accept for such deposit any Shares identified by the Company in order to facilitate the Company’s compliance with the requirements of the Securities Act of 1933 or the Rules made thereunder.

 

(2)  Withdrawal of Deposited Securities.  Subject to paragraphs (4) and (5), upon surrender of (i) a certificated ADR in form satisfactory to the Depositary at the Transfer Office or (ii) proper instructions and documentation in the case of a Direct Registration ADR, the Holder hereof is entitled to delivery at, or to the extent in dematerialized form from, the Custodian’s office of the Deposited Securities at the time represented by the ADSs evidenced by this ADR.  At the request, risk and expense of the Holder hereof, the Depositary may deliver such Deposited Securities at such other place as may have been requested by the Holder.  Notwithstanding any other provision of the Deposit Agreement or this ADR, the withdrawal of Deposited Securities may be restricted only for the reasons set forth in General Instruction I.A.(1) of Form F-6 (as such instructions may be amended from time to time) under the Securities Act of 1933.

 

(3)  Transfers of ADRs.  The Depositary or its agent will keep, at a designated transfer office (the “Transfer Office”), (a) a register (the “ADR Register”) for the registration, registration of transfer, combination and split-up of ADRs, and, in the case of Direct Registration ADRs, shall include the Direct Registration System, which at all reasonable times will be open for inspection by Holders and the Company for the purpose of communicating with Holders in the interest of the business of the Company or a matter relating to the Deposit Agreement and (b) facilities for the delivery and receipt of ADRs. The term ADR Register includes the Direct Registration 

 

A-3

 

System.  Title to this ADR (and to the Deposited Securities represented by the ADSs evidenced hereby), when properly endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer, is transferable by delivery with the same effect as in the case of negotiable instruments under the laws of the State of New York; provided that the Depositary, notwithstanding any notice to the contrary, may treat the person in whose name this ADR is registered on the ADR Register as the absolute owner hereof for all purposes and neither the Depositary nor the Company will have any obligation or be subject to any liability under the Deposit Agreement to any holder of an ADR, unless such holder is the Holder thereof.  Subject to paragraphs (4) and (5), this ADR is transferable on the ADR Register and may be split into other ADRs or combined with other ADRs into one ADR, evidencing the aggregate number of ADSs surrendered for split-up or combination, by the Holder hereof or by duly authorized attorney upon surrender of this ADR at the Transfer Office properly endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer and duly stamped as may be required by applicable law; provided that the Depositary may close the ADR Register at any time or from time to time when deemed expedient by it or when reasonably requested by the Company solely in order to enable the Company to comply with applicable law.  At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated ADR with a Direct Registration ADR, or vice versa, execute and deliver a certificated ADR or a Direct Registration ADR, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the certificated ADR or Direct Registration ADR, as the case may be, substituted.

 

(4)  Certain Limitations.  Prior to the issue, registration, registration of transfer, split-up or combination of any ADR, the delivery of any distribution in respect thereof, or, subject to the last sentence of paragraph (2), the withdrawal of any Deposited Securities, and from time to time in the case of clause (b)(ii) of this paragraph (4), the Company, the Depositary or the Custodian may require:  (a) payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of Shares or other Deposited Securities upon any applicable register and (iii) any applicable charges as provided in paragraph (7) of this ADR; (b) the production of proof satisfactory to it of (i) the identity of any signatory and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing Deposited Securities and terms of the Deposit Agreement and this ADR, as it may deem necessary or proper; and (c) compliance with such regulations as the Depositary may establish consistent with the Deposit Agreement.  The issuance of ADRs, the acceptance of deposits of Shares, the registration, registration of transfer, split-up or combination of ADRs or, subject to the last 

 

A-4

 

sentence of paragraph (2), the withdrawal of Deposited Securities may be suspended, generally or in particular instances, when the ADR Register or any register for Deposited Securities is closed or when any such action is deemed advisable by the Depositary.

 

(5)  Taxes.  If any tax or other governmental charges (including any penalties and/or interest) shall become payable by or on behalf of the Custodian or the Depositary with respect to this ADR, any Deposited Securities represented by the ADSs evidenced hereby or any distribution thereon, including, without limitation, any Chinese Enterprise Income Tax owing if the Circular Guoshuifa [2009] No. 82 issued by the Chinese State Administration of Taxation (SAT) or any other circular, edict, order or ruling, as issued and as from time to time amended, is applied or otherwise, such tax or other governmental charge shall be paid by the Holder hereof to the Depositary and by holding or having held an ADR the Holder and all prior Holders hereof, jointly and severally, agree to indemnify, defend and save harmless each of the Depositary and its agents in respect thereof.  The Depositary may refuse to effect any registration, registration of transfer, split-up or combination hereof or, subject to the last sentence of paragraph (2), any withdrawal of such Deposited Securities until such payment is made.  The Depositary may also deduct from any distributions on or in respect of Deposited Securities, or may sell by public or private sale for the account of the Holder hereof any part or all of such Deposited Securities (after attempting by reasonable means to notify the Holder hereof prior to such sale), and may apply such deduction or the proceeds of any such sale in payment of such tax or other governmental charge, the Holder hereof remaining liable for any deficiency, and shall reduce the number of ADSs evidenced hereby to reflect any such sales of Shares. In connection with any distribution to Holders, the Company will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Company; and the Depositary and the Custodian will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Depositary or the Custodian.  If the Depositary determines that any distribution in property other than cash (including Shares or rights) on Deposited Securities is subject to any tax that the Depositary or the Custodian is obligated to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the Holders entitled thereto. Each Holder of an ADR or an interest therein agrees to indemnify the Depositary, the Company, the Custodian and any of their respective officers, directors, employees, agents and affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained.

 

A-5

 

(6)  Disclosure of Interests.  To the extent that the provisions of or governing any Deposited Securities may require disclosure of or impose limits on beneficial or other ownership of Deposited Securities, other Shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, Holders and all persons holding ADRs agree to comply with all such disclosure requirements and ownership limitations and to comply with any reasonable Company instructions in respect thereof. The Company reserves the right to instruct Holders to deliver their ADSs for cancellation and withdrawal of the Deposited Securities so as to permit the Company to deal directly with the Holder thereof as a holder of Shares and Holders agree to comply with such instructions.  The Depositary agrees to cooperate with the Company in its efforts to inform Holders of the Company’s exercise of its rights under this paragraph and agrees to consult with, and provide reasonable assistance without risk, liability or expense on the part of the Depositary, to the Company on the manner or manners in which it may enforce such rights with respect to any Holder.

 

(7)  Charges of Depositary.  The Depositary may charge, and collect from, (i) each person to whom ADSs are issued, including, without limitation, issuances against deposits of Shares, issuances in respect of Share Distributions, Rights and Other Distributions (as such terms are defined in paragraph (10)), issuances pursuant to a stock dividend or stock split declared by the Company, or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or the Deposited Securities, and (ii) each person surrendering ADSs for withdrawal of Deposited Securities or whose ADSs are cancelled or reduced for any other reason, U.S.$5.00 for each 100 ADSs (or portion thereof) issued, delivered, reduced, cancelled or surrendered (as the case may be). The Depositary may sell (by public or private sale) sufficient securities and property received in respect of Share Distributions, Rights and Other Distributions prior to such deposit to pay such charge. The following additional charges shall be incurred by the Holders, by any party depositing or withdrawing Shares or by any party surrendering ADSs, to whom ADSs are issued (including, without limitation, issuances pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the ADSs or the Deposited Securities or a distribution of ADSs pursuant to paragraph (10)), whichever is applicable (i) a fee of U.S.$0.05 or less per ADS for any Cash distribution made pursuant to the Deposit Agreement, (ii) a fee of U.S.$1.50 per ADR or ADRs for transfers made pursuant to paragraph (3) hereof, (iii) a fee for the distribution or sale of securities pursuant to paragraph (10) hereof, such fee being in an amount equal to the fee for the execution and delivery of ADSs referred to above which would have been charged as a result of the deposit of such securities (for purposes of this paragraph (7) treating all such securities as if they were Shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the Depositary to Holders entitled thereto, (iv) an aggregate fee of U.S.$0.05 per ADS per 

 

A-6

 

calendar year (or portion thereof) for services performed by the Depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against Holders as of the record date or record dates set by the Depositary during each calendar year and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash distributions), and (v) a fee for the reimbursement of such fees, charges and expenses as are incurred by the Depositary and/or any of its agents (including, without limitation, the Custodian and expenses incurred on behalf of Holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the servicing of the Shares or other Deposited Securities, the sale of securities (including, without limitation, Deposited Securities), the delivery of Deposited Securities or otherwise in connection with the Depositary’s or its Custodian’s compliance with applicable law, rule or regulation (which fees and charges shall be assessed on a proportionate basis against Holders as of the record date or dates set by the Depositary and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash distributions). The Company will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time between the Company and the Depositary, except (i) stock transfer or other taxes and other governmental charges (which are payable by Holders or persons depositing Shares), (ii) cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or Holders delivering Shares, ADRs or Deposited Securities (which are payable by such persons or Holders), (iii) transfer or registration fees for the registration or transfer of Deposited Securities on any applicable register in connection with the deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares or Holders withdrawing Deposited Securities; there are no such fees in respect of the Shares as of the date of the Deposit Agreement), and (iv) in connection with the conversion of foreign currency into U.S. dollars, JPMorgan Chase Bank, N.A. (“JPMorgan”) shall deduct out of such foreign currency the fees, expenses and other charges charged by it and/or its agent (which may be a division, branch or affiliate) so appointed in connection with such conversion. JPMorgan and/or its agent may act as principal for such conversion of foreign currency. Such charges may at any time and from time to time be changed by agreement between the Company and the Depositary.

 

The Depositary anticipates reimbursing the Company for certain expenses incurred by the Company that are related to the establishment and maintenance of the ADR program upon such terms and conditions as the Company and the Depositary may agree from time to time.  The Depositary may make available to the Company a set amount or a portion of the Depositary fees charged in respect of the ADR program or otherwise upon such terms and conditions as the Company and the Depositary may agree from time to time.

 

A-7

 

The right of the Depositary to receive payment of fees, charges and expenses as provided above shall survive the termination of the Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary, such right shall extend for those fees, charges and expenses incurred prior to the effectiveness of such resignation or removal.

 

(8)  Available Information.  The Deposit Agreement, the provisions of or governing Deposited Securities and any written communications from the Company, which are both received by the Custodian or its nominee as a holder of Deposited Securities and made generally available to the holders of Deposited Securities, are available for inspection by Holders at the offices of the Depositary and the Custodian and at the Transfer Office.  The Depositary will distribute copies of such communications (or English translations or summaries thereof) to Holders when furnished by the Company.  The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and accordingly files certain reports with the United States Securities and Exchange Commission (the “Commission”).  Such reports and other information may be inspected and copied at public reference facilities maintained by the Commission located at the date hereof at 100 F Street, NE, Washington, DC 20549.

 

(9)  Execution.  This ADR shall not be valid for any purpose unless executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary.

 

	
Dated:
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A., as Depositary
    
	
 
    	
By
    	
 
    
	
 
    	
Authorized   Officer
    

 

The Depositary’s office is located at 1 Chase Manhattan Plaza, Floor 58, New York, New York, 10005-1401.

 

A-8

 

[FORM OF REVERSE OF ADR]

 

(10)  Distributions on Deposited Securities.  Subject to paragraphs (4) and (5), to the extent practicable, the Depositary will distribute to each Holder entitled thereto on the record date set by the Depositary therefor at such Holder’s address shown on the ADR Register, in proportion to the number of Deposited Securities (on which the following distributions on Deposited Securities are received by the Custodian) represented by ADSs evidenced by such Holder’s ADRs:  (a) Cash.  Any U.S. dollars available to the Depositary resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof authorized in this paragraph (10) (“Cash”), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain Holders, and (iii) deduction of the Depositary’s and/or its agents’ fees and expenses in (1) converting any foreign currency to U.S. dollars by sale or in such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the Depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner.  (b) Shares.  (i) Additional ADRs evidencing whole ADSs representing any Shares available to the Depositary resulting from a dividend or free distribution on Deposited Securities consisting of Shares (a “Share Distribution”) and (ii) U.S. dollars available to it resulting from the net proceeds of sales of Shares received in a Share Distribution, which Shares would give rise to fractional ADSs if additional ADRs were issued therefor, as in the case of Cash. (c) Rights.  (i) Warrants or other instruments in the discretion of the Depositary representing rights to acquire additional ADRs in respect of any rights to subscribe for additional Shares or rights of any nature available to the Depositary as a result of a distribution on Deposited Securities (“Rights”), to the extent that the Company timely furnishes to the Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Company has no obligation to so furnish such evidence), or (ii) to the extent the Company does not so furnish such evidence and sales of Rights are practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Company does not so furnish such evidence and such sales cannot practicably be accomplished by reason of the nontransferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse).  (d) Other Distributions.  (i) Securities or property available to the Depositary resulting from any distribution on Deposited Securities other than Cash, Share Distributions and Rights (“Other Distributions”), by any means that the Depositary may deem equitable and practicable, or (ii) to the extent the Depositary

 

 

deems distribution of such securities or property not to be equitable and practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash. The Depositary reserves the right to utilize a division, branch or affiliate of JPMorgan Chase Bank, N.A. to direct, manage and/or execute any public and/or private sale of securities hereunder.  Such division, branch and/or affiliate may charge the Depositary a fee in connection with such sales, which fee is considered an expense of the Depositary contemplated above and/or under paragraph (7) hereof.  Any U.S. dollars available will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices.  The Company agrees that it shall not make cash distributions (including, without limitation, cash dividends) to shareholders in a currency other than U.S. dollars.

 

(11)  Record Dates.  The Depositary may, after consultation with the Company if practicable, fix a record date (which, to the extent applicable, shall be as near as practicable to any corresponding record date set by the Company) for the determination of the Holders who shall be responsible for the fee assessed by the Depositary for administration of the ADR program and for any expenses provided for in paragraph (7) hereof as well as for the determination of the Holders who shall be entitled to receive any distribution on or in respect of Deposited Securities, to give instructions for the exercise of any voting rights, to receive any notice or to act in respect of other matters and only such Holders shall be so entitled or obligated.

 

(12)  Voting of Deposited Securities.  As soon as practicable after receipt from the Company of notice of any meeting or solicitation of consents or proxies of holders of Shares or other Deposited Securities, the Depositary shall distribute to Holders a notice stating (a) such information as is contained in such notice and any solicitation materials, (b) that each Holder on the record date set by the Depositary therefor will, subject to any applicable provisions of Cayman Island law, be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs and (c) the manner in which such instructions may be given, including instructions to give a discretionary proxy to a person designated by the Company.  Upon actual receipt by the ADR department of the Depositary of instructions of a Holder on such record date in the manner and on or before the time established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the provisions of or governing Deposited Securities to vote or cause to be voted the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs in accordance with such instructions.  The Depositary will not itself exercise any voting discretion in respect of any Deposited Securities.  There is no guarantee that Holders generally or any Holder in particular will receive the notice described above with sufficient time to enable such Holder to return any voting instructions to the Depositary in a timely manner.  Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary may, to the extent not prohibited by law or

 

 

regulations, or by the requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (i.e., by reference to a website containing the materials for retrieval or a contact for requesting copies of the materials).  Holders are strongly encouraged to forward their voting instructions as soon as possible.  Voting instructions will not be deemed received until such time as the ADR department responsible for proxies and voting has received such instructions notwithstanding that such instructions may have been physically received by JPMorgan Chase Bank, N.A., as Depositary, prior to such time.

 

The Depositary has been advised by the Company that under the Cayman Islands law and the Memorandum and Articles of Association of the Company, each as in effect as of the date of the Deposit Agreement, voting at any meeting of shareholders of the Company is by show of hands unless a poll is (before or on the declaration of the results of the show of hands) demanded.  In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions (or the deemed voting instructions, as set out above) received by the Depositary from Holders shall lapse. The Depositary will not demand a poll or join in demanding a poll, whether or not requested to do so by Holders of ADSs.

 

(13)  Changes Affecting Deposited Securities.  Subject to paragraphs (4) and (5), the Depositary may, in its discretion, and shall if reasonably requested by the Company, amend this ADR or distribute additional or amended ADRs (with or without calling this ADR for exchange) or cash, securities or property on the record date set by the Depositary therefor to reflect any change in par value, split-up, consolidation, cancellation or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not distributed to Holders or any cash, securities or property available to the Depositary in respect of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited Securities to any person and, irrespective of whether such Deposited Securities are surrendered or otherwise cancelled by operation of law, rule, regulation or otherwise, to sell by public or private sale any property received in connection with) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the Company, and to the extent the Depositary does not so amend this ADR or make a distribution to Holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute Deposited Securities and each ADS evidenced by this ADR shall automatically represent its pro rata interest in the Deposited Securities as then constituted.  Promptly upon the occurrence of any of the aforementioned changes affecting Deposited Securities, the Company shall notify the

 

 

Depositary in writing of such occurrence and as soon as practicable after receipt of such notice from the Company, may instruct the Depositary to give notice thereof, at the Company’s expense, to Holders in accordance with the provisions hereof. Upon receipt of such instruction, the Depositary shall give notice to the Holders in accordance with the terms thereof, as soon as reasonably practicable.

 

(14)  Exoneration.  The Depositary, the Company, their agents and each of them shall: (a) incur no liability (i) if any present or future law, rule, regulation, fiat, order or decree of the United States, the Cayman Islands, The People’s Republic of China (including the Hong Kong Special Administrative Region, the People’s Republic of China) or any other country, or of any governmental or regulatory authority or any securities exchange or market or automated quotation system, the provisions of or governing any Deposited Securities, any present or future provision of the Company’s charter, any act of God, war, terrorism, nationalization or other circumstance beyond its control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act which the Deposit Agreement or this ADR provides shall be done or performed by it or them (including, without limitation, voting pursuant to paragraph (12) hereof), or (ii) by reason of any exercise or failure to exercise any discretion given it in the Deposit Agreement or this ADR (including, without limitation, any failure to determine that any distribution or action may be lawful or reasonably practicable); (b) assume no liability except to perform its obligations to the extent they are specifically set forth in this ADR and the Deposit Agreement without gross negligence or willful misconduct; (c) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR; (d) in the case of the Company and its agents hereunder be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required; or (e) not be liable for any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person believed by it to be competent to give such advice or information. The Depositary shall not be liable for the acts or omissions made by, or the insolvency of, any securities depository, clearing agency or settlement system.  The Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, the insolvency of any Custodian that is not a branch or affiliate of JPMorgan Chase Bank, N.A.  The Depositary shall not have any liability for the price received in connection with any sale of securities, the timing thereof or any delay in action or omission to act nor shall it be responsible for any error or delay in action, omission to act, default or negligence on the part of the party so retained in connection with any such sale or proposed sale.  Notwithstanding anything to the contrary contained in the Deposit Agreement (including the ADRs), subject to the penultimate sentence of this paragraph (14), the Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, any

 

 

act or omission to act on the part of the Custodian except to the extent that the Custodian has (i) committed fraud or willful misconduct in the provision of custodial services to the Depositary or (ii) failed to use reasonable care in the provision of custodial services to the Depositary as determined in accordance with the standards prevailing in the jurisdiction in which the Custodian is located. The Depositary, its agents and the Company may rely and shall be protected in acting upon any written notice, request, direction, instruction or document believed by them to be genuine and to have been signed, presented or given by the proper party or parties. The Depositary shall be under no obligation to inform Holders or any other holders of an interest in any ADSs about the requirements of Cayman Island or People’s Republic of China (including the Hong Kong Special Administrative Region, the People’s Republic of China) law, rules or regulations or any changes therein or thereto. The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, for the manner in which any such vote is cast or for the effect of any such vote. The Depositary may rely upon instructions from the Company or its counsel in respect of any approval or license required for any currency conversion, transfer or distribution. The Depositary and its agents may own and deal in any class of securities of the Company and its affiliates and in ADRs. Notwithstanding anything to the contrary set forth in the Deposit Agreement or an ADR, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder or Holders, any ADR or ADRs or otherwise related hereto or thereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators.  None of the Depositary, the Custodian or the Company shall be liable for the failure by any Holder or beneficial owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holder’s or beneficial owner’s income tax liability. The Depositary and the Company shall not incur any liability for any tax consequences that may be incurred by Holders and beneficial owners on account of their ownership of the ADRs or ADSs. The Depositary shall not incur any liability for the content of any information submitted to it by or on behalf of the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement or for the failure or timeliness of any notice from the Company.  The Depositary shall not be liable for any acts or omissions made by a successor depositary in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises JPMorgan Chase Bank, N.A., in its capacity as Depositary performed its obligations without negligence while it acted as Depositary. By holding an ADS or an interest therein, Holders and owners of ADSs each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement or the transactions contemplated hereby, may only be instituted

 

 

in a state or federal court in New York, New York, and by holding an ADS or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company has agreed to indemnify the Depositary and its agents under certain circumstances and the Depositary has agreed to indemnify the Company under certain circumstances.  Neither the Depositary nor any of its agents shall be liable to Holders or beneficial owners of interests in ADSs for any indirect, special, punitive or consequential damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought. No disclaimer of liability under the Securities Act of 1933 is intended by any provision hereof.

 

(15)  Resignation and Removal of Depositary; the Custodian. The Depositary may resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement.  The Depositary may at any time be removed by the Company by no less than 120 days prior written notice of such removal, to become effective upon the later of (i) the 120th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may appoint substitute or additional Custodians and the term “Custodian” refers to each Custodian or all Custodians as the context requires.

 

(16)  Amendment.  Subject to the last sentence of paragraph (2), the ADRs and the Deposit Agreement may be amended by the Company and the Depositary, provided that any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise prejudice any substantial existing right of Holders, shall become effective 30 days after notice of such amendment shall have been given to the Holders.  Every Holder of an ADR at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such ADR, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby.  In no event shall any amendment impair the right of the Holder of any ADR to surrender such ADR and receive the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act of 1933 or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to prejudice any substantial rights of Holders.  Notwithstanding the foregoing, if any governmental body or regulatory body should adopt new laws, rules or regulations

 

 

which would require amendment or supplement of the Deposit Agreement or the form of ADR to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the ADR at any time in accordance with such changed laws, rules or regulations.  Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance. Notice of any amendment to the Deposit Agreement or form of ADRs shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary).

 

(17)  Termination.  The Depositary may, and shall at the written direction of the Company, terminate the Deposit Agreement and this ADR by mailing notice of such termination to the Holders at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the Depositary shall have (i) resigned as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder within 60 days of the date of such resignation, or (ii) been removed as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder on the 120th day after the Company’s notice of removal was first provided to the Depositary.  After the date so fixed for termination, (a) all Direct Registration ADRs shall cease to be eligible for the Direct Registration System and shall be considered ADRs issued on the ADR Register and (b) the Depositary shall use its reasonable efforts to ensure that the ADSs cease to be DTC eligible so that neither DTC nor any of its nominees shall thereafter be a Holder.  At such time as the ADSs cease to be DTC eligible and/or neither DTC nor any of its nominees is a Holder, the Depositary shall (a) instruct its Custodian to deliver all Deposited Securities to the Company along with a general stock power that refers to the names set forth on the ADR Register and (b) provide the Company with a copy of the ADR Register (which copy may be sent by email or by any means permitted under the notice provisions of the Deposit Agreement). Upon receipt of such Deposited Securities and the ADR Register, the Company shall use its best efforts to issue to each Holder a Share certificate representing the Shares represented by the ADSs reflected on the ADR Register in such Holder’s name and to deliver such Share certificate to the Holder at the address set forth on the ADR Register.  After providing such instruction to the Custodian and delivering a copy of the ADR Register to the Company, the Depositary and its agents will perform no further acts under the Deposit Agreement and this ADR and shall cease to have any obligations under the Deposit Agreement and/or the ADRs.  After the Company receives the copy of the ADR Register and the Deposited Securities, the Company shall be discharged from all obligations under the Deposit Agreement except (i) to distribute the Shares to the Holders entitled thereto and (ii) for its obligations to the

 

 

Depositary and its agents.

 

(18)  Appointment.  Each Holder and each person holding an interest in ADSs, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

 

(19)  Waiver.  EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).Exhibit 4.4

 

EXECUTION VERSION

 

INVESTOR RIGHTS AGREEMENT

 

INVESTOR RIGHTS AGREEMENT, dated as of March 31, 2014 (this “Agreement”), by and among E-HOUSE (CHINA) HOLDINGS LIMITED, a company organized under the laws of the Cayman Islands (“E-House”), THL O LIMITED, a company incorporated in the British Virgin Islands (“Tencent”), and LEJU HOLDINGS LIMITED, a company organized under the laws of the Cayman Islands (the “Company”).  Capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in Section 1.1.

 

WITNESSETH:

 

WHEREAS, the parties entered into a share purchase and subscription agreement, dated as of March 21, 2014, as amended by the first amendment to share purchase and subscription agreement, dated as of March 21, 2014 (as amended, the “Share Purchase and Subscription Agreement”), with respect to ordinary shares of the Company, par value $0.001 (the “Ordinary Shares”);

 

WHEREAS, after giving effect to the transactions contemplated by the Share Purchase and Subscription Agreement, Tencent shall be the owner of not less than fifteen percent (15%) of the issued and outstanding Ordinary Shares and E-House shall be the owner of the majority of the issued and outstanding Ordinary Shares; and

 

WHEREAS, the parties have agreed that Tencent and E-House shall have certain rights with respect to Ordinary Shares of the Company.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I

 

CERTAIN DEFINITIONS

 

Section 1.1  Certain Definitions.

 

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

 

“affiliate” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.

 

“ADS” means American Depositary Shares representing Ordinary Shares.

 

 

“Controlled” or “Controlling” means with respect to a non-natural person, direct or indirect ownership of more than fifty percent (50%) of the outstanding voting securities of such person or the ability to appoint more than half of the directors of the board or equivalent governing body of such person or the ability, direct or indirect, whether by way of equity ownership, contractual arrangement or otherwise, to direct or cause the direction of the management and policies of such person.

 

“Equity Securities” means the Ordinary Shares and ADSs, and all direct or indirect options, warrants, convertible securities or other rights to acquire any Ordinary Shares or ADSs or securities or instruments exchangeable or exercisable for, or convertible into, Ordinary Shares or ADSs.

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and all rules and regulations promulgated thereunder.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“GAAP” means generally accepted accounting principles and practices in the United States in effect from time to time applied consistently throughout the periods involved.

 

“Holder” means each of E-House and Tencent, and any affiliate transferee of E-House or Tencent to whom Registrable Securities are transferred in accordance with the terms of this Agreement.

 

“Important Shareholder” means, at any time, the beneficial owner of at least 10% of the issued and outstanding Ordinary Shares at such time directly or through direct or indirect beneficial ownership of ADSs; provided that all beneficial owners of the same Ordinary Shares or ADSs, as applicable, shall be deemed to be a single “Important Shareholder.”

 

“NYSE” means the New York Stock Exchange, or any successor entity thereof.

 

“Ordinary Share Equivalents” shall mean, (x) in the case of an Ordinary Share, one Ordinary Share or (y) in the case of an ADS, the number of Ordinary Shares represented by such ADSs.

 

“Permitted Transferee” means, with respect to any Person, an affiliate of such Person.

 

“Parties” means the parties to this Agreement, and “Party” means any one of them.

 

“person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

 

“Qualified Public Offering” means an underwritten public offering of ADSs by the Company pursuant to (a) an effective registration statement filed by the Company with

 

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the SEC under the Securities Act, resulting in the listing of the ADSs on a United States nationally recognized stock exchange, including, without limitation, the NYSE and (b) which the aggregate offering price of the ADSs actually sold in such offering (not including, for the avoidance of doubt, any Equity Securities acquired by Tencent pursuant to the Share Purchase and Subscription Agreement) is at least $120 million.

 

“Registrable Securities” means all and any of the Ordinary Shares or ADSs held by the Holders (including any securities issuable or issued or distributed in respect of any such Ordinary Shares or ADSs by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, reorganization, merger, amalgamation, consolidation or otherwise). For purposes of this Agreement, Registrable Securities shall cease to be Registrable Securities when (i) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the SEC and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (ii) any such Registrable Securities have been sold in a sale made pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act or (iii) the Holder of the Registrable Securities is a non-affiliate of the Company and the Registrable Securities are saleable without any requirement to comply with any conditions in Rule 144, pursuant to Rule 144(b)(1), or (iv) such Registrable Securities cease to be outstanding.

 

“Registration Expenses” means all expenses in connection with or incident to the registration of Registrable Securities hereunder, including (a) all registration and filing fees and expenses (including filings made by a Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of FINRA)), (b) all fees and expenses in connection with the registration or qualification of Registrable Securities for offering and sale under the securities or “blue sky” laws of any state or other jurisdiction of the United States of America and, in the case of an underwritten offering, determination of their eligibility for investment under the laws of such jurisdictions as the managing underwriter or underwriters may reasonably designate, including reasonable fees and disbursements, if any, of counsel for the underwriters in connection with such registrations or qualifications and determination, (c) all expenses relating to the preparation, printing, distribution and reproduction of any Registration Statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing Registrable Securities in a form for delivery for purchase pursuant to such registration or qualification and the expense of printing or producing any underwriting agreement(s) and agreement(s) among underwriters and any “blue sky” or legal investment memoranda, any selling agreements and all other documents approved for use in writing by the Company to be used in connection with the offering, sale or delivery of Registrable Securities, (d) messenger, telephone and delivery expenses of the Company and out-of-pocket travel expenses incurred by or for the Company’s personnel for travel undertaken for any “road show” made in connection with the offering of securities registered thereby, (e) fees and expenses of any transfer agent and registrar with respect to the delivery of any Registrable Securities and any escrow agent or custodian involved in the offering, (f) fees, disbursements and expenses of counsel of the Company and independent certified public accountants of the Company incurred in connection with the registration, qualification and offering of the Registrable Securities (including the expenses of any opinions or “comfort” letters required by or incident to such performance and compliance), (g) fees, expenses and disbursements of counsel and any other persons retained by the Company, including special experts retained by the Company in connection with such registration,

 

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(h) Securities Act liability insurance, if the Company desires such insurance, (i) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, (j) the reasonable fees and expenses, up to a maximum amount of $75,000, of one counsel reasonably acceptable to the Company for all Holders participating in the registration of Registrable Securities incurred in connection with any such registration, and (k) the fees and expenses incurred by the Company and its advisers in connection with the quotation or listing of Registrable Securities on any securities exchange or automated securities quotation system.  Any brokerage commissions attributable to the sale of any of the Registrable Securities, any ADS issuance fees payable to any depositary institution attributable to the sale of any of the Registrable Securities, and any commissions, fees, spreads, discounts, transfer taxes or stamp duties or, except as specified in the immediately preceding sentence, expenses of any underwriter or placement agent incurred in connection with an offering of Registrable Securities in accordance with this Agreement and, subject to the immediately preceding sentence, any fees and expenses of advisors to a Holder and any other out-of-pocket expenses of a Holder shall not be “Registration Expenses.”

 

“Registration Statement” means a Demand Registration Statement or a Shelf Registration Statement or a Piggyback Registration Statement, as the case may be.

 

“SEC” means the United States Securities and Exchange Commission, or any successor thereto.

 

“Securities Act” means the United States Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder.

 

“Subsidiary” or “Subsidiaries” means, with respect to any person, any and all corporations, partnerships, limited liability companies, joint ventures, associations, variable interest entities and other entities controlled by such person directly or indirectly through one or more intermediaries.

 

“Substantial Change” means the occurrence of (a) any consolidation or merger of the Company with or into any other entity, or any other corporate reorganization or transaction (including the acquisition or issuance of share capital of the Company), whether or not the Company is a party thereto, after giving effect to which (i) in excess of 50% of the Company’s voting power is beneficially owned by any person or “group” (as such term is used in Rule 13d-5 under the Exchange Act) or (ii) the stockholders of the Company and their respective affiliates prior to such consolidation, merger, reorganization or other transaction shall cease to have a majority of the voting power of, or the power to elect a majority of the entire board of the directors of, the Company or other surviving entity; or (b) a sale of all or substantially all of the assets of the Company to any person or “group” (as such term is used in Rule 13d-5 under the Exchange Act) (other than to a Subsidiary or an affiliate of the company).

 

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

 

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

 

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(ii)                                  Whenever the words “include”, “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;

 

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

 

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

 

(v)                                 References to a person are also to its successors and permitted assigns; and

 

(vi)                              The use of “or” is not intended to be exclusive unless expressly indicated otherwise.

 

ARTICLE II

 

REGISTRATION RIGHTS

 

Section 2.1  Demand Registration.

 

(a)                                 Each Important Shareholder (the “Requesting Holder”) may request registration (a “Demand Registration”) under the Securities Act of all or part of its Registrable Securities.  Each request must specify the number of Registrable Securities for which registration is requested and the intended method or methods of distribution thereof.  Upon receipt of such request, the Company shall promptly (but no later than (10) days following receipt thereof) deliver notice of such request to all other Holders, who shall then have fifteen (15) days from the date such notice is given to notify the Company in writing of their desire to be included in such registration (the Requesting Holder and any Holder that delivers such writing to the Company, the “Selling Holders”).  The Company shall use its reasonable best efforts, after receipt of such written requests, to file with the SEC at the earliest practicable date, but in any event not later than (i) sixty (60) days after the receipt of such notice or (ii) if, as of such sixtieth (60th) day, the Company does not have audited financial statements required to be included in the registration statement, thirty (30) days after receipt by the Company from its independent public accountants of such audited financial statements, and use its reasonable best efforts to cause to be declared effective as promptly as practicable, a registration statement (a “Demand Registration Statement”) relating to all of the Registrable Securities that the Company has been so requested to register for sale, to the extent required to permit the disposition (in accordance with the intended method or methods of distribution thereof) of the Registrable Securities so registered; provided that the Company shall not be required to file a Demand Registration Statement unless the aggregate offering value of the Registrable Securities requested to be registered by the Selling Holders is at least $10,000,000.

 

(b)                                 The Company shall not include in any Demand Registration any securities which are not Registrable Securities without the prior written consent of the Selling Holders holding a majority of the Registrable Securities proposed to be included in the offering.  If the Demand Registration relates to an underwritten public offering and the

 

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managing underwriter of such proposed public offering advises the Company and the Selling Holders in writing that, in its reasonable and good faith opinion, the number of Registrable Securities requested to be included in the Demand Registration (including securities to be sold by the Company or any other security holder) exceeds the largest number of securities which reasonably can be sold in such offering without having a material adverse effect on such offering, including the price at which such securities can be sold (the “Maximum Offering Size” ), then the Company shall include in such Demand Registration, up to the Maximum Offering Size, first, the Registrable Securities the Selling Holders propose to register, and second, any securities the Company proposes to register and any securities with respect to which any other security holder has requested registration.  If the managing underwriter determines that less than all of the Registrable Securities proposed to be sold can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated pro rata among the respective Selling Holders thereof on the basis of Registrable Securities sought to be registered by each Selling Holder.  The Company shall not hereafter enter into any agreement which is inconsistent with the rights of priority provided in this Section 2.1(b).

 

(c)                                  Each Important Shareholder shall be entitled to an aggregate of three (3) Demand Registrations pursuant to this Section 2.1; provided that a Demand Registration requested pursuant to this Section 2.1 shall not be deemed to have been effected for purposes of this Section 2.1(c) unless (i) it has been declared effective by the SEC and all of the Registrable Securities of the Selling Holders included in such Demand Registration Statement have actually been sold thereunder, (ii) it has remained effective for the period set forth in Section 2.5(a) and (iii) the offering of Registrable Securities pursuant to such registration is not subject to any stop order, injunction or other order or requirement of the SEC; provided that if a Requesting Holder revokes a Demand Registration pursuant to Section 2.4 hereof, such Demand Registration shall not count as one of the permitted Demand Registration requests; and provided further that, in the event the Requesting Holder revokes a Demand Registration request (which revocation may only be made prior to the Company requesting acceleration of effectiveness of the registration statement) for a reason other than as stated in Section 2.4 hereof, then such Demand Registration shall count as having been effected unless the Requesting Holder pays all Registration Expenses in connection with such revoked Demand Registration within twenty-one (21) days of written request therefor by the Company.

 

(d)                                 If after any Demand Registration Statement requested pursuant to this Section 2.1 becomes effective, such Demand Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court solely due to the actions or omissions to act of the Company, such Demand Registration Statement shall be at the sole expense of the Company and shall not be included as one of the Demand Registrations which may be requested pursuant to this Section 2.1.

 

(e)                                  Notwithstanding anything to the contrary contained herein, the Company shall not be required to prepare and file (i) more than two (2) Demand Registration Statements in any twelve (12) month period, or (ii)  any Demand Registration Statement within one hundred and twenty (120) days following the date of effectiveness of any other Registration Statement.

 

Section 2.2  Shelf Registration.  The Company shall promptly give written notice to all Holders once it has become eligible to file a shelf registration statement on Form F-3 or S-3, as applicable, pursuant to Rule 415 promulgated under the Securities Act (the

 

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“Shelf Registration”).  Thereafter, each Important Shareholder may make a written request (each a “Shelf Demand Request”) that the Company file a shelf registration statement (a “Shelf Registration Statement”) and undertake any related qualification or compliance with respect to all or part of the Registrable Securities owned by such Important Shareholder (a “Shelf Demanding Shareholder”).  Following such Shelf Demand Request, the Company shall (i) promptly (but no later than ten (10) days following receipt of such Shelf Demand Request) give written notice of the proposed registration to all other Holders (the “Shelf Notice”); and (ii) as soon as practicable, use its reasonable best efforts to file such Shelf Registration Statement under the Securities Act at the earliest practicable date, but in any event not later than sixty (60) days after receiving the Shelf Demand Request is requested, and use its reasonable best efforts to have such Shelf Registration Statement thereafter become effective with the SEC at the earliest practicable date and shall use its reasonable best efforts to effect, at the earliest practicable date, such registration under the Securities Act of (x) the Registrable Securities that the Company has been so requested to register by the Shelf Demanding Shareholder and (y) all other Registrable Securities which the Company has been so requested to register by any other Holder by written request of such Holder given to the Company within fifteen (15) days after such Holder’s receipt of the Shelf Notice.  The Company agrees to use its reasonable best efforts to keep the Shelf Registration Statement continuously effective for the period beginning on the date on which the Shelf Registration Statement becomes effective under the Securities Act until the earlier to occur of (i) eighteen (18) months thereafter (plus a number of days equal to the number of days, if any, that the Shelf Registration Statement is not kept effective after the initial date of its effectiveness and prior to eighteen (18) months thereafter pursuant to Section 2.5 or otherwise), (ii) the day after the date on which all of the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or another registration statement and (iii) the first date on which there shall cease to be any Registrable Securities covered by such Shelf Registration Statement.  The Company further agrees, if necessary, to supplement or amend the Shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration or by the Securities Act or by any other rules and regulations thereunder for Shelf Registration (including, for the avoidance of doubt, to effect underwritten shelf take-downs), and the Company agrees to furnish to the Holders whose Registrable Securities are included in such Shelf Registration Statement copies of any such supplement or amendment promptly after its being issued or filed with the SEC.  No registration requested by any Holder pursuant to this Section 2.2 shall be deemed a Demand Registration request pursuant to Section 2.1 hereof.  The Company shall be required to file no more than two (2) Shelf Registration Statements pursuant to this Section 2.2 in any twelve (12) month period, it being understood that the Shelf Demanding Holder, together with any other Holders who request that certain of their Registrable Securities be registered on the Shelf Registration Statement, request a number of Registrable Securities be registered that have an aggregate offering value of at least $10,000,000.  If at the time a request for a Shelf Registration is made under this Section 2.2, the Company is a “well-known seasoned issuer” (as defined in Rule 405 of the Securities Act), then the Company’s obligation to file a registration statement under this Section 2.2 shall be deemed satisfied if there is a Form F-3 or S-3 on file pursuant to which the requesting Holder shall be entitled to dispose of all its Registrable Securities that it has requested to register.  Notwithstanding anything to the contrary herein, at any time that a Shelf Registration Statement registering Registrable Securities of a Holder shall be effective, such Holder shall be permitted to effect an unlimited number of non-underwritten offerings and underwritten shelf-take-downs off the Shelf Registration Statement, including

 

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underwritten “block trades,” without notice to or inclusion of any other Holder’s Registrable Securities.

 

Section 2.3  Piggyback Registration

 

(a)                     If the Company proposes to file on its behalf and/or on behalf of any holder of its securities (other than a holder of Registrable Securities) a registration statement under the Securities Act on any form (other than a registration statement on Form S-4, F-4 or S-8 (or any successor form) for securities to be offered in a transaction of the type referred to in Rule 145 under the Securities Act or to employees of the Company pursuant to any employee benefit plan, respectively) for the registration of Ordinary Shares or ADSs (a “Piggyback Registration”), it shall give written notice to the Holders at least thirty (30) days before the initial filing with the SEC of such registration statement (a “Piggyback Registration Statement”), which notice shall set forth the number of the Ordinary Shares or ADSs (as applicable) that the Company and other holders of the Ordinary Shares or ADSs (as applicable), if any, then contemplate including in such registration and the intended method of disposition of such the Ordinary Shares or ADSs (as applicable).

 

(b)                                 If a Holder desires to have Registrable Securities registered under this Section 2.3, it shall advise the Company in writing within fifteen (15) days after the date of receipt of such notice from the Company of its desire to have Registrable Securities registered under this Section 2.3, and shall set forth the number of Registrable Securities for which registration is requested.  The Company shall thereupon use its reasonable best efforts to include, or in the case of a proposed underwritten public offering, use its reasonable best efforts to cause the managing underwriter or underwriters to permit each such Holder to include in such filing the number of Registrable Securities for which registration is so requested, subject to paragraph (c) below, and shall use its reasonable best efforts to effect registration of such Registrable Securities under the Securities Act.

 

(c)                                  If the Piggyback Registration relates to an underwritten public offering and the managing underwriter of such proposed public offering advises the Company in writing (with a copy to each Selling Holder) that, in its reasonable opinion, the number of Registrable Securities requested to be included in the Piggyback Registration together with the securities being registered by the Company or any other security holder exceeds the Maximum Offering Size, then:

 

(i)                                     in the event the Company initiated the Piggyback Registration, the Company shall include in such Piggyback Registration first, the securities the Company proposes to register and second, the securities of all other selling security holders, including the Registrable Securities requested to be included by any Holder, to be included in such Piggyback Registration in an amount that, together with the securities the Company proposes to register, shall not exceed the Maximum Offering Size and shall be allocated among such selling security holders on a pro rata basis (based on the number of the Ordinary Shares or ADSs (as applicable) sought to be registered by each such selling security holder); and

 

(ii)                                  in the event any holder of securities of the Company initiated the Piggyback Registration, the Company shall include in such Piggyback Registration first, the securities such initiating security holder proposes to register, second, the Registrable Securities requested to be sold by any Holder, in an amount

 

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that, together with the securities the initiating security holder proposes to register, shall not exceed the Maximum Offering Size and shall be allocated among such Holders selling Registrable Securities on a pro rata basis (based on the number of the Ordinary Shares or ADSs (as applicable) sought to be registered by each such Holder), and third, any securities the Company proposes to register, in an amount that, together with the securities the initiating security holder and the other selling security holders propose to register, shall not exceed the Maximum Offering Size.

 

(d)                                 The Company shall not hereafter enter into any agreement that is inconsistent with the rights of priority provided in Section 2.3(c).

 

Section 2.4  Blackout Periods.  The Company shall have the right to delay the filing or effectiveness of a Registration Statement required pursuant to Section 2.1 or Section 2.3 hereof during no more than two (2) periods aggregating to not more than ninety (90) days in any consecutive twelve (12) month period (each, a “Blackout Period”), in the event that (i) the Company would, in the good faith judgment of the Company’s Board of Directors, be required to disclose in the prospectus information not otherwise then required by law to be publicly disclosed and (ii) in the good faith judgment of the Company’s Board of Directors, there is a reasonable likelihood that such disclosure, or any other action to be taken in connection with the prospectus, would materially and adversely affect or interfere with any significant financing, acquisition, merger, disposition of assets, corporate reorganization or other material transaction or negotiations involving the Company; provided that (A) a Requesting Holder shall be entitled, at any time after receiving notice of such delay and before such Demand Registration Statement becomes effective, to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the permitted Demand Registrations and (B) the Company shall delay during such Blackout Period the filing or effectiveness of any Registration Statement required pursuant to the registration rights of other holders of any securities of the Company.  The chief executive officer of the Company shall promptly give the applicable Holders written notice of such determination containing, to the extent permitted by law, a general statement of the reasons for such postponement and an approximation of the anticipated delay.  After the expiration of any Blackout Period (including, if required, upon public disclosure of the information that was the reason for such Blackout Period) and without any further request from the Holders, the Company shall (subject to there being no other Blackout Period) promptly notify the applicable Holders and shall use its reasonable best efforts to prepare and file with the SEC the requisite Registration Statement or such amendments or supplements to such Registration Statement or prospectus used in connection therewith as may be necessary to cause such Registration Statement to become effective as promptly as practicable thereafter.

 

Section 2.5  Registration Procedures.  If and whenever Holders request that any Registrable Securities be registered pursuant to the provisions of this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale of the applicable Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall, as soon as reasonably practicable:

 

(a)                                 prepare and file with the SEC, in accordance with the time periods set forth in Section 2.1(a) and Section 2.2, as applicable, a Registration Statement with respect to such securities and use its reasonable best efforts to cause such Registration Statement to become effective as promptly as practicable and to remain effective for a period of time required for the disposition of such Registrable Securities by the applicable Holders thereof but not to exceed one hundred twenty (120) days excluding any days that fall during a

 

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permitted Blackout Period under Section 2.4; provided that a Shelf Registration Statement be kept effective for eighteen (18) months subject to Section 2.2 hereof; and provided further that before filing such Registration Statement or any amendments or supplements thereto, the Company shall furnish to counsel selected by each such Holder copies of all documents proposed to be filed, which documents shall be subject to the review of such counsel, and shall in good faith consider incorporating in each such document such changes as such counsel to each such Holder reasonably and in a timely manner may suggest; provided that the Company shall not have any obligation to so modify any information (other than information relating to such Holder).

 

(b)                                 prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such Registration Statement until the earlier of such time as all of such securities have been disposed of in a public offering or the expiration of one hundred twenty (120) days (excluding any days that fall during a permitted Blackout Period under Section 2.4); provided that a Shelf Registration Statement be kept effective for eighteen (18) months subject to Section 2.2 hereof.

 

(c)                                  furnish to the applicable Holders such number of conformed copies of the applicable Registration Statement and each such amendment and supplement thereto (including in each case all exhibits), such number of copies of the prospectus contained in such Registration Statement (including each preliminary prospectus and any summary prospectus) and any other prospectus, in conformity with the requirements of the Securities Act, and such other documents, as such Holders may reasonably request;

 

(d)                                 use its reasonable best efforts to register or qualify the Registrable Securities or other securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions within the United States and its territories and possessions as each applicable Holder of such Registrable Securities shall reasonably request, to keep such registration or qualification in effect for so long as such Registration Statement remains in effect or until all of the Registrable Securities are sold, whichever is shorter, and to take any other action which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the securities owned by such Holder (provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business as a foreign corporation, subject itself to taxation in or to file a general consent to service of process in any jurisdiction where it would not, but for the requirements of this paragraph (d), be obligated to do so) and do such other reasonable acts and things as may be required of it to enable such Holder to consummate the disposition in such jurisdiction of the securities covered by such Registration Statement;

 

(e)                                  use its reasonable best efforts to furnish, at the request of the applicable Holders, if the method of distribution is by means of an underwriting, on the date that the shares of Registrable Securities are delivered to the underwriters for sale pursuant to such registration, or if such Registrable Securities are not being sold through underwriters, on the date that the registration statement with respect to such shares of Registrable Securities becomes effective, (1) a signed opinion and 10b-5 letter, dated such date, of the independent legal counsel or counsels representing the Company for the purpose of such registration, addressed to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then to the applicable Holders, and (2) letters dated such date and the

 

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date the offering is priced from the independent certified public accountants of the Company, addressed to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then to the applicable Holders, in each case, in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, in such a transaction;

 

(f)                                   enter into customary agreements (including if the method of distribution is by means of an underwriting, an underwriting agreement containing representations, warranties and indemnities in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities;

 

(g)                                  comply and continue to comply with all applicable rules and regulations promulgated by the SEC, including so as to enable any Holder to sell its Registrable Securities pursuant to Rule 144 under the Securities Act, including without limitation to make and keep public information available, as those terms are understood and defined in Rule 144(c)(1) under the Securities Act, and, upon written request by such Holder and to the extent permitted by law, cooperate in the removal of restrictive legends on such Registrable Securities to enable such sale;

 

(h)                                 use its reasonable best efforts to cause all such Registrable Securities to be listed on each securities exchange or quotation system on which the Ordinary Shares or ADSs (as applicable) are listed or traded;

 

(i)                                     give written notice to the applicable Holders;

 

(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)                               of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose;

 

(iv)                              of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Ordinary Shares or ADSs (as applicable) for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

 

(v)                                 of the happening of any event that requires the Company to make changes in such Registration Statement or such prospectus in order to make the statements therein, in light of the circumstances in which they were made, not misleading (which notice shall be accompanied by an instruction to suspend the use of such prospectus until the requisite changes have been made);

 

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(j)                                    use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such Registration Statement at the earliest possible time;

 

(k)                                 furnish to the applicable Holders, without charge, at least one copy of such Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if any such Holder so requests in writing, all exhibits (including those, if any, incorporated by reference);

 

(l)                                     upon the occurrence of any event contemplated by Section 2.5(i)(v) above, promptly prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to the applicable Holders, the prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the applicable Holders in accordance with Section 2.5(i)(v) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then such Holders shall suspend use of such prospectus and use their reasonable best efforts to return to the Company all copies of such prospectus other than permanent file copies then in such Holders’ possessions, and the period of effectiveness of such Registration Statement provided for above shall be extended by the number of days from and including the date of the giving of such notice to the date the Holder shall have received such amended or supplemented prospectus pursuant to this Section 2.5(l);

 

(m)                             subject to the execution of confidentiality agreements satisfactory in form and substance to the Company, pursuant to the reasonable request of the applicable Holders or underwriters, make reasonably available for inspection by representatives of the such Holders, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by such representative or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and cause the Company’s officers, directors and employees to supply all relevant information reasonably requested by such representative or any such underwriter, attorney, accountant or agent in connection with the registration; provided that any such information inspected or discussions conducted shall be done in a manner so as not to disrupt the operation of the Company’s business;

 

(n)                                 in connection with any underwritten offering, make appropriate officers and senior executives of the Company reasonably available to the selling security holders for meetings with prospective purchasers of Registrable Securities and prepare and present to potential investors customary “road show” material in each case in accordance with the recommendations of the underwriters and in all respects in a manner reasonably requested and consistent with other new issuances of securities in an offering of a similar size to such offering of the Registrable Securities; and

 

(o)                                 use reasonable best efforts to procure the cooperation of the Company’s transfer agent in settling any offering or sale of Registrable Securities, including with respect to the transfer of physical stock certificates into book-entry form in accordance with any procedures reasonably requested by the applicable Holders or the underwriters, if any.

 

It shall be a condition precedent to the obligation of the Company to take any action pursuant to this Agreement in respect of the Registrable Securities which are to be

 

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registered at the request of the applicable Holders that such Holders shall furnish to the Company such information regarding the Registrable Securities held by such Holders and the intended method of distribution thereof as the Company shall reasonably request and as shall be required in connection with the action taken by the Company.

 

Section 2.6  Registration Expenses.  Except as otherwise agreed or set forth herein, all Registration Expenses shall be paid by the Company, except that each Holder shall bear and pay all (a) brokerage commissions attributable to the sale of any of its Registrable Securities, (b) ADS issuance fees payable to any depositary institution attributable to the sale of any of its Registrable Securities, (c) commissions, fees, spreads, discounts, transfer taxes or stamp duties, (d) subject to the definition of “Registration Expenses” included in Section 1.1(a) hereto, the fees and expenses of advisors to such Holder and (e) other out-of-pocket expenses of such Holder, in each case, with respect to such Holder’s Registrable Securities only.

 

Section 2.7  Rule 144 Information.  With a view to making available 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, 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; and

 

(b)                                 use its reasonable best efforts to file with or furnish to the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act.

 

Section 2.8  Indemnification and Contribution.

 

(a)                                 The Company shall indemnify and hold harmless each Holder, such Holder’s directors and officers, each agent and any underwriter for the Company (within the meaning of the Securities Act), and each person, if any, who controls such Holder or such agent or underwriter within the meaning of the Securities Act, against any losses, claims, damages, liabilities or costs (including reasonable attorney’s fees and disbursements), joint or several, to which they may become subject under the Securities Act or otherwise, , including any amount paid in settlement of any litigation commenced or threatened, insofar as such losses, claims, damages or liabilities (or proceedings in respect thereof) arise out of or are based on any untrue or alleged untrue statement of any material fact contained in a Registration Statement on the effective date thereof (including any prospectus filed under Rule 424 under the Securities Act or any amendments or supplements thereto), or any document incorporated by reference therein, or arise out of or are based upon 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, and shall reimburse such Holder, such Holder’s directors and officers, such agent or underwriter or such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, proceeding or action; provided that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, proceeding or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed); provided further that the Company shall not be liable to such Holder, such Holder’s directors and officers, such agent or underwriter or such controlling person in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is

 

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based upon an untrue statement or alleged untrue statement or omission or alleged omission made in connection with a Registration Statement, preliminary prospectus, final prospectus or amendments or supplements thereto, in reliance upon and in conformity with written information furnished for use in connection with such registration to the Company by such Holder, such Holder’s directors or officers, such agent or underwriter or such controlling person expressly for inclusion in a Registration Statement, preliminary prospectus, final prospectus or amendments or supplements thereto.  The Company shall not, without the consent of such Holder, effect any settlement of any pending or threatened proceeding or action in respect of which such Holder is a party and indemnity has been sought hereunder by such Holder, unless such settlement includes (i) an unconditional release of such Holder from all liability for claims that are the subject matter of such proceeding or action and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of a Holder. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder, such Holder’s directors and officers, such agent or underwriter or such controlling person, and shall survive the transfer of such securities by such Holder.

 

(b)                                 Each Holder, severally and not jointly, shall indemnify and hold harmless the Company and each other Holder, each of their respective directors and officers, each person, if any, who controls the Company or such other Holder within the meaning of the Securities Act, and each agent and any underwriter for the Company (within the meaning of the Securities Act) against any losses, claims, damages or liabilities, to which they may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in a Registration Statement on the effective date thereof (including any prospectus filed under Rule 424 under the Securities Act or any amendments or supplements thereto) or arise out of or are based upon 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, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in such Registration Statement, preliminary or final prospectus, or amendments or supplements thereto, in reliance upon and in conformity with written information furnished by or on behalf of such indemnifying Holder to the Company for use in connection with such registration, preliminary prospectus, final prospectus or amendments or supplements thereto; and such indemnifying Holder shall reimburse any legal or other expenses reasonably incurred by the Company or such other Holder or any such director, officer, controlling person, agent or underwriter in connection with investigating or defending any such loss, claim, damage, liability or action; provided that the indemnity agreement contained in this Section 2.8(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 such indemnifying Holder, and provided further that the liability of such indemnifying Holder hereunder shall be limited to the aggregate net proceeds (after giving effect to underwriting discounts and commissions) received by such indemnifying Holder in connection with any offering to which such registration under the Securities Act relates. The indemnifying Holder shall not, without the consent of the Company and each such other Holder (which consent shall not be unreasonably withheld or delayed), effect any settlement of any pending or threatened proceeding or action in respect of which the Company or such other Holder is a party and indemnity has been sought hereunder by the Company or such other Holder, unless such settlement includes (i) an unconditional release of the Company and such other Holder from all liability for claims that are the subject matter of such proceeding or action and

 

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(ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of the Company or such other Holder.

 

(c)                                  If the indemnification provided for in this Section 2.8 from the indemnifying party (the “Indemnifying Party”) is unavailable to any person entitled to indemnification hereunder (the “Indemnified Party”) in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the Indemnifying Party, in lieu of indemnifying the Indemnified Party, shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified Party in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and the Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, the Indemnifying Party or the Indemnified Party, and the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a Party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such Party in connection with any investigation or proceeding. If the allocation provided in this paragraph (c) is not permitted by applicable law, the Parties shall contribute based upon the relevant benefits received by the Company from the offering of securities on the one hand and the net proceeds received by the Holders from the sale of securities on the other.

 

The Parties agree that it would not be just and equitable if contribution pursuant to this Section 2.8(c) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  Notwithstanding anything in this Section 2.8(c) to the contrary, no indemnifying party (other than the Company) shall be required pursuant to this Section 2.8(c) to contribute any amount in excess of the amount by which the net proceeds (after giving effect to underwriting discounts and commissions) received by such Indemnifying Party from the sale of the Registrable Securities in the offering to which the losses of the Indemnified Parties relate exceeds the amount of any damages which such Indemnifying Party has otherwise been required to pay by reason of such untrue statement or omission.

 

(d)                                 The Indemnified Party agrees to give prompt written notice to the Indemnifying Party after the receipt by the Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; provided that the failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability that it may have to the Indemnified Party hereunder unless such failure is materially prejudicial to the Indemnifying Party. If notice of commencement of any such action is given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such Indemnified Party. The Indemnified Party shall have the right to employ

 

15

 

separate counsel in any such action and participate in the defense thereof, but the reasonable fees and expenses of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action within forty-five (45) days’ notice of a request to do so or (iii) the named parties to any such action (including any impleaded parties) have been advised by such counsel that either (A) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (B) there are one or more legal defenses available to it which are substantially different from or additional to those available to the Indemnifying Party. No Indemnifying Party shall be liable for any settlement entered into without its written consent, which consent shall not be unreasonably withheld or delayed.

 

(e)                                  The agreements contained in this Section 2.8 shall survive the transfer of the Registrable Securities by the applicable Holder and sale of all the Registrable Securities pursuant to any Registration Statement and shall remain in full force and effect, regardless of any investigation made by or on behalf of such Holder, such Holder’s directors and officers, any person who participates in the offering of Registrable Securities, including underwriters (as defined in the Securities Act), and any person, if any, who controls such Holder or such participating person within the meaning of the Securities Act.

 

Section 2.9  Limitations on Registration of Other Securities; Representation.  From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are more favorable taken as a whole than the registration rights granted to the Holders hereunder unless the Company shall also give such rights to the Holders.

 

Section 2.10  No Inconsistent Agreements.  The Company shall not hereafter enter into any agreement with respect to its securities that is inconsistent in any material respects with the rights granted to the Holders in this Agreement.

 

Section 2.11  Selection of Managing Underwriters.  In the event that one or more Holders have requested an underwritten offering, the underwriter or underwriters shall be selected by such Holder(s) and shall be approved by the Company, which approval shall not be unreasonably withheld or delayed; provided that (i) all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of each such Holder, (ii) any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement shall be conditions precedent to the obligations of each such Holder, and (iii) no such Holder be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, the Registrable Securities of such Holder and such Holder’s intended method of distribution and any other representations customarily required or required by law. Subject to the foregoing, each such Holder shall enter into an underwriting agreement in customary form with the underwriter or underwriters.

 

16

 

ARTICLE III

 

BOARD REPRESENTATION

 

Section 3.1  Board Representation.

 

(a)                                 For so long as Tencent is an Important Shareholder, Tencent shall have the right, following consultation with the Company (but, for the avoidance of doubt, at Tencent’s discretion), to designate one (1) director of the Company (the “Tencent Director”) for nomination for election to the Company’s board of directors (the “Board”). The Tencent Director shall be appointed to each committee of the Board (other than the Audit Committee (the “Audit Committee”)) in place from time to time; provided that (i) the Board will have the right to approve the Tencent Director (such approval not to be unreasonably withheld, conditioned or delayed, it being understood that such approval right is intended to permit the Board to comply with its fiduciary duties and that Tencent will, subject to those duties, be entitled to select its designee in its discretion), (ii) the Tencent Director shall at all times be an individual from the senior management of Tencent; (iii) the Company may exclude any director from meetings of the Board or its committees if (A) attendance would violate any applicable securities laws or listing requirements or (B) the Board reasonably determines that such exclusion is necessary with respect to any matter in which such director holds any interest adverse to the Company or its Subsidiaries or to preserve attorney-client privilege.  Each of Tencent and E-House hereby agrees to cause any director designated by it, and any director of the Company who is a director, officer or employee of it or its affiliates, to be bound by and comply with the Company’s confidentiality, trading windows and blackout policies applicable to directors, as in effect from time to time and duly noticed to the directors.

 

(b)                                 For so long as Tencent has the right to designate the Tencent Director for nomination for election to the Board pursuant to Section 3.1(a), E-House and the Company agree to use their reasonable best efforts to cause the election or appointment of the Tencent Director to the Board, including by (i) nominating such individual to be elected as a director of the Company as provided herein, (ii) including such nomination and other required information regarding such individual in the Company’s proxy statement for its annual meeting of stockholders and (iii) solicitation of proxies in connection with the election of such individual as a director of the Company.  The Company shall (a) at all times maintain directors’ and officers’ liability insurance for the benefit of the Tencent Director in accordance with past and current practice for directors of the Company and (b) enter into an indemnification agreement with the Tencent Director on the effective date of this Agreement (or, in the case of any subsequent Tencent Director, on the date such person becomes a director), in each case, to the reasonable satisfaction of Tencent.

 

(c)                                  For so long as Tencent has the right to designate the Tencent Director for nomination for election to the Board pursuant to Section 3.1(a), in the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of the Tencent Director, Tencent shall have the right to designate a replacement to fill such vacancy, and E-House and the Company, subject to applicable law, the bylaws and the fiduciary duties of the Board, shall use their reasonable best efforts to take all necessary or desirable actions as may be required under applicable law to cause the individual designated by Tencent to be appointed or elected without delay.  For so long as Tencent has the right to designate the Tencent Director for nomination for the election to the

 

17

 

Board pursuant to Section 3.1(a), none of E-House and the Company shall take any action to cause the removal of the Tencent Director without cause (provided that (i) any material violation of the confidentiality agreement between the Tencent Director and the Company shall constitute cause and (ii) E-House and the Company shall consult with Tencent prior to the removal of the Tencent Director for cause) unless it is directed to do so by Tencent, and if the Company is so directed, the Company shall use its reasonable best efforts to take all necessary or desirable actions to effect such removal and to elect a replacement without delay as provided in the immediately preceding sentence.

 

(d)                                 Notwithstanding the provisions of Section 3.1(a), (b) and (c) above, as of and after such time as Tencent, together with its affiliates, is no longer an Important Shareholder, Tencent shall have no right to nominate any Director to the Board as set forth in this Section 3.1, and E-House and the Company shall have the right to remove or procure the removal of, and Tencent shall render all reasonable and necessary assistance for the purpose of the removal of the Tencent Director from the Board in accordance with any resolution of Shareholders.

 

ARTICLE IV

 

PROTECTIVE PROVISIONS

 

Section 4.1  Company Prohibited Actions.  For so long as Tencent is an Important Shareholder;

 

(a)                                 Tencent’s prior written consent shall be required for (i) a Substantial Change of the Company that results in certain specified entities as agreed by the Company and Tencent (such entities, the “Company Restricted Persons”) Controlling the Company, (ii) the issuance, by way of a privately negotiated transaction, to any Company Restricted Person of Equity Securities representing more than ten percent (10%) of the issued and outstanding share capital of the Company immediately after giving effect to such issuance, or (iii) the sale, assignment, transfer, distribution or other disposition, in each case, by way of a privately negotiated transaction, of Equity Securities representing more than ten percent (10%) of the issued and outstanding share capital of the Company at such time by E-House to any Company Restricted Person; provided that Tencent’s prior written consent shall not be required for any transaction that results in a Company Restricted Person acquiring any Equity Securities being Controlled by E-House or the Company upon consummation of the acquisition of such Equity Securities.

 

(b)                                 Neither the Company nor any of its Subsidiaries will enter into, or agree to enter into, any transaction, agreement, arrangement or amendment to any agreement between the Company or any of its Subsidiaries on the one hand and E-House or any of its affiliates (other than the Company and any of its Subsidiaries) on the other without the prior written approval of the of at least one director (or a committee comprised solely of directors) who is not an employee, officer or director of, or of any affiliate of, E-House.

 

Section 4.2  Tencent Prohibited Actions.  Tencent shall not, without the Company’s prior written consent, sell, assign, transfer, distribute or otherwise dispose, in each case, by way of a privately negotiated transaction, of Equity Securities held by Tencent to certain specified entities as agreed by the Company and Tencent (such entities, the

 

18

 

“Tencent Restricted Persons”); provided that the Company’s prior written consent shall not be required for any transaction that results in a Tencent Restricted Person acquiring any Equity Securities being Controlled by Tencent upon consummation of the acquisition of such Equity Securities.

 

ARTICLE V

 

RESTRICTIONS PRIOR TO A QUALIFIED PUBLIC OFFERING

 

Section 5.1  Company Prohibited Actions.  From the effective date of the Share Purchase and Subscription Agreement until the consummation of a Qualified Public Offering, the Company shall not (and shall procure that no Subsidiary shall, in respect of itself), without Tencent’s prior written consent:

 

(a)                     Amend its constitutional documents in any way that could reasonably be expected to adversely and disproportionately affect the rights of Tencent in a manner material to Tencent.

 

(b)                     Make any change material to Tencent in the terms of the ADSs as described in the draft Registration Statement attached as an exhibit to the Share Purchase and Subscription Agreement.

 

(c)                      Adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries that are material to the Company’s business on a consolidated basis.

 

(d)                     Commence any initial public offering of Equity Securities of the Company that is not a Qualified Public Offering.

 

(e)                      Enter into any agreement or otherwise obligate or commit the Company or any of its Subsidiaries to do any of the foregoing.

 

Section 5.2  Annex A: Certain Rights and Obligations.  Each Party agrees that, from the effective date of the Share Purchase and Subscription Agreement until the consummation of a Qualified Public Offering, it shall be bound by, and shall be entitled to the benefits of, the provisions set out in Annex A to this Agreement.

 

ARTICLE VI

 

INFORMATION RIGHTS; CONFIDENTIALITY

 

Section 6.1  Information Rights.

 

(a)                                 For so long as Tencent and its affiliates own at least ten percent (10%) of the Equity Securities of the Company and the Company has not consummated an initial public offering of Equity Securities in the United States, the Company shall provide to Tencent the following, in each case prepared in accordance with GAAP:

 

19

 

(i)                                    Within ninety (90) days following the end of each fiscal year of the Company, consolidated annual financial statements of the Company audited by a “Big Four” accounting firm or such other accounting firm that is acceptable to Tencent;

 

(ii)                                 Within forty-five (45) days following the end of each fiscal quarter of the Company, unaudited consolidated quarterly financial statements of the Company; and

 

(iii)                              Within thirty (30) days following the end of each calendar month, unaudited consolidated monthly management accounts of the Company.

 

(b)                                 The Company hereby acknowledges that Tencent intends to use the “equity method” under GAAP and agrees that, for so long as Tencent is an Important Shareholder, the Company will provide Tencent with sufficient information, and shall provide reasonable assistance to Tencent, for Tencent to satisfy its financial, accounting and regulatory reporting obligations arising from the use of the equity method to account for investments.

 

(c)                                  For so long as Tencent is an Important Shareholder, the Company shall permit Tencent, at Tencent’s expense, to examine the Company’s books of account and records and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company, as may be reasonably requested by Tencent; provided, however, that the Company shall not be obligated pursuant to this Section 6.1(c) to provide access to any information that it reasonably and in good faith considers the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

Section 6.2  Confidentiality.

 

(a)                                 Subject to any other provisions to the contrary in this Agreement, Tencent shall keep confidential any non-public material or information with respect to the business, technology, financial condition (including but not limited to information provided to Tencent pursuant to this Article VI, if any, and the existence and terms of this Agreement), and other aspects of the Company disclosed by or on behalf of the Company to Tencent during the term of this Agreement, excluding information (i) previously known on a non-confidential basis by Tencent, (ii) in the public domain through no fault of Tencent or its affiliates, representatives or agents, (iii) received from a party other than the Company or the Company’s representatives or agents, so long as such party was not, to the knowledge of the receiving party, subject to a duty of confidentiality to the Company or (iv) developed independently by Tencent without reference to such information (including written or non-written information, hereinafter the “Confidential Information”).  Tencent shall not disclose Confidential Information to any third party and may use Confidential Information only for the purpose of, and to the extent necessary for, reviewing, reporting on and evaluating its investment in the Company.  Notwithstanding any other provision of this Section 6.2 or any provisions under the Strategic Cooperation Agreement, this Section 6.2 and any provisions under the Strategic Cooperation Agreement shall not restrict Tencent’s or its Affiliates’ normal accounting or tax reporting in respect of Tencent’s investment in the Company as required by applicable law and International Financial Reporting Standards, as applicable.

 

(b)                                 Notwithstanding any other provisions in this Article VI, if Tencent believes in good faith that any announcement or notice must be prepared or published

 

20

 

pursuant to applicable laws (including any rules or regulations of any securities exchange or valid legal process or the rules, regulations and practices governing the equity method for accounting for investments) or information is otherwise required to be disclosed to any governmental authority, Tencent may, in accordance with its understanding of the applicable laws, make the required disclosure in the manner it deems in compliance with the requirements of applicable laws; provided that Tencent shall, to the extent permitted by law and so far as it is practicable, provide the other Parties with prompt notice of such requirement and cooperate with the other Parties, at such other Parties’ request and at the requesting Party’s cost, to enable such other Parties to seek an appropriate protection order or remedy.  In addition, Tencent may disclose, after giving prior notice to the other Parties to the extent practicable under the circumstances and subject to any practicable arrangements to protect confidentiality, Confidential Information to the extent required under judicial or regulatory process or in connection with any judicial process regarding any legal action, suit or proceeding arising out of or relating to this Agreement, the Share Purchase and Subscription Agreement and the Strategic Cooperation Agreement (as defined in the Share Purchase and Subscription Agreement) (collectively, the “Transaction Documents”); provided that Tencent shall, to the extent permitted by law and so far as it is practicable, cooperate with the other Parties, at the other Parties’ request and at the requesting Party’s cost, to enable such other Parties to seek an appropriate protection order or remedy.

 

(c)                                  Tencent may disclose the Confidential Information to its affiliates and its affiliates’ officers, directors, employees, agents and representatives (such persons, the “Representatives”) on a need to know basis in the performance of the Transaction Documents; provided that Tencent shall ensure that the Representatives strictly abide by the confidentiality obligations of Tencent hereunder.

 

(d)                                 The confidentiality obligations of Tencent hereunder shall survive the termination of this Agreement.  Tencent shall continue to abide by the confidentiality clause hereof and perform the obligation of confidentiality it undertakes until the other Parties approve the release of that obligation or until a breach of the confidentiality clause hereof will no longer result in any prejudice to the other Parties.

 

ARTICLE VII

 

TERMINATION

 

Section 7.1  Termination.  This Agreement shall take effect immediately and shall continue in force until the earliest of (i) all Holders and their affiliates ceasing to own any Equity Securities, or (ii) the date this Agreement is terminated by agreement of the Parties in writing; provided that the Parties agree to make such amendments as are required under the relevant rules of the NYSE or other exchange or quotation system rules, as applicable, to the extent required such that the Equity Securities of the Company shall be eligible to be listed on the NYSE or any other exchange or quotation system, as applicable, on which such Equity Securities may be listed or contemplated to be listed; provided that the provisions of Section 5.2 and Article VIII shall survive any termination of this Agreement.

 

21

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.1  Specific Performance.  The Parties agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity.

 

Section 8.2  Amendments and Waivers.

 

(a)                                 This Agreement shall not be amended, changed or modified, except by another agreement in writing executed by the Parties hereto.

 

(b)                                 Any Party may (a) extend the time for the performance of any of the obligations or other acts of another Party to such other Party, (b) waive compliance with any of the agreements of the another Party or conditions to such Party’s obligations contained herein to such other Party. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby. No waiver of any agreement or obligation granted pursuant to this Section 7.2 or otherwise in accordance with this Agreement shall be construed as a waiver of any prior or subsequent breach of such agreement or obligation or any other agreement or obligation. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

 

Section 8.3  Notices.  All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of actual delivery if delivered personally to the Party to whom notice is to be given, on the date sent if sent by telecopier, tested telex or prepaid telegram, on the next business day following overnight delivery by an internationally recognized postal delivery service properly addressed or on the day of attempted delivery by an internationally recognized postal delivery service if mailed by registered or certified mail, return receipt requested, postage paid, and properly addressed as follows:

 

	
if to   E-House:
    	
 
    
	
 
    	
 
    
	
E-House   (China) Holdings Ltd.
    	
 
    
	
Room 1706,   Two Exchange Square
    	
 
    
	
Central, Hong   Kong
    	
 
    
	
Facsimile:   +852 2110 1400
    	
 
    
	
Attention:   Li-Lan Cheng
    	
 
    
	
 
    	
 
    
	
with a copy   (which shall not constitute notice) to:
    	
 
    
	
 
    	
 
    
	
Skadden,   Arps, Slate, Meagher & Flom
    	
 
    
	
42/F,   Edinburgh Tower, The Landmark
    	
 
    
	
12 Queen’s Road Central, Hong Kong
    	
 
    
	
Facsimile:   +852 3740 4727
    	
 
    
	
Attention: Z.   Julie Gao, Esq.
    	
 
    

 

22

 

	
if to Tencent:
    
	
 
    
	
Deputy General Counsel
    
	
29/F., Three Pacific Place, No.1 Queen’s Road East, Wanchai, Hong Kong
    
	
Telephone:
    	
+852 3148   5100 Ext: 68805
    
	
Fax No.:
    	
+852 2520   1148
    
	
E-mail:
    	
richardpu@tencent.com.hk
    
	
 
    	
 
    
	
With a copy to:
    
	
 
    
	
Tencent Building, Kejizhongyi Avenue, Hi-tech Park, Nanshan District,
    
	
Shenzhen, 518057, P.R. China
    
	
 
    
	
Attn.:
    	
General   Counsel
    
	
Telephone:
    	
+86 755 8601   3388 Ext: 82238
    
	
Facsimile:
    	
+86 755 8601   3090 Ext: 82238
    
	
E-mail:
    	
brentirvin@tencent.com
    
	
 
    	
 
    
	
Attn.:
    	
General   Manager, M&A Department
    
	
Telephone:
    	
+86   755-8601-3388 Ext: 88978
    
	
Facsimile:
    	
+86   755-8601-3078
    
	
Email:
    	
richardpeng@tencent.com
    
	
 
    
	
with a copy (which shall not constitute notice) to:
    
	
 
    
	
Paul, Weiss, Rifkind, Wharton & Garrison LLP
    
	
12th Floor, The Hong Kong Club Building
    
	
3A Chater Road, Central
    
	
Hong Kong
    
	
Fax: (852) 2840-4300
    
	
Attn: Jeanette K. Chan, Esq
    
	
 
    
	
and to:
    
	
 
    
	
Paul, Weiss, Rifkind, Wharton & Garrison LLP
    
	
1285 Avenue of the Americas
    
	
New York, New York 10019
    
	
USA
    
	
Fax: (212) 757-3990
    
	
Attn: Steven J. Williams, Esq
    
	
 
    
	
if to the Company:
    
	
 
    
	
Leju Holdings Limited
    
	
Room 1706, Two Exchange Square
    
	
Central, Hong Kong
    

 

23

 

	
Facsimile: +852 2110 1400
    
	
Attention:   Li-Lan Cheng
    
	
 
    
	
with a copy   (which shall not constitute notice) to:
    
	
 
    
	
Skadden,   Arps, Slate, Meagher & Flom
    
	
42/F,   Edinburgh Tower, The Landmark
    
	
12 Queen’s Road Central, Hong Kong
    
	
Facsimile:   +852 3740 4727
    
	
Attention: Z.   Julie Gao, Esq.
    

 

Any Party may change its address for purposes of this Section 7.3 by giving the other Parties hereto written notice of the new address in the manner set forth above.

 

Section 8.4  Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of each Party, and, except as expressly provided in Section 2.8 hereof, nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.  Neither this Agreement nor any of the rights or obligations of any Party may be assigned by any Party without the prior written consent of the other Parties, except that: (A) the registration rights of a Holder with respect to any Registrable Securities may be transferred to any transferee of such Holder (i) to which Registrable Securities have been transferred and (ii) who executes and delivers to the Company a written instrument in form and substance reasonably satisfactory to the Company agreeing to be bound by and entitled to the benefits of, the terms of this Agreement, and any purported assignment in breach hereof by such Holder shall be void. All of the obligations of the Company hereunder shall survive any such transfer and (B) Tencent may transfer any of its rights and obligations under this Agreement to any of its affiliates or to any transferee of its Ordinary Shares or ADSs who executes a written agreement in form and substance reasonably satisfactory to the Company agreeing to be bound by the terms of this Agreement.  Each party hereto who transfers Equity Securities to a Permitted Transferee shall cause such Permitted Transferee to execute and deliver to the Company a written instrument in form and substance reasonably satisfactory to the Company agreeing to be bound by and entitled to the benefits of, the terms of this Agreement

 

Section 8.5  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 8.6  Governing Law; Jurisdiction. This Agreement shall be governed and interpreted in accordance with the internal laws of the Hong Kong Special Administrative Region of the People’s Republic of China.  Any dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination (“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. Each Party that is party to the Dispute shall have the right to appoint one arbitrator and one arbitrator shall be appointed by the Hong Kong International Arbitration Centre. The language to be used in the arbitration proceedings shall be English.  Each of the Parties irrevocably waives any immunity to jurisdiction to which it may be entitled or become entitled (including without limitation

 

24

 

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.

 

Section 8.7  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.

 

Section 8.8  Entire Agreement.  This Agreement (together with any schedules and exhibits hereto, the Share Purchase and Subscription Agreement and the Strategic Cooperation Agreement (as defined in the Share Purchase and Subscription Agreement) constitutes the entire understanding and agreement between the Parties with respect to the matters covered hereby, and all prior agreements and understandings, oral or in writing, if any, between the Parties with respect to the matters covered hereby are merged and superseded by this Agreement.

 

Section 8.9  Cumulative Remedies.  The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any Party shall not preclude or waive its right to use any or all other remedies. Such rights and remedies are given in addition to any other rights the Parties may have by law, statute, ordinance or otherwise.

 

Section 8.10  Construction.  Each Party acknowledges and agrees it has had the opportunity to draft, review and edit the language of this Agreement and that no presumption for or against any Party arising out of drafting all or any part of this Agreement will be applied in any dispute relating to, in connection with or involving this Agreement. Accordingly, the Parties hereto hereby waive the benefit of any rule of law or any legal decision that would require, in cases of uncertainty, that the language of a contract should be interpreted most strongly against the Party who drafted such language.

 

Section 8.11  Obligations of E-House. E-House agrees to, prior to the consummation of a Qualified Public Offering, procure the performance of all obligations of the Company under this Agreement and, after the consummation of a Qualified Public Offering, use its reasonable best efforts to procure the performance of all obligations of the Company under this Agreement.

 

Section 8.12  Counterparts.  For the convenience of the Parties 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.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

25

 

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

 

 

	
 
    	
E-HOUSE (CHINA)   HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Xin Zhou
    
	
 
    	
Name:
    	
Xin Zhou
    
	
 
    	
Title:
    	
Co-Chairman and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THL O LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Zhidong Zhang
    
	
 
    	
Name:
    	
Zhidong Zhang
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LEJU HOLDINGS   LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Xin Zhou
    
	
 
    	
Name:
    	
Xin Zhou
    
	
 
    	
Title:
    	
Executive Chairman
    
				

 

[Signature Page to Investor Rights Agreement]

 

 

Annex A: Certain Rights and Obligations

 

Section 1.1                                    Tag-Along Rights.

 

(a)                                 Subject to Section 1.1(g), if E-House or any of its Permitted Transferees (a “Selling Person”) proposes to transfer (in one or a series of transactions) more than five percent (5%) of its Equity Securities to a bona fide third party other than a Permitted Transferee (each such transaction, a “Tag-Along Sale”), the Selling Person shall provide each other Important Shareholder (other than the Selling Person, if it is an Important Shareholder) with written notice of the terms and conditions of such proposed transfer (the “Tag-Along Notice”) and each Important Shareholder (other than the Selling Person, if it is an Important Shareholder) may elect, at their option, to exercise its rights under this Section 1.1 (each such Important Shareholder, a “Tagging Person”).

 

(b)                                 The Tag-Along Notice must identify the aggregate number of Equity Securities subject to the offer (the “Tag-Along Offer”), the name and address of the proposed transferee (the “Tag-Along Buyer”), the proposed consideration per Ordinary Share Equivalents, and all other material terms and conditions of the Tag-Along Offer.

 

(c)                                  Each Tagging Person shall have the right, at its option, exercisable by written notice (the “Exercise Notice”) given to the Selling Person and the other Important Shareholders, within twenty (20) days after receipt of the Tag-Along Notice by such Tagging Person (the “Tag-Along Notice Period”), to include in the proposed transfer any number of Ordinary Share Equivalents then held by such Tagging Person proposed to be Transferred by the Selling Person; provided, that if the aggregate number of Ordinary Share Equivalents proposed to be Transferred by the Selling Person and all Tagging Persons in such transaction exceeds the maximum amount that can be Transferred on the terms and conditions set forth in the Tag-Along Notice, then each Tagging Person who has timely delivered an Exercise Notice to the Selling Person will be entitled to sell only up to an amount equal to such maximum amount of Equity Securities multiplied by a fraction, the numerator of which is the number of Ordinary Share Equivalents held by the Tagging Person and the denominator of which is the aggregate number of outstanding Ordinary Share Equivalents held by all Tagging Persons and the Selling Person, and the number of Equity Securities to be Transferred by the Selling Person as set forth in the Tag-Along Notice shall be reduced to the extent necessary so that each such Tagging Person who has timely delivered an Exercise Notice shall be able to sell the amount set forth in this sentence.

 

(d)                                 If any Tagging Person has delivered an Exercise Notice to the Selling Person, then not less than ten (10) days prior to the proposed closing of the Tag-Along Sale, the Selling Person shall deliver to each such Tagging Person notice of (i) the number and class of such Tagging Person’s Ordinary Share Equivalents to be Transferred in such sale as determined pursuant to clause (c) above, and (ii) the time and location of the closing of such sale.  Not less than five (5) days prior to the closing of the Tag-Along Sale, each such Tagging Person shall deliver to the Buyer a written notice containing the payment instructions to be followed in connection with the transfer of such Tagging Person’s Equity Securities in the Tag-Along Sale.  On the date of closing of the Tag-Along Sale, each such Tagging Person shall deliver, subject to the terms and conditions of the Tag-Along Offer, the certificate or certificates (if any) representing the Equity Securities of such Tagging Person to be included in such Tag-Along Sale at the time and location specified in the notice given pursuant to the first sentence of this clause (d).  If, at the end of a ninety (90) day period after

 

 

delivery of the Exercise Notice, such Tag-Along Sale has not been consummated on substantially the same terms and conditions as set forth in the Tag-Along Notice, the Selling Person shall return any certificate previously delivered by any Tagging Person and must again follow all of the procedures set forth in this Section 1.1.

 

(e)                                  If at the termination of the Tag-Along Notice Period any Important Shareholder shall not have delivered an Exercise Notice, such Tagging Person will be deemed to have waived its rights under this Section 1.1 to transfer any Equity Securities pursuant to such Tag-Along Sale (but not in respect of future Tag-Along Sales).

 

(f)                                   The rights and obligations of the Selling Person and the Tagging Persons under this Section 1.1 shall be subject to satisfaction of the following conditions:

 

(i)                                     upon the consummation of any Tag-Along Sale, each of the Selling Person and the Tagging Persons participating therein will receive the same form and amount of consideration per Ordinary Share Equivalent or if the Selling Person or any Tagging Person is given an option as to the form and amount of consideration to be received, the Selling Person and all Tagging Persons participating therein will be given the same option;

 

(ii)                                  no Selling Person nor Tagging Person shall be obligated to pay more than its pro rata portion (based on the aggregate consideration to be received in connection with the Tag-Along Sale) of costs, fees and expenses incurred in connection with the Tag-Along Sale to the extent such costs, fees and expenses are incurred for the benefit of all such Tagging Persons and the Selling Person and are not otherwise paid by the Company or the acquiring party; and

 

(iii)                               if the Selling Person and the Tagging Persons are required to provide any representations or indemnities in connection with such Tag-Along Sale (other than representations and indemnities concerning the Selling Person’s and each Tagging Person’s title to the Equity Securities and authority, power and right to enter into and consummate the transfer without contravention of any law or agreement, for which each such Person will be entirely liable for its own representations and warranties only), then liability for misrepresentation or indemnity shall be expressly stated to be several but not joint and the Selling Person and each Tagging Person shall not be liable for more than its pro rata portion (based on the aggregate consideration to be received in connection with the Tag-Along Sale) of any liability for misrepresentation or indemnity.

 

(g)                                  The provisions of this Section 1.1 shall terminate upon completion of an initial public offering.

 

Section 1.2                                    Pre-emptive Rights.

 

(a)                                 Subject to Section 1.2(f), each Important Shareholder shall have the right to purchase, on the terms set forth herein, a portion of any Equity Securities (including securities linked to Equity Securities), any other equity securities of the Company or any equity securities issued by any Subsidiary of the Company, other than securities issued to a party that directly or indirectly wholly owns or is wholly-owned by such Subsidiary (the “Issued Securities”) that the Company or any such Subsidiary may propose to issue.

 

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(b)                                 The Company shall deliver written notice (the “Preemptive Notice”) to each Important Shareholder at least fifteen (15) days prior to the date of any proposed issuance of Issued Securities.  Such notice shall describe the price, the aggregate number of Issued Securities and the amount or number of Issued Securities that each Important Shareholder may elect to purchase in connection with such issuance (assuming that all Important Shareholders elect to purchase Issued Securities) determined in accordance with Section 1.2(c).  Such notice shall also describe any other terms of such Issued Securities, including rights to receive distributions and the rank of such Issued Securities relative to the Equity Securities then outstanding.

 

(c)                                  Each Important Shareholder shall have the right to purchase up to its Pro Rata Share of any Issued Securities. “Pro Rata Share” shall mean, with respect to each Important Shareholder, the number of Ordinary Share Equivalents held by such Important Shareholder divided by the total number of Ordinary Share Equivalents then outstanding.

 

(d)                                 Each Important Shareholder shall have a period of ten (10) days from the date the Preemptive Notice is given (the “Election Period”) within which to agree to purchase up to the number or amount of Issued Securities which such Important Shareholder is entitled to purchase pursuant to Section 1.2(c), at the price and upon the terms specified in the Preemptive Notice by giving written notice (an “Election Notice”) to the Company. An Election Notice delivered by any Important Shareholder shall be irrevocable and binding upon such Important Shareholder and shall, subject to Section 1.2(e), constitute an irrevocable commitment on the part of such Important Shareholder to purchase the number and class of Issued Securities set forth therein.  Such Election Notice shall also include the maximum number or amount of additional Issued Securities such Important Shareholder would be willing to purchase in the event that the Important Shareholders elect to purchase less than the maximum number or amount of Issued Securities that they are entitled to purchase pursuant to this provision.  If any such Important Shareholder shall not have delivered an Election Notice within the Election Period, such Important Shareholder will be deemed to have irrevocably waived any and all rights under this Section 1.2 with respect to such Issued Securities (but not with respect to future issuances in accordance with this Section 1.2).  In the event that fewer than all of the Important Shareholders elect to purchase any Issued Securities in the manner described above, the under subscription shall be allocated among such Important Shareholders on a pro rata basis (based on the number of Company Units owned by such Important Shareholders) who have indicated in an Election Notice a desire to purchase additional Issued Securities, subject to any limitations such Important Shareholders may have indicated as to the amount of such additional Issued Securities they desire to purchase.  Promptly following the end of the Election Period, the Company shall notify each electing Important Shareholder of the amount of Issued Securities that it will purchase.

 

(e)                                  If the Important Shareholders have elected to purchase all of the Issued Securities proposed to be issued at any one time pursuant to this Section 1.2, the consummation of such purchase shall take place as soon as practicable (but in no event more than sixty (60) days) following the expiration of the Election Period.  If the Important Shareholders do not elect to purchase all of the Issued Securities proposed to be so issued, the Company shall have ninety (90) days after the expiration of the Election Period to sell the remaining Issued Securities to any Person at a price and upon terms that are not more favorable to such Person than offered to the Important Shareholders; provided that if such purchase is subject to receipt of regulatory approvals, such ninety (90) day period shall be

 

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extended until the expiration of ten (10) days after all regulatory approvals have been received, but in no event later than 180 days following the expiration of the Election Period.  The purchase of Issued Securities by the Important Shareholders exercising their rights pursuant to this Section 1.2 shall be consummated simultaneously with the closing of the sale of the Issued Securities to such Person.  In the event the Company has not sold the Issued Securities to such Person within said 90 day period (or said 180 day period (or such shorter period as may be required) if regulatory approvals are required), then the Company’s rights to sell such Issued Securities, and the rights of the Important Shareholders to purchase such Issued Securities pursuant to this Section 1.2 shall expire and the procedures in this Section 1.2 shall be reinstated.  Notwithstanding anything to the contrary in this Agreement, no sale of Issued Securities to any Person pursuant to this Section 1.2(e) will be valid unless such purchaser shall execute a counterpart to this Agreement, accepting and agreeing to be bound by all terms and conditions hereof.

 

(f)                                   Notwithstanding the foregoing provisions of this Section 1.2, no Important Shareholder shall have preemptive rights to purchase any Issued Securities as contemplated by this Section 1.2 in connection with issuances of Equity (or securities linked to Equity) or equity securities issued by any Subsidiary of the Company:

 

(i)                                     (x) as a dividend or distribution in respect of outstanding equity or equity-based securities in connection with a stock split or similar event, (y) pursuant to an initial public offering or (z) in connection with any bona fide, arm’s-length direct or indirect merger, acquisition or similar transaction, provided that, if the Company’s obligation to issue and sell, and Tencent’s obligation to purchase the Subscription Shares (as defined in the Share Purchase and Subscription Agreement), have been terminated pursuant to Section 5.12(a)(iv) of the Share Purchase and Subscription Agreement, Tencent shall have the pre-emptive rights to purchase any Issued Securities as contemplated by this Section 1.2 in connection with issuances of Equity (or securities linked to Equity) or equity securities issued by any Subsidiary of the Company pursuant to an initial public offering; or

 

(ii)                                  to officers, employees or consultants of the Company or any Subsidiary of the Company or members of the Company Board or of the board of directors of any Subsidiary of the Company pursuant to an employee benefit plan or any similar arrangement that has been approved by the Board of Directors.

 

(g)                                  Each Important Shareholder shall have the right to transfer or assign its right to purchase all or a portion of its Pro Rata Share of any issuance of Issued Securities pursuant to this Section 1.2 to any Permitted Transferee upon written notice to the Company during the Election Period.  For purposes of this Section 1.2, references to any Important Shareholder shall be deemed to include any of such Important Shareholder’s Permitted Transferees so notified to the Company.  The Company shall not be under any obligation to consummate any proposed issuance of Issued Securities, regardless of whether it shall have delivered notice hereunder in respect of such proposed issuance.

 

(h)                                 The provisions of this Section 1.2 shall terminate immediately prior to the effectiveness of an initial public offering.

 

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