UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

 

 

Tuniu Corporation

(Name of Issuer)

Class A Ordinary Shares, par value US$0.0001 per share

(Title of Class of Securities)

89977P106 (1)

(CUSIP Number)

Mr. Huiping Zhou

BHR (Shanghai) Investment Fund IV, L.P.

Unit 3101, 31/F, Tower 2

China Central Place 79 Jianguo Road

Chaoyang District, Beijing 100025, China

(8610) 5969-5858

Mr. Jie Zhu

BHR (Shanghai) Investment Fund IV, L.P.

20F, Tower A, Hainan Airlines Plaza,

B-2, East 3 rd Ring North Road,

Chaoyang District, Beijing, 100027 China

(8610) 6019-5322

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

With a copy to:

Craig A. Roeder

Baker & McKenzie LLP

300 East Randolph Street

Chicago, Illinois 60601

(312) 861-8000

January 21, 2016

(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 which 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   ¨ .

 

(1) There is no CUSIP number for the Issuer’s Class A Ordinary Shares. The indicated CUSIP number applies to the Issuer’s American Depositary Shares, each representing three Class A Ordinary Shares.

 

 

 


CUSIP No. 89977P106

     13D       Page 2 of Pages

 

  1   

NAMES OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS [ENTITIES ONLY]

 

BHR (Shanghai) Investment Fund IV, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)   ¨         (b)   x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUND

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

People’s Republic of China

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

-0-

     8   

SHARED VOTING POWER

 

90,909,091

     9   

SOLE DISPOSITIVE POWER

 

-0-

   10   

SHARED DISPOSITIVE POWER

 

90,909,091

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

90,909,091

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

24.06%

14  

TYPE OF REPORTING PERSON

 

PN


CUSIP No. 89977P106

     13D       Page 3 of Pages

 

  1   

NAMES OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS [ENTITIES ONLY]

 

BHR Winwood Investment Management Limited

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)   ¨         (b)   x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUND

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

Hong Kong

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

-0-

     8   

SHARED VOTING POWER

 

90,909,091

     9   

SOLE DISPOSITIVE POWER

 

-0-

   10   

SHARED DISPOSITIVE POWER

 

90,909,091

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

90,909,091

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

24.06%

14  

TYPE OF REPORTING PERSON

 

CO


Item 1. Security and Issuer.

This Statement on Schedule 13D (this “Statement”) relates to the Class A ordinary shares, par value US$0.0001 per share (the “Class A Ordinary Shares”), of Tuniu Corporation, a company organized under the laws of the Cayman Islands (the “Issuer”). The principal executive offices of the Issuer are located at Tuniu Building No. 699-32, Xuanwudadao, Xuanwu District, Nanjing, Jiangsu Province 210042, People’s Republic of China.

The Issuer’s American depositary shares (“ADSs”), each representing three Class A Ordinary Shares, are listed on the Nasdaq Global Market under the symbol “TOUR.” As of the date of this Statement, the Reporting Persons (as defined below) beneficially own only Class A Ordinary Shares and do not beneficially own any ADSs.

In addition to the Class A Ordinary Shares, the Issuer also has outstanding Class B ordinary shares, par value US$0.0001 per share (the “Class B Ordinary Shares,” and together with the Class A Ordinary Shares, the “Ordinary Shares”). Holders of the Class A Ordinary Shares are entitled to one vote per share, while holders of the Class B Ordinary Shares are entitled to ten votes per share. Holders of the Ordinary Shares vote together as one class on all matters that require a shareholder vote. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof, while Class A Ordinary Shares are not convertible into the Class B Ordinary Shares.

Item 2. Identity and Background.

This Statement is being filed jointly pursuant to Rule 13d-1(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by the following persons (each, a “Reporting Person” and collectively, the “Reporting Persons”):

 

  (i) BHR (Shanghai) Investment Fund IV, L.P., a limited partnership organized under the laws of the People’s Republic of China (“BHR Fund”); and

 

  (ii) BHR Winwood Investment Management Limited, a company organized under the laws of Hong Kong (“BHR Winwood”)

The Reporting Persons have entered into a joint filing agreement relating to the joint filing of this Statement in accordance with Rule 13d-1(k)(1) under the Exchange Act, a copy of which is attached as Exhibit 7.6 to this Statement.

The addresses of the principal executive offices of the Reporting Persons are:

 

BHR Fund   

Unit 3101, 31/F, Tower 2, China Central Place,

79 Jianguo Road, Chaoyang District, Beijing

100025, China

BHR Winwood   

Unit 3101, 31/F, Tower 2, China Central Place,

79 Jianguo Road, Chaoyang District, Beijing

100025, China

BHR Fund is a limited partnership organized under the laws of the People’s Republic of China. BHR Winwood is a company organized under the laws of Hong Kong and a wholly-owned subsidiary of BHR Fund. BHR Fund and BHR Winwood were each formed for the purpose of investing in the Class A Ordinary Shares of the Issuer.

HNA Tourism Holding (Group) Co., Ltd., a company organized under the laws of the People’s Republic of China (“HNA”), through majority-owned or controlled subsidiaries, holds a general partner interest and a minority limited partner interest in BHR Fund. HNA is one of three strategic industrial conglomerates of HNA Group, which specializes in air travel, operating an integrated supply chain comprising hospitality management, aviation, tourism, finance, investment, e-Commerce, etc. Its portfolio of quality brands includes Beijing Capital Airlines, Deer Jet, Caissa Touristic, Tangla International Hotels and Resorts, Easy Pay and Transforex among more than 20 subsidiary and invested travel companies.

Bank of China Asset Management Co., Ltd., a company organized under the laws of the People’s Republic of China (“Bank of China Asset Management”), directly holds a majority limited partner interest in BHR Fund and, through an affiliate, holds a general partner interest in BHR Fund. Bank of China Asset Management is engaged in providing asset management services and products to its customers.

Certain information with respect to the directors and executive officers of the Reporting Persons is set forth on Schedule A to this Statement, including each director’s and executive officer’s present principal occupation or employment, business address, citizenship and other information.

 


None of the Reporting Persons nor, to the knowledge of the Reporting Persons, any person identified on Schedule A to this Statement has, during the last five years, 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, the United States federal or state securities laws or finding any violation with respect to such laws.

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

HNA and the Issuer entered into a Subscription Agreement dated as of November 20, 2015, as amended as of December 31, 2015 (as so amended, the “Subscription Agreement”), pursuant to which HNA, subject to the satisfaction of certain conditions, agreed to purchase 90,909,091 Class A Ordinary Shares (collectively, the “Shares”) for a purchase price of US$5.50 per share, or an aggregate purchase price of US$500,000,000.

On January 20, 2016, HNA assigned its rights pursuant to the Subscription Agreement and the related Investor Rights Agreement, as defined and described further below, to BHR Winwood. The issuance of the Shares to BHR Winwood pursuant to the Subscription Agreement was consummated on January 21, 2016.

BHR Winwood used funds contributed by BHR Fund to purchase the Shares. These funds were received by BHR Fund as capital contributions by HNA and Bank of China Asset Management, in each case directly or through majority-owned or controlled subsidiaries, in exchange for the issuance of general and limited partner interests in BHR Fund. HNA used its general operating funds, and Bank of China Asset Management used funds under its management, for its capital contribution to BHR Fund.

The information set forth in Section 6 of this Statement, including the description of the Subscription Agreement and the Investor Rights Agreement (as defined below), is incorporated herein by reference.

Item 4. Purpose of Transaction.

The Reporting Persons acquired the Shares for investment purposes and as part of a strategic partnership arrangement between HNA and the Issuer. Subject to the terms of the Subscription Agreement and the Investor Rights Agreement, depending on various factors, including the Issuer’s financial performance and strategic direction, the market price of the Class A Ordinary Shares, conditions in the securities and financial markets, general economic and industry conditions, the status of the strategic partnership between HNA and the Issuer and other factors, the Reporting Persons may in the future take actions with respect to their investment in the Shares as they deem appropriate, including changing their present intentions, with respect to any and all matters required to be disclosed in this Statement. Without limiting the foregoing, subject to the terms of the Subscription Agreement and the Investor Rights Agreement, the Reporting Persons may, from time to time, acquire or cause affiliates to acquire additional Class A Ordinary Shares or other securities of the Issuer, dispose, or cause affiliates to dispose, of some or all of the Shares or other securities of the Issuer, including through transactions or arrangements (including the creation, purchase or sale of any security, including any security-based swap, swap, cash-settled option, forward sale agreement, exchangeable note, total return swap or other derivative) the effect of which is to hedge the risk of owning the Shares or other securities of the Issuer, or continue to hold, or cause affiliates to hold, the Shares or other securities of the Issuer (or any combination or derivation of the foregoing).

In addition, subject to the terms of the Subscription Agreement and the Investor Rights Agreement, the Reporting Persons, as shareholders of the Issuer, may engage in discussions with the shareholders, board of directors or management of the Issuer or other relevant parties, or take other actions concerning, extraordinary corporate transactions (including mergers, reorganizations or liquidations), sales or transfers of a material amount of the assets of the Issuer or its subsidiaries, changes in the present board of directors or management of the Issuer, including plans or proposals to change the number or term of directors or to fill any existing vacancies on the board of directors, changes to capitalization or dividend policy of the Issuer, changes to the Issuer’s constituent documents or other actions which may impede the acquisition of control of the Issuer by any person, the deregistration or delisting of securities of the Issuer, or actions similar to the foregoing.

The provisions of the Subscription Agreement and the Investor Rights Agreement may restrict or prohibit the Reporting Persons from taking certain of the foregoing actions. The information set forth in Section 6 of this Statement, including the description of the Subscription Agreement and the Investor Rights Agreement, is incorporated herein by reference.


Except as set forth in this Statement, the Reporting Persons and, to the knowledge of the Reporting Persons, the persons identified on Schedule A to this Statement have no present plans, proposals or intentions that would result in or relate to any of the transactions described in clauses (a) though (j) of Item 4 of Schedule 13D under the Exchange Act. Although the foregoing reflects activities and intentions presently contemplated by the Reporting Persons and the persons identified on Schedule A to this Statement, subject to the terms of the Subscription Agreement and the Investor Rights Agreement, the foregoing is subject to change at any time.

Item 5. Interest in Securities of the Issuer.

The Reporting Persons beneficially own an aggregate of 90,909,091 Class A Ordinary Shares, representing approximately 24.06% of the outstanding Ordinary Shares. The foregoing percentage beneficial ownership is based on a total of 360,510,857 Class A Ordinary Shares and 17,373,500 Class B Ordinary Shares outstanding as of January 21, 2016, as reported to the Reporting Persons by the Issuer as of that date. To the knowledge of the Reporting Persons, except as set forth on Schedule A to this Statement, none of the persons identified on Schedule A beneficially owns any Class A Ordinary Shares.

Except as set forth in this Statement, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any person identified on Schedule A to this Statement has effected any transaction in the Class A Ordinary Shares during the past 60 days.

To the knowledge of the Reporting Persons, no person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds of the sale of, the Shares.

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

On November 20, 2015, HNA and the Issuer entered into the Subscription Agreement. The Subscription Agreement was subsequently amended as of December 31, 2015. HNA and the Issuer also entered into an Investor Rights Agreement dated November 20, 2015, which was subsequently amended as of December 31, 2015 (as so amended, the “Investor Rights Agreement”). On January 20, 2016, HNA assigned its rights pursuant to the Subscription Agreement and the Investor Rights Agreement to BHR Winwood.

HNA and the Issuer also entered into a Business Cooperation Agreement dated as of November 20, 2015 (the “Business Cooperation Agreement”) pursuant to which HNA agreed to provide the Issuer with access to its or its affiliates’ premium airlines and hotels resources at a preferential price, subject to fair competitive market rules, and the Issuer agreed to purchase certain products and services from HNA or HNA’s affiliates.

Subscription Agreement

The Subscription Agreement provides for the issuance by the Issuer, subject to the satisfaction of certain conditions, of 90,909,091 Class A Ordinary Shares for a purchase price of US$5.50 per share, or an aggregate purchase price of US$500,000,000. The issuance of the Shares pursuant to the Subscription Agreement was consummated on January 21, 2016 (the “Closing Date”).

Transfer Restrictions

The Subscription Agreement provides that the Reporting Persons may not, during the period commencing on the date of the Subscription Agreement and ending six months after the Closing Date, (i) offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of the Shares or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares. The foregoing provision does not restrict the right of the Reporting Persons to transfer the Shares in response to a tender or exchange offer by any person that has been approved or recommended by the Board of Directors of the Issuer.

Conversion of Class B Ordinary Shares

The Issuer is required pursuant to the Subscription Agreement to use its reasonable best efforts to cause the conversion into Class A Ordinary Shares, on or prior to December 31, 2015, of a sufficient number of outstanding Class B Ordinary Shares held by non-management shareholders of the Issuer so that, following such conversion, the Shares will be entitled to exercise no less than 16.5% of the combined voting power of all outstanding shares of the Issuer. From November 20, 2015 to December 31, 2015, 61,236,209 Class B Ordinary Shares were converted into Class A Ordinary Shares. The remaining Class B Ordinary Shares were beneficially held by Mr. Dunde Yu, who holds 10,423,503 Class B Ordinary Shares, through Dragon Rabbit Capital Limited and by Mr. Haifeng Yan, who holds 6,949,997 Class B Ordinary Shares, through Verne Capital Limited.


Noncompetition Covenant

The Subscription Agreement includes a covenant applicable to the Reporting Persons providing that, so long as the Reporting Persons hold any Class A Ordinary Shares or any other securities of the Issuer which in the aggregate represent more than 5% of the voting rights of the Issuer, the Reporting Persons will not, either on their own account or in concert with or on behalf of any other person, directly or indirectly make any equity investment in certain named competitors of the Issuer, or any of their respective subsidiaries or affiliates, without first obtaining the consent of the Issuer. The foregoing provision does not restrict the right of the Reporting Persons to hold not more than 5% of the issued shares of a company with securities listed on a recognized stock exchange that directly or indirectly holds securities of the foregoing competitor companies.

Representations and Warranties; Indemnification

The Subscription Agreement includes customary representations and warranties and customary indemnification provisions with respect to breaches of the representations, warranties and covenants of the parties. The representations and warranties of the Issuer expire on the second anniversary of the Closing Date, except for certain fundamental representations and warranties, which survive indefinitely.

Investor Rights Agreement

The Investor Rights Agreement provides the Reporting Persons with certain rights with respect to their investment in the Issuer, including director nomination rights and resale registration rights with respect to the Shares.

Director Nomination Rights

The Investor Rights Agreement provides that for as long as the Reporting Persons, together with their affiliates, beneficially own a number of Class A Ordinary Shares equal to 70% or more of the aggregate number of Shares, the Reporting Persons will be entitled to nominate two individuals to serve on the Board of Directors of the Issuer, one of whom will be required to qualify as an “independent director” under applicable Nasdaq listing rules. The director candidates nominated by the Reporting Persons are subject to the approval of the Board of Directors of the Issuer, which approval may not be unreasonably withheld. The Issuer is required pursuant to the Investor Rights Agreement to take certain corporate actions in order to cause the prompt appointment or election of approved director candidates nominated by the Reporting Persons.

Registration Rights

The Investor Rights Agreement includes customary demand and piggyback registration rights with respect to the Shares held by the Reporting Persons. The Reporting Persons have the right to request that the Issuer file a registration statement with the United States Securities and Exchange Commission in order to register all or part of the Shares. The Reporting Persons are entitled to make no more than three demand requests, each of which must register securities with a minimum aggregate value of $7,500,000. The Reporting Persons also have the right to request the Issuer to file and maintain the effectiveness of registration statements permitting the resale of Shares on a delayed or continuous basis. The Issuer has customary registration postponement rights for up to 120 days in any 12-month period.

The foregoing descriptions of the Subscription Agreement and the Investor Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements, copies of which are included as Exhibits 7.1, 7.2, 7.3 and 7.4 to this Statement.

Business Cooperation Agreement

The Business Cooperation Agreement includes an agreement by HNA to provide the Issuer with access to HNA’s and its affiliates’ premium airlines and hotels resources at a preferential price, subject to fair competitive market rules, and an agreement by the Issuer to purchase certain products and services from HNA and HNA’s affiliates, in each case during the period from April 1, 2016 to March 31, 2018 (the “Cooperation Period”). The Issuer has agreed in the Business Cooperation Agreement that it will, or it will procure its affiliates to, or it and its affiliates together will, acquire no less than US$100,000,000 in products and services sourced from HNA during the Cooperation Period, which will include no less than US$60,000,000 in group flight tickets and hotel stays and no less than US$40,000,000 in single flight tickets.

The Issuer paid US$100,000,000 or its Renminbi equivalent to HNA prior to the Closing Date as a down payment under the Business Cooperation Agreement. The purchase prices for products and services sourced by the Issuer from HNA or HNA’s affiliates will be deducted from the down payment until the balance reaches zero. Depending upon future circumstances, HNA and the Issuer may by mutual agreement alter the use of the balance of the down payment, if any, to invest in the equity interests of certain of HNA’s affiliates.


The Business Cooperation Agreement establishes a steering committee comprised of representatives of HNA and the Issuer. Representatives on the committee will meet regularly and as needed to implement the cooperation arrangement.

Limited Partnership Agreement of BHR Fund

General Partners and Limited Partners

Pursuant to the Limited Partnership Agreement of BHR Fund, a controlled subsidiary of HNA, Beijing Jinglvshenghong Investment Management Co., Ltd. (the “HNA GP”), and an affiliate of Bank of China Asset Management, BHR Ruila (Shanghai) Investment Management Co., Ltd. (the “BHR GP”), act as the general partners of BHR Fund. Each of the HNA GP and the BHR GP has subscribed for a general partnership interest in BHR Fund, representing a nominal percentage of the total partnership interests in BHR Fund. The general partners are endowed with the customary powers and authorities provided to general partners under the Partnership Law of the People’s Republic of China. Except for matters that are explicitly reserved for the Investment Committee or the general meeting of partners, and limited matters that are explicitly allowed to be decided by any one general partner, all the matters of BHR Fund are required to be jointly decided by the general partners.

Another controlled subsidiary of HNA, Beijing Capital Airlines Co., Ltd., has subscribed for a minority limited partnership interest in BHR Fund. The remaining majority limited partnership interest in BHR Fund is held by Bank of China Asset Management.

Investment Committee; Board of Directors of BHR Winwood

The Limited Partnership Agreement of BHR Fund provides for an Investment Committee comprised of three representatives appointed by the HNA GP and two representatives appointed by the BHR GP. The Investment Committee has the authority to decide on all matters relating to the investment of BHR Fund in the Issuer, including with respect to the voting and disposition of the Shares. All decisions of the Investment Committee require the approval of at least 4/5 of the representatives on the Investment Committee at a duly convened meeting of the Investment Committee.

BHR Winwood has a board of directors comprised of three members nominated by the HNA GP and two members nominated by the BHR GP. All decisions of the board of directors of BHR Winwood require the approval of at least 4/5 of the members on the board.

Item 7. Material to Be Filed as Exhibits.

The following documents are filed as exhibits to this Statement:

 

Exhibit

  

Description

Exhibit 7.1    Subscription Agreement dated as of November 20, 2015 between Tuniu Corporation and HNA Tourism Holding (Group) Co., Ltd.
Exhibit 7.2    Amendment No. 1 to Subscription Agreement dated as of December 31, 2015 between Tuniu Corporation and HNA Tourism Holding (Group) Co., Ltd.
Exhibit 7.3    Investor Rights Agreement dated as of November 20, 2015 between Tuniu Corporation and HNA Tourism Holding (Group) Co., Ltd.
Exhibit 7.4    Amendment No. 1 to Investor Rights Agreement dated as of December 31, 2015 between Tuniu Corporation and HNA Tourism Holding (Group) Co., Ltd.
Exhibit 7.5    Assignment and Assumption Agreement and Joinder dated as of January 21, 2016 between HNA Tourism Holding (Group) Co., Ltd. and BHR Winwood Investment Management Limited.
Exhibit 7.6    Joint Filing Agreement dated as of January 29, 2016 between the Reporting Persons.
Exhibit 7.7    Powers of Attorney.


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.

 

BHR (SHANGHAI) INVESTMENT FUND IV, L.P.
By:   BEIJING JINGLVSHENGHONG INVESTMENT MANAGEMENT CO., LTD.
Its: GENERAL PARTNER
By:  

/s/ Jie Zhu

Name:   Jie Zhu
Title:   Legal Representative
By:  

BHR RUILA (SHANGHAI) INVESTMENT

MANAGEMENT CO., LTD.

Its: GENERAL PARTNER
By:  

/s/ Chengang Zhu

Name:   Chengang Zhu
Title:   Executive Director
BHR WINWOOD INVESTMENT MANAGEMENT LIMITED
By:  

/s/ Jie Zhu

Name:   Jie Zhu
Title:   Director

 

 


SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF

BHR (SHANGHAI) INVESTMENT FUND IV, L.P.

The following table sets forth the name, present occupation or employment and business address of each Investment Committee member of BHR (Shanghai) Investment Fund IV, L.P. Except as otherwise indicated, each such person is a citizen of the People’s Republic of China. The business address of each of Mr. Qiang Li, Mr. Jie Zhu and Mr. Xisong Cui is 20F, Tower A, Hainan Airlines Plaza, B-2, East 3 rd Ring North Road, Chaoyang District, Beijing, 100027 China, and of each of Mr. Huiping Zhou and Mr. Feiqiang Yu, is Unit 3101, 31/F, Tower 2, China Central Place, 79 Jianguo Road, Chaoyang District, Beijing 100025, China.

 

Name

  

Present Occupation or Employment

Mr. Qiang Li

   Investment Committee member

Mr. Jie Zhu

   Investment Committee member

Mr. Xisong Cui

   Investment Committee member

Mr. Huiping Zhou

   Investment Committee member

Mr. Feiqiang Yu

   Investment Committee member


SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF

BHR WINWOOD INVESTMENT MANAGEMENT LIMITED

The following table sets forth the name, present occupation or employment and business address of each director and executive officer of BHR Winwood Investment Management Limited. Except as otherwise indicated, each such person is a citizen of the People’s Republic of China. The business address of each of Mr. Qiang Li, Mr. Jie Zhu and Mr. Xisong Cui is 20F, Tower A, Hainan Airlines Plaza, B-2, East 3 rd Ring North Road, Chaoyang District, Beijing, 100027 China, and of each of Mr. Huiping Zhou and Mr. Feiqiang Yu, is Unit 3101, 31/F, Tower 2, China Central Place, 79 Jianguo Road, Chaoyang District, Beijing 100025, China.

 

Name

  

Present Occupation or Employment

Mr. Qiang Li

   Director

Mr. Jie Zhu

   Director

Mr. Xisong Cui

   Director

Mr. Huiping Zhou

   Director

Mr. Feiqiang Yu

   Director

Exhibit 7.1

Execution Version

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “ Agreement ”) is made as of November 20, 2015 by and between:

 

  (1) Tuniu Corporation, a company incorporated in the Cayman Islands (the “ Company ”); and

 

  (2) HNA Tourism Holding (Group) Co., Ltd., a company organized under the laws of the People’s Republic of China (the “ PRC ”) (the “ Purchaser ”).

The Purchaser and the Company are sometimes each referred to herein as a “ Party , and collectively as the “ Parties ”.

W I T N E S S E T H :

WHEREAS, upon the terms and conditions of this Agreement, the Company desires to issue and sell to the Purchaser, and the Purchaser wishes to purchase from the Company, Class A ordinary shares, US$0.0001 par value per share (“ Ordinary Shares ”), of the Company in a private placement exempt from registration pursuant to Regulation S of the U.S. Securities Act of 1933, as amended (“ Regulation S ” and the “ Securities Act ”, respectively);

WHEREAS, pursuant to the terms and conditions of this Agreement, as part of the consideration for the sale and purchase of the Ordinary Shares, the Company and the Purchaser each desires to enter into, directly or through their respective Affiliate(s)(as defined below), a Business Cooperation Agreement, substantially in the form set forth in Exhibit A attached herein (the “ BCA ”) and an Investor Rights Agreement, substantially in the form set forth in Exhibit B attached herein (the “ IRA ” and, together with this Agreement, the BCA, the exhibits attached hereto and thereto, and all the agreements and other documents otherwise required in connection with implementing the transactions contemplated by any of the foregoing, the “ Transaction Documents ”);

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the Parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE

Section 1.1 Issuance, Sale and Purchase of Purchased Shares .

(a) Upon the terms and subject to the conditions of this Agreement, at the Closing (as defined below), the Purchaser agrees to purchase, and the Company agrees to issue and sell to the Purchaser, 90,909,091 Ordinary Shares (“ Purchased Shares ”) for a purchase price of US$5.50 per Ordinary Share in immediately available funds, as set forth in Schedule I hereto, free and clear of all liens or Encumbrances (as defined below) (except for restrictions arising under the Securities Act or created by virtue of the lock-up provision in Section 3.1 below).


(b) On or prior to the Closing Date (as defined below), the Purchaser and the Company intend to enter into the BCA providing for, among other matters, the purchase by the Company of certain products, services and resources of the Purchaser or its Affiliates for a specified period for a consideration of not less than US$100,000,000 (the “ Minimum BCA Consideration ”), the details of which shall be substantially as set forth in the form attached herein as Exhibit A . For the purpose of this Agreement, the term “Affiliate” means, with respect to any person, (i) in the case of a person other than a natural person, any other person that directly or indirectly Controls, is Controlled by or is under common Control with such first person, and (ii) in the case of a natural person, any other person that is directly or indirectly Controlled by such first person or is a Relative of such first person, and in the forgoing definition, the term “Control” means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise (the term “Controlled” to be construed accordingly), and “Relative” of a natural person means any spouse, parent, child, or sibling of such person.

Section 1.2 Closing .

(a) Closing . The closing (the “ Closing ”) of the sale and purchase of the Purchased Shares pursuant to Section 1.1 shall take place remotely via the electronic exchange of the closing documents and signatures (followed by prompt delivery of the originals therefor). Unless otherwise agreed by the Parties, the Closing shall occur on the later of December 18, 2015 or the second business day following the day on which the last of the conditions set forth in Section 1.3 is satisfied or, if permissible, waived in accordance with this Agreement (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or, if permissible, waiver of those conditions). The date of the Closing is referred to herein as the “ Closing Date ”.

(b) Payment and Delivery . At the Closing:

(i) The Purchaser shall (A) pay and deliver US$300,000,000, being 60% of the total purchase price for the Purchased Shares as set forth in Schedule I hereto, by wire transfer, or by such other method mutually agreeable to the Parties, of immediately available funds to such bank account as designated in writing by the Company; (B) deliver or cause to be delivered to the Company the BCA, duly and validly executed by the Purchaser, and (C) deliver or cause to be delivered to the Company all other Transaction Documents and all documents expressly required under the Transaction Documents to be delivered by the Purchaser at Closing, duly and validly executed, as applicable; and

(ii) The Company shall (A) deliver to the Purchaser the BCA, duly and validly executed by the Company; (B) deliver a duly executed share certificate in original form, registered in the name of the Purchaser in respect of all the Purchased Shares, together with a certified true copy of the register of members of the Company, evidencing all of the Purchased Shares being issued and sold to the Purchaser; and (C) deliver or cause to be delivered to the Purchaser all Transaction Documents and all documents expressly required under the Transaction Documents to be delivered by the Company at Closing, duly and validly executed, as applicable.

(c) Restrictive Legend . Subject to the provisions of the IRA, each certificate representing the Purchased Shares shall be endorsed with the following legend:

 

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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (AS AMENDED, THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS SECURITY MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE: (A) IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (2) AN EXEMPTION OR QUALIFICATION UNDER APPLICABLE SECURITIES LAWS, AND IN THE CASE OF CLAUSE (2), UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED; AND (B) WITHIN THE UNITED STATES OR TO ANY U.S. PERSON, AS EACH OF THOSE TERMS IS DEFINED IN REGULATION S UNDER THE ACT, DURING THE 40 DAYS FOLLOWING CLOSING OF THE PURCHASE. ANY ATTEMPT TO TRANSFER OR SELL THIS SECURITY IN VIOLATION OF THESE RESTRICTIONS SHALL BE VOID.

Section 1.3 Closing Conditions .

(a) Conditions to the Company’s Obligation to Effect the Closing . The obligation of the Company to issue and sell the Purchased Shares to the Purchaser as contemplated by this Agreement is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, any of which may be waived in writing by the Company in its sole discretion, to the extent permitted by law:

(i) All corporate and other actions required to be taken by the Purchaser in connection with the purchase of the Purchased Shares hereunder and any other transactions contemplated under the Transaction Documents shall have been completed.

(ii) The representations and warranties of the Purchaser contained in Section 2.1 of this Agreement shall have been true and correct on the date of this Agreement and true and correct in all material respects on and as of the Closing Date; and the Purchaser shall have performed and complied in all material respects with all, and not be in breach or default in any material respect under any, agreements, covenants, conditions and obligations contained in this Agreement or any other Transaction Document that are required to be performed or complied with on or before the Closing Date.

(iii) No governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, decree or order (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, prevents, prohibits or otherwise makes illegal the consummation of the transactions contemplated by this Agreement or any other Transaction Document, imposes any damages or penalties in connection with the transactions contemplated by this Agreement or any other Transaction Document that are substantial in relation to the Company, or that would prohibit or materially restrict or interfere with the right of the Purchaser to hold, vote or dispose of the Purchased Shares; and no action, suit, proceeding or investigation shall have been instituted by a governmental authority of competent jurisdiction or threatened that seeks to restrain, enjoin, prevent, prohibit or otherwise make illegal the consummation of the transactions contemplated by this Agreement or any other Transaction Document, or imposes any damages or penalties in connection with the transactions contemplated by this Agreement or any other Transaction Document that are substantial in relation to the Company, or that would have any of the foregoing effects.

 

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(b) Conditions to the Purchaser’s Obligation to Effect the Closing . The obligation of the Purchaser to purchase and pay for the Purchased Shares as contemplated by this Agreement is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, any of which may be waived in writing by the Purchaser in its sole discretion:

(i) All corporate and other actions required to be taken by the Company in connection with the issuance and sale of the Purchased Shares hereunder and any other transactions contemplated under the Transaction Documents shall have been completed.

(ii) The representations and warranties of the Company contained in Section 2.2 of this Agreement shall have been true and correct on the date of this Agreement and true and correct in all material respects on and as of the Closing Date; and the Company shall have performed and complied in all material respects with all, and not be in breach or default in any material respect under any, agreements, covenants, conditions and obligations contained in this Agreement or any other Transaction Document that are required to be performed or complied with on or before the Closing Date.

(iii) No governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, decree or order (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, prevents, prohibits or otherwise makes illegal the consummation of the transactions contemplated by this Agreement or any other Transaction Document, or imposes any damages or penalties in connection with the transactions contemplated by this Agreement or any other Transaction Document that are substantial in relation to the Company; and no action, suit, proceeding or investigation shall have been instituted by a governmental authority of competent jurisdiction or threatened that seeks to restrain, enjoin, prevent, prohibit or otherwise make illegal the consummation of the transactions contemplated by this Agreement or any other Transaction Document, or imposes any damages or penalties in connection with the transactions contemplated by this Agreement or any other Transaction Document that are substantial in relation to the Company, or that would have any of the foregoing effects.

(iv) Each of the governmental consents and approvals set forth in Schedule II shall have been obtained or granted, and no such consent or approval shall impose any Burdensome Condition on the Purchaser.

(v) The Company shall have paid and delivered US$100,000,000 or its RMB equivalent, being the Minimum BCA Consideration, by wire transfer, or by such other method mutually agreeable to the Parties, to such bank account designated in writing by the Purchaser.

Section 1.4 Withholding of Part of Purchase Price . The Company acknowledges and agrees that US$200,000,000, being 40% of the total purchase price for the Purchased Shares as set forth in Schedule I hereto, shall not be paid at the Closing and shall be withheld by the Purchaser until January 18, 2016, on which date the Purchaser shall pay and deliver such withheld amount by wire transfer, or by such other method mutually agreeable to the Parties, of immediately available funds to such bank account as designated in writing by the Company.

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.1 Representations and Warranties of the Purchaser . The Purchaser hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date, as follows:

(a) Due Formation . The Purchaser is duly formed, validly existing and in good standing in the jurisdiction of its organization. The Purchaser has all requisite power and authority to carry on its business as it is currently being conducted.

(b) Authority . The Purchaser has full power and authority to enter into, execute and deliver this Agreement and the other Transaction Documents and each agreement, certificate, document and instrument to be executed and delivered by the Purchaser pursuant to this Agreement and the other Transaction Documents and to perform his obligations hereunder and thereunder. The execution and delivery by the Purchaser of this Agreement and the other Transaction Documents and the performance by the Purchaser of its obligations hereunder and thereunder have been duly authorized by all requisite actions on its part.

(c) Valid Agreement . The Transaction Documents have all been duly executed and delivered by the Purchaser and constitute the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting the enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

(d) Noncontravention . Neither the execution and the delivery of this Agreement or any other Transaction Document, nor the consummation of the transactions contemplated hereby and thereby, will (i) subject to obtaining the governmental consents and approvals set forth on Schedule 1.3 , violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental entity or court to which the Purchaser is subject, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of or creation of an encumbrance under, or create in any party the right to accelerate, terminate, modify, or cancel, any agreement, contract, lease, license, instrument, or other arrangement to which the Purchaser is a party or by which the Purchaser is bound or to which any of the Purchaser’s assets are subject. There is no action, suit or proceeding, pending or threatened against the Purchaser that questions the validity of this Agreement or any other Transaction Documents or the right of the Purchaser to enter into this Agreement or any other Transaction Documents or to consummate the transactions contemplated hereby and thereby.

(e) Consents and Approvals . Neither the execution and delivery by the Purchaser of this Agreement or any other Transaction Document, nor the consummation by the Purchaser of any of the transactions contemplated hereby and thereby, nor the performance by the Purchaser of this Agreement or any other Transaction Document in accordance with its terms requires the consent, approval, order or authorization of, or registration with, or the giving of notice to, any governmental or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior to the Closing Date.

 

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(f) Status and Investment Intent .

(i) Experience . The Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Purchased Shares. The Purchaser is capable of bearing the economic risks of such investment, including a complete loss of its investment.

(ii) Purchase Entirely for Own Account . The Purchaser is acquiring the Purchased Shares that it is purchasing pursuant to this Agreement for investment 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 in violation of the Securities Act or any other applicable state securities laws. The Purchaser does not have any direct or indirect arrangement, or understanding with any other persons to distribute, or regarding the distribution of the Purchased Shares in violation of the Securities Act or any other applicable state securities law.

(iii) Solicitation . The Purchaser was not identified or contacted through the marketing of the Purchase Shares. The Purchaser did not contact the Company as a result of any general solicitation or directed selling efforts.

(iv) Restricted Securities . The Purchaser acknowledges that the Purchased Shares are “restricted securities” that have not been registered under the Securities Act or any applicable state securities law. The Purchaser further acknowledges that, absent an effective registration under the Securities Act, the Purchased Shares may only be offered, sold or otherwise transferred (x) to the Company, (y) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act or (z) pursuant to an exemption from registration under the Securities Act.

(v) Not U.S. Person . The Purchaser is not a “U.S. person” as defined in Rule 902 of Regulation S.

(vi) Offshore Transaction . The Purchaser has been advised and acknowledges that in issuing the Purchased Shares to the Purchaser pursuant hereto, the Company is relying upon the exemption from registration provided by Regulation S. The Purchaser is acquiring the Purchased Shares in an offshore transaction in reliance upon the exemption from registration provided by Regulation S.

Section 2.2 Representations and Warranties of the Company . The Company hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, as follows:

(a) Due Formation . The Company is a company duly incorporated as an exempted company with limited liability, validly existing and in good standing under the laws of the Cayman Islands. The Company has all requisite power and authority to carry on its business as it is currently being conducted. Each Subsidiary (as defined below) has been duly organized, is validly existing and in good standing under the laws of its jurisdiction of organization, and has the requisite corporate power and authorization to own, lease and operate its properties and to carry on its business as now being conducted and as described in the SEC Documents (as defined below).

 

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(b) Authority . The Company has full power and authority to enter into, execute and deliver this Agreement and other Transaction Documents and each agreement, certificate, document and instrument to be executed and delivered by the Company pursuant to this Agreement and the other Transaction Documents and to perform its obligations hereunder and thereunder. The execution and delivery by the Company of this Agreement and the other Transaction Documents and the performance by the Company of its obligations have been duly authorized by all requisite actions on its part. No approval by the shareholders of the Company is required pursuant to applicable law or the listing rules of the NASDAQ in connection with this Agreement or the other Transaction Documents, the performance by the Company of its obligations hereunder or thereunder, or the consummation by the Company of the transactions contemplated hereby or thereby, except for those that have been obtained, waived or exempted on or prior to the Closing.

(c) Valid Agreement . The Transaction Documents have all been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

(d) Capitalization .

(i) The authorized share capital of the Company consists of 780,000,000 Ordinary Shares and 120,000,000 Class B ordinary shares, par value US$0.0001 per share (“ Class B Ordinary Shares ”) and 100,000,000 shares of such class or classes (however designated) as the Board may determine in accordance with Article 9 of the articles of association of the Company.

(ii) At the close of business on November 19, 2015, (A) 207,762,866 Ordinary Shares were issued and outstanding, (B) 78,609,709 Class B Ordinary Shares were issued and outstanding, and (C) 2,449,878 Ordinary Shares were reserved for issuance pursuant to equity compensation plans maintained by the Company or agreements to which the Company is a party (and for the avoidance of doubt, such reserved Ordinary Shares are not included in the number of issued and outstanding Ordinary Shares set forth in sub-clause (A)). Except as set forth above, as of November 19, 2015, no other equity securities of the Company were issued, reserved for issuance or outstanding.

(iii) All outstanding shares of capital stock of the Company and all outstanding shares of capital stock of each of the Company’s subsidiaries and consolidated affiliated entities (each a “ Subsidiary ” and collectively “ Subsidiaries ”) are duly authorized, validly issued, fully paid and nonassessable and have been issued and granted in compliance with (A) all applicable Securities Laws and other applicable laws and (B) all requirements set forth in applicable contracts, without violation of preemptive rights, rights of first refusal or other similar rights. “ Securities Laws ” means the Securities Act , the U.S. Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), the listing rules of, or any listing agreement with the NASDAQ (including any waivers or exemptions applicable to the Company as a foreign private issuer) and any other applicable law regulating securities or takeover matters.

 

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(iv) Other than set forth in the SEC Documents or as otherwise disclosed to the Purchaser or awards granted pursuant to the Company’s share incentive plans as disclosed in the SEC Documents, there are no preemptive or similar rights that obligate the Company or any of its Subsidiaries to issue or sell any of its equity securities, and neither the Company nor any of its Subsidiaries has any outstanding bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the holders of any class of securities of the Company or any of its Subsidiaries on any matter submitted to such holders of such securities. Other than set forth in the SEC Documents or as otherwise disclosed to the Purchaser or awards granted pursuant to the Company’s share incentive plans as disclosed in the SEC Documents, there are no outstanding options, warrants, calls, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, contracts or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound (A) obligating the Company or any of its Subsidiaries to issue, deliver, sell or transfer or repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold or transferred or repurchased, redeemed or otherwise acquired, any securities of the Company or any of its Subsidiaries, or any security convertible or exercisable for or exchangeable into any securities of the Company or any of its Subsidiaries, (B) obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, contract or undertaking or (C) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of securities of the Company or any of its Subsidiaries. Other than set forth in the SEC Documents or as otherwise disclosed to the Purchaser or awards granted pursuant to the Company’s share incentive plans as disclosed in the SEC Documents, there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of its securities, and there are no proxies, voting trusts or other contracts or agreements to which the Company or any of its Subsidiaries is a party or by which any of them is bound with respect to the voting of the securities of the Company or any of its Subsidiaries or the registration of the securities of the Company or any of its Subsidiaries under the United States or any foreign securities laws.

(e) Due Issuance of the Purchased Shares . The Purchased Shares have been duly authorized and, when issued and delivered to and paid for by the Purchaser pursuant to this Agreement, will be validly issued, fully paid and non-assessable and free and clear of any pledge, mortgage, security interest, encumbrance, lien, charge, assessment, title defect, right of first refusal, right of pre-emption, third party right or interest, claim or restriction of any kind or nature (collectively the “ Encumbrances ”), except for restrictions arising under the Securities Act or created by virtue of this Agreement (including the lock-up provision in Section 3.1 below), and upon delivery and entry into the register of members of the Company will transfer to the Purchaser good and valid title to the Purchased Shares.

(f) Noncontravention . Neither the execution and the delivery of this Agreement or any other Transaction Document, nor the consummation of the transactions contemplated hereby and thereby, will (i) violate any provision of the organizational documents of the Company or its Subsidiaries or, subject to obtaining the governmental consents and approvals set forth on Schedule 1.3 , violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental entity or court to which the Company or its Subsidiaries is subject, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of or creation of an Encumbrance under, or create in any party the right to accelerate, terminate, modify, or cancel, any agreement, contract, lease, license, instrument, or other arrangement to which the Company or its Subsidiaries is a party or by which the

 

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Company or its Subsidiaries is bound or to which any of the Company’s or its Subsidiaries’ assets are subject. There is no action, suit or proceeding, pending or threatened against the Company or its Subsidiaries that questions the validity of this Agreement or any of the Transaction Documents or the right of the Company to enter into this Agreement or any of the Transaction Documents or to consummate the transactions contemplated hereby and thereby.

(g) Consents and Approvals . Neither the execution and delivery by the Company of this Agreement or any other Transaction Document, nor the consummation by the Company of any of the transactions contemplated hereby and thereby, nor the performance by the Company of this Agreement or any other Transaction Document in accordance with their respective terms requires the consent, approval, order or authorization of, or registration with, or the giving of notice to, any governmental or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior to the Closing Date.

(h) Compliance with Laws .

(i) The business of the Company and its Subsidiaries has, since January 1, 2013, been and is being conducted in compliance will all laws and governmental orders applicable to the Company and its Subsidiaries, except for violations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. As used herein, “ Material Adverse Effect ” shall mean any event, fact, circumstance, condition or occurrence that, individually or in the aggregate with any other events, facts, circumstances, conditions or occurrences, results in or would reasonably be expected to result in a material adverse change in or a material adverse effect on any of (A) the financial condition, assets, liabilities, results of operations, business, operations, or prospects of the Company and its Subsidiaries taken as a whole, except to the extent that any such Material Adverse Effect results from (1) the public disclosure of the transactions contemplated under this Agreement and the other Transaction Documents in accordance with the terms of such documents, (2) changes in generally accepted accounting principles that are generally applicable to comparable companies, or (3) changes in general economic and market conditions; or (B) the ability of the Company to consummate the transactions contemplated by the other Transaction Documents and to timely perform its material obligations under the Transaction Documents.

(ii) Since January 1, 2013, neither the Company nor any of its Subsidiaries has received any written notice or, to the Company’s knowledge, other communication from any governmental authority regarding any actual or potential noncompliance with any law by the Company or any of its Subsidiaries, except for matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.

(iii) Except as disclosed in the SEC Documents, the Company and its Subsidiaries hold all permits, licenses, approvals, authorizations, consents and orders issued or granted by or filed or made with any governmental authority (collectively “ Permits ”) that are required in order to carry on their business as presently conducted, except where the failure to have such Permits would not have a Material Adverse Effect. Except as disclosed in the SEC Documents, all such Permits are in full force and effect and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened, except where such absence, suspension or cancellation would not have a Material Adverse Effect. Neither the Company nor its Subsidiaries

 

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has received at any time since January 1, 2012 any notice or other communication from any governmental authority regarding any actual or threatened revocation, withdrawal, suspension, cancellation, termination or modification of any Permit, except for matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.

(iv) Except as disclosed in the SEC Documents, since January 1, 2013, none of the Company’s outside auditors or the audit committee of the Board of Directors of the Company has received any oral or written notification of (A) any “significant deficiencies” or “material weaknesses” in the design or operation of internal control over financial reporting which could reasonably be expected to materially and adversely affect the Company’s ability to record, process, summarize and report financial information or (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. For purposes of this Agreement, the terms “significant deficiency” and “material weakness” will have the meanings assigned to them in Appendix A of Auditing Standard No. 5 of the Public Company Accounting Oversight Board, as in effect on the date of this Agreement. The Company’s outside auditors have confirmed to the Company in writing that they are independent registered certified public accountants as required by the Exchange Act and the rules of the Public Company Accounting Oversight Board.

(v) Since January 1, 2013, (i) neither the Company nor any of its Subsidiaries has received any material complaint, allegation, assertion or claim, whether written or oral, regarding accounting, internal accounting controls or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or any concerns from employees of the Company or any of its Subsidiaries regarding questionable accounting or auditing matters with respect to the Company or any of its Subsidiaries relating to periods after January 1, 2013, in each case which complaint, allegation, assertion, claim or concern is reasonably believed by the Company to be material to the Company and its Subsidiaries, taken as a whole, in light of the facts known to the Company forming the basis of such complaint, allegation, assertion, claim or concern and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its directors, officers, employees or agents to the Board of Directors of the Company or any committee thereof or to the general counsel or chief executive officer of the Company pursuant to the rules of the SEC adopted under Section 307 of the Sarbanes-Oxley Act (as defined below), in each case which report of the purported violation of securities laws, breach of fiduciary duty or similar violation is reasonably believed by the Company to be material to the Company and its Subsidiaries, taken as a whole, in light of the facts known to the Company forming the basis of such report.

(vi) Neither the Company nor any of its Subsidiaries, nor any of their respective Affiliates, directors, officers, employees, or such consultants, agents or other representatives in the course of acting on behalf of the Company or providing services to the Company, has materially violated or is in material violation of the U.S. Foreign Corrupt Practices Act of 1977 (the “ FCPA ”), or any other applicable law of similar effect, including laws implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

 

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(vii) Since January 1, 2013, (A) neither the Company nor any of its Subsidiaries has conducted or initiated any internal investigation or made a voluntary disclosure to any governmental authority with respect to any alleged act or omission arising under any applicable laws and (B) to the Company’s knowledge, no governmental authority has initiated, or threatened to initiate, a proceeding against the Company or any of its Subsidiaries, or any of their respective Affiliates, directors, officers, employees, agents or other representatives asserting that the Company or any of its Subsidiaries, or any of their respective Affiliates is not in compliance with any export or import laws or the FCPA or any other applicable law of similar effect.

(i) SEC Documents .

(i) The Company has timely filed or furnished, as applicable, all reports, schedules, forms, statements and other documents required to be filed or furnished by it with the U.S. Securities and Exchange Commission (the “ SEC ”) pursuant to the Securities Act or the Exchange Act and the rules and regulations promulgated thereunder (all of the foregoing documents filed with or furnished to the SEC and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “ SEC Documents ”). As of their respective effective dates (in the case of the SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of their respective filing or furnishing dates, (in the case of all other SEC Documents), or in each case, if amended prior to the date hereof, as of the date of the last such amendment, each of the SEC Documents complied in all material respects with the requirements of the Securities Act, the Exchange Act or the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”), as the case may be, and the rules and regulations promulgated thereunder, as applicable, to the respective SEC Documents, and, none of the SEC Documents, at the time they were filed or furnished, effected or amended (as the case may be), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The information contained in the SEC Documents, considered as a whole and as amended as of the date hereof, do not as of the date hereof, and will not as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. There are no contracts, agreements, arrangements, transactions or documents which are required to be described or disclosed in the SEC Documents or to be filed as exhibits to the SEC Documents which have not been so described, disclosed or filed. The Company is in compliance with the applicable listing and corporate governance rules and regulations of the NASDAQ. The Company and its Subsidiaries have taken no action designed to, or reasonably likely to have the effect of, delisting its American Depositary Shares (“ ADSs ”) from the NASDAQ. The Company has not received any notification that the SEC or the NASDAQ is contemplating suspending or terminating such listing (or the applicable registration under the Exchange Act related thereto). The Company is in compliance with the Sarbanes-Oxley Act in all material respects.

(ii) The Financial Statements (as defined below) contained in the SEC Documents: (A) complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (B) were prepared in accordance with the generally accepted accounting principles in the United States (the “GAAP”) applied on a consistent basis throughout the periods covered thereby and (C) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of the Company and its Subsidiaries for the periods covered thereby, except as disclosed

 

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therein and as permitted under the Exchange Act. For the purposes of this Agreement, “ Financial Statements ” means the consolidated financial statements of the Company and the Company’s Subsidiaries included in the SEC Documents together, in the case of year-end statements, with reports thereon by PricewaterhouseCoopers Zhong Tian LLP, the independent auditors of the Company for the periods included therein, including in each case consolidated statements of income, consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows, and accompanying notes.

(iii) The Company’s auditors and the audit committee of the board of directors of the Company have not been advised of any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. Since December 31, 2014, there has been no change to the Company’s internal control over financial reporting that has materially and adversely affected, or is reasonably likely to materially and adversely affect, the Company’s internal control over financial reporting. Since December 31, 2014, there has been no material adverse change to the “disclosure controls and procedures” (as defined in Rules 13a-15(e) 15d-15(e), as applicable, under the Exchange Act) of the Company as disclosed in the SEC Documents.

(iv) The Company has not submitted any request for confidential treatment of documents filed as exhibits to the SEC Documents that as of the date of this Agreement is currently pending or that has otherwise not been acted upon by staff of the SEC. As of the date of this Agreement, the Company has timely responded to all comment letters of the staff of the SEC relating to the SEC Documents, and the SEC has not asserted that any of such responses are inadequate, insufficient or otherwise non-responsive. None of the SEC Documents is, to the knowledge of the Company, the subject of ongoing SEC review.

(v) Since January 1, 2013, (A) neither the Company nor any of its Subsidiaries has received any “complaints” (within the meaning of Exchange Act Rule 10A-3) in respect of any accounting, internal accounting controls or auditing matters, (B) to the Company’s knowledge, no person has submitted or threatened to submit written information to the staff of the SEC pursuant to Section 21F of the Exchange Act or the rules of the SEC thereunder or to any other governmental authority under any similar “whistleblower” law concerning the Company or any of its Subsidiaries and (C) to the Company’s knowledge, no complaint seeking relief under Section 806 of the Sarbanes-Oxley Act has been filed with the United States Secretary of Labor with respect to the Company or any of its Subsidiaries, in each case which complaint or information concerns a matter that is reasonably believed by the Company to be material to the Company and its Subsidiaries, taken as a whole, in light of the facts known to the Company forming the basis of such complaint or submission of information.

(j) Absence of Undisclosed Liabilities . Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, neither the Company nor any of its Subsidiaries has incurred or undertaken any liabilities or obligations, whether direct or indirect, liquidated or contingent, matured or un-matured, or entered into any transactions, including any acquisition or disposition of any business or asset, other than (A) liabilities or obligations disclosed and provided for in the Financial Statements or in the notes thereto, (B) liabilities or obligations that have been incurred by the Company or its Subsidiaries since December 31, 2014 in the ordinary course of business or (C) liabilities or obligations arising under or in connection with the transactions contemplated by this Agreement and the other Transaction Documents.

 

12


(k) Takeover Statutes . The Company has taken or caused to be taken all necessary action in order to make this Agreement, the purchase of the Purchased Shares and the other transactions contemplated by this Agreement comply with or be exempt from the application of (i) any “fair price,” “moratorium,” “control share acquisition,” “business combination” or similar anti-takeover law applicable to this Agreement, and the other Transaction Documents, the purchase of the Purchased Shares or the other transactions contemplated by this Agreement and (ii) the requirements in the certificate or articles of incorporation or association and bylaws, or any similar organizational documents, of the Company and its Subsidiaries concerning “business combinations,” “fair price,” “voting requirements” or other related provisions.

(l) Investment Company . The Company is not and, after giving effect to the issuance and sale of the Purchased Shares, the consummation of the issuance and sale and the application of the proceeds hereof and thereof, will not be an “investment company,” as such term is defined in the U.S. Investment Company Act of 1940, as amended.

(m) Regulation S . No directed selling efforts (as defined in Rule 902 of Regulation S under the Securities Act) have been made by any of the Company, any of its Affiliates or any person acting on its behalf with respect to any Purchased Shares that are not registered under the Securities Act; and none of such persons has taken any actions that would result in the sale of the Purchased Shares to the Purchaser under this Agreement requiring registration under the Securities Act; and the Company is a “foreign issuer” (as defined in Regulation S). Assuming the accuracy of the representations and warranties set forth in Section 2.1 , it is not necessary in connection with the issuance and sale of the Purchased Shares to register the Purchased Shares under the Securities Act or to qualify or register the Purchased Shares under applicable U.S. state securities laws.

(n) Events Subsequent to Most Recent Fiscal Period . Since December 31, 2014, there have not been any events that, to the Company’s knowledge, have had or would reasonably be expected to have a Material Adverse Effect.

(o) Litigation . There are no actions by or against the Company or its Subsidiaries or affecting the business or any of the assets of the Company or its Subsidiaries pending before any governmental authority, or, to the Company’s knowledge, threatened to be brought by or before any governmental authority, that would have a Material Adverse Effect.

(p) Solicitation . Neither the Company nor any person acting on its behalf has offered or sold the Purchased Shares by any form of general solicitation or general advertising or directed selling efforts.

ARTICLE III

COVENANTS

Section 3.1 Lock-up . The Purchaser agrees that it will not, during the period commencing on the date hereof and ending six (6) months after the Closing Date (the “ Lock-Up Period ”), (a) offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to

 

13


purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of the Purchased Shares or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Purchased Shares. The Purchaser further understands that the provisions of this Section 3.1 shall be binding upon the Purchaser’s successors and assigns. Notwithstanding the foregoing, the provisions of this Section 3.1 shall not restrict the right of the Purchaser to transfer the Purchased Shares in response to a tender or exchange offer by any person that has been approved or recommended by the Board of Directors of the Company.

Section 3.2 Distribution Compliance Period . The Purchaser agrees not to resell or transfer any Purchased Shares within the United States or to any U.S. person, as each of those terms is defined in Regulation S, during the forty (40) days following the Closing Date.

Section 3.3 Further Assurances .

(a) From the date of this Agreement until the Closing Date, the Parties shall use their reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to the consummation of the transactions contemplated hereby. Without limiting the foregoing, subject to the terms and conditions of this Agreement, each of the Purchaser and the Company shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable law to consummate the issuance, sale and purchase of the Purchased Shares and the other transactions contemplated by this Agreement, including (i) determining all necessary or, in the reasonable judgment of the Purchaser and the Company, advisable filings, notices, petitions, statements, registrations, submissions of information, applications and other documents necessary to consummate the purchase of the Purchased Shares and the other transactions contemplated by this Agreement (including from governmental authorities or third parties), (ii) preparing and filing as promptly as practicable all documentation to effect such filings, notices, petitions, statements, registrations, submissions of information, applications and other documents and (iii) obtaining all approvals, consents, registrations, waivers, permits, authorizations, orders and other confirmations from any governmental authority or third party necessary, proper or advisable to consummate the purchase of the Purchased Shares and the other transactions contemplated by this Agreement. Notwithstanding the foregoing or any other provision in this Agreement to the contrary, nothing in this Agreement shall be deemed to (i) require the Purchaser or any of its Subsidiaries to agree to or take any action that would result in any Burdensome Condition or (ii) limit the right of a Party to terminate this Agreement in accordance with Section 5.12 , so long as such Party has until that time complied in all material respects with its obligations under this Section 3.3 . For the purposes of this Agreement, the term “ Burdensome Condition ” means any arrangement, condition or restriction (i) that would materially delay, restrict or interfere with the right of the Purchaser to hold, vote or dispose of the Purchased Shares or the right of the Company to issue and sell the Purchased Shares or otherwise materially impair the expected economic or other benefits reasonably sought to be obtained by the Purchaser or the Company in connection with the transactions contemplated by this Agreement or (ii) that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or a material adverse effect on the business, financial condition, operations or results of operations of the Purchaser and its subsidiaries or the Company and its Subsidiaries, in each case taken as a whole.

 

14


(b) From the date of this Agreement until the Closing Date, the Company shall, and shall cause each of its Subsidiaries to conduct its business and affairs in the ordinary course of business, consistent with past practice, and not take any action, or omit to take any action, that would reasonably be expected to make any of its representations and warranties in this Agreement untrue at, or as of any time before, the Closing Date. Without limiting the foregoing, from the date of this Agreement until the Closing, neither the Company nor any of its Subsidiaries will, except as specifically contemplated in this Agreement, as required under applicable laws and regulations, or as consented to by the Purchaser in writing (which consent shall not be unreasonably withheld, conditioned or delayed), directly or indirectly:

(i) amend or otherwise modify or change its articles of association or other organizational documents in a manner adverse to the Purchaser;

(ii) take any action to adopt or implement a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization, other than any such actions taken with respect to the Subsidiaries of the Company in the ordinary course of business and mergers or acquisitions the aggregate consideration for which shall not exceed US$10,000,000;

(iii) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, license, pledge, disposition, grant or encumbrance of, any shares of any class of share capital or other ownership interest of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any such shares or any other ownership interest (including any phantom interest) of the Company or any of its Subsidiaries, other than (A) the issuance of Ordinary Shares upon the exercise or vesting of stock options and other awards outstanding as of the date of this Agreement issued pursuant to any equity-based incentive or compensation plan; (B) the grant of options and other awards pursuant to employee or director stock award or incentive compensation or similar plans, or in connection with employment offers in the ordinary course and (C) any issuance of any shares of any class of share capital or other ownership interest of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any such shares or any other ownership interest (including any phantom interest) of the Company or any of its Subsidiaries, as consideration in one or more mergers or acquisitions by the Company and/or any of its Subsidiaries, provided that the total issuance amount shall not exceed 1% of the aggregate number of Ordinary Shares and Class B Ordinary Shares then outstanding;

(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, securities, property or otherwise (except for dividends or other distributions by any of the Company’s Subsidiaries to the Company or to any Subsidiary of the Company);

(v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, except (A) the withholding of Company’s securities to satisfy any applicable tax obligations with respect to share incentive awards issued by the Company or (B) the acquisition by the Company of its securities in connection with the forfeiture of share incentive awards issued by the Company or (C) the acquisition by the Company of its securities in connection with the net exercise of share incentive awards issued by the Company in accordance with the terms thereof;

 

15


(vi) knowingly take any actions or omit to take any actions that would or would reasonably be expected to (A) result in any of the conditions set forth in Section 1.3 not being satisfied, (B) result in new or additional required approvals from any governmental authority that would reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by this Agreement or (C) materially impair, interfere with, hinder or delay the ability of the Company or the Purchaser to consummate the transactions contemplated by this Agreement; or

(c) enter into any agreement or otherwise make a commitment to do any of the foregoing.

Nothing contained in this Agreement will give the Purchaser, directly or indirectly, rights to control or direct the Company’s or its Subsidiaries’ operations.

Section 3.4 Conversion of Class B Ordinary Shares . The Company shall use its reasonable best efforts to cause the conversion into Ordinary Shares, on or prior to December 31, 2015, of a sufficient number of outstanding Class B Ordinary Shares held by non-management shareholders of the Company so that, following such conversion, the Ordinary Shares purchased by the Purchaser shall be entitled to exercise no less than 16.5% of the combined voting power of all outstanding shares of the Company.

Section 3.5 Non-Compete . The Purchaser agrees that, so long as it holds any Ordinary Shares or any other securities of the Company, which in the aggregate represent more than 5% of the voting rights of the Company, it will not, either on its own account or in concert with or on behalf of any other person, directly or indirectly make any equity investment in Tongcheng Network Technology Share Co., Ltd. LOGO or Shanghai Lvmama Synwalk Travel Co., Ltd. LOGO or any of their Subsidiaries or Affiliates, without first obtaining the consent of the Company, except as a holder of not more than 5% of the issued shares of a company (which company may be the direct or indirect holder of any securities of Tongcheng Network Technology Share Co., Ltd. LOGO or Shanghai Lvmama Synwalk Travel Co., Ltd. LOGO or any of their Subsidiaries or Affiliates) with securities listed on a recognized stock exchange.

ARTICLE IV

INDEMNIFICATION

Section 4.1 Indemnification . The Company and the Purchaser (each an “ Indemnifying Party ”) shall each indemnify and hold the other Party and its respective directors, officers and agents (collectively, the “ Indemnified Party ”) harmless from and against any losses, claims, damages, judgments, fines, obligations, expenses and liabilities of any kind or nature whatsoever, including but not limited to any investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any pending or threatened legal action or proceeding, and any taxes or levies that may be payable by such person by reason of the indemnification of any indemnifiable loss hereunder (collectively, “ Losses ”) resulting from or arising out of: (i) the breach of any representation or warranty of such Indemnifying Party contained in this Agreement or any other Transaction Documents or in any schedule or exhibit hereto or thereto; or (ii) the violation or nonperformance, partial or total, of any covenant or agreement of such Indemnifying Party contained in

 

16


this Agreement or any other Transaction Documents for reasons other than gross negligence or willful misconduct of such Indemnified Party. In calculating the amount of any Losses of an Indemnified Party hereunder, there shall be subtracted the amount of any insurance proceeds and third-party payments received by the Indemnified Party with respect to such Losses, if any.

Section 4.2 Third Party Claims .

(a) If any third party shall notify the Indemnified Party in writing with respect to any matter involving a claim by such third party (a “ Third Party Claim ”) which the Indemnified Party believes would give rise to a claim for indemnification against the Indemnifying Party under this Article IV , then the Indemnified Party shall promptly (i) notify the Indemnifying Party thereof in writing within thirty (30) days of receipt of notice of such claim and (ii) transmit to the Indemnifying Party a written notice (“ Claim Notice ”) describing in reasonable detail the nature of the Third Party Claim, a copy of all papers served with respect to such claim, if any, and the basis of the Indemnified Party’s request for indemnification under this Agreement.

(b) Upon receipt of a Claim Notice with respect to a Third Party Claim, the Indemnifying Party shall have the right to assume the defense of any Third Party Claim by, within thirty (30) days of receipt of the Claim Notice, notifying the Indemnified Party in writing that the Indemnifying Party elects to assume the defense of such Third Party Claim, and upon delivery of such notice by the Indemnifying Party, the Indemnifying Party shall have the right to fully control and settle the proceeding, provided, that, any such settlement or compromise shall be permitted hereunder only with the written consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed.

(c) If requested by the Indemnifying Party, the Indemnified Party shall, at the sole cost and expense of the Indemnifying Party, cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim which the Indemnifying Party elects to contest, including the making of any related counterclaim against the person asserting the Third Party Claim or any cross complaint against any person. The Indemnified Party shall have the right to receive copies of all pleadings, notices and communications with respect to any Third Party Claim, other than any privileged communications between the Indemnifying Party and its counsel, and shall be entitled, at its sole cost and expense, to retain separate co-counsel and participate in, but not control, any defense or settlement of any Third Party Claim assumed by the Indemnifying Party pursuant to Section 4.2(b) above.

(d) In the event of a Third Party Claim for which the Indemnifying Party elects not to assume the defense or fails to make such an election within thirty (30) days of the Claim Notice, the Indemnified Party may, at its option, defend, settle, compromise or pay such action or claim at the expense of the Indemnifying Party; provided, that, any such settlement or compromise shall be permitted hereunder only with the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

Section 4.3 Other Claims . In the event the Indemnified Party should have a claim against the Indemnifying Party hereunder which does not involve a Third Party Claim, the Indemnified Party shall promptly transmit to the Indemnifying Party a written notice (the “ Indemnity Notice ”) describing in reasonable detail the nature of the claim, the Indemnified Party’s best estimate of the amount of Losses attributable to such claim and the basis of the Indemnified Party’s request for indemnification

 

17


under this Agreement. If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days from its receipt of the Indemnity Notice that the Indemnifying Party disputes such claim, the Indemnifying Party shall be deemed to have accepted and agreed with such claim.

Section 4.4 Cap . Notwithstanding the foregoing, the Indemnifying Party shall have no liability (for indemnification or otherwise) with respect to any Losses in excess of the value of the consideration set forth in Schedule I attached hereto.

ARTICLE V

MISCELLANEOUS

Section 5.1 Survival of the Representations and Warranties . All representations and warranties made by any Party shall survive for two (2) years and shall terminate and be without further force or effect on the second anniversary of the date hereof, except as to (a) any claims thereunder which have been asserted in writing pursuant to Section 5.6 against the Party making such representations and warranties on or prior to such second anniversary, and (b) the Company’s representations contained in Section 2.2(a) , (b) , (c) , (d)  and (e)  hereof, each of which shall survive indefinitely.

Section 5.2 Governing Law; Arbitration . This Agreement shall be governed and interpreted in accordance with the internal laws of the State of New York. Any dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination (“ Dispute ”) shall be referred to and finally resolved by arbitration at the Hong Kong International Arbitration Centre in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules then in force. There shall be three arbitrators. Each Party has the right to appoint one arbitrator and the third arbitrator shall be appointed by the Hong Kong International Arbitration Centre. The language to be used in the arbitration proceedings shall be English. Each of the Parties irrevocably waives any immunity to jurisdiction to which it may be entitled or become entitled (including without limitation sovereign immunity, immunity to pre-award attachment, post-award attachment or otherwise) in any arbitration proceedings and/or enforcement proceedings against it arising out of or based on this Agreement or the transactions contemplated hereby. The costs of arbitration will be apportioned by the arbitration panel in its award in such manner as the arbitration panel deems just and reasonable taking into account the circumstances of the dispute, the conduct of the Parties during the arbitration proceeding and the result of the arbitration. Judgment on any award of the arbitration panel may be entered in any court of competent jurisdiction.

Section 5.3 Amendment . This Agreement shall not be amended, changed or modified, except by another agreement in writing executed by the Parties hereto.

Section 5.4 Binding Effect . This Agreement shall inure to the benefit of, and be binding upon, each of the Company and the Purchaser and their respective heirs, successors and permitted assigns and legal representatives.

Section 5.5 Assignment . Neither this Agreement nor any of the rights, duties or obligations hereunder may be assigned by the Company or the Purchaser without the express written consent of the other Party, except that the Purchaser may assign all or any part of its rights and obligations hereunder to any Affiliate of the Purchaser without the consent of the Company, provided that no such assignment shall relieve the Purchaser of its obligations hereunder if such assignee does not perform such obligations. Any purported assignment in violation of the foregoing sentence shall be null and void.

 

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Section 5.6 Notices . All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of actual delivery if delivered personally to the Party to whom notice is to be given, on the date sent if sent by telecopier, tested telex or prepaid telegram, or on the second business day following delivery to Federal Express, UPS or another comparable global courier delivery service, properly addressed, as follows:

 

If to the Purchaser, at:

   The address set forth in Schedule I hereto.

If to the Company, at:

  

Tuniu Corporation

Tuniu Building, No. 699-32

Xuanwudadao, Xuanwu District

Nanjing, Jiangsu Province 210042

People’s Republic of China

Attn: Chief Financial Officer

Any Party may change its address for purposes of this Section 5.6 by giving the other Parties hereto written notice of the new address in the manner set forth above.

Section 5.7 Entire Agreement . This Agreement and the other Transaction Documents constitute the entire understanding and agreement between the Parties with respect to the matters covered hereby, and all prior agreements and understandings, oral or in writing, if any, between the Parties with respect to the matters covered hereby are merged and superseded by this Agreement and the other Transaction Documents.

Section 5.8 Severability . If any provisions of this Agreement shall be adjudicated to be illegal, invalid or unenforceable in any action or proceeding whether in its entirety or in any portion, then such provision shall be deemed amended, if possible, or deleted, as the case may be, from the Agreement in order to render the remainder of the Agreement and any provision thereof both valid and enforceable, and all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby.

Section 5.9 Fees and Expenses . Except as otherwise provided in this Agreement, each of the Company and the Purchaser will bear their respective expenses incurred in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby, including fees and expenses of attorneys, accountants, consultants and financial advisors.

Section 5.10 Confidentiality . Each Party shall keep in confidence, and shall not use (except for the purposes of the transactions contemplated hereby) or disclose, any non-public information disclosed to it or its Affiliates, representatives or agents in connection with this Agreement and the other Transaction Documents or the transactions contemplated hereby and thereby, except as required under the Securities Laws or pursuant to an effective government order. Each Party shall ensure that its Affiliates, representatives and agents keep in confidence, and do not use (except for the purposes of the transactions contemplated hereby) or disclose, any such non-public information except as required under the Securities Laws or pursuant to an effective government order.

 

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Section 5.11 Specific Performance . The Parties agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof (without any requirement to post a bond or other indemnity), in addition to any other remedy at law or equity.

Section 5.12 Termination . In the event that the Closing shall not have occurred by December 31, 2015, either the Company or the Purchaser (in each case provided that it has performed and complied in all material respects with its obligations under this Agreement) may terminate this Agreement by delivery of written notice to the other Party. Upon the termination of this Agreement, neither Party shall have any further liability or obligation to the other Party under or by reason of this Agreement, except with respect to the provisions of Sections 5.10 , which shall survive any termination under this Section 5.12 , and provided that no Party shall be relieved or released from any liability or damages arising from an intentional and material breach of any provision of this Agreement or fraud.

Section 5.13 Headings . The headings of the various articles and sections of this Agreement are inserted merely for the purpose of convenience and do not expressly or by implication limit, define or extend the specific terms of the section so designated.

Section 5.14 Execution in Counterparts . For the convenience of the Parties and to facilitate execution, this Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

 

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Execution Version

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the day and year first above written.

 

TUNIU CORPORATION
By:  

/s/ Dunde Yu

Name:   Dunde Yu
Title:   Director & CEO
By:  

/s/ Haifeng Yan

Name:   Haifeng Yan
Title:   Director & CEO
HNA TOURISM HOLDING (GROUP) CO., LTD.
By:  

/s/ Tie Li

Name:   Tie Li
Title:   Vice Chairman & CEO


SCHEDULE I

 

Purchaser

  Total Purchase Price   Purchased Shares   Notice Address
HNA Tourism
Holding (Group)
Co., Ltd.
  US$500,000,000 in
immediately available
cash
  90,909,091 Class A
ordinary shares
  9/F, Tower B,
Hainan Aviation
Building, B-2, East
3rd Ring Road
North Road
Chaoyang District,
Beijing, China

Tel: 010-60195365


SCHEDULE II

Governmental approvals for the Purchaser to obtain prior to the Closing:

(a) notice of recordal or approval by the National Development and Reform Commission of the PRC or its local counterpart;

(b) certificate of recordal or approval by the Ministry of Commerce of the PRC or its local counterpart; and

(c) insofar as the transactions contemplated under this Agreement, in whole or in part, are required to be notified to the competent competition authority of the PRC or any other jurisdiction such that, without such notification, the Closing may be unlawful or otherwise prohibited or restricted under the laws of the PRC or that jurisdiction, or to the extent that the Purchaser deems it necessary to notify the competent competition authority of the PRC or any other jurisdiction, all consents, approvals and clearances of such competition authority.


EXHIBIT A

Form of Business Cooperation Agreement


EXHIBIT B

Form of Investor Rights Agreement

Exhibit 7.2

AMENDMENT NO. 1 TO

SUBSCRIPTION AGREEMENT

This Amendment No. 1 (this “ Amendment ”) is made as of December 31, 2015 by and between:

 

  (1) Tuniu Corporation, a company incorporated in the Cayman Islands (the “ Company ”); and

 

  (2) HNA Tourism Holding (Group) Co., Ltd., a company organized under the laws of the People’s Republic of China (the “ PRC ”) (“ HNA ”).

The Parties are each referred to herein as a “ Party ”, and collectively as the “ Parties ”.

W I T N E S S E T H :

WHEREAS, HNA and the Company entered into a Subscription Agreement (the “ Subscription Agreement ”) on November 20, 2015 whereby, the Company desires to issue and sell to HNA, and HNA wishes to purchase from the Company, certain Class A ordinary shares of the Company in a private placement;

WHEREAS, HNA and the Company have agreed to amend the terms of the Subscription Agreement by entering into this Amendment;

NOW, THEREFORE, in consideration of the foregoing recitals, the Parties hereto agree as follows:

ARTICLE I

AMENDMENT

Section 1.1

The Company and HNA hereby agree that, Section 1.2(b)(i) of the Subscription Agreement shall be deleted and replaced in its entirety by the following:

“(i) The Purchaser shall (A) pay and deliver US$500,000,000, being the total purchase price for the Purchased Shares as set forth in Schedule I hereto, by wire transfer, or by such other method mutually agreeable to the Parties, of immediately available funds to such bank account as designated in writing by the Company; (B) deliver or cause to be delivered to the Company the BCA, duly and validly executed by the Purchaser, and (C) deliver or cause to be delivered to the Company all other Transaction Documents and all documents expressly required under the Transaction Documents to be delivered by the Purchaser at Closing, duly and validly executed, as applicable; and”

Section 1.2

The Company and HNA agree that, section 1.4 of the Subscription Agreement shall be deleted in its entirety.


Section 1.3

The Company and HNA hereby agree that, Section 5.12 of the Subscription Agreement shall be deleted and replaced in its entirety by the following:

Section 5.12 Termination . In the event that the Closing shall not have occurred by January 31, 2016, the Parties shall consult in good faith to postpone the Closing to another agreed date. The Parties may terminate this Agreement by mutual written agreement. Upon the termination of this Agreement, neither Party shall have any further liability or obligation to the other Party under or by reason of this Agreement, except with respect to the provisions of Sections 5.10, which shall survive any termination under this Section 5.12, and provided that no Party shall be relieved or released from any liability or damages arising from an intentional and material breach of any provision of this Agreement or fraud.”

Section 1.4

By executing this Amendment, each of the Parties agrees that this Amendment fully satisfies the requirements for amending the provisions of the Subscription Agreement as set forth under Section 5.3 of the Subscription Agreement.

Except as expressly amended and/or superseded by this Amendment, the Subscription Agreement remains and shall remain in full force and effect. This Amendment shall not constitute an amendment or waiver of any provision of the Subscription Agreement, except as expressly set forth herein. Upon the execution and delivery hereof, the Subscription Agreement shall thereupon be deemed to be amended and supplemented as hereinabove set forth as fully and with the same effect as if the amendments and supplements made hereby were originally set forth in the Subscription Agreement. This Amendment and the Subscription Agreement shall each henceforth be read, taken and construed as one and the same instrument, but such amendments and supplements shall not operate so as to render invalid or improper any action heretofore taken under the Subscription Agreement. If and to the extent there are any inconsistencies between the Subscription Agreement and this Amendment with respect to the matters set forth herein, the terms of this Amendment shall control. This Amendment taken together with the Subscription Agreement embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

ARTICLE II

MISCELLANEOUS

Section 2.1 Interpretation . Terms used but note defined in this Agreement shall, unless the context otherwise requires, have the same meanings given to them in the Subscription Agreement.

Section 2.2 Notices . All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of actual delivery if delivered personally to the Party to whom notice is to be given, on the date sent if sent by telecopier, tested telex or prepaid telegram, or on the second business day following delivery to Federal Express, UPS or another comparable global courier delivery service, properly addressed, as follows:

 

2


 

If to HNA, at:

   HNA Tourism Holding (Group) Co., Ltd.
    

9/F, Tower B, Hainan Aviation Building, B-

2, East 3rd Ring Road North Road Chaoyang

District, Beijing, China

Tel: 010-60195365

Attn: Chief Financial Officer

 

If to the Company, at:

  

Tuniu Corporation

Tuniu Building, No. 699-32

Xuanwudadao, Xuanwu District

Nanjing, Jiangsu Province 210042

People’s Republic of China

Attn: Chief Financial Officer

Any Party may change its address for purposes of this Section 2.2 by giving the other Party hereto written notice of the new address in the manner set forth above.

Section 2.3 Miscellaneous . Sections 5.2, 5.3, 5.4, 5.5, 5.7, 5.8, 5.9, 5.10, 5.13 and 5.14 of the Subscription Agreement shall apply to this Amendment mutatis mutandis as if set out in full in this Amendment.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the day and year first above written.

 

Tuniu Corporation
By:   /s/ Dunde Yu
Name:   Dunde Yu
Title:   Director & CEO
HNA TOURISM HOLDING (GROUP) CO., LTD.
By:   /s/ Tie Li
Name:   Tie Li
Title:   Vice Chairman & CEO

Exhibit 7.3

Execution Version

INVESTOR RIGHTS AGREEMENT

dated as of November 20, 2015

between

TUNIU CORPORATION

and

HNA TOURISM HOLDING (GROUP) CO, LTD.


Execution Version

TABLE OF CONTENTS

ARTICLE 1

D EFINITIONS

 

Section 1.01. Definitions

     1   

Section 1.02. Other Definitional and Interpretative Provisions

     3   

ARTICLE 2

C ORPORATE G OVERNANCE

 

Section 2.01. Board Representation

     4   

Section 2.02. Expenses and Indemnification

     5   

Section 2.03. No Inconsistent Amendments

     6   

ARTICLE 3

R EGISTRATION R IGHTS

 

Section 3.01. Registration Rights

     6   

ARTICLE 4

C ERTAIN C OVENANTS AND A GREEMENTS

 

Section 4.01. Conflicting Agreements

     6   

Section 4.02. Depositary Arrangement

     6   

ARTICLE 5

M ISCELLANEOUS

 

Section 5.01. Binding Effect; Assignability; Benefit

     7   

Section 5.02. Notices

     7   

Section 5.03. Severability

     8   

Section 5.04. Entire Agreement

     8   

Section 5.05. Counterparts

     8   

Section 5.06. Descriptive Headings

     8   

Section 5.07. Amendment; Termination

     8   

Section 5.08. Governing Law

     9   

Section 5.09. Arbitration

     9   

Section 5.10. Further Assurances

     9   

Schedules

 

Schedule 1    Registration Rights

 

i


Execution Version

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (this “ Agreement ”), dated as of November 20, 2015 (the “ Effective Date ”), by and between Tuniu Corporation, a company incorporated under the laws of the Cayman Islands (the “ Company ”), and HNA Tourism Holding (Group) Co., Ltd., a company incorporated under the laws of the People’s Republic of China (“ HNA ” or the “ Investor ”).

WITNESSETH

WHEREAS, pursuant to a subscription agreement, dated as of November 20, 2015 (the “ Subscription Agreement ”), between the Company and the Investor, the Investor has agreed to acquire certain Company Securities (as defined below); and

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

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

A RTICLE 1

D EFINITIONS

Section 1.01. Definitions .

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

ADSs ” means the American depositary shares of the Company, each one of which represents three (3) Class A ordinary shares of the Company.

Affiliate ” means, with respect to any Person, (i) in the case of a Person other than a natural person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with such first Person, and (ii) in the case of a natural person, any other Person that is directly or indirectly Controlled by such first Person or is a Relative of such first Person; provided that the Company and its Subsidiaries shall be deemed not to be Affiliates of any Investor.

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

Board ” means the board of directors of the Company.

Business Day ” means any day, other than a Saturday, a Sunday or a public holiday on which commercial banks in New York, Hong Kong or the PRC are authorized or required by Applicable Law to close.

 

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

Control ” means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. The terms “ Controlling ” and “ Controlled ” have correlative meanings.

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

Governmental Authority ” means any international, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

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

Memorandum and Articles ” means the Memorandum and Articles of Association of the Company in effect from time to time.

Ordinary Shares ” means Class A and Class B ordinary shares of the Company, with par value being US$0.0001 per share, and any other security, including ADSs, into which such Ordinary Shares may have been, or may hereafter be, converted, changed or exchanged.

Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Government Entity.

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

“Relative” of a natural person means any spouse, parent, child, or sibling of such person.

“Securities” means any shares, stocks, debentures, funds, bonds, notes or any rights, warrants, options or interests in respect of any of the foregoing or any other derivatives or instruments having similar economic effect.

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

Shareholder ” means at any time, any Person who is a record holder of Company Securities.

“Subsidiary” of any Person means any corporation, partnership, limited liability company, or other organization, whether incorporated or unincorporated, which is Controlled by such Person. For the avoidance of the doubt, the Subsidiaries of a Person shall include any variable interest entity over which such Person or any of its Subsidiaries effects control pursuant to contractual arrangement and which is consolidated with such Person in accordance with the generally acceptable accounting principles applicable to such Person.

 

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

 

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

 

Term

   Section

Agreement

   Preamble

Company

   Preamble

Effective Date

   Preamble

e-mail

   5.02

HKIAC

   5.09

HNA

   Preamble

HNA Director

   2.01(a)

Independent Director

   2.02(a)

Investor

   Preamble

PDF

   5.05

Rules

   5.09

Subscription Agreement

   Preamble

Section 1.02. Other Definitional and Interpretative Provisions .

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

 

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ARTICLE 2

C ORPORATE G OVERNANCE

Section 2.01. Board Representation .

 

  (a) For as long as HNA, together with its Affiliates, beneficially owns a number of Company Securities that equals to 70% or more of the aggregate number of Company Securities it purchased under the Subscription Agreement, HNA shall be entitled to designate one (1) director to the Board of the Company (such director, or such other individual who may be designated by HNA from time to time, the “ HNA Director ”), and the Company shall arrange for the appointment or election of such HNA Director to the Board as soon as practicable after the Closing but in no event later than December 31, 2015, including convening a meeting of the Board or obtaining unanimous signed Board resolutions pursuant to the Memorandum and Articles and appointing such HNA Director to the Board, and in the case of an election, (i) nominating such individual to be elected as a director as provided herein, (ii) recommending to the Shareholders the election of such HNA Director to the Board in any meeting of Shareholders to elect directors, including soliciting proxies in favor of the election of the HNA Director, (iii) including such nomination and recommendation regarding such individual in the Company’s notice for any meeting of Shareholders to elect directors, and (iv) if necessary, expanding the size of the Board in order to appoint the HNA Director; provided, however, that the HNA Director candidate shall be subject to the approval of the Board, which approval shall not be unreasonably withheld.

 

  (b) Subject to the shareholding threshold referred to in Section 2.01(a) above, in the event of the death, disability, retirement or resignation of the HNA Director (or any other vacancy created by removal thereof by or at the direction of HNA), HNA shall have the exclusive right to designate a replacement to fill such vacancy and serve on the Board, and the Company shall promptly arrange for the appointment or election of such individual to its Board (who shall, following such appointment or election, be the HNA Director for purposes of this Agreement); provided, however, that the HNA Director candidate thus designated shall be subject to the approval of the Board, which approval shall not be unreasonably withheld.

 

  (c) At any meeting of the Board or any annual general or other meeting of the Shareholders that may be held from time to time at which the HNA Director is up for re-appointment or re-election to the Board, the Company shall re-appoint the HNA Director to serve on the Board and shall use best efforts to ensure that the HNA Director is re-elected by the Shareholders to serve on the Board pursuant to the terms of the Memorandum and Articles and any Applicable Law. The Company agrees that it shall not take any action, in favor of the removal of the HNA Director unless such removal shall be for Cause. Removal for “Cause” shall mean removal of a director because of such director’s (i) willful misconduct that is materially injurious, monetarily or otherwise, to the Company or any of its Subsidiaries, (ii) conviction for, or guilty plea to, a felony or a crime involving moral turpitude, or (iii) abuse of illegal drugs or other controlled substances or habitual intoxication.

 

4


Section 2.02 Independent Director Nomination.

 

  (a) For as long as HNA, together with its Affiliates, beneficially owns a number of Company Securities that equals to 70% or more of the aggregate number of Company Securities it purchased under the Subscription Agreement, in addition to the HNA Director, HNA shall also be entitled to nominate one (1) director to the Board of the Company who qualifies as an “independent director” under the independence requirements of Rule 5605(a)(2) of the NASDAQ Stock Market Rules (such requirements, the “ Independence Requirements ” and such director, or such other individual who may be nominated by HNA from time to time, the “ Independent Director ”), and the Company shall arrange for the appointment or election of such Independent Director to the Board as soon as practicable after the Closing but in no event later than December 31, 2015, including convening a meeting of the Board or arranging to obtain unanimous signed Board resolutions pursuant to the Memorandum and Articles regarding the appointment of such Independent Director to the Board, and in the case of an election, (i) nominating such individual to be elected as a director as provided herein, (ii) recommending to the Shareholders the election of such Independent Director to the Board in any meeting of Shareholders to elect directors, including soliciting proxies in favor of the election of the Independent Director, (iii) including such nomination and recommendation regarding such individual in the Company’s notice for any meeting of Shareholders to elect directors and (iv) if necessary, expanding the size of the Board in order to appoint the Independent Director; provided, however, that the Independent Director candidate shall be subject to the approval of the Board, taking into account whether the nominated Independent Director meets the Independence Requirements, which approval shall not be unreasonably withheld.

 

  (b) Subject to the shareholding threshold referred to in Section 2.02(a) above, in the event of the death, disability, retirement or resignation of the Independent Director (or any other vacancy created by removal thereof by or at the direction of HNA), HNA shall have the exclusive right to nominate a replacement to fill such vacancy and serve on the Board, and the Company shall promptly arrange for the appointment or election of such individual to its Board (who shall, following a successful appointment or election, be the Independent Director for purposes of this Agreement); provided, however, that the Independent Director candidate thus nominated shall be subject to the approval of the Board, taking into account whether the nominated Independent Director meets the Independence Requirements, which approval shall not be unreasonably withheld.

 

  (c) At any meeting of the Board or any annual general or other meeting of the Shareholders that may be held from time to time at which the Independent Director is up for re-appointment or re-election to the Board, the Company shall arrange for the re-appointment of the Independent Director to serve on the Board and shall use best efforts to cause the Independent Director to be re-elected by the Shareholders to serve on the Board pursuant to the terms of the Memorandum and Articles and any Applicable Law. The Company agrees that it shall not take any action in favor of the removal of the Independent Director unless such removal shall be for Cause.

 

5


Section 2.03 Expenses and Indemnification .

Each of HNA Director and the Independent Director shall be entitled to the same rights, capacities, entitlements, compensation, if any, indemnification and insurance in connection with his or her role as a director as other members of the Board, and shall be entitled to reimbursement for all documented, out-of-pocket expenses properly incurred in connection with the performance of his or her services as a director of the Company, including without limitation out-of-pocket expenses incurred in attending meetings of the Board or any committees thereof, to the same extent as other members of the Board. The Company shall, upon the appointment of each of the HNA Director and the Independent Director, enter into an indemnification agreement in the same form as applicable to other members of the Board with such director. In addition, each of the HNA Director and the Independent Director shall be entitled to coverage under the Company’s directors’ and officers’ liability insurance effective upon his or her appointment to the Board, with the same coverage as, and containing terms and conditions no less favorable than, those available to the other members of the Board. Each of the HNA Director and the Independent Director shall also execute and deliver, if requested by the Company, a director agreement and any other standard agreements required to be signed by directors of the Company, in each case, substantially in the same form as applicable to other members of the Board.

Section 2.04. No Inconsistent Amendments .

For so long as HNA has the right to designate a HNA Director and nominate an Independent Director and except as otherwise required by Applicable Law, the Company shall not amend its Memorandum and Articles in any manner, enter into or amend any agreement, or take any similar action that would adversely affect HNA’s rights under this Article 2 or the Company’s ability to comply with its obligations under this Article 2.

ARTICLE 3

R EGISTRATION R IGHTS

Section 3.01. Registration Rights .

The Investor shall have the rights, and the Company shall have the obligations, set forth in Schedule 1 hereto. The provisions set forth in Schedule 1 hereto are hereby incorporated by reference and shall be deemed part of this Agreement.

ARTICLE 4

C ERTAIN C OVENANTS AND A GREEMENTS

Section 4.01. Conflicting Agreements .

The Company agrees that it shall not enter into any agreement or arrangement of any kind with any Person with respect to any Company Securities for the purpose or with the effect of denying or reducing the rights of the Investor under this Agreement without the Investor’s prior written consent.

Section 4.02. Depositary Arrangement .

The Company shall use its commercially reasonable efforts to facilitate and consent to the deposit of any or all of the Ordinary Shares held by the Investor (as may be requested by the Investor from time to time) with the depositary for the issuance of ADSs in accordance

 

6


with the Deposit Agreement among the Company, JPMorgan Chase Bank, N.A. as depositary and all holders and beneficial owners of American depositary shares issued thereunder (as may be amended or replaced from time to time); provided that the Investor shall be solely responsible for any fees incurred in relation to such deposit and issuance except as otherwise agreed to by the parties hereto.

ARTICLE 5

M ISCELLANEOUS

Section 5.01. Binding Effect; Assignability; Benefi t .

 

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

 

  (b) Except as provided in Section 13 of Schedule 1, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party without the prior written consent of the other party hereto; provided that except as otherwise specified herein, the Investor may assign any right, remedy, obligation or liability arising under this Agreement or by reason hereof to any of its Affiliates that executes and delivers to each party hereto a joinder agreement pursuant to which such Affiliate shall become a party to this Agreement.

 

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

Section 5.02. Notices .

All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“ e-mail ”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given,

if to the Company, to:

Tuniu Corporation

Tuniu Building, No. 699-32

Xuanwudadao, Xuanwu District

Nanjing, Jiangsu Province 210042

People’s Republic of China

Attn: Chief Financial Officer

if to the Investor, to:

HNA Tourism Holding (Group) Co., Ltd.

9/F, Tower B, Hainan Aviation Building,

B-2, East 3rd Ring Road North Road,

Chaoyang District, Beijing, China

Tel: 010-60195365

 

7


or such other address or facsimile number as the parties may hereafter specify by notice to the other party hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.

Section 5.03. Severability .

If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 5.04. Entire Agreement .

This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 5.05. Counterparts .

This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures in the form of facsimile or electronically imaged “ PDF ” shall be deemed to be original signatures for all purposes hereunder.

Section 5.06. Descriptive Headings .

The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

Section 5.07. Amendment; Termination .

 

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

 

  (b) This Agreement shall terminate and be of no further force and effect upon the Investor and its Affiliates ceasing to own less than 1% of the total number of then-outstanding Company Securities; provided that the provisions of this Article shall survive any termination of this Agreement.

 

8


Section 5.08. Governing Law .

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

Section 5.09. Arbitration .

Any dispute, controversy or claim arising out of or relating to this Agreement, including, but not limited to, any question regarding the breach, termination or invalidity thereof shall be finally resolved by arbitration in Hong Kong in accordance with the administered rules (the “ Rules ”) of the Hong Kong International Arbitration Centre (the “ HKIAC ”) in force at the time of commencement of the arbitration, which Rules are deemed to be incorporated by reference into this Section. The number of arbitrators shall be three (3) and shall be selected in accordance with the provisions of the Subscription Agreement. All selections shall be made within thirty (30) days after the selecting party gives or receives, as the case may be, the demand for arbitration. The seat of the arbitration shall be in Hong Kong and the language to be used shall be English. Any arbitration award shall be (i) in writing and shall contain the reasons for the decision, (ii) final and binding on the parties hereto, and (iii) enforceable in any court of competent jurisdiction, and the parties hereto agree to be bound thereby and to act accordingly.

Section 5.10. Further Assurances .

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

[Signature Pages Follow]

 

9


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

 

TUNIU CORPORATION
By:   /s/ Conor Yang
  Name: Conor Chia-hung Yang
  Title: Chief Financial Officer

[Signature Page to Investor Rights Agreement]

 

10


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

 

HNA Tourism Holding (Group) Co., Ltd.
By:   /s/ Tie Li
  Name: Tie Li
  Title: Vice Chairman & CEO

[Signature Page to Investor Rights Agreement]

 

11


SCHEDULE 1

Registration Rights

1. Definitions . For the purpose of this Schedule 1:

(a) The term “ Existing Holder ” has the same meaning as the term “Holder” in the Existing Investors’ Rights Agreement;

(b) The term “ Existing Holders’ Registrable Securities ” has the meaning ascribed to the term “ Registrable Securities ” under the Existing Investors’ Rights Agreement;

(c) The term “ Existing Investors’ Rights Agreement ” means the Third Amended and Restated Investors’ Rights Agreement dated as of August 28, 2013 by and among the Company and other parties named therein;

(d) The terms “ Form S-3 ” and “ Form F-3 ” mean such respective forms under the Securities Act as in effect on the date hereof or any successor form under the Securities Act that permits significant incorporation by reference of the Company’s subsequent public filings under the Exchange Act;

(e) The term “ Holder ” means the Investor, any of its Affiliates or any assignee thereof in accordance with Section 13 of this Schedule 1;

(f) The term “ Hony Holder ” means Unicorn Riches Limited, any of its Affiliates or any assignee thereof in accordance with the terms of the Hony Registration Rights Agreement;

(g) The term “ Hony Holders’ Registrable Securities ” has the meaning ascribed to the term “Registrable Securities” under the Hony Registration Rights Agreement;

(h) The term “ Hony Registration Rights Agreement ” means the Registration Rights Agreement dated as of May 22, 2015 by and among the Company and Unicorn Riches Limited;

(i) The term “ JD Holder ” means Fabulous Jade Global Limited, any of its Affiliates or any assignee thereof in accordance with the terms of Schedule 1 of the JD Investor Rights Agreement;

(j) The term “ JD Holders’ Registrable Securities ” has the meaning ascribed to the term “Registrable Securities” under Schedule 1 of the JD Investor Rights Agreement;

(k) The term “ JD Investor Rights Agreement ” means the Investor Rights Agreement dated as of May 22, 2015 by and among the Company and Fabulous Jade Global Limited;

(l) The terms “register ,” “ registered ” and “ registration ” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document;

 

1


(m) The term “ Registrable Securities ” means (i) all of the Ordinary Shares owned by the Investor and its Affiliates (including any Ordinary Shares hereafter acquired by the Investor or its Affiliates, other than shares for which registration rights have terminated pursuant to Section 15 of this Schedule 1, and (ii) any other Ordinary Shares of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares listed in clauses (i) and (ii); provided, however, that the foregoing definition shall exclude in all cases any Registrable Securities sold by a person in a transaction in which his or her rights under this Schedule 1 are not assigned. Notwithstanding the foregoing, Ordinary Shares or other securities shall only be treated as Registrable Securities if and so long as (A) they have not been sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, (B) they have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions, and restrictive legends with respect thereto, if any, are removed upon the consummation of such sale, or (C) the Holder thereof is entitled to exercise any right provided in this Schedule 1 in accordance with Section 15 below;

(n) The number of shares of “ Registrable Securities then Outstanding ” means the number of Ordinary Shares of the Company that are Registrable Securities and are then issued and outstanding or would be outstanding assuming full conversion of all securities, warrants or other rights which are, directly or indirectly, convertible, exercisable or exchangeable into or for Registrable Securities;

(o) The term “ SEC ” means the United States Securities and Exchange Commission.

(p) Terms not otherwise defined under this Schedule 1 have the meanings given under the main text of the Agreement.

2. Request for Registration .

(a) If the Company shall receive at any time a written request from the Holders (the “ Initiating Holders ”) of at least thirty percent (30%) of the Registrable Securities then Outstanding that the Company file a registration statement under the Securities Act with an anticipated aggregate offering price (before deduction of underwriting discounts, commissions and expenses) of at least $7,500,000, then the Company shall, within ten (10) days of the receipt thereof, give written notice of such requests to all Holders, Hony Holders, JD Holders and Existing Holders and shall, subject to the limitations of subsection 2(b), use its best efforts to file as soon as practicable, and in any event within ninety (90) days of the receipt of such requests, a registration statement under the Securities Act covering all Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities which the Initiating Holders (together with the other Holders, Hony Holders, JD Holders and Existing Holders who so request) request to be registered within twenty (20) days of the mailing of such notice by the Company.

 

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(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2 and the Company shall include such information in the written notice referred to in subsection 2(a). The underwriter will be selected by a majority in interest of the Initiating Holders and shall be reasonably acceptable to the Company. In such event, the right of any Holder, Hony Holder, JD Holder and Existing Holder to include its Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities or Existing Holders’ Registrable Securities in such registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such holder) to the extent provided herein. All Holders, Hony Holders, JD Holders and Existing Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in subsection 5(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters of internationally recognized standing selected for such underwriting reasonably acceptable to the Holders, Hony Holders, JD Holders and Existing Holders of at least a majority of the voting power of all Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities proposed to be included in such registration. Notwithstanding any other provision of this Section 2, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Initiating Holders shall so advise all holders of Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities or Existing Holders’ Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of such Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities or Existing Holders’ Registrable Securities that may be included in the underwriting shall be allocated among all participating Holders, Hony Holders, JD Holders and Existing Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities of the Company owned by each participating Holder, Hony Holder, JD Holder and Existing Holder; provided, however, that the number of shares of Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting; provided further that any Initiating Holder shall have the right to withdraw its request for registration from the underwriting by written notice to the Company and the underwriters delivered at least ten (10) days prior to the effective date of the registration statement, and such withdrawal request for registration shall not be deemed to constitute one of the registration rights granted pursuant to this Section 2. If any Holder, Hony Holder, JD Holder or Existing Holder disapproves the terms of any underwriting, such holder may elect to withdraw therefrom by written notice to the Company and the underwriters delivered at least ten (10) days prior to the effective date of the registration statement. Any Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities or Existing Holders’ Registrable Securities excluded or withdrawn from such underwritten offering shall be withdrawn from the registration. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to a Holder, Hony Holder, JD Holder or Existing Holder to the nearest one hundred (100) shares.

 

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(c) Notwithstanding the foregoing, if the Company shall furnish to the Initiating Holders requesting a registration statement pursuant to this Section 2, a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than one hundred twenty (120) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any 12-month period; provided further that during such one hundred twenty (120) day period, the Company shall not file any registration statement pertaining to a public offering of any securities of the Company.

(d) In addition, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 2:

(i) After the Company has effected three (3) registrations pursuant to this Section 2 and such registrations have been declared or ordered effective;

(ii) During the period starting with the date ninety (90) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date ninety (90) days after the effective date of, a registration subject to Section 3 of this Schedule 1; provided that the Company is actively employing in good faith its best efforts to cause such registration statement to become effective and that the Holders are entitled to join such registration in accordance with Section 3 of this Schedule 1;

(iii) If the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 or Form F-3 pursuant to a request made pursuant to Section 4 below; or

(iv) If such registration may be declared effective within one hundred twenty (120) days of the effective date of any registration effected pursuant to Section 1.2 of the Existing Investors’ Rights Agreement, Section 2.1 of the Hony Registration Rights Agreement or Section 2.(a) of Schedule 1 to the JD Investor Rights Agreement (each an “Existing Registration”), pursuant to the demand registration rights of the Existing Holders, the Hony Holders or the JD Holders under these respective agreements, provided that the Existing Registration had provided the Holders with an opportunity to participate pursuant to the provisions of Section 2 or 3 hereof.

3. Company Registration . If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holders, such as the Hony Holders, the JD Holders or the Existing Holders) any of its shares under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company share option, share purchase or similar plan or a transaction covered by Rule 145 under the Securities Act, a registration in which the only shares being registered are Ordinary Shares issuable upon conversion of debt securities which are also being registered, or any registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, promptly give each

 

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Holder, Hony Holder, JD Holder and Existing Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with the Agreement, the Company shall, subject to the provisions of Section 8, use its best efforts to cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered, in addition to any registrable securities that the other holders of the registration rights contemplated by the Existing Investors’ Rights Agreement, the Hony Registration Rights Agreement and the JD Investor Rights Agreement. Registration pursuant to this Section 3 shall not be deemed to be a demand registration as described in Section 2 above. If a Holder decides not to include all or any of its Registrable Securities in such registration by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company, all upon the terms and conditions set forth herein. There shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 3.

The Company may, in its sole discretion, defer, terminate or withdraw any registration initiated under this Section 3 whether or not the Holders have elected to include any Registrable Securities in such registration. Notwithstanding anything contained herein, in the event that the SEC or applicable federal securities laws and regulations prohibit the Company from including all of the Registrable Securities requested by the Holders to be registered in a registration statement pursuant to this Section 3, then the Company shall be obligated to include in such registration statement only such portion of the Registrable Securities as is permitted by the SEC or such federal securities laws and regulations.

4. Form S-3 or F-3 Registration . The Company shall use its best efforts to qualify for registration on Form F-3 or Form S-3. In case the Company shall receive from any Holder or Holders of not less than thirty percent (30%) of the Registrable Securities then outstanding (or the other holders of the registration rights contemplated by the Existing Investors’ Rights Agreement, the Hony Registration Rights Agreement or the JD Investor Rights Agreement) a written request or requests that the Company effect a registration on Form S-3 or Form F-3 or any comparable or successor form and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders (or the registrable securities owned by the other holders of the registration rights contemplated under the Existing Investors’ Rights Agreement, the Hony Registration Rights Agreement or the JD Investor Rights Agreement), the Company shall:

(a) Promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

(b) Use its best efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company, as well as any other securities of the Company entitled to inclusion in such registration; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 4: (i) if Form S-3 or Form F-3 is not available for such

 

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offering by the Holders; (ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (after the deduction of any underwriters’ discounts or commissions) of less than US$2,000,000; (iii) if the Company shall furnish to the Holders a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such Form S-3 or Form F-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 or Form F-3 registration statement for a period of not more than one hundred twenty (120) days after receipt of the request of the Holder or Holders under this Section 4; provided, however, that the Company shall not utilize this right more than once in any 12-month period; provided further that during such one hundred twenty (120) day period, the Company shall not file any registration statement pertaining to the public offering of any securities of the Company; (iv) if, within the 12-month period preceding the date of such request, the Company has already effected two (2) registrations on Form S-3 or Form F-3 for the Holders pursuant to this Section 4; or (v) during the period ending one hundred eighty (180) days after the effective date of a registration statement subject to Section 3; provided that the Holders are entitled to join such registration in accordance with Section 3 of this Schedule 1.

(c) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section 4 shall not be counted as demands for registration or registrations effected pursuant to Sections 2 or 3, respectively. Subject to Section 4(b), there shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 4.

5. Obligations of the Company . Whenever required under this Schedule 1 to effect the registration of any Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the holders (including Holders, Hony Holders, JD Holders and Existing Holders) of a majority of the Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred eighty (180) days or until the distribution described in such registration statement is completed, if earlier. In the case of any registration of Registrable Securities on Form S-3 or Form F-3 which are intended to be offered on a continuous or delayed basis, such one hundred eighty (180) day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold, provided that Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous or delayed basis, and provided further that applicable rules under the Securities Act governing the obligation to file a post-effective amendment permit, in lieu of filing a post-effective amendment that (i) includes any prospectus required by Section

 

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10(a)(3) of the Securities Act or (ii) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference of information required to be included in (i) and (ii) above to be contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement.

(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for up to one hundred eighty (180) days or until the distribution described in such registration statement is completed, if earlier.

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

(d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

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

(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, or if in the opinion of counsel for the Company it is necessary to supplement or amend such prospectus to comply with law, and at the request of any such Holder promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made or such prospectus, as supplemented or amended, shall comply with law.

(g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed.

 

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(h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

(i) Use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Schedule 1, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Schedule 1, if such securities are being sold through underwriters, a copy of each of (i) the opinion of the counsel representing the Company delivered to the underwriters, and (ii) the “comfort” letter from the independent certified public accountants of the Company in customary form and covering such matters of the type customarily covered by comfort letters delivered to the underwriters, but only in such instances where (i) and (ii) are actually delivered to the underwriters.

(j) To the extent the Company is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) (a “WKSI”) at the time any request for registration is submitted to the Company in accordance with Section 4, (i) if so requested, file an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “automatic shelf registration statement”) to effect such registration, and (ii) remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such automatic shelf registration statement is required to remain effective in accordance with this Agreement.

(k) If at any time when the Company is required to re-evaluate its WKSI status for purposes of an automatic shelf registration statement used to effect a request for registration in accordance with Section 4 (i) the Company determines that it is not a WKSI, (ii) the registration statement is required to be kept effective in accordance with this Agreement, and (iii) the registration rights of the applicable Holders have not terminated, promptly amend the registration statement onto a form the Company is then eligible to use or file a new registration statement on such form, and keep such registration statement effective in accordance with the requirements otherwise applicable under this Agreement.

(l) If (i) a registration made pursuant to a shelf registration statement is required to be kept effective in accordance with this Schedule 1 after the third anniversary of the initial effective date of the shelf registration statement and (ii) the registration rights of the applicable Holders have not terminated, file a new registration statement with respect to any unsold Registrable Securities subject to the original request for registration prior to the end of the three year period after the initial effective date of the shelf registration statement, and keep such registration statement effective in accordance with the requirements otherwise applicable under this Agreement.

(m) Otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months, but not more than eighteen (18) months, beginning with the first month after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.

 

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6. Furnish Information . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Schedule 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder’s Registrable Securities. The Company shall have no obligation with respect to any registration requested pursuant to Section 2 or Section 4 of this Schedule 1 if, as a result of the application of the preceding sentence, the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in subsection 2(a) or subsection 4(b), whichever is applicable.

7. Expenses of Registration .

(a) Demand Registration . All expenses (other than underwriting discounts and commissions and ADS issuance and stock transfer taxes and fees) incurred in connection with registrations, filings or qualifications pursuant to Section 2 for each Holder (which right may be assigned as provided in Section 13), including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be thereby registered in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 2 (and for the avoidance of doubt, such agreement shall bind all Holders of the Registrable Securities); provided further, however, that if at the time of such withdrawal, the Holders (i) have learned of a material adverse change in the condition, business, or prospects of the Company that was not known to the Holders at the time of their request and (ii) have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall not forfeit their rights pursuant to Section 2.

(b) Company Registration . All expenses (other than underwriting discounts and commissions and ADS issuance and stock transfer taxes and fees) incurred in connection with registrations, filings or qualifications of Registrable Securities pursuant to Section 3 for each Holder, including (without limitation) all registration, filing, and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company.

(c) Registration on Form S-3 or Form F-3 . All expenses (other than underwriting discounts and commissions and ADS issuance and stock transfer taxes and fees) incurred in connection with registrations, filings or qualifications pursuant to Section 4 for each Holder,

 

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including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company.

8. Underwriting Requirements . In connection with any offering involving an underwriting of the Company’s capital shares, the Company shall not be required under Section 3 to include any of the Holders’, Hony Holders’, JD Holders’ or Existing Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters of internationally recognized standing selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holder’s Registrable Securities, proposed to be included in such offering exceeds the amount of securities that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities and Existing Holders’ Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling shareholders according to the total amount of securities entitled to be included therein owned by each selling shareholder or in such other proportions as shall mutually be agreed to by such selling shareholders), but in no event shall (i) the amount of securities of the selling Existing Holders included in the offering be reduced below thirty percent (30%) of the total amount of securities included in such offering, (ii) any securities held by any other shareholder, including the Holder, Hony Holders and JD Holders, be included if any securities held by any selling Existing Holder are excluded, (iii) any securities held by any other shareholder, including the Holder, be included if any securities held by any selling Hony Holder or JD Holder or Existing Holders are excluded or (iv) any securities held by any shareholders other than the selling Existing Holders, Hony Holders, JD Holders and Holders be included if any securities held by any selling Existing Holder, Hony Holder, JD Holder or Holder are excluded. For the avoidance of doubt, the rights of Holders to be included in such an offering shall be subordinated to those of Hony Holders and JD Holders, whose rights in turn shall be subordinated to those of Existing Holders. For purposes of the preceding parenthetical concerning apportionment, for any selling shareholder which is an Existing Holder, Hony Holder, JD Holder or Holder and which is a venture capital fund, partnership or corporation, the partners, retired partners, the affiliated venture capital funds and shareholders of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling shareholder,” and any pro-rata reduction with respect to such “selling shareholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling shareholder,” as defined in this sentence. If any Holder disapproves the terms of any underwriting, the Holder may elect to withdraw therefrom by written notice to the Company and the underwriters delivered at least ten (10) days prior to the effective date of the registration statement. Any Registrable Securities, Hony Holders’ Registrable Securities, JD Holders’ Registrable Securities or Existing Holders’ Registrable Securities excluded or withdrawn from the underwritten offering shall be withdrawn from the registration.

 

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9. Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Schedule 1.

10. Indemnification . In the event any Registrable Securities are included in a registration statement under this Schedule 1:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as such term is defined in the Securities Act) for such Holder and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “ Violation ”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will pay to each such Holder, underwriter or controlling Person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable to any Holder, underwriter or controlling Person for any such loss, claim, damage, liability, or action to the extent that it arises solely out of or is based solely upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling Person.

(b) To the extent permitted by law, each selling Holder that has included Registrable Securities in a registration will, severally and not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each Person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling Person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing Persons may become subject, under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any Person intended to be indemnified pursuant to this subsection 10(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the

 

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indemnity agreement contained in this subsection 10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided, that in no event shall any indemnity under this subsection 10(b) plus any amount under subsection 10(d) exceed the net proceeds from the offering out of which such Violation arises received by such Holder, except in the case of willful fraud by such Holder.

(c) Promptly after receipt by an indemnified party under this Section 10 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 10, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 10 to the extent the indemnifying party is prejudiced as a result thereof, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 10.

(d) If the indemnification provided for in this Section 10 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations; provided, that in no event shall any contribution by a Holder under this subsection 10(d) plus any amount under subsection 10(b) exceed the net proceeds from the offering received by such Holder, except in the case of willful fraud by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

12


(f) The obligations of the Company and Holders under this Section 10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Schedule 1, and otherwise.

11. Reports Under the Exchange Act . With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3 or Form F-3, the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after ninety (90) days after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;

(b) take such action, including the voluntary registration of its Ordinary Shares under Section 12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 or Form F-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective;

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

(d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after the effective date of the first registration statement filed by the Company), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 or Form F-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.

12. Removal of Legends and Stop Transfer Instructions. If any Registrable Securities are certificated and bear any restrictive legend, or are held in non-certificated book-entry form and are subject to any stop transfer or similar instruction or restriction, the Company shall upon the request of the holder of such Registrable Securities, as applicable and as soon as practicable, cause such legends to be removed and new certificates without any restrictive legends to be issued or cause such stop transfer or similar instructions or restrictions to be promptly terminated and removed if (a) such Registrable Securities are registered for resale under the Securities Act pursuant to this Schedule 1 or (b) the Holder of such Registrable Securities provides the Company with assurances that are reasonably satisfactory in form and content to the Company and its depositary, as determined at the sole reasonable discretion of the Company and the Company’s depositary, that such Registrable Securities can be sold, assigned or transferred pursuant to Rule 144 or otherwise without registration under the applicable requirements of the Securities Act, including but not limited to, if requested by the

 

13


Company or its depositary, an opinion of outside legal counsel, reasonably acceptable to the Company or its depositary in its sole discretion, to such effect. Following the effective date of any Registration Statement pursuant to which Registrable Securities are registered for resale, the Company shall, as applicable, as soon as reasonably practicable deliver or cause to be delivered to the Holder of such Registrable Securities certificates representing such Registrable Securities that are free from all restrictive legends, and cause all stop transfer or similar instructions or restrictions relating to such Registrable Securities to be terminated and removed.

13. Assignment of Registration Rights . The rights to cause the Company to register Registrable Securities pursuant to this Schedule 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee (i) of at least 100,000 shares of such securities (as adjusted for share splits, share combinations, share dividends and the like) (or if the transferring Holder owns less than 100,000 shares of such securities, then all Registrable Securities held by the transferring Holder), (ii) that is a subsidiary, Affiliate, parent, partner, limited partner, retired partner, member, retired member and/or shareholder of a Holder, (iii) that is an affiliated fund or entity of the Holder, which means with respect to a limited liability company or a limited liability partnership, a fund or entity managed by the same manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common control with such manager or managing member or general partner or management company (such a fund or entity, an “Affiliated Fund”), (iv) who is a Holder’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, cousin, nephew, niece, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (such a relation, a Holder’s “Immediate Family Member”, which term shall include adoptive relationships), or (v) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member, provided the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and provided, further, that such assignment shall be effective only if the transferee agrees to be bound by this Agreement and immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of (x) a partnership who are partners or retired partners of such partnership, or (y) a limited liability company who are members or retired members of such limited liability company (including Immediate Family Members of such partners or members who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together and with the partnership or limited liability company; provided that all assignees and transferees who would not qualify individually for assignment of registration rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices or taking any action under this Schedule 1.

14. Limitations on Subsequent Registration Rights .

From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder (a) to include such securities in any registration filed under this Schedule 1, unless under the terms of such agreement, such

 

14


holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his, her, or its securities will not reduce the amount of the Registrable Securities of the Holders which are included, or (b) to make a demand registration which could result in such registration statement being declared effective within one hundred twenty (120) days of the effective date of any registration effected pursuant to Section 2.

15. Termination of Registration Rights .

 

(a) No Holder shall be entitled to exercise any right provided for in this Schedule 1 after the earlier of (i) such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all (but not just some) of such Holder’s Registrable Securities during a 3-month period without registration on such sale or (ii) upon termination of the Agreement, as provided in Section 5.07 of the Agreement.

 

(b) The registration rights of any of the Existing Holder, Hony Holder and JD Holder as referred to in this Schedule 1 shall be deemed to automatically terminate as soon as such rights are terminated pursuant to the respective terms of the Existing Investors’ Rights Agreement, Hony Registration Rights Agreement and JD Investor Rights Agreement.

 

15

Exhibit 7.4

AMENDMENT NO. 1 TO INVESTOR RIGHTS AGREEMENT

This AMENDMENT NO. 1 (this “ Amendment ”), dated as of December 31, 2015, is made by and between Tuniu Corporation, a company incorporated under the laws of the Cayman Islands (the “ Company ”), and HNA Tourism Holding (Group) Co., Ltd., a company incorporated under the laws of the People’s Republic of China (“ HNA ”).

RECITALS

 

A. The Company and HNA entered into a subscription agreement, dated as of November 20, 2015 (the “ Subscription Agreement ”), pursuant to which HNA agreed to acquire certain shares of the Company as specified therein, with a closing (“ Closing ”) contemplated to take place on the later of December 18, 2015 or the second business day following the day on which the last of the closing conditions specified in Section 1.3 of the Subscription Agreement is satisfied or waived, unless otherwise agreed by the Company and HNA.

 

B. The Company and HNA entered into an Investor Rights Agreement dated as of November 20, 2015 (the “ IRA ”), which provided HNA with the right to designate a director (“ HNA Director ”) and nominate an Independent Director (as defined under the IRA), and specified that the Company shall arrange for the appointment or election of such director and Independent Director to the Company’s board of directors as soon as practicable after the closing but in no event later than December 31, 2015.

 

C. Due to changes in circumstances, the Closing has not taken place as of the date of this Amendment, as a result of which the Company needs more time to appoint or elect each of the HNA Director and the Independent Director.

NOW, THEREFORE, each of the Company and HNA hereby agrees as follows:

 

1. Amendment to Section 2.01(a) of the IRA . The reference to “December 31, 2015” shall be replaced with “January 31, 2016” so that Section 2.01(a) of the IRA is hereby amended and restated to read in its entirety as follows (the amended portion is underlined and highlighted in yellow):

“(a) For as long as HNA, together with its Affiliates, beneficially owns a number of Company Securities that equals to 70% or more of the aggregate number of Company Securities it purchased under the Subscription Agreement, HNA shall be entitled to designate one (1) director to the Board of the Company (such director, or such other individual who may be designated by HNA from time to time, the “ HNA Director ”), and the Company shall arrange for the appointment or election of such HNA Director to the Board as soon as practicable after the Closing but in no event later than January 31, 2016 , including convening a meeting of the Board or obtaining unanimous signed Board resolutions pursuant to the Memorandum and Articles and appointing such HNA Director to the Board, and in the case of an election, (i) nominating such individual to be elected as a director as provided herein, (ii) recommending to the Shareholders the election of such HNA Director to the Board in any meeting of Shareholders to elect directors, including soliciting proxies in favor of the election of the HNA Director, (iii) including such nomination and


recommendation regarding such individual in the Company’s notice for any meeting of Shareholders to elect directors, and (iv) if necessary, expanding the size of the Board in order to appoint the HNA Director; provided, however, that the HNA Director candidate shall be subject to the approval of the Board, which approval shall not be unreasonably withheld.”

 

2. Amendment to Section 2.02(a) of the IRA . The reference to “December 31, 2015” shall be replaced with “January 31, 2016” so that Section 2.02(a) of the IRA is hereby amended and restated to read in its entirety as follows (the amended portion is underlined and highlighted in yellow):

“For as long as HNA, together with its Affiliates, beneficially owns a number of Company Securities that equals to 70% or more of the aggregate number of Company Securities it purchased under the Subscription Agreement, in addition to the HNA Director, HNA shall also be entitled to nominate one (1) director to the Board of the Company who qualifies as an “independent director” under the independence requirements of Rule 5605(a)(2) of the NASDAQ Stock Market Rules (such requirements, the “ Independence Requirements ” and such director, or such other individual who may be nominated by HNA from time to time, the “ Independent Director ”), and the Company shall arrange for the appointment or election of such Independent Director to the Board as soon as practicable after the Closing but in no event later than January 31, 2016 , including convening a meeting of the Board or arranging to obtain unanimous signed Board resolutions pursuant to the Memorandum and Articles regarding the appointment of such Independent Director to the Board, and in the case of an election, (i) nominating such individual to be elected as a director as provided herein, (ii) recommending to the Shareholders the election of such Independent Director to the Board in any meeting of Shareholders to elect directors, including soliciting proxies in favor of the election of the Independent Director, (iii) including such nomination and recommendation regarding such individual in the Company’s notice for any meeting of Shareholders to elect directors and (iv) if necessary, expanding the size of the Board in order to appoint the Independent Director; provided, however, that the Independent Director candidate shall be subject to the approval of the Board, taking into account whether the nominated Independent Director meets the Independence Requirements, which approval shall not be unreasonably withheld.”

 

3. Further Amendments to IRA . If the Closing, as contemplated under the Subscription Agreement, is not completed by January 31, 2016, the Company and HNA shall promptly consult in good faith to further amend Sections 2.01(a) and 2.02(a) of the IRA to provide the Company with more time to appoint or elect each of the HNA Director and the Independent Director.

 

4. Miscellaneous .

(i) By executing this Amendment, each of the Company and HNA agrees that this Amendment fully satisfies the requirements for amending the provisions of the IRA as set forth under Section 5.07 of the IRA.


(ii) Except as expressly amended and/or superseded by this Amendment, the IRA remains and shall remain in full force and effect. This Amendment shall not constitute an amendment or waiver of any provision of the IRA, except as expressly set forth herein. Upon the execution and delivery hereof, the IRA shall thereupon be deemed to be amended and supplemented as hereinabove set forth as fully and with the same effect as if the amendments and supplements made hereby were originally set forth in the IRA. This Amendment and the IRA shall each henceforth be read, taken and construed as one and the same instrument, but such amendments and supplements shall not operate so as to render invalid or improper any action heretofore taken under the IRA. If and to the extent there are any inconsistencies between the IRA and this Amendment with respect to the matters set forth herein, the terms of this Amendment shall control. This Amendment taken together with the IRA embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

(iii) THIS AMENDMENT, INCLUDING THE FORMATION, BREACH, TERMINATION, VALIDITY, INTERPRETATION AND ENFORCEMENT THEREOF, AND ALL TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO, AND ALL CLAIMS OR DISPUTES RELATING HERETO, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES OF SUCH STATE.

 

5. Counterparts . This Amendment may executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


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

 

TUNIU CORPORATION
By:  

/s/ Dunde Yu

  Name: Dunde Yu
  Title: Director & CEO

[Signature page to Amendment No. 1 to Investor Rights Agreement]


Execution Version

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

 

HNA Tourism Holding (Group) Co., Ltd.
By:  

/s/ Tie Li

  Name: Tie Li
  Title: Vice Chairman & CEO

[Signature page to Amendment No. 1 to Investor Rights Agreement]

Exhibit 7.5

Execution Version

ASSIGNMENT AND ASSUMPTION AGREEMENT AND JOINDER

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT AND JOINDER (this “ Agreement ”) is dated effective as of January 20, 2016 (the “ Effective Date ”) by and between HNA Tourism Holding (Group) Co., Ltd., a company organized under the laws of the People’s Republic of China (“ HNA ”) and BHR Winwood Investment Management Limited, a company organized under the laws of Hong Kong (“ BHR ”, and collectively with HNA, the “ Parties ”).

Recitals

 

A. HNA and Tuniu Corporation, a company incorporated in the Cayman Islands (“ Tuniu ”) entered into a Subscription Agreement (the “ Subscription Agreement ”) and an Investor Rights Agreement (“ IRA ”) each dated as of November 20, 2015, and as amended on December 31, 2015, pursuant to which Tuniu has agreed to issue and sell to HNA, and HNA has agreed to purchase from Tuniu, certain Class A ordinary shares in a private placement and HNA has been provided certain rights as an investor in connection with the purchase of such shares; and

 

B. HNA desires to assign to BHR which is an Affiliate (as defined in the Subscription Agreement) of HNA, and BHR desires to assume, all of the rights, remedies, duties, obligations, terms, provisions and covenants of HNA under the Subscription Agreement and the IRA.

NOW, THEREFORE, intending to be legally bound and in consideration of the mutual provisions set forth in this Agreement and in the Subscription Agreement and the IRA, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Section 1—Assignment and Assumption of the Subscription Agreement and the IRA .

In accordance with Section 5.5 of the Subscription Agreement and Section 5.01 of the IRA, HNA hereby assigns (collectively, the “ Assignment ”) to BHR all of HNA’s rights and remedies under the Subscription Agreement and the IRA. BHR hereby accepts the Assignment and assumes and agrees to observe and perform all of the duties, obligations, terms, provisions and covenants of HNA under the Subscription Agreement and the IRA. HNA and BHR recognize that the Assignment shall not relieve HNA of its obligations under the Subscription Agreement and the IRA if BHR does not perform such obligations.

Section 2—Joinder to IRA .

In accordance with Section 5.01 of the IRA, BHR agrees that, with effect from the Effective Date, BHR will become a party to the IRA in the place of HNA and will be entitled to exercise all rights and remedies, and will be fully bound by and subject to all of the covenants, terms and conditions of the IRA, in each case with the same force and effect as if BHR was an original party thereto.


Execution Version

Section 3—Notice .

All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of actual delivery if delivered personally to the Party to whom notice is to be given, on the date sent if sent by telecopier, tested telex or prepaid telegram, or on the second business day following delivery to Federal Express, UPS or another comparable global courier delivery service, properly addressed, as follows:

 

If to HNA, at:  

9/F, Tower B, Hainan Aviation Building

B-2, East 3rd Ring Road North Road

Chaoyang District, Beijing, China

Tel: 010-60195365

If to BHR, at:  

Unit 3101, 31/F, Tower 2, China Central Place

79 Jianguo Road, Chaoyang District

Beijing 100025, China

Tel: 010-59695858

Any Party may change its address for purposes of this Section 3 by giving the other Party hereto written notice of the new address in the manner set forth above.

Section 4—Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]


IN WITNESS WHEREOF , the undersigned each have caused this Assignment and Assumption Agreement and Joinder to be executed as of the Effective Date.

 

HNA TOURISM HOLDING (GROUP) CO., LTD.
By:   /s/ Tie Li
Name:   Tie Li
Title:   Vice Chairman & CEO
BHR WINWOOD INVESTMENT MANAGEMENT LIMITED
By:   /s/ Xiangsheng Li
Name:   Xiangsheng Li
Title:   Director

Signature Page to Assignment and Joinder


Acknowledged and Agreed:
TUNIU CORPORATION
By:   /s/ Dunde Yu
Name:   Dunde Yu
Title:   Director & CEO

Signature Page to Assignment and Joinder

EXHIBIT 7.6

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, BHR (Shanghai) Investment Fund IV, L.P. and BHR Winwood Investment Management Limited agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including any amendments thereto) with respect to the Class A Ordinary Shares of Tuniu Corporation, and further agree that this Agreement be included as an exhibit to such joint filing.

This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument.

The undersigned, being duly authorized, hereby execute this Agreement this January 29, 2016.

 

BHR (SHANGHAI) INVESTMENT FUND IV, L.P.
By:   BEIJING JINGLVSHENGHONG INVESTMENT MANAGEMENT CO., LTD.
Its:   GENERAL PARTNER
By:  

/s/ Jie Zhu

Name:   Jie Zhu
Title:   Legal Representative
By:  

BHR RUILA (SHANGHAI) INVESTMENT

MANAGEMENT CO., LTD.

Its:   GENERAL PARTNER
By:  

/s/ Chengang Zhu

Name:   Chengang Zhu
Title:   Executive Director
BHR WINWOOD INVESTMENT MANAGEMENT LIMITED
By:  

/s/ Jie Zhu

Name:   Jie Zhu
Title:   Director

EXHIBIT 7.7

Date: January 29, 2016

POWER OF ATTORNEY

BHR (SHANGHAI) INVESTMENT FUND IV, L.P.

Know all men by these presents that BHR (Shanghai) Investment Fund IV, L.P. does hereby make, constitute and appoint Craig A. Roeder and Alexander P. Silverberg of Baker & McKenzie LLP, or either of them, as a true and lawful attorney-in-fact of the undersigned with full powers of substitution and revocation, for and in the name, place and stead of the undersigned (both in the undersigned’s individual capacity and as a manager or member of any limited liability company, as a partner of any partnership, as an officer of any corporate or other entity, or in the undersigned’s capacity in a position similar to the foregoing at any entity, in each case, for which the undersigned is otherwise authorized to sign), to execute and deliver such forms, schedules, statements and other documents as may be required to be filed from time to time with the Securities and Exchange Commission with respect to (i) Sections 13(d), 13(g), 13(f), 13(h) and 16(a) of the Securities Exchange Act of 1934, as amended, including Schedule 13D, Schedule 13G, Form 13F, Form 13H, Form 3, Form 4 and Form 5 and (ii) in connection with any applications for EDGAR access codes, including Form ID.

 

BHR (SHANGHAI) INVESTMENT FUND IV, L.P.
By:   BEIJING JINGLVSHENGHONG INVESTMENT MANAGEMENT CO., LTD.
Its:   GENERAL PARTNER
By:  

/s/ Jie Zhu

Name:   Jie Zhu
Title:   Legal Representative
By: BHR RUILA (SHANGHAI) INVESTMENT       MANAGEMENT CO., LTD.
Its:   GENERAL PARTNER
By:  

/s/ Chengang Zhu

Name:   Chengang Zhu
Title:   Executive Director


Date: January 29, 2016

POWER OF ATTORNEY

BHR WINWOOD INVESTMENT MANAGEMENT LIMITED

Know all men by these presents that BHR Winwood Investment Management Limited does hereby make, constitute and appoint Craig A. Roeder and Alexander P. Silverberg of Baker & McKenzie LLP, or either of them, as a true and lawful attorney-in-fact of the undersigned with full powers of substitution and revocation, for and in the name, place and stead of the undersigned (both in the undersigned’s individual capacity and as a manager or member of any limited liability company, as a partner of any partnership, as an officer of any corporate or other entity, or in the undersigned’s capacity in a position similar to the foregoing at any entity, in each case, for which the undersigned is otherwise authorized to sign), to execute and deliver such forms, schedules, statements and other documents as may be required to be filed from time to time with the Securities and Exchange Commission with respect to (i) Sections 13(d), 13(g), 13(f), 13(h) and 16(a) of the Securities Exchange Act of 1934, as amended, including Schedule 13D, Schedule 13G, Form 13F, Form 13H, Form 3, Form 4 and Form 5 and (ii) in connection with any applications for EDGAR access codes, including Form ID.

 

BHR WINWOOD INVESTMENT MANAGEMENT LIMITED
By:  

/s/ Jie Zhu

Name:   Jie Zhu
Title:   Director