EXHIBIT 10.2
 
STANDSTILL AGREEMENT
dated as of September 19, 2008
between
eTelecare Global Solutions, Inc.
and
Newbridge International Investment Ltd.
 

 

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STANDSTILL AGREEMENT
     This Standstill Agreement (this “Agreement”) is made and entered into as of
September 19, 2008 between eTelecare Global Solutions, Inc., a Phillipines
corporation (the “Company”) and Newbridge International Investment Ltd., a
British Virgin Islands company (the “Shareholder”). The Company and the
Shareholder shall be referred to herein as the “Parties.”
WITNESSETH
     WHEREAS, the Shareholder has previously filed a Schedule 13D, as amended,
under the United States Securities Exchange Act of 1934, as amended (the
“Exchange Act”), with the United States Securities and Exchange Commission
(“SEC”) indicating the Shareholder’s Beneficial Ownership of 6,392,550 shares of
Company Common Stock and American Depositary Shares (such securities being
collectively referred to herein as the “Existing Securities”), representing
approximately 21.58% of the total outstanding Voting Securities (as defined
below) as of the date hereof;
     WHEREAS, concurrently with the execution of this Agreement, the Company and
EGS Acquisition Co LLC, a Delaware limited liability company (“Purchaser”), are
entering into an Acquisition Agreement of even date herewith which provides for
the offer by the Purchaser to purchase any and all of the Company’s outstanding
Voting Securities (the “Offer”) which Offer is supported by the Shareholder; and
     WHEREAS, the Shareholder has, or will have, a direct or indirect interest
in the Purchaser.
     NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein and as an inducement to the Company to enter
into the Acquisition Agreement, the Parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
     1.1. Defined Terms. (a) As used in this Agreement, the following terms
shall have the following meanings:
     “Affiliate” shall mean with respect to any Person, a Person that directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with such Person or group of Persons.

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     “Agreement” shall mean this Agreement as in effect on the date hereof and
as hereafter from time to time amended, modified or supplemented in accordance
with the terms hereof.
     “Beneficial Ownership” and “Beneficially Owns” shall have the meaning set
forth in Rules 13d-3 and 13d-5 under the Exchange Act.
     “Company Acquisition Transaction” shall mean (i) any merger, consolidation,
business combination, share exchange, reorganization, restructuring or similar
transaction or series of related transactions involving the Company or (ii) a
tender offer or exchange offer for at least 50% of the outstanding Voting
Securities.
     “Governmental Authority” shall mean any United States (federal, state,
local) or foreign court or tribunal, or administrative, governmental or
regulatory body, agency or authority.
     “group” shall have the meaning set forth in Section 13(d)(3) of the
Exchange Act and Rule 13d-5 promulgated thereunder.
     “Other Directors” shall mean each member of the board of directors of the
Company who is not a nominee or employee of the Shareholder or an Affiliate of
the Shareholder.
     “Person” shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or political subdivision or an agency or instrumentality thereof,
including its Affiliates.
     “Securities Act” shall mean the United States Securities Act of 1933, as
amended.
     “Voting Securities” shall mean any securities of the Company having the
power to vote, in the absence of contingencies, in the election of directors of
the Company; provided that American Depositary Shares and the shares of Common
Stock representing such American Depositary Shares shall not be double-counted
for purposes of determining the number of Voting Securities.

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ARTICLE II
STANDSTILL PROVISIONS
     2.1. Standstill Provisions.
     (a) In consideration of the execution by the Company of the Acquisition
Agreement with the Purchaser, the Shareholder agrees with the Company that prior
to termination of the Acquisition Agreement, the Shareholder will not (and the
Shareholder will cause its Affiliates not to) directly or indirectly in any way
acquire or agree to acquire Beneficial Ownership of any Voting Securities (other
than the acquisition of Voting Securities by the Purchaser in accordance with
the Acquisition Agreement).
     (b) If the Acquisition Agreement is terminated pursuant to
Section 5.4(a)(ii) or 5.5(c)(ii) thereof, then for a period of six months from
the date of such termination, or, if the Acquisition Agreement is terminated
pursuant to Section 5.1, 5.2(a), 5.2(b), 5.2(c), 5.3(b), 5.4(a)(i), 5.4(b),
5.4(c)(i) or 5.4(d) thereof, then for a period of 18 months from the date of
such termination, or, if the Acquisition Agreement is terminated pursuant to
Section 5.3(a), 5.3(c) or 5.3(d) thereof, then for a period of three years from
the date of such termination (in either case, the date of such termination, the
“Commencement Date” and such six-month period, 18-month period or 3-year period,
as the case may be, the “Standstill Period”), the Shareholder agrees with the
Company that, except as may be specifically permitted by this Agreement or
unless specifically approved by resolution of a majority of the Other Directors
of the Company, the Shareholder will not (and the Shareholder will cause its
Affiliates not to), acting alone or in concert with others (i) directly or
indirectly in any way acquire or agree to acquire Beneficial Ownership of any
Voting Securities if such acquisition or agreement to acquire would result in
the Shareholder and its Affiliates Beneficially Owning more than thirty-two
percent (32%) of the then outstanding Voting Securities (the “Maximum Amount”)
as measured on such date, (ii) publicly offer, seek or propose any Company
Acquisition Transaction, (iii) seek to nominate and elect more than two
(2) directors out of seven (7) directors to the Company’s board of directors or
(iv) except as otherwise required by applicable law, disclose publicly any
intention, plan or arrangement inconsistent with the foregoing. Notwithstanding
the foregoing, during the Standstill Period, the Shareholder shall have the
right to request, and the Other Directors shall consider in good faith in light
of the facts and circumstances, a suspension of this Section 2.1(b) in the event
that, and for so long as, any Person or “group” other than Shareholder
(A) acquires more than fifteen percent (15%) of the outstanding Voting
Securities, (B) publicly announces a bona fide tender or exchange offer by such
Person or group which would result, if consummated in accordance with its terms,
in the Beneficial Ownership by such Person or group of in excess of fifteen
percent (15%) of the then outstanding Voting Securities, whether or not such
offer

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is approved by the Other Directors or (C) publicly seeks or proposes to seek a
Company Acquisition Transaction.
     (c) Notwithstanding anything herein to the contrary, in the case of an
18-month Standstill Period, during the six-month period, or, in the case of a
3-year Standstill Period, during the two-year period (such 6-month period or
18-month period, as the case may be, the “Additional Limitation Period”)
following the expiration or termination of the Standstill Period, Shareholder
shall not (and Shareholder shall cause its Affiliates not to) acquire or agree
to acquire Beneficial Ownership of any securities of the Company if such
acquisition or agreement to acquire would result in the Shareholder and its
Affiliates collectively Beneficially Owning Voting Securities in excess of the
Maximum Amount, except as follows:
          (i) In the event Shareholder or its Affiliates intends to acquire any
Voting Securities of the Company in excess of the Maximum Amount, Shareholder
shall provide (and shall cause its Affiliates to provide) written notice to the
Company of such intent not less than 25 business days prior to any such
acquisition (the “Notice Period”). If prior to the end of the Notice Period, the
Company provides written notice (the “Company Notice”) to Shareholder or its
Affiliates of the Company’s intent to undertake a Company Acquisition
Transaction, the Shareholder shall not (and Shareholder shall cause its
Affiliates not to) acquire any Voting Securities of the Company in excess of the
Maximum Amount for a period of six months after the receipt by the Shareholder
or its Affiliates of the Company Notice. Subject to any other legal
restrictions, if the Company shall not have entered into a definitive agreement
related to a Company Acquisition Transaction at the end of such six-month
period, then the restrictions set forth in this Section 2.1(c) shall terminate
and be of no further force or effect. If the Company has entered into a
definitive agreement related to a Company Acquisition Transaction within such
six-month period, then the provisions of Sections 2.1(e)(i) and 2.1(e)(ii) shall
apply in full force and effect.
          (ii) In the event the Company fails to provide the Shareholder with a
Company Notice or otherwise indicates in the Company Notice that it will not
undertake a Company Acquisition Transaction, then the Shareholder and its
Affiliates shall be entitled to purchase Voting Securities in excess of the
Maximum Amount.
     (d) It is expressly agreed that if, during the Standstill Period or at any
time thereafter, and for so long as the Shareholder Beneficially Owns not less
than ten percent (10%) of the outstanding Voting Securities, the board of
directors of the Company authorizes the Company to undertake a Company
Acquisition Transaction (either through a public or private auction or other
similar sale process), then Shareholder and its Affiliates shall be permitted to
participate in the bidding process on the same terms and conditions as any other
bidder. The board

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of directors of the Company (or a committee thereof as may be constituted for
such purpose) will in good faith and in the proper discharge of its fiduciary
duties consider and evaluate the bid of the Shareholder or its Affiliates for
the acquisition of the Company; provided that, nothing herein shall obligate the
Company to negotiate with or accept any bid or other proposal submitted by
Shareholder or its Affiliates.
     (e) From the Commencement Date until the expiration of the Additional
Limitation Period (or the Standstill Period, in the case of a six-month
Standstill Period), in the event that a majority of the board of directors of
the Company and the holders of a majority of the outstanding Voting Securities
of the Company shall approve a Company Acquisition Transaction with a party
other than the Shareholder or any other transaction that requires at least
two-thirds of the then outstanding Voting Securities, then (i) Shareholder shall
(and Shareholder shall cause its Affiliates to) vote all Voting Securities held
by it in excess of the Existing Securities in favor of such Company Acquisition
Transaction or any other transaction that requires at least two-thirds of the
then outstanding Voting Securities and grant to persons designated by the Other
Directors a proxy, which shall be irrevocable and coupled with an interest, to
vote such excess as provided herein (it being understood that Shareholder and
its Affiliates will at all times be permitted to vote the Existing Securities in
its sole discretion in any manner it deems appropriate), and (ii) Shareholder
shall (and Shareholder shall cause its Affiliates to) sell or otherwise transfer
all Voting Securities then held by it and its Affiliates in excess of the
Existing Amount to the winning bidder in any such Company Acquisition
Transaction on the same terms and conditions as all other Shareholders of the
Company and pursuant to the terms and conditions contained in any definitive
agreement executed by the Company in connection therewith. It is expressly
understood that neither Shareholder nor its Affiliates shall have any obligation
to transfer any Voting Securities representing the Existing Amount in connection
with any Company Acquisition Transaction. Shareholder will (and Shareholder
shall cause its Affiliates to) take all reasonably necessary or desirable
actions in connection with the consummation of the Company Acquisition
Transaction as requested by the Other Directors including, without limitation,
executing and delivering any documents, certificates or other instruments
required to be signed by any other Shareholder, and delivering such
Shareholder’s and its Affiliates’ stock certificates free and clear of any
encumbrances; provided that any indemnification obligations or other contractual
liability of any stockholders incurred in connection with the Company
Acquisition Transaction shall be apportioned among all of the stockholders of
the Company in proportion to the amount of consideration received by each such
stockholder.
     2.2. Recording Provisions. The Parties agree that the Company shall
(i) advise its stock transfer agent or other relevant agents (each a “Transfer
Agent”)

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of the existence and restrictions of this Agreement and (ii) authorize such
Transfer Agent to notify the Parties of a potential breach of this Agreement and
refrain from recording any transfer of Voting Securities that the Company
advises would be in violation of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     3.1. Each Party hereto represents and warrants to the other as follows:
     (a) Authorization. Such Party has the requisite power, authority and legal
capacity to execute, deliver and perform and to consummate the transactions
contemplated by this Agreement. This Agreement constitutes a legal, valid and
binding obligation of such Party, enforceable against such Party in accordance
with its terms, except as such enforcement may be limited by any applicable
bankruptcy, insolvency, moratorium or similar law affecting creditors’ rights
generally.
     (b) No Conflicts; Consents. No consent of any Governmental Authority or
other person is required to be obtained by such Party in connection with the
execution and delivery by such Party of this Agreement.
ARTICLE IV
MISCELLANEOUS
     4.1. Severability. If any term, provision, covenant or restriction of this
Agreement is determined to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect, unless such action would substantially impair the
benefits to either Party of the remaining provisions of this Agreement.
     4.2. Specific Enforcement. The Parties hereto acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions of this
Agreement (without the necessity of posting any bond), this being in addition to
any other remedy to which they may be entitled by law or equity.
     4.3. Further Assurances.  The Shareholder shall use its reasonable best
efforts to cause its Affiliates to comply in all respects with the provisions of
this Agreement applicable to the Shareholder to the same extent as if such
Affiliates were original parties hereto.

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     4.4 Entire Agreement; Amendments. This Agreement contains the entire
understanding of the Parties with respect to the matters covered hereby and
thereby. This Agreement may be amended only by an agreement in writing executed
by the Parties hereto. The Parties hereto may amend this Agreement without
notice to or the consent of any third party, including any Affiliate of
Shareholder.
     4.5. Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be effective (a) when personally
delivered or transmitted by telecopier or other electronic means, such as
electronic mail, on a business day during normal business hours where such
notice is to be received at the address or number designated below or (b) on the
business day that is three (3) days following the date of mailing by courier,
fully prepaid, addressed to such address, whichever shall first occur. The
addresses for such communications shall be:

         
 
  If to the Company:   eTelecare Global Solutions, Inc.
 
      8901 East Raintree, Suite 100
 
      Scottsdale, AZ 85260
 
      Telecopier: (480) 754-8466
 
      Email: mike.dodson@etelecare.com
 
      Attention: J. Michael Dodson
 
       
 
  With a copy to:   Pillsbury Winthrop Shaw Pittman LLP
 
      2475 Hanover Street
 
      Palo Alto, CA 94304
 
      Telecopier: (650) 233-4545
 
      Email: jorge@pillsburylaw.com
 
      Attention: Jorge del Calvo
 
       
 
  If to the Shareholder:   Newbridge International Investment Ltd.
 
      c/o Ayala Corporation
 
      32/F Tower One Exchange Plaza, Ayala Avenue
 
      Makati City, Metro Manila, Philippines 1226
 
      Telecopier: (632) 7594383
 
      Email: hermosura.sm@ayala.com.ph
 
      Attention: Solomon M. Hermosura
 
       
 
  With a copy to:   Davis Polk & Wardwell
 
      450 Lexington Avenue
 
      New York, NY 10017
 
      Telecopier: (212) 450-3597
 
      Email: john.knight@dpw.com
 
      Attention: John Knight

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Any Party hereto may from time to time change its address for notices under this
Section 4.5 by giving at least 10 days’ notice of such changed address to the
other Party hereto.
     4.6. Waivers. No waiver by either Party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future thereof or a waiver of any other provision,
condition or requirement of this Agreement; nor shall any delay or omission of
either Party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
     4.7. Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions of this Agreement.
     4.8. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties and their successors and legal representatives. No
Party shall assign this Agreement or any rights hereunder without the prior
written consent of the other Party (which consent may be withheld for any reason
in the sole discretion of the Party from whom consent is sought).
     4.9. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the Parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision of this Agreement
be enforced by, any other person.
     4.10. Governing Law; Venue. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
without regard to the principles of conflicts of laws. The parties hereby
irrevocably submit to the jurisdiction of the courts of the State of Delaware
and the federal courts of the United States of America located in the State of
Delaware in respect of the interpretation and enforcement of the provisions of
this Agreement.
     4.11. Counterparts. This Agreement may be executed in separate counterparts
(including by facsimile), each of which when so executed and delivered shall be
deemed an original, but both such counterparts shall together constitute one and
the same instrument.
[Remainder of this page is intentionally blank.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date hereof.

            eTelecare Global Solutions, Inc.
      By:   /s/ John R. Harris         Name:   John R. Harris        Title:  
President and Chief Executive Officer     

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            NEWBRIDGE INTERNATIONAL INVESTMENTS LTD.
      By:   /s/ Solomon M. Hermosura         Name:   Solomon M. Hermosura       
Title:   Authorized Signatory     

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