UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

 

Under the Securities Exchange Act of 1934

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

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

 

(Date of Event Which Requires Filing of this Statement)

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

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

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

 

 

CUSIP No.

026852W10

Page

2

of

13

Pages

 

1	NAMES OF REPORTING PERSONS     Xin Zhou
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP   (a)  [  ]   (b)  [  ]
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)   PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)      [  ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION   People’s Republic of China
NUMBER OF SHARES BEN EFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER   2,610,498 ordinary shares
		8	SHARED VOTING POWER   40,232,225 ordinary shares
		9	SOLE DISPOSITIVE POWER   2,610,498 ordinary shares
		10	SHARED DISPOSITIVE POWER   40,232,225 ordinary shares
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   42,842,723 ordinary shares
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)               [  ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   31.6%
14	TYPE OF REPORTING PERSON (See Instructions)   IN

 

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CUSIP No.

026852W10

Page

2

of

13

Pages

 

1	NAMES OF REPORTING PERSONS     Kanrich Holdings Limited
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP   (a)  [  ]   (b)  [  ]
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)   WC, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)      [  ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION   British Virgin Islands
NUMBER OF SHARES BEN EFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER   0
		8	SHARED VOTING POWER   17,790,125 ordinary shares
		9	SOLE DISPOSITIVE POWER   0
		10	SHARED DISPOSITIVE POWER   17,790,125 ordinary shares
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   17,790,125 ordinary shares
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)               [  ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   13.4%
14	TYPE OF REPORTING PERSON (See Instructions)   CO

 

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Item 1. Security and Issuer.

 

This Statement on Schedule 13D (this “Statement”) relates to the ordinary shares, par value $0.001 per share (the “Shares”), of E-House (China) Holdings Limited, a company organized under the laws of the Cayman Islands (the “Company”), whose principal executive offices are located at 17/F, East Tower, No. 333 North Chengdu Road Shanghai 200041, The People’s Republic of China.

 

Item 2. Identity and Background.

 

This Statement is being filed by Kanrich Holdings Limited, a company organized under the laws of the British Virgin Islands (“Kanrich”), and Xin Zhou, a co-chairman of the board of directors and chief executive officer of the Company and a director and controlling shareholder of Kanrich.

 

Kanrich is solely engaged in holding, distributing or effecting any sale of the Shares held by it. Kanrich is jointly established by Xin Zhou and other members of the Company’s management, and controlled by Xin Zhou. The principal executive offices of Kanrich are located at 17/F, East Tower, No. 333 North Chengdu Road Shanghai 200041, The People’s Republic of China.

 

The name, business address, present principal occupation or employment and citizenship of each of the executive officers and directors of Kanrich are set forth on Schedule A hereto and are incorporated herein by reference.

 

During the last five years, none of Kanrich, Xin Zhou and, to the best of their knowledge, any of the persons listed on Schedule A hereto has been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Kanrich and Xin Zhou entered into a Joint Filing Agreement on April 1, 2013 (the “Joint Filing Agreement”), pursuant to which they have agreed to file this Schedule 13D jointly in accordance with the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended. A copy of the Joint Filing Agreement is attached hereto as Exhibit A.

 

Item 3. Source and Amount of Funds or Other Consideration.

 

Kanrich and the Company entered into a Share Purchase Agreement on December 27, 2012, a copy of which is attached hereto as Exhibit B, and an Amendment to the Share Purchase Agreement on March 22, 2013, a copy of which is attached hereto as Exhibit C (together with the Share Purchase Agreement, the “SPA”).  The description of the SPA contained herein is qualified in its entirety by reference to Exhibit B and Exhibit C, which are incorporated herein by reference.

 

Pursuant to the SPA, the Company issued to Kanrich 17,790,125 Shares (the “Subscription Shares”), representing 13.4% of the Company’s outstanding voting capital, at a subscription price of US$62,621,240, at a closing that occurred on March 22, 2013 (the “Closing Date”).

 

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To fund part of the purchase of the Subscription Shares, Kanrich and Prominent Asset Investment Limited (“Prominent”) entered into a Margin Loan Facility Agreement on March 22, 2013 (the “Facility Agreement”), pursuant to which Kanrich obtained a two-year term loan from Prominent in the principal amount of US$44,000,000 (the “Margin Loan”). A copy of the Facility Agreement is attached hereto as Exhibit D.

 

The funds used to purchase the remainder of the Subscription Shares were obtained from the working capital of Kanrich, contributed by Xin Zhou and other shareholders of Kanrich.

 

Item 4. Purpose of Transaction.

 

The information set forth in Item 3 is hereby incorporated by reference in this Item 4.

 

Lock-up.  Pursuant to the SPA, Kanrich will not offer, sell, pledge, file a registration statement with respect to, or otherwise dispose of, directly or indirectly, any of the Subscription Shares until after 12 months following the Closing Date. However, this lock-up restriction does not apply to: (a) any pledge of, or any charge or other security interest (a “Security Interest”) in, any or all of the Subscription Shares in order to secure financing obtained by Kanrich for the purpose of paying any or all of the purchase price payable under the SPA, created by Kanrich for the benefit of Prominent Asset Investment Limited or its assignee, transferee or other successor in title (“Chargee”); or (b) any sale, transfer, filing a registration statement with respect to or other disposal of all or any of the Subscription Shares upon any enforcement by a Chargee of any of its rights in respect of the Security Interest in accordance with the terms of the relevant security agreement.

 

Repayment of loan.  Kanrich shall repay the Margin Loan on the maturity date, which is the date falling two years from the date of the Facility Agreement. Kanrich shall pay interest on the Margin Loan in advance on the first day of each three-month  interest period. The first interest period shall commence on March 22, 2013, the utilization date, and the last interest period shall end on (and exclude) the maturity date.

 

Share and account charge.  Pursuant to the Share and Account Charge, Kanrich, Jun Heng Investment Ltd. (“Jun Heng”) and On Chance Inc. (“On Chance”) charged in favor of the Chargee all their rights, title and interest present and future in and to the Subscription Shares, 9,665,000 Shares and 9,982,500 Shares that each of them owned in the Company, respectively (collectively, the “Charged Shares”), and all their rights, title and interest present and future in respect of or represented by each relevant securities account each of them maintains with the custodian of Prominent, as the continuing security for the due and punctual performance and discharge of all the obligations under the Facility Agreement and other documents relating to the Margin Loan. Prior to the disposition of any Charged Shares by the Chargee pursuant to an enforcement of the Security Interest, Kanrich, Jun Heng and On Chance have the right to exercise all voting, consensual and other powers of ownership pertaining to the Charged Shares, provided they are not exercised in a manner that is inconsistent with the terms of the Finance Documents or any document or instrument referred to therein, or that would reasonably be expected to have a material adverse effect on the value of the Charged Shares or otherwise prejudice the interests of the Chargee under the Finance Documents.

 

Although Kanrich and Xin Zhou have no present intention to acquire securities of the Company, they intend to review their investment on a regular basis and, as a result thereof and subject to the terms and

 

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conditions of the SPA, may at any time or from time to time determine, either alone or as part of a group, (i) to acquire additional securities of the Company, through open market purchases, privately negotiated transactions or otherwise, (ii) to dispose of all or a portion of the securities of the Company owned by it in the open market, in privately negotiated transactions or otherwise or (iii) to take any other available course of action, which could involve one or more of the types of transactions or have one or more of the results described in the next paragraph of this Item 4. Any such acquisition or disposition or other transaction would be made in compliance with all applicable laws and regulations and subject to the restrictions on transfers set forth in the SPA. Notwithstanding anything contained herein, each of Kanrich and Xin Zhou specifically reserves the right to change its/his intention with respect to any or all of such matters. In reaching any decision as to its course of action (as well as to the specific elements thereof), each of Kanrich and Xin Zhou currently expects that it/he would take into consideration a variety of factors, including, but not limited to, the following: the Company’s business and prospects; other developments concerning the Company and its businesses generally; other business opportunities available to Kanrich and Xin Zhou; changes in law and government regulations; general economic conditions; and money and stock market conditions, including the market price of the securities of the Company.

 

Except as set forth in this Schedule 13D, Kanrich and Xin Zhou have no present plans or proposals that relate to or would result in:

 

(a)                            The acquisition by any person of additional securities of the Company, or the disposition of securities of the Company,

 

(b)                            An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company,

 

(c)                             A sale or transfer of a material amount of assets of the Company,

 

(d)                            Any change in the present board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board,

 

(e)                             Any material change in the present capitalization or dividend policy of the Company,

 

(f)                              Any other material change in the Company’s business or corporate structure,

 

(g)                             Changes in the Company’s charter, bylaws or instruments corresponding thereto or other actions that may impede the acquisition of control of the Company by any person;

 

(h)                            A class of securities of the Company being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association,

 

(i)                                A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act, or

 

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(j)                               Any action similar to any of those enumerated above.

 

Item 5. Interest in Securities of the Issuer.

 

The responses of Kanrich and Xin Zhou to Rows (7) through (13) of the cover pages of this Schedule 13D are hereby incorporated by reference in this Item 5. The information with respect to Shares that may be deemed to be beneficially owned by each director and officer of Kanrich is set forth on Schedule B hereto, which is incorporated herein by reference.

 

Pursuant to the SPA, on the Closing Date, Kanrich acuired and is deemed to beneficially own 17,790,125 Subscription Shares, representing 13.4% of the Company’s outstanding voting capital.

 

After acquiring the Subscription Shares, Xin Zhou’s beneficial ownership in the Company increased to 42,842,723 Shares, representing 31.6% of the outstanding voting capital of the Company. The 42,842,723 Shares beneficially owned by Mr. Xin Zhou comprise (i) 17,790,125 Subscription Shares beneficially owned by Kanrich as described below, (ii) 9,977,300 Shares beneficially owned by Jun Heng Investment Limited as described below, (iii) 12,464,800 Shares beneficially owned by On Chance Inc. as described below, (iv) 66,666 Shares Mr. Zhou personally held as of the Closing Date; and (v) 2,543,832 Shares that Mr. Zhou has the right to acquire upon exercise of options within 60 days after the Closing Date.

 

Mr. Xin Zhou holds 94% of the shares of Kanrich and is a director of Kanrich. Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, Mr. Zhou may be deemed to beneficially own all of the Shares of the Company held by Kanrich.

 

Jun Heng Investment Limited, a British Virgin Islands company, directly holds 9,665,000 Shares of the Company and 312,300 American depositary shares representing 312,300 Shares of the Company. On Chance Inc., a company controlled by Mr. Zhou as described below, holds 51.54% of the shares of Jun Heng Investment Limited. Mr. Zhou is a director of Jun Heng Investment Limited. Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, Mr. Zhou may be deemed to beneficially own all of the Shares of the Company held by Jun Heng Investment Limited.

 

On Chance Inc., a British Virgin Islands company, directly holds 9,982,500 Shares of the Company and 2,482,300 American depositary shares representing 2,482,300 Shares of the Company. Mr. Xin Zhou holds 95% of the shares of On Chance Inc. and is the sole director of On Chance Inc. Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, Mr. Zhou may be deemed to beneficially own all of the ordinary shares of the Company held by On Chance Inc.

 

Mr. Zhou disclaims beneficial ownership of the Shares owned by Kanrich, Jun Heng Investment Limited and On Chance Inc. except to the extent of his pecuniary interest therein.

 

The percentage of the class of securities identified pursuant to Item 1 beneficially owned by Kanrich and Xin Zhou is based on 132,955,918 Shares outstanding as of the Closing Date after the issuance of the Subscription Shares, which excludes (i) 1,529,126 Shares issued to the depositary bank of the Company

 

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under reservation for future grants under the Company’s share incentive plan, and (ii) 3,530,074 Shares underlying the 3,530,074 American depositary shares that have been repurchased by the Company from the open market but remain uncancelled.

 

Except as disclosed in this Schedule 13D, none of Kanrich, Xin Zhou or to the best of their knowledge, any of the persons listed in Schedule A hereto, beneficially owns any Shares or has the right to acquire any Shares.

 

Except as disclosed in this Schedule 13D, none of Kanrich, Xin Zhou or to the best of their knowledge, any of the persons listed in Schedule A hereto,  presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Shares that they may be deemed to beneficially own.

 

Except as disclosed in this Schedule 13D, none of Kanrich, Xin Zhou or to the best of their knowledge, any of the persons listed in Schedule A hereto, has effected any transaction in the Shares during the past 60 days.

 

Except as disclosed in this Schedule 13D, to the best knowledge of Kanrich and Xin Zhou, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares beneficially owned by Kanrich and Xin Zhou.

 

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

 

The information set forth in Items 3 and 4 is hereby incorporated by reference in this Item 6.

 

Except as described above or elsewhere in this Schedule 13D or incorporated by reference in this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between Kanrich, Xin Zhou or, to the best of their knowledge, any of the persons named in Schedule A hereto and any other person with respect to any securities of the Company, including, but not limited to, transfer or voting of any securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

 

Item 7. Material to be Filed as Exhibits.

 

Exhibit No.		Description
A		Joint Filing Agreement, dated April 1, 2013, between Xin Zhou and Kanrich Holdings Limited
B		Share Purchase Agreement, dated as of December 27, 2012, between E-House (China) Holdings Limited and Kanrich Holdings Limited
C		Amendment to Share Purchase Agreement, dated as of March 22, 2013, between

 

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		E-House (China) Holdings Limited and Kanrich Holdings Limited
D*		Margin Loan Facility Agreement, dated as of March 22, 2013, between Kanrich Holdings Limited and Prominent Asset Investment Limited
E*		Share and Account Charge, dated as of March 22, 2013, between Kanrich Holdings Limited, Jun Heng Investment Ltd., On Chance Inc. and Prominent Asset Investment Limited

 

*      Confidential treatment has been requested. Confidential material has been redacted and separately filed with the SEC.

 

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SIGNATURE

 

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

 

Dated: April 1, 2013
	Xin Zhou
	/s/ Xin Zhou
	Kanrich Holdings Limited
	By:	/s/ Xin Zhou
	Name: Xin Zhou
	Title: Director

 

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SCHEDULE A

 

Directors and Executive Officers of Kanrich

 

Name		Position with Kanrich		Present Principal Occupation		Business Address		Citizenship
Xin Zhou		Director		Co-Chairman and Chief Executive Officer of the Company		17/F, East Tower, No. 333 North Chengdu Road Shanghai 200041, The People’s Republic of China		P.R. China
Canhao Huang		Director		Executive Director of the Company		17/F, East Tower, No. 333 North Chengdu Road Shanghai 200041, The People’s Republic of China		P.R. China

 

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SCHEDULE B

 

Shares Beneficially Owned by the Directors and Executive Officers of Kanrich

 

		Shares Beneficially Owned (1)
		Number		%
Directors and Executive Officers
Xin Zhou		42,842,723		31.6	%
Canhao Huang		246,750	(2)	0.2	%

 

(1) For each person included in this table, percentage of beneficial ownership is calculated by dividing the number of Shares beneficially owned by such person by the sum of (i) the number of Shares outstanding (which shall exclude  (a) the Shares issued to the depositary bank of the Company under reservation for future grants under the Company’s share incentive plan and (b) the Shares underlying the American depositary shares that have been repurchased from the open market but remain uncancelled) and (ii) either the number of Shares underlying share options held by such person that are exercisable within 60 days after the Closing Date or the number of restricted shares held by such person that will be vested within 60 days after the Closing Date, as the case may be. The total number of Shares outstanding as of the Closing Date is 132,955,918 Shares, excluding (i) 1,529,126 Shares issued to the depositary bank of the Company under reservation for future grants under the Company’s share incentive plan and (ii) 3,530,074 Shares underlying the 3,530,074 American depositary shares that have been repurchased from the open market but remain uncancelled.

 

(2) represent (i) 90,000 Shares Mr. Huang personally held as of the Closing Date and (ii) 156,750 Shares that Mr. Huang has the right to acquire upon exercise of options within 60 days after the Closing Date.

 

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EXHIBIT A

 

JOINT FILING AGREEMENT

 

In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13G referred to below) on behalf of each of them of a statement on Schedule 13G (including amendments thereto) with respect to the ordinary shares, par value of $0.001 per share, of E-House (China) Holdings Limited, a Cayman Islands exempted company, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

 

[Signature page to follow]

 

 

Signature Page

 

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of April 1, 2013.

 

 

Dated: April 1, 2013
	Xin Zhou
	/s/ Xin Zhou
	Kanrich Holdings Limited
	By:	/s/ Xin Zhou
	Name:	Xin Zhou
	Title:	Director

 

 

Exhibit B

 

 

SHARE PURCHASE AGREEMENT

 

between

 

E-HOUSE (CHINA) HOLDINGS LIMITED

 

and

 

KANRICH HOLDINGS LIMITED

 

December 27, 2012

 

 

 

SHARE PURCHASE AGREEMENT

 

This Share Purchase Agreement (this “Agreement”) is entered into as of December 27, 2012 by and between E-House (China) Holdings Limited, a Cayman Islands company (the “Company”), and Kanrich Holdings Limited, a British Virgin Islands company (the “Purchaser”).

 

RECITALS

 

WHEREAS, the Company is an exempted company organized under the laws of the Cayman Islands, and the Purchaser is controlled by Xin Zhou, co-chairman of the Company’s board of directors and chief executive officer of the Company;

 

WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to subscribe for and purchase from the Company, certain number of  newly issued ordinary shares of the Company, par value of US$0.001 each (“Ordinary Shares”) pursuant to the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,, the parties hereto agree as follows:

 

1.                                       SALE AND PURCHASE OF ORDINARY SHARES

 

1.1           Upon the terms and subject to the conditions contained herein, at the Closing (as defined below), the Company shall issue to the Purchaser, and the Purchaser hereby agrees to purchase from Seller, 17,790,125 newly issued Ordinary Shares (the “Subject Shares”).

 

1.2           The consideration payable by the Purchaser for the Subject Shares shall be US$3.52 per Ordinary Share, and shall be US$$62,621,240 in aggregate (the “Purchase Price”).

 

1.3           The Purchase Price shall be payable at the Closing (as defined below) to the Company by wire transfer in immediately available funds, to the account designated by the Company in writing at least two Business Days prior to the Closing. “Business Day” means any day other than a Saturday, Sunday or another day on which commercial banks in Shanghai or Hong Kong are authorized or required by law or executive order to close.

 

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2.                                       CLOSING

 

2.1           The closing (the “Closing”) of the purchase and sale of the Subject Shares contemplated in Section 1 hereof shall take place at the offices of the Company, 17/F, East Tower, No. 333 North Chengdu Road, Shanghai 200041, China at 10:00 a.m., local time, on the date upon which the conditions set forth in Section 5 are satisfied or waived in accordance with this Agreement, or at such other time, date and place that the Company and the Purchaser may mutually agree (such date, the “Closing Date”).

 

2.2           At the Closing, the Company shall deliver to the Purchaser an updated register of members of the Company reflecting the Subject Shares purchased by the Purchaser.

 

2.3           At the Closing, the Purchaser shall deliver to the Company proof of payment of the Purchase Price reasonably satisfactory to the Company.

 

3.                                       REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to the Purchaser as follows:

 

3.1           Organization, Good Standing and Qualification.

 

The Company has been duly incorporated, and is validly existing and in good standing under the laws of the Cayman Islands, and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement.

 

3.2           Authorization.

 

All corporate actions on the part of the Company, its officers and directors necessary for the execution, delivery, and performance by the Company of this Agreement have been taken prior to the Closing.  This Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally.  The execution, delivery and performance of this Agreement by the Company will not violate, or constitute a breach or default (whether upon lapse of time and/or the occurrence of any act or event or otherwise) under or result in a conflict with, (i) the memorandum and articles of association or other constitutional documents of the Company, (ii) any applicable law by which the Company is bound or (iii) any agreement to which the Company is a party or by which it or any of its assets is bound.

 

3.3           The Subject Shares.

 

The Subject Shares, when issued, sold and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable.

 

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4.                                       REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

The Purchaser hereby represents and warrants to the Company as follows:

 

4.1           Organization, Good Standing and Qualification.

 

The Purchaser has been duly incorporated, and is validly existing and in good standing under the laws of the British Virgin Islands, and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement.

 

4.2           Authorization.

 

All corporate actions on the part of the Purchaser and its officers and directors necessary for the execution, delivery, and performance by the Purchaser of this Agreement have been taken prior to the Closing.  This Agreement constitutes a valid and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally.   The execution, delivery and performance of this Agreement by the Purchaser will not violate, or constitute a breach or default (whether upon lapse of time and/or the occurrence of any act or event or otherwise) under or result in a conflict with, (i) the memorandum and articles of association or other constitutional documents of the Purchaser, (ii) any applicable law by which the Purchaser or any of its assets is bound or (iii) any agreement to which the Purchaser is a party or by which it or any of its assets is bound.

 

4.3           Securities Law Restrictions.

 

The Purchaser acknowledges that upon its purchase of the Subject Shares, each such Subject Share shall be subject to the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) promulgated thereunder, and/or under similar state securities law. In particular, the Purchaser understands that the Subject Shares are not publicly traded, are not registered under the Securities Act or under any state securities law. The Purchaser understands that because the Subject Shares have not been registered under the Securities Act, the Subject Shares cannot be sold unless they are subsequently registered or an exemption from registration is available. The Purchaser acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Subject Shares and requirements relating to the Company which are outside of the Purchaser’s control and the Company is under no obligation and may not be able to satisfy.

 

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4.4           Accredited Investor.

 

The Purchaser is an Accredited Investor within the meaning of Rule 501 of Regulation D under the Securities Act.

 

4.5           Purchase Entirely for Own Account.

 

The Purchaser is acquiring the Subject Shares pursuant to this Agreement for its own account for investment purposes only and not with the view to, or with any intention of, resale, distribution or other disposition thereof. The Purchaser does not have any direct or indirect arrangement, or understanding with any other persons to distribute, or regarding the distribution of the Subject Shares in violation of the Securities Act or any other applicable securities law.

 

4.6           Execution.

 

The person executing this Agreement on behalf of the Purchaser was outside the United States at the time of such execution.

 

5.                                       CONDITIONS TO CLOSING

 

5.1           Conditions Precedent to the Purchaser’s Obligations.

 

The obligations of the Purchaser to be performed at the Closing shall be subject to the satisfaction or waiver prior to or at the Closing of each of the following conditions:

 

(a)           The representations and warranties set forth in Section 3 hereof shall be true and correct as of the Closing;

 

(b)           The Company shall have caused the Purchaser’s name to be entered into the Company’s register of members as the registered holder of the Subject Shares.

 

(c)           No action shall have been taken or threatened, and no law shall exist or have been enacted, promulgated or issued or deemed applicable to the transactions contemplated hereby by any governmental authority that would (i) make the consummation of the transaction contemplated hereby illegal or substantially delay the consummation of any material aspect of the transaction contemplated hereby, or (ii) render the Company unable to consummate the transaction contemplated hereby.

 

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5.2           Conditions Precedent to the Company’s Obligations.

 

The obligations of the Company to be performed at the Closing shall be subject to the satisfaction or waiver prior to or at the Closing of each of the following conditions:

 

(a)           The representations and warranties set forth in Section 4 hereof shall be true and correct as of the Closing;

 

(b)           The Company shall have paid the Purchase Price to the Company in the manner as set forth in Section 1.3;

 

(c)           No action shall have been taken or threatened, and no law shall exist or have been enacted, promulgated or issued or deemed applicable to the transactions contemplated hereby by any governmental authority that would (i) make the consummation of the transaction contemplated hereby illegal or substantially delay the consummation of any material aspect of the transaction contemplated hereby, or (ii) render the Purchaser unable to consummate the transaction contemplated hereby.

 

6.                                       LOCK-UP

 

The Purchaser will not offer, sell, contract to sell, pledge, grant any option to purchase, purchase any option or contract to sell, make any short sale, file a registration statement with respect to, or otherwise dispose of, directly or indirectly, any of the Subject Shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interest of any of the Subject Shares, until after 12 months following the Closing Date.

 

7.                                       TERMINATION

 

This Agreement shall terminate in its entirety and be of no further force or effect with the exception of the provisions set forth in Section 8 hereof if the Company and the Purchaser agree to terminate this Agreement in writing prior to the Closing; provided, however, that no such termination shall relieve either party hereto of liability for its breach of this Agreement.

 

8.                                       MISCELLANEOUS

 

8.1           Expenses.

 

Each party hereto shall bear its own expenses incurred in connection with this Agreement, including without limitation any transfer or assignment expenses or transaction taxes.

 

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8.2           Notices.

 

All notices, requests, claims, demands and other communications hereunder shall be in writing and given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by cable, by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.2):

 

(a)           if to the Company

 

To:                                                                              E-House (China) Holdings Limited

17/F, East Tower, No. 333 North Chengdu Road, Shanghai 200041, China

Attention:                                         Bin Laurence, Chief Financial Officer

 

(b)           if to the Purchaser

 

To:                                                                              Kanrich Holdings Limited

Room 1706, Two Exchange Square

Central, Hong Kong

Attention:                                         Xin Zhou, Director

 

8.3           Amendments and Waivers.

 

This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived only by a written instrument signed by the parties hereto or in the case of a waiver, by the party waiving compliance.

 

8.4           Entire Agreement

 

This Agreement sets forth the entire agreement and understanding between the parties hereto in relation to the subject matter of this Agreement and supersedes and cancels in all respects all previous agreements, letters of intent, correspondence, understandings, agreements and undertakings (if any) between the parties hereto with respect to the subject matter hereof, whether such be written or oral.

 

8.5           Governing Law.

 

This Agreement shall be governed by and construed under the laws of the Cayman Islands, without regard to principles of conflicts of law thereunder. In the event the parties are unable to settle a dispute between them regarding this Agreement, such dispute shall be referred to and finally settled by arbitration in Hong Kong under the auspices of the Hong Kong International Arbitration Centre in accordance with the

 

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UNCITRAL Arbitration Rules then in effect. The award of the arbitration tribunal shall be final and binding upon the disputing parties, and either party may apply to a court of competent jurisdiction for enforcement of such award. The prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

8.6           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.

 

8.7           Counterparts.

 

This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

 

[Signature page follows.]

 

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

 

 

	E-HOUSE (CHINA) HOLDINGS LIMITED
	By:	/s/ Fan Bao
	Name:	Fan Bao
	Title:	Director
	KANRICH HOLDINGS LIMITED
	By:	/s/ Xin Zhou
	Name:	Xin Zhou
	Title:	Director

 

8

 

Exhibit C

 

AMENDMENT TO

SHARE PURCHASE AGREEMENT

 

This Amendment to Share Purchase Agreement (this “Amendment”) is entered into as of March 22, 2013 by and between E-House (China) Holdings Limited, a Cayman Islands company (the “Company”), and Kanrich Holdings Limited, a British Virgin Islands company (the “Purchaser”).

 

RECITALS

 

WHEREAS, the Company is an exempted company organized under the laws of the Cayman Islands, and the Purchaser is controlled by Xin Zhou, co-chairman of the Company’s board of directors and chief executive officer of the Company;

 

WHEREAS, the Company and the Purchaser entered into a share purchase agreement dated December 27, 2012 (the “Share Purchase Agreement”), pursuant to which the Company will issue and sell to the Purchaser, and the Purchaser will subscribe for and purchase from the Company, certain number of  newly issued ordinary shares of the Company, par value of US$0.001 each (“Ordinary Shares”).

 

WHEREAS, pursuant to section 8.3 of the Share Purchase Agreement, any term of the Share Purchase Agreement may be amended only by a written instrument signed by the parties thereto.

 

NOW, THEREFORE, the Company and the Purchaser have agreed to amend certain provisions of the Share Purchase Agreement upon and subject to the terms and conditions set out hereinafter:

 

1.                                       Amendment to Section 6

 

1.1           The section 6 titled “Lock-up” in the Share Purchase Agreement shall be deleted in its entirety and replaced with the following:

 

The Purchaser will not offer, sell, contract to sell, pledge, grant any option to purchase, purchase any option or contract to sell, make any short sale, file a registration statement with respect to, or otherwise dispose of, directly or indirectly, any of the Subject Shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interest of any of the Subject Shares, until after 12 months following the Closing Date, provided, however, that this Section 6 shall not apply to:

 

 

(a)                                  any pledge of, or any charge or other security interest (a “Security Interest”) in, any or all of the Subject Shares in order to secure financing obtained by the Purchaser for the purpose of paying any or all of the Purchase Price payable under this Agreement, created by the Purchaser for the benefit of:

 

(i)                                     Prominent Asset Investment Limited or any other bank(s) or financial institution(s) or any  of their agents or trustees (each a “Chargee”); or

 

(ii)                                  any assignee, transferee or other successor in title of any Chargee (each a “Successor”); or

 

(b)                                 any sale, transfer, filing a registration statement with respect to or other disposal of all or any of the Subject Shares upon any enforcement by a Chargee or a Successor of any of its rights in respect of the Security Interest in accordance with the terms of the relevant security agreement.

 

2.                                       Miscellaneous

 

2.1           The amendments contained in this Amendment shall take effect from the date hereof.  Except as expressly amended pursuant to this Amendment, all terms and conditions of the Share Purchase Agreement shall remain unchanged and shall continue in full force and effect.

 

2.2           The following provisions in the Share Purchase Agreement, namely, “Notice” (Section 8.2) and “Governing Law” (Section 8.5) shall apply, mutatis mutandis, to this Amendment.

 

2.3           From and after the date hereof, this Amendment and the Share Purchase Agreement shall be read as a single integrated document with all references in the Share Purchase Agreement to “this Agreement” being read and construed as if they were references to the Share Purchase Agreement, as amended by this Amendment.

 

2.4           This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

 

[Signature page follows]

 

1

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date herein above first written.

 

 

	E-HOUSE (CHINA) HOLDINGS LIMITED
	By:	/s/ Fan Bao
	Name:	Fan Bao
	Title:	Director
	KANRICH HOLDINGS LIMITED
	By:	/s/ Xin Zhou
	Name:	Xin Zhou
	Title:	Director

 

2

Exhibit D

 

EXECUTION VERSION

Confidential Information Redacted ***

 

DATED 22 MARCH 2013

 

KANRICH HOLDINGS LIMITED

 

AS BORROWER

 

AND

 

PROMINENT ASSET INVESTMENT LIMITED

 

AS ORIGINAL LENDER AND AS CALCULATION AGENT

 

 

MARGIN LOAN FACILITY AGREEMENT

 

 

*      Certain portions of this Exhibit have been omitted based upon a request for confidential treatment. The omitted portions have been filed separately with the SEC.

 

 

CONTENTS

 

Clause			Page
1.	Definitions and Interpretation		1
2.	The Facility		23
3.	Purpose		23
4.	Conditions of Utilisation		23
5.	Utilisation		25
6.	Repayment		27
7.	Prepayment and Cancellation		27
8.	Interest		31
9.	Interest Periods		32
10.	Fees		32
11.	Tax Gross-up and Indemnities		33
12.	Increased Costs		35
13.	Other Indemnities		37
14.	Mitigation by the Lender		39
15.	Costs and Expenses		39
16.	Representations		41
17.	Information Undertakings		53
18.	Margining and Sale of Collateral Shares		56
19.	General Undertakings		62
20.	Dividends		70
21.	Events of Default		70
22.	Changes to the Lender		76
23.	Changes to the Borrower		78
24.	Conduct of Business by the Lender		79
25.	Role of Calculation Agent		79
26.	Payment Mechanics		83
27.	Set-off		84
28.	Notices		85
29.	Calculations and Certificates		86
30.	Partial Invalidity		87
31.	Remedies and Waivers		87
32.	Amendments and Waivers		87
33.	Confidentiality		88
34.	Counterparts		90

 

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35.	Governing Law	91
36.	Arbitration	91
Schedule 1 Conditions Precedent		93
Schedule 2 Utilisation Request		97
Schedule 3 Form of Transfer Certificate		98
Schedule 4 Timetables		100
Schedule 5 Form of Issuer Conversion Undertaking		101
Schedule 6 Form of Issuer Registration Undertaking Letter		105
Schedule 7 Form of Deed of Indemnity		113
Schedule 8 Form of Notice to Custodian		121
Schedule 9 Form of Board Minutes		128

 

ii

 

THIS AGREEMENT is dated 22 March 2013

 

BETWEEN:

 

(1)                                 KANRICH HOLDINGS LIMITED, a BVI Business Company incorporated with limited liability in the British Virgin Islands with registration number 1749526 and its registered office at Commerce Chambers, P. O. Box 2208, Road Town, Tortola, British Virgin Islands as borrower (the “Borrower”);

 

(2)                                 PROMINENT ASSET INVESTMENT LIMITED as lender (the “Original Lender”); and

 

(3)                                 PROMINENT ASSET INVESTMENT LIMITED as calculation agent (the “Calculation Agent”).

 

IT IS AGREED as follows:

 

SECTION 1
INTERPRETATION

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                               Definitions

 

In this Agreement:

 

“Additional Collateral Shares” has the meaning given to such term under Clause 18.1 (Definitions).

 

“Adjustment Event” means, as determined by the Calculation Agent, any of the following:

 

(a)                                 a subdivision, consolidation or reclassification of the Shares (unless resulting in a Merger Event or Tender Offer), or a free distribution or dividend of any Shares to existing holders by way of bonus, capitalisation or similar issue;

 

(b)                                 a distribution, issue or dividend to existing holders of the Shares of:

 

(i)                                     additional Shares;

 

(ii)                                  other share capital or securities granting the right to payment of dividends and/or the proceeds of liquidation of the Issuer equally or proportionately with such payments to holders of the Shares;

 

(iii)                               share capital or other securities of another issuer acquired or owned (directly or indirectly) by the Issuer as a result of a spin-off or other similar transaction; or

 

(iv)                              any other type of securities, rights or warrants or other assets, in any case for payment (cash or other consideration) at less than the prevailing market price as determined by the Calculation Agent;

 

 

(c)                                  a dividend determined by the Calculation Agent to be an extraordinary dividend in respect of the Shares;

 

(d)                                 a call by the Issuer in respect of the Shares that are not fully paid;

 

(e)                                  a repurchase by the Issuer or any of its Affiliates of Shares whether out of profits or capital and whether the consideration for such repurchase is cash, securities or otherwise;

 

(f)                                   in respect of the Issuer, any event that results in any shareholder rights being distributed or becoming separated from shares of common stock or other shares of the capital stock of the Issuer pursuant to a shareholder rights plan or arrangement directed against hostile takeovers that provides upon the occurrence of certain events for a distribution of preferred stock, warrants, debt instruments or stock rights at a price below their market value, as determined by the Calculation Agent at the relevant time, provided that any adjustment effected as a result of such an event in this paragraph (f) shall be readjusted upon any redemption of such rights, as determined by the Calculation Agent; or

 

(g)                                  any other similar event that, as determined by the Calculation Agent, has or could reasonably be expected to have a diluting or concentrative effect on the theoretical value of the Shares.

 

“Adjustment Trigger Event” means, at any time, the Lender determines in its sole and absolute discretion that it is not able to make any adjustments to the terms of this Agreement in accordance with Clause 32.2 (Adjustment following Adjustment Event) in order to account for the relevant Adjustment Event.

 

“ADRs” means American depositary receipts issued by the Depositary Bank listed on the Exchange (Ticker: EJ-US), evidencing American depositary shares each of which represents the right to receive one Ordinary Share.

 

“ADR Closing Price” means, on any Scheduled Trading Day, the price equal to (a) the official closing price per ADR as published on the Exchange on that Scheduled Trading Day (or if such information is not available for any reason, as reasonably determined by the Calculation Agent); provided that if any such Scheduled Trading Day is a Disrupted Day, the Calculation Agent shall determine an estimate of the closing price per ADR on that Disrupted Day.

 

“ADR Initial Price” means USD4.70.

 

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

 

“Authorisation” means:

 

(a)                                 an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration; and

 

(b)                                 in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Agency intervenes or acts in any way within a specified

 

2

 

period after lodgement, filing, registration or notification, the expiry of that period without intervention or action.

 

“Availability Period” means the period from and including the date of this Agreement to and including the date falling two Business Days after the date of this Agreement.

 

“Blocked Distribution” means a Distribution that, as determined by the Calculation Agent, has a per-ADR value exceeding five per cent. of the ADR Closing Price as of the Ex-dividend Date for such Distribution; provided that a Distribution shall no longer be a Blocked Distribution if the Calculation Agent has determined that:

 

(a)                                 the payment of the Distribution does not constitute an Adjustment Event; or

 

(b)                                 the payment of the Distribution does constitute an Adjustment Event but the Calculation Agent has determined that it is able to make an adjustment to the terms of the Agreement in accordance with Clause 32.2 (Adjustment following Adjustment Event), and has made such adjustment.

 

“Board” means the Board of Governors of the Federal Reserve System of the United States or any successor.

 

“Break Costs” means the amount (if any) determined by the Lender by which:

 

(a)                                 the interest which the Lender should have received pursuant to the terms of this Agreement for the period from the date of receipt of all or any part of the principal amount of the Loan or Unpaid Sum to the Maturity Date in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the Maturity Date (on the basis that the Loan Interest Rate had been the Break Costs Interest Rate),

 

exceeds:

 

(b)                                 the amount of interest which the Lender would be able to obtain by placing an amount equal to the principal amount of the Loan or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the Maturity Date,

 

provided that if such amount is higher than the One Month Interest Amount, then the Break Costs will be the One Month Interest Amount.

 

“Break Costs Interest Rate” means 6.00 per cent. per annum.

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York.

 

“BVI Act” means the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands.

 

“Cash Account” means, in respect of each Charged Account, a cash sub-account opened in the name of such Chargor with the Custodian (or its nominee(s)) which

 

3

 

forms part of that Charged Account (and any account or sub-account established in substitution therefor) and is subject to the Transaction Security.

 

“Cash Collateral” means at any time, the cash balance standing to the credit of each Cash Account and all rights, benefits and proceeds in respect of each cash balance and each Cash Account.

 

“Charged Account” means, in respect of each Chargor, a custody account opened in the name of such Chargor with the Custodian (or its nominee(s)) details of which are shown in schedule 2 of the Share and Account Charge (and any account or sub-account established in substitution therefor), comprising a Cash Account and a Securities Account.

 

“Charged Assets” means all of the assets of the Borrower which from time to time are, or are expressed to be, the subject of the Transaction Security.

 

“Chargor” means each of the Borrower, On Chance and Jun Heng and “Chargors” means all of them.

 

“Collateral ADRs” means, as of any date, any and all ADRs beneficially owned by any of the Chargors and deposited into and held in the Securities Accounts and which are the subject of a first fixed charge in favour of the Lender pursuant to and in accordance with the Share and Account Charge as of such date.

 

“Collateral ADR Value” means, in respect of a Scheduled Trading Day, the value of the Collateral ADRs that are Eligible Collateral on such Scheduled Trading Day, as determined by the Lender in its sole and absolute discretion based on the ADR Closing Price on such Scheduled Trading Day.

 

“Collateral Deadline Date” has the meaning given to such term under Clause 18.1 (Definitions).

 

“Collateral Ordinary Shares” means, as of any date, any and all Ordinary Shares beneficially owned by any of the Chargors and which are the subject of a first fixed charge in favour of the Lender pursuant to and in accordance with the Share and Account Charge as of such date.

 

“Collateral Ordinary Share Value” means, in respect of a Scheduled Trading Day, the value of the Collateral Ordinary Shares that are Eligible Collateral on such Scheduled Trading Day, as determined by the Lender based on the ADR Closing Price on such Scheduled Trading Day (as if all such Collateral Ordinary Shares were Collateral ADRs).

 

“Collateral Release Loan-to-Value Ratio” has the meaning given to such term under Clause 18.1 (Definitions).

 

“Collateral Share Value” means, in respect of a Scheduled Trading Day, the sum of the Collateral ADR Value and the Collateral Ordinary Share Value corresponding to such Scheduled Trading Day, as determined by the Lender in its sole and absolute discretion, provided that if, in determining the Collateral Ordinary Share Value and Collateral ADR Value, the number of Collateral Ordinary Shares plus the number of Collateral ADR Shares exceeds 42,000,000, the Collateral Share Value shall be

 

4

 

calculated on the basis that there are 42,000,000 Collateral Shares that are Eligible Collateral on such Scheduled Trading Day and the excess over 42,000,000 Collateral Shares that are Eligible Collateral shall be disregarded for the purposes of determining the Collateral Ordinary Share Value and the Collateral ADR Value.

 

“Collateral Shares” means the Collateral ADRs and the Collateral Ordinary Shares.

 

“Collateral Trigger” means the obligation of the Borrower pursuant to paragraph (b) of Clause 18.2 (Top-up obligations), and any reference to curing a Collateral Trigger means compliance with such obligation.

 

“Collateral Trigger Date” has the meaning given to such term under paragraph (a) of Clause 18.2 (Top-up obligations).

 

“Commitment” means the lower of:

 

(a)                                 USD 44,000,000; and

 

(b)                                 an amount in USD determined by the Calculation Agent (in its sole and absolute discretion) equal to the product of:

 

(i)                                     the Collateral Ordinary Share Value (which shall be determined on the basis that the ADR Closing Price is equal to USD4.70); and

 

(ii)                                  the Initial Loan-to-Value Ratio,

 

rounded to the nearest half a million.

 

“Communication” has the meaning given to it in Clause 17.7 (Certification of public information).

 

“Confidential Information” means all information relating to the Borrower, the Shares, the Issuer, the Finance Documents or the Facility of which the Lender becomes aware in its capacity as, or for the purpose of becoming, the Lender or which is received by the Lender in relation to, or for the purpose of becoming a Lender under, the Finance Documents or the Facility from either:

 

(a)                                 the Borrower; or

 

(b)                                 any of the advisers of the Borrower,

 

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

 

(i)                                     is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 33 (Confidentiality);

 

(ii)                                  is identified in writing at the time of delivery as non-confidential by the Borrower or any of its advisers; or

 

5

 

(iii)                               is known by the Lender or any of its Affiliates before the date the information is disclosed to it in accordance with paragraph (a) or (b) above or is lawfully obtained by the Lender or any of its Affiliates after that date, from a source which is, as far as the Lender or such Affiliate is aware, unconnected with the Borrower and which, in either case, as far as the Lender or such Affiliate is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

 

“Custodian” means Merrill Lynch International or such other nominee of the Lender as notified to the Borrower by the Lender from time to time.

 

“Custody Agreement” means each of the custody agreements dated on or about the date of this Agreement entered into between each Chargor and the Custodian in relation to the establishment, operation and maintenance of the Charged Account with respect to such Chargor.

 

“Debt Purchase Transaction” means, in relation to a person, a transaction where such person:

 

(a)                                 purchases by way of assignment or transfer;

 

(b)                                 enters into any sub-participation in respect of; or

 

(c)                                  enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of,

 

any Commitment or amount outstanding under this Agreement.

 

“Deed of Indemnity” means the deed of indemnity by the Chargors to the Lender substantially in the form set out in Schedule 7 (Form of Deed of Indemnity).

 

“Default” means an Event of Default or any event or circumstance specified in Clause 21 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

 

“Default Interest Period” means, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

 

“Demand Notice” means a notice (which may be in the form of an electronic mail (and shall be deemed delivered on the date of delivery)) delivered by the Lender to the Borrower which notifies the Borrower of:

 

(a)                                 the occurrence of a Collateral Trigger Date in respect of a Valuation Date; and

 

(b)                                 the requirement for the Borrower to cure such Collateral Trigger in accordance with Clause 18.2 (Top-up obligations).

 

“Depositary Bank” means JPMorgan Chase Bank, N.A. as the depositary under the agreement with the Issuer pursuant to which the ADRs are issued, and any successor thereto.

 

6

 

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any country- or territory-wide Sanctions, which at the time of this Agreement means Cuba, Iran, Sudan, Syria, Burma/Myanmar, North Korea and Libya.

 

“Disrupted Day” means any Scheduled Trading Day on which, as determined by the Calculation Agent in its sole and absolute discretion:

 

(a)                                 the Exchange does not open for trading on any one or more of its regular trading sessions; or

 

(b)                                 a Share Market Disruption Event exists or has occurred.

 

“Distributions” means, in relation to any Collateral Share, all present and future:

 

(a)                                 dividends and distributions of any kind and any other sum received or receivable in respect of that Collateral Share;

 

(b)                                 rights, shares, money or other assets accruing or offered by way of redemption, bonus, option, conversion, exchange, substitution, consolidation, subdivision or otherwise in respect of that Collateral Share;

 

(c)                                  allotments, offers and rights accruing or offered in respect of that Collateral Share; and

 

(d)                                 other rights and assets relating to, deriving from or exercisable by virtue of the ownership of that Collateral Share.

 

“DTC” means The Depository Trust Company or any successor entity thereto.

 

“Eligible Collateral” means, at any time, the Collateral Shares that:

 

(a)                                 are subject to first ranking Security in favour of the Lender pursuant to and in accordance with the Share and Account Charge, which Security has been registered in accordance with Clause 19.1(b)(iii) (Authorisations);

 

(b)                                 in the case of Collateral ADRs, are in book-entry form held through DTC; and

 

(c)                                  are not subject to any Transfer Restrictions (whether with respect to the respective Chargor or the Lender exercising its rights with respect thereto under the Finance Documents).

 

“Employee” means, with respect to any Party, any entity, any owner, principal, officer, director, employee or other agent or representative of such Party, and any Affiliate of any of such owner, principal, officer, director, employee, agent or representative.

 

“Event of Default” means any event or circumstance specified as such in Clause 21 (Events of Default).

 

“Exchange” means the New York Stock Exchange and any successor to such exchange or quotation system.

 

7

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

 

“Exchange Business Day” means any Scheduled Trading Day that is not a Disrupted Day.

 

“Exchange Deposit Cash” has the meaning given to it in Clause 18.6 (Exchange of Shares for cash).

 

“Ex-dividend Date” means, in relation to any Distribution with respect to the Shares, the first date on which the Shares trade on the applicable exchange without the right to receive the Distribution in question, as determined by the Calculation Agent.

 

“Facility” means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

 

“Facility Office” means the office or offices notified by the Lender to the Borrower in writing as the office or offices through which it will perform its obligations under this Agreement.

 

“Finance Documents” means:

 

(a)                                 this Agreement;

 

(b)                                 each Notice to Custodian;

 

(c)                                  the Share and Account Charge;

 

(d)                                 the Guarantee;

 

(e)                                  the Deed of Indemnity;

 

(f)                                   the Issuer Conversion Undertaking;

 

(g)                                  the Issuer Registration Undertaking Letter; and

 

(h)                                 any other document designated as such by the Lender and the Borrower.

 

“Financial Indebtedness” means any indebtedness for or in respect of:

 

(a)                                 moneys borrowed;

 

(b)                                 any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

 

(c)                                  any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

 

(d)                                 the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

 

8

 

(e)                                  receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

 

(f)                                   any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

 

(g)                                  any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

 

(h)                                 shares which are expressed to be redeemable;

 

(i)                                     any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

 

(j)                                    the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above.

 

“GAAP” means generally accepted accounting principles, standards and practices in the jurisdiction of incorporation of the Borrower.

 

“Governmental Agency” means any government or any governmental agency, semi-governmental or judicial entity or authority (including, without limitation, any stock exchange or any self-regulatory organisation established under statute).

 

“Group” means the Borrower and its Subsidiaries for the time being.

 

“Guarantee” means the deed of guarantee extended by the Guarantor in favour of the Lender dated on or about the date of this Agreement.

 

“Guarantor” means Mr. Zhou Xin (holder of Hong Kong Identity Card No. R285049(3)).

 

“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

 

“Indirect Tax” means any goods and services tax, consumption tax, value added tax or any tax of a similar nature.

 

“Initial Collateral Shares” means 37,437,625 Ordinary Shares and includes the SPA Shares.

 

“Initial Loan-to-Value Ratio” means a Loan-to-Value Ratio equal to [***] per cent.

 

“Initial Shares” has the meaning given to such term in the Share and Account Charge.

 

“Interest Period” means, in relation to the Loan, each period determined in accordance with Clause 9 (Interest Periods).

 

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“Issuer” means E-House (China) Holdings Limited, a company incorporated in the Cayman Islands and the American depositary shares of which are listed on the Exchange.

 

“Issuer Change of Control” means, as determined by the Calculation Agent, an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of the Shares or other voting securities of the Issuer, entitling such person or group to exercise 50 per cent. or more of the total voting power of the Issuer entitled to vote generally in elections of directors, other than an acquisition of such Shares or other voting securities by the Issuer, any of its Subsidiaries or any of its or their employee benefit plans.

 

“Issuer Conversion Undertaking” means an undertaking by the Issuer to the Lender substantially in the form set out in Schedule 5 (Form of Issuer Conversion Undertaking).

 

“Issuer Dissolution” means that (a) the Issuer is liquidated or dissolved, or (b) holders of the Shares approve any plan or proposal for the Issuer’s liquidation or dissolution, as determined by the Calculation Agent.

 

“Issuer Insolvency” means that, by reason of the voluntary or involuntary liquidation, bankruptcy, insolvency, dissolution or winding-up of or any analogous proceeding affecting the Issuer, (a) all of the Shares are required to be transferred to a trustee, liquidator or other similar official, or (b) holders of the Shares become legally prohibited from transferring them, as determined by the Calculation Agent.

 

“Issuer Insolvency Filing” means that:

 

(a)                                 the Issuer institutes or has instituted against it by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office;

 

(b)                                 the Issuer consents to a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights; or

 

(c)                                  a petition is presented for the Issuer’s winding-up or liquidation by it or such regulator, supervisor or similar official or the Issuer consents to such a petition,

 

provided that proceedings instituted or petitions presented by creditors and not consented to by the Issuer shall not be deemed an Issuer Insolvency Filing, as determined by the Calculation Agent.

 

“Issuer Registration Undertaking Letter” means an undertaking by the Issuer to the Lender substantially in the form set out in Schedule 6 (Form of Issuer Registration Undertaking Letter).

 

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“Jun Heng” means Jun Heng Investment Ltd., a BVI Business Company incorporated with limited liability in the British Virgin Islands with registration number 499815 and its registered office at Palm Grove House, P. O. Box 438, Road Town, Tortola, British Virgin Islands.

 

“Legal Reservations” means:

 

(a)                                 the principle that equitable remedies may be granted or refused at the discretion of a court;

 

(b)                                 the limitation of enforcement by laws relating to insolvency, reorganisation, penalties and other laws generally affecting the rights of creditors;

 

(c)                                  the time barring of claims under the statutes of limitation;

 

(d)                                 the possibility that an undertaking to assume liability for or indemnify a person against non-payment of stamp duty may be void;

 

(e)                                  defences of set-off or counterclaim;

 

(f)                                   any principles which are set out in the qualifications as to matters of law in any legal opinions delivered pursuant to Clause 4.1 (Initial conditions precedent); and

 

(g)                                  in relation to the Guarantee, the fact that so far as the laws of the PRC are applicable, enforceability of the Guarantee may be subject to approval of the Guarantee by, and registration of the Guarantee with, SAFE, which approval and registration will not be obtained.

 

“Lender” means:

 

(a)                                 the Original Lender; and

 

(b)                                 any person which has become a Party in accordance with Clause 22 (Changes to the Lender),

 

which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

 

“Loan” means the loan made or to be made under the Facility or the principal amount outstanding for the time being of the loan.

 

“Loan Interest Rate” means [***] per cent. per annum.

 

“Loan-to-Value Ratio” has the meaning given to it in Clause 18.1 (Definitions).

 

“Maintenance Loan-to-Value Ratio” has the meaning given to such term under Clause 18.1 (Definitions).

 

“Mandatory Prepayment Event” means any of (a) an event described under Clause 7.1 (Illegality); (b) an event described under  Clause 7.2 (Chargor Change of Control) and (c) an event described under Clause 7.3 (Mandatory Prepayment Events).

 

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“Margin Release Notice Date” has the meaning given to such term in paragraph (a) of Clause 18.3 (Margin release).

 

“Material Adverse Effect” means, in respect of any Obligor or the Issuer, a material adverse effect on:

 

(a)                                 the business, operations, performance, assets, property, liabilities, management, condition (financial or otherwise), prospects or value of any Obligor (or any of their Subsidiaries) or the Issuer as applicable; or

 

(b)                                 the ability of any Obligor to perform its obligations under the Finance Documents; or

 

(c)                                  the validity or enforceability of, or the effectiveness or ranking of any security granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents.

 

“Maturity Date” means the date falling two years from the date of this Agreement.

 

“Maximum Loan-to-Value Ratio” has the meaning given to such term under Clause 18.1 (Definitions).

 

“Merger Event” means, in respect of a Share, any:

 

(a)                                 reclassification or change of that Share that results in a transfer of or an irrevocable commitment to transfer all outstanding Shares of that type to another entity or person;

 

(b)                                 consolidation, amalgamation, merger or binding share exchange of the Issuer with or into another entity or person (other than a consolidation, amalgamation, merger or binding share exchange in which the Issuer is the continuing entity and which does not result in a reclassification or change of any of the Shares of that type then outstanding or otherwise prejudice the Transaction Security);

 

(c)                                  takeover offer, scheme of arrangement, exchange offer, solicitation, proposal or other event by any entity or person to purchase or otherwise obtain 100 per cent. of the outstanding Shares of that type that results in a transfer of or an irrevocable commitment to transfer all such Shares of that type (other than the Shares of that type owned or controlled by such other entity or person); or

 

(d)                                 consolidation, amalgamation, merger or binding share exchange of the Issuer with or into another entity in which the Issuer is the continuing entity and which does not result in a reclassification or change of the outstanding Shares of that type but results in the outstanding Shares of that type (other than the Shares of that type owned or controlled by such other entity) immediately prior to such event collectively representing less than 50 per cent. of the outstanding Shares of that type immediately following such event.

 

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“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

(a)                                 if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or, if there is not, on the immediately preceding Business Day; and

 

(b)                                 if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.

 

The above rules will only apply to the last Month of any period.

 

“Nationalisation” means, as determined by the Calculation Agent:

 

(a)                                 all the Shares or any of the Collateral Shares or all or substantially all of the assets of the Issuer are nationalised, expropriated or are otherwise required to be transferred to any governmental agency, authority, entity or instrumentality thereof;

 

(b)                                 the authority or ability of any person to deal in, or transact in, all of the Shares or any of the Collateral Shares or all or substantially all of the assets of the Issuer is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to that person or all of the Shares or any of the Collateral Shares or all or substantially all of the assets of the Issuer; or

 

(c)                                  the adoption, promulgation, enactment, order, decree, announcement or such other action or statement as the Calculation Agent deems relevant, by or with effect on any governmental agency, authority, entity or instrumentality thereof at any time, of any event or circumstance (whether or not subsequently amended or appealed) that, if completed, would lead to any event set forth in the immediately preceding paragraph (a) or (b).

 

“Notice to Custodian” means a notice from each Chargor to the Custodian dated on or about the date of this Agreement substantially in the form set out in Schedule 8 (Form of Notice to Custodian).

 

“Obligor” means each of the Borrower, Jun Heng, On Chance and the Guarantor and “Obligors” means all of them.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“On Chance” means On Chance Inc., a BVI Business Company incorporated with limited liability in the British Virgin Islands with registration number 479399 and its registered office at Sea Meadow House, Blackburne Highway, P.O. Box 116, Road Town, Tortola, British Virgin Islands.

 

“One Month Interest Amount” means the amount, determined by the Lender, equal

 

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to the interest which the Lender would have received pursuant to the terms of this Agreement for the period from the date of receipt of all or any part of the principal amount of the Loan or Unpaid Sum (the “Early Prepayment Date”) to the date falling one Month from the Early Prepayment Date in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the date falling one Month from the Early Prepayment Date.

 

“Ordinary Shares” means the ordinary shares of the Issuer with a par value of US$0.001 each.

 

“Outstanding Liability” means, at any time, the sum of:

 

(a)                                 the Outstanding Loan Amount at such time;

 

(b)                                 any accrued interest on the Loan which remains unpaid as at such time; and

 

(c)                                 any other sum due and payable but unpaid by the Borrower under the Finance Documents at such time.

 

“Outstanding Loan Amount” means at any time the principal amount outstanding for the time being of the Loan.

 

“Party” means a party to this Agreement.

 

“Permitted Financial Indebtedness” means:

 

(a)                                 any indebtedness incurred under the Finance Documents;

 

(b)                                 any indebtedness the proceeds of which are used to prepay/repay the Loan in full; or

 

(c)                                  any Subordinated Loan, provided that the proceeds from such Subordinated Loan are used for the purposes of (i) payment into the Cash Account in accordance with Clause 18.2(b)(i)(A) (Top-up Obligations) or Clause 18.6 (Exchange of Shares for Cash), (ii) repayment of the Loan in accordance with Clause 6 (Repayment) or Clause 7 (Prepayment and Cancellation) or (iii) payment of interest on the Loan.

 

“Permitted Security” means:

 

(a)                                 any Security or Quasi-Security created under or evidenced by any Security Document;

 

(b)                                 any netting or set-off arrangement entered into by the Borrower in the ordinary course of its banking arrangements;

 

(c)                                  any lien arising by operation of law and in the ordinary course of the Borrower’s acting as a Holding Company for the Shares; or

 

(d)                                 any Security granted in favour of the custodian or broker (including the Custodian) of the ADRs or the Cash Collateral in connection with the establishment, maintenance or operation of the custodian, securities and/or

14

 

brokerage account through which the ADRs or the Cash Collateral are held by the Chargors (including the Charged Accounts) to secure (i) all custodian and brokerage fees owed to the relevant custodian or broker or (ii) liabilities owed to the relevant custodian or broker in connection with the establishment, maintenance or operation of such custodian, securities and/or brokerage account.

 

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

 

“Quasi-Security” has the meaning given to such term under Clause 19.4 (Negative pledge).

 

“Related Persons” shall mean, with respect to the Lender, the Lender’s Affiliates and their respective principals, control persons, directors, trustees, officers, employees, agents and advisors.

 

“Relevant Interbank Market” means the London interbank market.

 

“Relevant Jurisdiction” means, in relation to the Borrower:

 

(a)                                 its jurisdiction of incorporation;

 

(b)                                 any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated; or

 

(c)                                  any jurisdiction where it conducts its business.

 

“Repeating Representations” means each of the representations set out in Clauses 16.1 (Status) to Clause 16.6 (Governing law and enforcement), Clause 16.8 (No default) to 16.11 (No proceedings pending or threatened), Clause 16.13 (Disclosure requirements) to Clause 16.23 (No immunity), Clause 16.25 (Sanctions), 16.27 (Fiduciary duties) and Clause 16.29 (Governmental regulation) to Clause 16.32 (Holding Company Status).

 

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

“Required Ownership Percentage” means:

 

(a)                                 in respect of the Borrower, 75 per cent.;

 

(b)                                 in respect of On Chance, 75 per cent.; and

 

(c)                                  in respect of Jun Heng, 50 per cent.

 

“Restrictive Event” means any of (a) a Default; (b) a Collateral Trigger Date has occurred and has not been cured; (c) a Mandatory Prepayment Event; and/or (d) for the purposes of Clause 18.5 (Sale of Collateral Shares at the request of the Borrower) only, the ADR Closing Price is less than the ADR Initial Price.

 

“SAFE” means the State Administration of Foreign Exchange of the PRC and its competent braches.

 

15

 

“Sanctioned Person” means any person that is listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC or that is or is the government of or located in a Designated Jurisdiction.

 

“Sanctions” means any economic sanctions administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

 

“Scheduled Closing Time” means, in respect of the Exchange and a Scheduled Trading Day, the scheduled weekday closing time of the Exchange on such Scheduled Trading Day, without regard to after hours or any other trading outside of the regular trading session hours.

 

“Scheduled Trading Day” means each day on which the Exchange is scheduled (as of the date of this Agreement) to be open for trading for its regular trading sessions.

 

“SEC” means the United States Securities and Exchange Commission, or any governmental authority succeeding to any of its principal functions.

 

“Securities Account” means, in respect of each Charged Account, a securities sub-account opened in the name of such Chargor with the Custodian (or its nominee(s)) which forms part of that Charged Account (and any account or sub-account established in substitution therefor) and is subject to the Transaction Security.

 

“Securities Act” means the United States Securities Act of 1933, as amended from time to time, and any successor statute.

 

“Secured Obligations” has the meaning given to such term in the Share and Account Charge.

 

“Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

 

“Security Documents” means the Share and Account Charge and any other security document that may at any time be given as security for any of the Borrower’s liabilities arising pursuant to or in connection with any Finance Document.

 

“Shares” means the ADRs and the Ordinary Shares.

 

“Share and Account Charge” means the share and account charge dated on or about the date of this Agreement granted by the Chargors in favour of the Lender.

 

“Share Market Disruption Event” means:

 

(a)                                 the occurrence or existence at any time of:

 

(i)                                     any suspension of or limitation imposed on trading by the Exchange or otherwise and whether by reason of movements in price exceeding limits permitted by the Exchange or otherwise relating to the ADRs; or

 

16

 

(ii)                                  any event (other than an event described in paragraph (b) below) that disrupts or impairs (as determined by the Calculation Agent) the ability of market participants in general to effect transactions in, or obtain market values for, the ADRs on the Exchange,

 

which in either case the Calculation Agent determines in its sole and absolute discretion is material; or

 

(b)                                 the closure on any Exchange Business Day of the Exchange prior to its Scheduled Closing Time.

 

“Specified Time” means a time determined in accordance with Schedule 4 (Timetables).

 

“SPA” means the share purchase agreement dated 27 December 2012 and made between E-House (China) Holdings as company and Kanrich Holdings Limited as purchaser, as amended by an amendment agreement dated on or about the date of this Agreement;

 

“SPA Shares” means 17,790,125 Ordinary Shares acquired by the Borrower from the Issuer on the Utilisation Date pursuant to the SPA.

 

“Subsidiary” means any person (referred to as the “first person”) in respect of which another person (referred to as the “second person”):

 

(a)                                 holds a majority of the voting rights in that first person or has the right under the constitution of the first person to direct the overall policy of the first person or alter the terms of its constitution; or

 

(b)                                 is a member of that first person and has the right to appoint or remove a majority of its board of directors or equivalent administration, management or supervisory body; or

 

(c)                                  has the right to exercise a dominant influence (which must include the right to give directions with respect to operating and financial policies of the first person which its directors are obliged to comply with whether or not for its benefit) over the first person by virtue of provisions contained in the articles (or equivalent) of the first person or by virtue of a control contract which is in writing and is authorised by the articles (or equivalent) of the first person and is permitted by the law under which such first person is established; or

 

(d)                                 is a member of that first person and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in the first person or the rights under its constitution to direct the overall policy of the first person or alter the terms of its constitution; or

 

(e)                                  has the power to exercise, or actually exercises dominant influence or control over the first person; or

 

(f)                                   together with the first person is managed on a unified basis,

 

17

 

and, for the purposes of this definition, a person shall be treated as a member of another person if any of that person’s Subsidiaries is a member of that other person or if any shares in that other person are held by a person acting on behalf of it or any of its Subsidiaries. A subsidiary undertaking shall include any person the shares or ownership interests in which are subject to Security and where the legal title to the shares or ownership interests so secured are registered in the name of the secured party or its nominee pursuant to such Security.

 

“Subordinated Loan” means any loan subordinated to the Loan to the satisfaction of the Lender.

 

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

 

“Tender Offer” means a takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person that results in such entity or person purchasing or otherwise obtaining or having the right to obtain, by conversion or other means, 10 per cent. or more of the outstanding Shares as determined by the Calculation Agent, based upon the making of filings with governmental or self-regulatory agencies or such other information as the Calculation Agent deems relevant; except for the share placement expressly contemplated in the SPA.

 

“Three Month Interest Amount” means the amount, reasonably determined by the Lender, equal to the interest which the Lender would have received in respect of the Loan or Unpaid Sum pursuant to the terms of this Agreement for the period from the date of receipt of all or any part of the principal amount of the Loan or Unpaid Sum (the “Early Prepayment Date”) to the date falling three Months from the Early Prepayment Date in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the date falling three Months from the Early Prepayment Date; provided that if the relevant Early Prepayment Date occurs during an Interest Period, there shall be deducted from such amount an amount equal to the interest which has already been prepaid by the Borrower to the Lender under Clause 8.2 (Payment of Interest) for the period from such Early Prepayment Date to (and excluding) the last day of such Interest Period.

 

“Transaction Security” means the Security created or expressed to be created in favour of the Lender pursuant to or under any or all of the Security Documents.

 

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 3 (Form of Transfer Certificate).

 

“Transfer Date” means, in relation to a transfer, the Transfer Date specified in the relevant Transfer Certificate.

 

“Transfer Restrictions” means, with respect to any Collateral Shares (including security entitlements in respect thereof), any condition to or restriction on the ability of the (i) Borrower, (ii) a Chargor or (iii) the Lender or any purchaser or transferee of Collateral Shares (pursuant to or in connection with an enforcement of any Security therein), as a holder thereof  to sell, assign or otherwise transfer such Collateral Shares (or entitlements), including, without limitation:

 

18

 

(a)                                 any requirement that any sale, assignment or transfer (including pursuant to or in connection with any enforcement of any Security in such Collateral Shares) be subject to any manner of sale or volume limitations or be consented to or approved by any person, including, without limitation, the issuer thereof;

 

(b)                                 any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, chargee, assignee or transferee of such Collateral Shares;

 

(c)                                  any requirement of the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document of any person to the issuer of, or the corporate secretary of the issuer of, or any registrar or transfer agent for, such  Collateral Shares, prior to the sale, pledge, assignment (or other grant of Security) or other transfer of or enforcement of a Security in such Collateral Shares;

 

(d)                                 any registration or qualification requirement or prospectus delivery requirement for such Collateral Shares pursuant to any United States, United Kingdom or British Virgin Islands federal, state or national securities law (including, without limitation, any such requirement arising under the Securities Act); and

 

(e)                                  any legend or other notification appearing on any certificate representing such Collateral Shares to the effect that any such condition or restriction exists; except that (i) the required delivery of any assignment, instruction or entitlement order from the Borrower or any pledgor, chargor, assignor or transferor of such Shares (or securities entitlements in respect thereof), together with any evidence of the corporate or other authority of such person, and (ii) any legend or other notification to the effect that such Collateral Shares have not been registered under the Securities Act shall not constitute such a condition or restriction,

 

provided that, notwithstanding the foregoing, Transfer Restrictions shall not include any:

 

(i)                                     restrictions, conditions or limitations under the federal securities laws of the United States arising solely as a result of any Chargor’s or the Guarantor’s  status as an “affiliate” (within the meaning of Rule 144 under the Securities Act) of the Issuer or the fact that any of the Collateral Shares solely as a result of having been acquired from the Issuer in a transaction not involving a public offering are “Restricted Securities” (within the meaning of Rule 144 under the Securities Act);

 

(ii)                                  restrictions, conditions or limitations under any anti-fraud laws or any similar laws or any laws relating to foreign assistance, corrupt practices, terrorism or money laundering, in each case arising solely as a result of actions taken by any Chargor, the Guarantor or any purchaser, pledgee, chargee, assignee or transferee of such Shares, including, but not limited to the insider trading policy maintained by the Issuer in compliance with federal securities laws of the United States;

 

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(iii)                               restrictions, conditions or limitations under any laws that are applicable only because such purchaser, pledgee, chargee, assignee or transferee is engaged in a regulated business activity and that are not applicable to the Issuer generally, to business corporations generally or to holders of the Shares (including security entitlements in respect thereof) generally;

 

(iv)                              restrictions, conditions or limitations under the federal securities laws of the United States arising solely as a result of the Lender’s or such purchaser’s, pledgee’s, chargee’s, assignee’s or transferee’s status as an “affiliate” (within the meaning of Rule 144 under the Securities Act) of the Issuer or the fact that any of the Collateral Shares solely as a result of having been acquired from the Issuer in a transaction not involving a public offering are “Restricted Securities” (within the meaning of Rule 144 under the Securities Act);

 

(v)                                 restrictions, conditions or limitations under any lien permitted by and created in accordance with the Finance Documents in favour of any custodian for the Collateral Shares subject to the Transaction Security;

 

(vi)                              any contractual restriction, condition or limitation expressly set forth under any of the Finance Documents and/or clause 6 (Lock-up) of the SPA; and

 

(vii)                           a restriction, condition or limitation to which the Lender has expressly agreed in writing in an agreement to which the Borrower is not a party.

 

“USA Patriot Act” means the U.S. Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

 

“Unpaid Sum” means any sum due and payable but unpaid by the Borrower under the Finance Documents.

 

“Upfront Fee” means 1.00 per cent. of USD 44,000,000.

 

“Utilisation” means the utilisation of the Facility.

 

“Utilisation Date” means the date of the Utilisation, being the date on which the Loan is to be made.

 

“Utilisation Request” means a notice substantially in the form set out in Schedule 2 (Utilisation Request).

 

“Valuation Date” means each Scheduled Trading Day during the period from and including the Utilisation Date to but excluding the Maturity Date.

 

1.2                               Construction

 

(a)                                 Unless a contrary indication appears, any reference in this Agreement to:

 

(i)                                     the “Borrower”, the “Guarantor”, the “Lender”, the “Custodian”, the “Calculation Agent” any “Party” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

 

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(ii)                                  “assets” includes present and future properties, revenues and rights of every description;

 

(iii)                               “customer due diligence requirements” is to the identification checks that the Lender requests in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer;

 

(iv)                              “disposal” means a sale, transfer, assignment, grant, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary, and “dispose” will be construed accordingly;

 

(v)                                 a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended, restated (however fundamentally and whether or not more onerously) or replaced and includes any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under that Finance Document or other agreement or instrument;

 

(vi)                              “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

(vii)                           a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

 

(viii)                        a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

 

(ix)                              a provision of law is a reference to that provision as amended or re-enacted; and

 

(x)                                 a time of day is a reference to London time.

 

(b)                                 Section, Clause and Schedule headings are for ease of reference only.

 

(c)                                  Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

 

(d)                                 A Default is “continuing” if it has not been remedied or waived.

 

(e)                                  The “equivalent” in any currency (the “first currency”) of any amount in another currency (the “second currency”) shall be construed as a reference to the amount in the first currency which could be purchased with that amount in

 

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the second currency at the Lender’s spot rate of exchange for the purchase of the first currency with the second currency at or about 11:00 a.m. on a particular day (or at or about such time and on such date as the Lender may from time to time reasonably determine to be appropriate in the circumstances).

 

(f)                                   A reference to any document in the form as agreed shall be construed as meaning such document being in the same form as agreed by the relevant parties via email on or before the date of this Agreement, save for the insertion of information left in blank or typographical errors.

 

(g)                                  Unless the context otherwise requires, a reference to any Cash Collateral or Collateral Shares includes:

 

(i)                                     any part of that Cash Collateral or Collateral Shares;

 

(ii)                                  any proceeds of that Cash Collateral or Collateral Shares; and

 

(iii)                               any present and future assets of that type that are required to be delivered as Cash Collateral or Collateral Shares by the terms of the Finance Documents as an addition to or replacement of the Cash Collateral or Collateral Shares.

 

1.3                               Currency symbols and definitions

 

In this Agreement:

 

“United States Dollars” or “USD” denotes the lawful currency of the United States of America.

 

1.4                               Third party right

 

(a)                                 A person who is not a Party has no right under the Contracts (Right of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

 

(b)                                 Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

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SECTION 2
THE FACILITY

 

2.                                      THE FACILITY

 

Subject to the terms of this Agreement, the Lender makes available to the Borrower a term loan facility in United States Dollars in an amount equal to the Commitment.

 

3.                                      PURPOSE

 

3.1                               Purpose

 

The Borrower shall apply all amounts borrowed by it under the Loan towards the subscription price of the Ordinary Shares to be acquired by the Borrower pursuant to the SPA.

 

3.2                               Monitoring

 

The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

4.                                      CONDITIONS OF UTILISATION

 

4.1                               Initial conditions precedent

 

The Borrower may not deliver the Utilisation Request unless the Lender has received all of the documents and other evidence listed in Schedule 1 (Conditions Precedent) in form and substance satisfactory to the Lender.  The Lender shall notify the Borrower promptly upon being so satisfied.

 

4.2                               Further conditions precedent

 

The Lender will only be obliged to comply with Clause 5.4 (Availability of Loan) if:

 

(a)                                 on the date of the Utilisation Request and on the proposed Utilisation Date:

 

(i)                                     no Default is continuing or would result from the proposed Loan;

 

(ii)                                  the making of the Loan would not cause the Loan-to-Value Ratio (which shall be determined on the basis that all of the Initial Collateral Shares have become subject to the Transaction Security) to exceed the Initial Loan-to-Value Ratio (determined as at the Scheduled Trading Day immediately preceding the date of the Utilisation Request and the Utilisation Date respectively);

 

(iii)                               the Repeating Representations to be made by the Borrower are true in all material respects; and

 

(b)                                 on the proposed Utilisation Date, the Lender has received evidence to its satisfaction that, upon receipt by the Issuer of the amounts borrowed by the Borrower under the Loan into the Issuer’s designated cash account, the SPA Shares will be issued by the Issuer to the Borrower and will immediately be registered in the name of the Borrower in the register of members of the Issuer

 

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and that an annotation to the register of members of the Issuer will be made in accordance with the terms of the Share and Account Charge to reflect that the Initial Collateral Shares are the subject of the Transaction Security.

 

4.3                               Single Loan

 

There shall be no more than one Loan.

 

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SECTION 3
UTILISATION

 

5.                                      UTILISATION

 

5.1                               Delivery of the Utilisation Request

 

The Borrower may utilise the Facility by delivery to the Lender of a duly completed Utilisation Request not later than the Specified Time.

 

5.2                               Completion of the Utilisation Request

 

(a)                                 The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

(i)                                     the Utilisation Date is a Business Day and a Scheduled Trading Day falling within the Availability Period;

 

(ii)                                  the currency and amount of the proposed Utilisation comply with Clause 5.3 (Currency and amount); and

 

(iii)                               it specifies the account and bank of the Issuer to which the proceeds of the Utilisation are to be credited.

 

(b)                                 Only one Utilisation Request may be delivered and only one Loan may be requested in such Utilisation Request.

 

5.3                               Currency and amount

 

(a)                                 The currency specified in the Utilisation Request must be United States Dollars.

 

(b)                                 The Outstanding Loan Amount (taking into account the amount of the proposed Loan) must be an amount equal to or less than the Commitment.

 

5.4                              Availability of Loan

 

(a)                                 If the conditions set out in this Agreement have been met, the Lender shall make the Loan available by the Utilisation Date through its Facility Office.

 

(b)                                 The amount payable by the Lender to the Borrower on the Utilisation Date shall be an amount equal to the proposed Loan less:

 

(i)                                     the Upfront Fee;

 

(ii)                                  an amount equal to the greater of (A) zero and (B) an amount equal to the amount of interest payable by the Borrower to the Lender in respect of the first Interest Period which shall be calculated in accordance with Clause 8 (Interest) (the deduction from the proposed Loan of the amounts referred to this sub-paragraph (iii) shall satisfy the Borrower’s obligation to pay interest to the Lender pursuant to Clause 8.2 (Payment of Interest) in respect of the first Interest Period); and

 

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(iii)                               any amounts deducted under Clause 15.1 (Transaction expenses).

 

5.5                               Cancellation of Commitment

 

The Commitment, if unutilised, shall be immediately cancelled at close of business in London on the last Business Day falling in the Availability Period.

 

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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION

 

6.                                      REPAYMENT

 

(a)                                 The Borrower shall repay the Loan on the Maturity Date.

 

(b)                                 The Borrower may not reborrow any part of the Facility which is repaid.

 

7.                                      PREPAYMENT AND CANCELLATION

 

7.1                               Illegality

 

If, at any time, it is or becomes unlawful in any applicable jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain the Loan or to hold, acquire or dispose of any Shares (or a Security in any Shares):

 

(a)                                 the Lender shall promptly notify the Borrower upon becoming aware of that event;

 

(b)                                 upon the Lender notifying the Borrower, the Commitment will be immediately cancelled, and the Lender shall not be obliged to fund the Utilisation; and

 

(c)                                  the Borrower must repay or prepay to the Lender the Loan together with accrued interest, the Three Month Interest Amount and all other amounts accrued under the Finance Documents on the date specified in the notice provided in accordance with paragraph (a) above.

 

7.2                               Chargor Change of Control

 

(a)                                 If (i) the Guarantor ceases to control (directly or indirectly) any of the Chargors,  (ii) the Guarantor ceases to beneficially own (directly or indirectly) not less than the Required Ownership Percentage of the issued share capital in each of the Borrower and On Chance or (iii) On Chance ceases to beneficially own (directly or indirectly) more than the Required Ownership Percentage of the issued share capital in Jun Heng:

 

(i)                                     the Borrower shall promptly notify the Lender upon becoming aware of that event;

 

(ii)                                  the Lender shall not be obliged to fund the Utilisation; and

 

(iii)                               the Lender may, by not less than five Business Days’ notice to the Borrower, cancel the Facility and the Commitment and declare the Loan, together with accrued interest, the Three Month Interest Amount and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and all such outstanding amounts will become immediately due and payable;

 

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(b)                                 For the purposes of paragraph (a) above, “control” of one person (the “first person”) by another person (the “second person”) or the first person being “controlled” by the second person means that the second person (whether directly or indirectly and whether by the ownership of share capital, the possession of voting power, contract or otherwise) the power to appoint and/or remove all or a majority of the members of the board of directors or other governing body of the first person or otherwise controls or has the power of control over the affairs and policies of the first person.

 

7.3                               Mandatory Prepayment Events

 

(a)                                 If, on any Scheduled Trading Day, the Calculation Agent determines (in its sole and absolute discretion) that the ADR Closing Price on such Scheduled Trading Day is lower than 50 per cent. of the ADR Initial Price, then:

 

(A)                               (without prejudice to the rights of the Lender under paragraphs (B) and (C) below) the Calculation Agent shall promptly notify the Lender and the Borrower upon becoming aware of the relevant event;

 

(B)                               the Lender shall not be obliged to fund the Utilisation; and

 

(C)                               the Lender may, by not less than five Business Days’ notice to the Borrower, cancel the Facility and the Commitment and declare the Loan, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and all such outstanding amounts will become immediately due and payable.

 

(b)                                 If, at any time, the Lender determines (in its sole and absolute discretion) that any one of the following events has occurred:

 

(i)                                     the public announcement (whether or not subsequently amended), including any public announcement as defined in Rule 165(f) of the Securities Act, by any entity, of any intention to enter into (including, without limitation, any intention of the Issuer to solicit or explore strategic alternatives to) any transaction or other event that, if completed, would lead to an Issuer Change of Control, Merger Event or Tender Offer;

 

(ii)                                  the Exchange announces that, pursuant to the rules of the Exchange, the ADRs cease (or will cease) to be listed, traded or publicly quoted on the Exchange for any reason, in each case, for five consecutive Scheduled Trading Days or more;

 

(iii)                               the suspension of trading of the ADRs on the Exchange or the Issuer otherwise has its trading privileges on the Exchange revoked or suspended, in each case, for five consecutive Scheduled Trading Days or more;

 

(iv)                              an Adjustment Trigger Event;

 

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(v)                                 any event, development or circumstance which could reasonably be expected to have (I) a Material Adverse Effect in relation to the Issuer or (II) a material adverse effect on the value or liquidity of the ADRs; and/or

 

(vi)                              an Issuer Change of Control, Issuer Dissolution, Issuer Insolvency, Issuer Insolvency Filing, Merger Event, Nationalisation or Tender Offer occurs,

 

then:

 

(A)                              (without prejudice to the rights of the Lender under paragraphs (B) and (C) below) the Lender shall promptly notify the Borrower upon becoming aware of the relevant event;

 

(B)                              the Lender shall not be obliged to fund the Utilisation; and

 

(C)                              the Lender may, by not less than five Business Days’ notice to the Borrower, cancel the Facility and the Commitment and declare the Loan, together with accrued interest, the Three Month Interest Amount, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and all such outstanding amounts will become immediately due and payable.

 

7.4                               Voluntary prepayment

 

(a)                                 The Borrower may, on any day following the date falling 365 days from the Utilisation Date, prepay the whole or any part of the Loan but, if in part, being an amount that reduces the Loan by a minimum amount of USD1,000,000, provided that:

 

(i)                                     the Borrower gives the Lender not less than five Business Days’ prior written notice and pays the Lender the Three Month Interest Amount (calculated on the amount to be prepaid) on the date of the voluntary prepayment of the whole or any part of the Loan; or

 

(ii)                                  the Borrower gives the Lender not less than three Months’ prior written notice and pays the Lender the Break Costs on the date of the voluntary prepayment of the whole or any part of the Loan, provided that if the relevant date of prepayment pursuant to this subparagraph (ii) above occurs during an Interest Period, an amount equal to the interest which has already been prepaid by the Borrower to the Lender under Clause ‎8.2 (Payment of Interest) for the period from such date of prepayment to (and excluding) the last day of such Interest Period shall be deducted from the prepayment amount under this Clause 7.4 (Voluntary Prepayment) and any amount by which such deduction exceeds the Break Costs payable shall be refunded to the Borrower by the Lender on the date of such prepayment.

 

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(b)                                 If any voluntary prepayment is made in connection with curing any Collateral Trigger:

 

(i)                                     the Borrower may prepay the whole or any part of the Loan at any time (without having first given not less than five Business Days’ or Three Months’ prior written notice to the Lender under paragraphs (a)(i) and (ii) above); and

 

(ii)                                  the Borrower shall pay the Lender the Three Month Interest Amount on the date of such voluntary prepayment.

 

(c)                                  No Break Costs shall be payable in connection with any voluntary prepayment in connection with paragraph (a)(i) or (b) of this Clause 7.4.

 

7.5                               Restrictions

 

(a)                                 Any notice of cancellation or prepayment given by any Party under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

 

(b)                                 Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Three Month Interest Amount or Break Costs (as applicable), without premium or penalty.

 

(c)                                  The Borrower may not reborrow any part of the Facility which is prepaid.

 

(d)                                 The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitment except at the times and in the manner expressly provided for in this Agreement.

 

(e)                                  No amount of the Commitment cancelled under this Agreement may be subsequently reinstated.

 

(f)                                   For the avoidance of doubt (and subject to Clause 7.4(a)(ii) (Voluntary Prepayment)), any interest on the Loan prepaid by the Borrower under this Agreement shall not be refundable in any circumstances.

 

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SECTION 5
COSTS OF UTILISATION

 

8.                                      INTEREST

 

8.1                               Calculation of interest

 

The rate of interest on the Loan for each Interest Period is the Loan Interest Rate.

 

8.2                               Payment of interest

 

In respect of each Interest Period, the Borrower shall pay interest on the Loan in advance on the first day of such Interest Period.

 

8.3                               Default interest

 

(a)                                 If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is the sum of (i) seven per cent. per annum and (ii) the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted the Loan in the currency of the Unpaid Sum for successive Default Interest Periods (being the Loan Interest Rate), each of a duration selected by the Lender (acting reasonably).  Any interest accruing under this Clause 8.3 shall be immediately payable by the Borrower on demand by the Lender.

 

(b)                                 If any Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan:

 

(i)                                     the first Default Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and

 

(ii)                                  the rate of interest applying to the Unpaid Sum during that first Default Interest Period shall be the sum of seven per cent. and the rate which would have applied if the Unpaid Sum had not become due.

 

(c)                                  Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Default Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.

 

8.4                               Notification of rates of interest

 

The Lender shall notify the Borrower of the determination of a rate of interest under this Agreement promptly (and, where such rate of interest relates to an Interest Period, prior to the date that is one Business Day before the first day of that Interest Period).

 

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9.                                      INTEREST PERIODS

 

9.1                               Interest Periods

 

Each Interest Period shall be three Months commencing from (and including) the first day of such Interest Period to (but excluding) the first day of the next Interest Period, provided that the first Interest Period shall commence on (and include) the Utilisation Date and the last Interest Period shall end on (and exclude) the Maturity Date.

 

9.2                               Non-Business Days

 

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

10.                               FEES

 

The Borrower shall pay to the Lender the Upfront Fee payable by netting off on the Utilisation Date in accordance with Clause 5.4(b) (Availability of Loan).

 

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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS

 

11.                               TAX GROSS-UP AND INDEMNITIES

 

11.1                        Definitions

 

(a)                                 In this Agreement:

 

“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.

 

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document.

 

“Tax Payment” means an increased payment made by the Borrower to the Lender under Clause 11.2 (Tax gross-up) or a payment under Clause 11.3 (Tax indemnity).

 

(b)                                 Unless a contrary indication appears, in this Clause 11, a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

 

11.2                        Tax gross-up

 

(a)                                 All payments to be made by the Borrower to the Lender under the Finance Documents shall be made free and clear of and without any Tax Deduction unless the Borrower is required to make a Tax Deduction, in which case the sum payable by the Borrower (in respect of which such Tax Deduction is required to be made) shall be increased to the extent necessary to ensure that the Lender receives a sum net of any deduction or withholding equal to the sum which it would have received had no such Tax Deduction been made or required to be made.

 

(b)                                 The Borrower shall promptly upon becoming aware that the Borrower must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly.  Similarly, the Lender shall notify the Borrower on becoming so aware in respect of a payment payable to the Lender.

 

(c)                                  If the Borrower is required to make a Tax Deduction, it shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

(d)                                 Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall deliver to the Lender evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

 

(e)                                  This Clause 11.2 (Tax gross-up) shall survive after the date of full repayment of all sums owing by the Borrower under the Facility and the date on which

 

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this Agreement is terminated, until the end of the limitation period applicable to claims in respect of amounts paid or payable under this Agreement by the relevant tax authorities.

 

11.3                        Tax indemnity

 

(a)                                 Without prejudice to Clause 11.2 (Tax gross-up), if the Lender is required to make any payment of or on account of Tax on or in relation to any sum received or receivable under the Finance Documents (including any sum deemed for purposes of Tax to be received or receivable by the Lender whether or not actually received or receivable) or if any liability in respect of any such payment is asserted, imposed, levied or assessed against the Lender, the Borrower shall, within five Business Days of demand of the Lender, promptly indemnify the Lender against such payment or liability, together with any interest, penalties, costs and expenses payable or incurred in connection therewith, provided that this Clause 11.3 shall not apply to:

 

(i)                                     any Tax imposed on and calculated by reference to the net income actually received or receivable by the Lender (but, for the avoidance of doubt, not including any sum deemed for purposes of Tax to be received or receivable by the Lender but not actually receivable) by the jurisdiction in which the Lender is incorporated; or

 

(ii)                                  any Tax imposed on and calculated by reference to the net income of the Facility Office of the Lender actually received or receivable by the Lender (but, for the avoidance of doubt, not including any sum deemed for purposes of Tax to be received or receivable by the Lender but not actually receivable) by the jurisdiction in which its Facility Office is located.

 

(b)                                 If the Lender intends to make a claim under paragraph (a) above, it shall notify the Borrower of the event giving rise to the claim.

 

(c)                                  This Clause 11.3 (Tax indemnity) shall survive after the date of full repayment of all sums owing by the Borrower under the Facility and the date on which this Agreement is terminated, until the end of the limitation period applicable to claims in respect of amounts paid or payable under this Agreement by the relevant tax authorities

 

11.4                        Tax Credit

 

If the Borrower makes a Tax Payment and the Lender determines that:

 

(a)                                 a Tax Credit is attributable to that Tax Payment; and

 

(b)                                 it has obtained, utilised and retained that Tax Credit,

 

the Lender shall pay an amount to the Borrower which the Lender determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been made by the Borrower.

 

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11.5                        Stamp taxes

 

The Borrower shall:

 

(a)                                 pay all stamp duty, registration and other similar Taxes payable in respect of any Finance Document; and

 

(b)                                 within five Business Days of demand, indemnify the Lender against any cost, loss or liability the Lender incurs in relation to any stamp duty, registration and other similar Tax paid or payable in respect of any Finance Document.

 

11.6                        Indirect Tax

 

(a)                                 All consideration expressed to be payable under a Finance Document by any Party to the Lender shall be deemed to be exclusive of any Indirect Tax.  If any Indirect Tax is chargeable on any supply made by the Lender to any Party in connection with a Finance Document, that Party shall pay to the Lender (in addition to and at the same time as paying the consideration) an amount equal to the amount of the Indirect Tax.

 

(b)                                 Where a Finance Document requires any Party to reimburse the Lender for any costs or expenses, that Party shall also at the same time pay and indemnify the Lender against all Indirect Tax incurred by the Lender in respect of the costs or expenses to the extent that the Lender reasonably determines that it is not entitled to credit or repayment in respect of the Indirect Tax.

 

12.                               INCREASED COSTS

 

12.1                        Increased Costs

 

(a)                                 Subject to Clause 12.3 (Exceptions), the Borrower shall, within five Business Days of a demand by the Lender, pay the Lender the amount of any Increased Costs incurred by the Lender or any of its Affiliates as a result of:

 

(i)                                     the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation;

 

(ii)                                  compliance with any law or regulation made after the date of this Agreement (and for the purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, or directives in connection therewith are deemed to have gone into effect and been adopted after the date of this Agreement); or

 

(iii)                               the implementation or application of, or compliance with, Basel III or any law or regulation that implements or applies Basel III.

 

The terms “law” and “regulation” in this paragraph (a) shall include any law or regulation concerning capital adequacy, prudential limits, liquidity, reserve assets or Tax.

 

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(b)                                 In this Agreement:

 

“Basel III” means:

 

(i)                                     the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

 

(ii)                                  the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement — Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

(iii)                               any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

 

“Increased Costs” means:

 

(i)                                     a reduction in the rate of return from the Facility or on the Lender’s (or its Affiliate’s) overall capital (including as a result of any reduction in the rate of return on capital brought about by more capital being required to be allocated by the Lender);

 

(ii)                                  an additional or increased cost; or

 

(iii)                               a reduction of any amount due and payable under any Finance Document,

 

which is incurred or suffered by the Lender or any of its Affiliates to the extent that it is attributable to the Lender having entered into its Commitment or funding or performing its obligations under any Finance Document.

 

12.2                        Increased Cost claims

 

(a)                                 If the Lender intends to make a claim pursuant to Clause 12.1 (Increased Costs), it shall notify the Borrower of the event giving rise to the claim.

 

(b)                                 The Lender shall, as soon as practicable after a demand by the Borrower, provide a certificate confirming the amount of its Increased Costs.

 

12.3                        Exceptions

 

(a)                                 Clause 12.1 (Increased Costs) does not apply to the extent any Increased Cost is:

 

(i)                                     attributable to a Tax Deduction required by law to be made by the Borrower;

 

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(ii)                                  compensated for by Clause 11.3 (Tax indemnity) (or would have been compensated for under Clause 11.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (a) of Clause 11.3 (Tax indemnity) applied); or

 

(iii)                               attributable to the wilful breach by the Lender or its Affiliates of any law or regulation.

 

(b)                                 In this Clause 12.3, a reference to a “Tax Deduction” has the same meaning given to the term in Clause 11.1 (Definitions).

 

13.                               OTHER INDEMNITIES

 

13.1                        Currency indemnity

 

(a)                                 If any sum due from the Borrower under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

 

(i)                                     making or filing a claim or proof against the Borrower;

 

(ii)                                  obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

 

the Borrower shall as an independent obligation, within five Business Days of demand, indemnify the Lender against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

(b)                                 The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

 

13.2                        Other indemnities

 

The Borrower shall, within five Business Days of demand, indemnify the Lender and its Related Persons against any cost, loss or liability incurred by the Lender or its Related Persons as a result of:

 

(a)                                 the occurrence of any Event of Default;

 

(b)                                 any information produced or approved by the Borrower being or being alleged to be misleading or deceptive in any respect;

 

(c)                                  any claim, enquiry, investigation, deposition, subpoena (or similar order), arbitration, proceeding or litigation with respect to any Obligor or with respect to the transactions contemplated or financed under this Agreement, whether or not the Lender or any Related Persons is a party thereto or target thereof;

 

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(d)                                 a failure by any Obligor to pay any amount due under a Finance Document on its due date;

 

(e)                                  (other than by reason of default or negligence by the Lender alone) the Loan not being made after the Utilisation Request has been delivered for the Loan by reason of the operation of any one or more of the provisions of this Agreement;

 

(f)                                   the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower;

 

(g)                                  any use of the proceeds of the Loan which is not in compliance with the terms of this Agreement;

 

(h)                                 acting or relying on any notice which the Lender reasonably believes to be genuine, correct and appropriately authorised; or

 

(i)                                     any representation under Clause 16 (Representations) is or becomes inaccurate, incorrect or misleading in any respect when it is made or deemed to be made.

 

13.3                        Indemnity to the Lender

 

The Borrower shall promptly indemnify the Lender against any cost, loss or liability incurred by the Lender (acting reasonably) as a result of:

 

(a)                                 investigating any event which it reasonably believes is a Default; or

 

(b)                                 acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

 

(c)                                  taking, holding, protecting or enforcing any Security created pursuant to any Finance Document, including but not limited to, any fees or other amounts due to the Depositary Bank in respect of any arrangements for the conversion of Collateral Ordinary Shares to ADRs; or

 

(d)                                 exercising any of the rights, powers, discretions or remedies vested in it under any Finance Document or by law.

 

13.4                        Indemnity to the Calculation Agent

 

The Borrower shall promptly indemnify the Calculation Agent against any cost, loss, taxes or liability and related expenses incurred by it as a result of:

 

(a)                                 acting or relying on any notice, request or instruction from or on behalf of any Obligor that it reasonably believes to be genuine, correct and appropriately authorised; or

 

(b)                                 any information required to be provided by any Obligor to the Calculation Agent pursuant to the Finance Documents not being provided by any Obligor to the Calculation Agent when due or any relevant information required to be

 

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provided by any Obligor to the Calculation Agent pursuant to the Finance Documents and provided by any Obligor to it proving to have been incorrect,

 

provided that the Borrower shall not be liable for the same cost, loss or liability under more than one provision of the Finance Documents.

 

14.                               MITIGATION BY THE LENDER

 

14.1                        Mitigation

 

(a)                                 The Lender shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 11 (Tax Gross-up and Indemnities) or Clause 12 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

 

(b)                                 Paragraph (a) above does not in any way limit the obligations of the Borrower under the Finance Documents.

 

14.2                        Limitation of liability

 

(a)                                 The Borrower shall promptly indemnify the Lender for all costs and expenses reasonably incurred by the Lender as a result of steps taken by it under Clause 14.1 (Mitigation).

 

(b)                                 The Lender is not obliged to take any steps under Clause 14.1 (Mitigation) if, in its opinion (acting reasonably), to do so might be prejudicial to it.

 

15.                               COSTS AND EXPENSES

 

15.1                        Transaction expenses

 

The Borrower shall, promptly on demand and subject to any applicable cap agreed between the Lender and the Borrower, pay the Lender the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with the negotiation, preparation, printing and execution of:

 

(a)                                 this Agreement and any other documents referred to in this Agreement; and

 

(b)                                 any other Finance Documents executed after the date of this Agreement,

 

and such amounts may be deducted from the Loan advanced by the Lender on the Utilisation Date.

 

15.2                        Subsequent costs

 

The Borrower must promptly within five Business Days after demand pay to the Lender the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with:

 

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(a)                                 the negotiation, preparation, printing, entry into and delivery of any Finance Document entered into after the date of this Agreement; and

 

(b)                                 any amendment, waiver, consent, withdrawal or release requested by or on behalf of the Borrower or specifically allowed by a Finance Document.

 

15.3                        Enforcement costs

 

The Borrower shall, within three Business Days of demand, pay to the Lender the amount of all costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

 

15.4                        Security expenses

 

The Borrower shall promptly on demand pay the Lender the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with the administration or release of any Security created pursuant to any Security Document.

 

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