Purchaser (the date on which the Closing actually occurs, the “Closing Date”). At theClosing, (a) the Purchaser shall deliver the First Payment to the Company by wire transfer inimmediately available funds, and (b) the Company shall deliver or cause to be delivered to thePurchaser certificate(s) representing the Purchase Shares, registered in the name of the Purchaser(or its nominee), and any and all other documents as may be reasonably requested by Purchaser orrequired by the laws of the Cayman Islands to effect the issuance and sale of the Purchase Sharesand entry into the register of members of the Company. Of the Purchase Shares, 3,005,801 Sharesshall be marked as fully paid in the register of members and 4,508,702 Shares shall be marked asunpaid, pending the delivery of the Second Payment.(b) Within 30 calendar days of the Closing Date, the Purchaser shall deliver the SecondPayment to the Company by wire transfer in immediately available funds. Immediately upon receipt ofthe Second Payment, the Company shall update the register of members to show that all PurchaseShares have been fully paid.**Section 1.4**Closing Conditions.(a) Conditions of the Purchaser for the Closing. The obligation of the Purchaser topurchase and pay for the Purchase Shares as contemplated by this Agreement is subject to thesatisfaction, on or before the Closing Date, of the following conditions, any of which may bewaived by the Purchaser in its sole discretion:(i) The Registration Rights Agreement between the Company and the Purchaser dated as of thedate hereof, substantially in the form attached as Exhibit A hereto (the “RegistrationRights Agreement”), shall have been executed and delivered by the Company.(ii) All corporate and other actions required to be taken by the Company in connection withthe issuance and sale of the Purchase Shares shall have been completed.(iii) The Company shall have provided to the Purchaser a legal opinion of Cayman Islandscounsel to the Company dated as of the Closing Date, substantially in the form attached asExhibit B hereto.(iv) The representations and warranties of the Company contained in Section 2.1 ofthis Agreement that are qualified as to materiality or Material Adverse Effect (as defined herein)shall have been true and correct on the date of this Agreement and on and as of the Closing Date,and any representations or warranties not so qualified shall have been true and correct in allmaterial respects on the date of this Agreement and on and as of the Closing Date; and the Companyshall have performed and complied in all material respects with all, and not be in breach ordefault in any material respect under any, agreements, covenants, conditions and obligationscontained in this Agreement that are required to be performed or complied with on or before theClosing Date. As used herein, “Material Adverse Effect” shall mean any event, fact,circumstance or occurrence that, individually or in the aggregate with any other events, facts,circumstances or occurrences, results in or would reasonably be expected to result in a materialadverse change in or a material adverse effect on any of (i) the financial condition, assets,liabilities, results of operations, business, or operations of the Company taken as a whole, exceptto the extent that any such Material Adverse Effect results from (w) changes in the trading price
 
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of the Company’s American depositary shares, (x) the public disclosure of the transactionscontemplated hereby in accordance with the terms of this Agreement, (y) changes in generallyaccepted accounting principles that are generally applicable to comparable companies, or (z)changes in general economic and market conditions; or (ii) the ability of the Company to consummatethe transactions contemplated by this Agreement and to timely perform its material obligationsunder this Agreement.(v) No governmental authority of competent jurisdiction shall have enacted, issued,promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is ineffect and restrains, enjoins, prevents, prohibits, imposes any damages or penalties that aresubstantial in relation to the Company, or otherwise makes illegal the consummation of thetransactions contemplated by this Agreement; and no action, suit, proceeding or investigation shallhave been instituted by a governmental authority of competent jurisdiction or threatened that seeksto restrain, enjoin, prevent, prohibit, impose any damages or penalties that are substantial inrelation to the Company, or otherwise makes illegal the consummation of the transactionscontemplated by this Agreement.(b) Conditions of the Company. The obligation of the Company to issue and sell thePurchase Shares to be sold to and purchased by the Purchaser as contemplated by this Agreement aresubject to the satisfaction, on or before the Closing Date, of each of the following conditions,any of which may be waived in writing by the Company in its sole discretion:(i) The Registration Rights Agreement shall have been executed and delivered by the Purchaser.(ii) All corporate and other actions required to be taken by the Purchaser in connection withthe purchase of the Purchase Shares shall have been completed.(iii) The representations and warranties of the Purchaser contained in Section 2.2 ofthis Agreement shall have been true and correct in all material respects on the date of thisAgreement and on and as of the Closing Date; and the Purchaser shall have performed and complied inall material respects with all, and not be in breach or default in any material respect under any,agreements, covenants, conditions and obligations contained in this Agreement that are required tobe performed or complied with on or before the Closing Date.(iv) No governmental authority of competent jurisdiction shall have enacted, issued,promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is ineffect and restrains, enjoins, prevents, prohibits, imposes any damages or penalties that aresubstantial in relation to the Company, or otherwise makes illegal the consummation of thetransactions contemplated by this Agreement; and no action, suit, proceeding or investigation shallhave been instituted by a governmental authority of competent jurisdiction or threatened that seeksto restrain, enjoin, prevent, prohibit, impose any damages or penalties that are substantial inrelation to the Company, or otherwise makes illegal the consummation of the transactionscontemplated by this Agreement.
 
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**ARTICLE II****REPRESENTATIONS AND WARRANTIES****Section 2.1**Representations and Warranties of the Company. The Company herebyrepresents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, asfollows:(a) Organization and Authority. The Company is a company duly incorporated as anexempted company with limited liability, validly existing and in good standing under the laws ofthe Cayman Islands. The Company has all requisite power and authority to carry on its business asit is currently being conducted. The Company has all necessary corporate power and authority toenter into this Agreement and to perform its obligations hereunder. The execution and delivery bythe Company of this Agreement and the performance of its obligations hereunder have been dulyauthorized by all requisite action on the part of the Company and its shareholders. This Agreementconstitutes the valid and legally binding obligations of the Company, enforceable in accordancewith its respective terms and conditions, except (i) as limited by applicable bankruptcy,insolvency, reorganization, moratorium, and other laws of general application affecting enforcementof creditors’ rights generally, and (ii) as limited by laws relating to the availability ofspecific performance, injunctive relief, or other equitable remedies.(b) Capitalization.(i) The authorized share capital of the Company consists of 200,000,000 Shares, of which, asof the date of this Agreement, 71,413,780 Shares are issued and outstanding (not including 121,075restricted shares owned by members of management or 584,648 shares being held in the form ofAmerican depositary shares for issuance under the Company Stock Plans, as defined below). Allissued and outstanding Shares of the Company are validly issued, fully paid and nonassessable. Asof the date of this Agreement, no Shares are held in treasury and no Shares are reserved for futureissuance except as provided in Employee Stock Option Plan and the 2006 Share Incentive Plan(collectively, the “Company Stock Plans”), the vesting and exercisability of which shallnot accelerate due to this Agreement or the Closing. Except for the Company Stock Plans and theCompany’s zero coupon convertible senior bonds due 2012, there are no options, warrants or otherrights, agreements, arrangements or commitments of any character relating to the issued or unissuedcapital stock of the Company or any of its subsidiaries or obligating the Company or any of itssubsidiaries to issue or sell any shares of capital stock of, or other equity interests in, theCompany or any of its subsidiaries. All Shares subject to issuance as aforesaid, upon issuance onthe terms and subject to the conditions specified in the instruments pursuant to which they areissuable, will be duly authorized, validly issued, fully paid and nonassessable. There are nooutstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeemor otherwise acquire any capital stock of the Company or any of its subsidiaries or to providefunds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, anysubsidiary or any other Person. As used herein, “Person” means an individual, corporation,partnership, limited partnership, limited liability company, syndicate, person (including, withoutlimitation, a “person” as defined in Section 13(d)(3) of the Securities and Exchange Act of 1934,as amended (the “Exchange Act”)),
 
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trust, association or entity or government, political subdivision, agency or instrumentality of agovernment.(ii) All outstanding Shares and all outstanding awards under the Company Stock Plans and alloutstanding shares of capital stock of each of the Company’s subsidiaries have been issued andgranted in compliance with (i) all applicable Securities Laws and other applicable laws and (ii)all requirements set forth in applicable contracts. Except for the Company’s zero couponconvertible senior bonds due 2012, the Company or any of its subsidiaries has not issued any notes,bonds or other debt securities, or any option, warrant or other right to acquire the same, of theCompany or any of its subsidiaries. “Securities Laws” means the United States SecuritiesAct of 1933, as amended (the “Securities Act”), the Exchange Act, the listing rules of, orany listing agreement with Nasdaq Global Market and any other applicable law regulating securitiesor takeover matters.(c) Due Issuance of the Purchase Shares. The Purchase Shares have been dulyauthorized and, when issued and delivered to and paid for by the Purchaser pursuant to thisAgreement, will be validly issued, fully paid and non-assessable and free and clear of any pledge,mortgage, security interest, encumbrance, lien, charge, assessment, claim or restriction of anykind or nature, except for restrictions arising under the Securities Act and upon delivery andentry into the register of members of the Company will transfer to the Purchaser good and validtitle to the Purchase Shares.(d) Noncontravention. Neither the execution and the delivery of this Agreement, northe consummation of the transactions contemplated hereby, will (i) violate any provision of theMemorandum and Articles of Association or other constitutional documents of the Company or itssubsidiaries or violate any constitution, statute, regulation, rule, injunction, judgment, order,decree, ruling, charge, or other restriction of any government, governmental entity or court towhich the Company is subject, or (ii) conflict with, result in a breach of, constitute a defaultunder, result in the acceleration of or creation of an encumbrance under, create in any party theright to accelerate, terminate, modify, or cancel, or require any notice under, any agreement,contract, lease, license, instrument, or other arrangement to which the Company is a party or bywhich the Company is bound or to which any of the Company’s assets are subject. There is noaction, suit or proceeding, pending or threatened against the Company that questions the validityof this Agreement or the right of the Company to enter into this Agreement or to consummate thetransactions contemplated hereby or thereby.(e) Consents and Approvals. Neither the execution and delivery by the Company of thisAgreement, nor the consummation by the Company of any of the transactions contemplated hereby, northe performance by the Company of this Agreement in accordance with its terms requires the consent,approval, order or authorization of, or registration with, or the giving notice to, anygovernmental or public body or authority or any third party, except such as have been obtained,made or given.(f) Compliance with Laws. The business of the Company is not being conducted inviolation of any law or government order applicable to the Company except for violations which donot and would not reasonably be expected to have, individually or in the aggregate, a MaterialAdverse Effect.
 
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(g) SEC Filings; Financial Statements.(i) The Company has filed all forms, reports and documents required to be filed by it with theSecurities and Exchange Commission (the “SEC”) since October 26, 2006, including (i) itsannual reports on Form 20-F for the fiscal years ended December 31, 2006, 2007 and 2008,respectively, and (ii) all other forms, reports and other registration statements filed by theCompany with the SEC since October 26, 2006 (the forms, reports and other documents referred to inclauses (i) and (ii) above being, collectively, the “SEC Reports”). The SEC Reports (i)complied as to form in all material respects with the requirements of the Securities Act, or theExchange Act, as the case may be, and the rules and regulations promulgated thereunder, and (ii)did not, at the time they were filed, or, if amended, as of the date of such amendment, contain anyuntrue statement of a material fact or omit to state a material fact required to be stated thereinor necessary in order to make the statements made therein, in the light of the circumstances underwhich they were made, not misleading.(ii) Each of the consolidated financial statements (including, in each case, any notesthereto) contained in the SEC Reports was prepared in accordance with United States generallyaccepted accounting principles (“GAAP”) applied on a consistent basis throughout theperiods indicated (except as may be indicated in the notes thereto) and each fairly presents, inall material respects, the consolidated financial position, results of operations and cash flows ofthe Company and its consolidated subsidiaries as at the respective dates thereof and for therespective periods indicated therein (subject, in the case of unaudited statements, to normalyear-end adjustments which would not have had, and would not reasonably be expected to have,individually or in the aggregate, a Material Adverse Effect).(iii) Except as and to the extent set forth on the audited consolidated balance sheet of theCompany and the consolidated subsidiaries as at December 31, 2008, including the notes thereto (the“Balance Sheet”), neither the Company nor any subsidiary has any liability or obligation ofany nature (whether accrued, absolute, contingent or otherwise) that would be required to bedisclosed in accordance with GAAP, except for liabilities and obligations, incurred in the ordinarycourse of business consistent with past practice since December 31, 2008, which would not,individually or in the aggregate, prevent or materially delay consummation of any of thetransactions or otherwise prevent or materially delay the Company from performing its obligationsunder this Agreement and would not reasonably be expected to have, individually or in theaggregate, a Material Adverse Effect. None of the Company or its subsidiaries is a party to anycontract or any commitment providing for an interest rate, currency or commodity swap, derivative,forward purchase or sale or other transaction similar in nature or effect or involving anyoff-balance sheet financing.(h) Events Subsequent to Most Recent Fiscal Period. Since December 31, 2008, therehas not occurred any Material Adverse Effect or any event, fact, circumstance or occurrence thatwould reasonably be expected to result in a Material Adverse Effect.(i) The Company is not a “passive foreign investment company” (a “PFIC”), as definedin the U.S. Internal Revenue Code of 1986, as amended (the “Code”), for the year endedDecember 31, 2008. The Company has no plan or intention to take any action that would result inthe Company becoming a PFIC for the current year or any future year.
 
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(j) Litigation. There are no actions by or against the Company or affecting thebusiness or any of the assets of the Company pending before any governmental authority, or, to theCompany’s knowledge, threatened to be brought by or before any governmental authority that wouldreasonably be expected to result in a Material Adverse Effect.**Section 2.2**Representations and Warranties of the Purchaser. The Purchaser herebyrepresents and warrants to the Company as of the date hereof and as of the Closing Date, asfollows:(a) Due Formation. The Purchaser is a company duly incorporated as an exemptedcompany with limited liability, validly existing and in good standing under the laws of the CaymanIslands, with full power and authority to own and operate and to carry on its business in theplaces and in the manner as currently conducted.(b) Authority. The Purchaser has full power and authority to enter into, execute anddeliver this Agreement and each agreement, certificate, document and instrument to be executed anddelivered by the Purchaser pursuant to this Agreement and to perform its obligations hereunder.The execution and delivery by the Purchaser of this Agreement and the performance by the Purchaserof its obligations hereunder have been duly authorized by all requisite actions on its part.(c) Valid Agreement. This Agreement has been duly executed and delivered by thePurchaser and constitutes the legal, valid and binding obligation of the Purchaser, enforceableagainst it in accordance with its terms, except (i) as limited by applicable bankruptcy,insolvency, reorganization, moratorium, and other laws of general application affecting enforcementof creditors’ rights generally, and (ii) as limited by laws relating to the availability ofspecific performance, injunctive relief, or other equitable remedies.(d) Consents. Neither the execution and delivery by the Purchaser of this Agreementnor the consummation by it of any of the transactions contemplated hereby nor the performance bythe Purchaser of this Agreement in accordance with its terms requires the consent, approval, orderor authorization of, or registration with, or the giving of notice to, any governmental or publicbody or authority or any third party, except as have been obtained, made or given.(e) No Conflict. Neither the execution and delivery by Purchaser of this Agreement,nor the consummation by it of any of the transactions contemplated hereby, nor compliance byPurchaser with any of the terms and conditions hereof will contravene any existing agreement,federal, state, county or local law, rule or regulation or any judgment, decree or order applicableto, or binding upon, Purchaser.(f) Status and Investment Intent.(i) Experience. The Purchaser has sufficient knowledge and experience in financialand business matters so as to be capable of evaluating the merits and risks of its investment inthe Purchase Shares. The Purchaser is capable of bearing the economic risks of such investment,including a complete loss of its investment.
 
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(ii) Purchase Entirely for Own Account. The Purchaser is acquiring the PurchaseShares that it is purchasing pursuant to this Agreement for investment for its own account forinvestment purposes only and not with the view to, or with any intention of, resale, distributionor other disposition thereof. The Purchaser does not have any direct or indirect arrangement, orunderstanding with any other persons to distribute, or regarding the distribution of the Shares inviolation of the Securities Act or any other applicable state securities law.(iii) Restricted Securities. The Purchaser acknowledges that the Purchase Shares are“restricted securities” that have not been registered under the Securities Act or any applicablestate securities law. The Purchaser further acknowledges that, absent an effective registrationunder the Securities Act, the Purchase Shares may only be offered, sold or otherwise transferred(i) to the Company, (ii) outside the United States in accordance with Rule 904 of Regulation Sunder the Securities Act or (iii) pursuant to an exemption from registration under the SecuritiesAct.(iv) Information. The Purchaser has been furnished access to all materials suchPurchaser has requested relating to the Company and its subsidiaries and other due diligenceinformation and documents, including certain balance sheet and income statement data of the Companyon a consolidated basis for the first quarter of 2009, and the Purchaser has been afforded theopportunity to ask questions of and receive answers from representatives of the Company concerningthe foregoing, including the terms and conditions of this Agreement. The Purchaser has consultedto the extent deemed appropriate by such Purchaser with such Purchaser’s own advisers as to thefinancial, tax, legal and related matters concerning an investment in the Purchase Securities andon that basis believes that an investment in the Purchase Securities is suitable and appropriatefor such Purchaser.(v) No Broker. No broker, investment banker or other person is entitled to anybroker’s, finder’s or other similar fee or commission in connection with the execution and deliveryof this Agreement or the Registration Rights Agreement or the consummation of any of thetransactions contemplated by this Agreement based upon arrangements made by or on behalf of thePurchaser.(g) Financing. The Purchaser has sufficient funds available to it to purchase all ofthe Purchase Shares pursuant to this Agreement.**ARTICLE III****COVENANTS****Section 3.1**Lock-Up. The Purchaser agrees that it will not, without the priorwritten consent of the Company, (i) offer, pledge, sell, contract to sell, sell any option orcontract to purchase, purchase any option or contract to sell, grant any option, right or warrantfor the sale of, lend or otherwise dispose of or transfer any of the Purchase Shares or (ii) enterinto any swap or any other agreement or any transaction that transfers, in whole or in part,directly or indirectly, the economic consequence of ownership of any of the Purchase Shares priorto the date 270 days
 
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after the Closing Date, except to a direct or indirect wholly-owned subsidiary of thePurchaser that shall be bound by this Agreement as if such subsidiary were a party (“RelatedTransferee”).**Section 3.2**Standstill.(a) The Purchaser hereby agrees that, without the prior written approval of the Company, thePurchaser and its affiliates will not, for a period of 180 days from the date of this Agreement,acquire more than an additional 5% of the total outstanding Shares of Voting Securities (as definedbelow) of the Company, calculated on a basis that includes all Shares actually outstanding.“Voting Securities” shall mean the Shares (including Shares represented by the Company’sAmerican depositary shares) and any other securities entitled to vote generally for the election ofdirectors of the Company. For the avoidance of doubt, the Purchase Shares acquired by thePurchaser on the Closing Date are not “additional” Shares for purposes of this section 3.2(a).(b) The Purchaser hereby agrees that, without the prior written approval of the Company, thePurchaser will not, and will use its reasonable efforts to cause its affiliates not to, for aperiod of 18 months from the date of this Agreement, directly or indirectly, acting alone or withothers, assist, support, encourage, finance, participate with or advise any other person’s orentity’s efforts to:(i) propose a merger, business combination, tender or exchange offer, share exchange,recapitalization, consolidation or other similar transaction involving the Company or any of itssubsidiaries;(ii) propose or offer to purchase, lease or otherwise acquire all or a substantial portion ofthe assets of the Company or any of its subsidiaries;(iii) form, join or in any way participate in a “group” (as defined in Section 13(d)(3) of theExchange Act), or act in concert with any person with respect to the securities of the Company orany of its subsidiaries in an attempt to circumvent the provisions of this Agreement;(iv) solicit or participate in the solicitation of any proxies or consents with respect to thevoting securities of the Company or any of its subsidiaries; or(v) enter into any substantial discussions or arrangements with any third party with respectto any of the foregoing.**Section 3.3**Further Assurances. From the date of this Agreement until the earlierof the Closing Date or the termination of this Agreement in accordance with Section 5.2,the Parties shall use their best efforts to fulfill or obtain the fulfillment of the conditionsprecedent to the consummation of the transactions contemplated hereby.**Section 3.4**Between the date of this Agreement and the Closing, the Company and itssubsidiaries shall operate their respective businesses only in the ordinary course consistent withpast practice.
 
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**ARTICLE IV****ADDITIONAL AGREEMENTS****Section 4.1**Rights to Purchase New Voting Securities.(a) For a period of 180 days beginning from the date of this Agreement, in the event that theCompany proposes to issue new Voting Securities, the Purchaser shall have the right to purchase, inlieu of the Person to whom the Company proposed to issue such new Voting Securities, in accordancewith paragraph (b) below, a number of shares of new Voting Securities equal to the product of (i)the total number or amount of shares of new Voting Securities which the Company proposes to issueat such time and (ii) a fraction, the numerator of which shall be the total number of PurchaseShares which the Purchaser owns at such time, and the denominator of which shall be the totalnumber of Shares of the Company then outstanding (prior to the issuance of new Voting Securities).The rights given by the Company under this Section 4.1(a) shall terminate if unexercised within ten(10) days after receipt of the Notice of Issuance referred to in paragraph (b) below.(b) For a period of 180 days beginning from the date of this Agreement, in the event that theCompany proposes to undertake an issuance of new Voting Securities, it shall give written notice (a“Notice of Issuance”) of its intention to the Purchaser, describing all material terms ofthe new Voting Securities, the price and all material terms upon which the Company proposes toissue such new Voting Securities. The Purchaser shall have ten (10) days from the date of theNotice of Issuance to agree to purchase its *pro rata*share of such new Voting Securities (asdetermined pursuant to paragraph (a) above) for the same consideration and otherwise upon the termsspecified in the Notice of Issuance by giving written notice to the Company, and stating thereinthe quantity of new Voting Securities to be purchased by the Purchaser. Upon the expiry of suchten (10) day period, if the Purchaser has not provided such written notice to the Company it shallbe deemed to have refused to participate in the offering of new Voting Securities and the Companymay issue such new Voting Securities to any other Person, as determined by the Company’s board.The Company shall take all steps necessary to include the provisions of this Section 4.1 in theMemorandum and Articles of Association of the Company as soon as reasonably practicable after thedate of this Agreement.**ARTICLE V****INDEMNIFICATION****Section 5.1**Indemnification. Each of the Company and the Purchaser (an“Indemnifying Party”) shall indemnify and hold each other and their directors, officers andagents (collectively, the “Indemnified Party”) harmless from and against any losses,claims, damages, liabilities, judgments, fines, obligations, expenses and liabilities of any kindor nature whatsoever, including but not limited to any investigative, legal and other expensesincurred in connection with, and any amounts paid in settlement of, any pending or threatened legal action
 
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or proceeding, but excluding consequential damages, special or incidental damages, indirectdamages, punitive damages, lost profits, and diminution in value (collectively, “Losses”)resulting from or arising out of: (i) the breach of any representation or warranty of suchIndemnifying Party contained in this Agreement or in any schedule or exhibit hereto; or (ii) theviolation or nonperformance, partial or total, of any covenant or agreement of such IndemnifyingParty contained in this Agreement for reasons other than gross negligence or willful misconduct ofsuch Indemnified Party. Notwithstanding the foregoing, the Indemnifying Party shall have noliability (for indemnification or otherwise) with respect to any Losses in excess of the aggregatetotal of the Purchase Price. In calculating the amount of any Losses of an Indemnified Partyhereunder, there shall be subtracted the amount of any insurance proceeds and third-party paymentsreceived by the Indemnified Party with respect to such Losses, if any.**Section 5.2**Notice of Claims; Procedures. If an Indemnified Party makes any claimagainst an Indemnifying Party for indemnification, the claim shall be in writing and shall state ingeneral terms the facts upon which such Indemnified Party makes the claim. In the event of anyclaim or demand asserted against an Indemnified Party by a third party upon which the IndemnifiedParty may claim indemnification, the Indemnifying Party shall give written notice to theIndemnified Party within 30 days after receipt from the Indemnified Party of the claim referred toabove, indicating whether such Indemnifying Party intends to assume the defense of the claim ordemand. If an Indemnifying Party assumes the defense, such Indemnifying Party shall have the rightto fully control and settle the proceeding, provided, that, any such settlement or compromise shallbe permitted hereunder only with the written consent of the Indemnified Party, which consent shallnot be unreasonably withheld or delayed. If the Indemnifying Party elects not to assume thedefense or fails to make such an election with the 30-day period, the Indemnified Party may, at itsoption, defend, settle, compromise or pay such action or claim; provided, that, any such settlementor compromise shall be permitted hereunder only with the written consent of the Indemnifying Party,which consent shall not be unreasonably withheld or delayed.**Section 5.3**Basket and Cap. Notwithstanding anything to the contrary in thisAgreement, except in the case of fraud or willful misconduct, (i) the Indemnifying Party shall notbe obligated to indemnify an Indemnified Party under Section 5.1, except if and to theextent that the aggregate Losses incurred by the Indemnified Party as a result of all Losses thatwould otherwise be subject to indemnification under Section 5.1 exceeds the sum ofUS$500,000 (the “Basket Amount”), and then such Indemnified Party shall be entitled toindemnification only for the portion of its Losses that exceeds the Basket Amount, (ii) theIndemnifying Party shall not be responsible for indemnifying any Indemnified Party for anyindividual claims where the Losses relating thereto are less than US$50,000 and such items shallnot be aggregated for purposes of clause (i) above, and (iii) the aggregate Liability of theIndemnifying Party to the Indemnified Party for indemnification under this Section 5.1shall be limited to the Purchase Price.**Section 5.4**Third Party Claims.(a) If any third party shall notify any Indemnified Party in writing with respect to anymatter involving a claim by such third party (a “Third Party Claim”) which such IndemnifiedParty believes would give rise to a claim for indemnification against the Indemnifying Party underthis Article IV, then the Indemnified Party shall promptly (i) notify the
 
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Indemnifying Party thereof in writing within thirty (30) days of receipt of notice of suchclaim and (ii) transmit to the Indemnifying Party a written notice (“Claim Notice”)describing in reasonable detail the nature of the Third Party Claim, a copy of all papers servedwith respect to such claim (if any), and the basis of the Indemnified Party’s request forindemnification under this Agreement; provided, however, that no delay on the partof the Indemnified Party in so notifying the Company shall relieve the Company of any obligationunder Section 5.1 with respect thereto unless (and then solely to the extent) the Companyis prejudiced thereby.(b) Subject to Section 5.4(d) below, upon receipt of a Claim Notice with respect to aThird Party Claim, the Indemnifying Party shall have the right to assume the defense of any ThirdParty Claim by notifying the Indemnified Party in writing that the Indemnifying Party elects toassume the defense of such Third Party Claim, and upon delivery of such notice by the IndemnifyingParty, the Indemnifying Party shall have the right to defend such Third Party Claim with counsel,selected by it, who is reasonably satisfactory to the Indemnified Party, by all appropriateproceedings, which proceedings shall be prosecuted actively and diligently by the IndemnifyingParty to a final conclusion or settled. Notwithstanding the foregoing, the Indemnifying Partyshall not be entitled to consent to the entry of a judgment or enter into any compromise orsettlement with respect to such Third Party Claim without the prior written consent of theIndemnified Party (which shall not be unreasonably withheld).(c) If requested by the Indemnifying Party, the Indemnified Party agrees, at the sole cost andexpense of the Indemnifying Party, to cooperate with the Indemnifying Party and its counsel incontesting any Third Party Claim which the Indemnifying Party elects to contest, including themaking of any related counterclaim against the Person asserting the Third Party Claim or any crosscomplaint against any Person. The Indemnified Party shall have the right to receive copies of allpleadings, notices and communications with respect to any Third Party Claim, other than anyprivileged communications between the Indemnifying Party and its counsel, and shall be entitled, atits sole cost and expense, to retain separate co-counsel and participate in, but not control, anydefense or settlement of any Third Party Claim assumed by the Indemnifying Party pursuant toSection 5.4(b); provided, however, if, based on written advice of counsel,the Indemnified Party concludes that there is a reasonable likelihood of a conflict of interestbetween the Indemnifying Party and the Indemnified Party with respect to such Third Party Claim,the Indemnifying Party shall bear the reasonable costs and expenses of one counsel to theIndemnified Party in connection with such defense.(d) If (i) the Indemnifying Party fails to notify the Indemnified Party within the thirty (30)days after receipt of any Claim Notice that the Indemnifying Party elects to assume the defense ofany Third Party Claim pursuant to Section 5.4(b), (ii) the Indemnifying Party elects toassume the defense of any Third Party Claim pursuant to Section 5.4(b) but fails todiligently prosecute or settle such Third Party Claim, (iii) the Indemnifying Party and theIndemnified Party are parties to the same proceeding (or, assuming the veracity of the factsalleged by the party bringing the Third Party Claim, the Indemnifying Party and the IndemnifiedParty may become parties to the same proceeding) and the Indemnified Party determines in good faiththat a conflict of interest exists between the Indemnifying Party and the Indemnified Party, (iv)the Indemnified Party determines in good faith that there is a reasonable possibility that it willbe prejudiced in any material respect beyond the ambit of such Third Party Claim by theIndemnifying Party’s control of the defense and proceedings with respect to any Third Party
 
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Claim, or (v) such Third Party Claim is a claim by a governmental tax authority, then (A) theIndemnified Party shall have the right to assume full control of the defense and proceedings withrespect to such Third Party Claim, and the Indemnified Party may compromise or settle such ThirdParty Claim without consulting with, or obtaining consent from, the Indemnifying Party inconnection therewith (it being understood and agreed that the Indemnifying Party shall not be boundby any such compromise or settlement entered into without its consent) and (B) the IndemnifyingParty shall reimburse the Indemnified Party promptly and periodically for the costs of defendingagainst the Third Party Claim (including fees and disbursements of no more than one counsel perjurisdiction (such counsel reasonably acceptable to the Indemnifying Party) reasonably incurred inconnection with such Third Party Claim). The Indemnified Party shall have full control of suchdefense and proceedings, although the Indemnifying Party shall be entitled to participate in anydefense or settlement controlled by the Indemnified Party pursuant to this Section 5.4(d)at its sole expense. Any compromise or settlement of a Third Party Claim effected by theIndemnified Party without the Indemnifying Party’s consent shall not be dispositive of the amountof any Losses with respect to such Third Party Claim.(e) In the event any Indemnified Party should have a claim against the Indemnifying Partyhereunder which does not involve a Third Party Claim, the Indemnified Party shall promptly transmitto the Indemnifying Party a written notice (the “Indemnity Notice”) describing inreasonable detail the nature of the claim, the Indemnified Party’s best estimate of the amount ofLosses attributable to such claim and the basis of the Indemnified Party’s request forindemnification under this Agreement; provided that no delay on the part of the Indemnified Partyin delivering the Indemnity Notice pursuant to this Section 5.4(e) shall relieve theIndemnifying Party of any obligation hereunder unless (and then solely to the extent) theIndemnifying Party is prejudiced thereby. If the Indemnifying Party does not notify theIndemnified Party within thirty (30) days from its receipt of the Indemnity Notice that theIndemnifying Party disputes such claim (the “Dispute Notice”), the Indemnifying Party shallbe deemed to have accepted and agreed with such claim.**ARTICLE VI****MISCELLANEOUS****Section 6.1**Survival of the Representations and Warranties. All representationsand warranties made by any Party shall survive for two years and shall terminate and be withoutfurther force or effect on the second anniversary of the date hereof, except as to (i) any claimsthereunder which have been asserted in writing pursuant to Section 5.1 against the Partymaking such representations and warranties on or prior to such second anniversary, and (ii) theCompany’s representations contained in Section 2.1(a), (b) and (c) hereof, each of whichshall survive indefinitely.**Section 6.2**Termination. This Agreement may be terminated, and the transactionscontemplated hereby may be abandoned at any time prior to Closing, (i) by mutual agreement of theParties, (ii) by any Party in the event that the Closing has not occurred by June 30, 2009 (the“Termination Date”), provided, however, that the right to terminate thisAgreement pursuant to this clause (ii) shall not be available to any Party whose willful breach ofthis Agreement has
 
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resulted in the failure of the Closing to occur on or before the Termination Date. Nothing inthis Section 6.2 shall be deemed to release any Party from any liability for any breach ofthis Agreement prior to the effective date of such termination and after the effective date ofArticle V (Indemnification).**Section 6.3**Governing Law; Jurisdiction. This Agreement shall be governed andinterpreted in accordance with the laws of the State of New York without giving effect to theconflicts of law principles thereof. Each of the Parties hereto (a) irrevocably andunconditionally submits to the exclusive jurisdiction of the courts of the State of New York andany court of the United States located in the Borough of Manhattan in New York City with respect toall actions and proceedings arising out of or relating to this Agreement and the transactionscontemplated hereby, (b) agrees that all claims with respect to any such action or proceeding shallbe heard and determined in such courts and agrees not to commence any action or proceeding relatingto this Agreement or the transactions contemplated hereby except in such courts, (c) irrevocablyappoints Law Debenture Corporate Services Inc. as agent upon whom process may be served in any suchaction or proceeding (d) irrevocably and unconditionally waives any objection to the laying ofvenue of any action or proceeding arising out of this Agreement or the transactions contemplatedhereby and irrevocably and unconditionally waives the defense of an inconvenient forum, and (e)agrees that a final judgment in any such action or proceeding shall be conclusive and may beenforced in other jurisdictions by suit on the judgment or in any other manner provided by law.**Section 6.4**Amendment. This Agreement shall not be amended, changed or modified,except by another agreement in writing executed by the Parties hereto.**Section 6.5**Binding Effect. This Agreement shall inure to the benefit of, and bebinding upon, each of the Company and the Purchaser and their respective heirs, successors andpermitted assigns and legal representatives.**Section 6.6**Assignment. Neither this Agreement nor any of the rights, duties orobligations hereunder may be assigned by the Company or the Purchaser without the express writtenconsent of the other Parties, except that the Purchaser may assign all or any of its rights andobligations hereunder to any affiliate of Purchaser without the consent of the other Parties,provided that no such assignment shall relieve the Purchaser of its obligations hereunder if suchassignee does not perform such obligations. Any purported assignment in violation of the foregoingsentence shall be null and void.**Section 6.7**Notices. All notices, requests, demands, and other communicationsunder this Agreement shall be in writing and shall be deemed to have been duly given on the date ofactual delivery if delivered personally to the Party or Parties to whom notice is to be given, onthe date sent if sent by telecopier, tested telex or prepaid telegram, on the next business dayfollowing delivery to Federal Express properly addressed or on the day of attempted delivery by theU.S. Postal Service if mailed by registered or certified mail, return receipt requested, postagepaid, and properly addressed as follows:
 
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       If to Purchaser, at: Ctrip.com International, Ltd.