ADS LENDING AGREEMENT Dated as of May 27, 2025 Between GDS HOLDINGS LIMITED (“Lender”) (an exempted company incorporated under the laws of the Cayman Islands) and

 

Exhibit 99.1

 

Execution Version

 

ADS LENDING AGREEMENT 

 

Dated as of May 27, 2025

 

Between

 

GDS HOLDINGS LIMITED (“Lender”)

 

(an exempted company incorporated under the laws of the Cayman Islands)

 

and

 

▇.▇. ▇▇▇▇▇▇ SECURITIES PLC (“Borrower”)

 

This Agreement sets forth the terms and conditions under which Borrower shall borrow from Lender American Depositary Shares (as defined below) representing Class A ordinary shares of Lender.

 

The parties hereto agree as follows:

 

Section 1.         Certain Definitions.

 

The following capitalized terms shall have the following meanings in this Agreement:

 

“American Depositary Shares” or “ADSs” means American Depositary Shares, with each ADS representing as of the date hereof an ownership interest in eight (8) Class A ordinary shares, par value $0.00005 per share, of Lender held by JPMorgan Chase Bank, N.A., as depositary (including any successor depositary, the “Depositary”), under the Deposit Agreement dated November 1, 2016 (as from time to time amended, the “Deposit Agreement”) among Lender, the Depositary and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder.

 

“Applicable Share Limit” means a number of ADSs and/or Ordinary Shares equal to (A) the minimum number of ADSs and/or Ordinary Shares that could give rise to reporting or registration obligations (other than any reporting or registration obligations under Section 13 of the Exchange Act) or other requirements (including obtaining prior approval from any person or entity) of a Borrower Person (as defined in the definition of Share Amount), or could result in an adverse effect on a Borrower Person, under any Applicable Restriction (as defined in the definition of Share Amount), as determined by Borrower in its commercially reasonable discretion, minus (B) 1.00% of the number of Outstanding Shares.

 

“Bankruptcy Code” has the meaning set forth in Section 7(f).

 

“Bankruptcy Law” has the meaning set forth in Section 9(a)(iii).

 

“Borrower Group” has the meaning set forth in ‎Section 2(c).

 

“Borrower Termination Event” has the meaning set forth in Section 9(a).

 

 

“Borrower’s Cash Account” means a cash account of ▇▇▇▇▇▇▇▇ maintained with a financial institution to be notified by Borrower to Lender in writing following the execution of this Agreement from time to time.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

 

“Calculation Agent” means Borrower. Whenever Borrower in its capacity as Calculation Agent is required to act or to exercise judgment in any way, it will do so in good faith and in a commercially reasonable manner. Furthermore, each party agrees that the Calculation Agent is not acting as a fiduciary for or as an advisor to such party in respect of its duties as Calculation Agent hereunder. In making any adjustment hereunder (as set forth under the definitions of “Loaned ADSs” and “Maximum Number of ADSs” or otherwise under Section 4), the Calculation Agent may take into account (among other factors) any adjustment in respect of the relevant transaction or event made by the Depositary under the Deposit Agreement, any relevant fees and/or expenses of the Depositary and any relevant withholding, deduction or reduction for or on account of Taxes. The Calculation Agent shall provide written notice to Lender promptly upon the making of any calculation, adjustment or determination pursuant to this Agreement, so long as Lender has given prompt written notice to the Calculation Agent and Borrower of the event or action that gave rise to the relevant calculation, adjustment or determination made pursuant to this Agreement. After the Calculation Agent has given such notice to Lender, the Calculation Agent shall, upon written request by ▇▇▇▇▇▇, promptly (and in any event within five Business Days) provide a written explanation in reasonable detail of the basis for any such determination, adjustment or calculation (including any quotations, market data or information from external sources used in making such calculation, adjustment or determination, as the case may be, but without disclosing Calculation Agent’s proprietary models or other information that is subject to contractual, legal or regulatory obligations to not disclose such information). Calculation Agent will use good faith efforts to consult on a non-binding basis, during a period of up to ten (10) Business Days, with Lender regarding any adjustments, calculations or determination to be made hereunder, provided that no such consultation shall require Calculation Agent to delay or refrain from taking any action it is required or authorized to take hereunder or if such consultation would conflict with any policies and procedures of Borrower and its affiliates.

 

“Cash” means any currency of the United States as at the time shall be legal tender for payment of public and private debts.

 

“CCASS” means the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited.

 

“Clearing Organization” means The Depository Trust Company, or, if agreed to in writing by ▇▇▇▇▇▇▇▇ and Lender, such other Securities Intermediary at which Borrower and Lender maintain accounts.

 

“Closing Date” has the meaning set forth in the Convertible Notes Purchase Agreement.

 

 

“Code” has the meaning set forth in ‎Section 7(i).

 

“Common Equity”, of any person (including, for the avoidance of doubt, the Lender), means ordinary share capital or common stock (directly or in the form of depositary receipts) of such person.

 

“Conversion Rate” means an initial conversion rate of 30.2343 ADSs per $1,000 principal amount of Convertible Notes, as adjusted from time to time pursuant to the terms of the Indenture.

 

“Convertible Notes” means the $500,000,000 aggregate principal amount of 2.25% Convertible Senior Notes due 2032 issued by Lender, or up to $550,000,000 aggregate principal amount to the extent the option to purchase additional Convertible Notes is exercised in full as set forth in the Convertible Note Purchase Agreement.

 

“Convertible Note Purchase Agreement” means the purchase agreement, dated as of the date hereof, between Lender and the initial purchasers named therein relating to the offering of the Convertible Notes.

 

“Cutoff Time” means 11:00 a.m. in the jurisdiction of the Clearing Organization, which, in the case of The Depository Trust Company, shall be 11:00 a.m. New York City time.

 

“Delisting” means the occurrence of any of the following events:

 

(x) the Exchange announces that, pursuant to the rules of such Exchange, the ADSs cease (or will cease) to be listed or admitted to trading on the Exchange for any reason and such ADSs are not immediately re-listed or re-admitted to trading on any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors); if such ADSs are immediately re-listed or re-admitted to trading on any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors), such exchange shall thereafter be deemed to be the Exchange,

 

(y) Lender announces an intention to cause the ADSs to cease to be listed, traded or publicly quoted on the Exchange for any reason, or

 

(z) the Depositary, the Exchange, the U.S. Securities and Exchange Commission, or any other governmental agency, regulator or self-regulatory organization (the “Applicable Authority”) announces that a trading prohibition is or will be applicable to the ADSs pursuant to the U.S. Holding Foreign Companies Accountable Act (as enacted, and as may be amended from time to time thereafter) or other applicable law, rule or regulation, as determined by the Calculation Agent in good faith.

 

“Deposited Securities” has the meaning set forth in the Deposit Agreement.

 

“Designated Termination Date” has the meaning set forth in Section 3(b).

 

“Excess ADSs” has the meaning set forth in ‎Section 3(c).

 

 

“Excess ADS Event” has the meaning set forth in ‎Section 3(c).

 

“Exchange” means The NASDAQ Global Market (or any successor thereto) or, if different, the principal trading market for the ADSs.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Facility Termination Date” has the meaning set forth in Section 3(b).

 

“Final Day” has the meaning set forth in Section 10(a).

 

“Final Delivery Due Date” has the meaning set forth in Section 14.

 

“Foreign Private Issuer” means a “foreign private issuer,” as such term is defined in Rule 3b-4 under the Exchange Act, or an issuer of any Common Equity that is not otherwise subject to the requirements of Section 16 of the Exchange Act.

 

“Hong Kong Shares” means the shares in the Common Equity of Lender that have been registered on the books and records of ▇▇▇▇▇▇’s share registrar in Hong Kong (whether or not fungible with any Common Equity of Lender of the same class listed on The Stock Exchange of Hong Kong Limited (the “HKSE”)).

 

“Indemnified Party” has the meaning set forth in Section 12(c).

 

“Indemnifying Party” has the meaning set forth in Section 12(c).

 

“Indenture” means the Indenture to be dated on or about May 30, 2025, between Lender and The Bank of New York Mellon, as trustee, pursuant to which the Convertible Notes will be issued. It is understood and agreed that the Indenture shall be substantially in the form last reviewed by ▇▇▇▇▇▇ as of the date hereof.

 

“Indenture Adjustment Notice” has the meaning set forth in Section 8(b).

 

“Lender Termination Event” has the meaning set forth in Section 9(b).

 

“▇▇▇▇▇▇’s Cash Account” means a cash account of ▇▇▇▇▇▇ maintained with a financial institution to be notified by ▇▇▇▇▇▇ to Borrower in writing following the execution of this Agreement from time to time.

 

“▇▇▇▇▇▇’s Designated Account” means any securities account of ▇▇▇▇▇▇ maintained on the books of the Depositary to be notified by ▇▇▇▇▇▇ to Borrower in writing following the execution of this Agreement from time to time.

 

“Lien” means any pledge, mortgage, claim, encumbrance, lien (statutory or other), charge, preference, priority or other security interest or preferential arrangement, in each case, in the nature of a security interest of any kind whatsoever.

 

“Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

 

 

“Loan” has the meaning set forth in Section 2(a).

 

“Loan Processing Fee” has the meaning set forth in Section 2(b).

 

“Loaned ADSs” means the ADSs transferred to Borrower from time to time in any outstanding Loan hereunder. If, as the result of any change in the number of the Deposited Securities represented by each ADS, change in nominal value, change in par value, a stock dividend, stock split, reverse stock split or any reclassification of the Deposited Securities, or any split-up or combination of the Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting Lender or to which it is a party, the number of outstanding ADSs held by the holders thereof immediately prior to such event or transaction is increased or decreased as a result of such event or transaction, then the number of Loaned ADSs under the outstanding Loan shall, effective as of the payment, delivery or effective date of such event, be proportionately increased or decreased, as the case may be, as determined by the Calculation Agent. If any new or different security (or two or more securities), cash or other consideration shall be exchanged for the outstanding ADSs as the result of any reorganization, merger, split-up, consolidation, other business combination, reclassification, recapitalization or other corporate action (including, without limitation, a reorganization in bankruptcy) or as a result of the termination of the Deposit Agreement, such new or different security (or such two or more securities collectively), cash or other consideration shall, effective upon such exchange, be deemed to become a Loaned ADS in substitution for the former Loaned ADS for which such exchange is made and in the same proportion for which such exchange was made, as determined by the Calculation Agent. For purposes of return of Loaned ADSs by Borrower or purchase, sale, delivery or transfer of securities pursuant to Section 3, Section 9(a)(i), Section 10 and Section 14, the term “Loaned ADSs” shall refer to any of the following, in any combination in the sole discretion of the Borrower: (x)  Loaned ADSs, or (y) the equivalent in Deposited Securities then underlying such Loaned ADSs (provided in this case (y) that if and to the extent Deposited Securities include Ordinary Shares, an equivalent number of Hong Kong Shares may be returned in lieu of any Ordinary Shares that comprise the Deposited Securities), and shall mean securities of the same issuer, class and quantity as the Loaned ADSs or Deposited Securities, respectively, as adjusted pursuant to the two preceding sentences, as applicable. For purposes of the foregoing, where an ADS may be converted or exchanged into more than a single type of consideration based upon any form of shareholder election, such consideration will be deemed to be the weighted average of the type and amounts of consideration received by holders of ADSs or, at the election of Borrower, in its reasonable discretion, based upon the consideration actually received by Borrower or its affiliates in connection with such exchange or conversion. For the avoidance of doubt, the foregoing provisions shall apply in connection with the occurrence of each such event, in addition to any prior adjustments or modifications effected hereunder.

 

“Maximum Number of ADSs” means, subject to the adjustments referred to in the definition of Loaned ADSs above, at any time, the number of ADSs equal to the product of (a) the aggregate principal amount of Convertible Notes outstanding at such time (assuming for such purpose that the option to purchase additional Convertible Notes in the Convertible Note Purchase Agreement has been exercised in full, unless and until such option has expired, in which case the Maximum Number of ADSs shall be determined without taking into account this parenthetical), divided by $1,000 and (b) the Conversion Rate at such time.

 

 

“Non-Cash Distribution” has the meaning set forth in Section 4(b).

 

“Ordinary Shares” means “Shares” as such term is defined in the Deposit Agreement.

 

“Original Delivery Date” has the meaning set forth in Section 14.

 

“Outbound Investment Rules” means the Executive Order 14105 on “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern”, 88 Fed. Reg. 54867 (Aug. 9, 2023) , including all implementing regulations thereof at 31 C.F.R part 850.

 

“Outstanding Shares” means, as of any date, the outstanding Ordinary Shares as of such date, including the outstanding Deposited Securities.

 

“Permitted Lien” means (i) any lien, charge, claim or other encumbrance or restriction routinely imposed on all securities by the relevant Clearing Organization and (ii) any lien, charge, claim or other encumbrance or restriction (x) in the case of any Loaned ADSs, that exists in respect of all outstanding ADSs and (y) in the case of any Non-Cash Distribution, that exists in respect of all of the relevant distributed property in respect of such Non-Cash Distribution.

 

“Permitted Transferee” has the meaning set forth in Section 11(d).

 

“Repayment Suspension” has the meaning set forth in Section 10(a).

 

“Replacement ADSs” has the meaning set forth in Section 10(b).

 

“Replacement Cash” has the meaning set forth in ‎Section 10(a).

 

“Repurchase Notice” has the meaning set forth in Section 8(b).

 

“Repurchase Obstacle” has the meaning set forth in Section 10(a).

 

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the Exchange. If the ADSs are not listed or admitted for trading on the Exchange, “Scheduled Trading Day” means a Business Day.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securities Intermediary” means a “securities intermediary” as defined by Section 8-102(a)(14) of the UCC.

 

“SFO” means the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

 

 

“Share Amount”, as of any day, is the number of ADSs and Ordinary Shares that Borrower and any person whose ownership position would be aggregated with that of Borrower (Borrower or any such person, a “Borrower Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Lender that are, in each case, applicable to ownership of ADSs or Ordinary Shares, including, without limitation, under state, federal or foreign banking laws (“Applicable Restrictions”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction, as determined by Borrower in its commercially reasonable discretion.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges of any nature imposed by any governmental or other taxing authority, including any interest, additions to tax or penalties applicable thereto.

 

“Trading Day” means, if the ADSs are listed or admitted to trading on the Exchange, a day on which (i) there is no Market Disruption Event in respect of the ADSs and (ii) the Exchange is open for trading. A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then-standard closing time for regular trading on the Exchange. For the purpose of this definition, a “Market Disruption Event” means, in respect of the ADSs, the occurrence or existence of (i) a Trading Disruption (as defined in the 2002 ISDA Equity Derivatives Definitions as published by the International Swaps and Derivatives Association, Inc. (the “2002 ISDA Definitions”)), (ii) an Exchange Disruption (as defined in the 2002 ISDA Definitions) or (iii) an early closure of the Exchange prior to its scheduled closing time, in each case as the Calculation Agent determines is material. If the ADSs are not so listed or admitted to trading on the Exchange, “Trading Day” means a Business Day.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York on the date hereof and as it may be amended from time to time.

 

“Underwriting Agreement” means the underwriting agreement, dated as of the date hereof, between ▇▇▇▇▇▇ and Borrower and the underwriters named therein relating to the registered public offering of the ADSs commenced on or about the date hereof.

 

“VWAP Price” has the meaning set forth in Section 10(a).

 

Section 2.         Loan of ADSs; Transfer of Loaned ADSs.

 

(a)            Subject to the terms and conditions of this Agreement (including, for the avoidance of doubt, ▇▇▇▇▇▇’s making accurate representations as to the matters set forth in Section 7), and subject to the closing of the issuance of the “Firm” Convertible Notes pursuant to the Convertible Note Purchase Agreement, in consideration of Borrower’s agreements hereunder and other good and valuable consideration (the receipt of which is hereby acknowledged), ▇▇▇▇▇▇ hereby agrees to loan to Borrower, and ▇▇▇▇▇▇▇▇ agrees to borrow, 6,000,000 ADSs on the Closing Date, as specified by Borrower in a written notice to Lender substantially in the form of Exhibit A attached hereto (a “Borrowing Notice”) (such issuance and loan, the “Loan”). Such Loan shall be confirmed through the book-entry settlement system of the Clearing Organization. The records maintained by the Clearing Organization shall constitute conclusive evidence with respect to the Loan, including the number of ADSs that are the subject of the Loan. To effect the Loan, ▇▇▇▇▇▇ agrees to issue a number of Ordinary Shares (credited as fully paid) underlying the number of ADSs for the Loan registered in the name of the Depositary (or its nominee) and deposit share certificates evidencing such Ordinary Shares with, and deliver an original certified copy of the extract of the Lender’s register of members showing such Ordinary Shares registered in the name of the Depositary (or its nominee) to, the custodian of the Depositary on or prior to the Closing Date, and cause the Depositary to deliver the relevant ADSs to Borrower’s account maintained with the Clearing Organization by no later than the Cutoff Time on the Closing Date. For the avoidance of doubt, if ▇▇▇▇▇▇▇▇ redelivers any Loaned ADSs to Lender hereunder, Borrower may not subsequently reborrow such ADSs.

 

 

(b)            Borrower agrees to pay ▇▇▇▇▇▇ a single loan processing fee (the “Loan Processing Fee”) equal to $0.0004 per Loaned ADS (subject to adjustment to reflect any split up, combination or change in the ratio of Ordinary Shares to ADSs pursuant to the Deposit Agreement prior to the issuance of such Loaned ADSs). The Loan Processing Fee shall be paid by or on behalf of Borrower on or before the time of transfer of the Loaned ADSs. Lender shall apply the Loan Processing Fee to fully pay up the Ordinary Shares underlying the ADSs for the Loan. Lender agrees to pay all fees and expenses of the Depositary in connection with the Loan, including without limitation in connection with the issuance of the Loaned ADSs and the withdrawal of any such Ordinary Shares upon the cancellation of the Loaned ADSs.

 

(c)            ▇▇▇▇▇▇▇▇ shall not be entitled to receive or deemed to have received any Loaned ADSs, and any purported delivery of Loaned ADSs hereunder shall not be effective in conferring “beneficial ownership” (within the meaning of this Section 2(c)) on Borrower, and Borrower shall promptly return to Lender all Loaned ADSs comprising any such purported delivery hereunder, in each case, to the extent that (but only to the extent that), immediately upon giving effect to such receipt or deemed receipt of such ADSs, (i)(x) Lender is not a Foreign Private Issuer and (y) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Ordinary Shares by Borrower or any affiliate of Borrower subject to aggregation with Borrower under such Section 13 and rules or any “group” (within the meaning of such Section 13 and rules) of which Borrower is a member (collectively, “Borrower Group”) would be equal to or greater than 7.5% of the Outstanding Shares, and/or (ii) the Share Amount would be equal to or greater than the Applicable Share Limit (if any applies). If any delivery owed to Borrower hereunder is not made, in whole or in part, as a result of this provision, ▇▇▇▇▇▇’s obligation to make such delivery shall not be extinguished and Lender shall make such delivery as promptly as practicable after, but in no event later than two Business Days after, ▇▇▇▇▇▇▇▇ gives notice to Lender that such delivery would not result in (i) Borrower Group directly or indirectly so beneficially owning in excess of 7.5% of the Outstanding Shares (and at such time Lender is not a Foreign Private Issuer) or (ii) the Share Amount exceeding the Applicable Share Limit (if any applies), as described above. If, notwithstanding the foregoing, any delivery of Loaned ADSs is erroneously made to Borrower or Borrower otherwise receives or is deemed to have received Loaned ADSs in excess of any of the foregoing limitations contrary to the first sentence of this provision, such Loaned ADSs will remain the property of Lender and Borrower shall be deemed to hold the same as bailee of Lender and shall have no voting, dispositive control or pecuniary interest with respect thereto.

 

Section 3.         Redelivery of Loaned ADSs By Borrower; Loan Terminations.

 

(a)            Borrower may terminate all or any portion of the Loan on any Business Day by giving written notice thereof to Lender and transferring the corresponding number of Loaned ADSs to Lender, without any consideration being payable in respect thereof by Lender to Borrower; provided that such termination shall not relieve Borrower from the obligation to make such other payments and/or deliveries required to be made by it to Lender hereunder, including any such payments and/or deliveries pursuant to Section 4 hereof. Any such Loan termination shall be effective immediately upon delivery of the applicable Loaned ADSs in accordance with the terms hereof. All such redelivered Loaned ADSs shall be delivered by Borrower free and clear of all Liens (other than Permitted Liens) and shall not be deemed redelivered hereunder so long as any such Lien (other than Permitted Liens) shall exist.

 

 

(b)            The Loan, if outstanding on the date this Agreement terminates pursuant to Section 13 (the “Facility Termination Date”) or pursuant to Section 9 (the “Designated Termination Date”), shall terminate on such date and, in all cases subject to Section 10 and Section 14 hereof, Borrower shall use its reasonable best efforts to deliver any and all outstanding Loaned ADSs to Lender as soon as practicable and in any event such outstanding Loaned ADSs shall be delivered to Lender no later than the twenty-fifth (25^th) Trading Day following Facility Termination Date or the Designated Termination Date (as notified by the relevant party to the other party or deemed to occur pursuant to Section 9, as applicable), without any consideration being payable in respect thereof by Lender to Borrower; provided that such termination shall not relieve Borrower from the obligation to make such other payments and/or deliveries required to be made by it to Lender hereunder, including any such payments and/or deliveries pursuant to Section 4 hereof.

 

(c)            If on any date the aggregate number of Loaned ADSs exceeds the Maximum Number of ADSs (an “Excess ADS Event”), ▇▇▇▇▇▇ may request in writing that the number of Loaned ADSs in excess of the Maximum Number of ADSs (such excess Loaned ADSs, the “Excess ADSs”) shall be delivered by Borrower to Lender, without any consideration being payable in respect thereof by Lender to Borrower. Upon receipt of such notice, Borrower shall, as soon as practicable and in any event no later than the date twenty-five (25) Trading Days following the date on which Borrower receives such written notice, deliver the Excess ADSs to Lender.

 

(d)            For the avoidance of doubt, for the purposes of return or redelivery of Loaned ADSs pursuant to this Section 3, the term “Loaned ADSs” shall refer to either, in any combination at the sole discretion of the Borrower: (x) Loaned ADSs or (y) the equivalent in Deposited Securities then underlying such Loaned ADSs (provided in this case (y) that if and to the extent Deposited Securities include Ordinary Shares, an equivalent number of Hong Kong Shares may be returned in lieu of any Ordinary Shares that comprise the Deposited Securities). The obligation of Borrower to redeliver Loaned ADSs or Excess ADSs to Lender pursuant to Section 3(a), 3(b) or 3(c) shall be deemed satisfied in full, at Borrower’s election (or in any combination of the below methods as determined by Borrower to effect delivery of the full number of Loaned ADSs):

 

(i)              upon ▇▇▇▇▇▇▇▇’s delivery of the relevant Loaned ADSs or Excess ADSs, as the case may be, to the Depositary (with written instructions to the Depositary to cancel the relevant Loaned ADSs or Excess ADSs, as the case may be, and to deliver to Lender the Deposited Securities underlying the Loaned ADSs or Excess ADSs, as the case may be, being surrendered for cancellation);

 

 

(ii)             upon the transfer by Borrower of such Loaned ADSs or Excess ADSs, as the case may be, to ▇▇▇▇▇▇’s Designated Account; or

 

(iii)            in the case of any Loaned ADSs or Excess ADSs that are in the form of Deposited Securities, if any such surrender or transfer pursuant to clause (i) or (ii) above is not reasonably practicable for any reason, upon Borrower surrendering such Loaned ADSs or Excess ADSs to Lender by delivering in a form as may be required by applicable law the relevant Deposited Securities to Lender (and the Lender shall accept such surrender), or to such other account as timely notified by ▇▇▇▇▇▇ to Borrower prior to such transfer.

 

(e)            For the avoidance of doubt, (i) any and all outstanding Loaned ADSs shall be delivered by Borrower to Lender, net of any fees or expenses of the Depositary and any applicable withholdings or deductions on account of Taxes or other governmental charges imposed on such delivery, if any; and (ii) if the ADSs, Ordinary Shares, or other Deposited Securities at such time are listed on more than one securities exchange or, if delisted from the Exchange and listed on a different securities exchange than the Exchange, Borrower may deliver the relevant Loaned ADSs or Excess ADSs, as the case may be, to the applicable account at the relevant clearing organization or securities intermediary, unless Lender has notified Borrower of a different applicable account prior to such transfer.

 

Section 4.         Distributions.

 

(a)            If, at any time when there are Loaned ADSs outstanding under this Agreement, Lender makes a cash or other distribution in respect of all of its Ordinary Shares (including, without limitation, any cash exchanged for the outstanding ADSs as the result of any reorganization, merger, split-up, consolidation, other business combination, reclassification, recapitalization or other corporate action), with the result that, through the Depositary, a cash distribution is made to the then holder or holders of such Loaned ADSs pursuant to the Deposit Agreement, Borrower shall pay to Lender (whether or not Borrower is a holder of any or all of the outstanding Loaned ADSs), within five (5) Trading Days after the payment of such distribution, an amount in cash (in the same currency as received by holders of Loaned ADSs from the Depositary) equal to the product of (A) the amount per Loaned ADS of such distribution (net of any fees or expenses of the Depositary and any applicable withholdings or deductions on account of Taxes or other governmental charges imposed on such distribution and such payment, if any) and (B) the number of Loaned ADSs on the record date for ADSs for such distribution, in each case as determined by the Calculation Agent; provided that if Borrower returns any Loaned ADSs to Lender following a record date for such distribution in respect of such Loaned ADSs being returned (as applicable, for the avoidance of doubt, for the particular type of a security being returned) but prior to the payment of such distribution, Borrower shall nonetheless pay to Lender the amount of such distribution (net of any fees or expenses of the Depositary and any applicable withholdings or deductions on account of Taxes or other governmental charges imposed on such distribution and payment, if any) within five (5) Trading Days after the payment of such distribution.

 

 

(b)            If, at any time when there are Loaned ADSs outstanding under this Agreement, Lender, through the Depositary, makes a distribution in respect of all of its outstanding ADSs (other than a distribution upon liquidation or reorganization in bankruptcy) in property or securities, including any options, warrants, rights or privileges in respect of securities (other than a distribution of ADSs, but including any distribution of Ordinary Shares or any options, warrants, rights or privileges exercisable for, convertible into or exchangeable for ADSs or Ordinary Shares or other securities of any other entity) to the then holder or holders of such Loaned ADSs (a “Non-Cash Distribution”), Borrower shall (x) in the case of any Non-Cash Distribution consisting exclusively of Ordinary Shares, deliver to Lender (whether or not Borrower is a holder of any or all of the outstanding Loaned ADSs), within twenty-five (25) Trading Days after the delivery date of such Ordinary Shares in an amount equal to the product of (A) the amount of Ordinary Shares distributed pursuant to such Non-Cash Distribution and (B) the number of Loaned ADSs outstanding on the record date for ADSs for such distribution or (y) in the case of any other Non-Cash Distribution, use commercially reasonable efforts (including in light of the liquidity conditions prevailing at the time in respect of the relevant property or securities) to deliver to Lender in kind, within twenty-five (25) Trading Days after the delivery date of such Non-Cash Distribution, the property or securities distributed, in an amount equal to the product of (A) the amount per ADS of such Non-Cash Distribution (net of any reasonable fees or expenses of the Depositary and any applicable withholdings or deductions on account of Taxes or other government charges imposed on such distribution and delivery) and (B) the number of Loaned ADSs outstanding on the record date for such distribution in respect of such Loaned ADSs being returned (as applicable, for the avoidance of doubt, for the particular type of a security being returned), in each case, as determined by the Calculation Agent; provided that in lieu of making all or any portion of any such delivery pursuant to the foregoing, Borrower may elect to pay to Lender the cash value of such Non-Cash Distribution, or relevant portion thereof (in each case, net of any reasonable fees or expenses of the Depositary and any applicable withholdings or deductions on account of Taxes or other government charges imposed on such distribution), on or within a commercially reasonable period of time promptly following the relevant date on which Borrower would otherwise have been required to deliver such Non-Cash Distribution, or relevant portion thereof, in each case as determined by the Calculation Agent in good faith and in a commercially reasonable manner. Any such Non-Cash Distributions shall be delivered by Borrower free and clear of all Liens (other than Permitted Liens) and shall not be deemed delivered hereunder so long as any such Lien (other than Permitted Liens) shall exist. For the avoidance of doubt, Borrower’s obligation to deliver a Non-Cash Distribution to Lender pursuant to this Section 4(b) shall not apply to any Non-Cash Distribution retained through the facilities of the Depositary and not otherwise distributed directly to holders of ADSs.

 

(c)            In addition, in lieu of making all or any portion of any payment or delivery pursuant to the immediately preceding clauses, Borrower may elect for the number of Loaned ADSs to be deemed to be increased (but not in excess of the Maximum Number of ADSs, as determined by the Calculation Agent after giving effect to the Conversion Rate adjustment under the Indenture in respect of the relevant dividend or distribution) in an amount corresponding to the value of such dividend or distribution, or relevant portion thereof (in each case, net of any fees, Taxes, expenses, withholdings, deductions or charges contemplated above), on or within a commercially reasonable period of time promptly following the relevant date on which Borrower would otherwise have been required to pay or deliver such dividend or distribution, or relevant portion thereof, in each case as determined by the Calculation Agent. The Calculation Agent may refer to the corresponding provisions of the Indenture to make any such determination.

 

 

(d)            Notwithstanding anything to the contrary in this Section 4 or the final sentence of the definition of “Calculation Agent”, in the event of any contemplated cash or non-cash distribution to be effected by Lender that would require a payment or delivery by Borrower under this Section 4, upon request of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ agrees to use good faith efforts to consult on a non-binding basis, during a period of up to ten (10) Business Days, with Lender regarding such contemplated distribution, and the sub-sections of this Section 4 that may be applied to such distribution, and, if it would be commercially practicable to do so (taking into account Borrowers’ and its affiliates hedging and hedge unwind activity, applicable law and regulation, and related policies and procedures of Borrower and its affiliates), provide to Lender more specific methodology pursuant to which any resulting payment or delivery obligations by Borrower under this Section 4 may be calculated in respect of such cash or non-cash distribution and the timing for such payment or delivery, and to use commercially reasonable efforts to effectuate the methodology (if more than one methodology is presented by Borrower) requested by ▇▇▇▇▇▇; provided that no such consultation shall require Borrower to delay or refrain from taking any action it is required or authorized to take hereunder or if such consultation would conflict with any policies and procedures of Borrower and its affiliates.

 

Section 5.         Rights in Respect of Loaned ADSs.

 

Subject to the terms of this Agreement, ▇▇▇▇▇▇▇▇, insofar as it is the beneficial owner of the Loaned ADSs, subject to Section 2(c), shall have all of the incidents of ownership in respect of such Loaned ADSs, until it delivers such Loaned ADSs to Lender pursuant to the terms hereof, including the right to transfer the Loaned ADSs to others. Borrower agrees that neither it nor any of its affiliates that is the beneficial owner of any Loaned ADSs hereunder (including ADSs reacquired by Borrower or its affiliates for return to Lender hereunder) shall vote such Loaned ADSs on any matter submitted to a vote of ▇▇▇▇▇▇’s shareholders; provided that, if by Borrower failing to vote such Loaned ADSs there shall not be a quorum at any meeting of shareholders relating to such a matter, as advised by ▇▇▇▇▇▇ to Borrower in writing reasonably in advance, Borrower shall in accordance with customary practice vote its ADSs proportionately to the votes of all other shareholders voting on such matter at such meeting. Borrower will use the Loaned ADSs only for the purposes described in the offering memorandum relating to the Convertible Notes and the prospectus relating to the offering of the Loaned ADSs.

 

Section 6.         Taxes.

 

(a)            Notwithstanding the foregoing in Section 3(e) and Section 4 and anything else to the contrary in this Agreement, if Borrower or any of its affiliates determines in good faith that any payment or delivery (in cash or in kind) by Borrower or any of its affiliates under this Agreement is subject to withholding or reduction for or on account of Taxes under applicable law, Borrower shall promptly notify Lender and such payment or delivery may be reduced by such withholding or reduction. Any amount withheld in accordance with the foregoing shall be promptly remitted to the appropriate taxing authority, and such remittance shall be treated for purposes of this Agreement as a payment made to the party on whose behalf such amounts were withheld. Borrower shall provide reasonable proof of payment of such withholding or reduction to Lender and shall reasonably cooperate with Lender in connection with any contest or dispute with a governmental authority relating to such Tax. If Borrower or any of its affiliates is required to deduct or withhold from any payment or delivery (in cash or in kind) hereunder, and does not so deduct or withhold, but such withholding or reduction is assessed directly against Borrower or any of its affiliates, then, except to the extent Lender has satisfied or then satisfies the liability resulting from such withholding or deduction, Lender shall promptly pay to Borrower or its affiliate, as applicable, the amount of such liability. If, as the result of the imposition of any applicable withholdings or deductions on account of Taxes or other governmental charges, the amount Borrower or its affiliate actually receives in respect of any Loaned ADSs held by Borrower or such affiliate is less than the amount of the payment that Lender would otherwise be entitled to receive pursuant to Section 4 above, then the amount Borrower shall be required to pay per Loaned ADS pursuant to Section 4 above shall be the amount per Loaned ADS actually received by Borrower or such affiliate reduced by any fees or expenses of the Depositary and any applicable withholdings or deductions on account of Taxes or other governmental charges imposed.

 

 

(b)            Lender will bear any present or future stamp, transfer, court, issue, documentary, capital, registration, value-added, property or other similar Taxes or duties, including any indirect transfer Tax under Public Notice 2015 No. 7 and any related laws and regulations of the People’s Republic of China (the “PRC”), and including any interest or penalties, if any, that arise in any jurisdiction from the transfer of the Loaned ADSs or Ordinary Shares or other Deposited Securities under this Agreement or upon redelivery of the Loaned ADSs, Deposited Securities or Replacement Cash under Section 3 or Section 11, or otherwise in connection with this Agreement. If Borrower determines in good faith that it is required to pay such Taxes or duties to any taxing or governmental authority, Borrower shall be entitled to pay them to the relevant authority and ▇▇▇▇▇▇ shall reimburse Borrower for the amounts so paid and for the cost of preparing the applicable filings.

 

Section 7.         Representations and Warranties.

 

(a)            Each of Borrower and Lender represents and warrants to the other, as of the date hereof, and ▇▇▇▇▇▇▇▇ also represents and warrants to Lender as of the date any Loaned ADSs are transferred to Borrower in respect of the Loan hereunder, that:

 

(i)             it has full power to execute and deliver this Agreement, to enter into the Loan contemplated hereby and to perform its obligations hereunder;

 

(ii)            it has taken all necessary action to authorize such execution, delivery and performance;

 

(iii)           this Agreement constitutes its legal, valid and binding obligation enforceable against it in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and

 

(iv)           the execution, delivery and performance of this Agreement does not and will not violate, contravene, or constitute a default under, (A) its certificate of incorporation, amended and restated memorandum and articles of association, bylaws or other governing documents, (B) any laws, rules or regulations of any governmental authority to which it is subject (including, with respect to Lender’s representations and warranties, any requirements, whether of any governmental authority or stock exchange applicable to Lender due to its Common Equity being listed on the relevant exchange), (C) any material contracts, agreements or instrument to which it is a party, (D) with respect to Lender’s representations and warranties, any corporate policy of Lender or other rules or regulations of Lender applicable to it (including, but not limited to, ▇▇▇▇▇▇’s window period policy) or (E) any judgment, injunction, order or decree by which it is bound.

 

 

(b)            Lender represents and warrants to Borrower, as of the date hereof, and as of the date any Loaned ADSs are transferred to Borrower in respect of the Loan hereunder, that the Loaned ADSs and the Ordinary Shares (or other Deposited Securities, as applicable) underlying the Loaned ADSs have been duly authorized and, upon the issuance and delivery by the Lender of any Loaned ADSs to Borrower in accordance with the terms and conditions hereof, and subject to the contemporaneous or prior receipt of the Loan Processing Fee by Lender, such Loaned ADSs and the Ordinary Shares (or other Deposited Securities, as applicable) underlying such Loaned ADSs have been, or will be, duly authorized, validly issued, fully paid and non-assessable (which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof) and will not be subject to any call for the payment of further capital, and will rank pari passu with all other ADSs and Ordinary Shares (or other Deposited Securities), as applicable, and the holders of Ordinary Shares (or other Deposited Securities, as applicable) and holders of ADS have no preemptive rights with respect to the Loaned ADSs or the Ordinary Shares (or other Deposited Securities, as applicable) underlying such Loaned ADSs.

 

(c)            Lender represents and warrants to Borrower, as of the date any Loaned ADSs are transferred to Borrower in respect of the Loan hereunder, that it has good, valid and marketable title to all such ADSs and the Ordinary Shares (or other Deposited Securities, as applicable) underlying the Loaned ADSs, free and clear of any Liens (other than Permitted Liens);

 

(d)            Lender represents and warrants to Borrower, (i) as of the date hereof, and as of the date any Loaned ADSs are transferred to Borrower in respect of the Loan, that the outstanding ADSs (including the Loaned ADSs) are listed on the Exchange, and the Ordinary Shares that are Deposited Securities in respect of such Loaned ADSs are listed on the HKSE and (ii) as of the date any Loaned ADSs are transferred to Borrower in respect of the Loan hereunder, ▇▇▇▇▇▇ shall have delivered any required notice to the Exchange and the HKSE concerning the issuance of such Loaned ADSs and the Ordinary Shares represented thereby.

 

(e)            Lender represents and warrants, as of the date hereof, that it is not entering into this Agreement or taking any action hereunder (i) on the basis of any material non-public information regarding ADSs, Ordinary Shares or Lender or any “inside information” (as defined in sections 245 and 285 of SFO) regarding Lender, (ii) to create actual or apparent trading activity in ADSs (or any security convertible into or exchangeable for ADSs) or to raise or depress or otherwise manipulate the price of ADSs (or any security convertible into or exchangeable for ADSs) in violation of applicable law, or (iii) as part of a plan or scheme to evade compliance with U.S. federal securities laws, including, without limitation, any antifraud or anti-manipulation provisions of the federal or applicable state securities laws.

 

 

(f)             Lender represents and warrants to Borrower that, as of the date hereof, and as of the date any Loaned ADSs are transferred to Borrower in respect of the Loan hereunder, ▇▇▇▇▇▇ is not, and will not be required to register as, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(g)            Lender represents and warrants to Borrower, as of and immediately after the date any Loaned ADSs are transferred to Borrower in respect of the Loan hereunder, that (i) Lender is not “insolvent” (as such term is defined under Section 101(32) of Title 11 of the United States Code (the “Bankruptcy Code”)), (ii) for the purposes of Cayman Islands law, Lender is not insolvent and is able to pay its debts when due and (iii) Lender would be able to purchase the Maximum Number of ADSs in compliance with Cayman Islands law.

 

(h)            Lender represents and warrants to Borrower as of the date hereof and as of the date any Loaned ADSs are transferred to Borrower in respect of the Loan hereunder that the Deposit Agreement has been duly authorized, executed and delivered by ▇▇▇▇▇▇, and constitutes a valid and legally binding agreement of Lender, enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and, upon the deposit of Ordinary Shares in respect thereof in accordance with the provisions of the Deposit Agreement and this Agreement and the issuance by the Depositary of ADSs, such ADSs will be duly and validly issued and the persons in whose names the ADSs are registered will be entitled to the rights specified therein and in the Deposit Agreement.

 

(i)             Lender represents to Borrower that for United States tax purposes it is a foreign corporation within the meaning of Section 7701(a) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

 

(j)             ▇▇▇▇▇▇ represents to Borrower that it takes the position that the transactions contemplated by this Agreement are not subject to Tax or reporting under Public Notice 2015 No. 7 and any related laws and regulations of the PRC.

 

(k)             ▇▇▇▇▇▇ and Borrower each represents and agrees that (A) this Agreement is not unsuitable for it in the light of such party’s financial situation, investment objectives and needs and (B) it is entering into this Agreement in reliance upon such tax, accounting, regulatory, legal and financial advice as it deems necessary and not upon any view expressed by the other.

 

(l)             Lender represents to Borrower that it is not a United States person or a foreign person controlled by or acting on behalf of or in conjunction with United States persons within the meaning of, and Lender is not subject to, Regulation X of the Board of Governors of the Federal Reserve System (12 C.F.R. Section 224).

 

(m)            ▇▇▇▇▇▇ and Borrower each acknowledges and agrees that “Non-Reliance”, “Agreements and Acknowledgments Regarding Hedging Activities” and “Additional Acknowledgments” (each as set forth in the 2002 ISDA Definitions) will be deemed to be applicable as if set forth herein.

 

(n)            Lender represents that its board of directors (the “Board”) has concluded that (A) this Agreement is suitable for it, for its commercial benefit and in its best interests, in light of its own investment objectives, financial condition and expertise, (B) that it has received adequate consideration for the Loan contemplated by this Agreement, and (C) that this Agreement has been duly approved and authorized by the Board after due consideration by the Board of the foregoing matters and those referred to in sub-paragraph (n)(B) above.

 

 

(o)            Lender is exempt from compliance with (A) the provisions of the Hong Kong Codes on Takeovers and Mergers and Share Buy-backs and (ii) the provisions of Part XV of the SFO pursuant to the exemption granted by the Securities and Futures Commission of Hong Kong.

 

(p)            ▇▇▇▇▇▇ and the Hong Kong Shares are listed on the HKSE on a secondary basis pursuant to Chapter 19C of the Listing Rules.

 

(q)            Lender represents that to its actual knowledge, no state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Ordinary Shares (including in the form of ADSs) would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Borrower or its affiliates owning or holding (however defined) Loaned ADSs; provided that Lender makes no representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities by Borrower or any of its affiliates solely as a result of it or any of such affiliates being financial institutions or broker-dealers.

 

(r)             Lender is not a “covered foreign person,” as that term is defined in 31 C.F.R. § 850.209 (“Covered Foreign Person”). Neither the Lender nor any of its subsidiaries and consolidated affiliated entities engage, or have plans to engage, in a Covered Activity, as that term is defined in 31 C.F.R. § 850.221, and the ▇▇▇▇▇ does not, directly or indirectly, hold a board seat on, have a voting or equity interest in, or have any contractual power to direct or cause the direction of the management or policies of any person or persons that engages or plans to engage in any Covered Activity and from which the Lender derives more than 50% of its revenue or net income individually, or as aggregated across such persons from each of which the Lender derives at least US$50,000 (or equivalent) of its revenue or net income, on an annual basis, or for which the Lender incurs more than 50% of its capital expenditure or operating expenses individually, or as aggregated across such persons for each of which the Lender incurs at least US$50,000 (or equivalent) of its capital expenditure or operating expenses, on an annual basis.

 

Section 8.         Covenants.

 

(a)            The parties hereto agree and acknowledge that Borrower is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this Agreement and the Loan hereunder is intended to be (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Borrower is intended to be entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

 

 

(b)            Lender shall, on or prior to the date that is one Scheduled Trading Day immediately following any date on which Lender effects any repurchase of ADSs or Ordinary Shares, including Ordinary Shares underlying the ADSs, give Borrower a written notice of its Outstanding Shares taking into account such repurchase (a “Repurchase Notice”) if, following such repurchase, the Outstanding Shares shall have decreased by more than 0.5% since the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, the Outstanding Shares as of the date hereof). In addition, Lender shall, immediately following any adjustment described in this sentence, give Borrower written notice of the section or sections of the Indenture, and, if applicable, the formula therein, pursuant to which any adjustment or change will be made to made to the Convertible Notes in connection with any Conversion Rate adjustment event or any transaction or event set forth in Section 14.04 of the Indenture (an “Indenture Adjustment Notice”). If such repurchase or transaction or event giving rise to such Indenture Adjustment Notice, or the intention to effect the same, would constitute material nonpublic information with respect to Lender, the ADSs or the Ordinary Shares or would otherwise require a disclosure pursuant to the applicable listing rules to which Lender or any of its ADSs, Ordinary Shares or Common Equity are subject to at that time, Lender shall make public disclosure thereof at or prior to delivery of such Repurchase Notice or Indenture Adjustment Notice, as applicable.

 

(c)            Reserved.

 

(d)            Lender shall provide to Borrower (i) a properly executed Internal Revenue Service Form W-8BEN-E (or any successor thereto) prior to the initial delivery of the Loaned ADSs hereunder and from time to time thereafter whenever a lapse in time or change in circumstances renders such form inaccurate or the Lender becomes aware that the form has become obsolete, in each case, in any material respect or upon reasonable request by Borrower; (ii) any forms and other documentation required to be delivered in order to avoid a withholding Tax under Sections 1471 through 1474 of the Code; and (iii) any other form or document that may be required or reasonably requested in writing in order to allow Borrower to make a payment under this Agreement without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate. Lender shall provide a written notice to Borrower immediately upon becoming aware that any cash distributions paid (or that are planned to be paid) on any Loaned ADSs or Ordinary Shares or any Non-Cash Distributions made (or that are planned to be made) on or in respect of the Loaned ADSs or Ordinary Shares, did or will not qualify, or that there is a substantial likelihood that such cash distributions or Non-Cash Distributions did or will not qualify, as foreign source dividends for U.S. federal income tax purposes within the meaning of Section 862 of the Code, or were or would otherwise be subject to withholding Tax.

 

(e)            Lender will provide a written notice to Borrower immediately upon ▇▇▇▇▇▇ becoming aware that Lender is not, or will no longer be, a Foreign Private Issuer.

 

 

(f)             Lender shall deliver to Borrower, on or before the date hereof, resolutions of its Board authorizing this Agreement.

 

(g)            Lender shall, upon the occurrence of any event described in the definitions of “Loaned ADSs” hereunder or “Deposited Securities” in the Deposit Agreement that results in the right of holders of ADSs or Deposited Securities, as applicable, to receive more than one type of consideration based upon any form of shareholder election, notify Borrower promptly (but in any case prior to the effective date of such event) of the weighted average of the types and amounts of consideration actually received by the holders of ADSs or Deposited Securities, as applicable.

 

(h)            ▇▇▇▇▇▇ agrees and acknowledges that it shall have no interest whatsoever in any of the proceeds that any party may receive in connection with the sale of the Loaned ADSs by ▇▇▇▇▇▇▇▇.

 

(i)             ▇▇▇▇▇▇ has complied, and will during the term of this Agreement comply, in all material respects with the applicable laws and regulations of Hong Kong with regard to the Loan, including without limitation, any laws, regulations, requirements and obligations imposed by the Listing Rules and the SFO.

 

(j)             Lender shall promptly notify Borrower upon reasonably believing that it has become a Covered Foreign Person and/or engaging in or having plans to engage in a “covered activity” (as that term is defined in the Outbound Investment Rules).

 

Section 9.         Termination Events.

 

(a)            The Loan may, at the option of Lender by a written notice to Borrower (which option shall be deemed exercised, even if no notice is given, immediately on the occurrence of an event specified in either Section 9(a)(iii) or ‎(iv) below), be terminated (A) immediately on the occurrence of any of the events set forth in either Section 9(a)(iii) or ‎(iv) below and (B) two (2) Trading Days following such notice on the occurrence of any of the other events set forth below (each, a “Borrower Termination Event”) (provided that Lender may, in its sole discretion, waive in writing such Borrower Termination Event):

 

(i)             Subject to Section 10(a), Borrower fails to deliver the Loaned ADSs or the equivalent in Ordinary Shares (or other Common Equity of the Lender at such time) to Lender as required by Section 3, unless such failure to deliver is caused solely by a technical or administrative error outside the control of Borrower and delivery is made within two (2) Business Days of its due date;

 

(ii)            Subject to Section 10(a), Borrower fails to deliver or pay to Lender when due any cash, securities or other property as required by Section 4 or Section 10, unless such failure to deliver or pay is caused solely by a technical or administrative error outside the control of Borrower and delivery or payment is made within two (2) Business Days of its due date;

 

(iii)           the filing by or on behalf of Borrower of a voluntary petition or an answer, or the convening of a meeting for the passing of a resolution, seeking reorganization, arrangement, readjustment of its debts, voluntary winding up or liquidation, or for any other relief under any bankruptcy, reorganization, receivership, compromise, arrangement, insolvency, readjustment of debt, dissolution, winding-up or liquidation or similar act or law, of any state, federal or other applicable foreign jurisdictions, now or hereafter existing (“Bankruptcy Law”), or any action by Borrower for, or consent or acquiescence to, the appointment of a receiver, trustee, custodian or similar official of Borrower, or of all or a substantial part of its property; or the making by Borrower of a general assignment for the benefit of creditors; or the inability of Borrower, or the admission by Borrower in writing of its inability, to pay its debts as they become due;

 

 

(iv)           the filing of any involuntary petition against Borrower in bankruptcy or the winding up or liquidation or seeking reorganization, arrangement, readjustment of its debts or for any other relief under any Bankruptcy Law and an order for relief by a court having jurisdiction in the premises shall have been issued or entered therein; or any other similar relief shall be granted under any applicable federal or state law or law of any other applicable foreign jurisdictions; or a decree or order of a court having jurisdiction in the premises for the winding up or liquidation of Borrower or the appointment of a receiver, liquidator, sequestrator, trustee or other officer having similar powers over Borrower or over all or a part of its property shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of Borrower or of all or a substantial part of its property or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of Borrower and continuance of any such event for thirty (30) consecutive calendar days unless dismissed, bonded to the satisfaction of the court having jurisdiction in the premises or discharged;

 

(v)            Borrower fails to provide any indemnity as required by Section 12;

 

(vi)           (a) Borrower notifies Lender of ▇▇▇▇▇▇▇▇’s inability or intention not to perform its obligations hereunder or (b) Borrower otherwise disaffirms, fails to perform, rejects or repudiates any of its obligations hereunder; or

 

(vii)          any representation made by Borrower under this Agreement in connection with the Loan shall be incorrect or untrue in any material respect during the term of the Loan or Borrower fails to comply in any material respect with any of its covenants or agreements under this Agreement.

 

(b)            The Loan may, at the option of Borrower by a written notice to Lender (which option shall be deemed exercised, even if no notice is given, immediately on the occurrence of an event specified in either Section 9(b)(i) or ‎(ii) below), be terminated immediately on the occurrence of any of the events set forth below (each, a “Lender Termination Event”) (provided that Borrower may, in its sole discretion, waive in writing such Lender Termination Event):

 

(i)             the filing by or on behalf of Lender of a voluntary petition or an answer, or the convening of a meeting for the passing of a resolution, seeking reorganization, restructuring, arrangement, readjustment of its debts, striking-off, voluntary winding-up, provisional liquidation or liquidation, or for any other relief under any Bankruptcy Law, or any action by ▇▇▇▇▇▇ for, or consent or acquiescence to, the appointment of a receiver, trustee, restructuring officer or other custodian of Lender, or of all or a substantial part of its property; or the making by ▇▇▇▇▇▇ of a general assignment for the benefit of creditors; or the inability of Lender, or the admission by ▇▇▇▇▇▇ in writing of its inability, to pay its debts as they become due;

 

 

(ii)            the filing of any involuntary petition against Lender in bankruptcy or for its winding-up, provisional liquidation or liquidation or seeking reorganization, arrangement, readjustment of its debts or for any other relief under any Bankruptcy Law and an order for relief by a court having jurisdiction in the premises shall have been issued or entered therein; or any other similar relief shall be granted under any applicable federal or state law, Cayman Islands law or law of any other applicable foreign jurisdictions; or a decree or order of a court having jurisdiction in the premises for the winding-up, provision liquidation or liquidation of Lender or the appointment of a receiver, liquidator, provisional liquidator, restructuring officer, sequestrator, trustee or other officer having similar powers over Lender or over all or a part of its property shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of Lender or of all or a substantial part of its property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of ▇▇▇▇▇▇; and continuance of any such event for thirty (30) consecutive calendar days unless dismissed, bonded to the satisfaction of the court having jurisdiction in the premises or discharged; or Lender is dissolved or struck off;

 

(iii)           Lender fails to provide any indemnity as required by Section 12;

 

(iv)           (a) Lender notifies Borrower of ▇▇▇▇▇▇’s inability or intention not to perform its obligations hereunder or (b) ▇▇▇▇▇▇ otherwise disaffirms, fails to perform, rejects or repudiates any of its obligations hereunder;

 

(v)            any representation made by Lender under this Agreement in connection with the Loan shall be incorrect or untrue in any material respect during the term of the Loan or Lender fails to comply in any material respect with any of its covenants or agreements under this Agreement;

 

(vi)           the Hong Kong Shares of the Lender become listed on the HKSE on a primary or dual primary basis pursuant to Chapter 19 of the Listing Rules or if the provisions of the Hong Kong Codes on Takeovers and Mergers and Share Buy-backs become applicable to Lender due to its primary listing status, and (x) the transaction contemplated by this Agreement was notified or determined by HKSE or the Securities and Futures Commission to be in breach of the relevant laws, regulations or requirements administered by them, and Borrower is notified by Lender thereof or (y) Borrower reasonably believes that ▇▇▇▇▇▇ is unable to cure, remedy or obtain waiver regarding such notification or ruling; or

 

(vii)          (x) Borrower is notified by Lender or (y) Borrower reasonably believes that (A) Lender or any of its subsidiaries and consolidated affiliated entities is or has become a Covered Foreign Person and/or currently engages, or has plans to engage, directly or indirectly, in a Covered Activity, as that term is defined in 31 C.F.R. § 850.221and/or (B) Lender directly or indirectly, holds a board seat on, has a voting or equity interest in, or has any contractual power to direct or cause the direction of the management or policies of any person or persons that engages or plans to engage in any Covered Activity and from which the Lender derives more than 50% of its revenue or net income individually, or as aggregated across such persons from each of which the Lender derives at least US$50,000 (or equivalent) of its revenue or net income, on an annual basis, or for which the Lender incurs more than 50% of its capital expenditure or operating expenses individually, or as aggregated across such persons for each of which the Lender incurs at least US$50,000 (or equivalent) of its capital expenditure or operating expenses, on an annual basis.

 

 

Section 10.       Repurchase Obstacle; ▇▇▇▇▇▇’s Remedies; Delisting from the Exchange.

 

(a)            Notwithstanding anything to the contrary herein, if Borrower is required to return Loaned ADSs pursuant to Section 3, and, in the good faith judgment of Borrower, the purchase and/or borrow of Loaned ADSs by Borrower or its affiliate or agent in an aggregate amount equal to all or any portion of the number of Loaned ADSs to be delivered to Lender in accordance with Section 3 shall (A) be prohibited by any law, rule or regulation of any governmental authority to which Borrower or its affiliate or agent is or would be subject (including any rule or code of conduct generally applicable to members of any self-regulatory organization of which Borrower or its affiliate or agent is a member or to the regulation of which it is subject (whether or not such rules or codes of conduct are imposed by law or have been voluntarily adopted by Borrower or its affiliate or agent)) or any related policies and procedures applicable to Borrower or its affiliate or agent (provided that such policies or procedures are generally applicable in similar situations and applied in a non-discriminatory manner) or would be unadvisable, based on the advice of external counsel of national standing or internal counsel of Borrower (or any of its affiliates), if Borrower or its affiliate or agent were to effect such purchases of Loaned ADSs as if Borrower or its affiliate or agent, as the case may be, were Lender or an affiliated purchaser of Lender while remaining in compliance with any such law, rule, regulation or code of conduct or related policies and procedures applicable to Borrower or such affiliate or agent (provided that such policies or procedures are generally applicable in similar situations and applied in a non-discriminatory manner), (B) violate, or would upon such purchase or borrow likely violate, any order or prohibition of any court, tribunal or other governmental authority, (C) require the prior consent of any court, tribunal or governmental authority prior to any such purchase or borrow, (D) based on the advice of counsel, subject Borrower or its affiliate or agent, as a result of making such purchase or borrow, to any liability or potential liability under any applicable federal securities law (including, without limitation, Section 16 of the Exchange Act, if applicable) or (E) be impracticable due to illiquidity of the ADSs across all relevant markets relative to the date hereof or due to a Delisting or cancellation of the ADSs (each of (A), (B), (C), (D) and (E), a “Repurchase Obstacle”), then, in each case, Borrower shall immediately notify Lender of the Repurchase Obstacle and the basis therefor, it being agreed and understood that Borrower shall not be obligated to disclose any confidential or other information that Borrower believes to be confidential, subject to contractual, legal or regulatory obligations not to disclose such information, in each case, used by Borrower in its determination regarding the Repurchase Obstacle, whereupon Borrower’s obligations under Section 3 shall be suspended until such time as no Repurchase Obstacle with respect to such obligations shall exist (a “Repayment Suspension”). Following the occurrence of and during the continuation of any Repayment Suspension, Borrower shall use commercially reasonable efforts to remove or cure the Repurchase Obstacle as promptly as reasonably practicable (if removal or cure of such Repurchase Obstacle is reasonably within Borrower’s control) and shall as promptly as reasonably practicable deliver to Lender any Loaned ADSs it is able to acquire in a manner that (x) would be in compliance with the law, rules, regulations, codes of conduct and policies and procedures set forth in clause (A) in the immediately preceding paragraph and (y) shall not be commercially impracticable after using commercially reasonable efforts, in the reasonable judgment of ▇▇▇▇▇▇▇▇, at the time; provided that (except in circumstances where the Repurchase Obstacle resulted solely from a Borrower Termination Event or solely from the failure of Borrower to comply with applicable securities laws or regulations or rules of a securities self-regulatory organization in existence as of the date hereof) Borrower shall not be required to use such commercially reasonable efforts to remove or cure the Repurchase Obstacle if Borrower believes in good faith that such commercially reasonable efforts would cause it to incur any costs and expenses (including of legal counsel to Borrower), unless Lender has agreed in writing to reimburse Borrower for such costs and expenses (including of legal counsel to Borrower) on terms (including any surety or guarantee) acceptable to Borrower in its reasonable but sole discretion. Other than if Borrower is required to return Loaned ADSs pursuant to Section 3 following a Lender Termination Event, if the Repurchase Obstacle does not cease to exist within ninety (90) Trading Days of the original date on which Borrower is required to return Loaned ADSs pursuant to this Agreement (such 90th Trading Day, the “Final Day”), then Lender shall have the right at any time thereafter, upon prior written notice, to require Borrower to pay to Lender, in lieu of the delivery of Loaned ADSs in accordance with Section 3, within five (5) Business Days of such notification, an amount in immediately available funds (the “Replacement Cash”) equal to the product of (x) the arithmetic average of the volume-weighted average prices per ADS (the “VWAP Price”) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on the Exchange on each Trading Day during a commercially reasonable period of consecutive Trading Days as determined by the Calculation Agent and (y) the number of Loaned ADSs otherwise required to be delivered; provided that, in case of (x) a Repurchase Obstacle due to a Delisting or cancellation of the ADSs, (y) an event referred to in Section 9(b)(i) or Section 9(b)(ii), or (z) where the prices for the ADSs are unavailable or manifestly incorrect, the VWAP Price shall be calculated by the Calculation Agent using commercially reasonable means, which may include, in the case of a Delisting, (A) the prevailing market prices of the Hong Kong Shares, if referencing such prevailing market prices would be commercially reasonable at the time (as determined by Borrower) and (B) the cost of Borrower’s and its affiliates’ hedging and hedge unwind activities, taking into account, among other things, applicable law and regulation, and Borrower’s and its affiliates’ related policies and procedures). In case (A) Borrower is required to return Loaned ADSs pursuant to Section 3 following a Lender Termination Event and (B) the Repurchase Obstacle does not cease to exist within ninety (90) Trading Days of the original date on which Borrower is required to return Loaned ADSs pursuant to this Agreement, Borrower may, in its sole discretion, elect to pay the Replacement Cash as set forth above; for the avoidance of doubt, in the absence of such election, the provisions of the immediately preceding sentence shall continue to apply. ▇▇▇▇▇▇ agrees to consult in good faith with Borrower regarding the reasonably appropriate means to remove or cure a Repurchase Obstacle reasonably within its control, in compliance with applicable law and regulation.

 

 

(b)            If Borrower shall fail to deliver Loaned ADSs to Lender as a result of a Borrower Termination Event pursuant to Section 3 when due or shall fail to pay Replacement Cash when due, then, in addition to any other remedies available to Lender under this Agreement or under applicable law, Lender shall have the right (upon prior written notice to Borrower) to purchase a like number of Loaned ADSs (“Replacement ADSs”) in the U.S. principal market for such securities in a commercially reasonable manner; provided that if any Repayment Suspension or failure to deliver shall exist and be continuing, Lender may not exercise such right unless Borrower shall fail to deliver the Loaned ADSs or pay the Replacement Cash to Lender when due in accordance with Section 10(a). To the extent Lender shall exercise such right, ▇▇▇▇▇▇▇▇’s obligation to return a like amount of Loaned ADSs or to pay the Replacement Cash, as applicable, shall terminate and Borrower shall be liable to Lender for the purchase price of the Replacement ADSs (plus all other amounts, if any, due to Lender hereunder), all of which shall be due and payable within three (3) Trading Days of notice to Borrower by Lender of the aggregate purchase price of the Replacement ADSs. The purchase price of Replacement ADSs purchased under this Section 10(b) shall include broker’s fees and commissions or any other reasonable costs, fees and expenses related to such purchase if none of the Borrower or any of its affiliates is able to act as a broker with respect to such purchases. In the event Lender exercises its rights under this Section 10(b), Lender may elect in its sole discretion, in lieu of purchasing all or a portion of the Replacement ADSs, to be deemed to have made, respectively, such purchase of Replacement ADSs for an amount equal to the arithmetic average of the VWAP Prices of the ADSs during the ten (10) consecutive Trading Days period ending on the Trading Day immediately preceding the date Lender elects to exercise this remedy.

 

(c)            Without limiting the generality of foregoing, upon the occurrence of a Delisting, if the Lender and the Ordinary Shares are listed on the HKSE, the Borrower, in its capacity as the Calculation Agent, may propose to Lender an adjustment as it reasonably determines appropriate to account for the economic effect on the relevant transaction(s) contemplated hereunder of such event and so that the transaction(s) contemplated hereunder may continue notwithstanding such Delisting, subject to credit, legal, tax, regulatory and other relevant internal policies and procedures applicable to the Borrower and its affiliates at the time, taking into account, among other factors and without limitation, such adjustments to the Borrower’s hedge position and hedging strategy, any reasonable losses or costs that are or would be incurred as a result of the related announcement or in terminating or replacing the Borrower’s hedge position, and related assumptions (including liquidity assumptions), costs, fees, taxes and other charges (including internal charges), as the Borrower, in its capacity as the Calculation Agent, determines in a commercially reasonable manner (it being understood that other market participants acting in a different manner shall not be evidence that such adjustments are not commercially reasonable). If the Borrower, in its capacity as the Calculation Agent, determines, in its commercially reasonable judgment, that no adjustment that it is permitted to make pursuant to the preceding sentence will produce a commercially reasonable result or if Borrower cannot reasonably continue the transaction in light of the then legal, regulatory, tax or internal requirements or related policies and procedures applicable to Borrower, its affiliate or the relevant transaction(s) hereunder, the Borrower shall be entitled to terminate this Agreement. After being notified by the Calculation Agent of a Delisting, Lender shall be entitled to terminate this Agreement if (i) it is unwilling to accept any cost to Lender of the adjustment proposed by the Calculation Agent or (ii) it determines in good faith it should not continue the Agreement in light of then-current legal, regulatory or tax considerations.

 

 

(d)            Notwithstanding anything to the contrary, the parties hereto agree that no special, indirect or consequential damages shall be due in connection with, arising out of, or in relation to this Agreement.

 

Section 11.       Transfers.

 

(a)            Subject to Section 3(d), all transfers of Loaned ADSs to Borrower or Lender hereunder shall be made by the crediting by a Clearing Organization of such Loaned ADSs to the transferee’s “securities account” (within the meaning of Section 8-501 of the UCC) maintained with such Clearing Organization as the transferee shall reasonably inform the transferor, or in the case of transfers of Hong Kong Shares, the crediting of such Hong Kong Shares to a CCASS account (or an account or a sub-account held through CCASS) of Borrower or Lender, as the case may be. Subject to Section 3(d), all transfers of Loaned ADSs to Lender hereunder shall be made by the crediting of such Loaned ADSs to the Lender's Designated Account (whereupon, for the avoidance of doubt, such Loaned ADSs credited to ▇▇▇▇▇▇'s Designated Account shall become the property of ▇▇▇▇▇▇, and Borrower shall have no voting, dispositive control or pecuniary interest with respect thereto).

 

(b)            All transfers of cash hereunder to Borrower or Lender shall be by wire transfer in immediately available, freely transferable funds to the Borrower’s Cash Account (or such other account as Borrower shall notify to Lender in writing prior to such transfer) or the Lender’s Cash Account (or such other account as Lender shall notify to Borrower in writing prior to such transfer) respectively.

 

(c)            A transfer of securities or cash may be effected under this Section 11 on any day except (i) a day on which the transferee is closed for business at its principal address or (ii) a day on which a Clearing Organization or wire transfer system is closed, if the facilities of such Clearing Organization or wire transfer system are required to effect such transfer.

 

(d)            The rights and duties of Borrower under this Agreement may not be assigned or transferred by Borrower without the prior written consent of Lender, such consent not to be unreasonably withheld or delayed; provided that Borrower may, without the prior written consent of Lender, assign or transfer any of its rights or duties hereunder to Borrower’s ultimate parent entity or any directly or indirectly wholly-owned subsidiary or affiliate of Borrower’s ultimate parent entity (a “Permitted Transferee”) as long as such Permitted Transferee is of equal or better credit rating as Borrower or is guaranteed by Borrower or an entity of equal or better credit rating as Borrower.

 

(e)            The rights and duties of Lender under this Agreement may not be assigned or transferred by Lender without the prior written consent of ▇▇▇▇▇▇▇▇.

 

 

Section 12.       Indemnities.

 

(a)            Lender hereby agrees to indemnify and hold harmless Borrower and its former, present and future affiliates and its and their directors and officers, employees and other agents and representatives (to the extent permitted by applicable laws) and each person, if any, who controls the Borrower within the meaning of the Securities Act (to the fullest extent permitted by applicable law) from and against any and all liabilities, judgments, claims, settlements, losses, damages, fees, liens, Taxes, penalties, obligations and expenses (including, without limitation, any losses relating to Borrower’s market activities as a consequence of becoming, or of the risk of becoming, subject to Section 16(b) of the Exchange Act, including, without limitation, any forbearance of market activities or cessation of market activities and any losses in connection therewith or with respect to this Agreement) incurred or suffered by any such person or entity directly or indirectly arising from, by reason of, or in connection with, (i) any breach by Lender of any of its representations or warranties contained in Section 7 or (ii) any breach by Lender of any of its covenants or agreements in this Agreement.

 

(b)            Borrower hereby agrees to indemnify and hold harmless Lender and its affiliates and its and their directors and officers, and each person, if any, who controls the Lender within the meaning of the Securities Act from and against any and all liabilities, judgments, claims, settlements, losses, damages, fees, liens, Taxes, penalties, obligations and expenses, incurred or suffered by any such person or entity directly arising from, by reason of, or in connection with (i) any breach by Borrower of any of its representations or warranties contained in Section 7 or (ii) any breach by Borrower of any of its covenants or agreements in this Agreement.

 

(c)            In case any claim or litigation which might give rise to any obligation of a party under this Section 12 (each an “Indemnifying Party”) shall come to the attention of the party seeking indemnification hereunder (the “Indemnified Party”), the Indemnified Party shall promptly notify the Indemnifying Party in writing of the existence and amount thereof; provided that the failure of the Indemnified Party to give such notice shall not adversely affect the right of the Indemnified Party to indemnification under this Agreement, except to the extent the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party shall promptly notify the Indemnified Party in writing if it accepts such claim or litigation as being within its indemnification obligations under this Section 12. Such response shall be delivered no later than thirty (30) days after the initial notification from the Indemnified Party; provided that, if the Indemnifying Party reasonably cannot respond to such notice within thirty (30) days, the Indemnifying Party shall respond to the Indemnified Party as soon thereafter as reasonably possible.

 

(d)            An Indemnifying Party shall be entitled to participate in and, if (i) in the judgment of the Indemnified Party such claim can properly be resolved by money damages alone and the Indemnifying Party has the financial resources to pay such damages and (ii) the Indemnifying Party admits that this indemnity fully covers the claim or litigation, the Indemnifying Party shall be entitled to direct the defense of any claim at its expense, but such defense shall be conducted by legal counsel reasonably satisfactory to the Indemnified Party. An Indemnified Party shall not make any settlement of any claim or litigation under this Section 12 without the written consent of the Indemnifying Party. Notwithstanding the foregoing provisions in this Section 12, an Indemnifying Party shall not be responsible for any special, indirect or consequential damages, even if informed of the possibility thereof.

 

 

Section 13.       Termination of Agreement.

 

(a)            This Agreement shall terminate upon the earliest of (i) the date on which Lender notifies Borrower in writing of its intention to terminate this Agreement at any time after the date on which the entire principal amount of the Convertible Notes ceases to be outstanding, whether as a result of conversion, repurchase, redemption, cancellation or otherwise, (ii) the date as of which Borrower has returned all Loaned ADSs to Lender, (iii) the written agreement of ▇▇▇▇▇▇ and Borrower to so terminate, (iv) the termination of the Convertible Note Purchase Agreement without issuance of any Convertible Notes, (v) the election (or deemed election) by Lender to terminate pursuant to Section 9(a) upon the occurrence of a Borrower Termination Event as set forth in Section 9(a), (vi) the election (or deemed election) by Borrower to terminate pursuant to Section 9(b) upon the occurrence of a Lender Termination Event as set forth in Section 9(b); (v) the election by Borrower to terminate pursuant to the penultimate ultimate sentence of Section 10(c) or (vi) the election by ▇▇▇▇▇▇ to terminate pursuant to the ultimate sentence of Section 10(c).

 

(b)            Unless otherwise agreed in writing by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, the provisions of Section 12 shall survive the termination of this Agreement.

 

Section 14.       Delivery of ADSs; Right to Extend.

 

Notwithstanding anything to the contrary herein, at any time at which (a) (x) Lender is not a Foreign Private Issuer and (y) the number of Ordinary Shares “beneficially owned” (within the meaning of ‎Section 13 of the Exchange Act and the rules promulgated thereunder) by Borrower or any affiliate of Borrower subject to aggregation with Borrower under Section 13 of the Exchange Act and rules or any “group” (within the meaning of such Section 13 and rules) of which Borrower is a member plus the number of Ordinary Shares represented by the Loaned ADSs is, or, as a result of complying with Section 3, would be, equal to or greater than 7.5% of the Outstanding Shares, or (b) the Share Amount is, or, as a result of complying with Section 3, would be, equal to or exceeds the Applicable Share Limit, then Borrower may, by prior notice to Lender, satisfy its obligation to deliver any Loaned ADSs or other securities on any date due under the terms of this Agreement (an “Original Delivery Date”) by making separate deliveries of Loaned ADSs or such other securities, as the case may be, at more than one time on or prior to the twentieth (20^th) Trading Day immediately following such Original Delivery Date (the “Final Delivery Due Date”), so long as the aggregate number of Loaned ADSs and other securities so delivered on or prior to the Final Delivery Due Date is equal to the number required to be delivered on such Original Delivery Date; provided that to the extent there is any Repurchase Obstacle on any Trading Day following such Original Delivery Date but prior to the Final Delivery Due Date, Borrower shall be permitted, in its good faith and commercially reasonable discretion based on advice of counsel, to make separate deliveries of Loaned ADSs or such other securities up until the twentieth (20^th) Trading Day immediately following such time when the Repurchase Obstacle ceases to exist.

 

Section 15.       Notices.

 

(a)            All notices and other communications hereunder shall be in writing and, if delivered in person, by courier or mail, shall be deemed to have been duly given when received, and if delivered by email, shall be deemed to have been duly given when sent, provided that such email was sent to the correct email address.

 

 

(b)            Any and all notices, demands, or communications of any kind relating to this Agreement between Lender and Borrower shall be transmitted exclusively at the following addresses:

 

Borrower:

 

▇.▇. ▇▇▇▇▇▇ Securities plc 

▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 

Canary Wharf 

▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 

Attn: EMEA SBL Desk 

Email: ▇▇▇▇▇_▇▇▇▇▇▇▇▇▇_▇▇▇▇_▇▇▇_▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇

Phone: ▇▇▇▇▇▇▇▇▇▇▇▇▇

 

Lender:

 

GDS Holdings Limited 

2/F – Tower 2 

Youyou Century Place 

▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ 

Pudong, Shanghai 200127 

Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer 

Fax: ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇

 

Section 16.      Governing Law; Submission To Jurisdiction; Severability.

 

(a)            This Agreement shall be governed by and construed in accordance with the laws of the State of New York, but excluding any choice of law provisions that would require the application of the laws of a jurisdiction other than New York.

 

(b)            EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY SUCH COURT, SOLELY FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS OBLIGATIONS HEREUNDER OR RELATING IN ANY WAY TO THIS AGREEMENT OR THE LOAN HEREUNDER AND WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF RESIDENCE OR DOMICILE.

 

(c)            EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(d)            Lender hereby appoints Cogency Global Inc., located at ▇▇▇ ▇▇▇▇ ▇▇^▇▇ ▇▇▇▇▇▇, ▇▇^▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as agent for service of process.

 

 

(e)            To the extent permitted by law, the unenforceability or invalidity of any provision or provisions of this Agreement shall not render any other provision or provisions herein contained unenforceable or invalid.

 

Section 17.      U.K. Resolution Stay and Contractual Bail-in Provisions.

 

(a)            Recognition of the U.K. Special Resolution Regime.

 

(i)             The terms of the 2020 UK (PRA Rule) Jurisdictional Module (the “2020 UK Module”) are incorporated into and form part of this Agreement, and this Agreement shall be deemed to be a Covered Agreement for purposes of the 2020 UK Module. In the event of any inconsistencies between this Agreement and the 2020 UK Module, the 2020 UK Module will prevail. Borrower shall be deemed to have adhered to the 2020 UK Module as a Regulated Entity Counterparty, and the Lender shall be deemed to have adhered to the 2020 UK Module as a Module Adhering Party and identified Borrower as a Regulated Entity Counterparty.

 

(ii)            Each party agrees that, with respect to the Agreement between them, if a:

 

(A)            Crisis Prevention Measure;

 

(B)            Crisis Management Measure; or

 

(C)            Recognised Third-country Resolution Action

 

is taken in relation to Borrower or any member of the same Group as Borrower, the Lender shall be entitled to exercise a Termination Right under, or rights to enforce a Security Interest in connection with the Agreement, to the extent that it would be entitled to do so under the Special Resolution Regime if the Agreement was governed by the laws of any part of the United Kingdom.

 

(iii)            For purposes of this Section 17(a):

 

(A)            Section 48Z of the U.K. Banking Act 2009, as amended from time to time, is to be disregarded to the extent that it relates to a Crisis Prevention Measure other than the making of a “mandatory reduction instrument” by the Bank of England under section 6B of the U.K. Banking Act 2009, as amended from time to time;

 

(B)            “Crisis Prevention Measure”, “Crisis Management Measure”, “Group”, “Recognised Third-country Resolution Action”, “Security Interest”, “Special Resolution Regime” and “Termination Right” have the meaning given to them in or pursuant to the PRA Rule; and

 

(C)            “PRA Rule” means the Stay in Resolution Part of the PRA Rulebook promulgated by the United Kingdom Prudential Regulation Authority, as amended from time to time.

 

 

(b)            Contractual Recognition of the UK Bail-in Power.

 

(i)            Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements, or understanding between ▇▇▇▇▇▇▇▇ and Lender, the Lender acknowledges and accepts that a UK Bail-in Liability arising under this Agreement may be subject to the exercise of UK Bail-in Powers by the relevant UK resolution authority, and acknowledges, accepts, and agrees to be bound by:

 

(A)            the effect of the exercise of UK Bail-in Powers by the relevant UK resolution authority in relation to any UK Bail-in Liability of Borrower to Lender under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:

 

(1)            the reduction of all, or a portion, of the UK Bail-in Liability or outstanding amounts due thereon;

 

(2)            the conversion of all, or a portion, of the UK Bail-in Liability into shares, other securities or other obligations of Borrower or another person, and the issue to or conferral on Lender of such shares, securities or obligations;

 

(3)            the cancellation of the UK Bail-in Liability; and/or

 

(4)            the amendment or alteration of any interest or premium, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and

 

(B)            the variation of the terms of this Agreement, as deemed necessary by the relevant UK resolution authority, to give effect to the exercise of UK Bail-in Powers by the relevant UK resolution authority.

 

(ii)            For purposes of this Section 17(b):

 

(A)            “UK Bail-in Legislation” means Part I of the UK Banking Act 2009 and any other law or regulation applicable in the UK relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).

 

(B)            “UK Bail-in Liability” means a liability in respect of which the UK Bail-in Powers may be exercised.

 

(C)            “UK Bail-in Powers” means the powers under the UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability.

 

 

Section 18.      U.S. Resolution Stay Provisions.

 

(a)            Recognition of the U.S. Special Resolution Regimes.

 

(i)            In the event that Borrower becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder or (ii) Title II of the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and the regulations promulgated thereunder (a “U.S. Special Resolution Regime”) the transfer from Borrower of this Agreement, and any interest and obligation in or under, and any property securing, this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any interest and obligation in or under, and any property securing, this Agreement were governed by the laws of the United States or a state of the United States.

 

(ii)            In the event that Borrower or an Affiliate becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable (“Default Right”)) under this Agreement that may be exercised against Borrower are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

(b)            Limitation on Exercise of Certain Default Rights Related to an Affiliate’s Entry Into Insolvency Proceedings. Notwithstanding anything to the contrary in this Agreement, the parties expressly acknowledge and agree that:

 

(i)             Lender shall not be permitted to exercise any Default Right with respect to this Agreement or any Affiliate Credit Enhancement that is related, directly or indirectly, to an Affiliate of the Borrower becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R. 252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and

 

(ii)             Nothing in this Agreement shall prohibit the transfer of any Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Borrower becoming subject to an Insolvency Proceeding, unless the transfer would result in the Lender being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable to the Lender.

 

(iii)            For the purpose of this paragraph:

 

“Affiliate” is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

 

 

“Credit Enhancement” means any credit enhancement or credit support arrangement in support of the obligations of Borrower under or with respect to this Agreement, including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.

 

(c)            U.S. Protocol. If ▇▇▇▇▇▇ has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such protocol shall be incorporated into and form a part of this Agreement and the terms of the ISDA U.S. Protocol shall supersede and replace the terms of this section. For purposes of incorporating the ISDA U.S. Protocol, Borrower shall be deemed to be a Regulated Entity, Lender shall be deemed to be an Adhering Party, and this Agreement shall be deemed to be a Protocol Covered Agreement. Capitalized terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.

 

(d)            Pre-existing In-Scope Agreements. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d), that are not excluded under 12 C.F.R. § 252.88, between Borrower and Lender that do not otherwise comply with the requirements of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this section, with references to “this Agreement” being understood to be references to the applicable Preexisting In-Scope Agreement.

 

Section 19.      Financial Assistance. Lender represents and warrants that it and any of its subsidiaries has not applied, and shall not, until after the first date on which no portion of this Agreement remains outstanding following any final exercise and settlement, cancellation or early termination of this Agreement, apply, for a loan, loan guarantee, direct loan (as that term is defined in the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”)) or other investment, or to receive any financial assistance or relief under any program or facility (collectively “Financial Assistance”) that (a) is established under applicable law (whether in existence as of the Trade Date or subsequently enacted, adopted or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) (i) requires under applicable law (or any regulation, guidance, interpretation or other pronouncement of a governmental authority with jurisdiction for such program or facility) as a condition of such Financial Assistance, that the Lender comply with any requirement not to, or otherwise agree, attest, certify or warrant that it has not, as of the date specified in such condition, repurchased, or will not repurchase, any equity security of Lender, and that Lender has not, as of the date specified in the condition, made a capital distribution or will make a capital distribution, or (ii) where the terms of this Agreement would cause Lender to fail to satisfy any condition for application for or receipt or retention of the Financial Assistance (collectively “Restricted Financial Assistance”); provided, that Lender or any of its subsidiaries may apply for Restricted Financial Assistance if Lender either (a) determines based on the advice of outside counsel of national standing that the terms of this Agreement would not cause Lender or any of its subsidiaries to fail to satisfy any condition for application for or receipt or retention of such Financial Assistance based on the terms of the program or facility as of the date of such advice or (b) delivers to Borrower evidence or other guidance from a governmental authority with jurisdiction for such program or facility that this Agreement is permitted under such program or facility (either by specific reference to this Agreement or by general reference to transactions with the attributes of this Agreement in all relevant respects).

 

 

Section 20.      Counterparts. This Agreement may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement, if any, shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.

 

Section 21.      Amendments. No amendment or modification in respect of this Agreement shall be effective unless it shall be in writing and signed by the parties hereto.

 

 

IN WITNESS WHEREOF, the parties hereto to have executed this ADS Lending Agreement as of the date and year first above written.

 

GDS HOLDINGS LIMITED, as Lender			▇.▇. ▇▇▇▇▇▇ SECURITIES PLC, as Borrower
By:	/s/ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇		By:	/s/ ▇▇▇▇▇▇ ▇▇▇▇
	Name: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇			Name: ▇▇▇▇▇▇ ▇▇▇▇
	Title: Chairman of the Board of Directors and Chief Executive Officer			Title:

 

[Signature Page to ADS Lending Agreement]

 

 

Exhibit A

Form of Borrowing Notice

 

[Insert Date]

 

GDS Holdings Limited 

[Attention: 

Tel: 

Email:                      ]

 

Copy to: JPMorgan Chase Bank, N.A. (the “Depositary”) 

▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ 

New York, New York, 10004 

USA 

Attention: Depositary Receipts Group 

Fax: (▇▇▇) ▇▇▇-▇▇▇▇

 

Ladies and Gentlemen:

 

Reference is made to the ADS Lending Agreement, dated as of [____], 2025 (the “Agreement”), between GDS Holdings Limited, as Lender and ▇.▇. ▇▇▇▇▇▇ Securities plc, as Borrower. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given such terms in the Agreement.

 

Pursuant to the Agreement, you are hereby notified of the following:

 

1.

Borrower requests a Loan of [___] ADSs (the “Borrowed ADSs”) for transfer to Borrower on [insert date]1 no later than the Cutoff Time.

 

2.

As soon as reasonably practicable upon receipt of this notice, Lender shall submit a letter of transmittal to the Depositary for the deposit of the requisite number of Ordinary Shares (the “Underlying Shares”) underlying the Borrowed ADSs in accordance with the Deposit Agreement in order to cause the Depositary to deliver the Borrowed ADSs to Borrower’s account maintained with the Clearing Organization (or, to the extent applicable in accordance with the Agreement, to register the Borrowed ADSs on the books and records of the Depositary’s transfer agent and credit the Borrowed ADSs to Borrower’s account maintained with the Depositary) by no later than the date and time specified in paragraph 1 above.

 

¹ Note: To be the First Time of Delivery of the Convertible Notes.

 

 

We hereby certify to the Depositary that the Borrowed ADSs consist of [___] ADSs (and corresponding Underlying Shares) sold in a registered offering under the Securities Act pursuant to Borrower’s automatic shelf registration statement on Form F-3 (File No. 333-[●]). Such ADSs shall be issued by the Depositary without any restrictive legend.

 

This notice shall constitute a Borrowing Notice under the Agreement.

 

	Yours very truly,
	▇.▇. ▇▇▇▇▇▇ SECURITIES PLC, as Borrower
		By:
		Name:
		Title: