UNITED STATES

 

 

SECURITIES AND EXCHANGE COMMISSION

 

 

Washington, D.C. 20549

 

 

 

 

 

SCHEDULE 13D

 

 

Under the Securities Exchange Act of 1934

ZTO Express (Cayman) Inc.

(Name of Issuer)

 

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

(Title of Class of Securities)

 

G9897K 105

(CUSIP Number)

 

Timothy A. Steinert, Esq.

Alibaba Group Holding Limited

c/o Alibaba Group Services Limited

26/F, Tower One, Times Square

1 Matheson Street, Causeway Bay

Hong Kong

Telephone: +852 2215-5100

 

with copies to:

 

Peng Yu

James T. Lidbury

Ropes & Gray

41st Floor, One Exchange Square

8 Connaught Place

Central, Hong Kong

+852 3664-6488

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

 

June 12, 2018

(Date of Event Which Requires Filing of this Statement)

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

Note : Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

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

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

 



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

1.

Names of Reporting Persons.
Alibaba Group Holding Limited

2.

Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
o   (b) x

3.

SEC Use Only

4.

Source of Funds (See Instructions)
WC

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

6.

Citizenship or Place of Organization
Cayman Islands

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0 Class A Ordinary Shares

8.

Shared Voting Power
68,287,037 Class A Ordinary Shares

9.

Sole Dispositive Power
0 Class A Ordinary Shares

10.

Shared Dispositive Power
68,287,037 Class A Ordinary Shares

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
68,287,037 Class A Ordinary Shares

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

13.

Percent of Class Represented by Amount in Row (11)
8.6%
1

14.

Type of Reporting Person (See Instructions)
CO

 


1                    This percentage is calculated based upon 796,721,114 total issued and outstanding Class A and Class B ordinary shares, par value US$0.0001 per share, which is the sum of (a) 716,860,003 Class A and Class B ordinary shares outstanding as of May 29, 2018, (exclusive of 14,546,437 Class A Ordinary Shares in the form of ADSs repurchased by the Company and registered on the Company’s register of members as of May 29, 2018), according to the Share Purchase Agreement dated May 29, 2018 among the Company, Taobao China Holding Limited, Cainiao Smart Logistics Investment Limited, Rising Auspicious Limited and New Retail Strategic Opportunities Investments 2 Limited (the “Purchase Agreement”), and (b) 63,657,407 Class A Ordinary Shares sold and purchased on June 12, 2018 under the Purchase Agreement, and (c) 16,203,704 Class A Ordinary Shares to be sold and purchased on or around June 28, 2018 under the Purchase Agreement.

 

2



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

1.

Names of Reporting Persons.
Alibaba ZT Investment Limited

2.

Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
o   (b) x

3.

SEC Use Only

4.

Source of Funds (See Instructions)
AF

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

6.

Citizenship or Place of Organization
Hong Kong

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0 Class A Ordinary Shares

8.

Shared Voting Power
57,870,370 Class A Ordinary Shares

9.

Sole Dispositive Power
0 Class A Ordinary Shares

10.

Shared Dispositive Power
57,870,370 Class A Ordinary Shares

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
57,870,370 Class A Ordinary Shares

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

13.

Percent of Class Represented by Amount in Row (11)
7.3%
1

14.

Type of Reporting Person (See Instructions)
CO

 


1                    This percentage is calculated based upon 796,721,114 total issued and outstanding Class A and Class B ordinary shares, par value US$0.0001 per share, which is the sum of (a) 716,860,003 Class A and Class B ordinary shares outstanding as of May 29, 2018, (exclusive of 14,546,437 Class A Ordinary Shares in the form of ADSs repurchased by the Company and registered on the Company’s register of members as of May 29, 2018), according to the Purchase Agreement, and (b) 63,657,407 Class A Ordinary Shares sold and purchased on June 12, 2018 under the Purchase Agreement, and (c) 16,203,704 Class A Ordinary Shares to be sold and purchased on or around June 28, 2018 under the Purchase Agreement.

 

3



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

1.

Names of Reporting Persons.
Cainiao Smart Logistics Investment Limited

2.

Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
o   (b) x

3.

SEC Use Only

4.

Source of Funds (See Instructions)
AF

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

6.

Citizenship or Place of Organization
British Virgin Islands

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0 Class A Ordinary Shares

8.

Shared Voting Power
5,787,037 Class A Ordinary Shares

9.

Sole Dispositive Power
0 Class A Ordinary Shares

10.

Shared Dispositive Power
5,787,037 Class A Ordinary Shares

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
5,787,037 Class A Ordinary Shares

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

13.

Percent of Class Represented by Amount in Row (11)
0.7% 1

14.

Type of Reporting Person (See Instructions)
CO

 


1                    This percentage is calculated based upon 796,721,114 total issued and outstanding Class A and Class B ordinary shares, par value US$0.0001 per share, which is the sum of (a) 716,860,003 Class A and Class B ordinary shares outstanding as of May 29, 2018, (exclusive of 14,546,437 Class A Ordinary Shares in the form of ADSs repurchased by the Company and registered on the Company’s register of members as of May 29, 2018), according to the Purchase Agreement, and (b) 63,657,407 Class A Ordinary Shares sold and purchased on June 12, 2018 under the Purchase Agreement, and (c) 16,203,704 Class A Ordinary Shares to be sold and purchased on or around June 28, 2018 under the Purchase Agreement.

 

4



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

1.

Names of Reporting Persons.
New Retail Strategic Opportunities Investments 2 Limited

2.

Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
o   (b) x

3.

SEC Use Only

4.

Source of Funds (See Instructions)
OO

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

6.

Citizenship or Place of Organization
Cayman Islands

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0 Class A Ordinary Shares

8.

Shared Voting Power
4,629,630 Class A Ordinary Shares

9.

Sole Dispositive Power
0 Class A Ordinary Shares

10.

Shared Dispositive Power
4,629,630 Class A Ordinary Shares

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
4,629,630 Class A Ordinary Shares

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

13.

Percent of Class Represented by Amount in Row (11)
0.6% 1

14.

Type of Reporting Person (See Instructions)
CO

 


1                    This percentage is calculated based upon 796,721,114 total issued and outstanding Class A and Class B ordinary shares, par value US$0.0001 per share, which is the sum of (a) 716,860,003 Class A and Class B ordinary shares outstanding as of May 29, 2018, (exclusive of 14,546,437 Class A Ordinary Shares in the form of ADSs repurchased by the Company and registered on the Company’s register of members as of May 29, 2018), according to the Purchase Agreement, and (b) 63,657,407 Class A Ordinary Shares sold and purchased on June 12, 2018 under the Purchase Agreement, and (c) 16,203,704 Class A Ordinary Shares to be sold and purchased on or around June 28, 2018 under the Purchase Agreement.

 

5


 


 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

ITEM 1.                         SECURITY AND ISSUER.

 

The title and class of equity securities to which this Schedule 13D (this “ Schedule 13D ”) relates are the Class A ordinary shares, par value US$0.0001 per share, of ZTO Express (Cayman) Inc., an exempted company incorporated under the laws of the Cayman Islands (the “ Issuer ” and, such class of shares, the “ Class A Ordinary Shares ”). The address of the principal executive offices of the Issuer is Building One, No. 1685 Huazhi Road, Qingpu District, Shanghai, 201708, People’s Republic of China.

 

ITEM 2.                         IDENTITY AND BACKGROUND.

 

This Schedule 13D constitutes an initial Schedule 13D filing on behalf of each of (1) Alibaba Group Holding Limited, an exempted company incorporated under the laws of the Cayman Islands (“ AGHL ”), (2) Alibaba ZT Investment Limited, a company with limited liability incorporated under the laws of Hong Kong (“ AZIL ”), (3) Cainiao Smart Logistics Investment Limited, a company organized under the laws of the British Virgin Islands (“ Cainiao ”), and (4) New Retail Strategic Opportunities Investments 2 Limited, a company organized under the laws of the Cayman Islands (“ NRF ” and, together with AGHL, AZIL and Cainiao, the “ Reporting Persons ”), with respect to Class A Ordinary Shares. This Schedule 13D is filed jointly by the Reporting Persons pursuant to Rule 13d-1(k) under the Exchange Act. The agreement among the Reporting Persons relating to the joint filing of this Schedule 13D is attached hereto as Exhibit A.

 

The business address of AGHL, AZIL and NRF is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong. The business address of Cainiao is c/o Zhejiang Cainiao Supply Chain Management Limited, 588 West Wenyi Road, Xihu District, Hangzhou 310000, People’s Republic of China.

 

AGHL is a holding company which, through its subsidiaries and variable interest entities, operates leading online and mobile marketplaces in retail and wholesale trade, as well as provides cloud computing and other services.

 

AZIL is an indirect wholly-owned special purpose subsidiary of AGHL.

 

Cainiao is a majority owned indirect subsidiary of AGHL dedicated to meeting the current and future logistics demands of China’s and global online and mobile commerce sector. It operates a logistics data platform that leverages the capacity and capabilities of logistics partners to fulfil transactions between merchants and consumers at a large scale. It also uses data insights and technology to improve efficiency across the logistics value chain.

 

New Retail Strategic Opportunities Fund, L.P., a Cayman Islands exempted limited partnership (“ NRSF ”), owns 100% of NRF. New Retail Strategic Opportunities Fund GP, L.P., a Cayman Islands exempted limited partnership (“ NRSF GP ”), is the general partner of NRSF. New Retail Strategic Opportunities GP Limited, a company organized under the laws of the Cayman Islands and an indirect wholly-owned subsidiary of AGHL (“ NRSO ”), is the general partner of NRSF GP. Each of NRSF, NRSF GP and NRSO principally engages in investment activities.

 

The name, business address, citizenship and present principal occupation or employment of each executive officer and each member of the board of directors of each Reporting Person are set forth on Schedule A-1 hereto and are incorporated herein by reference.

 

During the last five years, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any person named in Schedule A-1, (a) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

ITEM 3.                         SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

 

On June 12, 2018, pursuant to the terms of the Purchase Agreement, AZIL and Cainiao purchased an aggregate of 63,657,407 Class A Ordinary Shares at a purchase price of $17.28 per share. Pursuant to the terms of the Purchase Agreement, AZIL purchased 57,870,370 Class A Ordinary Shares, and Cainiao purchased 5,787,037 Class A Ordinary Shares, in each case from the Company. Pursuant to the Purchase Agreement, on or around June 28, 2018, NRF is expected to purchase 4,629,630 Class A Ordinary Shares, and Rising Auspicious Limited, a company with limited liability incorporated under the laws of the British Virgin Islands and an affiliate of Yunfeng Fund III, L.P. (“YF”) is expected to purchase 11,574,074 Class A Ordinary Shares, in each case from the Company at a purchase price of $17.28 per share.

 

6



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

The Class A Ordinary Shares to be acquired by YF will constitute 1.5% of the total issued and outstanding shares of Class A and Class B Ordinary Shares after giving effect to the transactions contemplated by the Purchase Agreement.

 

The description of the Purchase Agreement contained herein is qualified in its entirety by reference to Exhibit 99.2 hereto, which exhibit is hereby incorporated by reference into this Item 3.

 

The parent company of AZIL, Taobao China Holding Limited (“Taobao China”), which is a company incorporated under the laws of Hong Kong and an indirect wholly-owned subsidiary of AGHL, funded to AZIL the aggregate purchase price paid by AZIL for the Class A Ordinary Shares. Such funding by Taobao China to AZIL was made in the form of equity contribution.

 

The parent company of Cainiao, Cainiao Smart Logistics Network Limited (“Cainiao Cayman”), which is a company incorporated under the laws of the Cayman Islands, funded to Cainiao the aggregate purchase price paid by Cainiao for the Class A Ordinary Shares, using the working capital of Cainiao Cayman.

 

NRSF will fund NRF’s purchase of the Class A Ordinary Shares through a capital call from its limited partners.

 

ITEM 4.                         PURPOSE OF TRANSACTION.

 

The Reporting Persons acquired the securities covered by this Schedule 13D for investment purposes and intend to review their investments in the Issuer on a continuous basis. Depending upon various factors, including but not limited to the Reporting Persons’ and the Issuer’s businesses, prospects and financial conditions and other developments concerning the Reporting Persons and the Issuer, market conditions and other factors that the Reporting Persons may deem relevant to their investment decisions, and, subject to the terms of the IRA (as defined below) and compliance with applicable laws, rules and regulations and the Issuer’s Second Amended and Restated Memorandum and Articles of Association (as the same may be amended from time to time), the Reporting Persons may in the future take actions with respect to their investments in the Issuer as they deem appropriate, including changing their current intentions or increasing or decreasing their investments in the Issuer, with respect to any or all matters required to be disclosed in this Schedule 13D.

 

In connection with the transactions contemplated by the Purchase Agreement, the Issuer removed one incumbent director from the board of directors of the Issuer (the “ Board ”) and AZIL designated one director to the Board (the “ Investor Director ”) to replace such director. If the Investor Director ceases to be a member of the Board for any reason, AZIL will have the right to appoint a replacement of such Investor Director.

 

Other than as set forth in this Schedule 13D, the Reporting Persons have no present plans or proposals which relate to or would result in any of the matters set forth in clauses (a) through (j) of Item 4 of Schedule 13D; provided that the Reporting Persons may, at any time, review or reconsider their positions with respect to the Issuer and reserve the right to develop such plans or proposals.

 

ITEM 5.                         INTEREST IN SECURITIES OF THE ISSUER.

 

(a)-(b) The responses of each Reporting Person to Rows (7) through (13) of the cover pages of this Schedule 13D are hereby incorporated by reference into this Item 5.

 

Pursuant to the Purchase Agreement, on or around June 28, 2018, YF is expected to acquire 11,574,074 Class A Ordinary Shares, which will constitute 1.5% of the total issued and outstanding shares of Class A and Class B ordinary shares immediately after giving effect to the transactions contemplated by the Purchase Agreement. After giving effect thereto, the Reporting Persons, together with YF, will collectively own 79,861,111 Class A Ordinary Shares of the Company, representing in the aggregate 10% of the 796,721,114 total issued and outstanding Class A and Class B ordinary shares, par value US$0.0001 per share, which is the sum of (a) 716,860,003 Class A and Class B ordinary shares outstanding as of May 29, 2018 (exclusive of 14,546,437 Class A Ordinary Shares in the form of ADSs repurchased by the Company and registered on the Company’s register of members as of May 29, 2018), according to the Purchase Agreement, and (b) 63,657,407 Class A Ordinary Shares purchased by the Reporting Persons on June 12, 2018 under the Purchase Agreement, (c) 4,629,630 Class A Ordinary Shares to be purchased by the Reporting Persons on or around June 28, 2018, under the Purchase Agreement, and (d) 11,574,074 Class A Ordinary Shares to be purchased by YF on or around June 28, 2018, under the Purchase Agreement.

 

Except as disclosed in this Schedule 13D, none of the Reporting Persons nor, to the best of their knowledge, any of the persons listed in Schedule A-1 hereto, beneficially owns any Class A Ordinary Shares or has the right to acquire any Class A Ordinary Shares.

 

7



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

Except as disclosed in this Schedule 13D, none of the Reporting Persons presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Class A Ordinary Shares which it may be deemed to beneficially own.

 

Based on the transactions described herein, the Reporting Persons may be deemed to constitute a “group” with one another and/or YF within the meaning of Section 13(d)(3) of the Act. Members of a group may be deemed to beneficially own the securities beneficially owned by other members of the group. However, each Reporting Person expressly disclaims any beneficial ownership in the securities held by the other Reporting Persons, by YF, or by any of their respective affiliates, except as otherwise stated herein. The filing of this Statement shall not be construed as an admission that the Reporting Persons are a group, or have agreed to act as a group with each other or with YF for purposes of Section 13(d) of the Act or for any other purpose.

 

(c) On June 12, 2018, the Reporting Persons and the Issuer consummated the first closing of the transactions contemplated by the Purchase Agreement and a second and final closing is expected to occur on or around June 28, 2018. The information set forth in Item 3 of this Schedule 13D is hereby incorporated by reference into this Item 5. Except as disclosed in this Schedule 13D, none of the Reporting Persons nor, to the best of their knowledge, YF or any of the persons listed in Schedule A-1 hereto, has effected any transactions relating to the Class A Ordinary Shares during the past 60 days.

 

(d) To the best knowledge of the Reporting Persons, no person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities beneficially owned by the Reporting Persons identified in this Item 5.

 

(e) Not applicable.

 

ITEM 6.                         CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

 

The information set forth and/or incorporated by reference in Items 2, 3, 4 and 5 of this Schedule 13D is hereby incorporated by reference into this Item 6.

 

Assignment Agreement

 

On June 12, 2018, Taobao China and AZIL entered into an Assignment Agreement, pursuant to which Taobao China assigned all its right, title and interests in, to and under the Purchase Agreement to AZIL and AZIL accepted such assignment and assumed to pay and perform in full when due all of Taobao China’s obligations arising from and under the Purchase Agreement.

 

Investor Rights Agreement

 

On June 12, 2018, the Issuer, AZIL and Cainiao entered into an Investor Rights Agreement (the “ IRA ”). The IRA provides AZIL with the Board designation rights described in Item 4 above. In addition, the IRA permits AZIL to appoint a designated representative to serve as a non-voting observer to the Board (the “ Investor Observer ”) and to appoint the Investor Director or Investor Observer to any Board committee, subject to compliance with independence requirements under applicable laws and listing rules. The IRA also provides that the Issuer shall not, without the prior written consent of AZIL, amend or terminate any Controlling Document (as defined therein), or enter into any joint venture, partnership, strategic alliance, strategic cooperation or similar arrangement with a competitor of AGHL or any other transaction with any competitor of AGHL which is not in the ordinary course of business of the Issuer.

 

The IRA contains customary right of first offer provisions whereby if the Issuer’s founder, Mr. Meisong Lai (the “ Founder ”), proposes to transfer securities of the Issuer which constitutes a Change of Control (as defined therein), the Founder shall first make an offer of such securities to AZIL and Cainiao (the “ ROFO ”). AZIL and Cainiao may elect to exercise their ROFO rights to purchase the securities, or exercise their tag-along rights to sell their securities, at the price and on the terms offered by the Founder. The IRA also provides for customary preemptive rights whereby if the Issuer proposes to issue any of its securities, AZIL, Cainiao and certain existing shareholders of the Issuer shall have the right to acquire a portion of such securities equal to the quotient obtained by dividing (i) the number of shares of all securities owned by such shareholder by (ii) the total number of shares of all securities issued and outstanding, or such other percentage as may mutually agreed among such shareholders following discussions with the Issuer.

 

Each of AZIL and Cainiao is prohibited from transferring its Class A Ordinary Shares prior the second anniversary of the date of the IRA other than transfers to its affiliates, transfers to the Issuer, transfers required by law or transfers approved by

 

8



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

the Board. In addition, certain existing shareholders of the Issuer are not permitted to transfer any securities of the Issuer to a competitor of AGHL without the prior written consent of AZIL and the Founder is not permitted to transfer any Class B Ordinary Shares beneficially owned by him without the prior written consent of AZIL prior to the second anniversary of the date of the IRA.

 

Registration Rights Agreements

 

On June 12, 2018, AZIL and Cainiao entered into a registration rights agreement with the Issuer. The registration rights agreement provides that the Issuer shall file a registration statement prior to the second anniversary of the date of the registration rights agreement covering the resale of the Class A Ordinary Shares owned by AZIL and Cainiao. The Issuer will bear the registration expenses related to the preparation and filing of the registration statement. The registration rights agreement contains customary indemnification provisions.

 

On or around June 28, 2018 when the second and final closing occurs as contemplated under the Purchase Agreement, NRF will enter into a registration rights agreement with the Issuer. The registration rights agreement provides that the Issuer shall file a registration statement prior to the first anniversary of the date of the registration rights agreement covering the resale of the Class A Ordinary Shares owned by NRF. NRF will bear the registration expenses related to the preparation and filing of the registration statement. The registration rights agreement contains customary indemnification provisions.

 

The descriptions of the assignment agreement, the IRA and the registration rights agreements contained herein are qualified in their entirety by reference to Exhibits 99.3, 99.4, 99.5 and 99.6 hereto, which exhibits are hereby incorporated by reference into this Item 6.

 

To the best knowledge of the Reporting Persons, except as set forth in this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise), including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, among the Reporting Persons and among the Reporting Persons and any other person, in each case with respect to any securities of the Issuer, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

 

9



 

CUSIP No.  G9897K 105

SCHEDULE 13D

 

 

ITEM 7.                              MATERIAL TO BE FILED AS EXHIBITS

 

Exhibit

 

Description

99.1

 

Joint Filing Agreement among Alibaba Group Holding Limited, Alibaba ZT Investment Limited, Cainiao Smart Logistics Investment Limited and New Retail Strategic Opportunities Investments 2 Limited, dated June 21, 2018

99.2

 

Share Purchase Agreement among ZTO Express (Cayman) Inc., Taobao China Holding Limited, Cainiao Smart Logistics Investment Limited, New Retail Strategic Opportunities Investments 2 Limited and Rising Auspicious Limited, dated May 29, 2018

99.3

 

Assignment Agreement between Taobao China Holding Limited and Alibaba ZT Investment Limited, dated June 12, 2018

99.4

 

Investor Rights Agreement among ZTO Express (Cayman) Inc., Alibaba ZT Investment Limited and Cainiao Smart Logistics Investment Limited, dated June 12, 2018

99.5

 

Registration Rights Agreement among ZTO Express (Cayman) Inc., Alibaba ZT Investment Limited and Cainiao Smart Logistics Investment Limited, dated June 12, 2018

99.6

 

Form of Registration Rights Agreement between ZTO Express (Cayman) Inc. and New Retail Strategic Opportunities Investments 2 Limited

 

10



 

SIGNATURES

 

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct.

 

Dated: June 21, 2018

 

 

Alibaba Group Holding Limited

 

 

 

By:

/s/ Timothy A. Steinert

 

 

Name:

Timothy A. Steinert

 

 

Title:

Authorized Signatory

 

 

 

Alibaba ZT Investment Limited

 

 

 

By:

/s/ Timothy A. Steinert

 

 

Name:

Timothy A. Steinert

 

 

Title:

Director

 

 

 

Cainiao Smart Logistics Investment Limited

 

 

 

By:

/s/ Lin Wan

 

 

Name:

Lin Wan

 

 

Title:

Director

 

 

 

New Retail Strategic Opportunities Investments 2 Limited

 

 

 

By:

/s/ David Egglishaw

 

 

Name:

David Egglishaw

 

 

Title:

Authorized Signatory

 

11



 

SCHEDULE A-1

 

Directors and Executive Officers of Alibaba Group Holding Limited

 

The following table sets forth the names, business addresses and present principal occupation of each director and executive officer of Alibaba Group Holding Limited, an exempted company incorporated under the laws of the Cayman Islands (“ AGHL ”). Unless otherwise noted, the business address for each director listed below is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong. Unless otherwise noted, the business address for each executive officer listed below is 969 West Wen Yi Road, Yu Hang District, Hangzhou 311121, People’s Republic of China.

 

Name/Citizenship

 

Present Principal Occupation

 

 

 

Jack Yun MA, People’s Republic of China
969 West Wen Yi Road,
Yu Hang District, Hangzhou 311121
People’s Republic of China

 

Executive Chairman of AGHL

 

 

 

Joseph C. TSAI, Canada

 

Executive Vice Chairman of AGHL

 

 

 

Daniel Yong ZHANG, People’s Republic of China
969 West Wen Yi Road,
Yu Hang District, Hangzhou 311121
People’s Republic of China

 

Director and Chief Executive Officer of AGHL

 

 

 

J. Michael EVANS, Canada

 

Director and President of AGHL

 

 

 

Eric Xiandong JING, People’s Republic of China
969 West Wen Yi Road,
Yu Hang District, Hangzhou 311121
People’s Republic of China

 

Director of AGHL; Chairman and Chief Executive Officer of Ant Financial

 

 

 

Masayoshi SON, Japan
c/o SOFTBANK CORP.
1-9-1 Higashi-shimbashi
Minato-ku, Tokyo, 105-7303
Japan

 

Director of AGHL; Founder, Chairman and Chief Executive Officer of SoftBank Group Corp.

 

 

 

Chee Hwa TUNG, Hong Kong

 

Independent Director of AGHL; Vice Chairman of the Thirteenth National Committee of the Chinese People’s Political Consultative Conference of the PRC

 

 

 

Walter Teh Ming KWAUK, Canada

 

Independent Director of AGHL; Senior Advisor of Motorola Solutions (China) Co. Ltd.

 

 

 

Jerry YANG, United States

 

Independent Director of AGHL; Founding Partner of AME Cloud Ventures

 

 

 

Börje E. EKHOLM, United States and Sweden

 

Independent Director of AGHL; Head of Patricia Industries Division of Investor AB

 

 

 

Wan Ling MARTELLO, United States

 

Independent Director of AGHL; Executive Vice President, chief executive officer for Zone Asia, Oceania, Sub-Saharan Africa of Nestlé S.A.

 

 

 

Maggie Wei WU, Hong Kong
c/o Alibaba Group Services Limited, 26/F, Tower One,
Times Square, 1 Matheson Street, Causeway Bay, Hong Kong

 

Chief Financial Officer of AGHL

 

12



 

Judy TONG, People’s Republic of China

 

Chief People Officer of AGHL

 

 

 

Jessie Junfang ZHENG, People’s Republic of China

 

Chief Risk Officer and Chief Platform Governance Officer of AGHL

 

 

 

Trudy Shan DAI, People’s Republic of China

 

President of Wholesale Marketplaces of AGHL

 

 

 

Timothy Alexander STEINERT, United States

 

General Counsel and Secretary of AGHL

 

 

 

Chris TUNG, Canada

 

Chief Marketing Officer of AGHL and President of Alimama of AGHL

 

 

 

Jeff Jianfeng ZHANG, People’s Republic of China

 

Chief Technology Officer of AGHL

 

 

 

Simon Xiaoming HU, People’s Republic of China

 

President of Alibaba Cloud Computing of AGHL

 

 

 

Sophie Minzhi WU, People’s Republic of China

 

Chief Customer Officer of AGHL

 

 

 

Angel Ying ZHAO, People’s Republic of China

 

Head of Alibaba Globalization Leadership Group of AGHL and Vice President of Ant Financial

 

 

 

Weidong YANG, People’s Republic of China

 

President of Alibaba Digital Media & Entertainment Group of AGHL and President of Youku business group

 

 

 

Fan JIANG, People’s Republic of China

 

President of Taobao of AGHL

 

 

 

Jet Jing JIE, People’s Republic of China

 

President of Tmall of AGHL

 

13



 

Directors and Executive Officers of Alibaba ZT Investment Limited

 

The following table sets forth the names, business addresses and present principal occupation of each director of Alibaba ZT Investment Limited, a company with limited liability incorporated under the laws of Hong Kong (“ AZIL ”). Unless otherwise noted, the business address for each director listed below is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong. AZIL does not have any executive officers.

 

Name/Citizenship 

 

Present Principal Occupation 

Timothy Alexander STEINERT, United States

 

Director of AZIL; General Counsel and Secretary of AGHL

 

 

 

Maggie Wei WU, Hong Kong

 

Director of AZIL; Chief Financial Officer of AGHL

 

 

 

Jason YIP Pak Tung, Hong Kong

 

Director of AZIL; Senior Director, Finance of AGHL

 

14



 

Directors and Executive Officers of Cainiao Smart Logistics Investment Limited

 

The following table sets forth the names, business addresses and present principal occupation of the sole director of Cainiao Smart Logistics Investment Limited, a company organized under the laws of the British Virgin Islands (“ Cainiao ”). The business address for the sole director listed below is c/o Zhejiang Cainiao Supply Chain Management Limited, 588 West Wenyi Road, Xihu District, Hangzhou 310000, People’s Republic of China. Cainiao does not have any executive officers.

 

Name/Citizenship 

 

Present Principal Occupation 

Lin WAN, People’s Republic of China

 

Director of Cainiao; President of Cainiao Smart Logistics Network Limited

 

15



 

Directors and Executive Officers of New Retail Strategic Opportunities Investments 2 Limited

 

The following table sets forth the names, business addresses and present principal occupation of each director of New Retail Strategic Opportunities Investments 2 Limited, a company organized under the laws of the Cayman Islands (“ NRF ”). The business address for each director listed below is c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong. NRF does not have any executive officers.

 

Name/Citizenship 

 

Present Principal Occupation 

David John Jepson EGGLISHAW, United Kingdom

 

Director of NRF

 

 

 

Yu ZHANG, People’s Republic of China

 

Director of NRF; Chief Financial Officer of Tmall of AGHL

 

 

 

Jun CHEN, Singapore

 

Director of NRF; Vice President of AGHL

 

16


Exhibit 99.1

 

Joint Filing Agreement

 

In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, each of the undersigned hereby agrees to the joint filing with the other Reporting Person (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Class A Ordinary Shares, par value US$0.0001 per share, of ZTO Express (Cayman) Inc., an exempted company incorporated under the laws of the Cayman Islands, and that this Agreement may be included as an Exhibit to such joint filing.  This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

 

[ Remainder of this page has been left intentionally blank .]

 



 

IN WITNESS WHEREOF, the undersigned hereby execute this agreement as of June 21, 2018.

 

 

 

Alibaba Group Holding Limited

 

 

 

By:

/s/ Timothy A. Steinert

 

 

Name: Timothy A. Steinert

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

Alibaba ZT Investment Limited

 

 

 

By:

/s/ Timothy A. Steinert

 

 

Name: Timothy A. Steinert

 

 

Title: Director

 

 

 

 

 

 

Cainiao Smart Logistics Investment Limited

 

 

 

By:

/s/ Lin Wan

 

 

Name: Lin Wan

 

 

Title: Director

 

 

 

 

 

 

 

New Retail Strategic Opportunities Investments 2 Limited

 

 

 

By:

/s/ David Egglishaw

 

 

Name: David Egglishaw

 

 

Title: Authorized Signatory

 


Exhibit 99.2

 

Execution Version

 

SHARE PURCHASE AGREEMENT

 

among

 

ZTO EXPRESS (CAYMAN) INC.

 

TAOBAO CHINA HOLDING LIMITED

 

CAINIAO SMART LOGISTICS INVESTMENT LIMITED

 

NEW RETAIL STRATEGIC OPPORTUNITIES INVESTMENTS 2 LIMITED

 

and

 

RISING AUSPICIOUS LIMITED

 


 

Dated May 29, 2018

 


 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

Definitions and Interpretation

1

 

 

 

 

1.1.

Definitions

1

 

1.2.

Terms

6

 

1.3.

Interpretation

7

 

 

 

2.

Purchase and Sale of the Shares

8

 

 

 

3.

Closing and Closing Deliveries

8

 

 

 

 

3.1.

Closing

8

 

3.2.

Closing Deliveries of the Company

9

 

3.3.

Closing Deliveries of the Investor

9

 

 

 

4.

Representations and Warranties of the Company

9

 

 

 

 

 

4.1.

Organization, Good Standing and Qualification

10

 

4.2.

Authorization

10

 

4.3.

Due Execution; Enforceability

10

 

4.4.

Capitalization

11

 

4.5.

Valid Issuance

12

 

4.6.

Consents

12

 

4.7.

No Conflicts

12

 

4.8.

SEC Filings

12

 

4.9.

Financial Statements

13

 

4.10.

Absence of Certain Changes

14

 

4.11.

Controlling Documents

14

 

4.12.

Material Contracts

14

 

4.13.

Tax Matters

15

 

4.14.

Properties

16

 



 

 

4.15.

Compliance with Laws

17

 

4.16.

Related Party Transactions

17

 

4.17.

Labor Matters

18

 

4.18.

Intellectual Property

18

 

4.19.

IT System

19

 

4.20.

Data Protection

19

 

4.21.

Environment, Health and Safety

19

 

4.22.

Litigation

19

 

4.23.

Anti-Corruption, Anti-Money Laundering and Sanction Laws

20

 

4.24.

Fees

21

 

4.25.

Listing and Maintenance Requirements

21

 

4.26.

No Directed Selling Efforts or General Solicitation

21

 

4.27.

Private Placement

21

 

4.28.

Investment Company

21

 

4.29.

No Integrated Offering

22

 

 

 

5.

Representations and Warranties of the Investors

22

 

 

 

 

5.1.

Organization and Authorization

22

 

5.2.

No Conflict

22

 

5.3.

Consents

22

 

5.4.

Purchase Entirely for Own Account

22

 

5.5.

Restricted Securities

23

 

5.6.

Experience

23

 

5.8.

U.S. Person

23

 

5.9.

No Solicitation

23

 

 

 

6.

Conditions to Closing

23

 

 

 

 

6.1.

Conditions to the Investors’ Obligations

23

 

6.2.

Conditions to Obligations of the Company

24

 

6.3.

Additional Condition

25

 

ii



 

7.

Covenants

25

 

 

 

 

7.1.

Commercially Reasonable Efforts

25

 

7.2.

Operation of the Business

25

 

7.3.

Notices of Certain Events

25

 

7.4.

Exclusivity

26

 

7.5.

Public Disclosure

26

 

7.6.

Confidentiality

26

 

7.7.

Financial Information

27

 

7.8.

Compliances with Laws

27

 

7.9.

ADSs

27

 

7.10.

Use of Proceeds

28

 

7.11.

Use of Names and Logos

28

 

7.12.

Specified Matters

29

 

 

 

8.

Indemnification

29

 

 

 

 

8.1.

Survival

29

 

8.2.

Limitation

29

 

8.3.

Proceedings

30

 

8.4.

Payment

31

 

8.5.

Investigation and Disclosure

31

 

 

 

9.

Termination

31

 

 

 

10.

Miscellaneous

32

 

 

 

 

10.1.

Expenses

32

 

10.2.

Governing Law

32

 

10.3.

Jurisdiction

32

 

10.4.

Equitable Remedies

33

 

10.5.

Successors and Assigns

33

 

iii



 

 

10.6.

No Third-Party Beneficiaries

33

 

10.7.

Entire Agreement

33

 

10.8.

Notices

33

 

10.9.

Delays or Omissions

35

 

10.10.

Amendments and Waivers

35

 

10.11.

Counterparts

35

 

10.12.

Severability

35

 

Schedule 1 Purchased Shares Particulars

 

Schedule 2 Key Persons

 

Schedule 3 Permitted Use of Proceeds

 

Exhibit A Form of Alibaba and Cainiao Registration Rights Agreement

 

Exhibit B Form of YF Registration Rights Agreement

 

Exhibit C Form of NRF Registration Rights Agreement

 

Exhibit D Form of Investor Rights Agreement

 

Exhibit E Form of Director Indemnification Agreement

 

Exhibit F Form of Cayman Legal Opinion

 

Exhibit G Form of PRC Legal Opinion

 

iv



 

SHARE PURCHASE AGREEMENT

 

THIS SHARE PURCHASE AGREEMENT (the “ Agreement ”) is made as of May 29, 2018, by and among ZTO Express (Cayman) Inc., an exempted company with limited liability incorporated under the Laws of the Cayman Islands (the “ Company ”), Taobao China Holding Limited, a company with limited liability incorporated under the Laws of Hong Kong (“ Alibaba ”), Cainiao Smart Logistics Investment Limited, a company with limited liability incorporated under the Laws of the British Virgin Islands (“ Cainiao ”), Rising Auspicious Limited, a company with limited liability incorporated under the Laws of the British Virgin Islands (“ YF ”) and New Retail Strategic Opportunities Investments 2 Limited, an exempted company with limited liability incorporated under the Laws of the Cayman Islands (“ NRF ,” collectively with Alibaba, Cainiao and YF, the “ Investors ” and each an  “ Investor ”).

 

BACKGROUND

 

A.                                     The Company wishes to issue and sell to each of the Investors, upon the terms and conditions stated in this Agreement, and each of the Investors wishes to subscribe for and purchase from the Company, certain number of Class A Ordinary Shares, by executing and delivering this Agreement.

 

B.                                     Contemporaneous with the sale of the Purchased Shares, the Company, Alibaba and Cainiao will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit A , the Company and YF will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit B , and the Company and NRF will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit C (collectively, the “ Registration Rights Agreements ”), pursuant to which the Company will agree to provide certain registration rights under the Securities Act, as amended, and the rules and regulations promulgated thereunder.

 

C.                                     Contemporaneous with the sale of the Purchased Shares, the Company and the Investors will execute and deliver an Investor Rights Agreement with certain other parties thereto, in the form attached hereto as Exhibit D (the “ Investor Rights Agreement ” and, together with this Agreement, the Registration Rights Agreements and any other agreement, certificate or other document to be entered into, furnished with or delivered pursuant to the terms hereof and thereof, the “ Transaction Documents ”).

 

AGREEMENT

 

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Definitions and Interpretation .

 

1.1.                             Definitions .  In addition to those terms defined above and elsewhere in this Agreement, for purposes of this Agreement, the following terms shall have the meanings set forth below:

 

ADSs ” means the American Depositary Shares of the Company issued pursuant to the Deposit Agreement; each ADS represents one (1) Class A Ordinary Share.

 



 

Affiliate ” means, (i) with respect to any Person other than a natural person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with such first Person, and (ii) with respect to any natural person, any other Person that is directly or indirectly Controlled by such natural person or is a spouse, child, step-child, parent, step-parent, brother, sister, step-brother, step-sister of such natural person and their respective lineal ascendants or descendants.

 

Affiliated Person ” with respect to a Person, means such Person’s director, supervisor, executive, employee, agent or other party acting on behalf of such Person.

 

Anti-Corruption Law ” means anti-bribery or anti-corruption related Laws that are applicable to business and transactions of the Group Companies and their respective Affiliates, including Laws relating to anti-corruption and anti-commercial bribery in the PRC, the amended U.S. Foreign Corrupt Practice Act of 1977, as well as applicable anti-bribery or anti-corruption Laws of other countries.

 

Board ” means the board of directors of the Company.

 

Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York City, the Cayman Islands, Hong Kong and the PRC are open for the general transaction of business.

 

Charter Documents ” means, with respect to a particular legal Person, the articles of incorporation, certificate of incorporation, formation or registration (including, if applicable, certificates of change of name), memorandum of association, articles of association, bylaws, articles of organization, limited liability company agreement, trust deed, trust instrument, operating agreement, joint venture agreement, business license, or similar or other constitutive, governing, or charter documents, or equivalent documents, of such Person.

 

Class A Ordinary Shares ” means class A ordinary shares of the Company, par value US$0.0001 per share, having rights and privileges set forth in the Memorandum and Articles of Association.

 

Class B Ordinary Shares ” means class B ordinary shares of the Company, par value US$0.0001 per share, having rights and privileges set forth in the Memorandum and Articles of Association.

 

Company Intellectual Property ” means all Intellectual Property that is used in connection with, and is material to the business of the Company and its Subsidiaries and all Intellectual Property owned by or licensed to the Company and its Subsidiaries.

 

Control ” of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of fifty percent (50%) or more of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing.

 

2



 

Controlling Documents ” means, collectively, the Voting Rights Proxy Agreement dated August 18, 2015 among the Shanghai Zhongtongji Network Technology Co., Ltd. (“ WFOE ”), the ZTO EXPRESS CO., LTD. (“ VIE Co ”) and the shareholders of the VIE Co, the Equity Pledge Agreement dated August 18, 2015 among the WFOE, the VIE Co and the shareholders of the VIE Co, the Exclusive Call Option Agreement dated August 18, 2015 among the WFOE, the VIE Co and the shareholders of the VIE Co, the Irrevocable Powers of Attorney dated August 18, 2015 issued by the shareholders of VIE Co, the Spousal Consents signed by the spouses of six key shareholders of the VIE Co, namely Meisong Lai, Jianfa Lai, Jilei Wang, Xiangliang Hu, Shunchang Zhang and Xuebing Shang, and the Exclusive Consulting and Services Agreement dated August 18, 2015 between the WFOE and the VIE Co.

 

Corporate Agent ” means Maples Corporate Services Limited.

 

Data Protection Obligations means any applicable Laws, contractual obligations, and written policies and terms of use relating to privacy, information security, network security, cybersecurity, data protection or the Processing of Personal Information, including those governing data breach notification, third-party data transfers, cross-border data transfers and data localization requirements.

 

Director Indemnification Agreement ” means the director indemnification agreement in the form attached hereto as Exhibit E .

 

Depositary ” means JPMorgan Chase Bank, N.A.

 

Deposit Agreement ” means the deposit agreement dated October 26, 2016 among the Company, the Depositary and holders of ADSs.

 

Equity Securities ” means, with respect to any Person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital and other equity securities of such Person, and any right, warrant, option, call, commitment, conversion privilege, preemptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing.

 

ESOP ” means the Amended and Restated 2016 Share Incentive Plan and the share incentive program the Company adopted through the onshore employee shareholding platform, Zto Es Holding Limited, each as disclosed in the SEC Filings.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

GAAP ” means United States generally accepted accounting principles, as in effect from time to time, applied on a consistent basis.

 

Governmental Authority ” means any government, or political subdivision thereof; any department, agency or instrumentality of any government or political subdivision thereof; any court or arbitral tribunal; and the governing body of any securities exchange or other self-regulatory body, whether domestic or foreign, in each case having competent jurisdiction.

 

3



 

Government Officials ” means (i) officers, employees and other persons (regardless of seniority) working in an official capacity on behalf of any branch of a government (e.g., legislative, administrative, judicial, military or public education departments) at any level (e.g., county and municipal level, provincial or central level), or any department or agency thereof; (ii) political party officials and candidates for political office; (iii) directors, officers and employees of state-owned, state-controlled or state-operated enterprises; (iv) officers, employees and other persons working in an official capacity on behalf of any public international organization (regardless of seniority), e.g., the United Nations or the World Bank; or (v) close relatives of persons identified above (e.g., parents, children, spouse and parents-in-law).

 

Group Company ” means each of the Company and its Subsidiaries (whether or not established after the date hereof); collectively, the “ Group .”

 

Hong Kong ” means the Hong Kong Special Administrative Region.

 

Intellectual Property ” means all rights, title, interests in and to all proprietary rights of every kind and nature however denominated, throughout the world, including any and all: (i) patents and patent applications (including re-issues, continuations, divisions, continuations-in-part, renewals or extensions); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans, and other indications of origin, together with all goodwill associated with each of the foregoing; (iii) copyrights, copyrightable works, and rights in mask works; (iv) rights in Internet Web sites, domain names, blogs, micro-blogs, and social media accounts; (v) patent disclosures, inventions, discoveries, improvements, ideas, designs, drawings, algorithms, confidential information, technical information, know-how, trade secrets, formulas, processes, procedures, specifications, protocols, models, tools, manuals, research data concerning historic and current research and development efforts, including the results of successful and unsuccessful designs, quality assurance and control procedures, platforms, technology, software (including computer programs, source code, object code, executable code and related documentation), data and databases (whether or not patentable or copyrightable or protectable as trade secrets and whether or not reduced to practice); (vi) registrations, applications and renewals in any jurisdiction for any of the foregoing; (vii) books and records pertaining to any of the foregoing; (viii) claims or causes of action arising out of past, present or future infringement or misappropriation of any of the foregoing; and (ix) any rights of the same or similar effect or nature as any of the foregoing anywhere in the world.

 

Key Person ” means any person listed on Schedule 2 attached hereto.

 

Knowledge ” means (i) with respect to the Company, the actual knowledge of the Key Persons after due inquiry; (ii) with respect to any other Person that is not an individual, the actual knowledge of such Person’s directors and officers who would reasonably be expected to have such knowledge, after due inquiry, and (iii) with respect to any natural Person, such Person’s actual knowledge after due inquiry.

 

Law(s) ” means any transnational, domestic or foreign, federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority.

 

4



 

Lien ” means any mortgage, deed of trust, pledge, charge, encumbrance, security interest, collateral assignment or other lien or restriction of any kind, whether based on common law, constitutional provision, statute or contract, and shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions.

 

Material Adverse Effect ” means any change, development, occurrence, condition or event that would or would reasonably be expected to (i) be materially adverse to the business, operations or financial condition of the Group, taken as a whole, or (ii) have a material adverse effect on the authority or ability of the Group, taken as a whole, to perform its obligations under the Transaction Documents; provided, however, that for purposes of clause (i) above, in no event shall any of the following exceptions, alone or in combination with the other enumerated exceptions below, be deemed to constitute, nor shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (A) any effect resulting from compliance with the terms and conditions of, or from the announcement of the transactions contemplated by any Transaction Document, (B) any effect that results from changes affecting any of the industries in which the Company operates generally or the economy generally, (C) any effect that results from changes affecting general worldwide economic or capital market conditions, provided that any such changes in (B) and (C) do not disproportionately affect the Company in any material respect relative to other similarly situated participants in the industry in which they operate, (D) pandemics, earthquakes, hurricanes, tornadoes or other natural disasters or similar force majeure events, (E) any failure to meet any internal or public projections, forecasts, or guidance, provided that the underlying causes that lead to any failure to meet any internal or public projections, forecasts, or guidance as set forth in (E) are not exceptions to a Material Adverse Effect, or (F) any change in the Company’s stock price or trading volume, in and of itself, primarily resulting from any of the effects or changes described in the foregoing clauses (A) to (E).

 

Memorandum and Articles of Association ” means the Second Amended and Restated Memorandum and Articles of Association of the Company.

 

NYSE ” means the New York Stock Exchange.

 

Ordinary Share ” means a Class A Ordinary Share or a Class B Ordinary Share.

 

Permit ” means with respect to any Person, any license, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the assets or business of such Person, including those relating to environmental or labor matters.

 

Person ” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

Personal Information ” means all information from or about an individual person that is used or could be used to identify, contact or precisely locate the individual.

 

PRC ” means the People’s Republic of China and solely for the purpose of this Agreement, excluding Hong Kong, the Macau Special Administrative Region and Taiwan.

 

5



 

Process ” or “ Processing ” means the receipt, access, acquisition, collection, compilation, use or transfer for use in direct marketing, storage, processing, safeguarding, security, disposal, destruction, disclosure, transfer, or export of Personal Information.

 

Regulation D ” means Regulation D as promulgated by the SEC under the Securities Act, as amended.

 

RMB ” means Renminbi, the lawful currency of the PRC.

 

SAFE ” means State Administration of Foreign Exchange of the PRC.

 

SAFE Circular 37 ” means the Circular on Issues Relating to the Administration of Foreign Exchange of Offshore Investment and Financing through Special Purpose Vehicles and Round-Tripping Investment by PRC Resident (in Chinese, “ 《国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》 [ 汇发( 2014 37 ]”) issued by the State Administration of Foreign Exchange on July 4, 2014 and rules and interpretation relating thereto and any succeeding rules.

 

SEC ” means the U.S. Securities and Exchange Commission.

 

SEC Filings ” means the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2017, and all other reports, schedules, forms, statements and other documents, together with all exhibits, financial statements, notes and schedules thereto and documents incorporated by reference therein, which are filed with the SEC and publicly available at least one (1) Business Day prior to the date hereof, without giving effect to any amendment or supplements thereto filed on or after the Business Day prior to the date hereof.

 

Securities Act ” means the U.S. Securities Act of 1933, as amended.

 

Shareholders Agreement ” means the Shareholders Agreement dated August 18, 2015 among the Company, Meisong Lai, Jianfa Lai, Jilei Wang, Xiangliang Hu and other parties thereto, a copy of which is included in the SEC Filings.

 

Significant Subsidiary ” has the meaning as defined under Regulation S-X and for the avoidance of doubt, includes any Group Company that Controls a Significant Subsidiary.

 

Subsidiary ” means, with respect to any Person other than a natural person, any other Person that is Controlled directly or indirectly by such Person, including such Person’s direct or indirect subsidiaries and consolidated affiliated entities.

 

Taxing Authority ” means any Governmental Authority responsible for the administration of any Tax.

 

1.2.                             Terms .  The following terms have the meanings ascribed to them in the corresponding Sections below:

 

6



 

Term

 

Section

Agreement

 

Preamble

Alibaba

 

Preamble

Allocation Price

 

Section 3.2(e)

Anti-Money Laundering Laws

 

Section 4.23(c)

Cainiao

 

Preamble

Closing

 

Section 3.1

Closing Date

 

Section 3.1

Company

 

Preamble

Company Systems

 

Section 4.19

EHS Laws

 

Section 4.21

Evaluation Date

 

Section 4.8(c)

HKIAC

 

Section 10.3

Indemnified Party

 

Section 7.12

Indemnifying Party

 

Section 7.12

Investor

 

Preamble

Investor Rights Agreement

 

Background

Latest Balance Sheet

 

Section 4.9(a)

Lease

 

Section 4.14(c)

Losses

 

Section 7.12

Material Contract

 

Section 4.12

NRF

 

Preamble

Proceeds

 

Section 7.10

Prohibited Person

 

Section 4.23(d)

Purchased Share

 

Section 2.1

Registration Rights Agreements

 

Background

Returns

 

Section 4.13(a)

SAFE Regulations

 

Section 4.15(c)

Sanction Laws

 

Section 4.23(d)

Tax

 

Section 4.13(a)

Total Price

 

Section 2.1

Transaction Documents

 

Background

YF

 

Preamble

 

1.3.                             Interpretation .  Unless otherwise expressly specified in this Agreement:

 

(a)                                  Directly or Indirectly .  The phrase “directly or indirectly” means directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning.

 

(b)                                  Gender and Number .  All words (whether gender-specific or gender neutral) shall be deemed to include each of the masculine, feminine and neuter genders.  Words importing the singular include the plural and vice versa.

 

(c)                                   Headings .  Headings, titles and subtitles are included for convenience only and shall not affect the construction or interpretation of any provision of this Agreement.

 

7



 

(d)                                  Include not Limiting .  “Include,” “including,” “are inclusive of” and similar expressions are not expressions of limitation and shall be construed as if followed by the words “without limitation.”

 

(e)                                   References .  A reference to any Section, Schedule or Exhibit is, unless otherwise specified, to such Section of, or Schedule or Exhibit to this Agreement.  The words “hereof,” “hereunder” and “hereto,” and words of like import, unless the context requires otherwise, refer to this Agreement as a whole and not to any particular Section hereof or Schedule or Exhibit hereto.  Any agreement, instrument or statute defined or referred to in this Agreement means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes or any rules or regulations promulgated under such statutes. The term “party” or “parties” shall mean a party to or the parties to this Agreement unless the context requires otherwise.  All references in this Agreement to “dollars” or “US$” shall mean the United States dollars.  The word “day” shall be deemed to refer to a calendar day.

 

(f)                                    Drafting and Negotiation .  Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it is drafted by each of the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

 

(g)                                   Writing .  References to “writing” and “written” include any mode of reproducing words in a legible and non-transitory form, including emails and faxes.

 

(h)                                  Language .  This Agreement is drawn up in the English language.

 

2.                                       Purchase and Sale of the Shares .

 

2.1.                             On the terms and conditions set forth in this Agreement, at the Closing, each Investor shall subscribe for, purchase and accept from the Company, and the Company shall issue, sell and deliver to each Investor, the number of Class A Ordinary Shares set forth opposite such Investor’s name on Schedule 1 (all such Class A Ordinary Shares purchased by the Investors, collectively, the “ Purchased Shares ” and each a “ Purchased Share ”), at a per share price of US$17.28 and total price of the Purchased Shares of US$1,380,000,000 (the “ Total Price ”), with full rights attached to such shares and free and clear of Liens (except for restrictions on transfer imposed by applicable securities Laws and the Transaction Documents).

 

2.2.                             Notwithstanding the provisions under Section 2.1 above, the Purchased Shares may be allocated among the Investors prior to or on the Closing at the Investors’ election so long as the allocation to each of Alibaba and Cainiao shall not be less than the number of Purchase Shares set forth opposite their respective names on Schedule 1 .

 

3.                                       Closing and Closing Deliveries .

 

3.1.                             Closing .  The consummation of the purchase and sale of the Purchased Shares (the “ Closing ”) shall, unless this Agreement is terminated pursuant to Section 9 , take place remotely via the exchange of documents and signature pages on a date that is, (i) with respect to each of Alibaba and Cainiao, no later than ten (10) Business Days, and (ii) with respect to each of YF and NRF, no later than twenty (20) Business Days, in each case, after each of the conditions set forth in Section 6 has been fulfilled or waived (other than those conditions that can be fulfilled only at the Closing), or at such other time and place as the Company and the Investors may mutually agree (such date, the “ Closing Date ”).

 

8



 

3.2.                             Closing Deliveries of the Company .  At the Closing, the Company shall deliver to the applicable Investor:

 

(a)                                  a copy of the duly executed share certificates issued by the Company representing the Purchased Shares in the name of such Investor, certified as true by the Corporate Agent, with the original copies to be delivered to such investor within five (5) Business Days after the Closing;

 

(b)                                  a copy of the register of members of the Company as of the Closing evidencing the issuance of the Purchased Shares in the name of such Investor, certified as true by the Corporate Agent;

 

(c)                                   a copy of the register of directors of the Company as of the Closing, certified as true by the Corporate Agent, reflecting that the person designated by Alibaba has been duly elected to the Board as a director as of the Closing;

 

(d)                                  a copy of the resolutions evidencing the authorization by the Board of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, and the execution, delivery and performance of this Agreement and the other Transaction Documents, certified by a duly authorized director of the Board to be a true, complete and correct copy thereof;

 

(e)                                   a receipt or written acknowledgement of payment of such Investor’s allocation in the Total Price, i.e., the amount as set forth in the right column opposite to such Investor’s name on Schedule 1 (or as adjusted in accordance with Section 2.2 , the “ Allocation Price ” of such Investor), executed on behalf of the Company by its chief executive officer or chief financial officer; and

 

(f)                                    such other documentary deliveries as set forth in Section 6.1 .

 

3.3.                             Closing Deliveries of the Investor .  At the Closing, the applicable Investor shall deliver to the Company:

 

(a)                                  its Allocation Price, by wire transfer of immediately available funds to an account designated by the Company no later than three (3) Business Days prior to the Closing Date; and

 

(b)                                  such other documentary deliveries as set forth in Section 6.2(c) .

 

4.                                       Representations and Warranties of the Company .  The Company hereby represents and warrants to each of the Investors as of the date hereof and the Closing Date (except for such representations and warranties made as of a specific date) that, except as disclosed in the SEC Filings (excluding any forward-looking disclosures set forth in any risk factor sections and any disclosure of non-specific risks faced by the Group included in any forward-looking statement, disclaimer, risk factor disclosure or other similarly non-specific statements that are similarly cautionary, predictive or forward-looking in nature):

 

9



 

4.1.                             Organization, Good Standing and Qualification .

 

(a)                                  Each Group Company is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted, to own or lease its properties and to perform its obligations under each Transaction Document to which it is a party.  Each Group Company is duly qualified to do business in all material respects, is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification necessary.

 

(b)                                  Except as disclosed in the SEC Filings, the Company has provided the Investors with a true and complete copy of

 

(i)                                      the effective Charter Documents of the Company;

 

(ii)                                   the latest register of members, shareholders’ ledger or its equivalent of each of the Company and its Significant Subsidiaries (other than any Significant Subsidiary wholly owned by a Group Company); and

 

(iii)                                the latest register of directors of the Company.

 

(c)                                   Each Group Company has been in compliance with its Charter Documents.  None of the Group Companies’ Charter Documents has violated any applicable Laws.

 

(d)                                  The Company has no Knowledge of any facts or circumstances that lead it to believe that it will be required to file for reorganization or liquidation under the bankruptcy or reorganization Laws of any jurisdiction, and has no present intention to so file.

 

4.2.                             Authorization .  The Company has the requisite corporate power and authority and has taken all requisite action on the part of itself, its officers, directors and shareholders necessary for (i) the authorization, execution and delivery of the Transaction Documents to which it is a party, (ii) the authorization of the performance of its obligations hereunder or thereunder, and (iii) in the case of the Company, the authorization, issuance (or reservation for issuance) and delivery of the Purchased Shares.  The Transaction Documents constitute, or when executed and delivered by the Company, will constitute, its legal, valid and binding obligations, enforceable against it in accordance with their terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other similar Laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity.

 

4.3.                             Due Execution; Enforceability .  This Agreement has been and, at or prior to the Closing, each other Transaction Document to be delivered at the Closing will be, duly executed and delivered by the Company.  This Agreement constitutes and, upon the execution and delivery thereof by the Company, each other Transaction Document will constitute, the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other similar Laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity.

 

10



 

4.4.                             Capitalization .

 

(a)                                  The authorized share capital of the Company is US$1,000,000 divided into 10,000,000,000 shares, comprising of (i) 8,000,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, (ii) 1,000,000,000 Class B Ordinary Shares of a par value of US$0.0001 each and (iii) 1,000,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the Board may determine in accordance with the Memorandum and Articles of Association, of which 510,760,003 Class A Ordinary Shares (not taking into account the 14,546,437 Class A Ordinary Shares in the form of ADSs repurchased by the Company and registered on the Company’s register of members as of the date hereof to be cancelled in the future or solely for the purpose of issuances under the ESOP) and 206,100,000 Class B Ordinary Shares were issued and outstanding, respectively, as of the date hereof and the Closing Date (not taking into account the issuance of the Purchased Shares).  All of the issued and outstanding Ordinary Shares of the Company’s share capital have been duly authorized and validly issued and are fully paid and non-assessable and were issued in compliance with applicable Laws.

 

(b)                                  All issued Equity Securities of each Group Company were duly and validly issued or subscribed for in compliance with applicable Laws and none of them were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase Equity Securities of any Group Company.  All Equity Securities of each Group Company that is a PRC Person have been duly paid in accordance with its Charter Documents and has been verified by a qualified accountant firm (if required by the applicable Law).  Except as contemplated by the Transaction Documents, there are no (i) resolutions pending to increase the share capital of any Group Company or cause the liquidation, winding up or dissolution of any Group Company, (ii) dividends that have accrued or been declared but are unpaid by any Group Company, (iii) obligations, contingent or otherwise, of any Group Company to repurchase, redeem or otherwise acquire any Equity Securities, (iv) outstanding or authorized equity appreciation, phantom equity, equity plans or similar rights with respect to any Group Company except the ESOP, or (v) outstanding rights, options, warrants, preemptive rights, rights of first offer, or similar rights for the purchase or acquisition from any Group Company of any securities, nor any agreements or commitments to issue or execute any such rights, options, warrants, preemptive rights or rights of first offer, except the ESOP.

 

(c)                                   The respective rights, preferences, privileges, and restrictions of the Ordinary Shares are as stated in the Memorandum and Articles of Association.  There is no outstanding shareholder purchase right or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in any Group Company upon the occurrence of certain events.

 

(d)                                  Except for the Shareholders Agreement, the Registration Rights Agreements and the Investor Rights Agreement, (i) no Group Company or anyone of Mr. Meisong Lai ( 赖梅松 ), Mr. Jianfa Lai ( 赖建法 ) and Mr. Jilei Wang ( 王吉雷 ) has entered into any agreement that would entitle any Person to a right of first refusal, voting arrangement, preemptive rights, drag-along, tag-along or similar rights with respect to the securities of such Group Company held by them, and (ii) no Person has the right to require any Group Company to register under the Securities Act any securities that are presently outstanding or may be issued subsequently.  The issuance and sale of the Purchased Shares hereunder will not obligate any Group Company to issue Ordinary Shares or other securities to any Person other than the Investors.

 

11



 

4.5.                             Valid Issuance .  The Purchased Shares have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and non-assessable, and shall be free and clear of all Liens, except for restrictions on transfer imposed by applicable securities Laws and the Transaction Documents, and will be delivered in compliance with all applicable federal and state securities Laws, assuming the accuracy of the representations and warranties of the Investors contained in Section 5 hereof.  The issuance of the Purchased Shares is not in violation of any preemptive rights, rights of first refusal or similar rights.

 

4.6.                             Consents .  The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Purchased Shares require no consent of, notification to, filing with or other actions by, any third party or Governmental Authority, other than consents that have been obtained, or notifications, filings or other actions that have been made, and except for any required filing or notification regarding the issuance or listing of additional securities with the NYSE.

 

4.7.                             No Conflicts .  The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Purchased Shares do not and will not (i) violate its Charter Documents, (ii) violate any applicable Law, (iii) require any consent or approval by any Person (other than those that have been obtained or will have been obtained prior to the Closing) under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of any Group Company or to a loss of any benefit to which such Group Company is entitled under any provision of any agreement or other instrument binding upon such Group Company, or (iv) result in the creation or imposition of any Lien on any asset of any Group Company, except in the cases of clause (ii), (iii) and (iv) above, as has not materially adversely affected and would not reasonably be expected to materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted.

 

4.8.                             SEC Filings .

 

(a)                                  The Company has timely filed or furnished, as the case may be, all documents required to be filed with or furnished to the SEC pursuant to Sections 13(a) or 15(d) of the Exchange Act.

 

(b)                                  The SEC Filings (including any exhibits and schedules thereto and other information incorporated by reference therein), when they became effective or were filed with or furnished to the SEC, as the case may be, complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, in each case as in effect at such time, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make such statements, in the light of the circumstances in which they were made, not misleading, in each case as of the date when they became effective or were filed with or furnished to the SEC (other than as corrected, supplemented or clarified in a subsequent SEC Filing which, for the avoidance of doubt, does not include any subsequent filing made after the Business Day prior to the date hereof).

 

12



 

(c)                                   The Company has designed and maintains a system of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting for the Group.  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) (A) designed to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management to allow timely decisions regarding required disclosure and (B) reasonably effective to perform the functions for which they were designed, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the board of the Company (and made summaries of such disclosures available to the Investors) (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “ Evaluation Date ”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 308 of Regulation S-K) or, to the Knowledge of the Company, in other factors that could significantly affect the Company’s internal controls.

 

(d)                                  There are no outstanding or unresolved comments in any comment letters received from the SEC staff with respect to any SEC Filing and none of the SEC Filings is the subject of ongoing SEC review.  There are no internal investigations, any SEC inquiries or investigations or other inquiries or investigations conducted by a Governmental Authority pending or, to the Knowledge of the Company, threatened, in each case, regarding the Company or any of its officers or directors.

 

4.9.                             Financial Statements .

 

(a)                                  The financial statements of the Company and its Subsidiaries on a consolidated basis for each of the periods included or incorporated by reference in the SEC Filings, including the Company’s consolidated and audited financial statements prepared in respect of the fiscal year ended December 31, 2017 filed with the SEC on Form 20-F as of April 24, 2018 (the balance sheet contained therein, the “ Latest Balance Sheet ”) and the Company’s unaudited consolidated financial statements prepared in respect of the fiscal quarter ended March 31, 2018 furnished to the SEC on Form 6-K as of May 14, 2018, (A) fairly present the consolidated financial condition and the results of operations of the Group as of the dates and for the periods indicated in such SEC Filings (other than as corrected, supplemented or clarified in a subsequent SEC Filing which, for the avoidance of doubt, does not include any subsequent filing made on or after the Business Day prior to the date hereof), (B) were prepared in accordance with GAAP applied on a consistent basis (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes, may be condensed to summary statements or may undergo normal year-end adjustments) and (C) have been prepared from and are consistent with the books and records of the Company and its Subsidiaries.

 

13



 

(b)                                  The Company and its Subsidiaries do not have any liabilities or obligations (accrued, absolute, contingent or otherwise) and there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such liabilities or obligations other than liabilities or obligations (i) reflected on, reserved against, or disclosed in the notes to, the Latest Balance Sheet, (ii) that were incurred in the ordinary course of business since December 31, 2017, or (iii) liabilities or obligations that have not materially adversely affected and would not reasonably be expected to materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted. There are no unconsolidated Subsidiaries of the Company or off-balance sheet arrangements of any type (including any off-balance sheet arrangement required to be disclosed pursuant to Item 303(a)(4) of Regulation S-K promulgated under the Securities Act) that have not been so described in the SEC Filings nor any obligations to enter into any such arrangements.

 

(c)                                   None of the Group Companies is, immediately prior to this Agreement, or will be, at the time of the Closing after giving effect to the Closing, in default in the payment of any indebtedness or in default under any agreement governing or creating any indebtedness for borrowed money, obligations evidenced by bonds, debentures, notes or similar instruments or capitalized lease obligations, except defaults that have not materially adversely affected and would not reasonably be expected to materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted.

 

4.10.                      Absence of Certain Changes .  Since December 31, 2017, the Group Companies have carried on their respective businesses in the ordinary course, except as reflected in the SEC Filings or as contemplated by the offer and sale of the Purchased Shares.  There has not been any event, occurrence, development or state of circumstances or facts that has had or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

4.11.                      Controlling Documents .  Each of the Controlling Documents has been duly authorized, executed and delivered by the parties thereto, and constitutes valid and binding obligations of the parties thereto, enforceable against such parties in accordance with its terms, and there is no enforceable agreement or understanding to rescind, amend or change the nature of such captive structure or material terms of the Controlling Documents.  The Controlling Documents are adequate to enable the financial statements of each Group Company that is a party to a Controlling Document to be consolidated with those of the Company in accordance with GAAP.

 

4.12.                      Material Contracts .  True and complete copies of all agreements to which any Group Company is a party and which are required to have been filed, or to be filed, by the Company pursuant to the Securities Act or the Exchange Act (each a “ Material Contract ”) have been filed by the Company with the SEC pursuant to the requirements of the Securities Act or the Exchange Act, as applicable, and since the filing of the most recent SEC Filing filed prior to the date hereof, there has been no material change or amendment to any Material Contract filed as an exhibit to the SEC Filings.  Except for those that have expired or terminated in accordance with their terms, each Material Contract is in full force and effect and is binding on the Company and/or its Subsidiaries, as applicable, and is binding upon such other parties, and neither any Group Company nor, to the Knowledge of the Company, any other party thereto, is in breach of or default under any Material Contract.  The Company has not sent or received any written communication regarding termination of, or intent not to renew, any Material Contract in effect, which are referred to or described in the SEC Filings or filed as an exhibit to the SEC Filings.

 

14



 

4.13.                      Tax Matters .

 

(a)                                  Each Group Company (i) has made or filed in a timely manner (within any applicable extension periods) and in the appropriate jurisdictions all foreign, federal and state income and all other tax returns, reports, information statements and other documentation (including any additional or supporting materials) required to be filed or maintained in connection with the calculation, determination, assessment or collection of any and all federal, state, local, foreign and other taxes, levies, fees, imposts, duties, governmental fees and charges of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto), including, without limitation, taxes imposed on, or measured by, income, franchise, profits, gross income or gross receipts, and also ad valorem, value added, sales, use, service, real or personal property, capital stock, stock transfer, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, environmental, transfer and gains taxes and customs duties (each a “ Tax ”), including all amended returns required as a result of examination adjustments made by any Governmental Authority responsible for the imposition of any Tax (collectively, the “ Returns ”), and such Returns are prepared in compliance with applicable Law and true, correct and complete in all material respects, (ii) has paid all material Taxes and other governmental assessments and charges, shown or determined to be due under applicable Laws and has withheld and remitted to the appropriate Taxing Authority all material Taxes that it is obligated to withhold and remit (whether or not shown on such Return, except those being contested in good faith, not finally determined), and (iii) has set aside on its books provision reasonably adequate for the payment of all Taxes for periods subsequent to the periods to which such Returns apply. Neither the Company nor any of its Subsidiaries has received notice regarding unpaid Taxes in any material amount claimed to be due by the Taxing Authority of any jurisdiction and the Company is not aware of any reasonable basis for such claim. No Returns filed by or on behalf of the Company or any of its Subsidiaries with respect to Taxes are currently being audited or examined. Neither the Company nor any of its Subsidiaries has received notice of any such audit or examination.

 

(b)                                  Each Group Company is in compliance in all material respects with all terms, conditions and formalities necessary for the continuance of any Tax exemption, Tax holiday, Tax credit, Tax incentive, Tax refund or other Tax reduction agreement or order available under any applicable Law.  Each such Tax exemption, Tax holiday, Tax credit, Tax incentive, Tax refund or other Tax reduction agreement or order is expected to remain in full effect throughout the current effective period thereof after the Closing Date and, to the Knowledge of the Company, is not subject to reduction, revocation, cancellation or any other changes (including retroactive changes) in the future, and no Group Company has received any notice to the contrary or is aware of any event that may result in repeal, cancellation, revocation, or return of such entitlements.  Each Group Company is in compliance with all transfer pricing requirements in all jurisdictions in which they are required to comply with applicable transfer pricing regulations, and all the transactions between any Group Company and other related Persons (including any Group Company) have been effected on an arm’s length basis.  All exemptions, reductions and rebates of any Taxes granted to any Group Company by a Governmental Authority are in full force and effect and have not been terminated as evidenced with valid governmental approvals.  None of the Group Companies is treated as a resident for Tax purposes of, or is otherwise subject to income Tax in, a jurisdiction other than the jurisdiction in which it has been established.

 

15



 

4.14.                      Properties .

 

(a)                                  Except as disclosed in the SEC Filings, each Group Company has good and marketable title to, or in the case of leased property and assets has valid leasehold interests in, all property and assets (whether real, personal, tangible or intangible) reflected on the latest audited balance sheet of the Company or acquired after December 31, 2017, except for property and assets sold after December 31, 2017 in the ordinary course of business. None of such property or assets is subject to any Lien, except:

 

(i)                                      Liens disclosed on the Latest Balance Sheet;

 

(ii)                                   Liens for Taxes not yet due or being contested in good faith (and for which adequate accruals or reserves have been established on the Latest Balance Sheet); or

 

(iii)                                Liens or any minor imperfections of title that have not materially adversely affected and would not reasonably be expected to materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted.

 

(b)                                  To the Knowledge of the Company, there are no developments affecting any such property or assets pending or threatened that would materially detract from the value, materially interfere with any present or intended use or materially adversely affect the marketability of any such property or assets.

 

(c)                                   Each leasehold interest pursuant to which any Group Company holds any real property (a “ Lease ”) is in good standing and is valid, binding and enforceable in accordance with their respective terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other similar Laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity.  There does not exist under any such Lease any default or any event that with notice or lapse of time or both would constitute a default, such that has materially adversely affected or would reasonably be expected to materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted.

 

(d)                                  Except as disclosed in the SEC Filings, with respect to any land use rights owned by the Group Companies, all land grant premiums required under the applicable Law and the relevant contract have been paid in full.  With respect to any plant, building and structure located on such land, the Group Companies have complied with the applicable Law in all material respects in respect of the development and construction of such plant, building or structure.

 

(e)                                   The property and assets owned or leased by the Group Companies, or that they otherwise have the right to use, constitute all of the property and assets used or held for use in connection with the businesses of the Group and are adequate to conduct such businesses in substantially the same manner as currently conducted.

 

16



 

4.15.                      Compliance with Laws .

 

(a)                                  Each Group Company has conducted its business in compliance with all applicable Laws, except where the failure to be in compliance has not materially adversely affected and would not reasonably be expected to materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted. The Group Companies have all Permits, and have made all filings and registrations with, any Governmental Authority that are required in order to carry out their businesses as presently conducted, except where the failure to have such Permits or the failure to make such filings and registrations, individually or in the aggregate, has not materially adversely affected and would not reasonably be expected to materially adversely affect the business of the Group as it is currently conducted. All such Permits, filings and registrations are in full force and effect and no Group Company is in default under any of such Permits, filings and registrations and to the Company’s Knowledge, no suspension or cancellation of any of them is threatened, except where such default, suspension or cancellation, individually or in the aggregate, has not materially adversely affected and would not reasonably be expected to materially adversely affect the business of the Group as it is currently conducted.

 

(b)                                  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation by any Governmental Authority, including the SEC, involving the Company or any current or former director or officer of the Company.  The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any of its Subsidiaries under the Securities Act or the Exchange Act.

 

(c)                                   Each holder or beneficial owner of Ordinary Shares who is a domestic resident (as set forth in SAFE Circular 37) and subject to any of the registration or reporting requirements of SAFE Circular 37 or any other applicable SAFE rules and regulations (collectively, the “ SAFE Regulations ”), has complied with such reporting, registration, subsequent registration-amendment requirements and other procedures under the SAFE Regulations with respect to its investment in the Company.  None of the Subsidiaries of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company or from making any other distribution on such Subsidiary’s capital stock.

 

(d)                                  To the Knowledge of the Company, all material business partners that own and operate pickup and delivery outlets in the Group’s network, operate express delivery services under the “Zhongtong” or “ZTO” brand and have direct contractual relationships with the Group Companies have maintained valid and sufficient Permits to operate businesses in relation to their contractual relationship with the Group Companies.

 

4.16.                      Related Party Transactions .  All related party transactions required to be disclosed under the rules of the NYSE, the Exchange Act or other applicable Laws have been accurately described in the SEC Filings in all material respects. Each of such related party transactions was entered into on an arm’s length basis.  Except as disclosed in the SEC Filings, none of the officers or directors (or their respective Affiliates) of each Group Company and to the Company’s Knowledge, none of the employees (or their respective Affiliates) of each Group Company is presently a party to any material transaction with any Group Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or any entity in which any such person has a substantial interest or is an officer, director, trustee or partner or any such person’s Affiliates.

 

17



 

4.17.                      Labor Matters .

 

(a)                                  Except as disclosed in the SEC Filings, (i) each Group Company has complied in all material respects with all applicable Laws in respect of employment and labor (including labor outsourcing), and (ii) each Group Company has entered into a written employment contract with its employees and made all social security contributions or similar contributions (including retirement, life insurance, medical, hospital, disability, welfare, pension, other employee benefit program and housing fund) in respect of or on behalf of its employees in accordance with all applicable Laws.

 

(b)                                  All the labor outsourcing agreements entered into by the Group Companies and the outsourcing firms are in full force and effect, binding on the parties thereto in accordance with their terms. There has been no material change or amendment to any such agreements and neither any Group Company, nor to the Knowledge of the Company any other party thereto, is in material breach of or default under any such agreements. The Group Companies have no contractual relationship with or other liabilities to the outsourced workers, even if the outsourcing firms fail to fulfill their duties to these personnel or violate any relevant requirements under the applicable PRC labor Laws.

 

(c)                                   There has not been, and there is not now pending or, to the Knowledge of the Company, threatened, any strike, union organization activity, slowdown or work stoppage against any Group Company.  None of the Group Companies is bound by or otherwise subject to any contract with any labor union or any collective bargaining agreements.

 

(d)                                  Each ESOP complies in all material respects with applicable Laws and has been implemented in accordance with its terms.  With respect to each ESOP, (i) no actions, Liens, lawsuits, claims, proceedings, investigations or complaints are pending or, to the Knowledge of the Company, threatened, and (ii) to the Knowledge of the Company, no facts or circumstances exist that would reasonably be expected to give rise to any such actions, Liens, lawsuits, claims or complaints.

 

4.18.                      Intellectual Property .  With respect to each item of Company Intellectual Property, the Company or one or more of its Subsidiaries owns or possesses all rights, titles and interests in and to the item if owned by the Company or any of its Subsidiaries, free and clear of any Lien, license or other material restriction (other than licenses granted to third parties in the ordinary course of business and other than Liens, licenses or other restrictions contained in any agreement disclosed by the Company in any SEC Filings), and possesses all rights necessary, in the case of a licensed item, under the applicable license agreement, to use such item in the manner in which such item is used by the Company or its Subsidiaries in the operation of their business as currently conducted and as currently proposed to be conducted. The Company Intellectual Property collectively represents in all material respects Intellectual Property necessary and sufficient for the operation of the business of the Group Companies as currently conducted and as currently proposed to be conducted. All employees, contractors, agents and consultants of a Group Company who are or were involved in the creation of any Intellectual Property for such Group Company have executed an assignment of inventions agreement that vests in the Group Company exclusive ownership of all right, title and interest in and to such Intellectual Property, to the extent not already provided by Law. Each Group Company has taken commercially reasonable measures to register, protect, maintain and safeguard the Company Intellectual Property and has executed appropriate nondisclosure and confidentiality agreements and, if registered or applied to be registered, made all appropriate filings, registrations and payments of fees in connection with the foregoing. To the Knowledge of the Company, there is no infringement or misappropriation of any Intellectual Property of a third party by any Group Company and there is no action, suit, proceeding, hearing, investigation, charge, complaint, demand or claim regarding any Company Intellectual Property.

 

18



 

4.19.                      IT System .  The software, hardware, servers, networks, interfaces databases, computer equipment and other information technology owned or used by the Group Companies and used in the business of the Group (the “ Company Systems” ) are adequate for the business of the Group as currently conducted and as currently proposed to be conducted.  The Company Systems have not suffered any material failure or any material unpermitted intrusions within the past three (3) years.  The Group Companies maintain security, business continuity and disaster recovery plans, procedures and facilities in relation to the Company Systems consistent with standard practices in the industry in which the Group Companies operate.  The Group Companies have secured all necessary license rights from third-party owners of software, Intellectual Property and technology utilized in connection with the Company Systems sufficient for the operation of the Company Systems as currently conducted and as currently proposed to be conducted, and are not in breach of any agreements pertaining thereto. The use of open source or public library software, including any version of any software licensed pursuant to any GNU or other public license, in the Company Intellectual Property, if any, as currently used, does not require the disclosure to any Person, or materially adversely impact the Company’s or any of its Subsidiaries’ ownership or use of, or validity or enforceability or confidentiality of, any material Intellectual Property (including rights in source code) owned or purported to be owned by the Company or any of its Subsidiaries.

 

4.20.                      Data Protection .  The Group Companies have complied in all material respects with all Data Protection Obligations, including in its Processing of Personal Information, and, to the Knowledge of the Company, there has not been any violation or breach of any Data Protection Obligations. There have been no instances of unauthorized access, loss, theft, use, modification, disclosure or other misuse of any Personal Information in the possession or control of the Group Companies.

 

4.21.                      Environment, Health and Safety .  Except as has not materially adversely affected or would not reasonably be expected to materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted, each Group Company is in compliance with all applicable Laws relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or project construction, fire protection, human health and safety (collectively, “ EHS Laws ”). No notice, notification, demand, request for information, citation, summons or order has been received, no complaint has been filed, no penalty has been assessed and no investigation, action, claim, suit, proceeding or review is pending or, to the Knowledge of the Company, threatened by any Governmental Authority or other Person against any Group Company and arising out of any EHS Laws.

 

4.22.                      Litigation .  Other than the shareholders’ class actions disclosed in the SEC Filings, there is no action, suit, investigation or proceeding or any basis therefor pending against, or to the Knowledge of the Company, threatened against, any Group Company or any of their respective properties before (or, in the case of threatened actions, suits, investigations or proceedings, that would be before) any Governmental Authority or arbitrator that would result or would reasonably be expected to result in damages in excess US$1,000,000 individually or US$10,000,000 in the aggregate, involve any equitable remedy that would materially adversely affect, individually or in the aggregate, the business of the Group as it is currently conducted, or that in any manner seeks to prevent, enjoin, alter or materially delay the transactions contemplated by the Transaction Documents.

 

19



 

4.23.                      Anti-Corruption, Anti-Money Laundering and Sanction Laws .

 

(a)                                  Neither any Group Company nor any of such Group Company’s officers, directors and employees acting on its behalf has violated any Anti-Corruption Laws, has ever offered, paid, promised to pay, or authorized the payment of any money or anything of value, to any Government Official (including any government official to whom such Person knows or ought to know that all or a portion of such money or things of value will be offered, given or promised, directly or indirectly):

 

(i)                                      for the purpose of (1) influencing any act or decision of Government Officials in their official capacity; (2) inducing Government Officials to act or omit to act in violation of lawful duties; (3) securing any improper advantage; (4) inducing Government Officials to influence or affect any act or decision of any Governmental Authority; or (5) assisting any Group Company in obtaining or retaining business, or directing business to, any Group Company; and

 

(ii)                                   in a manner that would constitute a breach of applicable Anti-Corruption Laws.

 

(b)                                  Neither any Group Company nor, to the Group Companies’ knowledge, any of such Group Company’s officers, directors and employees acting on its behalf has ever offered, given or accepted bribes to or from any Governmental Authority (including any government department, its subordinate institution and state-owned enterprise) in violation of applicable Anti-Corruption Laws.

 

(c)                                   The operations of the Group Companies are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company or any of its subsidiaries conducts business, including the U.S. PATRIOT ACT of 2001, Her Majesty’s Treasury (HMT), the Organized and Serious Crimes Ordinance and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance of Hong Kong, and PRC anti-money laundering laws, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental or regulatory agency (collectively, the “ Anti-Money Laundering Laws ”), and no action suit or proceeding by or before any Governmental Authority or any arbitrator involving the Group Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.  The directors, officers, administrators, members and employees of the Group Companies, in their capacities as such, (i) are in all material aspects in compliance with, and (ii) have not previously violated, the Anti-Money Laundering Laws.

 

20



 

(d)                                  None of the Group Companies is a Prohibited Person and to the Knowledge of the Company, none of the directors, officers, employees, agents of any Group Company and other Persons explicitly authorized to act on any Group Company’s behalf is a Prohibited Person.  No Prohibited Person will be given an offer to become an employee, officer, consultant or director of any Group Company.  No Group Company has conducted or agreed to conduct any business, or entered into or agreed to enter into any transaction with a Prohibited Person.  “ Prohibited Person ” means any Person that is (1) a national or resident of any U.S. embargoed or restricted country, (2) included on the United States Commerce Department’s Denied Parties List, Entities and Unverified Lists; the U.S. Department of Treasury’s Specially Designated Nationals, Specially Designated Narcotics Traffickers or Specially Designated Terrorists, or the Annex to Executive Order No. 13224; the Department of State’s Debarred List; UN Sanctions, or (3) a Person with whom business transactions, including exports and re-exports, are restricted by a U.S. Governmental Authority, including, in each clause above, any updates or revisions to the foregoing and any newly published rules or sanction programs, whether or not administered by the Office of the Foreign Assets Control of the United States Treasury Department (collectively with all such Laws, provisions and programs in respect of the foregoing, the “ Sanction Laws ”).

 

4.24.                      Fees .  No Group Company is a party to any agreement or arrangement that has obligated or would obligate any Group Company to pay any brokerage commission, finder’s fee or similar compensation to any underwriter, broker, agent or other representative as a result of the transactions contemplated by this Agreement.

 

4.25.                      Listing and Maintenance Requirements .  The ADSs are registered pursuant to Section 12(b) or 12(g) of the Exchange Act.  The Company has taken no action designed to, or which is reasonably likely to, have the effect of terminating the registration of such ADSs under the Exchange Act, nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the twelve (12) months preceding the date hereof, received notice from the NYSE to the effect that the Company is not in compliance with the listing or maintenance requirements of the NYSE.

 

4.26.                      No Directed Selling Efforts or General Solicitation .  Neither the Company, nor any Affiliate of the Company, nor any Person acting on its behalf (i) has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the transactions contemplated by this Agreement, or (ii) has, directly or indirectly, made any offers or sales of any security or the right to purchase any security, or solicited any offers to buy any security or any such right, under circumstances that would require registration of the Purchased Shares under the Securities Act.  The Company has offered the Purchased Shares for sale only to the Investors.

 

4.27.                      Private Placement .  Assuming the accuracy of the representations and warranties of the Investors contained in Section 5 hereof, the offer and sale of the Purchased Shares to the Investors as contemplated hereby is exempt from the registration requirements of the Securities Act.

 

4.28.                      Investment Company .  The Company is not required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

21



 

4.29.                      No Integrated Offering .  Neither the Company, nor any Affiliate of the Company, nor any person acting on its behalf or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of the Purchased Shares to be integrated with prior offerings by the Company for purposes of the Securities Act in a manner that would require registration of such offer and sale under the Securities Act, or would cause any applicable state securities Law exemptions or any applicable stockholder approval provisions exemptions, including under the rules and regulations of any national securities exchange or automated quotation system on which any of the securities of the Company are listed or designated to be unavailable, nor will the Company take any action or steps that would cause the offering or issuance of the Purchased Shares to be integrated with other offerings.

 

5.                                       Representations and Warranties of the Investors .  Each of the Investors hereby represents and warrants to the Company, severally and not jointly or jointly and severally, that:

 

5.1.                             Organization and Authorization .  It is a duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation and has full right, power, authority and capacity to enter into each of the Transaction Documents to which it is a party and to consummate the transactions contemplated by each such Transaction Document.  The execution, delivery and performance of each of the Transaction Documents have been duly authorized by all necessary action on the part of such Investor, its officers, directors and shareholders, and each of the Transaction Documents to which it is a party has been duly executed and delivered by such Investor and, assuming due authorization, execution and delivery of each of the Transaction Documents by the Company, will constitute valid and binding obligation of such Investor, enforceable against it in accordance with its terms.

 

5.2.                             No Conflict .  The execution, delivery and performance of the Transaction Documents by such Investor and the subscription and purchase of its allocation in the Purchased Shares (as set forth opposite such Investor’s name on Schedule 1 , or as adjusted in accordance with Section 2.2 ) do not and will not (i) violate its Charter Documents, (ii) violate any applicable Law, or (iii) require any consent or approval by any Person (other than those that have been obtained or will have been obtained prior to the Closing) under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of such Investor or to a loss of any benefit to which such Investor is entitled under any provision of any agreement or other instrument binding upon such Investor, except in the cases of clause (ii) and (iii) above, as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Investor to perform its obligations under the Transaction Documents.

 

5.3.                             Consents .  The execution, delivery and performance by such Investor of the Transaction Documents and the subscription and purchase of its allocation in the Purchased Shares (as set forth opposite such Investor’s name on Schedule 1 , or as adjusted in accordance with Section 2.2 ) require no consent of any third party or Governmental Authority, other than consents that have been obtained or will have been obtained prior to the Closing.

 

5.4.                             Purchase Entirely for Own Account .  The Purchased Shares to be received by such Investor (as set forth opposite such Investor’s name on Schedule 1 ) hereunder will be acquired for its own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, and it has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act, without prejudice, for the avoidance of doubt, to its right at all times to sell or otherwise dispose of all or any part of such shares in compliance with applicable federal and state securities Laws and the Transaction Documents. Such Investor is not a broker-dealer registered with the SEC under the Exchange Act.

 

22



 

5.5.                             Restricted Securities .  Such Investor understands that the Purchased Shares are characterized as “restricted securities” under the U.S. federal securities Laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such Laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances.

 

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

 

5.7.                             Alibaba . Alibaba is a wholly owned subsidiary of Alibaba Group Holding Limited, and has sufficient funds to pay its Allocation Price as of the Closing Date.

 

5.8.                             U.S. Person .  Such Investor is not a “U.S. person” as defined in Rule 902 of Regulation S under the Securities Act.

 

5.9.                             No Solicitation .  Such Investor was not identified or contacted through the marketing of the Shares.  Such Investor did not contact the Company as a result of any general solicitation or directed selling efforts.

 

6.                                       Conditions to Closing .

 

6.1.                             Conditions to the Investors’ Obligations .  Each Investor’s obligation to purchase its allocation in the Purchased Shares (as set forth opposite such Investor’s name on Schedule 1 , or as adjusted in accordance with Section 2.2 ) at the Closing is subject to the fulfillment, on or prior to the Closing Date, of the following conditions, any of which may be waived in writing by such Investor:

 

(a)                                  Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects (or shall be true and correct in all respects, in respect of any representation that includes a “materiality” or “Material Adverse Effect” qualifier) as of the Closing Date or, for such representations and warranties made as of a specific date, as of such date; provided, however, that the representations and warranties set forth in Sections 4.1 , 4.2 , 4.3 , 4.4 , 4.5 and 4.23 (a) shall be, as of the date hereof and the Closing Date, true and correct in all respects with the same effect as though such representations and warranties had been made as of the Closing.

 

(b)                                  The Company shall have performed and complied in all material respects with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with on or before the Closing.

 

23



 

(c)                                   Since the date of this Agreement, no Material Adverse Effect shall have occurred.

 

(d)                                  The Company shall have submitted to the NYSE any application or notification required in connection with the issuance and sale of the Purchased Shares and complied with all NYSE listing requirements applicable to the transactions contemplated by each of the Transaction Documents.

 

(e)                                   Each of the relevant Group Companies and all parties other than the Investors shall have executed and delivered the Registration Rights Agreements, the Investor Rights Agreement, the Director Indemnification Agreement and each other Transaction Document to which it is a party.

 

(f)                                    The Board shall consist of nine (9) directors, including one director designated by Alibaba, and the observer designated by Alibaba shall have been appointed as a non-voting observer of the Board, both appointments to be subject to and effective only upon Closing.

 

(g)                                   As of the Closing, no court or other Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated hereby.

 

(h)                                  Trading in the ADSs shall not be the subject of a current suspension order or trading halt by either the SEC or by the NYSE, nor shall a banking moratorium have been declared either by the United States or the New York state authorities.

 

(i)                                      Such Investor shall have received an opinion of Maples and Calder, counsel for the Company as to Cayman Islands Law, dated as of the Closing Date, in the form attached hereto as Exhibit F .

 

(j)                                     Such Investor shall have received an opinion of Zhong Lun Law Firm, counsel for the Company as to PRC Law, dated as of the Closing Date, in the form attached hereto as Exhibit G .

 

(k)                                  The Company shall have delivered to such Investor a certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Section 6.1(a)  through (d) .

 

6.2.                             Conditions to Obligations of the Company .  The Company’s obligation to sell and issue the Purchased Shares at the Closing is subject to the fulfillment of the Company on or prior to the Closing Date of the following conditions, any of which may be waived in writing by the Company:

 

(a)                                  Each of the representations and warranties of the Investors in this Agreement shall be true and correct in all material respects (or shall be true and correct in all respects, in respect of any representation that includes a “materiality” or “Material Adverse Effect” qualifier) as of the Closing Date or, for such representations and warranties made as of a specific date, as of such date; provided, however, that the representations and warranties set forth in Section 5.1 , 5.2 and 5.3 shall be, as of the Closing, true and correct in all respects with the same effect as though such representations and warranties had been made as of the Closing.

 

24



 

(b)                                  The Investors shall have performed and complied in all material respects with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with on or before the Closing.

 

(c)                                   The applicable Investors shall have executed and delivered the Registration Rights Agreements, the Investor Rights Agreement and each other Transaction Document to which it is a party;

 

(d)                                  As of the Closing, no court or other Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated hereby.

 

6.3.                             Additional Condition .  In addition and without prejudice to any provision under Sections 6.1 and 6.2, the obligations of the Company to consummate the issuance of respective Purchased Shares to Cainiao, YF and/or NRF at the Closing are subject to the consummation of issuance of the Purchase Shares set forth opposite Alibaba’s name on Schedule 1 (or as adjusted in accordance with Section 2.2 ) at the Closing; provided that the obligations of each Investor at the Closing are several and not joint or joint and several.

 

7.                                       Covenants .  The Company covenants and agrees to, and each Investor covenants and agrees to, for the benefit of the other parties to this Agreement and their respective assigns, the following (as applicable):

 

7.1.                             Commercially Reasonable Efforts .  Subject to the terms and conditions of this Agreement, from the date of this Agreement to the Closing, (a) the Group shall use its commercially reasonable efforts to take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to cause the conditions specified in Section 6.1 to be satisfied as soon as reasonably practicable; and (b) each Investor shall use its commercially reasonable efforts to take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to cause the conditions specified in Section 6.2 to be satisfied as soon as reasonably practicable.

 

7.2.                             Operation of the Business .  From the date hereof until the Closing Date, the Company shall cause each Group Company to conduct its business in all material respects in the ordinary course consistent with past practice and use its commercially reasonable efforts to (i) preserve intact its present business organization, (ii) maintain in effect all of its material Permits, (iii) keep available the services of its directors, officers and Key Persons, (iv) maintain satisfactory relationships with its customers, franchisees, lenders, suppliers and others having material business relationships with it, and (v) manage its working capital (including the timing of collection of accounts receivable and of the payment of accounts payable) in the ordinary course of business consistent with past practice.

 

7.3.                             Notices of Certain Events .  From the date hereof until the Closing Date, the Company shall promptly notify each Investor of:

 

25



 

(a)                                  any written communication from any Person alleging that the consent of such Person is or may be required for the consummation of the transactions contemplated by the Transaction Documents;

 

(b)                                  any notice or other communication from any Governmental Authority in connection with the transactions contemplated by the Transaction Documents;

 

(c)                                   any actions, suits, claims, investigations or proceedings commenced or, to the Knowledge of the Company, threatened, against or otherwise affecting any Group Company that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 4.22 ;

 

(d)                                  any inaccuracy of any representation or warranty contained in this Agreement at any time during the term hereof that could reasonably be expected to cause the conditions set forth in Section 6.1 not to be satisfied; and

 

(e)                                   any material breach of any covenant or agreement hereunder;

 

provided, however, that the delivery of any notice pursuant to this Section 7.3 shall not limit or otherwise affect the remedies available hereunder to each Investor.

 

7.4.                             Exclusivity .  From the date hereof until the earlier of the Closing and the termination of this Agreement in accordance with its terms, the Company shall not, and shall cause its Affiliates, directors, officers, agents or representatives not to, (i) solicit, initiate, encourage, conduct or engage in any discussions, or enter into any contract with any other Person with a view of consummating any transaction substantially the same in nature or competing with those contemplated by the Transaction Documents or (ii) except as required by applicable Laws, disclose any material nonpublic information relating to itself, or afford access to its properties, books and records, facilities or personnel, to any other Person that, to the Knowledge of the Company, is considering a transaction substantially the same in nature or competing with those contemplated by the Transaction Documents.

 

7.5.                             Public Disclosure .  Within the time limit required by applicable Laws, following the date of this Agreement, the Company shall issue a press release describing the terms of the transactions contemplated by the Transaction Documents in the form required by the Exchange Act and furnish it through a Current Report on Form 6-K, provided that each Investor shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release and the Investors’ comments thereto shall not be unreasonably rejected.

 

7.6.                             Confidentiality .  Subject to Section 7.5 , each party to this Agreement will hold, and will cause its respective Affiliates and its and such Affiliates’ respective directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a regulatory authority is necessary or appropriate in connection with any regulatory approval or unless disclosure is required by judicial or administrative process or, in the written opinion of its counsel, by other requirement of Law or the applicable requirements of any regulatory agency or relevant stock exchange, all terms and provisions of each Transaction Document and their existence (except to the extent that such Transaction Document can be shown to have been in the public domain through no fault of such party (including in the SEC Filings)) and no party shall release or disclose any terms and provisions of each Transaction Document and their existence to any other person, except its Affiliates, officers, directors, employees, partners, members, auditors, attorneys, financial advisors, other consultants and advisors.  The parties hereto acknowledge and agree that the Confidentiality Agreement dated April 26, 2018, entered into by and between the Company and Alibaba Investment Limited is deemed to be incorporated in its entirety by reference into this Section 7.6 .

 

26



 

7.7.                             Financial Information .  The Company shall, for so long as it remains an issuer that is subject to reporting obligations under the Exchange Act, timely file with the SEC, within the time periods specified in the SEC’s rules and regulations, including Rule 12b-25, all financial information and other reports required to be filed with the SEC, and any other information required to be filed with the SEC.

 

7.8.                             Compliances with Laws .  The Company shall comply, and cause each Subsidiary to comply, in all material respects with all applicable Laws, including the requirements of the Sarbanes-Oxley Act of 2002, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective; in particular, the Group shall strictly comply with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanction Laws in its business operations.  The Company further covenants to the Investors that the Company will not, and will take reasonable efforts to ensure that its directors, executives, employees, and persons acting on its behalf will not, offer to pay, promise to pay, or authorize the payment of any money or anything of value, to any Government Official (including any government officials to whom the Company or its Affiliated Person knows or ought to know that all or a portion of such money or things of value will be offered, given or promised, directly or indirectly) for the purpose of (1) influencing any act or decision of Government Officials in their official capacity; (2) inducing Government Officials to act or omit to act in violation of lawful duties; (3) securing any improper advantage; (4) inducing Government Officials to influence or affect any act or decision of any Governmental Authority; or (5) assisting any Group Company in obtaining or retaining business, or directing business to, such Group Company.  The Company shall maintain a reasonably complete financial record and reasonably effective internal control measures in accordance with applicable Laws, including Anti-Corruption Laws and GAAP.

 

7.9.                             ADSs .  Subject to any transfer restriction to which each Investor is subject, the Company shall use its commercially reasonable efforts to cause the Depositary to deliver ADSs to each Investor from time to time upon such Investor’s deposit of any Purchased Share with the Depositary or its designated custodian and the satisfaction of any other customary requirements under the Deposit Agreement and, in connection therewith, the Company shall cause new share certificate(s) to be issued and entries on the Company’s register of members to be entered with respect to such shares in the name of the Depositary, without restrictive legends, for the purpose of such deposit.  In connection with each Investor’s deposit of any Purchased Shares and the issuance of ADSs representing such shares, the Company shall bear fees and expenses, if any, related to the cancellation of any share certificates representing such shares and issuance of new share certificates, the updating of the Company’s register of members of any deposit of such shares with the Depositary or its designated custodian, and if any legal opinion by the counsel to the Company is required in connection with the deposit of such shares, the issuance of such legal opinion, except that any ADS issuance fees and other charges of the Depositary and its custodian shall be borne by the applicable Investor.

 

27



 

7.10.                      Use of Proceeds .  The net proceeds of the sale of the Purchased Shares (the “ Proceeds ”) hereunder shall be used by the Company only for purposes set forth in Schedule 3 attached hereto.

 

7.11.                      Use of Names and Logos .  Without the prior written consent of an Investor, and whether or not such Investor or any of its Affiliates is a shareholder of the Company, the Company shall not, and shall cause any other Group Company not to, (a) permit any of their Affiliates, directors, officers, employees, agents or other representatives to, use in advertising, publicity, announcements, or otherwise, the name or logo of such Investor or any of its Affiliates, or any similar name, trademark or logo in any manner, context or format (including references on or links to websites, in press releases, or in other public announcements), either alone or in combination of, including “ 阿里巴巴 ” (Chinese equivalent for “Alibaba”), “ 淘宝 ” (Chinese equivalent for “Taobao”), “ 阿里 ” (Chinese equivalent for “Ali”), “ 全球速卖通 ” (Chinese brand for “AliExpress”), “ ” (Chinese equivalent for “Tao”), “ 天猫 ” (Chinese equivalent for “Tmall”), “ 聚划算 ” (Chinese equivalent for “Juhuasuan”), “ 飞猪 ” (Chinese equivalent for “Fliggy”), “ 阿里妈妈 ” (Chinese equivalent for “Alimama”), “ 阿里云 ” (Chinese equivalent for “Alibaba Cloud”), “ 口碑 ” (Chinese equivalent for “Koubei’), “ 虾米 ” (Chinese equivalent for “Xiami”), “ 蚂蚁金服 ” (Chinese brand for “Ant Financial”), “ 蚂蚁 ” (Chinese equivalent for “Ant”), “ 蚂蚁财富 ” (Chinese equivalent for “Ant Fortune”), “ 支付宝 ” (Chinese brand for “Alipay”), “1688”, “ 一达通 ” (Chinese brand for “OneTouch”), “ 友盟 ” (Chinese equivalent for “Umeng”), “ 盒马 ” (Chinese equivalent for “HeMa”), “ 闲鱼 ” (Chinese equivalent for “XianYu”), “ 优视 ” (Chinese equivalent for “UC/UCWeb”), “ 高德地图 ” (Chinese brand for “AMAP”), “ 钉钉 ” (Chinese brand for “DingTalk”), “ 余额宝 ” (Chinese equivalent for “Yu’e Bao”), “ 招财宝 ” (Chinese equivalent for “Zhaocaibao”), “ 芝麻信用 ” (Chinese equivalent for “Zhima Credit”), “ 网商银行 ” (Chinese brand for “MYbank”), “ 阿里通信 ” (Chinese equivalent for “AliTelecom”), “ 优酷 ” (Chinese equivalent for “YOUKU”), “ 花呗 ” (Chinese equivalent for “HUABEI”), “ 借呗 ” (Chinese equivalent for “JIEBEI”), “Alibaba”, “Taobao”, “Ali”, “AliExpress”, “Tao”, “Tmall”, “Juhuasuan”, “Fliggy”, “Alimama”, “Alibaba Cloud”, “AliOS”, “Koubei”, “Xiami”, “Ant Financial”, “Ant”, “Ant Fortune”, “Alipay”, “OneTouch”, “Umeng”, “UCWeb”, “UC”, “AMAP”, “DingTalk”, “Yu’e Bao”, “Zhaocaibao”, “Zhima Credit”, “MYbank”, “AliTelecom”, “YOUKU”, “HUABEI”, “JIEBEI”, “ 菜鸟 ” (Chinese equivalent for “Cainiao”), “ 菜鸟网络 ” (Chinese equivalent for “Cainiao Network”), “ 菜鸟物流 ” (Chinese equivalent for “Cainiao Logistics”), “ 智能骨干网 ” (Chinese equivalent for “Cainiao Smart Logistics”), “ 菜鸟驿站 ” (Chinese equivalent for “Cainiao Station”), “ 菜鸟裹裹 ” (Chinese equivalent for “Cainiao GuoGuo”), “ 裹裹 ” (Chinese equivalent for “GuoGuo”), “ 菜鸟联盟 ” (Chinese equivalent for “Cainiao Alliance”), “ 菜鸟乡村 ” (Chinese equivalent for “Cainiao Countryside”), “ 橙诺达 ” (Chinese equivalent for “Chengnuoda”), “ 菜鸟小 G” (Chinese equivalent for “Cainiao G”), “E.T. 物流实验室 ” (Chinese equivalent for “E.T. Logistics Laboratory”), “ 菜鸟物流云 ” (Chinese equivalent for “Cainiao Logistics Cloud”), “CAINIAO”, “Cainiao Network”, “Cainiao Logistics”, “Cainiao Smart Logistics”, “SMART NETWORK”, “CSN”, “Cainiao Alliance,” the associated devices and logos of the above brands (including but not limited to the smiling face device of Alibaba Group, the cow device of Alibaba.com, the Tao doll device of Taobao, the cat device of Tmall, the Ju doll device of Juhuasuan, the bracket device of Alibaba Cloud, the hippo device of HeMa, the fish device of XianYu, the pig device of Fliggy, the wing device of Dingtalk, the ant device of Ant Financial, the Zhi device of Alipay, the ingot device of Zhaocaibao, the sesame device of Zhima Credit together with the Gaoxiaode device, the paper aeroplane device of AutoNavi, the bird device of Cainiao, the AI device of Cainiao, the Arrow device of Cainiao, the Station device of Cainiao, and the GuoGuo device of Cainiao) or any company name, trade name, trademark, service mark, domain name, device, design, symbol or any abbreviation, contraction or simulation thereof owned or used by such Investor or any of its Affiliates, or (b) represent, directly or indirectly, that any products or services provided by any Group Company have been approved or endorsed by Alibaba or any of its Affiliates.  The Company hereby grants each Investor or its Affiliates license to use any Group Company’s company name, trade name, trademark, service mark, domain name, device, design and/or symbol in its respective marketing materials.  If any Investor or its Affiliates have to use each Group Company’s company name, trade name, trademark, service mark, domain name, device, design and/or symbol, they must identify the rights held by each Group Company in relation to the company name, trade name, trademark, service mark, domain name, device, design and/or symbol.  The covenants of the Company under this Section 7.11 shall survive the termination of this Agreement.

 

28



 

7.12.                      Specified Matters .  The Company shall complete after the Closing certain operational improvement steps in accordance with a plan to be furnished by the Investors and agreed by the Company.

 

8.                                       Indemnification .  The Company (the “ Indemnifying Party ”) shall indemnify, defend and hold harmless each Investor and its respective Affiliates, directors, officers, employees and other agents or representatives (each an “ Indemnified Party ”) from and against any and all losses, damages, liabilities, diminution in value, claims, proceedings, costs and expenses (including fees and disbursements of counsel reasonably incurred by the Indemnified Party) (collectively, the “ Losses ”) resulting from or arising out of any fraud or intentional misrepresentation on the part of an Indemnifying Party or any breach by the Indemnifying Party of any of its representations, warranties, covenants or agreements in this Agreement and the Investor Rights Agreement.

 

8.1.                             Survival .  For the purposes of the indemnification obligations set forth in this Section 8 , (a) each of the representations and warranties of the Indemnifying Parties set forth in Sections 4.1 , 4.2 , 4.3 , 4.4 , 4.5 , 4.6 , and 4.23 (a) shall survive indefinitely, (b) each of the representations and warranties of the Indemnifying Parties set forth in Section 4.13 shall survive until thirty (30) days following the expiration of the applicable statute of limitations, (c) each of the representations and warranties of the Indemnifying Parties set forth in Section 4 (other than those identified in foregoing clauses (a) and (b)) shall survive for a period of eighteen (18) months following the Closing Date and (d) each of the covenants and agreements of the Indemnifying Parties set forth in this Agreement shall survive in accordance with its terms; provided, however, that, in each of (b), (c) and (d) of this Section 8.1 , such representations, warranties and covenants shall survive indefinitely in the case of fraud or intentional misrepresentation.

 

8.2.                             Limitation .  The Indemnifying Parties’ obligations under Section 8 with respect to any breach of the representations and warranties in this Agreement, other than any breach of any of the representations and warranties set forth in Sections 4.1 , 4.2 , 4.3 , 4.4 , 4.5 and 4.23 (a), shall be subject to the following limitations: (x) the aggregate indemnification amount payable by the Indemnifying Party in respect of all claims for such breaches to any Investor and its Indemnified Parties shall not exceed 50% of such Investor’s Allocation Price, and (y) the Indemnifying Party shall have no liability with respect to any claims for such breaches unless the aggregate amount of Losses suffered or incurred by all Indemnified Parties exceeds US$2,000,000, in which case the Indemnifying Party shall be liable for the entire amount of such Losses of the Indemnified Parties; provided, however, that (i) for purposes of determining the amount of Losses arising in connection with any such breach, all qualifications in all such representations or warranties as to or by material, materiality or Material Adverse Effect or words of similar import shall be disregarded, and (ii) the limitations in clauses (x) and (y) above shall not apply to any Loss resulting from or arising out of:

 

29



 

(a)                                  non-compliance of any Group Company with any Anti-Corruption Law, Anti-Money Laundering Law or Sanction Law, whether occurring before or after the Closing;

 

(b)                                  (i) any Taxes of a Group Company with respect to (1) a taxable period ending on or prior to the Closing Date or (2) the portion of any Taxes that are payable for a taxable period that begins on or before the Closing Date and ends after the Closing Date that relate to the portion of such period ending on the Closing Date, (ii) any liabilities or Tax withholding liabilities imposed on any Indemnified Party under applicable Tax Laws or by any Taxing Authority as a result of the failure of the Group Companies to pay any Tax set forth in item (i) or comply with any applicable Tax Laws, and (iii) any claims, actions, causes of action, demands, audits, investigations, appeals, hearings, protests, assessments and losses, in each case, in respect of Taxes asserted against, imposed upon or incurred by any Indemnified Party as a result of the failure of the Group Companies to pay any Tax set forth in item (i) or comply with any applicable Tax Laws. For the avoidance of doubt, all indemnification payments made under this Agreement shall be treated as adjustments to the Total Price and portion thereof paid or payable to the Indemnifying Party for Tax purposes, unless otherwise required by applicable Law; or

 

(c)                                   any fraud or intentional misrepresentation.

 

8.3.                             Proceedings .

 

(a)                                  The Indemnified Party shall give written notice to the Indemnifying Party promptly after receiving written notice of any action, lawsuit, proceeding, investigation or other claim against it (if by a third party) or discovering the Loss, obligation or facts giving rise to such claim for indemnification, describing the claim, the amount thereof (if known and quantifiable), and the basis thereof; provided that the failure to so notify the Indemnifying Party promptly shall not relieve the Indemnifying Party of its liability hereunder except to the extent such failure shall have materially prejudiced the Indemnifying Party.  In that regard, if any action, lawsuit, proceeding, investigation or other claim shall be brought or asserted by any third party that, if adversely determined, would entitle the Indemnified Party to indemnity pursuant to Section 8 , the Indemnified Party shall notify promptly the Indemnifying Party of the same in writing, specifying in reasonable detail the basis of such claim, and the Indemnifying Party shall be entitled to control the defense of such action, lawsuit, proceeding, investigation or other claim giving rise to the Indemnified Party’s claim for indemnification at the Indemnifying Party’s expense, and at the Indemnifying Party’s option (subject to the limitations set forth below) shall be entitled to appoint lead counsel of such defense with a reputable counsel reasonably acceptable to the Indemnified Party.  Within thirty (30) days after receiving written notice of an indemnification claim, the Indemnifying Party shall give written notice to the Indemnified Party stating whether it disputes all or any portion of the claim.  If the Indemnifying Party fails to give written notice to the Indemnified Party that it disputes an indemnification claim within thirty (30) days after receipt of notice thereof, the Indemnifying Party shall be deemed to have accepted and agreed to the claim, which shall become due and payable in accordance with Section 8.4 , subject to the limitations set forth in Section 8.2 .

 

30



 

(b)                                  If the Indemnifying Party exercises the right to control the defense of any third-party claim as provided above, then the Indemnified Party shall have the right to employ its own counsel in any such action and to participate in the defense thereof at its own expense, unless the Indemnifying Party has specifically authorized the employment of such counsel in writing, in which case the fees and expenses of such counsel shall be borne by the Indemnifying Party.  Similarly, if the Indemnified Party controls the defense of any such claim, then the Indemnifying Party shall have the right to employ its own counsel in any such action and to participate in the defense thereof at its own expense.  If the Indemnified Party reasonably determines that there exists a conflict of interest that would make it inappropriate for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel in each jurisdiction for which the Indemnified Party reasonably determines counsel is required, at the expense of the Indemnifying Party.  In the event that the Indemnifying Party exercises the right to control the defense of any third-party claim as provided above, then the Indemnified Party shall cooperate with the Indemnifying Party in such defense.  Similarly, in the event that the Indemnified Party is, directly or indirectly, controlling the defense of any such claim, then the Indemnifying Party shall cooperate with the Indemnified Party in such defense.  The Indemnifying Party shall obtain the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld, delayed or conditioned) before entering into any settlement of a claim or ceasing to defend such claim.

 

8.4.                             Payment .  Upon the earlier to occur of (i) the agreement of the Indemnifying Party to pay the amount claimed by an Indemnified Party in a claim notice, or (ii) a final determination of a court or arbitration tribunal of competent jurisdiction as provided for in Section 10.3 that any amount is payable by an Indemnifying Party hereunder, such Indemnifying Party shall pay the Indemnified Party as soon as commercially practicable but in no event more than five (5) Business Days thereafter.

 

8.5.                             Investigation and Disclosure .  The representations, warranties, covenants and agreement of the Indemnifying Parties, and any Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any reasonable investigation made by or on behalf of any Indemnified Party or by reason of the fact that the Indemnified Party knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of any Indemnified Party’s waiver of any condition set forth in Section 6.1 .

 

9.                                       Termination .  This Agreement may only be terminated prior to the Closing as follows:

 

(a)                                  by either the Company or Alibaba (acting on behalf of other Investors), if the Closing has not occurred by August 31, 2018;

 

(b)                                  by Alibaba (acting on behalf of other Investors), if the Company is in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach cannot be cured or, if it is capable of being cured, is not cured within thirty (30) days after the Company has been notified in writing of the same; provided, however, that the Investor shall not have the right to terminate this Agreement pursuant to this Section 9(b)  if the Investor shall have materially breached or failed to perform any of its representation, warrant, covenant or agreement under this Agreement, which breach or failure to perform would give rise to the failure of the condition set forth in Section 6.2 ;

 

31



 

(c)                                   by the Company, if any Investor is in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach cannot be cured or, if capable of being cured, is not cured within thirty (30) days after such Investor has been notified in writing of the same; provided, however, that the Company shall not have the right to terminate this Agreement pursuant to this Section 9(c)  if the Company shall have materially breached or failed to perform any of its representation, warrant, covenant or agreement under this Agreement, which breach or failure to perform would give rise to the failure of the condition set forth in Section 6.1 ;

 

(d)                                  by the mutual agreement in writing of the Company and Alibaba (acting on behalf of other Investors); or

 

(e)                                   by the Company or any Investor if any Governmental Authority shall have enacted, issued, promulgated, enforced or entered any law or governmental regulation or order that has the effect of prohibiting the sale and issuance of the Purchased Shares;

 

provided, however, that any right to terminate this Agreement pursuant to clause (a) of this Section 9 shall not be available to any party whose failure to fulfill any material obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to have occurred on or before such date.  If this Agreement is terminated in accordance with Section 9 , it shall become void and of no further force and effect, except for the provisions of Section 7.5 (Public Disclosure), Section 7.6 (Confidentiality), Section 8 (Indemnification), this Section 9 and Section 10 (Miscellaneous); provided, however, that such termination, unless otherwise agreed to in writing by each Investor and the Company, shall be without prejudice to the rights or obligations of any party in respect of a breach of this Agreement prior to such termination.

 

10.                                Miscellaneous .

 

10.1.                      Expenses .  Each party shall be responsible for all of its own costs expenses incurred by it or on its behalf in connection with the negotiation, execution, delivery and performance of this Agreement and other Transaction Documents and the transactions contemplated hereby and thereby; provided that, subject to the occurrence of the Closing, the Company shall reimburse the Investors for costs and expenses incurred by them or on their behalf in connection with the negotiation, execution, delivery and performance of this Agreement and other Transaction Documents and the transactions contemplated hereby and thereby, up to an aggregate amount to be furnished by the Investors in writing and agreed by the Company.

 

10.2.                      Governing Law .  This Agreement shall be governed in all respects by the Laws of the State of New York without regard to any choice of laws or conflict of law provisions that would require the application of the Laws of any other jurisdiction.

 

10.3.                      Jurisdiction .  Any dispute regarding this Agreement shall be referred to and finally settled by arbitration at the Hong Kong International Arbitration Centre (the “ HKIAC ”) for arbitration in Hong Kong.  The arbitration shall be conducted in accordance with the HKIAC Administered Arbitration Rules in force at the time of the initiation of the arbitration, which rules are deemed to be incorporated by reference into this Section 10.3 . There shall be a panel of three (3) arbitrators. The Investors shall appoint one (1) arbitrator, the Company shall appoint one (1) arbitrator, and the third arbitrator shall be appointed by the HKIAC.  The arbitral proceedings shall be conducted in English. The award of the arbitral tribunal shall be final and binding upon the parties thereto.

 

32



 

10.4.       Equitable Remedies .  The parties hereto agree that irreparable damage would occur in the event that the Company does not perform the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions.  Accordingly, the parties hereto acknowledge and agree that each party shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Agreement by the other party and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity. The remedies available to any party pursuant to this Section 10.4 shall be in addition to any other remedy to which it is entitled at law or in equity, and the election to pursue an injunction or specific performance shall not restrict, impair or otherwise limit any Investor from, in the alternative, seeking to terminate this Agreement and collect a remedy at law.

 

10.5.       Successors and Assigns .  Except as otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of and be binding upon the successors, assigns, heirs, executors, and administrators of the parties; provided, however, that (a) the Company shall not assign this Agreement or any of its rights herein to any Person without the prior written consent of each Investor, and (b) each Investor shall not assign this Agreement or any of its rights herein to any Person without the prior written consent of the Company, provided further, however, that each Investor shall be entitled to assign this Agreement or any of its rights herein to any of its Affiliates without the prior written consent of the Company.

 

10.6.       No Third-Party Beneficiaries .  Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties any rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including any partner, member, stockholder, director, officer, employee or other beneficial owner of any party, in its own capacity as such or in bringing a derivative action on behalf of a party) shall have any standing as a third-party beneficiary with respect to this Agreement or the transactions contemplated by this Agreement.

 

10.7.       Entire Agreement .  This Agreement and the other Transaction Documents constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof.

 

10.8.       Notices .  Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications required or permitted under this Agreement shall be in writing and shall be mailed by reliable overnight delivery service or delivered by hand, facsimile or email as follows:

 

33



 

if to the Company:

 

 

 

 

c/o ZTO Express Co., Ltd.

 

No. 1685, Huazhi Road, Qingpu District

 

Shanghai 201708, the PRC

 

Attention: Chief Financial Officer

 

Facsimile: +86-21 5913 9333

 

Email: hp.yan@zto.com

 

 

with a copy to (which shall not constitute notice):

 

 

 

 

Skadden, Arps, Slate, Meagher & Flom

 

42/F, Edinburgh Tower, The Landmark

 

15 Queen’s Road Central

 

Hong Kong

 

Attention: Z. Julie Gao

 

Facsimile: +852 3910 4863

 

Email: julie.gao@skadden.com

 

 

if to Cainiao:

c/o Zhejiang Cainiao Supply Chain Management Co. Ltd.

 

B1-2, Xixi Center, 588 West Wenyi Road

 

Xihu District, Hangzhou, Zhejiang, PRC

 

Attention: Lan Yao

 

Email: cnlegal@cainiao.com

 

 

if to YF:

c/o Rising Auspicious Limited

 

Room 3501, No. 1010 Mid Huai Hai Road

 

K Wah Centre, Shanghai, the PRC

 

Attention: Grace Ping

 

Email: grace.ping@yfc.cn

 

 

if to NRF

c/o Maples Corporate Services Limited

 

P.O. Box 309, Ugland House

 

Grand Cayman, KY1-1104, Cayman Islands

 

Attention: General Partner

 

 

with a copy to (which shall not constitute notice):

 

 

 

 

c/o Alibaba Group

 

26th Floor, Tower one, Time Square

 

1 Matheson Street, Causeway Bay, Hong Kong

 

Attention: Jin Lei

 

Email: lei.jin@alibaba-inc.com

 

 

if to Alibaba:

c/o Alibaba Group Services Limited

 

26th Floor, Tower one, Time Square

 

1 Matheson Street, Causeway Bay, Hong Kong

 

Attention: General Counsel

 

Tel: +852 2215 5200

 

Email: legalnotice@hk.alibaba-inc.com

 

with a copy to (which shall not constitute notice):

 

34



 

 

Ropes & Gray

 

41st Floor, One Exchange Square

 

8 Connaught Place

 

Central, Hong Kong

 

Attention: Peng Yu

 

 

James T. Lidbury

 

Facsimile: +852 3664 6588

 

Email: Peng.Yu@ropesgray.com

 

James.Lidbury@ropesgray.com

 

or in any such case to such other address, facsimile number or telephone as either party may, from time to time, designate in a written notice given in a like manner.  Notices shall be deemed given when actually delivered by overnight delivery service, hand or email, or when received by facsimile if promptly confirmed.

 

10.9.       Delays or Omissions .  No delay or omission to exercise any right, power, or remedy accruing to any party hereto under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of or acquiescence to any breach or default, or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default.  All remedies, either under this Agreement or by Law or otherwise afforded to any holder, shall be cumulative and not alternative.

 

10.10.     Amendments and Waivers .  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only if such amendment or waiver is in writing and signed, in the case of an amendment, by the Company and the Investors or, in the case of a waiver, by the party against whom the waiver is to be effective.

 

10.11.     Counterparts .  This Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile or in electronic format, all of which together shall constitute one instrument.

 

10.12.     Severability .  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement and the balance of this Agreement shall be enforceable in accordance with its terms.

 

[SIGNATURE PAGES FOLLOW]

 

35



 

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

 

 

 

ZTO EXPRESS (CAYMAN) INC.

 

 

 

 

 

 

By:

/s/ Meisong Lai

 

Name:

Meisong Lai

 

Title:

Chairman and CEO

 

Signature Page to Share Purchase Agreement
ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

 

TAOBAO CHINA HOLDING LIMITED

 

 

 

 

 

 

 

By:

/s/ Timothy A. Steinert

 

Name:

Timothy A. Steinert

 

Title:

Director

 

Signature Page to Share Purchase Agreement
ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

 

NEW RETAIL STRATEGIC OPPORTUNITIES INVESTMENTS 2 LIMITED

 

 

 

 

 

 

By:

/s/ David Egglishaw

 

Name:

David Egglishaw

 

Title:

Authorized Signatory

 

Signature Page to Share Purchase Agreement
ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

 

CAINIAO SMART LOGISTICS INVESTMENT LIMITED

 

 

 

 

 

 

 

By:

/s/ Lin Wan

 

Name:

Lin Wan

 

Title:

Director

 

Signature Page to Share Purchase Agreement
ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

 

RISING AUSPICIOUS LIMITED

 

 

 

 

 

 

 

By:

/s/ Xin Huang

 

Name:

Xin Huang

 

Title:

Director

 

Signature Page to Share Purchase Agreement
ZTO EXPRESS (CAYMAN) INC.

 


 


 

Schedule 1

 

PURCHASED SHARES PARTICULARS

 

Investor

 

Class A Ordinary Shares

 

Total Purchase Price

Taobao China Holding Limited

 

57,870,370

 

US$

1,000,000,000

Rising Auspicious Limited

 

11,574,074

 

US$

200,000,000

Cainiao Smart Logistics Investment Limited

 

5,787,037

 

US$

100,000,000

New Retail Strategic Opportunities Investments 2 Limited

 

4,629,630

 

US$

80,000,000

TOTAL:

 

79,861,111

 

US$

1,380,000,000

 



 

Schedule 2

 

KEY PERSONS

 

Personnel

 

Position/Title

Meisong Lai

 

Chairman of the Board of Directors and Chief Executive Officer

Jianfa Lai

 

Director and Vice President of Operations

Jilei Wang

 

Director and Vice President of Infrastructure Management

Hongqun Hu

 

Chief Operating Officer

Huiping Yan

 

Chief Financial Officer

Jianchang Lai

 

Vice President of Overseas Operations

Jingxi Zhu

 

Vice President of Information Technology

 



 

Schedule 3

 

PERMITTED USE OF PROCEEDS

 

1.

Purchase of land use right in relation to and for the purpose of business expansion

2.

Equipment expenditures, including investments on equipment manufacturer

3.

Purchase or maintenance of transportation fleet; and

4.

Expenditures in relation to and for the purpose of business cooperation between the Group and Alibaba or its Affiliates as may be otherwise agreed

 

The Company covenants to Alibaba and Cainiao that it shall provide them with a quarterly report of the use of Proceeds with reasonable details.

 



 

Exhibit A

 

FORM OF ALIBABA AND CAINIAO REGISTRATION RIGHTS AGREEMENT

 



 

Exhibit B

 

FORM OF YF REGISTRATION RIGHTS AGREEMENT

 



 

Exhibit C

 

FORM OF NRF REGISTRATION RIGHTS AGREEMENT

 



 

Exhibit D

 

FORM OF INVESTOR RIGHTS AGREEMENT

 



 

Exhibit E

 

FORM OF DIRECTOR INDEMNIFICATION AGREEMENT

 



 

Exhibit F

 

FORM OF CAYMAN LEGAL OPINION

 



 

Exhibit G

 

FORM OF PRC LEGAL OPINION

 


Exhibit 99.3

 

ASSIGNMENT AGREEMENT

 

THIS ASSIGNMENT AGREEMENT (the “ Assignment ”) is made and entered into as of June 12, 2018 (the “ Effective Date ”) by and among Alibaba ZT Investment Limited (“ Assignee ”) and Taobao China Holding Limited (“ Assignor ”).

 

WHEREAS, Assignor is a party to that certain Share Purchase Agreement dated as of May 29, 2018 (the “ Purchase Agreement ”), pursuant to which, among other things, Assignor has agreed to purchase from ZTO Express (Cayman) Inc. a certain number of Class A Ordinary Shares of ZTO Express (Cayman) Inc.; and

 

WHEREAS, Assignee is a wholly owned subsidiary of Assignor, and Assignor desires to assign to Assignee all of its right, title and interest in, to and under the Purchase Agreement in accordance with Section 10.5 of the Purchase Agreement.

 

NOW, THEREFORE, the parties hereto, intending legally to be bound, hereby agree as follows:

 

1.             Assignment .  Assignor does hereby grant, bargain, convey, sell, assign, transfer and deliver to Assignee all of its right, title, and interest in, to, and under the Purchase Agreement.

 

2.             Assumption .  Assignee hereby accepts this Assignment and assumes and agrees faithfully to pay, perform, honor, and discharge in full when due all of Assignors’ obligations first arising from and after the Effective Date under the Purchase Agreement, subject to all the terms, covenants and conditions of the Purchase Agreement.  Upon the assumption herein to the extent related to the Purchase Agreement, as between Assignor and Assignee, Assignor shall be fully, finally, and forever released and discharged from liability to the extent related to the Purchase Agreement.

 

3.             Further Assurances .  Each party hereby covenants with the other party that it and its successors and assigns will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all such further acts, transfers, assignments and conveyances, and assurances for the better selling, transferring, assigning, assuring, conveying and confirming unto Assignee right, title and interest assigned and obligations assumed hereby as the other party shall reasonably request.

 

4.             Governing Law .  This Assignment shall be governed by and construed in accordance with the laws of the State of New York without regard to any choice of laws or conflict of law provisions that would require the application of the laws of any other jurisdiction.  This Assignment shall become effective between Assignor and Assignee on the Effective Date.

 

5.             Counterparts; Amendment .  This Assignment may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one document.  This Assignment may not be changed, modified, discharged or terminated orally or in any manner other than by an agreement in writing signed by the parties hereto or their respective successors and assigns.

 



 

8.             Successors and Assigns .  This Assignment shall bind and inure to the benefit of Assignor and Assignee and their respective successors and assigns.

 

[Remainder of this page intentionally left blank]

 

2



 

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

 

ASSIGNOR

 

 

 

 

 

 

TAOBAO CHINA HOLDING LIMITED

 

 

 

 

By:

/s/ Timothy A. Steinert

 

Name:

Timothy A. Steinert

 

Title:

Director

 

Signature Page to Assignment Agreement

ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

ASSIGNEE

 

 

 

 

 

 

ALIBABA ZT INVESTMENT LIMITED

 

 

 

 

By:

/s/ Timothy A. Steinert

 

Name:

Timothy A. Steinert

 

Title:

Director

 

Signature Page to Assignment Agreement

ZTO EXPRESS (CAYMAN) INC.

 


Exhibit 99.4

 

Execution Version

 

INVESTOR RIGHTS AGREEMENT

 

among

 

ZTO EXPRESS (CAYMAN) INC.

 

THE FOUNDING SHAREHOLDERS

 

ALIBABA ZT INVESTMENT LIMITED

 

a nd

 

CAINIAO SMART LOGISTICS INVESTMENT LIMITED

 


 

Dated June 12, 2018

 


 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1 EFFECTIVENESS; DEFINITIONS

1

 

 

 

1.1.

Effective Date

1

1.2.

Definitions

1

 

 

 

ARTICLE 2 BOARD MATTERS

1

 

 

 

2.1.

Board Representation

1

2.2.

Removal and Replacement; Vacancies

2

2.3.

Observer Rights

2

2.4.

Board Committees

2

2.5.

Board Participation

2

 

 

 

ARTICLE 3 OTHER COVENANTS AND AGREEMENTS

3

 

 

 

3.1.

Consent Right

3

3.2.

Restriction on Transfers of Company Securities

3

3.3.

Right of First Offer

4

3.4.

Tag-Along Right

5

3.5.

Preemptive Rights

6

3.6.

Information and Consultation Rights

7

3.7.

No Restrictions on the Company or the Investors

8

3.8.

Non-Compete and Non-Solicit

8

3.9.

Use of Names and Logos

8

 

 

 

ARTICLE 4 TERMINATION

10

 

 

 

4.1.

Termination

10

 

 

 

ARTICLE 5 DEFINITIONS FOR PURPOSES OF THIS AGREEMENT

10

 

 

 

5.1.

Certain Matters of Construction

10

5.2.

Definitions

10

 

 

 

ARTICLE 6 MISCELLANEOUS

14

 

 

 

6.1.

Authority; Effect

14

6.2.

Notices

14

6.3.

Descriptive Heading

16

6.4.

Counterparts

16

6.5.

Successors and Assigns

16

6.6.

No Third-Party Beneficiaries

16

 

i



 

6.7.

Entire Agreement

16

6.8.

Delays or Omissions

16

6.9.

Amendments and Waivers

16

6.10.

Severability

17

 

 

 

ARTICLE 7 GOVERNING LAW; JURISDICTION, ETC.

17

 

 

 

7.1.

Governing Law; Venue

17

7.2.

Equitable Remedies

17

 

ii



 

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT (the “ Agreement ”) is made as of June 12, 2018, by and among ZTO Express (Cayman) Inc., an exempted company with limited liability incorporated under the Laws of the Cayman Islands (the “ Company ”), the Founding Shareholders, Alibaba ZT Investment Limited, a company incorporated under the Laws of Hong Kong (“ Alibaba ”), and Cainiao Smart Logistics Investment Limited, a company with limited liability incorporated under the Laws of the British Virgin Islands (“ Cainiao ”, together with Alibaba, the “ Investors ” and each an “ Investor ”).

 

BACKGROUND

 

A.                                     WHEREAS, the Company, the Investors and certain other parties have entered into that certain Share Purchase Agreement dated as of May 29, 2018 (the “ Purchase Agreement ”), pursuant to which, among other things, each Investor has agreed to purchase from the Company a certain number of Class A Ordinary Shares.

 

B.                                     WHEREAS, the Company, the Founding Shareholders and the Investors desire to set forth their agreements regarding certain matters, including the Investors’ rights with respect to their ownership of Class A Ordinary Shares and the Group Companies following the closing of the transactions contemplated by the Purchase Agreement (the “ Closing ”).

 

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

 

AGREEMENT

 

ARTICLE 1

 

EFFECTIVENESS; DEFINITIONS.

 

1.1.                             Effective Date . This Agreement shall become effective upon the Closing.

 

1.2.                             Definitions . Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Article 5 hereof.

 

ARTICLE 2

 

BOARD MATTERS.

 

2.1.                             Board Representation .

 

(a)                                  Effective as of the Closing and until this Agreement is terminated in accordance with Section 4.1, the Company agrees to take all Necessary Action, and the Founding Shareholders agree to take all Necessary Action to cause the Company, to ensure that (i) one (1) incumbent member of the Board shall resign his or her directorship, and (ii) the vacancy so caused by such resignation shall be filled by the appointment of one (1) director who shall be designated by Alibaba (the “ Investor Director ”).  The initial Investor Director designated by Alibaba is Mr. Lin Wan.

 



 

(b)                                  Alibaba shall have the right to designate the Investor Director by written notice to the Board. The Company and the Board shall, and the Founding Shareholders shall cause the Company and the Board to, take all Necessary Action to cause, at any election of the directors of the Board, the election or re-election as directors of the Board and during such period to continue in office, the individuals designated pursuant to Sections 2.1 and 2.2, and to vote against any proposal that would preclude the Investor Director duly designated pursuant to Sections 2.1 and 2.2 from being elected or re-elected.  The Company and each Founding Shareholder further agree not to seek, vote for or otherwise effect the removal (except for removal for Cause and such Cause is reasonably substantiated and demonstrated by the Company to Alibaba) of the Investor Director without written consent of Alibaba.

 

2.2.                             Removal and Replacement; Vacancies . Alibaba shall have the right to request (by written notice to the Board) the removal of the Investor Director, following which the Company and the Board shall, and the Founding Shareholders shall cause the Company and the Board to, take all Necessary Action to cause the removal of such Investor Director as a director of the Company. If, following election to the Board, the Investor Director resigns, is removed in accordance with the Charter Documents of the Company (subject always to Section 2.1(b)) or is unable to serve for any reason prior to the expiration of his or her term as a director, then Alibaba shall have the right to designate a replacement, who shall then be appointed as a director of the Company in accordance with Section 2.1.

 

2.3.                             Observer Rights . Alibaba may, at its election, by written notice to the Board, appoint a designated representative to serve as a non-voting “observer” on the Board (the “ Investor Observer ”) in addition to the Investor Director.

 

2.4.                             Board Committees . Alibaba may, at its election, by written notice to the Board, designate the Investor Director and/or the Investor Observer (as the case may be) to serve on any Board committee and/or Subsidiary board committee, following which the Company and the Board shall, and the Founding Shareholders shall cause the Company and the Board to, take all Necessary Action to cause the appointment of such Investor Director and/or Investor Observer as a member of such Board committee and/or Subsidiary board committee, provided that (a) if the Investor Observer is appointed to serve as an “observer” on any Board committee or Subsidiary board committee, he or she shall only be permitted to serve in a non-voting capacity; and (b) such Investor Director and/or Investor Observer shall not serve on such committee if and to the extent such service will contravene independence requirements of the Laws applicable to the Company (including Section 303A of the Corporate Governance Rules of the New York Stock Exchange and Rule 10A-3 under the Exchange Act of 1934 (as amended)).

 

2.5.                             Board Participation .  The Investor Director and the Investor Observer, as the case may be, shall (i) be provided by the Company with all notices of meetings, consents, minutes and other written materials that are provided to the directors serving on the Board and/or the members of any Board committee or Subsidiary board committee, at the same time as such materials are provided to such directors and/or members, and (ii) be entitled to attend all meetings of the Board or applicable board committee(s), except that, for the avoidance of doubt, the Investor Observer shall not be entitled to any voting right with respect to matters subject to decision, resolutions or approval of the Board or applicable Board committee(s).  The Company shall reimburse the Investor Director and the Investor Observer, as the case may be, for reasonable travel and lodging expenses in connection with the attendance by the Investor Director and the Investor Observer, as the case may be, at any Board or applicable board committee meeting on the same terms, and subject to the same policies, as shall apply to the other directors of the Company serving on the Board or such board committee(s).

 

2



 

ARTICLE 3

 

OTHER COVENANTS AND AGREEMENTS.

 

3.1.                             Consent Right . Each Group Company shall not, and the Founding Shareholders shall cause such Group Company not to, without the prior written consent of Alibaba, (i) amend or terminate any Controlling Documents or waive or enforce any rights thereunder, or (ii) enter into any joint venture, partnership, strategic alliance, strategic cooperation or similar arrangement with any Investor Competitor or any other transaction with any Investor Competitor that is not in the ordinary course of business of the Group Companies.

 

3.2.                             Restriction on Transfers of Company Securities .

 

(a)                                  At any time prior to the second (2 nd ) anniversary of the date of this Agreement or an earlier date mutually agreed in writing by the Company and Alibaba or Cainiao (as the case may be), Alibaba and Cainiao shall not Transfer any Company Securities other than (i) a Transfer to any of its Affiliates, (ii) a Transfer to the Company, (iii) to the extent required by applicable Law, or (iv) with the approval of the Board (including the written approval of the Founder if the Founder at the time of such approval is a member of the Board).  From the second (2 nd ) anniversary of the date of this Agreement, Alibaba and Cainiao may freely Transfer Company Securities to any Person(s), subject to Section 3.2(c).

 

(b)                                  Without the prior written consent of Alibaba or except pursuant to a Permitted Founding Shareholder Transfer, no Founding Shareholder shall, acting alone or together with other Founding Shareholders, Transfer any Company Securities legally or beneficially owned by him (directly or indirectly through any intermediary) at any time to any Investor Competitor; provided, however, that the foregoing restriction shall not apply to Transfer of Company Securities by the Founding Shareholders over a stock exchange or in one or more privately negotiated block sale transactions as long as the applicable Founding Shareholder is not aware after due inquiry that the transferee is an Investor Competitor.  Without prejudice to the foregoing sentence, the Founder shall not Transfer any Class B Ordinary Shares legally or beneficially owned by him (directly or indirectly through any intermediary) prior to the second (2 nd ) anniversary of the date hereof without the prior written consent of Alibaba or except pursuant to a Permitted Founding Shareholder Transfer. Except as explicitly set forth under Sections 3.2, 3.3 and 3.4 hereunder, there is no provision in this Agreement that directly or indirectly restricts the ability of any Founding Shareholder to transfer the Company Securities.

 

(c)                                   Notwithstanding anything contained herein to the contrary, any transferee (except the Company, any Founding Shareholder or public investors) of Company Securities in a Transfer made by any Founding Shareholder or Investor shall upon the consummation of, and as a condition to, such Transfer execute and deliver to the Company an agreement (or a counterpart to this Agreement) pursuant to which such transferee agrees to be bound by the terms of this Agreement, with such rights of the transferor that are assigned by the transferor in compliance with Section 6.5.

 

3



 

(d)                                  Any Transfer or attempted Transfer of Company Securities in violation of any provision of this Agreement shall be void, and the Company shall not record such Transfer on its books or treat any purported transferee of such Company Securities as the owner of such Company Securities for any purpose.

 

3.3.                             Right of First Offer .  Subject to Section 3.2, at any time the Founder proposes to Transfer, whether in a single transaction or a series of transactions, Company Securities legally or beneficially owned by him (directly or indirectly through any intermediary), which constitutes a Change of Control, the Founder shall first make an offer of such Company Securities to the Investors on the following terms:

 

(a)                                  the Founder shall first deliver to the Company and each Investor a written notice (a “ Sale Notice ”), which shall state the Founder’s irrevocable offer to Transfer Company Securities, the amount and type of Company Securities to be Transferred (the “ Subject Securities ”), the proposed purchase price per share of the Subject Securities (including the cash value of any non-cash consideration), the terms of payment of such purchase price and a summary of the other material terms of the proposed Transfer.  Each Investor shall have the right and option, for a period of fifteen (15) Business Days after delivery of the Sale Notice (the “ Offer Acceptance Period ”), to irrevocably elect to either (i) exercise its right of first offer and purchase all of its ROFO Percentage of the Subject Securities at the purchase price and on the terms stated in the Sale Notice; or (ii) exercise its Tag-Along Right pursuant to Section 3.4.  Each Investor’s acceptance hereunder shall be made by delivering a written notice setting forth its irrevocable election to the Founder within the Offer Acceptance Period.  For the avoidance of doubt, with respect to any proposed Transfer that contains non-cash consideration, Alibaba shall be entitled to pay cash in lieu of the cash value of the non-cash consideration included in the Sale Notice.

 

(b)                                  If effective acceptance shall not be received pursuant to Section 3.3(a), then the Founder may Transfer the Subject Securities to any purchaser other than an Investor Competitor (the “ Proposed Purchaser ”) at a price not less than the price, and on other terms not more favorable to such Proposed Purchaser than the terms stated in the Sale Notice at any time within sixty (60) days after the expiration of the Offer Acceptance Period (the “ Sale Period ”).  In the event that the Subject Securities (i) are not Transferred by the Founder during the Sale Period or (ii) are not Transferred to the purchaser at a price not less than the price and on other terms not more favorable to the purchaser thereof than the terms stated in the Sale Notice, the right of the Founder to Transfer the Subject Securities shall expire and the obligations of this Sections 3.3 shall be reinstated.

 

(c)                                   The Transfer of Subject Securities to either (or both) of the Investors pursuant to an effective election to purchase all of such Investor’s ROFO Percentage of the Subject Securities shall be consummated contemporaneously at the offices of the Company on the later of (i) a mutually satisfactory Business Day within fifteen (15) days after the expiration of the Offer Acceptance Period, and (ii) the fifth (5 th ) Business Day following the receipt of any regulatory approvals applicable to such Transfer, or at such other time and/or place as the parties to such Transfer may agree. The delivery of certificates or other instruments evidencing such Subject Securities duly endorsed for transfer shall be made on such date against payment of the purchase price for such Subject Securities.

 

4



 

(d)                                  The requirements of this Section 3.3 shall not apply to any Permitted Founding Shareholder Transfer. The requirements of this Section 3.3 are in addition to, and not in limitation of, any other restrictions on Transfers of Company Securities contained in this Agreement.

 

3.4.                             Tag-Along Right .

 

(a)                                  Upon delivery of the Sale Notice as contemplated under Section 3.3(a), in the event that either Investor irrevocably elects to exercise its right (the “ Tagging Investor ”) to, at the same price per share and upon the same terms included in the Sale Notice, to sell to the Proposed Purchaser, certain number of shares of Company Securities legally or beneficially owned by it (the “ Tag-Along Right ”), this number of shares shall be equal to the product of (x) a fraction, the numerator of which is the aggregate number of shares of the Subject Securities and the denominator of which is the aggregate number of shares of Company Securities legally or beneficially owned as of the date of the Sale Notice by the Founder and (y) the number of shares of Company Securities legally or beneficially owned by such Tagging Investor as of the date of the Sale Notice. The Tag-Along Right may be exercised in whole or in part at the option of each Tagging Investor; provided that notice of each Tagging Investor’s intention to exercise its Tag-Along Right, in whole or in part, shall be evidenced by the written notice delivered in compliance with Section 3.3(a) within the Offer Acceptance Period.

 

(b)                                  In connection with any Transfer of Company Securities pursuant to the exercise of Tag-Along Right (a “ Tag-Along Sale ”), the Tagging Investors and the Founder shall be obligated, if applicable, to vote (or consent in writing, as the case may be) all voting Company Securities legally or beneficially owned by them in favor of any Tag-Along Sale and the Tagging Investors, the Founder and the Company shall in all other respects support the transaction contemplated by the Tag-Along Sale and shall be obligated to cooperate in the consummation of the transaction contemplated thereby and shall execute all documents, including a sale or purchase agreement, reasonably requested by the Company or the Founder containing the terms and conditions of the Tag-Along Sale; provided, however , that (i) no Investor shall be required to make any representations or warranties in any agreement relating to a Tag-Along Sale other than representations and warranties relating to such Tagging Investor and the ownership of its shares of Company Securities that are customary in similar transactions including representations and warranties relating to title, authorization and execution and delivery and (ii) the Tagging Investors shall receive the same form of consideration as the Founder, and if the Founder is given an option as to the form and amount of consideration to be received, each Investor shall be given the same option.

 

(c)                                   The requirements of this Section 3.4 shall not apply to any Permitted Founding Shareholder Transfer. The requirements of this Section 3.4 are in addition to, and not in limitation of, any other restrictions on Transfers of Company Securities contained in this Agreement.

 

5



 

3.5.                             Preemptive Rights . Subject to Sections 3.1 and 3.2, the Company shall not issue, or cause any of its Subsidiaries to issue any Equity Securities, except in accordance with the following procedures:

 

(a)                                  The Company shall deliver to each Preemptive Shareholder a written notice (a “ Preemptive Offer Notice ”) which shall (i) state the intention of the Company or any of its Subsidiaries to issue Equity Securities to one or more Persons, the amount and type of Equity Securities to be issued (the “ Issuance Securities ”), the purchase price therefor and a summary of the other material terms of the proposed issuance and (ii) offer each of the Preemptive Shareholders the option to acquire all or any part of the Issuance Securities (the “ Preemptive Offer ”).  The Preemptive Offer shall remain open and irrevocable for the period set forth below (and, to the extent the Preemptive Offer is accepted during such period, until the consummation of the issuance contemplated by the Preemptive Offer).  Each Preemptive Shareholder shall have the right and option, for a period of fifteen (15) Business Days after delivery of the Preemptive Offer Notice (the “ Preemptive Acceptance Period ”), to elect to purchase all or any portion of its or his Preemptive Percentage of the Issuance Securities (and any of its or his Affiliates’ Preemptive Percentage of the Issuance Securities not purchased by such Affiliates) at the purchase price and on the terms stated in the Preemptive Offer Notice.  Such acceptance shall be made by a Preemptive Shareholder by delivering a written notice to the Company within the Preemptive Acceptance Period specifying the maximum number of shares of the Issuance Securities such Preemptive Shareholder will purchase.

 

(b)                                  If valid acceptance shall not be received pursuant to Section 3.5(a) above with respect to all of the Issuance Securities offered pursuant to the Preemptive Offer Notice, then the Company or its Subsidiary, as applicable, may issue all or any portion of such Issuance Securities so offered and not so accepted, at a price not less than the price, and on terms not more favorable to the purchaser thereof than the terms, stated in the Preemptive Offer Notice at any time within sixty (60) days after the expiration of the Preemptive Acceptance Period (the “ Issuance Period ”).  In the event that any Issuance Securities are not so issued by the Company during the Issuance Period, the right of the Company or its Subsidiary, as applicable, to issue such unsold Issuance Securities shall expire and the obligations of this Section 3.5 shall be reinstated and such securities shall not be offered unless first reoffered to the Preemptive Shareholders in accordance with this Section 3.5.

 

(c)                                   All sales of Issuance Securities to the Preemptive Shareholders subject to any Preemptive Offer Notice shall be consummated contemporaneously on the later of (i) a mutually satisfactory Business Day within ten (10) Business Days after the expiration of the Preemptive Acceptance Period or (ii) the fifth (5 th ) Business Day following the receipt of any regulatory approvals applicable to such issuance, or at such other time and/or place as the Company and the applicable Preemptive Shareholders may otherwise agree.  The delivery of certificates or other instruments evidencing such Issuance Securities shall be made by the Company or its Subsidiary, as applicable, on such date against payment of the purchase price for such Issuance Securities.

 

6



 

(d)                                  Notwithstanding anything to the contrary in this Section 3.5, the pre-emptive right hereunder shall not apply to any sale, offer or issuance of Equity Securities: (i) to employees, officers or consultants pursuant to any ESOP or similar share-based plan approved by the Board in accordance with the Company’s Charter Documents, (ii) in connection with any exercise of conversion rights by any Person holding any convertible securities of the Company not in contravention of the Transaction Documents or the Company’s Charter Documents, or (iii) any Equity Securities issued in connection with any share split, share dividend or any share subdivision or other similar event in which all shareholders of the Company are entitled to participate on a pro rata basis.

 

(e)                                   Investors’ rights under this Section 3.5 shall be suspended if and as long as, solely as a result of exercise of the rights under this Section 3.5, the Investors in aggregate own legally or beneficially more voting power of the Company than the voting power of the Company legally or beneficially owned by the Founder and his Affiliates.

 

(f)                                    Notwithstanding the foregoing, no Group Company shall be permitted to issue any Equity Securities to an Investor Competitor without the prior written consent of Alibaba; provided, however, that the foregoing restriction shall not apply to offerings or sale of Equity Securities to public investors where the Company is not aware that the transferee is an Investor Competitor.

 

3.6.                             Information and Consultation Rights . The Company shall:

 

(a)                                  provide each Investor and each of its respective designated representatives with:

 

(i)                                      as soon as available, consolidated balance sheets and statements of income and cash flows of the Company and its Subsidiaries as of the end of such period or year then ended, as applicable, prepared in conformity with generally accepted accounting principles in the United States, and with respect to each fiscal year end statement together with a report thereon of the Company’s outside auditor;

 

(ii)                                   any annual reports, interim reports, quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (as amended) prepared by the Company as soon as available; and

 

(iii)                                any business plan and budget of the Group Companies;

 

provided that, in each case, if the Company makes the information described in Sections 3.6(a)(i) and 3.6(a)(ii) available through public filings on the EDGAR system or any successor or replacement system of the U.S. Securities and Exchange Commission, the delivery of the information shall be deemed satisfied by such public filings.

 

(b)                                  make appropriate officers and directors of the Company and its Subsidiaries available periodically and at such times as reasonably requested by the Investors for consultation with the Investors or their designated representatives with respect to matters relating to the business and affairs of the Company and its Subsidiaries.

 

7



 

3.7.                             No Restrictions on the Company or the Investors .

 

(a)                                  Without the prior written consent of the Company, other than as contemplated by the Transaction Documents or pursuant to restrictions as applicable to the Company or the Investors and their respective Affiliates under applicable securities Laws, after the date hereof, each Investor shall not, and shall cause its Affiliates not to, take any action or execute any agreement that would purport to bind the Company or any of its Subsidiaries as a “subsidiary,” “affiliate” or similar related party of such Investor or any of its Affiliates, including any provision or covenant that would purport to limit the freedom of the Company or any of its Subsidiaries to (i) sell any products or services to any Person or in any geographic region, (ii) engage in any line of business or compete with any other Person, (iii) obtain products or services from any Person, (iv) solicit for employment, employ or otherwise engage any Persons as a service provider, or (v) disclose or use the confidential information of any Person (other than with respect to confidential information of a third party provided to the Company or any of its Subsidiaries by such Investor or any of its respective Affiliates).

 

(b)                                  Without the prior written consent of Alibaba, other than as contemplated by the Transaction Documents or pursuant to restrictions as applicable to the Company or the Investors and their respective Affiliates under applicable securities Laws, after the date hereof, the Company shall not, and shall cause its Affiliates not to, take any action or execute any agreement that would purport to bind the Investors or any of their respective Affiliates as an “affiliate,” “shareholder” or similar related party of the Company or any of its Subsidiaries, including any provision or covenant that would purport to limit the freedom of the Investors or any of their respective Affiliates to (i) sell any products or services to any Person or in any geographic region, (ii) engage in any line of business or compete with any other Person, (iii) obtain products or services from any Person, (iv) solicit for employment, employ or otherwise engage any Persons as a service provider, or (v) disclose or use the confidential information of any Person (other than with respect to confidential information of a third party provided to the Investors or any of their Affiliates by the Company or any of its Subsidiaries).

 

3.8.                             Non-Compete and Non-Solicit . Each Founding Shareholder agrees and covenants to remain compliant with Article 6 of his employment agreement with ZTO Express Co., Ltd. (in Chinese, “中通快递股份有限公司”) dated as of May 1, 2015.

 

8



 

3.9.                             Use of Names and Logos .  Without the prior written consent of Alibaba, and whether or not the relevant Investor or any of its Affiliates is a shareholder of the Company, none of the Group Companies and the Founding Shareholders shall, and they shall not (a) permit any of their Affiliates to, use in advertising, publicity, announcements, or otherwise, the name or logo of any Investor or any of its Affiliates, or any similar name, trademark or logo in any manner, context or format (including references on or links to websites, in press releases, or in other public announcements), either alone or in combination of, including “阿里巴巴” (Chinese equivalent for “Alibaba”), “淘宝” (Chinese equivalent for “Taobao”), “阿里” (Chinese equivalent for “Ali”), “全球速卖通” (Chinese brand for “AliExpress”), “淘” (Chinese equivalent for “Tao”), “天猫” (Chinese equivalent for “Tmall”), “聚划算” (Chinese equivalent for “Juhuasuan”), “飞猪” (Chinese equivalent for “Fliggy”), “阿里妈妈” (Chinese equivalent for “Alimama”), “阿里云” (Chinese equivalent for “Alibaba Cloud”), “口碑” (Chinese equivalent for “Koubei’), “虾米” (Chinese equivalent for “Xiami”), “蚂蚁金服” (Chinese brand for “Ant Financial”), “蚂蚁” (Chinese equivalent for “Ant”), “蚂蚁财富” (Chinese equivalent for “Ant Fortune”), “支付宝” (Chinese brand for “Alipay”), “1688”, “一达通” (Chinese brand for “OneTouch”), “友盟” (Chinese equivalent for “Umeng”), “盒马” (Chinese equivalent for “HeMa”), “闲鱼” (Chinese equivalent for “XianYu”), “优视” (Chinese equivalent for “UC/UCWeb”), “高德地图” (Chinese brand for “AMAP”), “钉钉” (Chinese brand for “DingTalk”), “余额宝” (Chinese equivalent for “Yu’e Bao”), “招财宝” (Chinese equivalent for “Zhaocaibao”), “芝麻信用” (Chinese equivalent for “Zhima Credit”), “网商银行” (Chinese brand for “MYbank”), “阿里通信” (Chinese equivalent for “AliTelecom”), “优酷” (Chinese equivalent for “YOUKU”), “花呗” (Chinese equivalent for “HUABEI”), “借呗” (Chinese equivalent for “JIEBEI”), “Alibaba”, “Taobao”, “Ali”, “AliExpress”, “Tao”, “Tmall”, “Juhuasuan”, “Fliggy”, “Alimama”, “Alibaba Cloud”, “AliOS”, “Koubei”, “Xiami”, “Ant Financial”, “Ant”, “Ant Fortune”, “Alipay”, “OneTouch”, “Umeng”, “UCWeb”, “UC”, “AMAP”, “DingTalk”, “Yu’e Bao”, “Zhaocaibao”, “Zhima Credit”, “MYbank”, “AliTelecom”, “YOUKU”, “HUABEI”, “JIEBEI”, “菜鸟” (Chinese equivalent for “Cainiao”), “菜鸟网络” (Chinese equivalent for “Cainiao Network”), “菜鸟物流” (Chinese equivalent for “Cainiao Logistics”), “智能骨干网” (Chinese equivalent for “Cainiao Smart Logistics”), “菜鸟驿站” (Chinese equivalent for “Cainiao Station”), “菜鸟裹裹” (Chinese equivalent for “Cainiao GuoGuo”), “裹裹” (Chinese equivalent for “GuoGuo”), “菜鸟联盟” (Chinese equivalent for “Cainiao Alliance”), “菜鸟乡村” (Chinese equivalent for “Cainiao Countryside”), “橙诺达” (Chinese equivalent for “Chengnuoda”), “菜鸟小G” (Chinese equivalent for “Cainiao G”), “E.T.物流实验室” (Chinese equivalent for “E.T. Logistics Laboratory”), “菜鸟物流云” (Chinese equivalent for “Cainiao Logistics Cloud”), “CAINIAO”, “Cainiao Network”, “Cainiao Logistics”, “Cainiao Smart Logistics”, “SMART NETWORK”, “CSN”, “Cainiao Alliance,” the associated devices and logos of the above brands (including but not limited to the smiling face device of Alibaba Group, the cow device of Alibaba.com, the Tao doll device of Taobao, the cat device of Tmall, the Ju doll device of Juhuasuan, the bracket device of Alibaba Cloud, the hippo device of HeMa, the fish device of XianYu, the pig device of Fliggy, the wing device of Dingtalk, the ant device of Ant Financial, the Zhi device of Alipay, the ingot device of Zhaocaibao, the sesame device of Zhima Credit together with the Gaoxiaode device, the paper aeroplane device of AutoNavi, the bird device of Cainiao, the AI device of Cainiao, the Arrow device of Cainiao, the Station device of Cainiao, and the GuoGuo device of Cainiao) or any company name, trade name, trademark, service mark, domain name, device, design, symbol or any abbreviation, contraction or simulation thereof owned or used by any Investor or any of its Affiliates, or (b) represent, directly or indirectly, that any products or services provided by any Group Company have been approved or endorsed by any Investor or any of its Affiliates.  Each Group Company hereby grants each Investor or its Affiliates license to use any Group Company’s company name, trade name, trademark, service mark, domain name, device, design and/or symbol in its respective marketing materials. If any Investor or its Affiliates have to use each Group Company’s company name, trade name, trademark, service mark, domain name, device, design and/or symbol, they must identify the rights held by each Group Company in relation to the company name, trade name, trademark, service mark, domain name, device, design and/or symbol. The covenants of the Group Companies and the Founding Shareholders under this Section 3.9 shall survive the termination of this Agreement.

 

9



 

ARTICLE 4

 

TERMINATION

 

4.1.                             Termination . This Agreement shall terminate (a) at such time as the Investors no longer own, in aggregate, seventy percent (70%) of the Company Securities legally or beneficially owned by both Investors on an aggregated basis immediately after the Closing (as appropriately adjusted for share splits, reverse share splits, share dividends, share consolidations, recapitalizations and the like), or (b) upon the mutual written consent of the Company, the Investors and the Founder.  No termination under this Agreement shall relieve any Person of liability for breach prior to termination.

 

ARTICLE 5

 

DEFINITIONS FOR PURPOSES OF THIS AGREEMENT

 

5.1.                             Certain Matters of Construction . In addition to the definitions referred to or set forth below in this Article 5:

 

(1)                                  The words “hereof”, “herein”, “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of this Agreement shall include all subsections thereof;

 

(2)                                  The word “including” shall mean “including, without limitation”;

 

(3)                                  Definitions shall be equally applicable to both nouns and verbs and the singular and plural forms of the terms defined; and

 

(4)                                  The masculine, feminine and neuter genders shall each include the other.

 

5.2.                             Definitions . The following terms shall have the following meanings:

 

ADSs ” has the meaning as set forth in the Purchase Agreement.

 

Affiliate ” has the meaning as set forth in the Purchase Agreement.

 

Agreement ” has the meaning set forth in the Preamble.

 

Alibaba ” has the meaning set forth in the Preamble.

 

Board ” means the board of directors of the Company.

 

Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York City, the Cayman Islands, Hong Kong and the PRC are open for the general transaction of business.

 

10



 

Cainiao ” has the meaning set forth in the Preamble.

 

Cause ” means with respect to any removal of a director, removal of such director because of such director’s (i) willful misconduct that is materially injurious to the Company or any of its Subsidiaries, or (ii) conviction for, or guilty plea to, a felony or a crime involving moral turpitude.

 

Change of Control ” means the occurrence of one or more of the following events:

 

(1)                                  the Company’s consolidation with, or merger with or into, any Person, or any Person’s consolidation with, or merger with or into, the Company, in any such event pursuant to a transaction in which any of the outstanding voting shares of the Company or such other Person are converted into or exchanged for cash, securities or other property, other than any such transaction where the voting shares of the Company outstanding immediately prior to such transaction are converted into or exchanged for (or continue as) voting shares of the surviving or transferee Person constituting a majority of the outstanding voting shares of such surviving or transferee Person (immediately after giving effect to such issuance) and in substantially the same proportion as before the transaction;

 

(2)                                  the Founder ceases to be the beneficial owner of more than 50% of the total voting power of the Company;

 

(3)                                  the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole, to any Person; or

 

(4)                                  the adoption of a plan relating to the liquidation or dissolution of the Company.

 

Charter Documents ” means, with respect to a particular legal Person, the articles of incorporation, certificate of incorporation, formation or registration (including, if applicable, certificates of change of name), memorandum of association, articles of association, bylaws, articles of organization, limited liability company agreement, trust deed, trust instrument, operating agreement, joint venture agreement, business license, or similar or other constitutive, governing, or charter documents, or equivalent documents, of such Person.

 

Class A Ordinary Shares ” means class A ordinary shares of the Company, par value US$0.0001 per share, having rights and privileges set forth in the Memorandum and Articles of Association.

 

Class B Ordinary Shares ” means class B ordinary shares of the Company, par value US$0.0001 per share, having rights and privileges set forth in the Memorandum and Articles of Association.

 

Closing ” has the meaning set forth in the Background.

 

Company ” has the meaning set forth in the Preamble.

 

11



 

Company Securities ” means (i) the ordinary shares of the Company, (ii) securities convertible or exercisable into, or exchangeable for, ordinary shares of the Company, (iii) any other equity or equity-linked security issued by the Company and (iv) options, warrants or other rights to acquire any of the foregoing; for the avoidance of doubt, “Company Securities” include ADSs.

 

Controlling Documents ” has the meaning as set forth in the Purchase Agreement.

 

Equity Securities ” has the meaning as set forth in the Purchase Agreement.

 

ESOP ” has the meaning as set forth in the Purchase Agreement.

 

Founder ” means Meisong Lai ( 赖梅松), the chairman of the Board and chief executive officer of the Company.

 

Founding Shareholders ” means the Founder, Jianfa Lai ( 赖建法), Jilei Wang (王吉雷) and any transferee of a Permitted Founding Shareholder Transfer by any of the foregoing Persons.

 

Group Companies ” has the meaning set forth in the Purchase Agreement.

 

HKIAC ” has the meaning set forth in Section 7.1(b).

 

Investor ” has the meaning set forth in the Preamble.

 

Investor Competitor ” means any Person that uses any trade name (lawfully as its primary trade name in the conduct of its business) listed on a schedule to be furnished by Alibaba, and its Subsidiaries, successors and successors’ Subsidiaries; it being acknowledged and agreed by the parties hereto that Alibaba and Cainiao have the right, not an obligation, to review and update such schedule on an annual basis, provided that (i) the number of individual Investor Competitors to be updated each year shall not exceed three (3) and (ii) the total number of Investor Competitors shall not be increased as a result of any such annual update. For the avoidance of doubt, any Investor Competitor that has been removed from the list of Investor Competitors as a result of any such annual update (a “ Removed Competitor ”) may be reinstated through any subsequent annual update, provided that such reinstatement of a Removed Competitor shall not invalidate or adversely affect any agreements entered into by any Group Company with any such Removed Competitor between the date of removal of such Removed Competitor and the date of reinstatement of such Removed Competitor (both days not inclusive) as long as such agreements so entered into with any Removed Competitor shall expire in accordance with their respective terms.

 

Investor Director ” has the meaning set forth in Section 2.1(a).

 

Investor Observer ” has the meaning set forth in Section 2.3.

 

Issuance Period ” has the meaning set forth in Section 3.5(b).

 

Issuance Securities ” has the meaning set forth in Section 3.5(a).

 

12



 

Law ” has the meaning set forth in the Purchase Agreement.

 

Necessary Action ” means, with respect to any party and a specified result, all actions (to the extent such actions are permitted by law and within such party’s control) necessary to cause such result, including (i) voting or providing a written consent or proxy, (ii) voting in favor of or against (as applicable) the adoption of shareholder resolutions and amendments to the Charter Documents, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.

 

Offer Acceptance Period ” has the meaning set forth in Section 3.3(a).

 

Permitted Founding Shareholder Transfer ” means any Transfer of Company Securities by a Founding Shareholder (i) to spouses, children, and trusts controlled by such Founding Shareholder solely for tax or estate planning purposes, or (ii) upon the death or incapacity of an individual Founding Shareholder, pursuant to the terms of any trust or will of the deceased individual Founding Shareholder or by the Law of intestate succession.

 

Person ” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

PRC ” means the People’s Republic of China and solely for the purpose of this Agreement, excluding Hong Kong, Macau and Taiwan.

 

Preemptive Acceptance Period ” has the meaning set forth in Section 3.5(a).

 

Preemptive Offer ” has the meaning set forth in Section 3.5(a).

 

Preemptive Offer Notice ” has the meaning set forth in Section 3.5(a).

 

Preemptive Percentage ” means, as to each Preemptive Shareholder, with respect to any Company Securities that the Company proposes to issue, the quotient obtained (expressed as a percentage) by dividing (i) the number of shares of all Company Securities owned by the Preemptive Shareholder on the date of the Preemptive Offer Notice by (ii) the total number of shares of all Company Securities issued and outstanding on the date of the Preemptive Offer Notice, or another percentage as may be mutually agreed among the Preemptive Shareholders following their good-faith discussions with the Company with respect to the Company’s equity financing needs.

 

Preemptive Shareholder ” means the Investors and the Founding Shareholders.

 

Proposed Purchaser ” has the meaning set forth in Section 3.3(b).

 

Purchase Agreement ” has the meaning set forth in the Background.

 

13



 

Removed Competitor ” has the meaning as set forth in the definition of Investor Competitor.

 

ROFO Percentage ” means, as to each Investor, the quotient obtained (expressed as a percentage) by dividing (i) the number of shares of such class or series of Company Securities owned by such Investor on the date of the Sale Notice by (ii) the total number of shares of such class or series of Company Securities owned by the Investors on the date of the Sale Notice.

 

Sale Notice ” has the meaning set forth in Section 3.3(a).

 

Sale Period ” has the meaning set forth in Section 3.3(b).

 

Subject Securities ” has the meaning set forth in Section 3.3(a).

 

Subsidiary ” has the meaning as set forth in the Purchase Agreement.

 

Tag-Along Right ” has the meaning set forth in Section 3.4(a).

 

Tag-Along Sale ” has the meaning set forth in Section 3.4(b).

 

Tagging Investor ” has the meaning set forth in Section 3.4(a).

 

Transaction Documents ” has the meaning as set forth in the Purchase Agreement.

 

Transfer ” means to transfer, sell, assign, distribute, pledge, encumber, hypothecate, assign, exchange, or in any other way directly or indirectly dispose of, in whole or in part, either voluntarily or involuntarily, through intermediate vehicles or not, including by gift, by way of merger (forward or reverse) or similar transaction, by operation of law or otherwise, any security or any legal or beneficial interest therein, including the grant of an option or other right or interest that would result in the transferor no longer having the economic consequences of ownership in, or the power to vote, such security.

 

ARTICLE 6

 

MISCELLANEOUS.

 

6.1.                             Authority; Effect . Each party hereto represents and warrants to and agrees with each other party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its or his assets are bound.  This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association.

 

6.2.                             Notices . Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications required or permitted under this Agreement shall be in writing and shall be mailed by reliable overnight delivery service or delivered by hand, facsimile or email as follows:

 

14



 

if to the Group Companies or

a Founding Shareholder:


c/o ZTO Express Co., Ltd.
No. 1685, Huazhi Road, Qingpu District
Shanghai 201708, the PRC
Attention: Chief Financial Officer
Facsimile: +86-21 5913 9333
Email: hp.yan@zto.com

 

with a copy to (which shall not constitute a notice):

 

Skadden, Arps, Slate, Meagher & Flom
42/F, Edinburgh Tower, The Landmark
15 Queen’s Road Central
Hong Kong
Attention: Z. Julie Gao
Facsimile: +852 3910 4863
Email: julie.gao@skadden.com

 

if to Cainiao:                                                                                                                                                 c/o Zhejiang Cainiao Supply Chain Management Co. Ltd.

B1-2, Xixi Center, 588 West Wenyi Road, Xihu Distrit

Hangzhou, Zhejiang, the PRC

Attention: Lan Yao

Email: cnlegal@cainiao.com

 

if to Alibaba:                                                                                                                                                 c/o Alibaba Group Services Limited

26th Floor, Tower one, Time Square

1 Matheson Street, Causeway Bay, Hong Kong

Attention: General Counsel

Tel: +852 2215 5200

Email: legalnotice@hk.alibaba-inc.com

 

with a copy to (which shall not constitute a notice):

 

Ropes & Gray
41st Floor, One Exchange Square
8 Connaught Place
Central, Hong Kong
Attention: Peng Yu

James T. Lidbury

Facsimile: +852 3664 6588

Email: Peng.Yu@ropesgray.com

James.Lidbury@ropesgray.com

 

or in any such case to such other address, facsimile number or telephone as either party may, from time to time, designate in a written notice given in a like manner. Notices shall be deemed given when actually delivered by overnight delivery service, hand or email, or when received by facsimile if promptly confirmed.

 

15



 

6.3.                             Descriptive Heading . The descriptive headings of this Agreement are for convenience of reference only, are not to be considered a part hereof and shall not be construed to define or limit any of the terms or provisions hereof.

 

6.4.                             Counterparts . This Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile or in electronic format, all of which together shall constitute one instrument.

 

6.5.                             Successors and Assigns .  Except as otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties; provided , however, that (a) neither any Group Company nor any Founding Shareholder shall assign this Agreement or any of its or his rights herein to any Person without the prior written consent of Alibaba, and (b) any Investor shall not assign this Agreement or any of its rights herein to any Person without the prior written consent of the Company and the Founder, provided further, however, that each party hereto shall be entitled to, without the consent of any Person, assign this Agreement or any of its or his rights herein to any of its or his Affiliates and any Person to whom such party transfers the Company Securities in accordance with the terms of this Agreement.

 

6.6.                             No Third-Party Beneficiaries .  Except as explicitly specified in this Agreement, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties any rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including any partner, member, stockholder, director, officer, employee or other beneficial owner of any party, in its or his own capacity as such or in bringing a derivative action on behalf of a party) shall have any standing as a third-party beneficiary with respect to this Agreement or the transactions contemplated by this Agreement.

 

6.7.                             Entire Agreement .  This Agreement and the other Transaction Documents constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof.

 

6.8.                             Delays or Omissions .  No delay or omission to exercise any right, power, or remedy accruing to any party hereto under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of or acquiescence to any breach or default, or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default.  All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative.

 

6.9.                             Amendments and Waivers .  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only if such amendment or waiver is in writing and signed, in the case of an amendment, by the Company, the Founder and Alibaba or, in the case of a waiver, by the party against whom the waiver is to be effective.

 

16



 

6.10.                      Severability .  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement and the balance of this Agreement shall be enforceable in accordance with its terms.

 

ARTICLE 7

 

GOVERNING LAW; JURISDICTION, ETC.

 

7.1.                             Governing Law; Venue .

 

(a)                                  This Agreement shall be governed in all respects by the Laws of the State of New York without regard to any choice of Laws or conflict of Laws provisions that would require the application of the Laws of any other jurisdiction.

 

(b)                                  Any dispute regarding this Agreement shall be referred to and finally settled by arbitration at the Hong Kong International Arbitration Centre (the “ HKIAC ”) for arbitration in Hong Kong.  The arbitration shall be conducted in accordance with the HKIAC Administered Arbitration Rules in force at the time of the initiation of the arbitration, which rules are deemed to be incorporated by reference into this Section 7.1(b). There shall be a panel of three (3) arbitrators. The claimant(s) shall appoint one (1) arbitrator, the respondent(s) shall appoint one (1) arbitrator, and the third arbitrator shall be appointed by the HKIAC.  The arbitral proceedings shall be conducted in English. The award of the arbitral tribunal shall be final and binding upon the parties thereto.

 

7.2.                             Equitable Remedies . The parties hereto agree that irreparable damage would occur in the event that any party does not perform the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions.  Accordingly, the parties hereto acknowledge and agree that any party shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Agreement by any other party and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity.   The remedies available pursuant to this Section 7.2 shall be in addition to any other remedy to which it is entitled at law or in equity, and the election to pursue an injunction or specific performance shall not restrict, impair or otherwise limit any party from, in the alternative, seeking to terminate this Agreement and collect a remedy at law.

 

[Signature pages follow]

 

17



 

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

 

 

ZTO EXPRESS (CAYMAN) INC.

 

 

 

 

 

By:

/s/ Meisong Lai

 

Name:

Meisong Lai

 

Title:

Chairman and CEO

 

Signature Page  t o Investor Rights Agreement

ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

MEISONG LAI (赖梅松)

 

 

 

 

 

/s/ Meisong Lai

 

Signature Page  t o Investor Rights Agreement

ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

JIANFA LAI (赖建法)

 

 

 

 

 

/s/ Jianfa Lai

 

Signature Page  t o Investor Rights Agreement

ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

JILEI WANG (王吉雷)

 

 

 

 

 

/s/ Jilei Wang

 

Signature Page  t o Investor Rights Agreement

ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

ALIBABA ZT INVESTMENT LIMITED

 

 

 

 

 

By:

/s/ Timothy A. Steinert

 

Name:

Timothy A. Steinert

 

Title:

Director

 

Signature Page  t o Investor Rights Agreement

ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

CAINIAO SMART LOGISTICS INVESTMENT LIMITED

 

 

 

 

 

By:

/s/ Lin Wan

 

Name:

Lin Wan

 

Title:

Director

 

Signature Page  t o Investor Rights Agreement

ZTO EXPRESS (CAYMAN) INC.

 


Exhibit 99.5

 

Execution Version

 

REGISTRATION RIGHTS AGREEMENT

 

among

 

ZTO EXPRESS (CAYMAN) INC.

 

ALIBABA ZT INVESTMENT LIMITED

 

and

 

CAINIAO SMART LOGISTICS INVESTMENT LIMITED

 


 

Dated June 12, 2018

 


 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE 1 EFFECTIVENESS; DEFINITIONS

1

1.1.

Effective Date

1

1.2.

Definitions

1

 

 

ARTICLE 2 REGISTRATION

1

2.1.

Filing of Registration Statement

1

2.2.

Expenses

2

2.3.

Effectiveness

2

2.4.

Rule 415; Cutback

3

 

 

ARTICLE 3 OTHER COVENANTS AND AGREEMENTS

3

3.1.

Company Obligations

3

3.2.

Obligations of the Investors

5

 

 

ARTICLE 4 INDEMNIFICATION

5

4.1.

Indemnification

5

4.2.

Proceedings

7

4.3.

Payment and Reimbursement

8

 

 

ARTICLE 5 TERMINATION

8

5.1.

Termination

8

 

 

ARTICLE 6 DEFINITIONS FOR PURPOSES OF THIS AGREEMENT

8

6.1.

Certain Matters of Construction

8

6.2.

Definitions

9

 

 

ARTICLE 7 MISCELLANEOUS

11

7.1.

Authority; Effect

11

7.2.

Notices

11

7.3.

Descriptive Heading

12

7.4.

Counterparts

12

7.5.

No Recourse

12

7.6.

Successors and Assigns

12

7.7.

No Third-Party Beneficiaries

13

7.8.

Entire Agreement

13

 

i



 

7.9.

Delays or Omissions

13

7.10.

Amendments and Waivers

13

7.11.

Severability

13

 

 

ARTICLE 8 GOVERNING LAW; JURISDICTION, ETC.

13

8.1.

Governing Law; Venue

13

8.2.

Equitable Remedies

14

 

ii



 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “ Agreement ”) is made as of June 12, 2018, by and among ZTO Express (Cayman) Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “ Company ”), Alibaba ZT Investment Limited, a company incorporated under the laws of Hong Kong (“ Alibaba ”), and Cainiao Smart Logistics Investment Limited, a company incorporated under the laws of the British Virgin Islands (“ Cainiao ,” together with Alibaba, the “ Investors ,” and each, an “ Investor ”).

 

BACKGROUND

 

A.                                     WHEREAS, the Company and the Investors, together with certain other parties thereto, have entered into that certain Share Purchase Agreement dated as of May 29, 2018 (the “ Purchase Agreement ”), pursuant to which the Investors have agreed to purchase from the Company a certain number of Class A Ordinary Shares (the “ Shares ”).

 

B.                                     WHEREAS, the Company and the Investors desire to set forth their agreements regarding certain registration rights with respect to the Shares following the execution and delivery of the Purchase Agreement.

 

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

 

AGREEMENT

 

ARTICLE 1

 

EFFECTIVENESS; DEFINITIONS.

 

1.1.                             Effective Date . This Agreement shall become effective upon the closing of the transactions contemplated by the Purchase Agreement (the “ Closing ”).

 

1.2.                             Definitions . Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Article 6 hereof.

 

ARTICLE 2

 

REGISTRATION.

 

2.1.                             Filing of Registration Statement . Prior to the earlier of (a) the second anniversary of the Closing Date, as such term is defined under the Purchase Agreement and (b) expiration of the Investor Lock-up Period (the “ Initial Filing Deadline ”), the Company shall prepare and file with the Commission one Registration Statement on Form F-3 (or, if Form F-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities), covering the resale of all of the Registrable Securities.  Subject to any Commission comments, the Company shall use its reasonable efforts to cause such Registration Statement to include the plan of distribution attached hereto as Schedule 1 (or such other plan of distribution reasonably requested by the Investors). The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3.1(c) to the Investors and their counsel prior to its filing or other submission.

 



 

2.2.                             Expenses . The Company will pay all expenses associated with effecting the registration of the Registrable Securities, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws, listing fees, and reasonable fees and expenses of one counsel to the Investors, but excluding any ADS issuance fees and any discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.

 

2.3.                             Effectiveness .

 

(a)                                  The Company shall use commercially reasonable best efforts to have the Registration Statement declared effective as soon as reasonably practicable after filing, but in no event later than the Registration Deadline. The Company shall respond promptly to any and all comments made by the staff of the Commission on the Registration Statement, and shall submit to the Commission, within five (5) Business Days after the Company learns that no review of the Registration Statement will be made by the staff of the Commission or that the staff of the Commission has no further comments on the Registration Statement, as the case may be, a request for acceleration of the effectiveness of the Registration Statement to a time and date not later than two (2) Business Days after the submission of such request. The Company shall notify the Investors as promptly as reasonably practicable, and in any event, within twenty-four (24) hours, after the Registration Statement is declared effective and shall simultaneously provide or make available to the Investors copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.

 

(b)                                  For not more than sixty (60) days (which need not be consecutive days) in any twelve (12) month period, the Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section 2.3(b) in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company, or (B) amend or supplement the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading (an “ Allowed Delay ”); provided , that the Company shall promptly (i) notify each Investor in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of the Investors) disclose to the Investors any material non-public information giving rise to an Allowed Delay, (ii) advise each Investor in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (iii) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.  Notwithstanding the provisions of this Section 2.3(b), if an Allowed Delay is not in connection with the review by the Commission of a Registration Statement or the financial statements contained therein, such Allowed Delay shall not be for a period exceeding twenty (20) consecutive days.

 

2



 

2.4.                             Rule 415; Cutback . If at any time the Commission takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the Securities Act or requires each Investor to be named as an “underwriter,” the Company shall use its commercially reasonable efforts to persuade the Commission that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that no Investor is an “underwriter.”  The Investors shall have the right to participate or have their counsel participate in any meetings or discussions with the Commission regarding the Commission’s position and to comment or have their counsel comment on any written submission made to the Commission with respect thereto.  Upon reasonable objection by any Investor’s counsel, no such written submission shall be made to the Commission.  In the event that, despite the Company’s reasonable efforts and compliance with the terms of this Section 2.4, the Commission refuses to alter its position, the Company shall (a) remove from the Registration Statement such portion of the Registrable Securities, and/or (b) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the Commission may require to assure the Company’s compliance with the requirements of Rule 415.

 

ARTICLE 3

 

OTHER COVENANTS AND AGREEMENTS.

 

3.1.                             Company Obligations . The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

 

(a)                                  use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective (other than during an Allowed Delay) for a period that will terminate upon the date on which all Registrable Securities covered by such Registration Statement, as amended from time to time, have been sold (the “ Effectiveness Period ”) and advise the Investors in writing when the Effectiveness Period has expired;

 

(b)                                  prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the Securities Act and the Exchange Act with respect to the distribution of all of the Registrable Securities covered thereby;

 

(c)                                   provide copies to and permit counsel designated by each Investor to review each Registration Statement and all amendments and supplements thereto no fewer than three (3) Business Days prior to their filing with the Commission and not file any document to which such counsel reasonably objects, provided that the Company is notified of such objection, including the substance of such objection, in writing no later than two (2) Business Days after such counsel has been so furnished with copies of such documents;

 

3



 

(d)                                  furnish or otherwise make available (including via EDGAR) to each Investor and its legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the Commission or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the Commission or the staff of the Commission, and each item of correspondence from the Commission or the staff of the Commission, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Investors may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investors that are covered by the related Registration Statement;

 

(e)                                   insofar as any stop order or other suspension of effectiveness is issued, use commercially reasonable efforts to obtain the withdrawal of any such order at the earliest possible moment and to notify the Investors of the issuance of such order and the resolution thereof;

 

(f)                                    use commercially reasonable efforts to register or qualify (unless an exemption from the registration or qualification exists) or cooperate with each Investor and its counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such domestic jurisdictions as are reasonably requested by the Investors and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement;

 

(g)                                   use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

 

(h)                                  promptly notify the Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and, subject to Section 2.3(b), promptly prepare, file with the Commission and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

4



 

(i)                                      otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, file any final Prospectus, including any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Investors in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, any Investor is required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and

 

(j)                                     with a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the Commission that may at any time permit the Investors to sell shares of Company Securities to the public without registration, the Company covenants and agrees to:  (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144 or any other rule of similar effect, or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act and (iii) furnish to such Investor upon request as long as such Investor owns any Registrable Securities any information as may be reasonably requested in order to avail such Investor of any rule or regulation of the Commission that permits the selling of any Registrable Securities without registration under Rule 144.

 

3.2.                             Obligations of the Investors .

 

(a)                                  Each Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities and other Company Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be required to effect the registration of such Registrable Securities, to respond to requests by the Commission, FINRA or any state securities commission or as may be required to be disclosed by applicable securities laws and shall execute such documents in connection with such registration as the Company may reasonably request.  At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Investor of the information the Company requires from such Investor.

 

(b)                                  Each Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2.3(b), or (ii) the happening of an event pursuant to Section 3.1(h) hereof, such Investor will use its commercially reasonable efforts to promptly discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until such Investor is advised by the Company that such dispositions may again be made.

 

5



 

ARTICLE 4

 

INDEMNIFICATION.

 

4.1.                             Indemnification .

 

(a)                                  Indemnification by the Company . In addition to indemnification provided pursuant to the Purchase Agreement, to the extent permitted by law, the Company will indemnify and hold harmless each Investor and its Affiliates, directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the Securities Act, Exchange Act or otherwise, including any legal or other expenses reasonably incurred in connection with investigating or defending any such losses, claims, damages or liabilities (collectively, “ Losses ”), insofar as such Losses (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “ Blue Sky Application ”); (iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the Securities Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on such Investor’s behalf pursuant to such Investor’s affirmative request under Section 3.1(f) hereof, except (A) to the extent that such untrue statements or omissions are based solely upon information regarding such Investor furnished in writing to the Company by such Investor expressly for use therein, or to the extent that such information relates to such Investor or such Investor’s proposed method of distribution of Registrable Securities and was reviewed and approved in writing by such Investor expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that such Investor has approved Schedule 1 hereto for this purpose) or (B) in the case of an occurrence of an event of the type specified in Section 3.1(i) related to the use by such Investor of an outdated or defective Prospectus after the Company has notified such Investor in writing that the Prospectus is outdated or defective and prior to such Investor being advised in writing by the Company that the use of the Prospectus may be resumed, but only if and to the extent that following the receipt of such notice the misstatement or omission giving rise to such Loss would have been corrected.

 

(b)                                  Indemnification by the Investors . To the extent permitted by law, each Investor, severally and not jointly or jointly and severally, will indemnify and hold harmless the Company and its Affiliates, directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents, against any Losses, insofar as such Losses (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein not misleading; or (iii) any violation by such Investor or its agents of any rule or regulation promulgated under the Securities Act applicable to such Investor or its agents and relating to action or inaction required of such Investor under this Agreement, (A) to the extent that such untrue statements or omissions are based solely upon information regarding such Investor furnished in writing to the Company by such Investor expressly for use therein, or to the extent that such information relates to such Investor or such Investor’s proposed method of distribution of Registrable Securities and was reviewed and approved  in writing by such Investor expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that such Investor has approved Schedule 1 hereto for this purpose) or (B) in the case of an occurrence of an event of the type specified in Section 3.1(i) related to the use by such Investor of an outdated or defective Prospectus after the Company has notified such Investor in writing that the Prospectus is outdated or defective and prior to such Investor being advised in writing by the Company that the use of the Prospectus may be resumed, but only if and to the extent that following the receipt of such notice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any Investor hereunder be greater in amount than the dollar amount of the net proceeds actually received by such Investor from the sale of the Registrable Securities giving rise to such indemnification obligation.

 

6



 

4.2.                             Proceedings .

 

(a)                                  Any Person entitled to indemnity hereunder (an “ Indemnified Party ”) shall give written notice to the Person from whom indemnity is sought (the “ Indemnifying Party ”) promptly after receiving written notice of any action, lawsuit, proceeding, investigation or other claim against it (if by a third party) or discovering the loss, obligation or facts giving rise to such claim for indemnification, describing the claim, the amount thereof (if known and quantifiable) and the basis thereof; provided that the failure to so notify the Indemnifying Party promptly shall not relieve the Indemnifying Party of its liability hereunder except to the extent such failure shall have materially prejudiced the Indemnifying Party.  In that regard, if any action, lawsuit, proceeding, investigation or other claim shall be brought or asserted by any third party that, if adversely determined, would entitle the Indemnified Party to indemnity pursuant to Section 4.1, the Indemnified Party shall notify promptly the Indemnifying Party of the same in writing, specifying in reasonable detail the basis of such claim, and the Indemnifying Party shall be entitled to control the defense of such action, lawsuit, proceeding, investigation or other claim giving rise to the Indemnified Party’s claim for indemnification at the Indemnifying Party’s expense, and at the Indemnifying Party’s option (subject to the limitations set forth below) shall be entitled to appoint lead counsel of such defense with a reputable counsel reasonably acceptable to the Indemnified Party; provided that, in the event that the Indemnifying Party elects to control such defense, such Indemnifying Party shall be deemed to have agreed to be fully responsible (with no reservation of rights) for all losses relating to such claim.  Within thirty (30) days after receiving written notice of an indemnification claim, the Indemnifying Party shall give written notice to the Indemnified Party stating whether it disputes all or any portion of the claim.  If the Indemnifying Party fails to give written notice to the Indemnified Party that it disputes an indemnification claim within thirty (30) days after receipt of notice thereof, the Indemnifying Party shall be deemed to have accepted and agreed to the claim, which shall become immediately due and payable.

 

(b)                                  If the Indemnifying Party exercises the right to control the defense of any third-party claim as provided above, then the Indemnified Party shall have the right to employ its own counsel in any such action and to participate in the defense thereof at its own expense, unless the Indemnifying Party has specifically authorized the employment of such counsel in writing, in which case the fees and expenses of such counsel shall be borne by the Indemnifying Party.  Similarly, if the Indemnified Party controls the defense of any such claim, then the Indemnifying Party shall have the right to employ its own counsel in any such action and to participate in the defense thereof at its own expense.  If the Indemnified Party reasonably determines that there exists a conflict of interest that would make it inappropriate for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel in each jurisdiction for which the Indemnified Party reasonably determines counsel is required, at the expense of the Indemnifying Party.  In the event that the Indemnifying Party exercises the right to control the defense of any third-party claim as provided above, then the Indemnified Party shall cooperate with the Indemnifying Party in such defense.  Similarly, in the event that the Indemnified Party is, directly or indirectly, controlling the defense of any such claim, then the Indemnifying Party shall cooperate with the Indemnified Party in such defense.  The Indemnifying Party shall obtain the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld, delayed or conditioned) before entering into any settlement of a claim or ceasing to defend such claim.

 

7



 

4.3.                             Payment and Reimbursement .  Upon the earlier to occur of (i) the agreement of the Indemnifying Party to pay the amount claimed by an Indemnified Party in a claim notice, or (ii) a final determination of a court or arbitration tribunal of competent jurisdiction as provided for in Section 8.1(b) that any amount is payable by an Indemnifying Party hereunder, such Indemnifying Party shall pay the Indemnified Party as soon as commercially practicable but in no event more than five (5) Business Days thereafter. The Indemnifying Party will reimburse the Indemnified Party for any legal or other expenses reasonably incurred by the Indemnified Party in connection with investigating or defending the Losses.

 

ARTICLE 5

 

TERMINATION

 

5.1.                             Termination . This Agreement shall terminate as to any Investor at such time it no longer owns any Registrable Securities or upon the mutual written consent of the Company and such Investor. No termination under this Agreement shall relieve any Person of liability for breach prior to termination.

 

ARTICLE 6

 

DEFINITIONS FOR PURPOSES OF THIS AGREEMENT.

 

6.1.                             Certain Matters of Construction . In addition to the definitions referred to or set forth below in this Article 6:

 

(1)                                  The words “hereof,” “herein,” “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of this Agreement shall include all subsections thereof;

 

(2)                                  The word “including” shall mean including, without limitation;

 

(3)                                  Definitions shall be equally applicable to both nouns and verbs and the singular and plural forms of the terms defined; and

 

8



 

(4)                                  The masculine, feminine and neuter genders shall each include the other.

 

6.2.                             Definitions . The following terms shall have the following meanings:

 

Affiliate ” has the meaning as set forth in the Purchase Agreement.

 

Agreement ” has the meaning set forth in the Preamble.

 

Alibaba ” has the meaning set forth in the Preamble.

 

Allowed Delay ” has the meaning set forth in Section 2.3(b).

 

Blue Sky Application ” has the meaning set forth in Section 4.1.

 

Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York City, Cayman Island, Hong Kong and the PRC are open for the general transaction of business.

 

Cainiao ” has the meaning set forth in the Preamble.

 

Class A Ordinary Shares ” means class A ordinary shares of the Company, par value US$0.0001 per share, having rights and privileges set forth in the Memorandum and Articles of Association.

 

Closing ” has the meaning set forth in Section 1.1.

 

Closing Date ” has the meaning as set forth in the Purchase Agreement.

 

Commission ” means the U.S. Securities and Exchange Commission.

 

Company ” has the meaning set forth in the Preamble.

 

Company Securities ” means (a) the ordinary shares of the Company, (b) securities convertible or exercisable into, or exchangeable for, ordinary shares of the Company, (c) any other equity or equity-linked security issued by the Company and (d) options, warrants or other rights to acquire any of the foregoing; for the avoidance of doubt, “Company Securities” include American depositary shares.

 

Effectiveness Period ” has the meaning set forth in Section 3.1(a).

 

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

 

FINRA ” means the Financial Industry Regulatory Authority, Inc.

 

HKIAC ” has the meaning set forth in Section 8.1(a).

 

Indemnified Party ” has the meaning set forth in Section 4.2.

 

9



 

Indemnifying Party ” has the meaning set forth in Section 4.2.

 

Initial Filing Deadline ” has the meaning set forth in Section 2.1.

 

Investor(s) ” has the meaning set forth in the Preamble.

 

Investor Lock-up Period ” means the period during which each Investor shall not transfer Company Securities, as set forth in further detail in Section 3.2(a) of the Investor Rights Agreement entered into on or about the same date hereof by and among the Company, the Investors and certain other parties thereto.

 

Losses ” has the meaning set forth in Section 4.1(a).

 

Person ” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

PRC ” means the People’s Republic of China and solely for the purpose of this Agreement, excluding Hong Kong, Macau and Taiwan.

 

Prospectus ” means (a) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (b) any “free writing prospectus” as defined in Rule 405 under the Securities Act.

 

Purchase Agreement ” has the meaning set forth in the Recitals.

 

Register ,” “ registered ” and “ registration ” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the Securities Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

 

Registrable Securities ” means, collectively, the (a) the Shares and (b) any other securities issued or issuable with respect to or in exchange for Registrable Securities, whether by merger, charter amendment or otherwise; provided that, a security shall cease to be a Registrable Security upon sale to the public pursuant to a Registration Statement or Rule 144 under the Securities Act.

 

Registration Deadline ” means the sixtieth (60th) calendar day following the Initial Filing Deadline, or the one hundred twentieth (120th) calendar day following the Initial Filing Deadline if the Commission reviews the Registration Statement.

 

Registration Statement ” means any registration statement of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

10



 

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

 

Shares ” has the meaning set forth in the Recitals.

 

Transaction Documents ” has the meaning as set forth in the Purchase Agreement.

 

ARTICLE 7

 

MISCELLANEOUS.

 

7.1.                             Authority; Effect . Each party hereto represents and warrants to and agrees with each other party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association.

 

7.2.                             Notices . Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications required or permitted under this Agreement shall be in writing and shall be mailed by reliable overnight delivery service or delivered by hand, facsimile or email as follows:

 

if to the Company:

 

c/o ZTO Express Co., Ltd.

No. 1685, Huazhi Road, Qingpu District

Shanghai 201708, the PRC

Attention:

Facsimile: +86-21 5913 9333

Email: hp.yan@zto.com

 

if to Cainiao:                                                                                                                                                 c/o Zhejiang Cainiao Supply Chain Management Co., Ltd.

B1-2, Xixi Center, 588 West Wenyi Road, Xihu District

Hangzhou, Zhejiang, PRC

Attention: Lan Yao

Email: cnlegal@cainiao.com

 

if to Alibaba:                                                                                                                                                 c/o Alibaba Group Services Limited

26th Floor, Tower one, Time Square

1 Matheson Street, Causeway Bay, Hong Kong

Attention: General Counsel

Tel: +852 2215 5200

Email: legalnotice@hk.alibaba-inc.com

 

11



 

with a copy to (which shall not constitute notice):

 

Ropes & Gray
41st Floor, One Exchange Square
8 Connaught Place
Central, Hong Kong
Attention: Peng Yu

James T. Lidbury
Facsimile: +852 3664 6588
Email: Peng.Yu@ropesgray.com

James.Lidbury@ropesgray.com

 

or in any such case to such other address, facsimile number or telephone as either party may, from time to time, designate in a written notice given in a like manner. Notices shall be deemed given when actually delivered by overnight delivery service, hand or email, or when received by facsimile if promptly confirmed.

 

7.3.                             Descriptive Heading . The descriptive headings of this Agreement are for convenience of reference only, are not to be considered a part hereof and shall not be construed to define or limit any of the terms or provisions hereof.

 

7.4.                             Counterparts . This Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile or in electronic format, all of which together shall constitute one instrument.

 

7.5.                             No Recourse . Notwithstanding anything that may be expressed or implied in this Agreement, the Company and each Investor covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or limited partner or member of any Investor or of any Affiliate or assignee thereof, as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Investor or any current or future member of any Investor or any of their respective current or future directors, officers, employees, partners or members or of any Affiliate or assignee thereof, as such, for any obligation of any Investor under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

 

7.6.                             Successors and Assigns .  Except as otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties; provided, however, that (a) the Company shall not assign this Agreement or any of its rights herein to any Person without the prior written consent of the Investors, and (b) each Investor shall not assign this Agreement or any of its rights herein to any Person without the prior written consent of the Company, provided further, however, that each Investor shall be entitled to, without the consent of any Person, assign this Agreement or any of its rights herein to any of its Affiliates and any Person to whom such Investor transfers the Company Securities in accordance with the terms of the Transaction Documents.

 

12



 

7.7.                             No Third-Party Beneficiaries .  Except as explicitly specified in this Agreement, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties any rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including any partner, member, stockholder, director, officer, employee or other beneficial owner of any party, in its or his own capacity as such or in bringing a derivative action on behalf of a party) shall have any standing as third-party beneficiary with respect to this Agreement or the transactions contemplated by this Agreement.

 

7.8.                             Entire Agreement .  This Agreement and the other Transaction Documents constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof.

 

7.9.                             Delays or Omissions .  No delay or omission to exercise any right, power, or remedy accruing to any party hereto under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of or acquiescence to any breach or default, or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default.  All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative.

 

7.10.                      Amendments and Waivers .  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only if such amendment or waiver is in writing and signed, in the case of an amendment, by the Company and the Investors or, in the case of a waiver, by the party against whom the waiver is to be effective.

 

7.11.                      Severability .  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement and the balance of this Agreement shall be enforceable in accordance with its terms.

 

ARTICLE 8

 

GOVERNING LAW; JURISDICTION, ETC.

 

8.1.                             Governing Law; Venue .

 

(a)                                  This Agreement shall be governed in all respects by the Laws of the State of New York without regard to any choice of laws or conflict of laws provisions that would require the application of the laws of any other jurisdiction.

 

13



 

(b)                                  Any dispute regarding this Agreement shall be referred to and finally settled by arbitration at the Hong Kong International Arbitration Centre (the “ HKIAC ”) for arbitration in Hong Kong.  The arbitration shall be conducted in accordance with the HKIAC Administered Arbitration Rules in force at the time of the initiation of the arbitration, which rules are deemed to be incorporated by reference into this Section 8.1(b). There shall be a panel of three (3) arbitrators. The Investors shall appoint one (1) arbitrator, the Company shall appoint one (1) arbitrator, and the third arbitrator shall be appointed by the HKIAC.  The arbitral proceedings shall be conducted in English. The award of the arbitral tribunal shall be final and binding upon the parties thereto.

 

8.2.                             Equitable Remedies . The parties hereto agree that irreparable damage would occur in the event that any party does not perform the provisions of this Agreement in accordance with the specified terms or otherwise breach such provisions. Accordingly, the parties hereto acknowledge and agree that any party shall be entitled to seek an injunction, specific performance and other equity relief to prevent breaches of this Agreement by any other party and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity. The remedies available pursuant to this Section 8.2 shall be in addition to any other remedy to which it is entitled at law or in equity, and the election to pursue an injunction or specific performance shall not restrict, impair or otherwise limit any party from, in the alternative, seeking to terminate this Agreement and collect a remedy at law.

 

[Signature pages follow]

 

14



 

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

 

 

ZTO EXPRESS (CAYMAN) INC.

 

 

 

 

 

By:

/s/ Meisong Lai

 

Name:

Meisong Lai

 

Title:

Chairman and CEO

 

Signature Page  t o Registration Rights Agreement

ZTO EXPRESS (CAYMAN) INC.

 



 

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

 

 

ALIBABA ZT INVESTMENT LIMITED

 

 

 

 

 

By:

/s/ Timothy A. Steinert