{"id":43725,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-purchase-and-contribution-agreement-with-alibaba.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-purchase-and-contribution-agreement-with-alibaba","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-purchase-and-contribution-agreement-with-alibaba.html","title":{"rendered":"Stock Purchase and Contribution Agreement with Alibaba"},"content":{"rendered":"
STOCK PURCHASE AND\nCONTRIBUTION AGREEMENT<\/p>\n\n
by and between<\/p>\n\n
Yahoo! Inc.<\/p>\n\n
and<\/p>\n\n
Alibaba.com\nCorporation<\/p>\n\n
Dated as of  August 10, 2005\n<\/p>
STOCK\n  PURCHASE AND CONTRIBUTION AGREEMENT<\/b>\n  \n<\/div>\n
This STOCK PURCHASE AND CONTRIBUTION AGREEMENT (this \u0093Agreement<\/u>\u0094),\ndated as of August 10, 2005, is made and entered into by and between\nYahoo! Inc., a Delaware corporation (\u0093Yahoo!<\/u>\u0094) and Alibaba.com\nCorporation, a Cayman Islands company (\u0093Alibaba<\/u>\u0094).<\/p>\n\n
<\/p>\n\n
W<\/u>\nI<\/u>  T<\/u>  N<\/u>  E<\/u>  S<\/u>  S<\/u>  E<\/u>  T<\/u>  H<\/u>:<\/p>\n\n
WHEREAS, Yahoo! wishes to transfer or cause to be\ntransferred (a) the Tao Bao Shares (as defined below) and (b) the\nChina Business to Alibaba through a transfer to (A) Alibaba of (i) all\nissued and outstanding shares (the \u00933721 Shares<\/u>\u0094) of Yahoo!\u0092s indirect,\nwholly-owned subsidiary, 3721 Network Software Co., Ltd., a Hong Kong company (\u00933721\nHK<\/u>\u0094), (ii) all issued and outstanding equity interests (the \u0093WFOE\nInterests<\/u>\u0094) in Beijing Yahoo! Consulting and Services Co., Ltd., a\nwholly-foreign-owned enterprise established under the Laws of China (the \u0093WFOE<\/u>\u0094)\nby Yahoo! Holdings (Hong Kong) Ltd., a Hong Kong company (\u0093Yahoo! HK<\/u>\u0094)\nand an indirect, wholly-owned subsidiary of Yahoo!, and (iii) certain\nother assets and properties used or held for use in connection with the China\nBusiness  set forth in Schedule A\nhereto that are not otherwise transferred to Alibaba under subclauses (i) or\n(ii) of this recital (the \u0093Other Assets<\/u>\u0094), and (B) the Alibaba\nDesignees, all of the issued and outstanding equity interests (the \u0093China\nICP Shares<\/u>\u0094) of the China ICP Companies, and Alibaba and the Alibaba\nDesignees wish to accept the transfer of the foregoing from Yahoo!, on the\nterms and conditions and for the consideration described in this Agreement;\n<\/p>
WHEREAS, Yahoo! wishes to subscribe for certain newly\nissued Ordinary Shares (as defined below) and Alibaba wishes to allot and issue\nto Yahoo! such Ordinary Shares, on the terms and conditions and for the\nconsideration described in this Agreement;<\/p>\n\n
WHEREAS, concurrently with the execution and delivery\nof this Agreement, Yahoo! and certain shareholders of Alibaba and Tao Bao have\nentered into the Voting Agreements, pursuant to which, among other things, each\nof such shareholders has agreed to vote its shares in favor of the adoption and\napproval of this Agreement, the Ancillary Agreements and the transactions\ncontemplated hereby and thereby; and<\/p>\n\n
WHEREAS, it is a condition precedent to the\nconsummation of the  transactions\ncontemplated by this Agreement that the Ancillary Agreements shall have been\nentered into and delivered by the relevant parties thereto and the transactions\ncontemplated thereby shall have been consummated on or prior to the Closing\nDate;<\/p>\n\n
NOW, THEREFORE, in consideration of the mutual\npromises, covenants, representations and warranties made herein and of the\nmutual benefits to be derived herefrom, the parties hereto agree as follows:
\n<\/p>\n\n\n  
<\/p>\n\n1.                                       Transfer of China Business; Issuance of\nShares<\/u>.
1.1  Transfer of China Business; Sale and\nPurchase of Shares<\/u>.  Subject to the\nterms and conditions hereof, Yahoo! will (i) cause to be transferred the\nTao Bao Shares, the 3721 Shares, the WFOE Interests and the Other Assets to\nAlibaba, (ii) cause to be transferred to the Alibaba Designees the China\nICP Shares and (iii) pay US$250 million (the \u0093Cash Consideration<\/u>\u0094)\nto Alibaba, in consideration of the allotment and issuance of 201,617,750\nOrdinary Shares (the \u0093Primary Shares<\/u>\u0094) to Yahoo!, in the manner and at\nsuch time set forth in Section 1.2.\n<\/p>
1.2  Closing<\/u>.  The closing (the \u0093Closing<\/u>\u0094) of the\ntransfer of the Tao Bao Shares, the 3721 Shares, the WFOE Interests, the Other\nAssets and the China ICP Shares, and the payment of the Cash Consideration in\nexchange for the issuance of the Primary Shares, shall be simultaneous and\nshall take place at the offices of Debevoise & Plimpton LLP, 13\/F\nEntertainment Building, 30 Queen\u0092s Road, Central, Hong Kong on a date (the \u0093Closing\nDate<\/u>\u0094) as soon as practicable following the satisfaction or waiver of the\nconditions precedent to the Closing set forth in Section 7 of this\nAgreement (other than those conditions that, by their terms, cannot be\nsatisfied until the Closing) but in no event before October 5, 2005, or at\nsuch other location as Yahoo! and Alibaba may mutually agree.  At the Closing: (a) Yahoo! will (i) deliver to Alibaba,\nfree and clear of any Lien, one or more certificates representing the Tao Bao\nShares, duly endorsed in blank or accompanied by stock powers or other\ninstruments of transfer duly executed in blank, (ii) deliver to Alibaba,\nfree and clear of any Lien, one or more certificates representing the 3721\nShares, duly endorsed in blank or accompanied by stock powers or other\ninstruments of transfer duly executed in blank, and bearing or accompanied by\nall requisite stock transfer stamps, (iii) deliver to Alibaba, documentary\nevidence of the transfer of the WFOE Interests to Alibaba, free and clear of\nany Lien, in form and substance reasonably satisfactory to Alibaba, (iv) deliver\nto Alibaba the Other Assets, free and clear of any Lien, except for Permitted\nLiens, (v) deliver to the Alibaba Designees, free and clear of any Lien,\nthe China ICP Shares, (vi) deliver to Alibaba a copy of the register of\nmembers of 3721 HK dated the Closing Date and duly certified by a duly\nauthorized officer of 3721 HK, and (vii) pay the Cash Consideration to\nAlibaba, by wire transfer of immediately available funds to the account of\nAlibaba designated in writing to Yahoo! at least five Business Days prior to\nthe Closing Date;\n (b) Alibaba will deliver to Yahoo!, or a direct\nor indirectly wholly-owned Subsidiary of Yahoo! designated by Yahoo!, free and\nclear of any Lien, one or more certificates representing the Primary Shares,\nduly executed and registered in the name of Yahoo!; and \n (c) the consideration, if any, required to be\ndelivered pursuant to the terms and conditions of any of the Ancillary\nAgreements shall be delivered.\n<\/p>
2<\/p>\n\n\n\n\n\n\n\n1.3  Allocation of Purchase Price<\/u>. (a) Allocation Schedule<\/u>.  Prior to the Closing Date, Yahoo! will\nprepare a schedule\nsetting forth the allocation of the Primary Shares to\neach of the Tao Bao Shares, the 3721 Shares, the WFOE Interests, the China ICP\nShares, the Other Assets and the Cash Consideration transferred by Yahoo! to\nAlibaba pursuant to this Agreement. \nYahoo! and Alibaba will consult with each other during the process of\npreparing such schedule.  The Yahoo!\nGroup and the Alibaba Group agree to follow and report the transaction\nconsistent with such allocation for all purposes.\n(b) Transfer Documentation<\/u>.  Amounts allocated in accordance with the schedule referred\nto in Section 1.3(a)\nmay be referenced in the specific transfer documentation\nwith respect to such assets.\n
2.                                       Representations and Warranties of Yahoo!<\/u>. Except as set forth in the disclosure schedule delivered\nby Yahoo! to Alibaba on or prior to the execution of this Agreement (the \u0093Yahoo!\nDisclosure Schedule<\/u>\u0094), Yahoo! represents and warrants to Alibaba\nas follows:\n<\/p>
<\/p>\n\n2.1  Authorization, etc<\/u>.  Yahoo! has full corporate power and authority\nto execute and deliver this Agreement and the Ancillary Agreements to which it\nshall be a party, to perform its obligations hereunder and thereunder and to\nconsummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement\nand the Ancillary Agreements to which Yahoo! or any of its Affiliates shall be\na party, the performance of such party\u0092s obligations hereunder and thereunder,\nand the consummation of the transactions contemplated hereby and thereby, have\nbeen duly authorized by all requisite corporate action of such party.  Yahoo! has duly executed and delivered this\nAgreement and on the Closing Date, Yahoo! and its relevant Affiliates will have\nduly executed and delivered the Ancillary Agreements to which it shall be a\nparty.  This Agreement constitutes, and\neach such Ancillary Agreement when so executed and delivered will constitute,\nthe legal, valid and binding obligation of Yahoo! and any such Affiliate\nenforceable against Yahoo! or such Affiliate in accordance with its respective\nterms, except as (i) the enforceability hereof and thereof may be limited\nby bankruptcy, insolvency, moratorium or other similar Laws affecting the\nenforcement of creditors\u0092 rights generally, and (ii) the availability of\nequitable remedies may be limited by equitable principles of general\napplicability.
2.2  Title to Shares, Capitalization, etc<\/u>. (a)  Title<\/u>.  Yahoo! owns, directly or indirectly, the 3721\nShares, the WFOE Interests and the Other Assets, free and clear of any Lien,\nexcept, with respect to the Other Assets, Permitted Liens.  Subject to receipt of all necessary Governmental\nApprovals and other Consents, upon the delivery of the certificate(s)\nrepresenting the Primary Shares to Yahoo! at the Closing as provided for in\nthis Agreement, Alibaba will acquire good and valid title to the Tao Bao Shares\n(to the fullest extent that such title was acquired by Yahoo! from Softbank\npursuant to the Tao Bao Share Purchase Agreement, free and clear of any Lien\ncreated by Yahoo! or\n<\/p>
3<\/p>\n\n\nits Affiliates), the 3721 Shares, the WFOE Interests and Other Assets,\nfree and clear of any Lien, except (i) Liens in favor of the China Group,\nAlibaba or any of its Subsidiaries, and (ii) with respect to the Other\nAssets, Permitted Liens.  The Yahoo!\nDesignees own, directly, the China ICP Shares free and clear of any Lien.  Subject to receipt of all Governmental\nApprovals and other Consents, at the Closing, the Alibaba Designees will\nacquire good and valid title to the China ICP Shares, free and clear of any\nLien. (b)  Authorized Share Capital of the 3721 HK\nand the WFOE<\/u>.  The authorized share\ncapital of 3721 HK consists of 10,000,000 ordinary shares, par value HK$0.1 per\nshare, of which only the 3721 Shares are issued and outstanding.  The 3721 Shares have been duly authorized and\nare validly issued, fully paid and nonassessable.  The registered capital of the WFOE is\nUS$1,470,000, all of which has been fully contributed by Yahoo! HK.  All such registered capital contribution has\nbeen duly verified by a duly licensed accounting firm in China, which has\nissued a capital verification report in respect thereof, and has been reflected\nin the certificate of approval of the WFOE. \nThe WFOE Interests have been duly authorized and are validly issued,\nfully paid and nonassessable.\n (c)  Authorized Share Capital of the China\nGroup<\/u>.  Section 2.2(c) of\nthe Yahoo! Disclosure Schedule contains a complete and correct description\nof the share capital that is authorized, or issued and outstanding, of each\nmember of the China Group (other than 3721 HK and the WFOE).  All of such outstanding share capital are\nduly authorized, validly issued, fully paid and nonassessable, and are owned\nbeneficially and of record by the member of the China Group or other Person set\nforth on Section 2.2(c) of the Yahoo! Disclosure Schedule, free and\nclear of any Lien.\n
(d) No Equity Rights<\/u>.  Except as set forth in Section 2.2(d) of\nthe Yahoo! Disclosure Schedule, there are no preemptive or similar rights\ngranted by any member of the China Group or, to the knowledge of any member of\nthe China Group, by any other Person, with respect to any equity securities of\nany member of the China Group.  Except\nfor this Agreement, no subscriptions, options, calls, warrants, convertible or\nexchangeable securities, conversion rights, repurchase rights, redemption rights,\nstock appreciation rights, phantom stock or other rights, plans, agreements,\ncommitments, arrangements or understandings of any kind obligating any member\nof Yahoo! Group, contingently or otherwise, to issue or sell, or cause to be\nissued or sold, any shares of share capital of any class of any member of the\nChina Group, or any securities convertible into or exchangeable for any such\nshares, are outstanding, and no authorization therefor has been given.  Except as set forth in Section 2.2(d) of\nthe Yahoo! Disclosure Schedule, there are no outstanding contractual or other\nrights or obligations to or of any member of the Yahoo! Group to repurchase,\nredeem or otherwise acquire any outstanding shares or other equity interests of\nany member of the China Group.\n<\/p>
2.3  No Conflicts, etc<\/u>.  The execution, delivery and performance of\nthis Agreement and the Ancillary Agreements by Yahoo! and each other member of\nthe \n<\/p>
4<\/p>\n\n\nYahoo! Group that is a party thereto, and the consummation of the\ntransactions contemplated hereby and thereby by Yahoo! or such member of the\nYahoo! Group do not and will not conflict with, contravene, result in a\nviolation or breach of, or default under (with or without the giving of notice\nor the lapse of time or both), create in any other Person a right or claim of\ntermination, amendment, or require modification, acceleration or cancellation\nof, or result in the creation of any Lien (or any obligation to create any\nLien) upon the 3721 Shares, WFOE Interests, the Assets (except for Permitted Liens),\nthe China ICP Shares or any of the properties, assets or rights of any member\nof the China Group (except for Permitted Liens) under, (a) any Law\napplicable to any member of Yahoo! Group or any of their respective properties\nor assets, (b) any provision of any of the Organizational Documents of\nsuch member of Yahoo! Group or (c) any Contract, or any other agreement or\ninstrument to which any member of Yahoo! Group is a party or by which any of\ntheir respective properties or assets may be bound, except, in the case of\nclauses (a) and (c) of this Section 2.3, for such conflict,\ncontravention, violation, breach, default, right or claim of termination,\namendment, modification, acceleration, cancellation, creation of a Lien or\nother occurrence which would not reasonably be expected to have a Material\nAdverse Effect.\n
2.4  Corporate Status<\/u>. (a)  Organization<\/u>.  Except as set forth in Section 2.4(c) of\nthe Yahoo! Disclosure Schedule, each of Yahoo! and each member of the China\nGroup is a corporation duly organized, validly existing, and if applicable\nunder the Laws of its respective jurisdiction, in good standing under the Laws\nof its respective jurisdiction of incorporation, which jurisdiction is set\nforth on Section 2.4(a) of the Yahoo! Disclosure Schedule, and has\nfull corporate power and authority to conduct its business as currently\nconducted and to own or lease and to operate its properties. (b)  Qualification<\/u>.  Each member of the China Group is duly\nqualified or licensed to do business and is in good standing as a foreign\nperson in each of the jurisdictions set forth in Section 2.4(b) of\nthe Yahoo! Disclosure Schedule, which includes each jurisdiction in which the\nnature of its business or the properties owned or leased by it makes such\nqualification or licensing necessary, except where the failure to be so\nqualified, licensed to do business or in good standing would not reasonably be\nexpected to have a Material Adverse Effect. (c)  Organizational Documents<\/u>.  Yahoo! has made available in the Yahoo! Online\nDataroom to Alibaba complete and correct copies of the Organizational Documents\nof each member of the China Group, as amended, modified or waived through and\nin effect on the date hereof.  Each of\nthe Organizational Documents of each member of the China Group, as so made\navailable to Alibaba, is in full force and effect.  No member of the China Group is in material\nviolation or breach of any of the provisions of its Organizational Documents.  The minute books of each member of the China\nGroup that are in the possession or control of the Yahoo! Group have heretofore\nbeen made available to Alibaba.  Such\nminute books contain materially accurate and complete records of all meetings\nheld of, and\n\n\n<\/p>
5<\/p>\n\ncorporate action taken by, the stockholders, the boards of directors,\nand committees of such boards of directors of the China Group.
2.5  Investments<\/u>.  No member of the China Group owns any share\ncapital or other securities of, or interest in, any other Person, except as set\nforth in Section 2.2(c) of the Yahoo! Disclosure Schedule.\n<\/p>
2.6  Financial Statements<\/u>. (a)  Section 2.6(a) of the Yahoo!\nDisclosure Schedule sets forth complete and correct copies of the China\nGroup Financial Statements. (b)  The China Group Financial Statements (i) present\nfairly in all material respects the financial condition and results of\noperations of the consolidated China Group (excluding COAL) as of the date\nthereof or for the period covered thereby and (ii) have been prepared in\naccordance with GAAP throughout the periods presented in the China Group\nFinancial Statements (except as indicated in the notes thereof).\n<\/p>
2.7  Undisclosed Liabilities, etc<\/u>.  No member of the China Group has any\nliabilities or obligations of any nature, whether known, unknown, absolute,\naccrued, contingent or otherwise and whether due or to become due, except (a) as\nare not required by GAAP to be disclosed or reserved against in the China Group\nBalance Sheet and (b) for liabilities and obligations that (i) are\nincurred after the date of the China Group Balance Sheet in the Ordinary Course\nof Business and are not prohibited by this Agreement and (ii) individually\nand in the aggregate, would not reasonably be expected to have or result in a\nMaterial Adverse Effect.  Since December 31,\n2004, there has not occurred or come to exist any Material Adverse Effect or\nany event, occurrence, fact, condition, change, development or effect that,\nindividually or in the aggregate, would reasonably be expected to result in a\nMaterial Adverse Effect.\n<\/p>
2.8  Absence of Changes<\/u>.  Since June 30, 2005 through the date\nhereof, except as set forth in Section 2.8 of the Yahoo! Disclosure\nSchedule, no member of the China Group has: (a)  declared, set aside, made or paid any\ndividend or other distribution in respect of its share capital or otherwise\npurchased or redeemed, directly or indirectly, any shares of its share capital; (b)  issued or sold any shares of any class of\nits share capital, or any securities convertible into or exchangeable for any\nsuch shares, or issued, sold, granted or entered into any subscriptions,\noptions, calls, warrants, conversion rights, repurchase rights, redemption\nrights or other rights, agreements, commitments, arrangements or understandings\nof any kind, contingently or otherwise, to purchase or otherwise acquire any\nsuch shares or any securities convertible into or exchangeable for any such\nshares;\n\n<\/p>
6<\/p>\n\n(c)  incurred any indebtedness for borrowed\nmoney, issued or sold any debt securities or prepaid any debt (including,\nwithout limitation, any borrowings from or prepayments to any member of Yahoo!\nGroup), or incurred, assumed, guaranteed or otherwise become directly or\nindirectly liable with respect to any liability or obligation in excess of\nUS$500,000 in each case or US$1,000,000 in the aggregate at one time\noutstanding, except for borrowings, prepayments and guarantees in the Ordinary\nCourse of Business; (d) mortgaged, pledged or otherwise subjected to\nany Lien, any of its Real Property or other properties or assets, tangible or\nintangible, except for Permitted Liens;\n(e)\nforgiven, cancelled, compromised, waived or\nreleased any material debts, claims or rights, except for debts, claims and\nrights against Persons other than any member of Yahoo! Group, which are\nforgiven, cancelled, compromised, waived or released in the Ordinary Course of\nBusiness;\n(f)\nmodified any existing Material Contract, or\nentered into any agreement, commitment or other transaction, other than\nagreements entered into in the Ordinary Course of Business and involving an\nexpenditure of less than US$500,000 in each case and US$1,000,000 in the\naggregate;\n(g)\npaid any bonus to any officer, director,\nemployee, sales representative, agent or consultant, or granted to any officer,\ndirector, employee, sales representative, agent or consultant any other\nincrease in compensation in any form, except for bonus payments and raises in\nthe Ordinary Course of Business;\n(h)\nexcept in the Ordinary Course of Business,\nentered into, adopted or amended any employment, consulting, retention,\nchange-in-control, collective bargaining, bonus or other incentive\ncompensation, profit-sharing, health or other welfare, stock option or other\nequity, pension, retirement, vacation, severance, deferred compensation or\nother employment, compensation or benefit plan, policy, agreement, trust, fund\nor arrangement for the benefit of any officer, director, employee, sales\nrepresentative, agent, consultant or Affiliate (whether or not legally\nbinding);\n(i)  suffered any damage, destruction or loss\n(whether or not covered by insurance), or any strike or other\nemployment-related problem, or any change in relations with or any loss of a\nsupplier, customer or employee, that, individually or in the aggregate, would\nreasonably be expected to <\/b>have or\nresult in a Material Adverse Effect;\n(j)  amended or\nmodified any of its Organizational Documents;\n(k)  changed in\nany respect its accounting policies or principles, except as required by GAAP\nor applicable Tax Law;\n
<\/p>\n\n
7<\/p>\n\n\n(l)  except in\naccordance with Section 4.5(f), transferred or granted any rights or\nlicenses under, or entered into any settlement regarding the infringement of,\nChina Intellectual Property or entered into or modified any licensing or\nsimilar agreements or arrangements, in each case, other than in the Ordinary\nCourse of Business;\n(m)  sold any\nassets with a value in excess of US$500,000 in each case or US$1,000,000 in the\naggregate, other than inventory in the Ordinary Course of Business;\n(n)  taken any\naction or omitted to take any action that would result or has resulted in the\noccurrence of any of the foregoing.\n
2.9  Tax Matters<\/u>. (a)  Except as set forth on Section 2.9(a) of\nthe Yahoo! Disclosure Schedule, (i) all Tax Returns relating to each\nmember of the China Group or the business or assets thereof that were required\nto be filed on or before the date hereof or the Closing Date, as the case may\nbe, have been (or by the Closing Date will be) duly and timely filed and are\n(or will be) correct and complete in all material respects, (ii) all Taxes\nshown as owing on such Tax Returns have been (or by the Closing Date will have\nbeen) paid and (iii) no member of the China Group is, on the date of this\nAgreement, the beneficiary of any extension of time within which to file any\nTax Return. (b)  Except as set forth on Section 2.9(b) of\nthe Yahoo! Disclosure Schedule, (i) all material Taxes that are payable by\nany member of the China Group or chargeable as a Lien upon its assets as of the\ndate hereof or the Closing Date, as the case may be, have been (or by the\nClosing Date will be) duly and timely paid or reflected on the China Group\nFinancial Statements, (ii) each member of the China Group has duly and\ntimely withheld all material Taxes required to be withheld in connection with\nthe business, employees or assets of such member, and such withheld Taxes have\nbeen either duly and timely paid to the proper Governmental Authorities or properly\nset aside in accounts for such purpose and (iii) the China Group Financial\nStatements reflect an adequate reserve for all Taxes payable or asserted to be\npayable by the China Group for all taxable periods or portions thereof through\nthe date of the China Group Financial Statements. (c)  Except as set forth on Section 2.9(c) of\nthe Yahoo! Disclosure Schedule, there has been no claim or issue (other than a\nclaim or issue that has been finally settled) concerning any material liability\nfor Taxes of any member of the China Group asserted, raised or threatened in\nwriting by any taxing authority. (d) Section 2.9(d) of the Disclosure Schedule lists\nall Income Tax Returns that have been filed with respect to any member of the\nChina Group for taxable periods ended on or after December 31, 2003 and\nthat have not yet been audited or are currently the subject of audit.\n\n<\/p>
8<\/p>\n\n\n(e) Except as set forth on Section\n2.9(e)\nof\nthe Yahoo! Disclosure Schedule, no member of the China Group has (i) waived\nany statute of limitations, (ii) agreed to any extension of the period for\nassessment or collection or (iii)\nexecuted or filed any power of attorney\nwith respect to Taxes, which waiver, agreement or power of attorney is currently\nin force.\n(f)\nExcept as set forth on Section\n2.9(f)\nof\nthe Yahoo! Disclosure Schedule, (i) there are no outstanding adjustments\nfor Income Tax purposes applicable to any member of the China Group required as\na result of changes in methods of accounting effected on or before the Closing\nDate and (ii) no material elections for Income Tax purposes have been made\nby any member of the China Group that are currently in force or by which any\nmember of the China Group is bound.\n(g)\nExcept as set forth in Section\n2.9(g)\nof\nthe Yahoo! Disclosure Schedule, no member of the China Group (i) is a\nparty to or bound by or has any obligation under any Tax allocation, sharing,\nindemnity or similar agreement or arrangement or (ii) is or has been a\nmember of any group of companies filing a consolidated, combined or unitary\nIncome Tax Return.\n
2.10  Assets and Sufficiency<\/u>. (a)  Assets<\/u>.  The members of the China Group collectively\nown, or otherwise have full, sufficient and legally enforceable rights to use,\nall of the material properties, assets and rights (real, personal or mixed,\ntangible or intangible), used or held for use in connection with the China\nBusiness including without limitation, the Other Assets and the Real Property,\nexcluding any assets covered by the Technology and Intellectual Property\nLicense Agreement (the \u0093Assets<\/u>\u0094). \nYahoo! owns or has full, sufficient and legally enforceable rights to\nuse all of the material properties, assets and rights (real, personal or mixed,\ntangible or intangible) covered by the Technology and Intellectual Property\nLicense Agreement. (b)  Sufficiency of Assets<\/u>.  The Assets, together with the rights,\nservices and arrangements as contemplated by the Technology and Intellectual\nProperty License Agreement, comprise all properties, assets, rights and\nservices required by Alibaba to conduct the China Business as now being\nconducted by the China Group. (c)  Patents Representations<\/u>.  Notwithstanding anything to the contrary in\nthis Section 2.10, Yahoo! makes no representations in this Section 2.10\n(i) with respect to patents owned by any third parties or any patents\noutside China and (ii) with respect to infringement or non-infringement of\nany Intellectual Property of any third party. \n\nFor the avoidance of doubt, the foregoing sentence shall not restrict\nthe independent representation given in Section 2.13(d).\n\n<\/p>
9<\/p>\n\n2.11  Real Property<\/u>. (a)  Owned Real Property<\/u>.  Section\n2.11(a) of the Yahoo!\nDisclosure Schedule\ncontains a complete and correct list of all Owned Real\nProperty of each member of the China Group setting forth the address and owner\nof each parcel of Owned Real Property. \nEach member of the China Group has good and marketable fee simple title\nto its Owned Real Property, free and clear of any Lien other than Permitted\nLiens and other than as set forth in Section\n2.11(a) of the Yahoo!\nDisclosure Schedule.\n(b)  Leases<\/u>.  Section\n2.11(b) of the Yahoo!\nDisclosure Schedule\ncontains a complete and correct list of all Leases of\neach member of the China Group setting forth the address, landlord, tenant and\nexpiration date for each Lease.  Yahoo!\nhas made available to Alibaba correct and complete copies of the Leases.  Each Lease is legal, valid, binding, in full\nforce and effect and enforceable against each party thereto, except to the\nextent that any failure to be so enforceable, individually and in the\naggregate, would not reasonably be expected to have or result in a Material\nAdverse Effect.  No member of the China\nGroup is, and, to the knowledge of any member of the China Group, <\/b>no other party is, in default, violation\nor breach in any respect under any Lease, and no event has occurred and is\ncontinuing that constitutes or, with notice or the passage of time or both,\nwould constitute a default, violation or breach in any respect under any Lease,\nexcept to the extent such default, violation or breach would not reasonably be\nexpected to have a Material Adverse Effect. \n\nEach Lease grants the tenant under the Lease the right to use and occupy\nthe premises and rights demised and intended to be demised thereunder.  Each member of the China Group has title to\nthe leasehold interests under its respective Leases, free and clear of any\nLien, except Permitted Liens.  Each\nmember of the China Group enjoys peaceful and undisturbed possession in all\nmaterial respects under its respective Leases for the Leased Real Property.\n(c)  No Proceedings<\/u>.  Except as would not reasonably be expected to\nhave a Material Adverse Effect, (i) there are no proceedings in eminent\ndomain or other similar proceedings pending or, to the knowledge of any member\nof the China Group, threatened affecting any portion of the Real Property and (ii) there\nexists no writ, injunction, decree, order or judgment outstanding, nor any\nLitigation, pending or threatened, relating to the ownership, lease, use,\noccupancy or operation by any Person of any Real Property.\n(d)\nCurrent Use<\/u>.  The use and operation of the Real Property in\nthe conduct of the China Business does not violate in any material respect any\ninstrument of record or agreement affecting the Real Property.  There is no material violation of any\ncovenant, condition, restriction, easement or agreement or order of any\nGovernmental Authority that affects the Real Property or the ownership,\noperation, use or occupancy thereof.  No\nmaterial damage or destruction has occurred with respect to any of the Real\nProperty that, individually or in the aggregate, would reasonably be expected\nto have or result in a Material Adverse Effect.\n
<\/p>\n\n
10<\/p>\n\n\n2.12  Contracts<\/u>. (a)  Disclosure<\/u>.  Except as set forth in Section 2.12(a) of\nthe Yahoo! Disclosure Schedule, as of the date hereof no member of the China\nGroup is a party to or bound by any Material Contract.  Yahoo! has made available to Alibaba complete\nand correct copies of all written Material Contracts, and accurate descriptions\nof all material terms of all oral Material Contracts, set forth or required to\nbe set forth in Section\n2.12(a) of the Yahoo! Disclosure Schedule.\n(b)  Enforceability<\/u>.  All Material Contracts are legal, valid,\nbinding, in full force and effect and enforceable against each party thereto,\nexcept to the extent that any failure to be enforceable, individually and in\nthe aggregate, would not reasonably be expected to have or result in a Material\nAdverse Effect.  As of the date hereof,\nno member of the China Group is in material violation, breach or default under,\nnor is there any event or condition that, after notice or lapse of time or both,\nwould constitute a material violation, material breach or material default\nthereunder, on the part of any member of the China Group or, to the knowledge\nof any member of the China Group, any other Person.  Except as set forth in Section\n2.12(b) of\nthe Yahoo! Disclosure Schedule, no Material Contract contains any change of\ncontrol or other terms or conditions that will become applicable or\ninapplicable as a result of the consummation of the transactions contemplated\nby this Agreement and the Ancillary Agreements.\n
2.13  Intellectual Property<\/u>. (a)  Disclosure<\/u>.  Section 2.13(a) of the Yahoo!\nDisclosure Schedule sets forth a complete and correct list of all\nIntellectual Property registrations or applications, filed before any\ngovernmental Intellectual Property office, that are material to the China\nBusiness and is owned by any member of the China Group. (b)  Title<\/u>.  Each member of the China Group owns the China\nIntellectual Property free and clear of any Lien, other than Permitted Liens\nand licenses.  Except as expressly\nprovided elsewhere in this Agreement or in the Ancillary Agreements,\nimmediately after the Closing, the China Group or Alibaba shall own all the\nChina Intellectual Property, in each case free from all Liens, other than\nPermitted Liens and licenses, and on the same terms and conditions as in effect\nprior to the Closing. (c)  Licensing and Similar Arrangements<\/u>.  Section 2.13(c) of the Yahoo!\nDisclosure Schedule sets forth all material written agreements and\narrangements (other than licenses for commercially available software having\nfees, whether up-front or annual, in the aggregate, of less than US$50,000) (i) pursuant\nto which any member of the China Group has licensed China Intellectual Property\nto, or the use of such China Intellectual Property is otherwise permitted\n(through non-assertion, settlement or similar agreements or otherwise) by, any\nother Person (including any member of Yahoo! Group), and (ii) pursuant to\nwhich any member of the China Group currently has Intellectual Property licensed\nto it, or is otherwise permitted to use Intellectual Property (through\nnon-assertion, settlement or similar agreements or otherwise); provided<\/u>\n\nthat web content agreements providing for\n\n<\/p>
11<\/p>\n\n\n\n\n\naggregate payments of less than $50,000 over the term of such agreement\nneed not appear on Section 2.13(c) of the Yahoo! Disclosure\nSchedule.  All of the agreements and\narrangements set forth or required to be set forth in Section\n2.13(c) of\nthe Yahoo! Disclosure Schedule: (x<\/u>)\nare in full force and effect\nand enforceable in accordance with their terms, except to the extent any\nfailure to be enforceable, individually or in the aggregate, would not\nreasonably be expected to have or result in a Material Adverse Effect,  (y<\/u>) no default exists or is threatened\nthereunder by any member of the China Group, or to the knowledge of any member\nof China Group, by any other Person, except for such defaults that,\nindividually and in the aggregate, would not reasonably be expected to have or\nresult in a Material Adverse Effect, or to materially impair the ability of any\nmember of China Group to perform its respective obligations hereunder and under\nthe Ancillary Agreements, and (z<\/u>)\ndo not contain any change in\ncontrol or other terms or conditions that will operate to terminate, or\notherwise adversely affect any right currently available to members of the\nChina Group holding such rights as a result of the consummation of the\ntransactions contemplated by this Agreement and the Ancillary Agreements.  Yahoo! has made available to Alibaba complete\nand correct copies of all licenses and arrangements (including amendments,\nsupplements, waivers and other modifications) set forth or required to be set\nforth in Section\n2.13(c) of the Yahoo! Disclosure Schedule.\n(d)\nNo Infringement<\/u>.  Except as set forth in Section\n2.13(d)\nof\nthe Yahoo! Disclosure Schedule\nand except as would not have a Material\nAdverse Effect, the conduct of the China Business as presently conducted does\nnot infringe or misappropriate any rights of any Person in respect of any\nIntellectual Property.  Except as set\nforth in Section\n2.13(d) of the Yahoo! Disclosure Schedule, none of\nthe China Intellectual Property is being infringed or misappropriated by any\nPerson, except as would not reasonably be expected to have or result in a\nMaterial Adverse effect.  (e)\nNo Intellectual Property Litigation<\/u>.  Except as set forth in Section\n2.13(e)\nof\nthe Yahoo! Disclosure Schedule, no written claim or demand by any Person has\nbeen made or, to the knowledge of any member of China Group, threatened, nor is\nthere any Litigation that is pending or, to the knowledge of any member of\nChina Group, threatened against any member of the China Group, that (i) challenges\nthe rights of any member of the China Group in respect of any China\nIntellectual Property, (ii) asserts that any member of the China Group is\ninfringing or misappropriating, or (except pursuant to the license agreements\nrequired to be set forth in Section\n2.13(c)(ii) of the Yahoo!\nDisclosure Schedule) is required to pay any royalty, license fee, charge or\nother amount with regard to, any Intellectual Property, or (iii)\nclaims\nthat any default exists under any agreement or arrangement set forth or\nrequired to be set forth in Section 2.13(c) of the Yahoo! Disclosure\nSchedule, that, individually or in the aggregate, would reasonably be expected\nto have or result in a Material Adverse Effect. \n\nNone of the China Intellectual Property is subject to any outstanding\norder, ruling, decree, judgment or stipulation by or with any court, tribunal,\narbitrator or other Governmental Authority.
12<\/p>\n\n(f) Due Registration, Etc<\/u>.  The China Intellectual Property has been duly\nregistered with, filed in or issued by, as the case may be, China\u0092s State\nPatent Bureau, State Trademark Bureau, State Copyright Bureau or other filing\noffices, domestic or foreign, to the extent necessary or desirable to ensure\nprotection under any applicable Law, and such registrations, filings, issuances\nand other actions remain in full force and effect, in each case, to the extent\nmaterial to the China Business and in accordance with the exercise of\nreasonable business judgment.  The China\nGroup takes reasonable measures to protect the confidentiality of its trade\nsecrets, including requiring their employees to execute written agreements\ncovering the protection of trade secrets and intellectual property and\nnon-competition, substantially in the form made available to Alibaba.\n
2.14  Insurance<\/u>.  Section 2.14 of the Yahoo! Disclosure Schedule contains\na complete and correct list of all insurance policies currently maintained by\nany member of the China Group.  Yahoo!\nhas made available to Alibaba complete and correct copies of all such policies\ntogether with all riders and amendments thereto.  Such scheduled policies and all other\npolicies maintained during the past three years are in full force and effect\nwith respect to the time periods covered thereunder, and all premiums due\nthereon have been paid.  Each member of\nthe China Group has complied in all material respects with the terms and\nprovisions of such scheduled policies and such other policies. \n<\/p>
2.15  Litigation<\/u>.  Except as set forth on Section 2.15 of\nthe Yahoo! Disclosure Schedule, as of the date hereof, there is no Litigation\npending or, to the knowledge of any member of the China Group, threatened by,\nagainst or affecting any member of China Group or any of its properties or\nassets, that, individually or in the aggregate, would reasonably be expected to\nhave or result in a Material Adverse Effect. \nThere are no outstanding orders, judgments, decrees or injunctions\nissued by any Governmental Authority against any member of the China Group that\nwould reasonably be expected to have or result in a Material Adverse Effect.\n<\/p>
2.16  Compliance with Laws and Instruments;\nConsents<\/u>. (a)  Compliance<\/u>.  Except as set forth in Section 2.16(a) of\nthe Yahoo! Disclosure Schedule, since January 1, 2004, each member of\nChina Group is not, and has not been, in conflict with or in violation or\nbreach of or default under (and there exists no event that, with notice or\npassage of time or both, would constitute a conflict, violation, breach or\ndefault with, of or under) (x<\/u>) any Law applicable to it or any of\nits properties, assets, operations or business, (y<\/u>) any provision\nof its Organizational Documents, or (z<\/u>) any Contract, or any other\nagreement or instrument to which it is a party or by which it or any of its\nproperties or assets is bound or affected, and no member of China Group has\nreceived any notice or has knowledge of any claim alleging any such conflict,\nviolation, breach or default, except, in the case of clauses (x) and (z) of\nthis Section 2.16, for any such conflict, contravention, violation,\nbreach, default or other occurrence which would not reasonably be expected  to have a Material Adverse Effect.  This Section 2.16 is not intended to\naddress any matter related to the topics described in Section 2.9 (Tax \n\n\n<\/p>
13<\/p>\n\n\nMatters), 2.11 (Real Property), 2.17 (Environmental Matters), 2.19\n(Employees, Labor Matters), 2.20 (Employee Benefit Plans and Related Matters),\nor 2.26 (Corrupt Practices). (b)  Consents<\/u>. (i)  Except as specified in Section 2.16(b)(i) of\nthe Yahoo! Disclosure Schedule, no Governmental Approval or other Consent is\nrequired to be obtained or made by any member of Yahoo! Group in connection\nwith the execution and delivery of this Agreement and the Ancillary Agreements\nor the consummation of the transactions contemplated hereby or thereby, except\nwhere the failure to obtain such approval or consent would not be reasonably\nexpected to have a Material Adverse Effect. (ii)  Section 2.16(b)(ii) of the Yahoo!\nDisclosure Schedule contains a complete and correct list of all material\nGovernmental Approvals and other Consents necessary for, or otherwise material\nto, the conduct of the China Business. \n\nAll such Governmental Approvals and other Consents have been duly\nobtained and are held by a member of the China Group and are in full force and\neffect.  Each member of the China Group\nis, and at all times has been, in compliance with all Governmental Approvals\nand other Consents held by such member, except for such failures to comply\nthat, individually and in the aggregate, would not reasonably be expected to\nhave or result in a Material Adverse Effect. \nThere is no Litigation pending or, to the knowledge of any member of the\nChina Group, threatened that would result in the revocation, cancellation,\nsuspension or modification or nonrenewal of any material Governmental Approval\nor Consent; no member of China Group has been notified that any material\nGovernmental Approval or Consent will be modified, suspended or cancelled or\ncannot be renewed in the Ordinary Course of Business; and there is, to the\nknowledge of any member of the China Group, no reasonable basis for any such\nrevocation, cancellation, suspension, modification or nonrenewal, in each case\nexcept where such revocation, cancellation, suspension, modification or\nnonrenewal would not be reasonably expected to have or result in a Material\nAdverse Effect. (c)  Governmental Filings<\/u>.  Each registration, report, statement, notice\nor other filing required to be filed by any member of the China Group or Yahoo!\nwith any Governmental Authority under any applicable Law affecting the China\nBusiness has been filed, and when filed complied and continues to comply with\napplicable Law, except to the extent that any failure to so file or comply\nwould not be reasonably expected to have or result in a Material Adverse\nEffect. \n
2.17  Environmental Matters<\/u>.  Each member of the China Group has materially\ncomplied and is in material compliance with all applicable material\nEnvironmental Laws pertaining to any of the properties and assets of such\nmember (including the Real Property) and the use and ownership thereof, and to\nthe operation of the China Business.  To\nthe knowledge of any member of the China Group, no violation by any member of\nthe China Group is being alleged of any applicable\n<\/p>
14<\/p>\n\n\n\nEnvironmental Law relating to any of the properties and assets of the\nChina Group or the use or ownership thereof, or to the operation of the China\nBusiness.  Except as would not be\nreasonably expected to have a Material Adverse Effect, no member of the China\nGroup used, generated, treated, stored, recycled or disposed of any hazardous\nsubstances on any property now owned, operated or leased by any member of the\nChina Group.
2.18  Affiliate Transactions<\/u>. (a)  Section 2.18(a) of the Yahoo!\nDisclosure Schedule contains a complete and correct list of all\nagreements, contracts, arrangements, understandings, Indebtedness, transfers of\nassets or liabilities or other commitments or transactions, whether or not\nentered into in the Ordinary Course of Business, to or by which any member of\nthe China Group, on the one hand, and Yahoo! or any of its Affiliates (other\nthan any member of the China Group), on the other hand, are or have been a\nparty or otherwise bound or affected, and that involve continuing\nliabilities and obligations that, individually or in the aggregate, have been,\nare or will be material to or from any member of the China Group.  Each agreement, contract, arrangement,\nunderstanding, Indebtedness, transfer of assets or liabilities or other\ncommitment or transaction set forth or required to be set forth in Section 2.18(a) of\nthe Yahoo! Disclosure Schedule was on terms and conditions as favorable to\nthe relevant member of the China Group as would have been reasonably obtained\nby it at the time in a comparable arm\u0092s-length transaction with a Person other\nthan Yahoo! or any of its Affiliates. \n\nTrue and complete copies of each such agreement have been made available\nto Alibaba. (b)  No stockholder, officer, director or\nemployee of any member of the China Group, or any family member, relative or\nAffiliate of any such stockholder, officer, director or employee, (i) owns,\ndirectly or indirectly, and whether on an individual, joint or other basis, any\ninterest in (x<\/u>) any property or asset, real or personal, tangible\nor intangible, used in or held for use in connection with or pertaining to the\nChina Business, or (y<\/u>) any Person, that is a supplier, customer or\ncompetitor of any member of the China Group, (ii) serves as an officer,\ndirector or employee of any Person that is a supplier, customer or competitor\nof any member of the China Group or (iii) has received any loans from or\nis otherwise a debtor of, or made any loans to or is otherwise a creditor of,\nany member of the China Group.\n<\/p>
2.19  Employees, Labor Matters, etc<\/u>.  No member of the China Group is a party to or\nbound by any collective bargaining agreement, and there are no labor unions or\nother organizations representing, purporting to represent or, to the knowledge\nof any member of the China Group, attempting to represent any employees\nemployed by any member of the China Group. \nSince January 1, 2004, there has not occurred or been threatened\nany strike, slowdown, picketing, work stoppage, concerted refusal to work\novertime or other similar concerted labor activity with respect to any\nemployees of any member of the China Group. \nThere are no labor disputes currently subject to any grievance\nprocedure, arbitration or litigation and there is no representation petition\npending or threatened with respect to any employee \n\n<\/p>
15<\/p>\n\n\n\nof any member of the China Group. \nThe China Group has complied with all applicable Laws pertaining to the\nemployment or termination of employment of their respective employees,\nincluding, without limitation, all such Laws relating to labor relations, equal\nemployment opportunities, fair employment practices, prohibited discrimination\nor distinction and other similar employment activities, except for any failure\nso to comply that, individually and in the aggregate, would not reasonably be\nexpected to have or result in a Material Adverse Effect.
2.20  Employee Benefit Plans and Related Matters<\/u>.  Neither any member of the China Group nor any\nof its Subsidiaries has any Benefit Plans subject to the Law of the United\nStates.  With respect to each Benefit\nPlan: (a)  all employer and employee contributions to\neach Benefit Plan required by applicable Law or by the terms of such Benefit\nPlan have been made, or, if applicable, accrued in accordance with GAAP; (b)  the fair market value of the assets of each\nfunded Benefit Plan, the liability of each insurer for any Benefit Plan funded\nthrough insurance or the book reserve established for any Benefit Plan,\ntogether with any accrued contributions, are sufficient to procure or provide\nfor the accrued benefit obligations, as of the Closing Date, with respect to\nall current and former participants in such plan according to the actuarial\nassumptions and valuations most recently used to determine employer\ncontributions to such Benefit Plan and none of the transactions contemplated by\nthis Agreement and the Ancillary Agreements shall cause such assets or\ninsurance obligations to be less than such benefit obligations; and (c)  Each of the Benefit Plans has been operated\nand administered in all respects in compliance with its terms, all applicable\nLaws and all applicable collective bargaining agreements, except for any\nfailure so to comply that, individually and in the aggregate, would not\nreasonably be expected to result in a material liability or obligation on the\npart of any member of the China Group or Yahoo! or any of its Affiliates, or to\nhave or result in a Material Adverse Effect. \nThere are no material pending or, to the knowledge of any member of the\nChina Group, threatened claims by or on behalf of any of the Benefit Plans, by\nany employee of any member of the China Group or otherwise involving any such\nBenefit Plan or the assets of any such Benefit Plan (other than routine claims\nfor benefits, all of which have been fully reserved for on the regularly\nprepared balance sheets of the China Group).\n<\/p>
2.21  Accounts Receivable<\/u>.  Yahoo! has delivered or caused to be\ndelivered to Alibaba a complete and accurate aging of all accounts receivable\nof the consolidated China Group (excluding COAL) as of December\n<\/p>
31, 2004\nand June 30, 2005.  All accounts\nreceivable reflected on the China Group Balance Sheet have been generated in\nthe Ordinary Course of Business and reflect a bona fide obligation for the\npayment of goods or services provided by the China Group.\n\n<\/p>
16<\/p>\n\n\n2.22  Resellers<\/u>.  Section 2.22 of the Yahoo! Disclosure Schedule sets\nforth for the twelve-month period ended December\n31, 2004 and the\nsix-month period ended June\n30, 2005 (a) the names of the 10 largest\nresellers of the China Group based on cash receipts net of discounts and\nrebates generated by such resellers during each such period and (b) the\namount of such cash receipts during each such period.\n
2.23  Bank Accounts<\/u>.  Section 2.23 of the Yahoo! Disclosure Schedule sets\nforth a complete and correct list containing the names set forth of each bank\nin which any member of the China Group has an account or safe deposit or lock\nbox, and the account or box number, as the case may be.\n<\/p>
2.24  Brokers, Finders, etc<\/u>.  All negotiations relating to this Agreement,\nthe Ancillary Agreements and the transactions contemplated hereby and thereby\nhave been carried on without the participation of any Person acting on behalf\nof any member of Yahoo! Group in such a manner as to, and the transactions\ncontemplated hereby and thereby will not otherwise, give rise to any valid\nclaim against any member of the Yahoo! Group or Alibaba for any brokerage or\nfinder\u0092s commission, fee or similar compensation, or for any bonus payable to\nany officer, director, employee, agent or representative of or consultant to\nany member of the Yahoo! Group upon consummation of the transactions\ncontemplated hereby or thereby, other than the fee payable to Banc of America\nSecurities LLC, which will be paid solely by Yahoo!.<\/p>
2.25  Acquisition for Investment<\/u>.  Yahoo! is purchasing the Primary Shares\nsolely for investment, with no present intention to resell the Primary\nShares.  Yahoo! hereby acknowledges that\nthe Primary Shares have not been registered pursuant to the Securities Act of\n1933, as amended, or the securities Laws of any other jurisdiction, and may not\nbe transferred in the absence of such registration or an exemption therefrom\nunder such act or such Laws, as the case may be.\n<\/p>
2.26  Corrupt Practices<\/u>.  Neither Yahoo!, nor any member of the China\nGroup, nor, to the knowledge of any member of the China Group, any of their\nrespective officers, employees, directors, representatives or agents has within\nthe past three years knowingly offered, promised, authorized or made, directly\nor indirectly, (i) any unlawful payments or (ii) payments or other\ninducements to any governmental officials, including any official of any entity\nowned or controlled by a government, with the intent or purpose of: (a)  influencing any act or decision of such\nofficial in his official capacity; (b)  inducing such official to do or omit to do\nany act in violation of the lawful duty of such official; or (c)  inducing such official to use his influence\nwith a government or instrumentality thereof to affect or influence any act or\ndecision of such government or instrumentality;\n\n<\/p>
17<\/p>\n\n
in order to assist Yahoo! or any member of the China\nGroup in obtaining or retaining business for or with, or directing business to,\nany Person.  To the knowledge of any\nmember of the China Group, no such payments or other inducements have been\nprovided to government officials described above in violation of any applicable\nLaw against improper payments or inaccurate recordkeeping.<\/p>\n\n
<\/p>
<\/p>\n\n
2.27  Insolvency<\/u>. (a)  No order has been made and no resolution has\n  been passed for the winding up of any member of the China Group, or for a\n  provisional liquidator to be appointed in respect of any member of the China\n  Group and, so far as any member of the China Group is aware, no petition has\n  been presented and no meeting has been convened for the purpose of winding up\n  any member of the China Group.\n  (b)  No receiver (which expression shall include\n  an administrative receiver) has been appointed in respect of any member of the\n  China Group or all or any of their respective assets or properties.\n  (c)  No member of the China Group is insolvent\n  and\/or has stopped paying debts as they fall due.\n  (d)\n  No guarantee, loan capital, borrowed money\n  or interest for which any member of the China Group is liable is overdue for\n  payment and no other obligation or Indebtedness of any member of the China Group\n  is outstanding which is substantially overdue for performance or payment.\n  (e) So far as any member of the China Group is\n  aware, no distress, execution or other process for the execution of a court\n  judgment has been levied against any member of the China Group that has not\n  been satisfied in full.  So far as any\n  member of the China Group is aware, no unsatisfied judgment is outstanding\n  against any member of the China Group.\n  (f)\n  So far as any member of the China Group is\n  aware, no floating charge, except for Permitted Liens, has been created by any\n  member of the China Group over their respective assets or properties.\n<\/p>\n
2.28 Disclosure<\/u>.  This Agreement and each Ancillary Agreement,\n    and each certificate or other instrument or document furnished by or on behalf\n    of any member of Yahoo! Group to Alibaba or any agent or representative of\n    Alibaba pursuant hereto or in connection herewith, taken as a whole, do not\n    contain any untrue statement of a material fact or omit to state a material\n    fact required to be stated herein or therein or necessary to make the\n    statements contained herein or therein in light of the circumstances under\n    which they were made, not misleading.  No\n    member of Yahoo! Group knows of any fact (other than matters of a general\n    economic or political nature that do not affect the business of the China Group\n    uniquely or that are set forth in Section 2.28 of the Yahoo! Disclosure\n    Schedule) that would reasonably be expected to have or result in, a Material\n    Adverse Effect. <\/p>\n\n
18<\/p>\n\n\n\n3.                                       Representations and\nWarranties of Alibaba<\/u>.  Except as set\nforth in the disclosure schedule delivered by Alibaba to Yahoo! on or\nprior to the execution of this Agreement (the \u0093Alibaba Disclosure Schedule<\/u>\u0094),\nrepresents and warrants to Yahoo! as follows:\n
3.1  Authorization, etc<\/u>. (a)  Alibaba has full corporate power and\nauthority to execute and deliver this Agreement and the Ancillary Agreements to\nwhich it shall be a party, to perform its obligations hereunder and thereunder\nand to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement\nand the Ancillary Agreements to which Alibaba or any member of the Alibaba\nGroup shall be a party, the performance of such party\u0092s obligations hereunder\nand thereunder, and the consummation of the transactions contemplated hereby\nand thereby, have been duly authorized by all requisite corporate action of\nsuch party except for the Alibaba Shareholders Approvals.  Alibaba has duly executed and delivered this\nAgreement and on the Closing Date, Alibaba or the relevant member of the\nAlibaba Group will have duly executed and delivered the Ancillary Agreements to\nwhich it shall be a party.  This\nAgreement constitutes, and each such Ancillary Agreement when so executed and\ndelivered will constitute, the legal, valid and binding obligation of Alibaba\nand the relevant member of the Alibaba Group enforceable against Alibaba and\nsuch member of the Aladdin Group and, to Alibaba\u0092s knowledge, the other parties\nthereto, in accordance with its respective terms, except as (i) the\nenforceability hereof and thereof may be limited by bankruptcy, insolvency,\nmoratorium or other similar Laws affecting the enforcement of creditors\u0092 rights\ngenerally, and (ii) the availability of equitable remedies may be limited\nby equitable principles of general applicability. (b)  Alibaba has obtained the Alibaba\nShareholders Approvals; the Alibaba Shareholders Approvals comprise a\nsufficient number of voting shares to approve the matters set forth in the\nVoting Agreements, including the consummation of the transactions contemplated\nby this Agreement and the Ancillary Agreements. \nThe Voting Agreements are enforceable against Alibaba in accordance with\ntheir terms, except as (i) the enforceability hereof and thereof may be\nlimited by bankruptcy, insolvency, moratorium or other similar Laws affecting\nthe enforcement of creditors\u0092 rights generally, and (ii) the availability\nof equitable remedies may be limited by equitable principles of general applicability.\n<\/p>
3.2  Capitalization, etc<\/u>. (a)  As of the date hereof, the authorized share\ncapital of Alibaba consists of 250,000,000 Ordinary Shares, 56,454,546 Series A\nPreferred Shares, 79,769,189 Series B Preferred and 45,000,000 Series C\nPreferred Shares and 68,776,265 undesignated preferred shares of par value\nUS$0.0001 per share (of which on the date hereof no shares are issued and\noutstanding).  As of July 31, 2005,\nthe issued and outstanding share capital of Alibaba consisted of 89,607,702\nOrdinary Shares, 56,454,546 Series A Preferred Shares, 79,769,189 Series B\nPreferred Shares\n\n<\/p>
19<\/p>\n\nand 8,426,685 Series C Preferred Shares.  As of the date hereof, 323,204,026 Ordinary\nShares were (i) outstanding, (ii) issuable upon the exercise or\nconversion of options, warrants, Series\nA Preferred Shares, Series\nB\nPreferred Shares, Series\nC Preferred Shares or convertible notes or (iii)\nreserved\nfor issuance under any Benefit Plan.  As\nof the Closing Date, after giving effect to the transactions contemplated\nhereby and in the other Ancillary Agreements, there will be 700,000,000\nauthorized Ordinary Shares, of which no more than 654,103,386 will be (i) issued\nand outstanding, (ii) issuable upon the exercise of any options or\nwarrants, or (iii)\nreserved for issuance under any Benefit Plan.\n(b)  Section 3.2(b) of the Alibaba\nDisclosure Schedule\ncontains a complete and correct description of the\nshare capital that is authorized, or issued and outstanding, of each member of\nthe Alibaba Group (other than Alibaba). \nAll of such outstanding share capital are duly authorized, validly\nissued, fully paid and nonassessable, and are owned beneficially and of record\nby the member of the Alibaba Group or other Person set forth on Section 3.2(b) of\nthe Alibaba Disclosure Schedule, free and clear of any Lien.\n(c)  All of the issued and outstanding share\ncapital of Alibaba (i) are duly authorized, validly issued, fully paid and\nnonassessable, (ii) as of the date hereof are held of record by the\nPersons and in the amounts as set forth in Section 3.2(c)(ii) of the\nAlibaba Disclosure Schedule, (iii)\nimmediately after the Closing and the\nconsummation of the transactions contemplated by the Ancillary Agreements will\nbe held of record by the Persons and in the amounts set forth in Section 3.2(c)(iii)\nof\nthe Alibaba Disclosure Schedule, and (iv)\nwere not issued in violation of\nany preemptive rights or the Organizational Documents of Alibaba.\n(d)\nExcept as set forth in Section 3.2(d)\nof\nthe Alibaba Disclosure Schedule, there are no preemptive or similar rights\ngranted by any member of the Alibaba Group or, to the knowledge of any member\nof the Alibaba Group, by any other Person, with respect to any equity\nsecurities of any member of the Alibaba Group. \n\nExcept as set forth in Section 3.2(d)\nof the Alibaba\nDisclosure Schedule, no subscriptions, options, calls, warrants, convertible or\nexchangeable securities, conversion rights, repurchase rights, redemption\nrights, stock appreciation rights, phantom stock, or other rights, plans,\nagreements, commitments, arrangements or understandings of any kind obligating\nany member of the Alibaba Group, contingently or otherwise, to issue or sell,\nor cause to be issued or sold, any shares of share capital of any member of the\nAlibaba Group, or any securities convertible into or exchangeable for any such\nshares, are outstanding, and no authorization therefor has been given.  Except as set forth in Section 3.2(d)\nof\nthe Alibaba Disclosure Schedule, there are no outstanding contractual or other\nrights or obligations to or of any member of the Alibaba Group to repurchase,\nredeem or otherwise acquire any outstanding shares or other equity interests of\nany member of the Alibaba Group.\n(e)\nSection 3.2(e)\nof the Alibaba Disclosure\nSchedule\nsets forth the current ownership of Alibaba, the identity of the\npersons that will transfer property to Alibaba in connection with the\ntransactions contemplated by this Agreement and the Ancillary Agreements, the\nnumber of shares such persons will own following the consummation of the\ntransactions contemplated by this Agreement and the\n\n\n
20<\/p>\n\n\n\nAncillary Agreements, and the total number of shares of Alibaba share\ncapital outstanding following such transfers and other transactions\ncontemplated by this Agreement and the Ancillary Agreements.
3.3  No Conflicts, etc<\/u>.  The execution, delivery and performance of\nthis Agreement and the Ancillary Agreements by Alibaba or each other member of\nthe Alibaba Group that is a party thereto, and the consummation of the\ntransactions contemplated hereby and thereby by Alibaba or each other member of\nthe Alibaba Group, do not and will not conflict with, contravene, result in a\nviolation or breach of or default under (with or without the giving of notice\nor the lapse of time or both), create in any other Person a right or claim of\ntermination, amendment, or require modification, acceleration or cancellation\nof, or result in the creation of any Lien (or any obligation to create any\nLien) upon any of the properties, assets or rights of any member of the Alibaba\nGroup (except for Permitted Liens) under, (a) any Law applicable to any\nmember of the Alibaba Group or any of their respective properties or assets, (b) any\nprovision of any of the Organizational Documents of such member of the Alibaba\nGroup or (c) any Contract, or any other agreement or instrument to which\nany member of the Alibaba Group is a party or by which any of their respective\nproperties or assets may be bound, except, in the case of clauses (a) and (c) of\nthis Section 3.3, for such conflict, contravention, violation, breach,\ndefault, right or claim of termination, amendment, modification, acceleration,\ncancellation, creation of a Lien or other occurrence which would not reasonably\nbe expected to have a Material Adverse Effect.\n<\/p>
3.4  Corporate Status<\/u>. (a)  Organization<\/u>.  Each member of the Alibaba Group is a\ncorporation duly organized, validly existing and, if applicable under the Laws\nof its respective jurisdiction, in good standing under the Laws of its\nrespective jurisdiction of incorporation, which jurisdiction is set forth in Section 3.4(a) of\nthe Alibaba Disclosure Schedule, and has full corporate power and authority to\nconduct its business as currently conducted and to own or lease and to operate\nits properties. (b)  Qualification<\/u>.  Each member of the Alibaba Group is duly\nqualified or licensed to do business and is in good standing as a foreign\nperson in each of the jurisdictions set forth in Section 3.4(b) of\nthe Alibaba Disclosure Schedule, which includes each jurisdiction in which the\nnature of its business or the properties owned or leased by it makes such\nqualification or licensing necessary, except where the failure to be so\nqualified, licensed to do business or in good standing would not reasonably be\nexpected to have a Material Adverse Effect. \nNo member of the Alibaba Group has operations or assets in Hong Kong\nthat are material to the Alibaba Group taken as a whole. (c)  Organizational Documents<\/u>.  Alibaba has made available in the Alibaba\nOnline Dataroom to Yahoo! complete and correct copies of the\n<\/p>
21<\/p>\n\n\n\n\n\n\nOrganizational Documents of each member of the Alibaba Group, as\namended, modified or waived through and in effect on the date hereof.  Each of the Organizational Documents of each\nmember of the Alibaba Group, as so made available to Yahoo!, is in full force\nand effect.  No member of the Alibaba\nGroup is in material violation or breach of any of the provisions of its\nOrganizational Documents.  The minute\nbooks of each member of the Alibaba Group have heretofore been made available\nto Yahoo!.  Such minute books contain materially\naccurate and complete records of all meetings held of, and corporate action\ntaken by, the stockholders, the boards of directors, and committees of such\nboards of directors of the Alibaba Group.
3.5  Valid Issuance to Primary Shares<\/u>.  The Primary Shares being subscribed by Yahoo!\nhereunder, when issued, sold and delivered in accordance with the terms of this\nAgreement for the consideration expressed herein, will be duly and validly\nissued, fully paid and non-assessable, and will, on the date of issuance\nthereof, be free of restrictions on transfer and other Liens, other than such\nrestrictions on transfer or other Liens as may be imposed by this Agreement,\nthe Ancillary Agreements or the Memorandum and Articles, and will be issued in\naccordance with applicable securities and other Laws.<\/p>
3.6  Financial Statements<\/u>. (a)  Section 3.6(a) of the Alibaba\nDisclosure Schedule sets forth complete and correct copies of the Alibaba\nFinancial Statements and the Tao Bao Financial Statements. (b)  The Alibaba Financial Statements and the Tao\nBao Financial Statements (i) present fairly in all material respects the\nfinancial condition and results of operations of Alibaba and its Subsidiaries\non a consolidated basis, and Tao Bao and its Subsidiaries on a consolidated\nbasis, respectively, as of the dates thereof or for the periods covered thereby\n(subject, in the case of unaudited balance sheets and related statements of\noperations, to normal year end audit adjustments, methods of presentation and\nthe absence of full footnote disclosure) and (ii) have been prepared in\naccordance with GAAP applied on a consistent basis throughout the periods\npresented in the Alibaba Financial Statements and the Tao Bao Financial\nStatements, respectively (except as may be indicated in the notes thereto).<\/p>
3.7  Undisclosed Liabilities, etc<\/u>.  No member of the Alibaba Group has any\nliabilities or obligations of any nature, whether known, unknown, absolute,\naccrued, contingent or otherwise and whether due or to become due, except (a) as\nare not required by GAAP to be disclosed or reserved against in the Alibaba\nBalance Sheet or the Tao Bao Balance Sheet and (b) for liabilities and\nobligations that (i) are incurred after the date of the Alibaba Balance\nSheet and the Tao Bao Balance Sheet in the Ordinary Course of Business and are\nnot prohibited by this Agreement and (ii) individually and in the\naggregate, would not reasonably be expected to have or result in a Material\nAdverse Effect.  Since December<\/p>
31,\n2004, there has not occurred or come to exist any Material Adverse Effect or\nany event, occurrence, fact,<\/p>
22<\/p>\n\n\n\ncondition, change, development or effect that, individually or in the\naggregate, would reasonably be expected to result in a Material Adverse Effect.
3.8  Absence of Changes<\/u>.  Since June 30, 2005 through the date hereof,\nexcept as set forth in Section 3.8 of the Alibaba Disclosure Schedule, no\nmember of the Alibaba Group has: (a)  declared, set aside, made or paid any\ndividend or other distribution in respect of its share capital or otherwise\npurchased or redeemed, directly or indirectly, any shares of its share capital; (b)  issued or sold any shares of any class of\nits share capital, or any securities convertible into or exchangeable for any\nsuch shares, or issued, sold, granted or entered into any subscriptions, options,\ncalls, warrants, conversion rights, repurchase rights, redemption rights or\nother rights, agreements, commitments, arrangements or understandings of any\nkind, contingently or otherwise, to purchase or otherwise acquire any such\nshares or any securities convertible into or exchangeable for any such shares; (c)  incurred any indebtedness for borrowed\nmoney, issued or sold any debt securities or prepaid any debt (including,\nwithout limitation, any borrowings from or prepayments to any member of the Alibaba\nGroup) or incurred, assumed, guaranteed or otherwise become directly or\nindirectly liable with respect to any liability or obligation in excess of\nUS$500,000 in each case or US$1,000,000 in the aggregate at one time\noutstanding, except for borrowings, prepayments and guarantees in the Ordinary\nCourse of Business; (d) mortgaged, pledged or otherwise subjected to\nany Lien, any of its Real Property or other properties or assets, tangible or\nintangible, except for Permitted Liens; (e) forgiven, cancelled, compromised, waived or\nreleased any material debts, claims or rights, except for debts, claims and\nrights against Persons other than any member of the Alibaba Group, which are\nforgiven, cancelled, compromised, waived or released in the Ordinary Course of\nBusiness; (f) modified any existing Material Contract, or\nentered into any agreement, commitment or other transaction, other than\nagreements entered into in the Ordinary Course of Business and involving an\nexpenditure of less than US$500,000 in each case and US$1,000,000 in the\naggregate; (g) paid any bonus to any officer, director,\nemployee, sales representative, agent or consultant, or granted to any officer,\ndirector, employee, sales representative, agent or consultant any other\nincrease in compensation in any form, except for bonus payments and raises in\nthe Ordinary Course of Business;\n<\/p>
23<\/p>\n\n\n\n\n\n\n(h) except in the Ordinary Course of Business,\nentered into, adopted or amended any employment, consulting, retention,\nchange-in-control, collective bargaining, bonus or other incentive\ncompensation, profit-sharing, health or other welfare, stock option or other\nequity, pension, retirement, vacation, severance, deferred compensation or\nother employment, compensation or benefit plan, policy, agreement, trust, fund\nor arrangement for the benefit of any officer, director, employee, sales\nrepresentative, agent, consultant or Affiliate (whether or not legally\nbinding);\n(i)  suffered any damage, destruction or loss (whether\nor not covered by insurance), or any strike or other employment-related\nproblem, or any change in relations with or any loss of a supplier, customer or\nemployee, that, individually or in the aggregate, would reasonably be expected\nto <\/b>have or result in a Material\nAdverse Effect;\n(j)  amended or\nmodified any of its Organizational Documents;\n(k)  changed in\nany respect its accounting policies or principles, except as required by GAAP\nor applicable Tax Law;\n(l)  transferred\nor granted any rights or licenses under, or entered into any settlement\nregarding the infringement of, Alibaba Intellectual Property or entered into or\nmodified any licensing or similar agreements or arrangements, in each case,\nother than in the Ordinary Course of Business;\n(m)  sold any\nassets with a value in excess of US$500,000 in each case or US$500,000 in the\naggregate, other than inventory in the Ordinary Course of Business;\n(n)  taken any\naction or omitted to take any action that would result or has resulted in the\noccurrence of any of the foregoing.\n
3.9  Tax Matters<\/u>. (a)  Except as set forth on Section 3.9(a) of\nthe Alibaba Disclosure Schedule, (i) all Tax Returns relating to each\nmember of the Alibaba Group or the business or assets thereof that were\nrequired to be filed on or before the date hereof or the Closing Date, as the\ncase may be, have been (or by the Closing Date will be) duly and timely filed\nand are (or will be) correct and complete in all material respects, (ii) all\nTaxes shown as owing on such Tax Returns have been (or by the Closing Date will\nhave been) paid and (iii) no member of the Alibaba Group is, on the date\nof this Agreement, the beneficiary of any extension of time within which to\nfile any Tax Return. (b)  Except as set forth on Section 3.9(b) of\nthe Alibaba Disclosure Schedule, (i) all material Taxes that are payable\nby any member of the Alibaba Group or chargeable as a Lien upon its assets as\nof the date hereof or the Closing Date, as the\n<\/p>
24<\/p>\n\n\n\ncase may be, have been duly and timely paid or reflected on the Alibaba\nFinancial Statements or the Tao Bao Financial Statements, (ii) each member\nof the Alibaba Group has duly and timely withheld all material Taxes required\nto be withheld in connection with its business or assets, and such withheld\nTaxes have been either duly and timely paid to the proper Governmental\nAuthorities or properly set aside in accounts for such purpose and (iii) the\nAlibaba Financial Statements and the Tao Bao Financial Statements reflect an\nadequate reserve for all Taxes payable or asserted to be payable by the Alibaba\nGroup for all taxable periods or portions thereof through the date of the\nAlibaba Financial Statements and the Tao Bao Financial Statements.\n(c)  Except as set forth on Section 3.9(c) of\nthe Alibaba Disclosure Schedule, there has been no claim or issue (other than a\nclaim or issue that has been finally settled) concerning any material liability\nfor Taxes of any member of the Alibaba Group asserted, raised or threatened in\nwriting by any taxing authority.\n(d)\nSection 3.9(d)\nof the Alibaba\nDisclosure Schedule\nlists all Income Tax Returns that have been filed with\nrespect to any member of the Alibaba Group for taxable periods ended on or\nafter December\n31, 2003 and that have not yet been audited or are\ncurrently the subject of audit.\n(e)\nExcept as set forth on Section 3.9(e)\nof\nthe Alibaba Disclosure Schedule, no member of the Alibaba Group has (i) waived\nany statute of limitations, (ii) agreed to any extension of the period for\nassessment or collection or (iii)\nexecuted or filed any power of attorney\nwith respect to Taxes, which waiver, agreement or power of attorney is\ncurrently in force.\n(f)\nExcept as set forth on Section 3.9(f)\nof\nthe Alibaba Disclosure Schedule, (i) there are no outstanding adjustments\nfor Income Tax purposes applicable to any member of the Alibaba Group required\nas a result of changes in methods of accounting effected on or before the\nClosing Date and (ii) no material elections for Income Tax purposes have\nbeen made by any member of the Alibaba Group that are currently in force or by\nwhich any member of the Alibaba Group is bound.\n(g)\nExcept as set forth in Section 3.9(g)\nof\nthe Alibaba Disclosure Schedule, no member of the Alibaba Group (i) is a\nparty to or bound by or has any obligation under any Tax allocation, sharing,\nindemnity or similar agreement or arrangement or (ii) is or has been a\nmember of any group of companies filing a consolidated, combined or unitary\nIncome Tax Return.\n
3.10  Assets<\/u>.  The members of the Alibaba Group collectively\nown, or otherwise have full, sufficient and legally enforceable rights to use,\nall of the material properties, assets and rights (real, personal or mixed,\ntangible or intangible), used or held for use in connection with their\nrespective business.<\/p>
25<\/p>\n\n\n\n\n\n\n\n\n3.11  Real Property<\/u>. (a)  Owned Real Property<\/u>.  Section 3.11(a) of the Alibaba\nDisclosure Schedule\ncontains a complete and correct list of all Owned Real\nProperty of each member of the Alibaba Group setting forth the address and\nowner of each parcel of Owned Real Property. \nEach member of the Alibaba Group has good and marketable fee simple\ntitle to the Owned Real Property, free and clear of any Lien other than\nPermitted Liens and other than as set forth in Section 3.11(a) of the\nAlibaba Disclosure Schedule.\n(b)  Leases<\/u>.  Section 3.11(b) of the Alibaba\nDisclosure Schedule\ncontains a complete and correct list of all Leases of\neach member of the Alibaba Group setting forth the address, landlord, tenant\nand expiration date for each Lease. \nAlibaba has made available to Yahoo! correct and complete copies of the\nLeases.  Each Lease is legal, valid,\nbinding, in full force and effect and enforceable against each party thereto,\nexcept to the extent that any failure to be so enforceable, individually and in\nthe aggregate, would not reasonably be expected to have or result in a Material\nAdverse Effect.  No member of the Alibaba\nGroup is, and to the knowledge of any member of the Alibaba Group, no other\nparty is, in default, violation or breach in any respect under any Lease, and\nno event has occurred and is continuing that constitutes or, with notice or the\npassage of time or both, would constitute a default, violation or breach in any\nrespect under any Lease, except to the extent such default, violation or breach\nwould not reasonably be expected to have a Material Adverse Effect.  Each Lease grants the tenant under the Lease\nthe right to use and occupy the premises and rights demised and intended to be\ndemised thereunder.  Each member of the\nAlibaba Group has title to the leasehold interests under its respective Leases,\nfree and clear of any Lien, except Permitted Liens.  Each member of the Alibaba Group enjoys\npeaceful and undisturbed possession in all material respects under its\nrespective Leases for the Leased Real Property.\n(c)  No Proceedings<\/u>.  Except as would not be reasonably expected to\nhave a Material Adverse Effect, (i) there are no proceedings in eminent\ndomain or other similar proceedings pending or, to the knowledge of any member\nof the Alibaba Group, threatened affecting any portion of the Real Property and\n(ii) there exists no writ, injunction, decree, order or judgment\noutstanding, nor any Litigation, pending or threatened, relating to the\nownership, lease, use, occupancy or operation by any Person of any Real\nProperty.\n(d)\nCurrent Use<\/u>.  The use and operation of the Real Property in\nthe conduct of its business does not violate in any material respect any\ninstrument of record or agreement affecting the Real Property.  There is no material violation of any\ncovenant, condition, restriction, easement or agreement or order of any\nGovernmental Authority that affects the Real Property or the ownership,\noperation, use or occupancy thereof.  No\nmaterial damage or destruction has occurred with respect to any of the Real\nProperty that, individually or in the aggregate, would reasonably be expected\nto have or result in a Material Adverse Effect.\n
26<\/p>\n\n\n\n\n\n\n3.12  Contracts<\/u>. (a)  Disclosure<\/u>.  Except as set forth in Section 3.12(a) of\nthe Alibaba Disclosure Schedule, as of the date hereof, no member of the\nAlibaba Group is a party to or bound by any Material Contract.  Alibaba has made available to Yahoo! complete\nand correct copies of all written Material Contracts, and accurate descriptions\nof all material terms of all oral Material Contracts, set forth or required to\nbe set forth in Section 3.12(a) of the Alibaba Disclosure\nSchedule.  Except as set forth in Section 3.12(a) of\nthe Alibaba Disclosure Schedule, to the knowledge of any member of the Alibaba\nGroup, there is no agreement among the Key Executives or between the Key\nExecutives and Alibaba relating to the ownership, voting or disposition of the\nshares of Alibaba held by the Key Executives or the exercise of rights under\nthis Agreement or any of the Ancillary Agreements.  Except as set forth in Section 3.12(a) of\nthe Alibaba Disclosure Schedule, no member of the Alibaba Group is a party to\nany Contract (other than this Agreement, the Ancillary Agreements and any agreement\nrelating to the transfer of COAL to Alibaba) that, as a result of the\nconsummation of the transactions contemplated by this Agreement and the\nAncillary Agreements, would impose any material obligations or duties on Yahoo!\nor its Subsidiaries (other than the China Group) following the Closing Date.\n(b)  Enforceability<\/u>.  All Material Contracts are legal, valid,\nbinding, in full force and effect and enforceable against each party thereto,\nexcept to the extent that any failure to be enforceable, individually and in\nthe aggregate, would not reasonably be expected to have or result in a Material\nAdverse Effect.  As of the date hereof,\nno member of the Alibaba Group is in material violation, breach or default\nunder, nor is there any event or condition that, after notice or lapse of time\nor both, would constitute a material violation, material breach or material\ndefault thereunder, on the part of any member of the Alibaba Group or, to the\nknowledge of any member of the Alibaba Group, any other Person.  Except as set forth in Section 3.12(b) of\nthe Alibaba Disclosure Schedule, no Material Contract contains any change of\ncontrol or other terms or conditions that will become applicable or\ninapplicable as a result of the consummation of the transactions contemplated\nby this Agreement and the Ancillary Agreements.\n
3.13  Intellectual Property<\/u>. (a)  Disclosure<\/u>.  Section 3.13(a) of the Alibaba\nDisclosure Schedule sets forth a complete and correct list of all\nIntellectual Property registrations or applications, filed before any\ngovernmental Intellectual Property office, that are material to the business of\nthe Alibaba Group and is owned by any member of the Alibaba Group. (b)  Title<\/u>.  Each member of the Alibaba Group owns the\nAlibaba Intellectual Property free and clear of any Lien, other than Permitted\nLiens and licenses.  Except as expressly\nprovided elsewhere in this Agreement or in the Ancillary Agreements,\nimmediately after the Closing, the Alibaba Group shall own all the Alibaba\nIntellectual Property, in each case, free and clear of all Liens, other than\nPermitted Liens and licenses, on the same terms and conditions as in effect\nprior to the Closing.\n<\/p>
27<\/p>\n\n\n\n\n\n\n(c)  Licensing and Similar Arrangements<\/u>.  Section 3.13(c) of the Alibaba\nDisclosure Schedule sets forth all material written agreements and\narrangements (other than licenses for commercially available software having\nfees, whether up-front or annual, in the aggregate, of less than $50,000) (i) pursuant\nto which any member of the Alibaba Group has licensed Alibaba Intellectual\nProperty to, or the use of such Alibaba Intellectual Property is otherwise\npermitted (through non-assertion, settlement or similar agreements or\notherwise) by, any other Person, and (ii) pursuant to which any member of\nAlibaba Group currently has Intellectual Property licensed to it, or is\notherwise permitted to use Intellectual Property (through non-assertion,\nsettlement or similar agreements or otherwise). \nAll of the agreements and arrangements set forth or required to be set\nforth in Section 3.13(c) of the Alibaba Disclosure Schedule: (x<\/u>)\nare\nin full force and effect and enforceable in accordance with their terms except\nto the extent any failure to be enforceable, individually or in the aggregate,\nwould not reasonably be expected to have or result in a Material Adverse\nEffect, (y<\/u>) no default exists or is threatened thereunder by any member\nof the Alibaba Group, or to the knowledge of the Alibaba Group, by any other\nPerson, except for such defaults that, individually and in the aggregate, would\nnot reasonably be expected to have or result in a Material Adverse Effect, or\nto materially impair the ability of any member of the Alibaba Group to perform\nits respective obligations hereunder and under the Ancillary Agreements, and (z<\/u>)\ndo\nnot contain any change in control or other terms or conditions that will\noperate to terminate, or otherwise adversely affect any right currently\navailable to members of the Alibaba Group holding such rights as a result of the\nconsummation of the transactions contemplated by this Agreement and the\nAncillary Agreements.  Alibaba has made\navailable to Yahoo! complete and correct copies of all licenses and\narrangements (including amendments, supplements, waivers and other modifications)\nset forth or required to be set forth in Section 3.13(c) of the\nAlibaba Disclosure Schedule.\n(d)\nNo Infringement<\/u>.  Except as set forth in Section 3.13(d)\nof\nthe Alibaba Disclosure Schedule\nand except as would have a Material\nAdverse Effect, the conduct of its business as presently conducted does not\ninfringe or misappropriate any rights of any Person in respect of any\nIntellectual Property.  Except as set\nforth in Section 3.13(d)\nof the Alibaba Disclosure Schedule, none of\nthe Alibaba Intellectual Property is being infringed or misappropriated by any\nPerson, except in each case as would not reasonably be expected to have or\nresult in a Material Adverse Effect.\n(e)\nNo Intellectual Property Litigation<\/u>.  Except as set forth in Section 3.13(e)\nof\nthe Alibaba Disclosure Schedule, no written claim or demand by any Person has\nbeen made or, to the knowledge of any member of the Alibaba Group, threatened,\nnor is there any Litigation that is pending or, to the knowledge of any member\nof the Alibaba Group, threatened against any member of the Alibaba Group, that (i) challenges\nthe rights of any member of the Alibaba Group in respect of any Alibaba\nIntellectual Property, (ii) asserts that any member of the Alibaba Group\nis infringing or misappropriating, or (except pursuant to the license\nagreements required to be set forth in Section 3.13(c) of the Alibaba\nDisclosure Schedule) is required to pay any royalty, license fee, charge or\nother amount with regard to, any Intellectual\n
28<\/p>\n\n\n\n\n\nProperty, or (iii) claims that any default exists under any\nagreement or arrangement set forth or required to be set forth in Section 3.13(c) of\nthe Alibaba Disclosure Schedule, that, individually or in the aggregate, would\nreasonably be expected to have or result in a Material Adverse Effect.  None of the Alibaba Intellectual Property is\nsubject to any outstanding order, ruling, decree, judgment or stipulation by or\nwith any court, tribunal, arbitrator or other Governmental Authority.\n(f)\nDue Registration, Etc<\/u>.  Except as set forth in Section 3.13(f)\nof\nthe Alibaba Disclosure Schedule, the Alibaba Intellectual Property has been\nduly registered with, filed in or issued by, as the case may be, China\u0092s State\nPatent Bureau, State Trademark Bureau, State Copyright Bureau or other filing\noffices, domestic or foreign, to the extent necessary or desirable to ensure\nprotection under any applicable Law, and such registrations, filings, issuances\nand other actions remain in full force and effect, in each case, to the extent\nmaterial to the business of the Alibaba Group and in accordance with the\nexercise of reasonable business judgment. \n\nThe Alibaba Group takes reasonable measures to protect the confidentiality\nof its trade secrets, including requiring their employees to execute written\nagreements covering the protection of trade secrets and intellectual property\nand non-competition, substantially in the form made available to Yahoo!.\n
3.14  Insurance<\/u>.  Section 3.14 of the Alibaba Disclosure Schedule contains\na complete and correct list of all insurance policies maintained by any member\nof the Alibaba Group.  Alibaba has made\navailable to Yahoo! complete and correct copies of all such policies together\nwith all riders and amendments thereto. \nSuch scheduled policies and all other policies maintained during the\npast three years are in full force and effect with respect to the time periods\ncovered thereunder, and all premiums due thereon have been paid.  Each member of the Alibaba Group has complied\nin all material respects with the terms and provisions of such scheduled\npolicies and such other policies.  The\ninsurance coverage provided by such policies is adequate and suitable for the\nbusiness of the respective member of the Alibaba Group, except where the\nfailure to obtain such coverage would not reasonably be expected to have a\nMaterial Adverse Effect.\n<\/p>
3.15  Litigation<\/u>.  Except as set forth on Section 3.15 of\nthe Alibaba Disclosure Schedule, as of the date hereof, there is no Litigation\npending or, to the knowledge of any member of the Alibaba Group, threatened by,\nagainst or affecting any member of the Alibaba Group or any of its properties\nor assets, that, individually or in the aggregate, would reasonably be expected\nto have or result in a Material Adverse Effect. \nThere are no outstanding orders, judgments, decrees or injunctions\nissued by any Governmental Authority against any member of the Alibaba Group\nthat would reasonably be expected to have or result in a Material Adverse\nEffect.\n<\/p>
3.16  Compliance with Laws and Instruments;\nConsents<\/u>. (a)  Compliance<\/u>.  Except as set forth in Section 3.16(a) of\nthe Alibaba Disclosure Schedule, since January 1, 2004, each member of the\nAlibaba Group is not, and has not been, in conflict with or in violation or breach\nof or default \n<\/p>
29<\/p>\n\n\n\n\n\n\nunder (and there exists no event that, with notice or passage of time\nor both, would constitute a conflict, violation, breach or default with, of or\nunder) (x<\/u>) any Law applicable to it or any of its properties,\nassets, operations or business, (y<\/u>)\nany provision of its\nOrganizational Documents, or (z<\/u>)\nany Contract, or any other\nagreement or instrument to which it is a party or by which it or any of its\nproperties or assets is bound or affected, and no member of the Alibaba Group\nhas received any notice or has any knowledge of any claim alleging any such\nconflict, violation, breach or default, except, in the case of clauses (x) and\n(z) of this Section 3.16, for any such conflict, contravention, violation,\nbreach, default or other occurrence which would not reasonably be expected  to have a Material Adverse Effect.  This Section 3.16 is not intended to\naddress any matter related to the topics described in Section 3.9 (Tax\nMatters), 3.11 (Real Property), 3.17 (Environmental Matters), 3.19 (Employees,\nLabor Matters), 3.20 (Employee Benefit Plans and Related Matters), or 3.24\n(Corrupt Practices).\n (b)  Consents<\/u>. (i)  Except as specified in Section 3.16(b)(i) of\nthe Alibaba Disclosure Schedule, no Governmental Approval or other Consent is\nrequired to be obtained or made by any member of the Alibaba Group in\nconnection with the execution and delivery of this Agreement and the Ancillary\nAgreements or the consummation of the transactions contemplated hereby or\nthereby, except where the failure to obtain such approval or consent would not\nbe reasonably expected to have a Material Adverse Effect. (ii)  Section 3.16(b)(ii) of the\nAlibaba Disclosure Schedule contains a complete and correct list of all material\nGovernmental Approvals and other Consents necessary for, or otherwise material\nto, the conduct of the business of the Alibaba Group.  All such Governmental Approvals and other\nConsents have been duly obtained and are held by a member of the Alibaba Group\nand are in full force and effect.  Each\nmember of the Alibaba Group is, and at all times has been, in compliance with\nall Governmental Approvals and other Consents held by such member, except for\nsuch failures to comply that, individually and in the aggregate, would not\nreasonably be expected to have or result in a Material Adverse Effect.  There is no Litigation pending or, to the\nknowledge of any member of the Alibaba Group, threatened that would result in\nthe revocation, cancellation, suspension or modification or nonrenewal of any\nmaterial Governmental Approval or Consent; Alibaba has not been notified that\nany material Governmental Approval or Consent will be modified, suspended or\ncancelled or cannot be renewed in the Ordinary Course of Business; and there\nis, to the knowledge of any member of the Alibaba Group, no reasonable basis\nfor any such revocation, cancellation, suspension, modification or nonrenewal,\nin each case except where such revocation, cancellation, suspension,\nmodification or nonrenewal would not be reasonably expected to have or result\nin a Material Adverse Effect.\n (c)  Governmental Filings<\/u>.  Each registration, report, statement, notice\nor other filing required to be filed by any member of the Alibaba Group with
30<\/p>\n\n\n\n\n\n\nany Governmental Authority under any applicable Law affecting the\nbusiness of the Alibaba Group has been filed, and when filed complied and\ncontinues to comply with applicable Law, except to the extent that any failure\nto so file or comply would not be reasonably expected to have or result in a\nMaterial Adverse Effect.
3.17  Environmental Matters<\/u>.  Each member of the Alibaba Group has\nmaterially complied and is in material compliance with all applicable material\nEnvironmental Laws pertaining to any of the properties and assets of such\nmember (including the Real Property) and the use and ownership thereof, and to\nthe operation of its business.  To the\nknowledge of any member of the Alibaba Group, no violation by any member of the\nAlibaba Group is being alleged of any applicable Environmental Law relating to\nany of the properties and assets of the Alibaba Group or the use or ownership\nthereof, or to the operation of its business. \nExcept as would not be reasonably expected to have a Material Adverse\nEffect, no member of the Alibaba Group used, generated, treated, stored,\nrecycled or disposed of any hazardous substances on any property now owned,\noperated or leased by any member of the Alibaba Group.\n<\/p>
3.18  Affiliate Transactions<\/u>. (a)  Section 3.18(a) of the Alibaba\nDisclosure Schedule contains a complete and correct list of all\nagreements, contracts, arrangements, understandings, Indebtedness, transfers of\nassets or liabilities or other commitments or transactions, whether or not\nentered into in the Ordinary Course of Business, to or by which (i) any\nmember of the Alibaba Group, on the one hand, and any of its Affiliates or any\nmember of Alibaba\u0092s management or any of their respective Affiliates or Family\nMembers, on the other hand, or (ii) any member of Alibaba\u0092s management, on\nthe one hand, and any other member of Alibaba\u0092s management or any of Alibaba\u0092s\nAffiliates, on the other hand, are or have been a party or otherwise bound or\naffected, and that involve continuing liabilities and obligations that,\nindividually or in the aggregate, have been, are or will be material to or from\nany member of the Alibaba Group.  Each\nagreement, contract, arrangement, understanding, Indebtedness, transfer of\nassets or liabilities or other commitment or transaction set forth or required\nto be set forth in Section 3.18(a) of the Alibaba Disclosure Schedule was\non terms and conditions as favorable to Alibaba as would have been reasonably\nobtained by it at the time in a comparable arm\u0092s-length transaction with a\nPerson other than any of its Affiliates. \n\nTrue and complete copies of each such agreement have been made available\nto Yahoo!. (b)  No stockholder, officer, director or\nemployee of any member of the Alibaba Group, or any family member, relative or\nAffiliate of any such stockholder, officer, director or employee, (i) owns,\ndirectly or indirectly, and whether on an individual, joint or other basis, any\ninterest in (x<\/u>) any property or asset, real or personal, tangible\nor intangible, used in or held for use in connection with or pertaining to the\nbusiness of the Alibaba Group, or (y<\/u>) any Person, that is a\nsupplier, customer or competitor of any member of the Alibaba Group, (ii) serves\nas an officer, director or employee of any Person that is a supplier, customer\nor competitor of any \n<\/p>
31<\/p>\n\n\n\n\n\n\nmember of the Alibaba Group or (iii)has received any loans from\nor is otherwise a debtor of, or made any loans to or is otherwise a creditor\nof, any member of the Alibaba Group.\n
3.19  Employees, Labor Matters, etc<\/u>.  No member of the Alibaba Group is a party to\nor bound by any collective bargaining agreement, and there are no labor unions\nor other organizations representing, purporting to represent or, to the knowledge\nof any member of the Alibaba Group, attempting to represent any employees\nemployed by any member of the Alibaba Group. \n\nSince January 1, 2004, there has not occurred or been threatened\nany strike, slowdown, picketing, work stoppage, concerted refusal to work\novertime or other similar concerted labor activity with respect to any\nemployees of any member of the Alibaba Group. \nThere are no labor disputes currently subject to any grievance\nprocedure, arbitration or litigation and there is no representation petition\npending or threatened with respect to any employee of Alibaba.  The Alibaba Group has complied with all\napplicable Laws pertaining to the employment or termination of employment of\ntheir respective employees, including, without limitation, all such Laws\nrelating to labor relations, equal employment opportunities, fair employment\npractices, prohibited discrimination or distinction and other similar\nemployment activities, except for any failure so to comply that, individually\nand in the aggregate, would not reasonably be expected to have or result in a\nMaterial Adverse Effect.\n<\/p>
3.20  Employee Benefit Plans and Related Matters<\/u>.  Neither any member of the Alibaba Group nor\nany of its Subsidiaries has any Benefit Plans subject to the Law of the United\nStates.  With respect to each Benefit\nPlan: (a)  all employer and employee contributions to\neach Benefit Plan required by applicable Law or by the terms of such Benefit\nPlan have been made, or, if applicable, accrued in accordance with GAAP; (b)  the fair market value of the assets of each\nfunded Benefit Plan, the liability of each insurer for any Benefit Plan funded\nthrough insurance or the book reserve established for any Benefit Plan,\ntogether with any accrued contributions, are sufficient to procure or provide\nfor the accrued benefit obligations, as of the Closing Date, with respect to\nall current and former participants in such plan according to the actuarial\nassumptions and valuations most recently used to determine employer\ncontributions to such Benefit Plan and none of the transactions contemplated by\nthis Agreement and the Ancillary Agreements shall cause such assets or\ninsurance obligations to be less than such benefit obligations; and (c)  each of the Benefit Plans has been operated\nand administered in all respects in compliance with its terms, all applicable\nLaws and all applicable collective bargaining agreements, except for any\nfailure so to comply that, individually and in the aggregate, would not\nreasonably be expected to result in a material liability or obligation on the\npart of any member of the Alibaba Group, or to have or result in a Material\nAdverse Effect.  There are no material\npending or, to the knowledge of any member of the Alibaba Group, threatened\nclaims by or on behalf of\n<\/p>
32<\/p>\n\n\n\n\n\n\nany of such Benefit Plan, by any employee of any member of the Alibaba\nGroup or otherwise involving any such Benefit Plan or the assets of any such\nBenefit Plan (other than routine claims for benefits, all of which have been\nfully reserved for on the regularly prepared balance sheets of the Alibaba\nGroup).
3.21  Accounts Receivable<\/u>.  All accounts receivable reflected on the\nAlibaba Balance Sheet and the Tao Bao Balance Sheet have been generated in the\nOrdinary Course of Business and reflect a bona fide obligation for the payment\nof goods or services provided by the Alibaba Group.<\/p>
3.22  Bank Accounts<\/u>.  Section 3.22 of the Alibaba Disclosure Schedule sets\nforth a complete and correct list containing the names set forth of each bank\nin which Alibaba has an account or safe deposit or lock box and the account or\nbox number, as the case may be.<\/p>
3.23  Brokers, Finders, etc<\/u>.  All negotiations relating to this Agreement,\nthe Ancillary Agreements and the transactions contemplated hereby and thereby\nhave been carried on without the participation of any Person acting on behalf\nof any member of the Alibaba Group in such a manner as to, and the transactions\ncontemplated hereby and thereby will not otherwise, give rise to any valid\nclaim against any member of the Alibaba Group or Yahoo! for any brokerage or\nfinder\u0092s commission, fee or similar compensation, or for any bonus payable to\nany officer, director, employee, agent or representative of or consultant to\nthe Alibaba Group upon consummation of the transactions contemplated hereby or\nthereby, other than the fee payable to Seraphin Capital Limited, which will be\npaid solely by Alibaba.\n<\/p>
3.24  Corrupt Practices<\/u>.  Neither any member of the Alibaba Group, nor,\nto the knowledge of any member of the Alibaba Group, any of its officers,\nemployees, directors, representatives or agents has within the past three years\nknowingly offered, promised, authorized or made, directly or indirectly, (i) any\nunlawful payments or (ii) payments or other inducements to any\ngovernmental officials, including any official of any entity owned or\ncontrolled by a government, with the intent or purpose of: (a)  influencing any act or decision of such\nofficial in his official capacity; (b)  inducing such official to do or omit to do\nany act in violation of the lawful duty of such official; or (c)  inducing such official to use his influence\nwith a government or instrumentality thereof to affect or influence any act or\ndecision of such government or instrumentality; in order to assist Yahoo! or any member of the China\nGroup in obtaining or retaining business for or with, or directing business to,\nany Person.  To the knowledge of any\nmember of the Alibaba Group, no such payments or other inducements have been\n<\/p>
33<\/p>\n\n\n\n\n\n\n
provided to government officials described above in\nviolation of any applicable Law against improper payments or inaccurate\nrecordkeeping.<\/p>\n\n
<\/p>
<\/p>\n\n3.25  Insolvency<\/u>. (a)  No order has been made and no resolution has\nbeen passed for the winding up of any member of the Alibaba Group, or for a\nprovisional liquidator to be appointed in respect of any member of the Alibaba\nGroup and, so far as any member of the Alibaba Group is aware, no petition has\nbeen presented and no meeting has been convened for the purpose of winding up\nany member of the Alibaba Group. (b)  No receiver (which expression shall include\nan administrative receiver) has been appointed in respect of any member of the\nAlibaba Group or all or any of their respective assets or properties. (c)  No member of the Alibaba Group is insolvent\nand\/or has stopped paying debts as they fall due. (d) No guarantee, loan capital, borrowed money\nor interest for which any member of the Alibaba Group is liable is overdue for\npayment and no other obligation or Indebtedness of any member of the Alibaba\nGroup is outstanding which is substantially overdue for performance or payment.\n(e)\nSo far as any member of the Alibaba Group is\naware, no distress, execution or other process for the execution of a court\njudgment has been levied against any member of the Alibaba Group that has not\nbeen satisfied in full.  So far as any\nmember of the Alibaba Group is aware, no unsatisfied judgment is outstanding\nagainst any member of the Alibaba Group.\n(f)\nSo far as any member of the Alibaba Group is\naware, no floating charge, except for Permitted Liens, has been created by any\nmember of the Alibaba Group over their respective assets or properties.\n
3.26  Disclosure<\/u>.  This Agreement and each Ancillary Agreement,\nand each certificate or other instrument or document furnished by or on behalf\nof any member of the Alibaba Group to Yahoo! or any agent or representative of\nYahoo! pursuant hereto or in connection herewith, taken as a whole, do not\ncontain any untrue statement of a material fact or omit to state a material\nfact required to be stated herein or therein or necessary to make the\nstatements contained herein or therein in light of the circumstances under\nwhich they were made, not misleading.  No\nmember of the Alibaba Group knows of any fact (other than matters of a general\neconomic or political nature that do not affect the business of the Alibaba\nGroup uniquely or that are set forth in Section 3.26 of the Alibaba\nDisclosure Schedule) that would reasonably be expected to have or result in, a\nMaterial Adverse Effect.<\/p>
34<\/p>\n\n\n4.                                       Covenants of Yahoo!<\/u>.
4.1  Conduct of Business<\/u>.  On and after the date hereof to the Closing\nDate, except as expressly required by this Agreement or as otherwise expressly\nconsented to by Alibaba in writing (such consent not to be unreasonably\nwithheld, conditioned or delayed), Yahoo! will (solely with respect to the\nChina Business), and will cause each member of the China Group to: (a)  carry on the China Business in, and only in,\nthe Ordinary Course of Business, in substantially the same manner as heretofore\nconducted, and use reasonable efforts to preserve intact the China Intellectual\nProperty, its present information technology system, business and condition and\nbusiness organization, keep available the services of its present officers and\nsignificant employees, and preserve its relationships with customers, suppliers\nand others having business dealings with it; (b)  not declare dividends or other distributions\non, or redeem or repurchase any shares of, any class of share capital of any\nmember of the China Group, make capital expenditures, prepay any accounts\npayable, delay payment of any trade payables or make any other cash payments,\nin each case other than in the Ordinary Course of Business; (c)  use reasonable efforts to maintain all of\nthe tangible Assets and all other tangible properties and assets owned, leased,\noccupied, operated or used by it in good repair, working order and operating\ncondition subject only to ordinary wear and tear; (d)  not sell, transfer, assign, mortgage,\npledge, hypothecate, grant any security interest in, or otherwise subject to\nany other Lien (other than Permitted Liens), any of its Assets, other than in\nthe Ordinary Course of Business; (e)  use reasonable efforts to keep in full force\nand effect insurance comparable in amount and scope of coverage to insurance\nnow carried by it; (f)   pay accounts payable and other obligations,\nwhen they become due and payable, in the Ordinary Course of Business; (g) perform in all material respects all of its\nobligations under any Contracts, agreements or other instruments relating to or\naffecting the Assets or the China Business; (h) not enter into or assume any Contract that\nwould constitute an Intellectual Property Contract that is material to the\nChina Business or a Material Contract, or enter into or permit any amendment,\nsupplement, waiver or other modification in respect thereof or in respect of\nany Intellectual Property Contract that is material to the China Business or\nany Material Contract;\n<\/p>
35<\/p>\n\n\n\n\n\n\n(i)  maintain its books of account and records in\nthe usual, regular and ordinary manner consistent with past policies and\npractice; (j)  comply in\nall material respects with all Laws applicable to the Assets or the China\nBusiness;\n(k)  not\ncompromise, settle, grant any waiver or release relating to or otherwise adjust\nany material Litigation;\n(l)  not cause\nor permit any amendment, supplement, waiver or modification to or of any of its\nOrganizational Documents, except to the extent contemplated or required by this\nAgreement or the Ancillary Agreements;\n(m)  use\nreasonable efforts to maintain each member of the China Group\u0092s good standing\nin its jurisdiction of organization and in the jurisdictions in which it is\nqualified to do business as a foreign corporation, except as would not\nreasonably be expected to have a Material Adverse Effect;\n(n)  maintain\nall Governmental Approvals and other Consents necessary for, or otherwise\nmaterial to, the China Business, except where the failure to maintain such\nGovernmental Approvals or other Consents would not be reasonably expected to\nhave a Material Adverse Effect;\n(o)  solely with\nrespect to the China Group, not merge or consolidate with, or agree to merge or\nconsolidate with, or purchase substantially all of the assets of, or otherwise\nacquire, any business, business organization or division thereof, or any other\nPerson;\n(p)  promptly\nadvise Alibaba in writing of any event, occurrence, fact, condition, change,\ndevelopment or effect that, individually or in the aggregate, would reasonably\nbe expected to have or result in a Material Adverse Effect or a breach of this Section 4.1;\n(q)  take such\nactions by and among the China Group on the one hand and the Yahoo! Group\n(excluding the China Group) on the other hand, to (i) repay and satisfy\nintercompany payables and receivables outstanding and (ii) terminate Intercompany\nContracts (a pro forma unaudited balance sheet as of June\n30, 2005 showing\nthe effect of the transactions contemplated by this Section 4.1(q) as if\nsuch transactions had occurred as of such date is attached as Section 4.1(q)(ii) of\nthe Yahoo! Disclosure Schedule);\n(r)  conduct all\nTax affairs relating to the China Group only in the Ordinary Course of\nBusiness, and in good faith in substantially the same manner as such affairs\nwould have been conducted if this Agreement had not been entered into;\n(s)  not issue\nor sell any shares of any class of its share capital, or any securities\nconvertible into or exchangeable for any such shares, or issue, sell,\n
36<\/p>\n\n\n\ngrant or enter into any subscriptions, options, calls, warrants,\nconversion rights, repurchase rights, redemption rights or other rights,\nagreements, commitments, arrangements or understandings of any kind,\ncontingently or otherwise, to purchase or otherwise acquire any such shares or\nany securities convertible into or exchangeable for any such shares; (t)  not incur\nany indebtedness for borrowed money, issue or sell any debt securities or\nprepay any debt (including, without limitation, any borrowings from or\nprepayments to any member of Yahoo! Group), or incur, assume, guarantee or\notherwise become directly or indirectly liable with respect to any liability or\nobligation, in each case other than in the Ordinary Course of Business;\n(u)  not\nforgive, cancel, compromise, waive or release any material debts, claims or\nrights, except for debts, claims and rights against Persons other than any\nmember of Yahoo! Group, which are forgiven, cancelled, compromised, waived or\nreleased in the Ordinary Course of Business;\n(v)\nnot pay any bonus to any officer, director,\nemployee, sales representative, agent or consultant, or grant to any officer,\ndirector, employee, sales representative, agent or consultant any other\nincrease in compensation in any form, except for bonus payments and raises as\nset forth on Section 4.1 of the Yahoo! Disclosure Schedule and except\nin the Ordinary Course of Business;\n(w)  except in\nthe Ordinary Course of Business, not enter into, adopt or amend any employment,\nconsulting, retention, change-in-control, collective bargaining, bonus or other\nincentive compensation, profit-sharing, health or other welfare, stock option\nor other equity, pension, retirement, vacation, severance, deferred\ncompensation or other employment, compensation or benefit plan, policy,\nagreement, trust, fund or arrangement for the benefit of any officer, director,\nemployee, sales representative, agent, consultant or Affiliate (whether or not\nlegally binding);\n(x)  not change\nin any respect its accounting policies or principles, except as required by\nGAAP or applicable Tax Law;\n(y)  not\ntransfer or grant any rights or licenses under, or enter into any settlement\nregarding the infringement of, China Intellectual Property or enter into any\nlicensing or similar agreement or arrangement other than in the Ordinary Course\nof Business;\n(z)  not sell\nany assets with a value in excess of US$500,000 in each case or US$1,000,000 in\nthe aggregate, other than inventory in the Ordinary Course of Business; and\n(aa)  not agree\nor otherwise commit to take any of the actions proscribed in the foregoing\nparagraphs (a) through (z).\n
37<\/p>\n\n\n4.2  No Solicitation<\/u>.  From the date hereof until the Closing Date,\nYahoo! shall not, and shall cause each other member of Yahoo! Group and each\nRepresentative of any member of Yahoo! Group not to, (a) directly or\nindirectly solicit or encourage any inquiries or proposals for, or enter into\nor continue any discussions with respect to, (i) the acquisition by any\nPerson of any of the share capital or other securities of any member of the\nChina Group, or all or any portion of the China Business or of the Assets of\nany member of the China Group, or (ii) the sale, grant, license,\ndisposition, transfer, contribution or acquisition of all or a material portion\nof the properties, assets and rights (real, personal or mixed, tangible or\nintangible) covered by the Technology and Intellectual Property License\nAgreement if such sale, grant, license, disposition, transfer, contribution or\nacquisition would prevent Yahoo! from performing its obligations under the\nTechnology and Intellectual Property License Agreement (any transaction that\nfalls within the description in subparagraph (i) or (ii), \u0093Yahoo!\nAlternative Transaction<\/u>\u0094), or (b) furnish or permit to be furnished\nany non-public information concerning any member of the China Group or its\nbusiness and operations to any Person (other than Alibaba and its\nRepresentatives), other than information furnished in the Ordinary Course of\nBusiness after prior written notice to and consultation with Alibaba.  Yahoo! shall promptly notify Alibaba of any\ninquiry or proposal received by any member of Yahoo! Group or Representative\nthereof with respect to any such Yahoo! Alternative Transaction.  Yahoo! shall immediately cease and cause to\nbe terminated any existing activities, discussions or negotiations with any\nPerson other than Alibaba in respect of any Yahoo! Alternative Transaction.
4.3  Access and Information<\/u>. (a)  So long as this Agreement remains in effect,\nYahoo! will, and will cause each other member of Yahoo! Group to, give Alibaba\nand its Representatives, reasonable access during reasonable business hours to\nall of such Person\u0092s respective properties, assets, books, contracts,\ncommitments, reports and records relating to the China Group, and furnish to\nthem all such documents, records and information with respect to the\nproperties, assets, rights and business of the China Group and copies of any\nsupporting schedules relating thereto as Alibaba shall from time to time\nreasonably request except to the extent prohibited by applicable Law or the\nYahoo! User Privacy Policy.  In addition,\nYahoo! will, and will cause each member of Yahoo! Group to, permit Alibaba and\nits Representatives, reasonable access during reasonable business hours to each\nmember of the China Group.  Yahoo! will,\nand will cause each member of Yahoo! Group to, keep Alibaba generally informed\nas to the affairs of the China Business. (b)  Yahoo! will, and will cause each other\nmember of Yahoo! Group, other than the China Group after the Closing, to,\nretain all books and records relating to the China Group in accordance with\nYahoo!\u0092s record retention policies as presently in effect.  During the three-year period beginning on the\nClosing Date, Yahoo! shall not dispose of or permit the disposal of any such\nbooks and records not required to be retained under such policies without first\ngiving 60 days\u0092 prior written notice to Alibaba offering to surrender the same\nto Alibaba at Alibaba\u0092s expense.<\/p>
38<\/p>\n\n\n\n\n\n\n4.4  Subsequent Financial Statements and\nReports<\/u>.  From the date hereof to and\nincluding the Closing Date, Yahoo! will (i) provide to Alibaba a\nconsolidated China Group (excluding COAL) monthly management report and a\nseparate monthly management report of COAL, in each case in scope and detail\nconsistent with those management reports that have historically been\ndistributed to the senior management of the China Group or the Yahoo! Group,\nand (ii) timely prepare, and promptly deliver to Alibaba, unaudited\nquarterly financial statements, in scope and detail consistent with such\nquarterly financial statements as historically distributed to such senior\nmanagement.  Each such financial\nstatement shall be prepared in accordance with GAAP (subject to year end\nadjustments and except as may be indicated in the notes thereto) and shall\npresent fairly the financial position, assets and liabilities of the\nconsolidated China Group, as well as COAL, as at the date thereof and the\nresults of its operations and its cash flows for the period then ended, in\naccordance with accounting policies and procedures consistent with those\nhistorically used by the China Group in the preparation of financial\nstatements.
4.5  Further Actions<\/u>. (a)  Yahoo! shall, and shall cause each other\nmember of Yahoo! Group to, use reasonable efforts to take or cause to be taken\nall actions, and to do or cause to be done all other things, necessary, proper\nor advisable in order for each member of Yahoo! Group to fulfill and perform\nits obligations in respect of this Agreement and the Ancillary Agreements to\nwhich it is a party, or otherwise to consummate and make effective the\ntransactions contemplated hereby and thereby. (b)  Yahoo! shall, and shall cause each other\nmember of Yahoo! Group to, as promptly as practicable, (i) make, or cause\nto be made, all filings and submissions required under any Law applicable to\nany member of Yahoo! Group, and give such reasonable undertakings as may be\nrequired in connection therewith, and (ii) use reasonable efforts to\nobtain or make, or cause to be obtained or made, all Governmental Approvals and\nConsents necessary to be obtained or made by any member of Yahoo! Group, in\neach case in connection with this Agreement or the Ancillary Agreements, the\ntransfer of the China Business and the purchase of the Primary Shares pursuant\nhereto, or the consummation of the other transactions contemplated hereby or\nthereby.  From the date hereof to and\nincluding the Closing Date, Yahoo! will use reasonable efforts to file, or\ncause to be filed, and concurrently deliver to Alibaba, copies of each\nregistration, report, statement, notice or other filing required to be filed by\nany member of the China Group or Yahoo! with any Governmental Authority under <\/b>any applicable Law.  All such registrations, reports, statements,\nnotices and other filings shall comply with applicable Law, except as would not\nreasonably be expected to have a Material Adverse Effect. (c)  Yahoo! shall, and shall cause each other\nmember of Yahoo! Group to, coordinate and cooperate with Alibaba in exchanging\nsuch information and supplying such reasonable assistance as may be reasonably\nrequested by Alibaba in connection with the filings and other actions\ncontemplated by Section 5.5.<\/p>
39<\/p>\n\n\n\n\n\n\n(d) At all times prior to the Closing Date,\nYahoo! shall promptly notify Alibaba in writing of any fact, condition, event\nor occurrence that could reasonably be expected to result in the failure of any\nof the conditions contained in Sections\n7.1 and 7.2 to be satisfied,\npromptly upon becoming aware of the same. (e)  Yahoo! shall, and shall cause each other\nmember of the Yahoo! Group that is a party to any of the Ancillary Agreements\nto, execute such agreements, in substantially the form attached as an exhibit\nto this Agreement (with such changes or modifications as may be mutually agreed\namong the parties thereto) on or prior to the Closing Date. (f)   Yahoo! shall, and shall cause each other\nmember of the Yahoo! Group to, transfer the owned Intellectual Property between\nthe members of the Yahoo! Group so that as of the Closing (i) all\nIntellectual Property set forth on Section 4.5(f)(i) of the Yahoo!\nDisclosure Schedule is owned by a member of the China Group and (ii) all\nIntellectual Property set forth on Section 4.5(f)(ii) of the Yahoo!\nDisclosure Schedule is owned by Yahoo!.\n
4.6  Further Assurances<\/u>.  Following the Closing Date, Yahoo! shall, and\nshall cause each other member of Yahoo! Group to, from time to time, execute\nand deliver such additional instruments, documents, conveyances or assurances\nand take such other actions as shall be necessary, or otherwise reasonably be\nrequested by Alibaba, to confirm and assure the rights and obligations provided\nfor in this Agreement and the Ancillary Agreements and render effective the\nconsummation of the transactions contemplated hereby and thereby, or otherwise\nto carry out the intent and purposes of this Agreement.<\/p>
4.7  Taxes<\/u>. (a)  Transfer Taxes<\/u>.  All sales, use, value added, transfer, stamp,\ndocumentary, filing, recording, registration, conveyance, license and other\nsimilar Taxes that arise from or are attributable to the transactions\ncontemplated by this Agreement (excluding, for the avoidance of doubt, any\nIncome Taxes) shall be borne 162<\/sup>\/3<\/sub>% by Yahoo! on the one\nhand and 831<\/sup>\/3<\/sub>% by Alibaba on the other hand; provided\nthat amount to be paid by Alibaba hereunder shall not exceed $1,166,666. (b)  Tax Returns<\/u>.  Alibaba shall be responsible for preparing\nany Tax Returns with respect to each member of the China Group for any taxable\nperiod ending on or before the Closing Date that is required to be filed after\nthe Closing Date.  Alibaba shall use\ncommercially reasonable efforts to make such Tax Returns available for review\nand comment by Yahoo! no less than twenty (20) days in advance of the due date\nfor filing such Tax Returns.  In the\nevent any disagreement between Yahoo! and Alibaba with respect to the reporting\nof any item on such Tax Returns cannot be resolved, the Tax Return on which\nsuch item is reflected shall be submitted to an accounting firm of\ninternational reputation mutually agreeable to Alibaba and Yahoo! (the \u0093Accountant<\/u>\u0094)\nfor determination of the proper reporting of such item and any such\ndetermination by the Accountant shall be final. \nThe fees and<\/p>
40<\/p>\n\n\n\n\n
\n\n\n
\n\nexpenses of the Accountant shall be borne equally by Yahoo! and\nAlibaba.  If the Accountant does not\nresolve any differences between Yahoo! and Alibaba with respect to such Tax\nReturn at least 5 days prior to the due date therefor, such Tax Return shall be\nfiled as prepared by Alibaba and thereafter amended to reflect the Accountant\u0092s\nresolution. (c)  Tax Contests<\/u>.  Alibaba shall promptly notify Yahoo! in\nwriting upon receipt by any member of the China Group of notice of any Tax\naudits, examinations or assessments with respect to a taxable period that\nincludes any period prior to the Closing Date, and Yahoo! shall participate in,\nand direct the portion of any such audit, examination or proceeding that\nrelates to a pre-Closing taxable period, provided that without the prior\nwritten consent of Alibaba, which consent shall not be unreasonably withheld,\nYahoo! shall not settle any such audit, examination or proceeding in a manner\nwhich would reasonably be expected to have a material adverse effect on Alibaba\nor any member of the China Group. \n\nAlibaba shall, at its own expense, have the opportunity to participate\nin any such audit, examination or proceeding. \nAlibaba shall control any audit, examination or proceeding (or portion\nthereof) that does not relate to a pre-Closing taxable period. (d)  Books and Records; Cooperation<\/u>.  Yahoo! and Alibaba shall (and shall cause\ntheir respective Affiliates to) (i) provide the other party and its\nAffiliates with such assistance as may be reasonably requested in connection\nwith the preparation of any Tax Return or any audit or other examination by any\ntaxing authority or judicial or administrative proceeding relating to Taxes\nwith respect to each member of the China Group; and (ii) retain (and\nprovide the other party and its Affiliates with reasonable access to) all\nrecords or information which may be relevant to such Tax Return, audit,\nexamination or proceeding, provided that the foregoing shall be done in a\nmanner so as not to interfere unreasonably with the conduct of the business of\nthe parties. (e)  Survival; Limitation; Overlap<\/u>.  The covenants of the parties contained in\nthis Section 4.7 shall survive until thirty (30) days following the date\nthat is fifteen (15) Business Days after the completion of the China Business\nAudit.  To the extent that an obligation\nor responsibility pursuant to Section 9.1 may overlap with an obligation\nor responsibility pursuant to this Section 4.7, the provisions of this Section 4.7\nshall govern such obligation or responsibility, subject to Section 9.2(b).
5.                                       Covenants of Alibaba<\/u>.<\/p>
5.1  Conduct of Business<\/u>.  On and after the date hereof to the Closing\nDate, except as expressly required by this Agreement or the Ancillary\nAgreements or as otherwise expressly consented to by Yahoo! in writing (such\nconsent not to be unreasonably withheld, conditioned or delayed), Alibaba will,\nand will cause each member of the Alibaba Group to: (a)  carry on their respective business in, and\nonly in, the Ordinary Course of Business, in substantially the same manner as\nheretofore conducted, and<\/p>
41<\/p>\n\n\n\n\n\nuse reasonable efforts to preserve intact its present business\norganization, keep available the services of its present officers and\nsignificant employees, and preserve its relationships with customers, suppliers\nand others having business dealings with it; (b)  not declare dividends or other distributions\non, or redeem or repurchase any shares of, any class of share capital of any\nmember of the Alibaba Group, make capital expenditures, prepay any accounts\npayable, delay payment of any trade payables other than in the Ordinary Course\nof Business or make any other cash payments, in each case other than in the\nOrdinary Course of Business; (c)  use reasonable efforts to maintain all of\nthe tangible assets and all other tangible properties and assets owned, leased,\noccupied, operated or used by it in good repair, working order and operating\ncondition subject only to ordinary wear and tear; (d)  not sell, transfer, assign, mortgage,\npledge, hypothecate, grant any security interest in, or otherwise subject to\nany other Lien (other than Permitted Liens), any of its assets, other than in\nthe Ordinary Course of Business; (e)  use reasonable efforts to keep in full force\nand effect insurance comparable in amount and scope of coverage to insurance\nnow carried by it; (f)   pay accounts payable and other obligations,\nwhen they become due and payable, in the Ordinary Course of Business; (g)\nperform in all material respects all of its\nobligations under any Contracts, agreements or other instruments relating to or\naffecting the properties, assets or business of the Alibaba Group;\n(h)\nnot enter into or assume any Contract that\nwould constitute an Intellectual Property Contract that is material to the\nbusiness of the Alibaba Group or a Material Contract, or enter into or permit\nany amendment, supplement, waiver or other modification in respect thereof or\nin respect of any Intellectual Property Contract that is material to the\nbusiness of the Alibaba Group or any Material Contract; (i)  maintain its books of account and records in\nthe usual, regular and ordinary manner consistent with past policies and\npractice;\n(j)  comply in\nall material respects with all Laws applicable to it or the properties, assets\nor business of the Alibaba Group;\n(k)  not\ncompromise, settle, grant any waiver or release relating to or otherwise adjust\nany material Litigation;\n(l)  not cause\nor permit any amendment, supplement, waiver or modification to or of any of its\nOrganizational Documents, except to the extent contemplated or required by this\nAgreement or the Ancillary Agreements;\n
42<\/p>\n\n\n\n\n\n\n\n(m)  use\nreasonable efforts to maintain each member of the Alibaba Group\u0092s good standing\nin its jurisdiction of organization and in the jurisdictions in which it is\nqualified to do business as a foreign corporation, except as would not be reasonably\nexpected to have a Material Adverse Effect; (n)  maintain\nall Governmental Approvals and other Consents necessary for, or otherwise\nmaterial to, the business of the Alibaba Group, except where the failure to\nmaintain such Governmental Approvals or other Consents would not reasonably be\nexpected to have a Material Adverse Effect;\n(o)  not merge\nor consolidate with, or agree to merge or consolidate with, or purchase\nsubstantially all of the assets of, or otherwise acquire, any business,\nbusiness organization or division thereof, or any other Person;\n(p)  promptly\nadvise Yahoo! in writing of any event, occurrence, fact, condition, change,\ndevelopment or effect that, individually or in the aggregate, would reasonably\nbe expected to have or result in a Material Adverse Effect or a breach of this Section 5.1;\n(q)  conduct all\nTax affairs relating to Alibaba only in the Ordinary Course of Business, and in\ngood faith in substantially the same manner as such affairs would have been\nconducted if this Agreement had not been entered into;\n(r)  not issue\nor sell any shares of any class of its share capital, or any securities\nconvertible into or exchangeable for any such shares, or issue, sell, grant or\nenter into any subscriptions, options, calls, warrants, conversion rights,\nrepurchase rights, redemption rights or other rights, agreements, commitments,\narrangements or understandings of any kind, contingently or otherwise, to\npurchase or otherwise acquire any such shares or any securities convertible\ninto or exchangeable for any such shares;\n(s)  not incur\nany indebtedness for borrowed money, issue or sell any debt securities or\nprepay any debt (including, without limitation, any borrowings from or\nprepayments to any member of Alibaba Group), or incur, assume, guarantee or\notherwise become directly or indirectly liable with respect to any liability or\nobligation, in each case other than in the Ordinary Course of Business;\n(t)  not\nforgive, cancel, compromise, waive or release any material debts, claims or rights,\nexcept for debts, claims and rights against Persons other than any member of\nYahoo! Group, which are forgiven, cancelled, compromised, waived or released in\nthe Ordinary Course of Business;\n(u)  not pay any\nbonus to any officer, director, employee, sales representative, agent or\nconsultant, or grant to any officer, director, employee, sales representative,\nagent or consultant any other increase in compensation in any form, except for\nbonus payments and raises as set forth on Section 5.1 of the Alibaba\nDisclosure Schedule and except in the Ordinary Course of Business;\n
43<\/p>\n\n\n\n\n\n\n(v) except in the Ordinary Course of Business,\nnot enter into, adopt or amend any employment, consulting, retention,\nchange-in-control, collective bargaining, bonus or other incentive\ncompensation, profit-sharing, health or other welfare, stock option or other\nequity, pension, retirement, vacation, severance, deferred compensation or\nother employment, compensation or benefit plan, policy, agreement, trust, fund\nor arrangement for the benefit of any officer, director, employee, sales\nrepresentative, agent, consultant or Affiliate (whether or not legally\nbinding);\n(w)  not change\nin any respect its accounting policies or principles, except as required by\nGAAP or applicable Tax Law;\n(x)  not\ntransfer or grant any rights or licenses under, or enter into any settlement\nregarding the infringement of, Alibaba Intellectual Property or enter into any\nlicensing or similar agreement or arrangement other than in the Ordinary Course\nof Business;\n(y)  not sell\nany assets with a value in excess of US$500,000 in each case or US$1,000,000 in\nthe aggregate, other than inventory in the Ordinary Course of Business;\n(z)  not agree\nor otherwise commit to take any of the actions proscribed in the foregoing\nparagraphs (a) through (y).\n
5.2  No Solicitation<\/u>.  From the date hereof until the Closing\nDate,  Alibaba shall not, and shall cause\neach other member of the Alibaba Group and each Representative of any member of\nthe Alibaba Group not to, (a) directly or indirectly solicit or encourage\nany inquiries or proposals for, or enter into or continue any discussions with\nrespect to, the acquisition by any Person of any of the share capital or other\nsecurities of any member of the Alibaba Group, of all or any portion of the\nbusiness of the Alibaba Group or of the assets of any member of the Alibaba\nGroup or of the assets of any member of the Alibaba Group, excluding the\nissuance of any capital stock or securities convertible, exchangeable,\nexercisable or redeemable for, or otherwise related to the value of, the\ncapital stock of any member of the Alibaba Group not in excess of 15% of the\nthen issued and outstanding capital stock of such member to financial investors\nsolely for capital raising purposes (an \u0093Alibaba Alternative Transaction<\/u>\u0094),\nor (b) furnish or permit to be furnished any non-public information\nconcerning any member of the Alibaba Group or its business and operations to\nany Person (other than Yahoo! and its Representatives), other than in the\nOrdinary Course of Business of Alibaba. \n\nAlibaba shall promptly notify Yahoo! of any inquiry or proposal received\nby any member of the Alibaba Group or Representative thereof with respect to\nany such Alibaba Alternative Transaction. \nAlibaba shall immediately cease and cause to be terminated any existing\nactivities, discussions or negotiations with any Person other than Yahoo! in\nrespect of any Alibaba Alternative Transaction.<\/p>
44<\/p>\n\n\n\n\n\n\n\n5.3  Access and Information<\/u>. (a)  So long as this Agreement remains in effect,\nAlibaba will (and will cause each member of the Alibaba Group to) give Yahoo!\nand its Representatives, full access during reasonable business hours to its\nproperties, assets, books, contracts, commitments, reports and records relating\nto the Alibaba Group, and furnish to them all such documents, records and\ninformation with respect to the properties, assets, rights and business of the\nAlibaba Group and copies of any work papers (in case of work papers, subject to\nexecution by Yahoo! of a customary confidentiality and indemnification\nagreement if requested by the accountants who produced such work papers)\nrelating thereto as Yahoo! shall from time to time reasonably request except to\nthe extent prohibited by applicable Law or the Alibaba User Privacy\nPolicy.  In addition, Alibaba will, and\nwill cause each member of the Alibaba Group to, permit Yahoo! and its\nRepresentatives, reasonable access during reasonable business hours to the\nAlibaba Group.  Alibaba will, and will\ncause each member of the Alibaba Group to, keep Yahoo! generally informed as to\nthe affairs of the business of the Alibaba Group. (b)  Alibaba will, and will cause each member of\nthe Alibaba Group to, retain all books and records relating to the Alibaba\nGroup in accordance with Alibaba\u0092s record retention policies as presently in\neffect.  During the three-year period\nbeginning on the Closing Date, Alibaba shall not dispose of or permit the\ndisposal of any such books and records not required to be retained under such\npolicies without first giving 60 days\u0092 prior written notice to Yahoo! offering\nto surrender the same to Yahoo! at Yahoo!\u0092s expense.
5.4  Subsequent Financial Statements and\nReports<\/u>.  From the date hereof to and\nincluding the Closing Date, Alibaba will (i) provide to Yahoo! a monthly\nmanagement report in scope and detail consistent with those management reports\nthat have historically been distributed to senior management of Alibaba and Tao\nBao, and (ii) timely prepare, and promptly deliver to Yahoo!, unaudited\nquarterly financial statements in scope and detail consistent with such\nquarterly financial statements as historically distributed to such senior\nmanagement.  Each such financial\nstatement shall be prepared in accordance with GAAP (subject to year end audit\nadjustments and except as may be indicated in the notes thereto) and shall\npresent fairly the financial position, assets and liabilities of the\nconsolidated Alibaba Group as at the date thereof and the results of its\noperations and its cash flows for the period then ended, in accordance with\naccounting policies and procedures consistent with those historically used by\nthe Alibaba Group in the preparation of financial statements.<\/p>
5.5  Further Actions<\/u>. (a)  Alibaba shall, and shall cause each other\nmember of the Alibaba Group to, use reasonable efforts to take or cause to be\ntaken all actions, and to do or cause to be done all other things, necessary,\nproper or advisable in order for each member of the Alibaba Group to fulfill\nand perform its obligations in respect of this Agreement and the Ancillary\nAgreements to which it is a party, or otherwise to consummate and make\neffective the transactions contemplated hereby and thereby.<\/p>
45<\/p>\n\n\n\n\n\n\n(b)  Alibaba shall, and shall cause each other\nmember of the Alibaba Group to, as promptly as practicable, (i) make, or\ncause to be made, all filings and submissions required under any Law applicable\nto any member of the Alibaba Group, and give such reasonable undertakings as\nmay be required in connection therewith, and (ii) use reasonable efforts\nto obtain or make, or cause to be obtained or made, all Governmental Approvals\nand Consents necessary to be obtained or made by any member of the Alibaba\nGroup, in each case in connection with this Agreement or the Ancillary\nAgreements or the consummation of the transactions contemplated hereby or\nthereby. (c)  Alibaba shall, and shall cause each other\nmember of the Alibaba Group to, coordinate and cooperate with Yahoo! in\nexchanging such information and supplying such reasonable assistance as may be\nreasonably requested by Yahoo! in connection with the filings and other actions\ncontemplated by Section 4.5. (d)  At all times prior to the Closing Date,\nAlibaba shall promptly notify Yahoo! in writing of any fact, condition, event\nor occurrence that could reasonably be expected to result in the failure of any\nof the conditions contained in Sections 7.1 and 7.3 to be satisfied, promptly\nupon becoming aware of the same. (e)  Alibaba shall, and shall cause each other\nmember of the Alibaba Group that is a party to any of the Ancillary Agreements\nto execute such agreements, in substantially the form attached as an exhibit to\nthis Agreement (with changes or modifications as may be mutually agreed among\nthe parties thereto) on or prior to the Closing Date.
5.6  Further Assurances<\/u>.  Following the Closing Date, Alibaba shall,\nand shall cause each other member of the Alibaba Group to, from time to time,\nexecute and deliver such additional instruments, documents, conveyances or\nassurances and take such other actions as shall be necessary, or otherwise\nreasonably be requested by Yahoo!, to confirm and assure the rights and\nobligations provided for in this Agreement and the Ancillary Agreements and\nrender effective the consummation of the transactions contemplated hereby and\nthereby, or otherwise to carry out the intent and purposes of this Agreement.<\/p>
5.7  China Group Employees<\/u>.  From and after the Closing, Alibaba shall,\nand shall cause its Subsidiaries (including the China Group after the Closing)\nto maintain compensation, bonus, incentive and other Benefit Plans for the\nbenefit of the employees of the China Group (the \u0093China Group Employees<\/u>\u0094)\nthat are not less favorable in the aggregate to those benefits currently\nprovided to similarly situated employees of any member of the Alibaba\nGroup.  With respect to each Benefit\nPlan, practice or policy of Alibaba or any of its Subsidiaries, each China Group\nEmployee shall be given credit under such Benefit Plan for all service with the\nChina Group or any predecessor employer (to the extent such credit was given by\nthe China Group or any predecessor employer under a comparable Benefit Plan),\nfor purposes of determining eligibility and vesting and for all other purposes\nfor which such service is<\/p>
46<\/p>\n\n\n\n\n
\n\n\n
\n\neither taken into account or recognized (except where such credit would\nresult in duplication of accrued benefits under each Benefit Plan).  Such service also shall apply for purposes of\nsatisfying any waiting periods, evidence of insurability requirements, or the\napplication of any preexisting condition limitations.  China Group Employees shall be given full\ncredit for amounts paid under any Benefit Plan during the same calendar year in\nwhich they commence participation in a comparable Benefit Plan of Alibaba or\nany of its Subsidiaries for purposes of applying deductibles, co-payments and\nout-of-pocket maximums as though such amounts have been paid in accordance with\nthe terms and conditions of the comparable Benefit Plan of Alibaba or any of\nits Subsidiaries.  Alibaba will, pursuant\nto its applicable Benefit Plan, grant to each China Group Employee options of\ncomparable economic value to subscribe for Ordinary Shares in substitution for\nthose in-the-money unvested options to purchase common stock of Yahoo! held by\nsuch employee at the Closing Date, which may be terminated by Yahoo!; provided<\/u>,\nhowever, that nothing in this Section 5.7 shall be construed as obligating\nAlibaba to continue the employment of any China Group Employee after Closing.
5.8  China Business Audit<\/u>.  Alibaba undertakes to complete the China\nBusiness Audit as soon as practicable after the Closing Date.<\/p>
6.                                      Covenants of Alibaba and Yahoo!<\/u>.<\/p>
6.1  Confidentiality<\/u>. (a)  Except as required by the NASDAQ rules<\/p>
or\nthe rules<\/p>
of any other quotation system or exchange on which Yahoo!\u0092s\nsecurities are listed or applicable Law, Yahoo! shall not disclose, shall not\npermit any other member of Yahoo! Group (together with Yahoo!, \u0093Yahoo!\nParties<\/u>\u0094) or any officers, directors or employees of Yahoo! or any other\nmember of Yahoo! Group to disclose, and shall prevent the respective other\nRepresentatives and contractors of any member of Yahoo! Group (such officers,\ndirectors, employees, other Representatives and contractors, \u0093Yahoo!\nRepresentatives<\/u>\u0094) from disclosing, to any Person, until the second\nanniversary of the Closing Date shall have occurred, any Alibaba Information\n(as hereinafter defined) that has been previously furnished by or on behalf of\nAlibaba to any Yahoo! Representative, or is so furnished prior to or on the\nClosing Date, or otherwise is known to any Yahoo! Party on the Closing Date.  The term \u0093Alibaba Information<\/u>\u0094 means\nany information concerning Alibaba or any member of the China Group, or the\nbusiness, activities or operations of Alibaba or any member of the China Group,\nincluding but not limited to information relating to pricing, technologies,\ntrade secrets, business plans, processes, strategies, customers, suppliers,\nfinancial data, statistics, or research and development, other than information\nthat (i) is or becomes generally available to the public other than as a\nresult of a disclosure by any Yahoo! Party or Yahoo! Representative, or (ii) any\nYahoo! Party or Yahoo! Representative is required to disclose by Law or legal\nprocess.  The term \u0093Confidential\nAlibaba Information<\/u>\u0094 means any Alibaba Information that the receiving\nYahoo! Party knows or reasonably should know is confidential or proprietary, or\nthat Alibaba or any<\/p>
47<\/p>\n\n\n\n\n\n\nmember of the China Group has identified in writing to the receiving\nYahoo! Party as being confidential or proprietary. (b)  Except as required by the NASDAQ rules
or\nthe rules<\/p>
of any other quotation system or exchange on which Alibaba\u0092s\nsecurities are listed or applicable Law, Alibaba shall not disclose, shall not\npermit any member of the China Group (together with Alibaba, \u0093Alibaba\nParties<\/u>\u0094) or any officers, directors or employees of Alibaba or any member\nof the China Group to disclose, and shall prevent the respective other\nRepresentatives and contractors of Alibaba or any member of the China Group\n(such officers, directors, employees, other Representatives and contractors, \u0093Alibaba\nRepresentatives<\/u>\u0094) from disclosing, to any Person, until the second\nanniversary of the Closing Date shall have occurred, any Yahoo! Information (as\nhereinafter defined) that has been previously furnished by or on behalf of\nYahoo! to any Alibaba Representative, or is so furnished prior to or on the\nClosing Date, or otherwise is known to any Alibaba Party on the Closing\nDate.  The term \u0093Yahoo! Information<\/u>\u0094\n\nmeans any information concerning Yahoo!, or the business, activities or\noperations of Yahoo!, including but not limited to information relating to\npricing, technologies, trade secrets, business plans, processes, strategies,\ncustomers, suppliers, financial data, statistics, or research and development,\nother than information that (i) is or becomes generally available to the\npublic other than as a result of a disclosure by any Alibaba Party or Alibaba\nRepresentative, or (ii) any Alibaba Party or Alibaba Representative is\nrequired to disclose by Law or legal process. \nThe term \u0093Confidential Yahoo! Information<\/u>\u0094 means any Yahoo!\nInformation that the receiving Alibaba Party knows or reasonably should know is\nconfidential or proprietary, or that Yahoo! has identified in writing to the\nreceiving Alibaba Party as being confidential or proprietary. (c)  In the event that any Yahoo! Party is\nrequested in any proceeding to disclose any Alibaba Information, Yahoo! shall\ngive Alibaba prompt written notice of such request so that Alibaba may seek an\nappropriate protective order.  If in the\nabsence of a protective order any Yahoo! Party is compelled in a proceeding to\ndisclose Alibaba Information, such Yahoo! Party may disclose such portion of\nAlibaba Information that in the opinion of Yahoo!\u0092s counsel such Yahoo! Party\nis compelled to disclose, without liability under this Agreement, provided,\nhowever, that Yahoo! shall give Alibaba written notice of Alibaba Information\nto be disclosed as far in advance of its disclosure as is practicable and shall\nuse reasonable efforts to obtain assurances that confidential treatment will be\naccorded to such Alibaba Information.  In\nthe event that any Alibaba Party is requested in any proceeding to disclose any\nYahoo! Information, Alibaba shall give Yahoo! prompt written notice of such\nrequest so that Yahoo! may seek an appropriate protective order.  If in the absence of a protective order any\nAlibaba Party is compelled in a proceeding to disclose Yahoo! Information, such\nAlibaba Party may disclose such portion of Yahoo! Information that in the\nopinion of Alibaba\u0092s counsel such Alibaba Party is compelled to disclose,\nwithout liability under this Agreement, provided, however, that Alibaba shall\ngive Yahoo! written notice of Yahoo! Information to be disclosed as far in\nadvance of its disclosure as is practicable and shall use reasonable<\/p>
48<\/p>\n\n\n\n\n\n\nefforts to obtain assurances that confidential treatment will be\naccorded to such Yahoo! Information. \nYahoo! agrees that neither it nor any other Yahoo! Party will\nappropriate any proprietary Alibaba Information for its or their benefit, and\nAlibaba agrees that neither it nor any other Alibaba Party will appropriate any\nproprietary Yahoo! Information for its or their benefit. (d)  Yahoo! and Alibaba each acknowledge that the\nother such party and its Affiliates would be irreparably damaged in the event\nof a breach or a threatened breach of any of the acknowledging party\u0092s\nobligations under this Section 6.1, and agrees, and shall cause each\nmember of Yahoo! Group, in the case of Yahoo!, and each member of the China\nGroup, in the case of Alibaba, to agree) that, in the event of a breach or a\nthreatened breach of any such obligation, the other such party shall, in\naddition to any other rights and remedies available to it in respect of such\nbreach, be entitled to an injunction from a court of competent jurisdiction\ngranting it specific performance of the provisions of this Section 6.1. (e)  The provisions of this Section 6.1\nshall not restrict Alibaba or any member of the China Group, or Yahoo! or any\nother member of Yahoo! Group, from using Information in performing their\nrespective obligations under, or enforcing the terms of, this Agreement or any\nAncillary Agreement, or in exercising their respective rights relating hereto\nor thereto or to the transactions contemplated hereby or thereby.
6.2  Publicity<\/u>.  Except as may be required by the NASDAQ rules or\nthe rules of any other quotation system or exchange on which Yahoo!\u0092s or\nAlibaba\u0092s securities are listed or applicable Law, neither Yahoo! nor Alibaba\nshall issue a publicity release or announcement or otherwise make any public\ndisclosure concerning this Agreement, the Ancillary Agreements or the\ntransactions contemplated hereby and thereby, without prior approval of the\nother party.  The parties will make a\nmutually agreed joint press release upon execution of this Agreement.  If any announcement is required by Law to be\nmade by any party hereto, prior to making such announcement such party will\ndeliver a draft of such announcement to the other parties and shall give the\nother parties an opportunity to comment thereon.\n<\/p>
6.3  COAL Shares<\/u>.  Subject to obtaining any necessary\nGovernmental Approvals or Consents, Yahoo! and Alibaba shall enter into a\ntransfer agreement, in a form proposed by Alibaba and reasonably satisfactory\nto Yahoo!, and take any other actions that are necessary to transfer the COAL\nShares to Alibaba on the Closing Date or as soon thereafter as is\npracticable.  Yahoo! shall use reasonable\nefforts to promptly obtain all such necessary Consents and Governmental\nApprovals.<\/p>
6.4  Tax Treatment<\/u>.  Alibaba shall not take or permit any action,\nor omit to take action, if such action or omission would prevent the direct and\nindirect transfers of property by Yahoo! described in Section 1 from\nqualifying as a transfer governed by Section 351 of Code.  Alibaba will cooperate with Skadden, Arps,\nSlate,<\/p>
49<\/p>\n\n\n\n\n\n\nMeagher & Flom LLP in obtaining the opinion referred to in Section 7.3(j),\nincluding by providing the representation letters referred to in Section 7.3(j).\n
6.5  Funding of China Business.<\/u> (a)  During the period between the date hereof\nand prior to the Closing, Yahoo! shall, and shall cause each member of the\nChina Group to, carry on the China Business only in their respective Ordinary\nCourse of Business and not deviate from the operating budget of the China Group\nas set forth in Section 6.5 of the Yahoo! Disclosure Schedule (the \u0093China\nGroup Budget<\/u>\u0094).  In particular, Yahoo!\nshall, and shall cause each member of the China Group to, make capital\nexpenditures as contemplated in the China Group Budget. (b)  During the period following the Closing Date\nto December 31, 2005, Alibaba shall, and shall cause each member of the China\nGroup to, conduct the China Business only in their respective Ordinary Course\nof Business and not deviate from the China Group Budget.  In particular, Alibaba shall not, and shall\ncause each member of the China Group not to: (i)  declare dividends or other distributions on,\nor redeem or repurchase any shares of, any class of share capital of any member\nof the China Group, make capital expenditures, defer any accounts receivable,\nprepay any accounts payable, delay payment of any trade payables or make any\nother cash payments, in each case other than in the Ordinary Course of Business\nof the China Group prior to the date of this Agreement; (ii)  compromise, settle, grant any waiver or\nrelease relating to or otherwise adjust any material Litigation; (iii) forgive, cancel, compromise, waive or\nrelease any material debts, claims or rights, except for debts, claims and\nrights against Persons, which are forgiven, cancelled, compromised, waived or\nreleased in the Ordinary Course of Business of the China Group prior to the\ndate of this Agreement; (iv) pay any bonus to any officer, director,\nemployee, sales representative, agent or consultant, or grant to any officer,\ndirector, employee, sales representative, agent or consultant any other\nincrease in compensation in any form, except in the Ordinary Course of Business\nof the China Group prior to the date of this Agreement; (v) except in the Ordinary Course of Business,\nenter into, adopt or amend any employment, consulting, retention,\nchange-in-control, collective bargaining, bonus or other incentive\ncompensation, profit-sharing, health or other welfare, stock option or other\nequity, pension, retirement, vacation, severance, deferred compensation or\nother employment, compensation or benefit plan, policy, agreement, trust, fund\nor arrangement for the benefit of any officer, director,\n<\/p>
50<\/p>\n\nemployee, sales representative, agent, consultant or Affiliate (whether\nor not legally binding); (vi)\nchange in any respect its accounting\npolicies or principles, except as required by GAAP or applicable Tax Law;\n(vii)\nmerge or consolidate with, or agree to\nmerge or consolidate with, or purchase substantially all of the assets of, or\notherwise acquire, any business, business organization or division thereof, or\nany other person; and\n(viii)\nagree or otherwise commit to take any of\nthe actions proscribed in the foregoing paragraph (i) through (vii). (c)  The Adjusted Cash Balance of the China Group\nas of December 31, 2005 shall be determined by an internationally\nrecognized accounting firm mutually agreeable to Yahoo! and Alibaba within\nthirty (30) Business Days following the completion of the audit of the China\nGroup for the fiscal year ended on December\n31, 2005.  The \u0093Adjusted Cash Balance<\/u>\u0094 means the\ncash balance (which could be a negative number) of the China Group as of December\n31,\n2005 on the audited financial statements of the China Group for the fiscal year\nended on December\n31, 2005, as adjusted to exclude any effect of business (i) conducted\noutside the Ordinary Course of Business and (ii) deviated from the China\nGroup Budget.  Such adjustment shall\ninclude, without limitation, (a) as to the period between the date hereof\nand the Closing Date, (i) deduction from the actual cash balance of the\namount by which capital expenditures are less than the budgeted amount in the\nChina Group Budget, and (ii) deduction from the actual cash balance of the\namount of liabilities (including any reserved amount) incurred other than in\nthe Ordinary Course of Business, and (b) as to the period between the day\nimmediately following the Closing Date and December\n31, 2005, (i) addition\nof the amount of capital expenditures in excess of the China Group Budget and (ii) addition\nof the amount of dividends or other distributions made other than in the\nOrdinary Course of Business.\n(d) (i) In the event the Adjusted Cash\nBalance is less than US$0.00, Yahoo! shall pay to Alibaba, and (ii) in the\nevent the Adjusted Cash Balance is greater than US$1,800,000, Alibaba shall pay\nto Yahoo!, in each case, up to US$5,000,000, an amount equal to such shortfall\nfrom US$0.00 or such excess above US$1,800,000, as the case may be, by wire\ntransfer of immediately available funds to the account of Alibaba or Yahoo!, as\nthe case may be, within twenty (20) Business Days following the determination\nof the Adjusted Cash Balance.\n
7.                                      Conditions Precedent<\/u>.<\/p>
7.1  Conditions to Obligations of Each Party<\/u>.  The obligations of each party to consummate\nthe transactions contemplated hereby shall be subject to the fulfillment on or\nprior to the Closing Date of the following conditions:<\/p>
51<\/p>\n\n\n\n\n\n\n(a)  No Injunction, etc<\/u>.  Consummation of the transactions contemplated\nhereby or by any of the Ancillary Agreements shall not have been restrained,\nenjoined or otherwise prohibited or made illegal by any applicable Law,\nincluding any order, injunction, decree or judgment of any court or other\nGovernmental Authority in any material respect; and no such Law that would have\nsuch an effect shall have been promulgated, entered, issued or determined by\nany court or other Governmental Authority to be applicable to this Agreement or\nany of the Ancillary Agreements.  No\naction or proceeding shall be pending or threatened by any Governmental\nAuthority on the Closing Date before any court or other Governmental Authority\nto restrain, enjoin or otherwise prevent the consummation of the transactions\ncontemplated hereby or by any of the Ancillary Agreements in any material\nrespect. (b)  ICP Share Transfer Agreements<\/u>.  Each of the ICP Share Transfer Agreements\nshall have been duly executed and delivered, and the China ICP Shares shall\nhave been validly transferred to the Alibaba Designees on or prior to the\nClosing Date, with control documentation reasonably satisfactory to Yahoo! and\nAlibaba. (c)  Tao Bao Share Exchange Agreement<\/u>.  The transactions contemplated by the Tao Bao\nShare Exchange Agreement shall have been consummated on or prior to the Closing\nDate. (d)  Share Conversion<\/u>.  The Share Conversion shall have been\nconsummated on or prior to the Closing Date. (e)  Tao Bao Share Purchase Agreement<\/u>.  The transactions contemplated by the Tao Bao\nShare Purchase Agreement shall have been consummated on or prior to the Closing\nDate.
7.2  Conditions to Obligations of Alibaba<\/u>.  The obligations of Alibaba to consummate the\ntransactions contemplated hereby shall be subject to the fulfillment on or\nprior to the Closing Date of the following additional conditions: (a)  Representations, Performance<\/u>. (i)  The representations and warranties contained\nin Section 2 (i) shall be true and correct in all respects at and as\nof the date hereof, and (ii) shall be deemed to be made and shall be true\nand correct in all respects on and as of the Closing Date with the same effect\nas though made on and as of the Closing Date (except to the extent expressly by\nits terms made as of an earlier date, in which case as of such earlier date),\nexcept where the failure of such representations and warranties to be true and\ncorrect, in the aggregate, would not reasonably be expected to have a Material\nAdverse Effect. (ii)  Yahoo! shall have in all material respects\nduly performed and complied with all agreements, covenants and conditions\nrequired by this<\/p>
52<\/p>\n\n\n\n\n\n\nAgreement to be performed or complied with by Yahoo! prior to or on the\nClosing Date. (iii)\nYahoo! shall have delivered to Alibaba a\ncertificate, dated the Closing Date and signed by a duly authorized officer of\nYahoo!, to the effect set forth above in this Section 7.2(a). (b)  Deliveries at Closing<\/u>.  At the Closing, Yahoo! shall have delivered (i) to\nAlibaba all of the certificates for the 3721 Shares and the Tao Bao Shares, (ii) to\nAlibaba documentary evidence of the transfer of the WFOE Interests, (iii)\nto\nAlibaba Designees, the China ICP Shares, (iv)\nthe Other Assets and (v)\nto\nAlibaba the Cash Consideration, in each case as provided in Section 1.2. (c)  Consents<\/u>.  The Governmental Approvals listed on Section 2.16(b)(i) of\nthe Yahoo! Disclosure Schedule required to be made or obtained by any\nmember of Yahoo! Group in connection with the consummation of the transactions\ncontemplated by this Agreement or the Ancillary Agreements shall have been made\nor obtained.  All Governmental Approvals\nthat arise after the date hereof required to be made or obtained by any member\nof the Yahoo! Group in connection with the consummation of the transactions\ncontemplated by this Agreement or the Ancillary Agreements shall have been made\nor obtained, except where the failure to obtain such Governmental Approvals\nwould not reasonably be expected to have or result in a Material Adverse\nEffect.  Complete and correct copies of all\nsuch Governmental Approvals shall have been delivered to Alibaba. (d)  Resignation of Directors<\/u>.  All directors and officers of any member of\nthe China Group whose resignations shall have been requested by Alibaba in\nwriting not less than five days prior to the Closing Date shall have submitted\ntheir resignations or been removed from office effective as of the Closing\nDate. (e)  No Material Adverse Effect<\/u>.  No event, occurrence, fact, condition,\nchange, development or effect shall exist or have occurred or come to exist or\nbeen threatened since December\n31, 2004 that, individually or in the\naggregate, has had or resulted in, or would reasonably be expected to become or\nresult in, a Material Adverse Effect on the China Group. (f)   Ancillary Agreements<\/u>.  Each of the Ancillary Agreements shall have\nbeen executed and delivered by each party thereto other than members of the\nAlibaba Group or members of management of Alibaba.\n(g)\nOpinion of Counsels<\/u>.  Alibaba shall have received an opinion,\naddressed to it and dated the Closing Date, from each of Skadden, Arps, Slate,\nMeagher& Flom LLP, Deacons, Conyers Dill\n& Pearman and\nHaiwen & Partners, each a counsel to Yahoo!, substantially in form of Exhibit\nI\nhereto.\n
53<\/p>\n\n\n\n\n\n\n7.3  Conditions to Obligations of Yahoo!<\/u>.  The obligation of Yahoo! to consummate the\ntransactions contemplated hereby shall be subject to the fulfillment, on or\nprior to the Closing Date, of the following additional conditions: (a)  Representations, Performance, etc.<\/u> (i)  The representations and warranties contained\nin Section 3 (i) shall be true and correct in all respects at and as\nof the date hereof and (ii) shall be deemed to be made and shall be true\nand correct in all respects on and as of the Closing Date with the same effect\nas though made at and as of such time (except to the extent expressly by its\nterms made as of an earlier date, in which case as of such earlier date),\nexcept where the failure of such representations and warranties to be true and\ncorrect, in the aggregate, would not reasonably be expected to have a Material\nAdverse Effect. (ii)  Alibaba shall have in all material respects\nduly performed and complied with all agreements, covenants and conditions\nrequired by this Agreement to be performed or complied with by it prior to or\non the Closing Date. (iii)\nAlibaba shall have delivered to Yahoo! a\ncertificate dated the Closing Date and signed by Alibaba\u0092s Chief Financial\nOfficer to the effect set forth above in this Section 7.3(a). (b)  Delivery of Share Certificates<\/u>.  Alibaba shall have delivered the certificates\nrepresenting the Primary Shares to Yahoo! at the Closing in the manner set\nforth in Section 1.2. (c)  Consents<\/u>.  All Governmental Approvals listed in Section 3.16(b)(i) of\nthe Alibaba Disclosure Schedule required to be made or obtained by any\nmember of the Alibaba Group in connection with the consummation of the\ntransactions contemplated by this Agreement or the Ancillary Agreements shall\nhave been made or obtained.  All Governmental\nApprovals that arise after the date hereof required to be made or obtained by\nany member of the Alibaba Group in connection with the consummation of the\ntransactions contemplated by this Agreement or the Ancillary Agreements shall\nhave been made or obtained, except where the failure to obtain such\nGovernmental Approvals would not reasonably be expected to have or result in a\nMaterial Adverse Effect.  Complete and\ncorrect copies of all such Governmental Approvals shall have been delivered to\nYahoo!. (d)  No Material Adverse Effect<\/u>.  No event, occurrence, fact, condition,\nchange, development or effect shall exist or have occurred or come to exist or\nbeen threatened since December\n31, 2004 that, individually or in the\naggregate, has had or resulted in, or would reasonably be expected to become or\nresult in, a Material Adverse Effect on the Alibaba Group. (e)  Opinion of Counsels<\/u>.  Yahoo! shall have received an opinion,\naddressed to it and dated the Closing Date, from each of Debevoise& Plimpton LLP,\n
54<\/p>\n\n\nMaples & Calder and TransAsia Lawyers, each a counsel to\nAlibaba, substantially in the form of Exhibit\nJ hereto. (f)   Ancillary Agreements<\/u>.  Each of the Ancillary Agreements shall have\nbeen executed and delivered by each Person that is to be a party thereto other\nthan Yahoo!.\n(g)\nBoard Composition<\/u>.  The board of directors of Alibaba shall have\nbeen reconstituted in the manner contemplated by the Shareholders\u0092 Agreement.\n(h)\nMemorandum and Articles<\/u>.  The Memorandum and Articles shall have been\nfiled with the Registrar of Companies of the Cayman Islands, shall not have\nbeen amended, and shall be in full force and effect. (i)  Secondary Share Purchase Agreement<\/u>.  The transactions contemplated by the\nSecondary Share Purchase Agreement shall have been consummated on or prior to\nthe Closing Date.\n(j)  Tax\nOpinion<\/u>.  Yahoo! shall have received\nan opinion, dated as of the Closing Date, from Skadden, Arps, Slate, Meagher& Flom LLP, counsel to Yahoo!, in form and substance reasonably satisfactory to\nYahoo!, to the effect that the direct and indirect transfers of property by\nYahoo! described in Section 1 should be treated as a transfer of property\ngoverned by Section 351 of the Code. \nThe issuance of such opinion shall be conditioned upon the receipt by\nSkadden, Arps, Slate, Meagher\n& Flom LLP, of representation letters\nfrom Yahoo!, Alibaba, Softbank, Netking Venture Corporation, Jack Ma,\nDataexchange Development Inc. and PEME Holding Limited, substantially in the\nform of Exhibit\nM hereto, including representations confirming the\naccuracy of Section 3.2(e)\nof the Alibaba Disclosure Schedule.  Each such representation letter shall be\ndated on or before the date of such opinion and shall not have been withdrawn\nor modified in any material respect.\n
8.                                      Termination<\/u>.\n<\/p>
8.1  Termination<\/u>.  This Agreement may be terminated at any time\nprior to the Closing Date: (a)  By the written agreement of Alibaba and\nYahoo!; (b)  By Yahoo! or Alibaba by written notice to\nthe other party after 5:00 p.m. Hong Kong time on December\n<\/p>
31, 2005\nif the transactions contemplated hereby shall not have been consummated\npursuant hereto, unless such date is extended by the mutual written consent of\nYahoo! and Alibaba; or (c)  By Yahoo! if the conditions set forth in Section 7.3(a)(i) and\n7.3(a)(ii) would not be satisfied and which shall not have been cured\nwithin 30 days following written notice thereof; provided that Yahoo! shall not\nhave the right to terminate this Agreement pursuant to this Section 8.1(c) if\nYahoo! is then in material<\/p>
55<\/p>\n\nbreach of any of its covenants or agreements contained in this\nAgreement such that the Closing conditions set forth in Section 7.2(a)(i) or\n7.2(a)(ii) would not be satisfied; or (d)  By Alibaba if conditions set forth in Section 7.2(a)(i) and\n7.2(a)(ii) would not be satisfied and which shall not have been cured\nwithin 30 days following written notice thereof; provided that Alibaba shall\nnot have the right to terminate this Agreement pursuant to this Section 8.1(d) if\nAlibaba is then in material breach of any of its covenants or agreements\ncontained in this Agreement such that the Closing conditions set forth in Section 7.3(a)(i) or\n7.3(a)(ii) would not be satisfied.\n
8.2  Effect of Termination<\/u>.  In the event of the termination of this\nAgreement pursuant to the provisions of Section 8.1, this Agreement shall\nbecome void and have no effect, without any liability to any Person in respect\nhereof or of the transactions contemplated hereby on the part of any party\nhereto, or any of its directors, officers, Representatives, stockholders or\nAffiliates, except as specified in Sections 2.24, 3.23, 6.1, 6.2, 8.2,\n11.1 and 11.3 and except for any liability resulting from such party\u0092s\nintentional and material breach of this Agreement.\n<\/p>
9.                                      Indemnification.\n<\/p>
9.1  Indemnification by Yahoo! and Alibaba<\/u>. (a)  Yahoo! covenants and agrees to defend,\nindemnify and hold harmless each of Alibaba, its Affiliates, the members of the\nChina Group and their respective officers, directors, employees, agents,\nadvisers and representatives (collectively, the \u0093Alibaba Indemnitees<\/u>\u0094)\nfrom and against, and pay or reimburse Alibaba Indemnitees for, any and all\nclaims, demands, liabilities, obligations, losses, fines, costs, expenses, royalties,\nLitigation, deficiencies or damages (whether absolute, accrued, conditional or\notherwise and whether or not resulting from third party claims), including\ninterest and penalties with respect thereto and out-of-pocket expenses and\nreasonable attorneys\u0092 and accountants\u0092 fees and expenses incurred in the\ninvestigation or defense of any of the same or in asserting, preserving or\nenforcing any of their respective rights hereunder (collectively, \u0093Losses<\/u>\u0094),\nresulting from or arising out of: (i) any inaccuracy of any representation\nor warranty that survives the Closing when made or deemed made by any member of\nYahoo! Group herein or in connection herewith; or (ii) any failure of any member of Yahoo!\nGroup to perform any post-Closing covenant or agreement hereunder or fulfill\nany other obligation in respect hereof; (b)  Alibaba covenants and agrees to defend,\nindemnify and hold harmless each of Yahoo!, its Subsidiaries and their\nrespective officers, directors, employees, agents, advisers and representatives\n(collectively, the \u0093Yahoo!<\/u>\n<\/p>
56<\/p>\n\n
Indemnitees<\/u>\u0094) from and against, and\n  pay or reimburse Yahoo! Indemnitees for any and all Losses, resulting from or\n  arising out of: (i)  any inaccuracy of any representation or\n  warranty that survives the Closing when made or deemed made by Alibaba herein\n  or in connection herewith; or(ii)  any\n  failure of Alibaba to perform any post-Closing covenant or agreement hereunder\n  or fulfill any other obligation in respect hereof.9.2 Limitation<\/u>.(a)  For\n  purposes of this Section 9, any inaccuracy in any representation or\n  warranty shall be determined without regard to any materiality or Material\n  Adverse Effect qualification, or any qualification or requirement that a matter\n  be or not be \u0093reasonably expected\u0094 to occur, contained in or otherwise\n  applicable to such representation or warranty, which qualification or\n  requirement limits the scope of such representation or warranty and, giving\n  effect thereto, renders such representation or warranty accurate. (b)  Neither Yahoo! nor Alibaba shall be required\n  to indemnify the Alibaba Indemnitees or the Yahoo! Indemnitees, as the case may\n  be, with respect to any claim for indemnification pursuant to clause (i) of\n  the Section 9.1(a) or clause (i) of Section 9.1(b), as the\n  case may be, in respect of any inaccuracies in the representations and\n  warranties of Yahoo! or Alibaba, as the case may be, referred to in such\n  clause, unless and until the aggregate amount of all claims against Yahoo! or\n  Alibaba, as the case may be, under Section 9.1 exceeds US$5,000,000, and\n  then only to the extent of such excess, provided<\/u>, however<\/u>, that (i) the\n  aggregate liability of Yahoo! under Section 9.1 shall not exceed\n  US$50,000,000, (ii) the aggregate liability of Alibaba under Section 9.1\n  shall not exceed US$70,000,000 and (iii) the amount of each claim arising\n  from a single occurrence or event under Section 9.1 shall be US$500,000 or\n  more. (c)  Alibaba shall pay any Loss payable by\n  Alibaba to any Yahoo! Indemnitee pursuant to this Section 9 by issuing\n  such number of new Ordinary Shares that is equal to such number of new Ordinary\n  Shares determined by applying the following formula: <\/p>\n
L*N<\/p>\n
S*(N-Y)-L<\/p>\n
where:<\/p>\n\n\n\n
L =   Amount\nof the Loss to be indemnified<\/p>\n\n
N                                       =                                         Total\nnumber of Ordinary Shares then outstanding<\/p>\n\n
S              =                                         6.49744381587623\n\n<\/p>\n\n
Y                                        =                                         The\nnumber of Ordinary Shares then owned by Yahoo!<\/p>\n\n
57<\/p>\n\n\n
9.3  Payment Adjustments, etc<\/u>.(a)  Any indemnity payment made by Yahoo! to Alibaba\n  Indemnitees, on the one hand, or by Alibaba to Yahoo! Indemnitees, on the other\n  hand, pursuant to this Section 9 in respect of any claim (i) shall be\n  net of an amount equal to (x<\/u>) any insurance proceeds realized by and\n  paid to the Indemnified Party minus (y<\/u>) any related costs and expenses,\n  including the aggregate cost of pursuing any related insurance claims plus any\n  correspondent increases in insurance premiums or other chargebacks, and (ii) shall\n  be (A) reduced by an amount equal to the Income Tax benefits, if any,\n  attributable to such claim and (B) increased by an amount equal to the\n  Income Taxes, if any, attributable to the receipt of such indemnity payment,\n  but only to the extent that such Tax benefits are actually realized, or such\n  Income Taxes are actually paid, as the case may be, by Yahoo! Indemnitees or\n  Alibaba Indemnitees or any consolidated, combined or unitary group of which any\n  Alibaba Indemnitee or Yahoo! Indemnitees is a member.  The Indemnified Party shall use its\n  reasonable efforts to make insurance claims relating to any claim for which it\n  is seeking indemnification pursuant to Section 9; provided<\/u>, that\n  the Indemnified Party shall not be obligated to make such an insurance claim if\n  the Indemnified Party in its reasonable judgment believes that the cost of\n  pursuing such an insurance claim together with any correspondent increase in\n  insurance premiums or other chargebacks to the Indemnified Party or the China\n  Group, as the case may be, would exceed the value of the claim for which the\n  Indemnified Party is seeking indemnification pursuant to this Section 9. (b)  The indemnity provided for in this Section 9\n  shall be the sole and exclusive remedy of Alibaba or Yahoo!, as the case may\n  be, after the Closing for any Losses incurred in connection with this\n  Agreement; provided<\/u>, that nothing herein shall limit in any way any such\n  party\u0092s remedies in respect of fraud or intentional misrepresentation or\n  intentional omission by the other party in connection herewith or the\n  transactions contemplated hereby. <\/p>\n
9.4 Indemnification Procedures<\/u>.  In the case of any claim asserted by a third\n    party against a party entitled to indemnification under this Agreement (the \u0093Indemnified\n    Party<\/u>\u0094), notice shall be given by the Indemnified Party to the party\n    required to provide indemnification (the \u0093Indemnifying Party<\/u>\u0094) promptly\n    after such Indemnified Party has actual knowledge of any claim as to which\n    indemnity may be sought, and the Indemnified Party shall permit the\n    Indemnifying Party (at the expense of such Indemnifying Party) to assume the\n    defense of any claim or any litigation resulting therefrom, provided<\/u>,\n    that (i) counsel for the Indemnifying Party who shall conduct the defense\n    of such claim or litigation shall be reasonably satisfactory to the Indemnified\n    Party, and the Indemnified Party may participate in such defense at such\n    Indemnified Party\u0092s expense, and (ii) the failure of any Indemnified Party\n    to give notice as provided herein shall not relieve the Indemnifying Party of\n    its indemnification obligation under this Agreement except to the extent that\n    such failure results in a lack of actual notice to the Indemnifying Party and\n    such Indemnifying Party is materially prejudiced as a result of such failure to\n    give notice.  Except with<\/p>\n
58<\/p>\n\n
the prior written consent of the Indemnified Party, no Indemnifying\n  Party, in the defense of any such claim or litigation, shall consent to entry\n  of any judgment or enter into any settlement that provides for injunctive or\n  other nonmonetary relief affecting the Indemnified Party or that does not\n  include as an unconditional term thereof the giving by each claimant or\n  plaintiff to such Indemnified Party of a release from all liability with\n  respect to such claim or litigation.  In\n  the event that the Indemnified Party shall in good faith determine that the\n  conduct of the defense of any claim subject to indemnification hereunder or any\n  proposed settlement of any such claim by the Indemnifying Party might be\n  expected to affect adversely the Indemnified Party\u0092s Tax liability or (in the\n  case of an Indemnified Party that is a Alibaba Indemnitee) the ability of any\n  member of the China Group to conduct its business, or that the Indemnified\n  Party may have available to it one or more defenses or counterclaims that are inconsistent\n  with one or more of those that may be available to the Indemnifying Party in\n  respect of such claim or any litigation relating thereto, the Indemnified Party\n  shall have the right at all times to take over and assume control over the\n  defense, settlement, negotiations or litigation relating to any such claim at\n  the sole cost of the Indemnifying Party, provided<\/u>, that if the\n  Indemnified Party does so take over and assume control, the Indemnified Party\n  shall not settle such claim or litigation without the written consent of the\n  Indemnifying Party, such consent not to be unreasonably withheld.  In the event that the Indemnifying Party does\n  not accept the defense of any matter as above provided, the Indemnified Party\n  shall have the full right to defend against any such claim or demand, and shall\n  be entitled to settle or agree to pay in full such claim or demand.  In any event, Yahoo! and Alibaba shall\n  cooperate in the defense of any claim or litigation subject to this Section 9\n  and the records of each shall be available to the other with respect to such\n  defense.<\/p>\n
9.5 Survival of Representations and\n    Warranties, etc<\/u>.  All claims for\n    indemnification under clause (i) of Section 9.1(a) or\n    clause (i) of Section 9.2 with respect to the representations\n    and warranties contained herein must be asserted on or prior to the date that\n    is twenty (20) Business Days  after the\n    termination of the survival period set forth in this Section 9.5, and all\n    lawsuits with respect to such claims must be brought within the proper periods\n    as specified by the applicable statutes of limitations.  The representations and warranties contained\n    in this Agreement shall survive the execution and delivery of this Agreement,\n    any examination by or on behalf of the parties hereto and the completion of the\n    transactions contemplated herein, but only to the extent specified below:(a)  the representations and warranties contained\n    in Sections 2.1, 2.2, 2.6, 2.7, 2.9, 2.10, 2.12, 2.13, 2.15, 2.16(b)(ii) and\n    2.18 and 3.1, 3.2, 3.5, 3.6, 3.7, 3.9, 3.12, 3.13, 3.15, 3.16(b)(ii) and\n    3.18 shall survive until 15 Business Days after the completion of the China\n    Business Audit; (b)  except as set forth in clause (a) above,\n    the representations and warranties of Yahoo! and Alibaba contained in Section 2\n    and Section 3, respectively, shall terminate upon the Closing.<\/p>\n
59<\/p>\n\n\n\n\n\n
10.                                Definitions<\/u>.<\/p>\n
10.1 Terms Generally<\/u>.  The words \u0093hereby,\u0094 \u0093herein,\u0094 \u0093hereof,\u0094 \u0093hereunder\u0094\n    \nand words of similar import refer to this Agreement as a whole (including any\n    Schedules hereto) and not merely to the specific section, paragraph or clause\n    in which such word appears.  All\n    references herein to Articles, Sections, Exhibits and Schedules shall be deemed\n    references to Articles and Sections of, and Exhibits and Schedules to,\n    this Agreement unless the context shall otherwise require.  The words \u0093include\u0094, \u0093includes\u0094 and \u0093including\u0094\n    shall be deemed to be followed by the phrase \u0093without limitation.\u0094  The definitions given for terms in this Section 10\n    and elsewhere in this Agreement shall apply equally to both the singular and\n    plural forms of the terms defined. \n    \nWhenever the context may require, any pronoun shall include the\n    corresponding masculine, feminine and neuter forms.  Except as otherwise expressly provided\n    herein, all references to \u0093dollars\u0094 or \u0093US$\u0094 shall be deemed references to the\n    lawful money of the United States of America. \n    All references to \u0093RMB\u0094 shall be deemed references to Renminbi, the\n    lawful money of China.<\/p>\n
10.2 Certain Terms<\/u>.  Whenever used in this Agreement (including in\n    the Schedules), the following terms shall have the respective meanings given to\n    them below or in the Sections indicated below:<\/p>\n
3721 HK<\/u>:  as defined in the recitals of this Agreement.<\/p>\n\n\n\n
3721 Shares<\/u>:  as defined in the recitals of this Agreement.<\/p>\n\n\n\n
Accountant<\/u>: as defined in Section 4.7(c).<\/p>\n\n\n\n
Adjusted Cash Balance<\/u>: as defined in\nSection 6.5(c).<\/p>\n\n\n\n
Affiliate<\/u>:  of a Person means a Person that directly or\nindirectly through one or more intermediaries, controls, is controlled by, or\nis under common control with, the first Person, including but not limited to a\nSubsidiary of the first Person, a Person of which the first Person is a\nSubsidiary, or another Subsidiary of a Person of which the first Person is also\na Subsidiary.  \u0093Control\u0094 (including the\nterms \u0093controlled by\u0094 and \u0093under common control with\u0094) means the possession,\ndirectly or indirectly, of the power to direct or cause the direction of the\nmanagement policies of a person, whether through the ownership of voting securities,\nby contract or credit arrangement, as trustee or executor, or otherwise.<\/p>\n\n\n\n
Agreement<\/u>:  as defined in the first paragraph of this\nAgreement.<\/p>\n\n\n\n
Alibaba<\/u>:  as defined in the first paragraph of this\nAgreement.<\/p>\n\n\n\n
Alibaba Alternative Transaction<\/u>: as\ndefined in Section 5.2.<\/p>\n\n\n\n
Alibaba Balance Sheet<\/u>:  means the balance sheet as of June 30,\n2005 included as a part of the Alibaba Financial Statements.<\/p>\n\n
60<\/p>\n\n\n\n\n\n
Alibaba Designees<\/u>: Jack Ma Yun, the\nChief Executive Officer of Alibaba, and\/or persons designated by him to act in\nsuch capacity.<\/p>\n\n\n\n
Alibaba Disclosure Schedule<\/u>: as\ndefined in the first paragraph of Section 3.<\/p>\n\n\n\n
Alibaba Financial Statements<\/u>:  the audited consolidated balance sheets and\nthe related statements of operations, shareholders\u0092 equity and cash flows as of\nand for the twelve months ended December 31, 2004 and 2005 and the\nunaudited consolidated balance sheets and the related statements of operations\nas of and for the six-month period ended June 30, 2005, of Alibaba.<\/p>\n\n\n\n
Alibaba Group<\/u>: Alibaba and its\nSubsidiaries.  For the purpose of this\nAgreement only, Tao Bao and its Subsidiaries shall be deemed to be members of\nthe Alibaba Group.<\/p>\n\n\n\n
Alibaba Indemnitees<\/u>:  as defined in Section 9.1(a).<\/p>\n\n\n\n
Alibaba Information<\/u>:  as defined in Section 6.1(a).<\/p>\n\n\n\n
Alibaba Intellectual Property<\/u>: all\nmaterial Intellectual Property purported to be owned by any member of the\nAlibaba Group.<\/p>\n\n\n\n
Alibaba Online Dataroom<\/u>: the online\ndocument dataroom hosted by Merrill Corporation to which Yahoo! was granted\naccess during the period before the execution of this Agreement.<\/p>\n\n\n\n
Alibaba Parties<\/u>: as defined in Section 6.1(b).<\/p>\n\n\n\n
Alibaba Representatives<\/u>: as defined\nin Section 6.1(b).<\/p>\n\n\n\n
Alibaba Shareholders Approvals<\/u>:\napprovals of certain shareholders of Alibaba, obtained through the execution\nand delivery by such shareholders of the Voting Agreements and related proxies,\nagreed to vote their shares, through their proxies, (i) in favor of the\napproval of this Agreement and the Ancillary Agreements and the other actions\ncontemplated by this Agreement and the Ancillary Agreements (including, without\nlimitation, the conversion of all issued and outstanding Series A\nPreferred Shares, Series B Preferred Shares and Series C Preferred\nShares into Ordinary Shares) and any actions required in furtherance thereof,\nincluding but not limited the approval of the Memorandum and Articles, as\ncontemplated by this Agreement; and under no circumstances will the\nshareholders seek to exercise their voting right contrary to the manner set out\nin this subclause; (ii) against (A) approval of any proposal made in\nopposition to, or in competition with, this Agreement, the Ancillary Agreements\nor the consummation of the transactions contemplated hereby and thereby, and (B) any\naction or agreement that would result in a breach of any representation,\nwarranty, covenant, agreement or other obligation of Alibaba in this Agreement\nor the Ancillary Agreements; (iii<\/u>)<\/p>\n\n
61<\/p>\n\n\n\n\n
impede, interfere with, delay, postpone, discourage or\nadversely affect the transactions contemplated by this Agreement and the\nAncillary Agreements.<\/p>\n\n\n\n
Alibaba User Privacy Policy<\/u>: the\npolicy of Alibaba for the purpose of protecting the privacy of the user data,\nas such policy may be updated from time to time.<\/p>\n\n\n\n
Ancillary Agreements<\/u>:  the ancillary agreements to be entered into\nin connection with the consummation of the transactions contemplated by this\nAgreement, including without limitation, the Shareholders Agreement, the\nMemorandum and Articles, the Secondary Shares Purchase Agreement, the Tao Bao\nShare Purchase Agreement, the Tao Bao Share Exchange Agreement, the\nNon-Competition Agreements, the Registration Rights Agreement, the Technology\nand Intellectual Property License Agreement and the Yahoo! Investment\nAgreement.<\/p>\n\n\n\n
Assets<\/u>:  as defined in Section 2.10(a).<\/p>\n\n\n\n
Benefit Plan<\/u>:  any plan, agreement or arrangement, formal or\ninformal, whether oral or written, whereby any member of the China Group or\nAlibaba, as the case may be, or any of their respective Subsidiaries provides\nany benefit to any present or former officer, director or employee, or\ndependent or beneficiary thereof, including, without limitation, any profit\nsharing, deferred compensation, stock option, performance stock, employee stock\npurchase, bonus, severance, retirement, health or insurance plans.<\/p>\n\n\n\n
Business Days<\/u>: any day that is not a\nSaturday, Sunday or other day on which banks are required or authorized by Law\nto be closed in New York, Beijing, or Hong Kong.<\/p>\n\n\n\n
Cash Consideration<\/u>: as defined in Section 1.1.<\/p>\n\n\n\n
China<\/u>:  the People\u0092s Republic of China.<\/p>\n\n\n\n
China Business<\/u>:  the business and operations of the China\nGroup as previously or currently conducted or contemplated by the members of\nthe China Group as of the date hereof to be conducted, which shall include: (i) the\nbusiness known as \u00933721 Internet Real Names\u0094 (a.k.a. \u0093Chinese Key Words\u0094); (ii) the\nbusiness relating to Yahoo!\u0092s search engine and its monetization models\n(including but not limited to the business as contemplated by Yahoo! Marketing\nServices); (iii) the business relating to the Yahoo! China portal,\nconsisting of the homepage, news and information and entertainment content; (iv) the\nbusiness relating to the e-commerce auction platform of 1pai.com.cn; (v) the\nbusiness relating to the Yahoo! Wireless platforms run by Yahoo! in China,\nincluding e-mail, instant messaging, greeting cards, personals and chat rooms.<\/p>\n\n
62<\/p>\n\n\n\n\n\n
China Business Audit<\/u>: the audit of\nthe China Business by an internationally recognized accounting firm for the\nnine-month period ending September 30, 2005.<\/p>\n\n\n\n
China Group<\/u>:  3721 HK, COAL, the WFOE and the China ICP\nCompanies, and their respective Subsidiaries and controlled-Affiliates.<\/p>\n\n\n\n
China Group Balance Sheet<\/u>:  means the unaudited balance sheet as of June 30,\n2005 included as a part of the China Group Financial Statements.<\/p>\n\n\n\n
China Group Budget<\/u>: as defined in Section 6.5(a).<\/p>\n\n\n\n
China Group Employee<\/u>: as defined in Section 5.7.<\/p>\n\n\n\n
China Group Financial Statements<\/u>:  the unaudited consolidated balance sheets and\nthe related statements of operations as of and for the twelve months ended December 31,\n2004 and as of and for the six months ended June 30, 2005, of the China\nGroup (excluding COAL).<\/p>\n\n\n\n
China Intellectual Property<\/u>: all material\nIntellectual Property purported to be owned by any member of the China Group.<\/p>\n\n\n\n
China ICP Companies<\/u>:  Beijing SunnyVale Information Technology Co.,\nLtd., Beijing Guofeng Xintong Technology and Science Co., Ltd. and Beijing 3721\nTechnology Co., Ltd.<\/p>\n\n\n\n
China ICP Shares<\/u>:  as defined in the recitals of this Agreement.<\/p>\n\n\n\n
Claimant<\/u>: as defined in Section 11.3(b).<\/p>\n\n\n\n
Closing<\/u>:  as defined in Section 1.2.<\/p>\n\n\n\n
Closing Date<\/u>:  as defined in Section 1.2.<\/p>\n\n\n\n
COAL<\/u>: China Online Auction Ltd., a\nCayman Islands company, and its Subsidiaries and controlled-Affiliates.<\/p>\n\n\n\n
COAL Shares<\/u>: 67% of the issued and\noutstanding shares of COAL, on a fully diluted basis.<\/p>\n\n\n\n
Code<\/u>: the United States Internal\nRevenue Code of 1986, as amended.<\/p>\n\n\n\n
Confidential Alibaba Information<\/u>:  as defined in Section 6.1(a).<\/p>\n\n\n\n
Confidential Yahoo! Information<\/u>:  as defined in Section 6.1(b).<\/p>\n\n
63<\/p>\n\n\n\n\n\n
Consent<\/u>:  any consent, approval, authorization, waiver,\npermit, grant, franchise, concession, agreement, license, certificate, exemption,\norder, registration, declaration, filing, report or notice of, with or to any\nPerson.<\/p>\n\n\n\n
Contract<\/u>:  all loan agreements, indentures, letters of\ncredit (including related letter of credit applications and reimbursement\nobligations), mortgages, security agreements, pledge agreements, deeds of\ntrust, bonds, notes, guarantees, surety obligations, warranties, licenses,\nfranchises, permits, powers of attorney, purchase orders, Leases, and other\nagreements, contracts, instruments, obligations, offers, legally binding\ncommitments, arrangements and understandings, written or oral.<\/p>\n\n\n\n
Environmental Laws<\/u>:  all Laws relating to the protection of the\nenvironment, to human health and safety or to any environmental activity.<\/p>\n\n\n\n
Family Members<\/u>:  any child, stepchild, grandchild, parent,\nstepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,\nson-in-law, daughter-in-law, brother-in-law, or sister-in-law of a Person, and\nshall include adoptive relationships of the same type.<\/p>\n\n\n\n
GAAP<\/u>:  United States generally accepted accounting\nprinciples applied on a consistent basis.<\/p>\n\n\n\n
Governmental Approval<\/u>:  any Consent of, with or to any Governmental\nAuthority.<\/p>\n\n\n\n
Governmental Authority<\/u>:  any nation or government, any state or other\npolitical subdivision thereof; any entity, authority or body exercising\nexecutive, legislative, judicial, regulatory or administrative functions of or\npertaining to government, including, without limitation, any government\nauthority, agency, department, board, commission or instrumentality of any nation\nor any political subdivision thereof; any court, tribunal or arbitrator; and\nany self-regulatory organization.<\/p>\n\n\n\n
ICC<\/u>: as defined in Section 11.3(b).<\/p>\n\n\n\n
ICP Share Transfer Agreements<\/u>:  one or more agreements pursuant to which the\nChina ICP Shares shall be transferred from the Yahoo! Designees to the Alibaba\nDesignees.<\/p>\n\n\n\n
Income Tax Return<\/u>:  any return, report, declaration, form, claim\nfor refund or information return or statement relating to Income Taxes,\nincluding any schedule or attachment thereto, and including any amendment\nthereof.<\/p>\n\n\n\n
Income Tax<\/u>:  any Tax computed in whole or in part based on\nor by reference to net income and any alternative, minimum, accumulated\nearnings or personal holding company Tax.<\/p>\n\n
64<\/p>\n\n\n\n\n\n
Indebtedness<\/u>:  as applied to any Person, means, without\nduplication, (a) all indebtedness for borrowed money, (b) all\nobligations evidenced by a note, bond, debenture, letter of credit, draft or\nsimilar instrument, (c) that portion of obligations with respect to\ncapital leases that is properly classified as a liability on a balance sheet in\nconformity with GAAP, (d) notes payable and drafts accepted representing\nextensions of credit, (e) any obligation owed for all or any part of the\ndeferred purchase price of property or services, which purchase price is due\nmore than six months from the date of incurrence of the obligation in respect\nthereof, and (f) all indebtedness and obligations of the types described\nin the foregoing clauses (a) through (e) to the extent secured by any\nLien on any property or asset owned or held by that Person regardless of\nwhether the indebtedness secured thereby shall have been assumed by that Person\nor is nonrecourse to the credit of that Person.<\/p>\n\n\n\n
Indemnified Party<\/u>:  as defined in Section 9.4.<\/p>\n\n\n\n
Indemnifying Party<\/u>:  as defined in Section 9.4.<\/p>\n\n\n\n
Intellectual Property<\/u>:  trademarks, service marks, trade names,\ndomain names, trade dress, copyrights and similar rights, including\nregistrations and applications to register or renew the registration of any of\nthe foregoing, patents and patent applications, and inventions, processes,\ndesigns, formulae, trade secrets, know-how, confidential information, computer\nsoftware, data and documentation, and all similar intellectual property rights,\ntangible embodiments of any of the foregoing (in any medium including\nelectronic media) and licenses of any of the foregoing.<\/p>\n\n\n\n
Intercompany Contracts<\/u>: Contracts\nbetween any member of the China Group, on the one hand, and any member of the\nYahoo! Group (other than a member of the China Group), on the other hand.<\/p>\n\n\n\n
Key Executives<\/u>:  the executives of Alibaba who are\ncontemplated to be signatories to a Non-Competition Agreement.<\/p>\n\n\n\n
knowledge<\/u>: (i) with respect to\nany natural person, the knowledge of such person after reasonable inquiry, or (ii) with\nrespect to any corporation or entity, the knowledge of the officers and\ndirectors of such corporation or entity and its Subsidiaries, in each case,\nafter reasonable inquiry.<\/p>\n\n\n\n
Law<\/u>: \n\nall applicable provisions of all (a) constitutions, treaties,\nstatutes, laws (including the common law), codes, rules, regulations,\nordinances or orders of any Governmental Authority, (b) Governmental\nApprovals and (c) orders, decisions, injunctions, judgments, awards and\ndecrees of or agreements with any Governmental Authority.<\/p>\n\n\n\n
Leased Real Property<\/u>:  all interests leased pursuant to the Leases\nof the China Group or the Alibaba Group, as applicable.<\/p>\n\n
65<\/p>\n\n\n\n\n\n
Leases<\/u>:  the real property leases, subleases, licenses\nand occupancy agreements.<\/p>\n\n\n\n
Lien<\/u>:  any mortgage, pledge, deed of trust,\nhypothecation, right of others, claim, security interest, encumbrance, burden,\ntitle defect, title retention agreement, lease, sublease, license, occupancy\nagreement, easement, covenant, condition, encroachment, voting trust agreement,\ninterest, option, right of first offer, negotiation or refusal, proxy, lien,\ncharge or other restrictions or limitations of any nature whatsoever, including\nbut not limited to such Liens as may arise under any Contract.<\/p>\n\n\n\n
Litigation<\/u>:  any action, cause of action, claim, demand,\nsuit, proceeding, citation, summons, subpoena, inquiry or investigation of any\nnature, civil, criminal, regulatory or otherwise, in law or in equity, pending\nor threatened, by or before any court, tribunal, arbitrator or other\nGovernmental Authority.<\/p>\n\n\n\n
Losses<\/u>:  as defined in Section 9.1.<\/p>\n\n\n\n
Material Adverse Effect<\/u>:  any event, occurrence, fact, condition,\nchange, development or effect that (i) is or would reasonably likely be\nmaterially adverse to the business, operations, results of operations,\ncondition (financial or otherwise), properties (including intangible\nproperties), assets (including intangible assets) or liabilities of the China\nGroup or the Alibaba Group, as applicable, (ii) results from the breach of\nSection 4.2 or Section 5.2 of this Agreement, or (iii) with\nrespect to any party hereto, would be reasonably likely to prevent or\nmaterially impair such party\u0092s ability to perform its obligations hereunder or\nunder any Ancillary Agreement, in each case other than any event, occurrence,\nfact, condition, change, development or effect relating to or arising out of (a) the\neconomy in general and not specifically related to or otherwise specifically\nand disproportionately affecting any member of the China Group or any member of\nthe Alibaba Group, respectively, (b) the industries in which the China\nGroup and the Alibaba Group, respectively, are engaged generally and not\nspecifically and disproportionately related to the China Group or the Alibaba\nGroup, respectively, (c) actions taken pursuant to and in compliance with\nthis Agreement or any of the Ancillary Agreements, (d) changes in Law or\nGAAP, (e) the announcement or consummation, actual or prospective, of this\nAgreement or any of the Ancillary Agreements or the transactions contemplated\nhereby or thereby or (f) any non-cash audit adjustments under GAAP\nrelating to stock-based compensation and deemed disposal to the unaudited\nAlibaba Financial Statements for the six months ended June 30, 2005 or the\nunaudited Tao Bao Financial Statements for the six months ended June 30,\n2005; provided, that these subclauses (c) and (e) shall not be\napplicable in determining whether a Material Adverse Effect occurs under Section 2.3\nor Section 3.3 of this Agreement.<\/p>\n\n
66<\/p>\n\n\n\n\n
Material Contract<\/u>: any Contract that\nany member of the China Group or the Alibaba Group, as applicable, is a party\nto or bound by, that (i) involves or is anticipated to involve aggregate\npayments of more than US$500,000 per year, or (ii) contains a\nnon-competition covenant that precludes or restricts any member of the China\nGroup or the Alibaba Group, as applicable, from operating in any line of\nbusiness or in any geographic location.<\/p>\n\n\n\n
made available<\/u>: available on the\nYahoo! Online Dataroom or the Alibaba Online Dataroom, as applicable.<\/p>\n\n\n\n
Memorandum and Articles<\/u>: the\nMemorandum and Articles of Association of Alibaba, to be adopted and approved\nby the shareholders of Alibaba on or prior to the Closing Date, substantially\nin the form of Exhibit A hereto.<\/p>\n\n\n\n
Non-Competition Agreements<\/u>:  the agreements to which Alibaba, Yahoo! and\neach of the Key Executives will become parties upon consummation of the\ntransactions contemplated by this Agreement, substantially in the form of Exhibit G\nhereto.<\/p>\n\n\n\n
Ordinary Course of Business<\/u>:  the usual, regular and ordinary course of\nbusiness consistent with the past custom and practice thereof.<\/p>\n\n\n\n
Ordinary Shares<\/u>:  the ordinary shares, par value US$0.0001 per\nshare, of Alibaba.<\/p>\n\n\n\n
Organizational Documents<\/u>:  as to any Person, its certificate or articles\nof incorporation, by-laws and other organizational documents.<\/p>\n\n\n\n
Other Assets<\/u>:  as defined in the recitals of this Agreement.<\/p>\n\n\n\n
Owned Real Property<\/u>:  the real property owned by the China Group or\nthe Alibaba Group, as applicable, together with all structures, facilities,\nimprovements, fixtures, systems, equipment and items of property presently or\nhereafter located thereon or attached or appurtenant thereto or owned by the China\nGroup or the Alibaba Group, as applicable, and located on Leased Real Property,\nand all easements, licenses, rights and appurtenances relating to the\nforegoing.<\/p>\n\n\n\n
Permitted Liens<\/u>: (i) Liens for\nTaxes, assessments and governmental charges or levies not yet due and payable, (ii) pledges\nor deposits to secure obligations under workers\u0092 compensation laws or similar\nlegislation or to secure public or statutory obligations, (iii) mechanics\u0092,\ncarriers\u0092, workers\u0092, repairers\u0092 and similar Liens arising or incurred in the\nOrdinary Course of business, (iv) zoning, entitlement and other land use\nand environmental regulations by Governmental Authorities; and (v) Liens\nthat do not materially and adversely affect the value of, or materially\ninterfere with the use of, the asset, property or right subject to such Lien.<\/p>\n\n
67<\/p>\n\n\n\n\n\n
Person<\/u>:  any natural person, firm, partnership,\nassociation, corporation, company, trust, business trust, Governmental\nAuthority or other entity.<\/p>\n\n\n\n
Primary Shares<\/u>:  as defined in Section 1.1.<\/p>\n\n\n\n
Real Property<\/u>:  the Owned Real Property and the Leased Real\nProperty of the China Group or the Alibaba Group, as applicable.<\/p>\n\n\n\n
Registration Rights Agreement<\/u>:  The registration rights agreement to be\nentered into by and among Alibaba and certain of its shareholders on or prior\nto the Closing Date, substantially in the form of Exhibit K hereto.<\/p>\n\n\n\n
Representatives<\/u>:  as to any Person, its accountants, counsel,\nconsultants (including actuarial, environmental and industry consultants),\nofficers, directors, employees, agents and other advisors and representatives.<\/p>\n\n\n\n
Request<\/u>: as defined in Section 11.3(b).<\/p>\n\n\n\n
Respondent<\/u>: as defined in Section 11.3(b).<\/p>\n\n\n\n
Secondary Share Purchase Agreement<\/u>:  the agreement pursuant to which Yahoo! and\nSoftbank will purchase from certain existing shareholders of Alibaba, and such\nshareholders will sell to Yahoo! and Softbank, certain Ordinary Shares, on the\nterms and conditions set forth in such agreement, substantially in the form of Exhibit C\nhereto, by and among Yahoo!, Softbank and such shareholders.<\/p>\n\n\n\n
Series A Preferred Shares<\/u>:  the series A preferred shares, par value\nUS$0.0001 per share, in the share capital of Alibaba.<\/p>\n\n\n\n
Series B Preferred Shares<\/u>:  the series B preferred shares, par value\nUS$0.0001 per share, in the share capital of Alibaba.<\/p>\n\n\n\n
Series C Preferred Shares<\/u>:  the series C preferred shares, par value\nUS$0.0001 per share, in the share capital of Alibaba.<\/p>\n\n\n\n
Share Conversion<\/u>:  the conversion of all issued and outstanding Series A\nPreferred Shares, Series B Preferred Shares and Series C Preferred\nShares into Ordinary Shares, in accordance with the resolutions of the holders\nof such preferred shares to be adopted at an Alibaba shareholders meeting to be\nheld on or prior to the Closing Date.<\/p>\n\n\n\n
Shareholders Agreement<\/u>: the\nshareholders agreement to be entered into by and among Yahoo!, Alibaba and the\nManagement Members (as defined in such Agreement) on or prior to the Closing\nDate, substantially in the form of Exhibit B hereto.<\/p>\n\n
68<\/p>\n\n\n\n\n\n
Subsidiaries<\/u>:  each corporation or other Person in which a\nPerson owns or controls, directly or indirectly, share capital or other equity\ninterests representing more than 50% of the outstanding voting stock or other\nequity interests or otherwise controls via contractual relationships similar to\nthose governing the China ICP Companies.<\/p>\n\n\n\n
Softbank<\/u>:  SOFTBANK CORP., a Japanese corporation.<\/p>\n\n\n\n
Tao Bao<\/u>:  Tao Bao Holding Limited, a Cayman Islands\ncompany.<\/p>\n\n\n\n
Tao Bao Balance Sheet<\/u>: means the\nbalance sheet as of June 30, 2005 included as a part of the China Group\nFinancial Statements.<\/p>\n\n\n\n
Tao Bao Financial Statements<\/u>:  the audited consolidated balance sheets and\nthe related statements of operations, shareholders\u0092 equity and cash flows as of\nand for the twelve months ended December 31, 2004 and for the period ended\nDecember 31, 2003 from June 17, 2003 and the unaudited consolidated\nbalance sheets and the related statements of operations as of and for the\nsix-month period ended June 30, 2005, of Tao Bao.<\/p>\n\n\n\n
Tao Bao Plan Participants<\/u>:  certain employees, consultants and directors\nof Tao Bao who hold certain shares and\/or options and\/or warrants to acquire\nshares of Tao Bao.<\/p>\n\n\n\n
Tao Bao Share Exchange Agreement<\/u>:  the agreement pursuant to which Alibaba will (i) issue\ncertain Ordinary Shares in exchange for all issued and outstanding shares held\nby Softbank and the other Tao Bao shareholders and the Tao Bao Plan\nParticipants (other than shares of Tao Bao held by Softbank that are\ntransferred to Yahoo! pursuant to the Tao Bao Share Purchase Agreement) and (ii) grant\ncertain options and\/or warrants of Alibaba to the Tao Bao Plan Participants in\nconsideration of cancellation of their respective options and\/or warrants of\nTao Bao, substantially in the form of Exhibit E hereto, by and among\nAlibaba, Softbank and the other shareholders of Tao Bao.<\/p>\n\n\n\n
Tao Bao Share Purchase Agreement<\/u>:  the agreement pursuant to which Softbank will\ncause its wholly-owned subsidiary to transfer certain shares of Tao Bao to\nYahoo! in consideration of US$360 million to be paid by Yahoo!, substantially\nin the form of Exhibit D hereto, by and among Softbank, such wholly-owned\nsubsidiary and Yahoo!.<\/p>\n\n\n\n
Tao Bao Shares<\/u>: the shares of Tao\nBao that are transferred from Softbank\u0092s wholly-owned Subsidiary to Yahoo!\npursuant to the Tao Bao Share Purchase Agreement.<\/p>\n\n
69<\/p>\n\n\n\n\n\n
Tax Return<\/u>:  any return, report, declaration, form, claim\nfor refund or information return or statement relating to Taxes, including any schedule or\nattachment thereto, and including any amendment thereof.<\/p>\n\n\n\n
Tax<\/u>: \n\nany federal, state, local or foreign income, alternative, minimum,\naccumulated earnings, personal holding company, franchise, share capital,\nprofits, windfall profits, gross receipts, sales, use, value added, transfer,\nregistration, stamp, premium, excise, customs duties, severance, environmental,\nreal property, personal property, ad valorem, occupancy, license, occupation,\nemployment, payroll, social security, disability, unemployment, workers\u0092\ncompensation, withholding, estimated or other similar tax, duty, fee,\nassessment or other governmental charge or deficiencies thereof (including all\ninterest and penalties thereon and additions thereto).<\/p>\n\n\n\n
Technology and Intellectual Property License Agreement<\/u>:  the agreement by and between Yahoo! and\nAlibaba to be entered into on or prior to the Closing Date, substantially in\nthe form of Exhibit F hereto.<\/p>\n\n\n\n
Voting Agreements<\/u>: the voting\nagreements and related proxies, substantially in the form of Exhibit H\nhereto.<\/p>\n\n\n\n
WFOE<\/u>: as defined in the recitals of\nthis Agreement.<\/p>\n\n\n\n
WFOE Interests<\/u>:  as defined in the recitals of this Agreement.<\/p>\n\n\n\n
Yahoo!<\/u>:  as defined in the first paragraph of this\nAgreement.<\/p>\n\n\n\n
Yahoo! Alternative Transaction<\/u>: as\ndefined in Section 4.2.<\/p>\n\n\n\n
Yahoo! Designees<\/u>:  in respect of Beijing SunnyVale Information\nTechnology Co., Ltd., Xie Hang, Xie Guejun, Wang Huainan, Shen Jianming and Cai\nJiangwen, in respect of Beijing Guofeng Xintong Technology and Science Co.,\nLtd., Hu Huan and Zhou Hongyi and in respect of Beijing 3721 Technology Co.\nLtd., Zhao Jian, Shi Xiaohong, Zhang Qing and Zhou Hongyi.<\/p>\n\n\n\n
Yahoo! Disclosure Schedule<\/u>: as\ndefined in the first paragraph of Section 2.<\/p>\n\n\n\n
Yahoo! Group<\/u>:  Yahoo! and its Subsidiaries, including (prior\nto the consummation of the Closing) each member of the China Group.<\/p>\n\n\n\n
Yahoo! HK<\/u>:  as defined in the recitals of this Agreement.<\/p>\n\n\n\n
Yahoo! Indemnitees<\/u>: as defined in Section 9.1(b).<\/p>\n\n\n\n
Yahoo! Information<\/u>:  as defined in Section 6.1(b).<\/p>\n\n
70<\/p>\n\n\n\n\n\n
Yahoo! Investment Agreement<\/u>:  the agreement substantially in the form of Exhibit M\nhereto to be executed by Yahoo! and Alibaba on the Closing Date.<\/p>\n\n\n\n
Yahoo! Online Dataroom<\/u>: the online\ndocument dataroom hosted by Merrill Corporation to which Alibaba was granted\naccess during the period before the execution of this Agreement.<\/p>\n\n\n\n
Yahoo! Parties<\/u>: as defined in Section 6.1(a).<\/p>\n\n\n\n
Yahoo! Representatives<\/u>: as defined\nin Section 6.1(a).<\/p>\n\n\n\n
Yahoo! User Privacy Policy<\/u>: the\npolicy of Yahoo! concerning privacy and the use and disclosure of user data, as\nsuch policy is posted at http:\\\\privacy.yahoo.com, or as it may be relocated by\nYahoo! in the future.<\/p>\n\n\n\n
11.                                Miscellaneous<\/u>.<\/p>\n
11.1 Expenses<\/u>.(a)  Except as set forth below in this Section 11.1\n    or as otherwise specifically provided for in this Agreement, each party to this\n    Agreement shall bear its respective expenses, costs and fees (including\n    attorneys\u0092 fees) in connection with the transactions contemplated hereby,\n    including the preparation, execution and delivery of this Agreement and\n    compliance herewith, whether or not the transactions contemplated hereby shall\n    be consummated. (b)  Alibaba and Yahoo! shall share in equal part\n    all expenses (other than Taxes, which are governed by Section 4.7) in\n    connection with the transfer of the Assets to Alibaba and all related\n    regulatory filing expenses. <\/p>\n
11.2 Notices<\/u>.  All notices, requests, demands, waivers and\n      other communications required or permitted to be given under this Agreement\n      shall be in writing and shall be deemed to have been duly given if (a) delivered\n      personally, (b) sent by next-day or overnight mail or delivery or (c) sent\n      by facsimile, as follows:(a)  if to Alibaba, <\/p>\n
Alibaba.com Corporation
\nc\/o Alibaba.com Hong Kong Limited
\n2403-05 Jubilee Centre
\n18 Fenwick Street
\nWanchai, Hong Kong
\nFax: +852-2215-5200
\nTelephone: +852-2215-5100
\n\nAttention: Chief Financial Officer<\/p>\n\n\n\n
with a copy to:<\/p>\n\n
71<\/p>\n\n\n
Debevoise & Plimpton LLP
\n\n13\/F Entertainment Building
\n30 Queen\u0092s Road Central
\nHong Kong
\nFax:  +852-2810-9828
\nTelephone:  +852-2160-9800
\nAttention: Thomas M. Britt III<\/p>\n\n\n\n(b)  if to Yahoo!, 
Yahoo! Inc.
\n701 First Avenue
\nSunnyvale, CA 94089
\nFax:  +1-408-349-3301
\n\nTelephone:  +1-408-349-3300
\nAttention:  General Counsel<\/p>\n\n\n\n
with a copy to:<\/p>\n\n\n\n
Skadden, Arps, Slate, Meagher & Flom LLP
\n\n525 University Avenue
\nSuite 1100
\nPalo Alto, CA 94301
\nFax:  +1-650-470-4570
\nTelephone:  +1-650-470-4500
\nAttention: Kenton J. King<\/p>\n\n\n\n
or, in each case, at such other address as may be\nspecified in writing to the other parties hereto.<\/p>\n\n\n\n
All such notices, requests, demands, waivers and other\ncommunications shall be deemed to have been received (i) if by personal\ndelivery on the day after such delivery, (ii) if by next-day or overnight\nmail or delivery, on the day delivered, (iii) if by facsimile, on the next\nday following the day on which such facsimile was sent, provided that a copy is\nalso sent by another method described herein.<\/p>\n\n\n\n11.3  Governing Law and Dispute Resolution<\/u>.(a)  THIS AGREEMENT SHALL BE GOVERNED IN ALL\nRESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF\nTHE STATE OF NEW YORK. (b)  Dispute Resolution<\/u> (i)  Any dispute, controversy or claim arising\nout of, relating to, or in connection with this Agreement, or the breach,\ntermination or validity hereof, shall be finally settled exclusively by\narbitration.  The arbitration shall be\nconducted
72<\/p>\n\n\nin accordance with the rules of the International Chamber of\nCommerce (the \u0093ICC<\/u>\u0094) in effect at the time of the arbitration, except as\nthey may be modified by mutual agreement of the parties.  The seat of the arbitration shall be\nSingapore, provided<\/u>, that, the arbitrators may hold hearings in such\nother locations as the arbitrators determine to be most convenient and\nefficient for all of the parties to such arbitration under the\ncircumstances.  The arbitration shall be\nconducted in the English language.(ii)  The arbitration shall be conducted by three\narbitrators.  The party (or the parties,\nacting jointly, if there are more than one) initiating arbitration (the \u0093Claimant<\/u>\u0094)\nshall appoint an arbitrator in its request for arbitration (the \u0093Request<\/u>\u0094).  The other party (or the other parties, acting\njointly, if there are more than one) to the arbitration (the \u0093Respondent<\/u>\u0094)\nshall appoint an arbitrator within 30 days of receipt of the Request and shall\nnotify the Claimant of such appointment in writing.  If within 30 days of receipt of the Request\nby the Respondent, either party has not appointed an arbitrator, then that\narbitrator shall be appointed by the ICC. \n\nThe first two arbitrators appointed in accordance with this provision\nshall appoint a third arbitrator within 30 days after the Respondent has\nnotified Claimant of the appointment of the Respondent\u0092s arbitrator or, in the\nevent of a failure by a party to appoint, within 30 days after the ICC has\nnotified the parties and any arbitrator already appointed of the appointment of\nan arbitrator on behalf of the party failing to appoint.  When the third arbitrator has accepted the\nappointment, the two arbitrators making the appointment shall promptly notify\nthe parties of the appointment.  If the\nfirst two arbitrators appointed fail to appoint a third arbitrator or so to\nnotify the parties within the time period prescribed above, then the ICC shall\nappoint the third arbitrator and shall promptly notify the parties of the\nappointment.  The third arbitrator shall\nact as Chair of the tribunal.(iii)  The arbitral award shall be in writing,\nstate the reasons for the award, and be final and binding on the parties.  The award may include an award of costs,\nincluding reasonable attorneys\u0092 fees and disbursements.  In addition to monetary damages, the arbitral\ntribunal shall be empowered to award equitable relief, including, but not\nlimited to, an injunction and specific performance of any obligation under this\nAgreement.  The arbitral tribunal is not\nempowered to award damages in excess of compensatory damages, and each party\nhereby irrevocably waives any right to recover punitive, exemplary or similar\ndamages with respect to any dispute, except insofar as a claim is for\nindemnification for an award of punitive damages awarded against a party in an\naction brought against it by an independent third party.  The arbitral tribunal shall be authorized in\nits discretion to grant pre-award and post-award interest at commercial\nrates.  Any costs, fees or taxes incident\nto enforcing the award shall, to the maximum extent permitted by Law, be\ncharged against the party resisting such enforcement.  Judgment upon the award may be entered by any\ncourt having jurisdiction thereof or having jurisdiction over the relevant\nparty or its assets.(iv)  In order to facilitate the comprehensive\nresolution of related disputes, and upon request of any party to the\narbitration proceeding, the arbitration tribunal may, within 90 days of its\nappointment, consolidate the arbitration proceeding with any other arbitration\nproceeding involving any of the parties relating
73<\/p>\n\n\n
to this Agreement and the Ancillary Agreements.  The arbitration tribunal shall not\n  consolidate such arbitrations unless it determines that (x<\/u>) there are\n  issues of fact or law common to the proceedings, so that a consolidated\n  proceeding would be more efficient than separate proceedings, and (y<\/u>) no\n  party would be prejudiced as a result of such consolidation through undue delay\n  or otherwise.  In the event of different\n  rulings on this question by the arbitration tribunal constituted hereunder and\n  any tribunal constituted under the Ancillary Agreements, the ruling of the\n  tribunal constituted under this Agreement will govern, and that tribunal will\n  decide all disputes in the consolidated proceeding.(v)  The parties agree that the arbitration shall\n  be kept confidential and that the existence of the proceeding and any element\n  of it (including but not limited to any pleadings, briefs or other documents\n  submitted or exchanged, any testimony or other oral submissions, and any\n  awards) shall not be disclosed beyond the tribunal, the ICC, the parties, their\n  counsel and any person necessary to the conduct of the proceeding, except as\n  may be lawfully required in judicial proceedings relating to the arbitration or\n  otherwise, or as required by NASDAQ rules or the rules of any other\n  quotation system or exchange on which the disclosing party\u0092s securities are\n  listed or applicable Law.(vi)  The costs of arbitration shall be borne by\n  the losing party unless otherwise determined by the arbitration award.(vii)  All payments made pursuant to the\n  arbitration decision or award and any judgment entered thereon shall be made in\n  United States dollars, free from any deduction, offset or withholding for\n  Taxes.(viii)  Notwithstanding this Section 11.3(b) or\n  any other provision to the contrary in this Agreement, no party shall be\n  obligated to follow the foregoing arbitration procedures where such party\n  intends to apply to any court of competent jurisdiction for an interim\n  injunction or similar equitable relief against any other party, provided there\n  is no unreasonable delay in the prosecution of that application.<\/p>\n
11.4 Binding Effect<\/u>.  This Agreement shall be binding upon and\n    inure to the benefit of the parties hereto and their respective heirs,\n    successors and permitted assigns.<\/p>\n
11.5 Assignment<\/u>.  This Agreement shall not be assignable or\n    otherwise transferable by any party hereto without the prior written consent of\n    the other parties hereto, and any purported assignment or other transfer\n    without such consent shall be void and unenforceable.11.6 No Third Party Beneficiaries<\/u>.  Except as provided in Section 9 with\n    respect to indemnification of Indemnified Parties hereunder, nothing in this\n    Agreement shall confer any rights upon any person or entity other than the\n    parties hereto and their respective heirs, successors and permitted assigns.<\/p>\n
74<\/p>\n\n\n
11.7  Amendment; Waivers, etc<\/u>.  No amendment, modification or discharge of\n  this Agreement, and no waiver hereunder, shall be valid or binding unless set\n  forth in writing and duly executed by the party against whom enforcement of the\n  amendment, modification, discharge or waiver is sought.  Any such waiver shall constitute a waiver\n  only with respect to the specific matter described in such writing and shall in\n  no way impair the rights of the party granting such waiver in any other respect\n  or at any other time.  Neither the waiver\n  by any of the parties hereto of a breach of or a default under any of the provisions\n  of this Agreement, nor the failure by any of the parties, on one or more\n  occasions, to enforce any of the provisions of this Agreement or to exercise\n  any right or privilege hereunder, shall be construed as a waiver of any other\n  breach or default of a similar nature, or as a waiver of any of such\n  provisions, rights or privileges hereunder. \n  The rights and remedies herein provided are cumulative and none is\n  exclusive of any other, or of any rights or remedies that any party may\n  otherwise have at law or in equity.  The\n  rights and remedies of any party based upon, arising out of or otherwise in\n  respect of any inaccuracy or breach of any representation, warranty, covenant\n  or agreement or failure to fulfill any condition shall in no way be limited by\n  the fact that the act, omission, occurrence or other state of facts upon which\n  any claim of any such inaccuracy or breach is based may also be the subject\n  matter of any other representation, warranty, covenant or agreement as to which\n  there is no inaccuracy or breach.  The\n  representations and warranties of Yahoo! shall not be affected or deemed waived\n  by reason of any investigation made by or on behalf of Alibaba (including but\n  not limited to by any of its advisors, consultants or representatives) or by\n  reason of the fact that Alibaba or any of such advisors, consultants or\n  representatives knew or should have known that any such representation or\n  warranty is or might be inaccurate.<\/p>\n
11.8 Entire Agreement<\/u>.  This Agreement and the Ancillary Agreements\n    (when executed and delivered) constitute the entire agreement and supersede all\n    prior agreements and understandings, both written and oral, between the parties\n    with respect to the subject matter hereof.<\/p>\n
11.9 Severability<\/u>.  If any provision, including any phrase,\n      sentence, clause, section or subsection, of this Agreement is invalid,\n      inoperative or unenforceable for any reason, such circumstances shall not have\n      the effect of rendering such provision in question invalid, inoperative or\n      unenforceable in any other case or circumstance, or of rendering any other\n      provision herein contained invalid, inoperative or unenforceable to any extent\n      whatsoever.<\/p>\n
11.10 Headings<\/u>.  The headings contained in this Agreement are\n        for purposes of convenience only and shall not affect the meaning or\n        interpretation of this Agreement.<\/p>\n
11.11 Counterparts<\/u>.  This Agreement may be executed in several\n          counterparts, each of which shall be deemed an original and all of which shall\n          together constitute one and the same instrument.<\/p>\n
75<\/p>\n\n\n
IN WITNESS WHEREOF, the parties have duly executed\nthis Agreement as of the date first above written.<\/p>\n\n\n\n\n \n  \n  \n  \n  \n  \n  \n  \n  \n  \n  \n  \n  \n  \n  
\n  
YAHOO!\n  INC.<\/b><\/p>\n\n  <\/td>\n  
\n  \n  <\/td>\n <\/tr>\n 
\n  \n  <\/td>\n\n  \n  \n  <\/td>\n  \n  \n  <\/td>\n <\/tr>\n 
\n\n  \n  <\/td>\n  \n  \n  <\/td>\n  \n  \n  <\/td>\n <\/tr>\n\n 
\n  
By:<\/p>\n  <\/td>\n  
\n  \n  <\/td>\n  \n\n  
\/s\/ Jerry Yang<\/p>\n  <\/td>\n  
\n  \n  <\/td>\n <\/tr>\n 
\n\n  \n  <\/td>\n  \n  
Name:<\/p>\n  <\/td>\n  
\n  
Jerry Yang<\/p>\n  <\/td>\n\n <\/tr>\n 
\n  \n  <\/td>\n  \n  
Title:<\/p>\n  <\/td>\n\n  
\n  
Chief Yahoo<\/p>\n  <\/td>\n <\/tr>\n 
\n  \n  <\/td>\n\n  \n  \n  <\/td>\n  \n  \n  <\/td>\n <\/tr>\n 
\n\n  
ALIBABA.COM\n  CORPORATION<\/b><\/p>\n  <\/td>\n <\/tr>\n 
\n  
 <\/b><\/p>\n  <\/td>\n  
\n\n  \n  <\/td>\n <\/tr>\n 
\n  \n  <\/td>\n  \n  \n\n  <\/td>\n  \n  \n  <\/td>\n <\/tr>\n 
\n  
By:<\/p>\n\n  <\/td>\n  
\n  \n  <\/td>\n  \n  
\/s\/ Jack Ma Yun<\/p>\n  <\/td>\n  
\n\n  \n  <\/td>\n <\/tr>\n 
\n  \n  <\/td>\n  \n  
Name:<\/p>\n\n  <\/td>\n  
\n  
Jack Ma Yun<\/p>\n  <\/td>\n <\/tr>\n 
\n  \n\n  <\/td>\n  \n  
Title:<\/p>\n  <\/td>\n  
\n  
Chief Executive\n  Officer<\/p>\n  <\/td>\n <\/tr>\n\n 
<\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n <\/tr>\n<\/table>\n\n\n\n
[SIGNATURE PAGE TO STOCK\nPURCHASE AND CONTRIBUTION AGREEMENT]<\/p>\n\n\n\n
\n<\/div>\n\n<\/div>\n
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