Document:

EX-10.5

 

Exhibit 10.5

AGREEMENT

     THIS AGREEMENT, made and entered into this 19th day of July, 2007, by and between
OAK HILL BANKS, hereinafter referred to as “Bank” and MILES R. ARMENTROUT, hereinafter
referred to as “Employee”, and WESBANCO, INC., a West Virginia corporation, hereinafter
referred to as “Wesbanco”.

     WHEREAS, Employee is serving as an executive officer of the Bank as of the date hereof, and is
a participant in the Oak Hill Financial, Inc. Key Executive Change in Control Plan (the “Plan”)
which the parties mutually agree will be terminated as of the Effective Date of the merger of Oak
Hill Financial, Inc. (“Oak Hill”) with and into Wesbanco upon payment by Wesbanco of the change in
control compensation provided under Section 5 thereof which the parties agree shall be in the
amount of One Hundred Sixty Thousand Dollars ($160,000), payable in a lump sum on the effective
date of the merger (the “Change in Control Payment”) notwithstanding the continued employment of
Employer, and

     WHEREAS, the Bank wishes to assure itself of the Employee’s full time employment and
continuing services in an executive capacity.

     WITNESSETH THAT: In consideration of the mutual promises and undertakings hereinafter set
forth, the parties hereto agree as follows:

     1. OFFER OF EMPLOYMENT. The Bank agrees to, and hereby does, continue the
employment of Employee at Bank in an executive capacity. In that capacity, Employee shall be
answerable to the Board of Directors of the Bank and such other officers of Wesbanco, the

 

 

parent company of the Bank, as the Board of Directors of Wesbanco shall direct. Employee shall
perform such duties, compatible with his employment under the Agreement, as the Bank, and Wesbanco,
from time to time may assign to him.

     2. COMPENSATION. As compensation for the performance of the services specified in
Paragraph (1) and the observance of all of the provisions of this Agreement, the Bank agrees
to pay Employee, and Employee agrees to accept, the following amounts and benefits during his
term of employment:

     (A) Salary at a rate to be determined by the Board of Directors of the Bank,
with notice to be given to employee in April of each calendar year, but in no
event shall Employee’s salary be less than One Hundred Sixty Thousand Dollars
($160,000.00) per year, plus any increases granted by the Board of Directors after
the date hereof, and payable in equal biweekly installments; and

     (B) Such other miscellaneous benefits and perquisites as the Bank
provides to its executive employees generally.

     3. ACCEPTANCE OF EMPLOYMENT. Employee accepts the employment provided for herein, at
the salary set forth above, and agrees to devote his talents and best efforts to the diligent,
faithful, and efficient discharge of the duties of his employment, and in furtherance of the
operations and best interests of Bank, and observe and abide by all rules and regulations
promulgated by Bank for the guidance and direction of its employees and the conduct of its
business, operations, and activities.

     4. TERM OF AGREEMENT. The employment term provided for herein shall consist of a
term of one (1) year, with the initial term beginning on the Effective Date of the

2

 

merger of Oak Hill with and into Wesbanco and ending on the first anniversary thereof. The term of
this Agreement shall automatically be extended on each anniversary of the beginning date of the
term hereof for an additional one year, thereby creating a new one (1) year term, unless written
notice of termination hereof is given by either party at least ninety (90) days prior to the
anniversary date of the beginning date of this Agreement.

     5. CONFIDENTIALITY. Employee agrees that such information concerning the business,
affairs, and records of Bank, Wesbanco or any affiliate thereof as he may acquire in the course of,
or as incident to, his employment hereunder, shall be regarded and treated as being of a
confidential nature, and that he will not disclose any such information to any person, firm, or
corporation, for his own benefit or to the detriment of Bank, Wesbanco or any affiliate thereof,
during the term of his employment under this Agreement or at any time following the termination
thereof.

     6. MISCELLANEOUS BENEFITS. This Agreement is not intended, and shall not be deemed to
be in lieu of any rights, benefits, and privileges to which Employee may be entitled as an employee
of Bank under any retirement, pension, profit sharing, insurance, hospital, bonus, vacation, or
other plan or plans which may now be in effect or which may hereafter be adopted by Bank, it being
understood that Employee shall have the same rights and privileges to participate in such plans and
benefits, as any other employee, during the period of his employment.

     7. BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon
Bank’s successors and assigns, including, without limitation, any company or corporation which may
acquire substantially all of Bank’s assets or business, or with, or into which Bank may be merged
or otherwise consolidated.

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     8. TERMINATION. The Employee’s employment hereunder shall terminate upon the
earliest to occur of any one of the following:

     (A) The expiration of the initial term of this Agreement, or any
extended term of this Agreement by written notice of termination as provided
in Paragraph (4) hereof; or

     (B) By the Bank for cause (as defined below) or other than for cause,
after thirty (30) days written notice to Employee, provided that such
termination may be immediate upon notice in the case of a termination by the
Bank for cause. Cause for purposes of this Agreement shall mean as follows:

     (i) An act of dishonesty, willful disloyalty or
fraud by the Employee that the Bank determines is
detrimental to the best interests of the Bank, Wesbanco or
any affiliate thereof; or

     (ii) The Employee’s continuing inattention to,
neglect of, or inability to perform (other than as a result of
the Employee’s disability, as determined by the Bank, the duties
to be performed under this Agreement, or

     (iii) Any other breach of the Employee’s covenants
contained herein or of any of the other terms and provisions of
this Agreement, or

     (iv) The deliberate and intentional engaging by
the Employee in gross misconduct which is materially and

4

 

demonstrably injurious to the Bank, Wesbanco or any
affiliate thereof.

     (C) Employee shall have the right to terminate this Agreement and his active
employment hereunder at any time after the expiration of the initial one (1) year
term of this Agreement upon ninety (90) days written notice to the Bank.

     (D) Upon the death of Employee, this Agreement shall automatically
terminate.

     9. EFFECT OF TERMINATION. In the event of a termination of this
Agreement, Employee shall be paid the following severance benefits, payable promptly after the date
of termination of his employment, in the following manner:

     (A) In the event that this Agreement is terminated by the death of
Employee, this Agreement shall be deemed to have been terminated as of the date of
such death except, however, that Bank shall pay to the surviving spouse of
Employee, or in lieu thereof, to Employee’s estate, an amount equal to six months
of the base salary at his then current base rate, provided, however, that if such
death occurs within six months of the Normal Retirement Date as defined in the
Wesbanco, Inc. KSOP, or after such Normal Retirement Date, so that a plan benefit
is payable to the surviving spouse of Employee, such payment shall be reduced to
an amount equal to one month of the base salary at his then current base rate.

5

 

     (B) In the event that this Agreement is terminated by Employee and Bank
by mutual agreement, then Bank shall pay such severance benefits, if any, as
shall be agreed upon by Bank and Employee.

     (C) In the event that Bank attempts to terminate this Agreement, other than
for cause, death of Employee, or by mutual agreement with Employee, in addition to
any other rights or remedies which Employee may have, Employee shall receive an
amount equal to the greater of (i) six months of base salary at his then current
base rate, or (ii) the base salary Employee would have received had he continued
to be employed pursuant to this Agreement throughout the end of the then existing
one-year term of employment hereunder.

     (D) In the event Bank terminates this Agreement for cause or the Employee
terminates this Agreement, no severance benefits shall be payable hereunder.

     10. ENTIRE UNDERSTANDING; AMENDMENT. This Agreement supersedes all previous agreements
between Employee and Bank, except as otherwise specifically provided herein, and contains the
entire understanding and agreement between the parties with respect to the subject matter hereof,
and cannot be amended, modified, or supplemented in any respect except by a subsequent written
agreement executed by the parties hereto.

     11. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of West Virginia.

     12. CERTAIN OBLIGATIONS OF WESBANCO. While the parties acknowledge that certain
provisions of this Agreement may be unenforceable in some respects against the

6

 

Bank, pursuant to applicable banking law, it is nonetheless the intention of the parties to create
pursuant to this Agreement a valid employment for a definite term (subject to early termination as
provided herein) with specified benefits. As an inducement for Employee and Bank to enter into this
Agreement, Wesbanco hereby undertakes the independent, separate and unconditional obligation to
Employee to pay all amounts which are or may become due to Employee under this Agreement as set
forth herein, regardless of the status of the direct or indirect enforceability or validity of
Bank’s obligation to pay any or all such amounts as may be due hereunder to Employee; provided,
however, that for purposes of this Paragraph 12, Wesbanco shall be obligated to the Employee for
any bonuses or any increases in base salary in excess of the rate of One Hundred Sixty Thousand
Dollars ($160,000.00) per annum only to the extent that it has consented to such bonuses or
increases. Wesbanco also acknowledges that it may or may not be entitled to indemnification or
contribution from Bank or to be subrogated to the claim of Employee hereunder for any payments
Wesbanco may make to Employee; and Wesbanco hereby specifically waives any rights it may otherwise
have to indemnification or contribution from Bank or to be subrogated to the claim of Employee
hereunder in the event that such payments as are made by Wesbanco would be unenforceable or invalid
for any reason against Bank.

     13. OBLIGATIONS OF THE EMPLOYEE UPON TERMINATION. As a condition of and
prior to receiving any benefits upon termination of this Agreement, the Employee will be
required to enter an agreement with Wesbanco, the form of which will be approved by Wesbanco,
under which the Employee will agree to the following:

     (A) To reasonably assist Wesbanco with any transition issues that
arises from the Employee’s termination of employment;

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     (B) Not to use or disclose proprietary or confidential information of
Wesbanco or any affiliate thereof, including customer and clients lists, financial
systems, personnel information and other information as reasonably determined by
Wesbanco;

     (C) Not to make statements, give interviews, write books, articles or other
publications related to Wesbanco or its management, customers or employees without
prior written consent of Wesbanco;

     (D) To reasonably cooperate with Wesbanco and its attorneys with respect
to any investigation or litigation of which the Employee has knowledge; and

     (E) To provide Wesbanco with a release of claims against Wesbanco, its
affiliates, officers, directors and assigns for matters related to the Employee’s
employment with Wesbanco or Bank.

     14. REIMBURSEMENT OBLIGATION. The parties acknowledge and agree that a Change in
Control Payment will be made to Employee upon the effective date of the merger of Oak Hill with and
into Wesbanco notwithstanding the continued employment of Employee and notwithstanding the dual
trigger provisions of the Plan. In consideration of such payment, Employee agrees to continue his
employment with Bank for the initial one (1) year term hereof and in the event Employee voluntarily
terminates his employment during such one (1) year term or is otherwise discharged for cause as
defined in said Plan during the one (1) year term, then Employee shall reimburse Wesbanco any and
all Change in Control Payments received by Employee by reason of the merger (including any
applicable withholding taxes withheld from such Change in Control Payment). In the event the
parties hereto mutually agree to terminate

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such employment prior to the expiration of said one (1) year term, the parties agree that no
reimbursement will be required hereunder.

     15. TERMINATION OF OAK HILL PLAN. Conditioned upon consummation of the merger by and
between Wesbanco and Oak Hill, the parties agree to the termination, as of the Effective Date of
the Merger, as those terms are defined in the Agreement and Plan of Merger dated the 19th day of
July, 2007, by and between such parties and their named subsidiaries, of the Plan subject to
receipt by Employee of the Change of Control Payment provided under Paragraph 5 thereof, except to
the extent that any such benefit is provided under this Agreement or to which Employee would be
entitled to receive as a continuing employee of Employer.

     16. MISCELLANEOUS. The invalidity or unenforceability of any term or provision of this
Agreement as against any one or more parties hereto, shall not impair or effect the other
provisions hereof or the enforceability of said term or provision against the other parties hereto,
and notwithstanding any such invalidity or unenforceability, each term or provision hereof shall
remain in full force and effect to the full extent consistent with law.

     IN WITNESS WHEREOF, Bank and Wesbanco have caused these presents to be signed and their
corporate seals to be hereto affixed, and Employee has hereto affixed signature and seal, at
Cincinnati, Ohio, as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	OAK HILL BANKS	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ R. E. Coffman, Jr.	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Its President and CEO	 	 

(SEAL)

ATTEST:

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	ATTEST:	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	Secretary	 	 

	 	 	 	 	 	 	 	 	 
	 	 	/s/ Miles R. Armentrout	(SEAL)
	 	 	 	 	 
	 	 	MILES R. ARMENTROUT	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	WESBANCO, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	/s/ Paul M. Limbert 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	    Its	 	President and Chief Executive Officer 	 	 
	 

	 	 	 	 	 	 	 	 

(SEAL)

	 	 	 	 	 
	ATTEST:	 	 
	 
	 	 	 	 
	/s/ Linda Woodfin 	 	 
	 	 	 
	 

	 	Assistant Secretary	 	 

10exv10w1

 

Exhibit 10.1

Execution Version

STOCK PURCHASE AGREEMENT

by and between

AOL LLC

and

ETELECARE GLOBAL SOLUTIONS, INC.

September 18, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE 1 DEFINITIONS AND CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Definitions
	 	 	1	 
	Section 1.2 Additional Defined Terms
	 	 	4	 
	Section 1.3 Construction
	 	 	5	 
	 
	 	 	 	 
	ARTICLE 2 THE TRANSACTION
	 	 	6	 
	 
	 	 	 	 
	Section 2.1 Purchase and Sale
	 	 	6	 
	Section 2.2 Purchase Price
	 	 	6	 
	Section 2.3 Escrow
	 	 	7	 
	Section 2.4 Closing
	 	 	7	 
	Section 2.5 Closing Deliveries
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLER
	 	 	8	 
	 
	 	 	 	 
	Section 3.1 Organization and Good Standing
	 	 	8	 
	Section 3.2 Authority and Enforceability
	 	 	8	 
	Section 3.3 No Conflict
	 	 	9	 
	Section 3.4 Capitalization and Ownership
	 	 	9	 
	Section 3.5 Financial Statements
	 	 	9	 
	Section 3.6 No Undisclosed Liabilities
	 	 	10	 
	Section 3.7 Absence of Certain Changes and Events
	 	 	10	 
	Section 3.8 Assets
	 	 	11	 
	Section 3.9 Real Property
	 	 	11	 
	Section 3.10 Intellectual Property
	 	 	12	 
	Section 3.11 Contracts
	 	 	12	 
	Section 3.12 Tax Matters
	 	 	13	 
	Section 3.13 Employee Benefit Matters
	 	 	14	 
	Section 3.14 Employment and Labor Matters
	 	 	15	 
	Section 3.15 Compliance with Laws
	 	 	16	 
	Section 3.16 Legal Proceedings
	 	 	16	 
	Section 3.17 Insurance
	 	 	16	 
	Section 3.18 Certain Relationships
	 	 	17	 
	Section 3.19 Brokers or Finders
	 	 	17	 
	Section 3.20 Bank Accounts
	 	 	17	 
	Section 3.21 Books and Records
	 	 	17	 
	Section 3.22 Fiscal and Non-Fiscal Incentives
	 	 	17	 
	Section 3.23 Disclaimer
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
	 	 	18	 
	 
	 	 	 	 
	Section 4.1 Organization and Good Standing
	 	 	18	 
	Section 4.2 Authority and Enforceability
	 	 	18	 
	Section 4.3 No Conflict
	 	 	18	 
	Section 4.4 Legal Proceedings
	 	 	18	 
	Section 4.5 Investment Intent
	 	 	18	 
	Section 4.6 Brokers or Finders
	 	 	18	 
	Section 4.7 Adequacy of Funds
	 	 	18	 
	Section 4.8 No Knowledge of Inaccuracies
	 	 	18	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE 5 COVENANTS
	 	 	19	 
	 
	 	 	 	 
	Section 5.1 Access and Investigation
	 	 	19	 
	Section 5.2 Operation of the Business of the Company
	 	 	19	 
	Section 5.3 Consents and Filings; Reasonable Efforts
	 	 	20	 
	Section 5.4 Notification
	 	 	20	 
	Section 5.5 Exclusivity
	 	 	21	 
	Section 5.6 Confidentiality
	 	 	21	 
	Section 5.9 Intellectual Property Carve-Out
	 	 	21	 
	Section 5.10 Further Actions
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE
	 	 	22	 
	 
	 	 	 	 
	Section 6.1 Conditions to the Obligation of the Purchaser
	 	 	22	 
	Section 6.2 Conditions to the Obligation of the Seller
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 7 TERMINATION
	 	 	23	 
	 
	 	 	 	 
	Section 7.1 Termination Events
	 	 	23	 
	Section 7.2 Effect of Termination
	 	 	24	 
	Section 7.3 Certain Effects of Termination
	 	 	24	 
	 
	 	 	 	 
	ARTICLE 8 INDEMNIFICATION
	 	 	24	 
	 
	 	 	 	 
	Section 8.1 Indemnification by the Seller
	 	 	24	 
	Section 8.2 Indemnification by the Purchaser
	 	 	24	 
	Section 8.3 Claim Procedure
	 	 	25	 
	Section 8.4 Survival
	 	 	26	 
	Section 8.5 Limitations on Liability
	 	 	26	 
	Section 8.6 Exclusive Remedy
	 	 	28	 
	Section 8.7 Exercise of Remedies by Purchaser Indemnified Parties other than the Purchaser
	 	 	28	 
	Section 9.1 Liability and Indemnification for Taxes
	 	 	28	 
	Section 9.2 Tax Return Filing and Payment of Taxes
	 	 	29	 
	Section 9.3 Cooperation
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 10 OTHER AGREEMENTS
	 	 	30	 
	 
	 	 	 	 
	Section 10.2 Indemnification; Insurance
	 	 	31	 
	Section 10.3 Seller’s Name, Assets and Information
	 	 	31	 
	Section 10.4 Company Assets and Information
	 	 	32	 
	Section 10.5 Non-Solicitation
	 	 	32	 
	Section 10.6 Confidentiality
	 	 	32	 
	 
	 	 	 	 
	ARTICLE 11 GENERAL PROVISIONS
	 	 	33	 
	 
	 	 	 	 
	Section 11.1 Transfer Taxes; Capital Gains Taxes
	 	 	33	 
	Section 11.2 Notices
	 	 	34	 
	Section 11.3 Amendment
	 	 	35	 
	Section 11.4 Waiver and Remedies
	 	 	35	 
	Section 11.5 Entire Agreement
	 	 	35	 
	Section 11.6 Assignment and Successors
	 	 	35	 
	Section 11.7 Severability
	 	 	36	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	Section 11.8 Exhibits and Schedules
	 	 	36	 
	Section 11.9 Interpretation
	 	 	36	 
	Section 11.10 Expenses
	 	 	36	 
	Section 11.11 Governing Law
	 	 	36	 
	Section 11.12 Specific Performance
	 	 	36	 
	Section 11.13 Jurisdiction and Service of Process
	 	 	36	 
	Section 11.14 Waiver of Jury Trial
	 	 	37	 
	Section 11.15 Limitation of Liability
	 	 	37	 
	Section 11.16 Counterparts
	 	 	37	 

-iii-

 

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (the “Agreement”) is made as of September 18, 2007, by and between AOL LLC, a limited liability company organized under the laws of the State of Delaware, United States of America (the “Seller”), and ETELECARE GLOBAL SOLUTIONS, INC., a corporation organized under the laws of the Republic of the Philippines (the “Purchaser”).

     The Seller will own (including beneficial ownership) at Closing 13,600,007 shares of common stock (the “Shares”) constituting all of the issued and outstanding shares of capital stock of AOL Member Services-Philippines, Inc., a corporation organized under the laws of the Republic of the Philippines (the “Company”), and the Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, the Shares in accordance with the provisions of this Agreement.

     NOW, THEREFORE, intending to be legally bound and in consideration of the mutual provisions set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1

DEFINITIONS AND CONSTRUCTION

     Section 1.1 Definitions. For the purposes of this Agreement:

     “Affiliate” means, with respect to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the specified Person. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”)
 means the possession, direct or indirect, of the power to direct or cause the direction of the
 management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

     “BIR” means the Philippines Bureau of Internal Revenue.

     “Company Plan” means any “employee benefit plan”, any “employee welfare benefit plan” and any other plan, Contract or arrangement involving compensation, including insurance coverage, severance benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement
 compensation maintained by the Company for the benefit of any current or former director, employee or consultant of the Company and with respect to which the Company may have any Liability following the Closing Date.

     “Contract” means any contract, agreement, lease, license, commitment, understanding, franchise, warranty, guaranty, mortgage, note, bond, option, warrant, right or other instrument or consensual obligation that is legally binding.

     “Corporate Officer,” with respect to the Company means those Persons holding the position of Chairman, President, Treasurer, Corporate Secretary and Assistant Corporate Secretary of the Company, as elected by the Board of Directors or shareholders of the Company.

     “Effective Time” means 11:59 p.m. (Philippines time) on the Closing Date.

 

 

     “Employee” means any employee or officer of the Company, other than any Corporate Officer of the Company, acting solely in such capacity (but including any Corporate Officer who is otherwise an employee of the Company).

     “Encumbrance” means any charge, claim, mortgage, encumbrance, pledge, security interest, restriction, adverse claim or other lien.

     “Environment” means soil, land surface or subsurface strata, surface waters and ambient air (including indoor air).

     “Environmental Law” means any Law that relates to protection of the Environment.

     “Estimated Net Book Value” means Six Million Two Hundred Thousand United States Dollars (US$6,200,000).

     “Financial Liability” means any of the following Liabilities: loans, accounts payable, mortgages pledges, security interests, liens, deferred revenues, and accrued expenses.

     “Governmental
Authority” means any (a) federal, state, local, municipal, foreign or other
government, (b) governmental or quasi-governmental authority of
any nature (including any governmental agency, branch, department or other entity and any court or
other tribunal), (c) multinational organization or (d) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature.

     “Governmental Authorization” means any approval, consent, ratification, waiver, license, permit, registration or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law.

     “Intellectual Property” means: (a) all patents and applications for patents and all related reissues, reexaminations, divisions, renewals, extensions, provisionals, continuations and continuations in part; (b) all copyrights, copyright registrations and copyright applications, copyrightable works and all other corresponding rights; (c) all trade dress and trade names,
logos, Internet addresses and domain names, trademarks and service marks and related registrations and applications, including any intent to use applications, supplemental registrations and any renewals or extensions, all other indicia of commercial source or origin and all goodwill associated with any of the foregoing; (d) all inventions (whether patentable or unpatentable and whether or not reduced to practice), know how, technology, technical data, trade secrets, and confidential business information; (e) all computer software including source, object and executable code, firmware, development tools, algorithms, files, records, technical drawings and related documentation, data and manuals; and (f) all copies and tangible embodiments of any of the foregoing.

     “Judgment” means any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority or arbitrator.

     “Knowledge” means, (a) with respect to the Seller, the current conscious awareness of any of the executive officers or senior managerial employees of the Seller or the Company listed in Section 1.1(a) of the Seller Disclosure Schedule, (b) with respect to the Purchaser, the current conscious awareness of any of the executive officers or senior managerial employees of the Purchaser
listed in Section 1.1(a) of the Purchaser Disclosure Schedule. The Seller will not be deemed to have knowledge (actual, constructive or otherwise) of any fact, event, condition or occurrence known or deemed to be known by any other Person other than as expressly set forth in the foregoing sentence.

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     “Law” means any federal, state, local, municipal, foreign, international, multinational, or other constitution, law, statute, treaty, rule, regulation, ordinance or code.

     “Liability” means any liability, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due.

     “Loss” means any loss, damage, fine, penalty, interest, charge, cost or other Liability.

     A violation or other matter is deemed to have a “Material Adverse Effect” on the Company, if such violation or other matter either individually or in the aggregate with all other circumstances, changes or effects, has a material adverse effect on business, assets, Liabilities, financial condition or results of operations of the Company, taken as a whole, but excluding (i) effects or
changes resulting from major acts of terrorism, (ii) any circumstance, change or effect that results from any action taken pursuant to or in accordance with this Agreement or at the request of the Purchaser, (iii) changes or developments in Laws applicable to the business of the Company or the enforcement thereof, (iv) effects or changes that are generally applicable to the industries and markets in which the Company operates, (v) changes in the United States, the
Philippines or world financial markets or general economic conditions (including prevailing interest rates), or (vi) the following effects directly and primarily arising out of the execution or delivery of this Agreement, the consummation of the transactions contemplated by this Agreement or the public announcement or other publicity, leak or rumor with respect to any of the foregoing: (w) any actions of competitors, (x) any actions taken by or losses of customers or employees,
(y) any delays or cancellations of orders for products or services, or (z) any reduction in the price of services or products offered by the Company in response to the reduction in price of comparable services or products offered by a competitor.

     “Net Book Value of the Company” means the amount as of the Effective Time by which the total book value of the assets of the Company exceeds the total book value of the Liabilities of the Company, as determined in accordance with Philippines Financial Accounting Standards.

     “Permitted Encumbrances” means (a) carrier’s, warehousemen’s, mechanic’s, materialmen’s and other similar liens with respect to amounts that are not yet due and payable or that are being contested in good faith, (b) liens for Taxes that are not yet due and payable or that are being contested in good faith, (c) liens securing rental payments under capital
lease arrangements, (d) restrictions on the transferability of securities arising under applicable securities Laws, (e) restrictions arising under applicable zoning and other land use Laws that do not, individually or in the aggregate, have a material adverse effect on the present use or occupancy of the property subject thereto, (f) defects, easements, rights of way, restrictions, covenants, claims, subleases or similar items relating to real property that do not, individually or in the aggregate, have a
material adverse effect on the present use or occupancy of the real property subject thereto, (g) matters which would be disclosed by an accurate survey or inspection of any land, buildings, improvements and fixtures erected thereon and all appurtenances related thereto, (h) matters of public record or (i) other charges, claims, mortgages, encumbrances, pledges, security interests or other liens that would not have a Material Adverse Effect.

     “Person” means an individual or an entity, including a corporation, limited liability company, general or limited partnership, trust, association or other business or investment entity, or any Governmental Authority.

     “Post-Closing Period” means any taxable period or portion of a period that begins after the Closing Date.

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     “Pre-Closing Period” means any taxable period or portion of a period that begins on or before the Closing Date and ends on the Closing Date.

     “Proceeding” means any action, suit, litigation, arbitration, hearing, or formal inquiry, audit, examination, or investigation (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, and whether public or private) commenced, brought or conducted by a Governmental Authority or arbitrator.

     “Straddle Period” means any taxable period that begins before and ends after the Closing Date.

     “Subsidiary” means, with respect to a specified Person, any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has not occurred) are held by the specified Person or one or more of its Subsidiaries.

     “Tax” means (a) any federal, state, local, foreign or other income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, franchise, employees’ income withholding, foreign or domestic withholding, social security, unemployment,
 disability, real property, personal property, sales, use, transfer, value added, alternative, add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever imposed, assessed or collected by or under the authority of any Governmental Authority, including employees tax or any Philippine Social Security System contributions mandated by Law, and (b) any interest, fines, penalties or additions resulting from, attributable to, or incurred in connection with
any items described in this paragraph or any related contest or dispute.

     “Tax Attributes” means any net operating loss, net capital loss, investment tax credit, foreign credit, charitable deduction or any other credit or tax attribute that could be carried forward or back to reduce Taxes (including deductions and credits relating to alternative minimum Taxes).

     “Tax Return” means any report, return, declaration, claim for refund, or information return or statement related to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

     Section 1.2 Additional Defined Terms. For purposes of this Agreement, the following terms have the meanings specified in the indicated Section of this Agreement:

	 	 	 
	Defined Term	 	Section
	Affiliate Indemnified Party

	 	10.2
	Agreement

	 	Preamble
	Balance Sheet

	 	3.5(a)(i)
	Base Payment

	 	2.2
	CAR

	 	11.1(b)
	Claim Notice

	 	8.3(a)
	Closing

	 	2.4
	Closing Date

	 	2.4
	Closing Net Book Value

	 	2.2(b)
	Company

	 	Preamble

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	Defined Term	 	Section
	Company Intellectual Property

	 	3.10(a)
	Confidential Information

	 	10.6(a)
	Confidentiality Agreement

	 	5.6(b)
	Controlling Party

	 	8.3(d)
	Deductible

	 	8.5(a)(i)
	Employees

	 	10.1(b)
	Escrow Agent

	 	2.3
	Escrow Agreement

	 	2.3
	Escrow Funds

	 	2.3
	Estimated Purchase Price

	 	2.2(a)
	Financial Statements

	 	3.5(a)
	Indemnification Period

	 	8.4
	Indemnified Party

	 	8.3(a)
	Indemnifying Party

	 	8.3(a)
	Independent Accountants

	 	2.2(c)
	Interim Balance Sheet

	 	3.5(a)(ii)
	Leased Real Property

	 	3.9(b)
	Marked Assets

	 	10.3(a)
	Material Contracts

	 	3.11(a)
	Nominee Shares

	 	2.5(a)(iv)
	Nonsolicitation Period

	 	10.5(a)
	Noncontrolling Party

	 	8.3(d)
	Purchase Price

	 	2.2
	Purchaser

	 	Preamble
	Purchaser Disclosure Schedule

	 	Article 4
	Purchaser Indemnified Parties

	 	8.1
	Real Property Leases

	 	3.9(b)
	Relief Application

	 	11.1(b)
	Seller

	 	Preamble
	Seller Disclosure Schedule

	 	Article 3
	Seller Indemnified Parties

	 	8.2
	Seller Information

	 	10.3(f)
	Seller Marks

	 	10.3(a)
	Services Agreement

	 	5.7
	Shares

	 	Preamble
	Tax Proceeding

	 	9.4(a)
	Third Party Claim

	 	8.3(b)
	Uncapped Seller Covenants

	 	8.5(a)
	Uncapped Seller Representations

	 	8.5(a)

     Section 1.3 Construction. Any reference in this Agreement to an “Article,” “Section,” “Exhibit” or “Schedule” refers to the corresponding Article, Section, Exhibit or Schedule of or to this Agreement, unless the context indicates otherwise. The table of contents and the headings of Articles and Sections are provided for convenience only and are not
intended to affect the construction or interpretation of this Agreement. All words used in this Agreement should be construed to be of such gender or number as the circumstances require. The term “including” means “including without limitation” and is intended by way of example and not limitation. Any reference to a statute is deemed also to refer to any amendments or successor legislation as in effect at the relevant time. Any reference to a Contract or other document as of
a given date means the Contract or other document as amended, supplemented and modified from time to time through such date.

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ARTICLE 2

THE TRANSACTION

     Section 2.1 Purchase and Sale. In accordance with the provisions of this Agreement (including, for the avoidance of doubt, Section 11.1), at the Closing, the Seller will sell, assign and transfer to the Purchaser (or cause to be sold, assigned and transferred in the case of the Nominee Shares), and the Purchaser will purchase and acquire from the Seller, free and clear of all
Encumbrances, all legal and beneficial right, title and interest in and to the Shares.

     Section 2.2 Purchase Price. The purchase price for the Shares (the “Purchase Price”) is
One Million United States Dollars (US$1,000,000.00) (the “Base Payment”) plus the Net Book Value of the Company as determined as follows:

     (a) For purposes of Closing, the Purchaser shall pay to the Seller an amount equal to the Base Payment plus the Estimated Net Book Value (the “Estimated Purchase Price”), less the amount to be paid into escrow pursuant to Section 2.3 hereof.

     (b) Within sixty (60) days after the Closing Date, the Purchaser shall deliver to the Seller an audited balance sheet of the Company prepared in accordance with Philippines Financial Accounting Standards as of the Effective Time and, based on such audited balance sheet, a summary calculation of the actual Net Book Value of the Company (the “Closing Net Book Value”). Within
thirty (30) days after the Seller’s receipt of such audited balance sheet and summary calculation of the Closing Net Book Value, the Seller shall notify the Purchaser in writing of the Seller’s acceptance or rejection of the Closing Net Book Value. Any notice of rejection by the Seller must include the reasons for such rejection and, if appropriate, the Seller’s proposed calculation of the Closing Net Book Value. During such thirty (30)-day period, the Purchaser shall
provide the Seller and its representatives with reasonable access to the Company’s books and records relevant to the Purchaser’s calculation of the Closing Net Book Value so as to permit the Seller to verify the Purchaser’s calculation. If (i) within the prescribed thirty (30)-day period, by written notice to the Purchaser, the Seller accepts the Closing Net Book Value, or (ii) the Seller fails to deliver any notice of acceptance or rejection of the Closing Net Book
Value within the prescribed thirty (30)-day period (which failure shall result in the Seller being deemed to have irrevocably accepted and agreed with the Closing Net Book Value), the Closing Net Book Value shall be final and binding on the parties hereto.

     (c) If, within the prescribed thirty (30)-day period, the Seller delivers written notice to the Purchaser under Section 2.2(b) of the Seller’s rejection of the Closing Net Book Value, the Seller and the Purchaser shall promptly (and in any event within ten (10) business days) confer with each other with a view to resolving such matter. If the parties are unable to resolve
such matter within thirty (30) days after the date of delivery of the Seller’s notice of rejection to the Purchaser, the Seller and the Purchaser shall refer the dispute to a mutually acceptable firm of independent certified public accountants (the “Independent Accountants”) for review and final determination of the Closing Net Book Value. The Independent Accountants may request of the Seller and/or the Purchaser such documents and information as may be necessary
or appropriate for proper determination of the matter, and the parties shall cooperate reasonably and in good faith to promptly satisfy any such request. The determination by the Independent Accountants of the Closing Net Book Value shall be final and binding on the parties. The fees and costs of the Independent Accountants in undertaking such review and determination shall be shared equally by Seller and the Purchaser.

     (d) Within five (5) business days after the final agreement of the Seller and the Purchaser, the final determination by the Independent Accountants or the deemed acceptance by the Seller (as the case

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may be) of the Closing Net Book Value, as applicable, (i) if the Closing Net Book Value exceeds the Estimated Net Book Value, the Purchaser shall pay to the Seller, by check or electronic transfer of immediately available funds to a bank account designated in writing by the Seller, the amount of such excess, or (ii) if the Estimated Net Book Value exceeds the Closing Net Book Value, the Seller shall pay to the Purchaser, by
check or electronic transfer of immediately available funds to a bank account designated in writing by the Purchaser, the amount of such excess.

     Section 2.3 Escrow. At the
Closing, the Seller, the Purchaser and JPMorgan Chase Bank, N.A. (the “Escrow Agent”) shall enter into the Escrow Agreement in the form attached hereto as Exhibit D (the “Escrow Agreement”) pursuant to which One Hundred Thousand United States Dollars (US$100,000) (the “Escrow Funds”) shall be deposited into
escrow to secure the Seller’s obligation to obtain the CAR in accordance with the provisions of Section 11.1(b). All expenses and fees of the Escrow Agent or otherwise in connection with the Escrow Agreement shall be borne by the Purchaser, and the parties agree to promptly direct the Escrow Agent to release the Escrow Funds plus any accrued interest thereon to the Seller following the receipt of the CAR. The Purchaser further agrees that if the Seller has complied
with Section 11.1(b), but the parties have not obtained the CAR due solely to the Purchaser’s failure to comply with its obligations in Section 11.1(a), it will promptly direct the Escrow Agent to release the Escrow Funds plus any accrued interest thereon to the Seller.

     Section 2.4 Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) will take place at the offices of the Seller, 22000 AOL Way, Dulles, Virginia, United States of America, at 10:00 a.m., local time, on September 28, 2007, or, if all of the conditions set forth in Article 6 have not been satisfied or waived on such
date, on such mutually agreeable later date as soon as practicable, but in no event later than three business days after satisfaction or waiver of such conditions, or at such other time and place as the Seller and the Purchaser may agree in writing. The time and date upon which the Closing actually occurs is referred to in this Agreement as the “Closing Date.”

     Section 2.5 Closing Deliveries.

     (a) At the Closing, in addition to any other deliveries to be made pursuant to this Agreement, the Seller will deliver or cause to be delivered to the Purchaser:

     (i) a duly executed Deed of Absolute Sale of Shares in the form attached hereto as Exhibit A;

     (ii) the certificates representing the Shares, duly endorsed in blank for transfer and, if required, a stock assignment separate from the certificates;

     (iii) the Services Agreement, as executed by the Seller;

     (iv) a written resignation, dated as of the Closing Date, of each director and Corporate Officer of the Company, other than any Corporate Officer identified in writing by the Purchaser to the Seller prior to the Closing Date whom the Purchaser wishes to have the Company retain in such capacity following the Closing, including the transfer of each director’s nominee share in
the Company (the “Nominee Shares”) to the Purchaser or its designee;

     (v) a certificate of corporate good standing of the Company dated not more than thirty days before the Closing Date issued by the Philippine Securities and Exchange Commission;

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     (vi) a certificate, in form and substance reasonably satisfactory to the Purchaser, duly executed by a senior officer of the Seller, stating that (A) all of the Seller’s representations and warranties contained in this Agreement that are qualified by materiality are true, accurate and complete, and all of the Seller’s representations and warranties contained in this
Agreement that are not so qualified are true, accurate and complete in all material respects, and (B) each of the Seller’s covenants and obligations set forth in this Agreement to be satisfied and performed at or before the time of Closing has been satisfied and performed;

     (vii)
a declaration of trust and irrevocable proxy over the Shares, in the
form attached hereto as Exhibit C, duly executed by the Seller in favor of the Purchaser; and

     (viii) the Escrow Agreement, duly executed by the Seller and the Escrow Agent.

     (b) At the Closing, in addition to any other deliveries to be made pursuant to this Agreement, the Purchaser will deliver or cause to be delivered to the Seller:

     (i) the Purchase Price by wire transfer of immediately available funds to the account specified by the Seller no later than two business days prior to the Closing Date;

     (ii) the Services Agreement, as executed by the Purchaser;

     (iii) a certificate, in form and substance reasonably satisfactory to the Seller, duly executed by a senior officer of the Purchaser, stating that (A) all of the Purchaser’s representations and warranties contained in this Agreement that are qualified by materiality are true, accurate and complete, and all of the Purchaser’s representations and warranties contained in this Agreement that
are not so qualified are true, accurate and complete in all material respects, and (B) each of the Purchaser’s covenants and obligations set forth in this Agreement to be satisfied and performed at or before the time of Closing has been satisfied and performed; and

     (iv) the Escrow Agreement, duly executed by the Purchaser.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE SELLER

     The Seller represents and warrants to the Purchaser that, as of the date hereof and as of the Closing Date, the statements set forth in this Article 3 are true and correct, except as set forth on the Seller Disclosure Schedule delivered to the Purchaser concurrently with the execution and delivery of this Agreement and dated as of the date of this Agreement (the “Seller Disclosure Schedule”).

     Section 3.1 Organization and Good Standing. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the Republic of the Philippines and has all requisite corporate power and authority to conduct its business as presently conducted. The Company is duly qualified to do business and, where applicable as a legal concept, is in good standing as a
foreign corporation in each jurisdiction in which the nature of its activities required such qualification, except where the failure to so qualify would not have a Material Adverse Effect. The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, United States of America, and has all requisite corporate power and authority to carry on its business as currently conducted.

     Section 3.2 Authority and Enforceability. The Seller has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. The execution, delivery

8

 

and performance of this Agreement have been duly authorized by all necessary corporate action on the part of the Seller. This Agreement has been duly executed and delivered by the Seller. Assuming the due authorization, execution and delivery of this Agreement by the Purchaser, this Agreement will constitute the valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, subject to (i) Laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) Laws governing specific performance, injunctive relief and other equitable remedies.

     Section 3.3
No Conflict. Neither the Seller’s execution and delivery
of this Agreement, nor the consummation or performance by the Seller
of the transactions contemplated by this Agreement, will
(a) conflict with or violate the Seller’s or the
Company’s organizational documents, (b) except as set forth
on Section 3.3 of the Seller Disclosure Schedule,
require the Seller or the Company to make any filing with, or obtain any authorization from, a Governmental Authority or other Person, (c) result in a breach or default under any material Contract to which the Seller or the Company is a party, or (d) violate any Law or Judgment applicable to the Seller or the Company or any of their assets.

     Section 3.4 Capitalization and Ownership.

     (a) The authorized capital stock of the Company consists solely of 14,400,000 shares of common stock, par value of Philippines Peso 1.00 each, of which 13,600,007 shares are issued and outstanding as the “Shares.” The Shares represent all of the issued and outstanding shares of the Company. As of the Closing, the Seller will be the sole record holder and beneficial owner of all of the Shares,
free and clear of all Encumbrances, other than the Nominee Shares, of which the Seller will be the beneficial owner, including the power to direct the transfer of the Nominee Shares. All of the Shares are duly authorized, validly issued, fully paid and nonassessable, and have not been issued in violation of the preemptive rights of any Person. Upon payment in full of the Purchase Price, execution of the Deed of Absolute Sale of Shares, issuance of the CAR (as defined below) and the recording
of the Shares in the name of the Purchaser in the Stock and Transfer Book of the Company, good and valid title to the Shares will pass to the Purchaser, free and clear of any Encumbrances, and with no restrictions on the voting rights or other incidents of record and beneficial ownership of such Shares.

     (b) The Company does not own any stock, membership, partnership or other equity ownership interest in any Subsidiary or other Person.

     (c) Except as set forth in Section 3.13(a) of the Seller Disclosure Schedule, there are no options, rights, warrants, calls or other outstanding securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, nor any outstanding subscriptions, options, rights, warrants, calls, rights of first refusal or offer, or other Contracts or
commitments (contingent or otherwise) obligating the Company to issue or transfer from treasury any shares of its capital stock or to issue, grant or sell other securities convertible into or exchangeable for shares of its capital stock. There are no subscriptions, options, warrants, calls, rights, commitments or Contracts of any character to which the Company is a party or by which it is bound obligating or permitting the Company to purchase or otherwise acquire the securities of any
other Person. There are no Contracts to which either the Seller or any other Person is a party or bound with respect to the voting (including voting trusts or proxies) of the Shares. There are no Contracts to which either the Seller or any other Person is a party or bound with respect to the voting (including voting trusts or proxies) of the Shares.

     Section 3.5 Financial Statements.

     (a) The Seller has delivered to the Purchaser the following financial statements (collectively, the “Financial Statements”):

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     (i) audited consolidated balance sheets of the Company as of December 31, 2005, and December 31, 2006 (the most recent of which, the “Balance Sheet”) and the related audited consolidated statements of income, stockholders equity and cash flow for each of the fiscal years then ended, including in each case any notes thereto, together with the report
thereon of SyCip Gorres Velayo & Co., independent certified public accountants; and

     (ii) an unaudited consolidated balance sheet of the Company as of June 30, 2007 (the “Interim Balance Sheet”) and the related unaudited consolidated statement of income for the six months then ended.

     (b) The Financial Statements have been prepared in accordance with Philippines Financial Accounting Standards and fairly present in all material respects the consolidated financial condition and results of operations of the Company as of the respective dates and for the periods indicated therein, all in accordance with Philippines Financial Accounting Standards, except that any unaudited financial
statements are subject to normal year-end adjustments and do not contain all footnotes as required by Philippines Financial Accounting Standards, and reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes thereto.

     Section 3.6 No Undisclosed Liabilities. The Company does not have any Financial Liability that would be required to be reflected on a consolidated balance sheet prepared in accordance with Philippines Financial Accounting Standards except for (a) Liabilities reflected, reserved against or otherwise disclosed in the Financial Statements, (b) current Liabilities arising in the ordinary course
of business after the date of the Interim Balance Sheet, or (c) ongoing performance obligations under Contracts that are not required by Philippines Financial Accounting Standards to be reflected in the Financial Statements.

     Section 3.7 Absence of Certain Changes and Events. Since the date of the Interim Balance Sheet, the Company has conducted its business in all material respects in the ordinary course of business and there has not been any Material Adverse Effect. Without limiting the generality of the foregoing, since the date of the Interim Balance Sheet except as set forth in Section 3.7 of
the Seller Disclosure Schedule, there has not been with respect to the Company any:

     (a) amendment to its articles of incorporation or bylaws;

     (b) change in its authorized or issued capital stock;

     (c) incurrence of any indebtedness for borrowed money in excess of US$25,000 individually or US$250,000 in the aggregate, that would be outstanding at Closing;

     (d) material damage to, or destruction, impairment or loss of, or any claim of whatever nature by any Person against or with respect to, any material asset of the Company, other than damage to or destruction of assets of the Company covered by insurance;

     (e) except as required by Law, adoption of, amendment to or increase in the payments to or benefits under, any Company Plan other than in the ordinary course of business of the Company;

     (f) change in the accounting methods used by the Company;

     (g) making or rescission of any Tax election, settlement or compromise of any Tax Liability or amendment of any Tax Return; or

10

 

          (h) other than in the ordinary course of business of the Company, increase in the compensation of any Employee or Corporate Officer other than periodic increases in wages or salaries of Employees that do not exceed 5% of such Employees’ pre-increase wage or salary level or as required by Law.

     Section 3.8 Assets.

     (a) The Company has good and marketable title to, or in the case of leased assets, valid leasehold interests in, all of its assets, free and clear of all Encumbrances, other than Permitted Encumbrances.

     (b) Except as set forth in Section 3.8(b) to the Seller Disclosure Schedule, the Company owns or leases all tangible personal property necessary to conduct its business as currently conducted by the Company. Each such item of tangible personal property is in all material respects in good operating condition and repair, ordinary wear and tear excepted, and,
to the Seller’s Knowledge, has been maintained in accordance with normal industry practice. All physical assets of the Company that are necessary for the business of the Company are, and on the Closing Date shall be, in the possession or under the control of the Company and except for leased assets and any assets owned or leased by Seller or its Affiliates, the Company is not in possession of any property or asset that is owned by another Person.

     Section 3.9 Real Property.

     (a) The Company does not own any real property.

     (b) Section 3.9(b) of the Seller Disclosure Schedule sets forth an accurate and complete description of each parcel of real property in which the Company has a leasehold estate (collectively, the “Leased Real Property”). The Seller has made available to the Purchaser accurate and complete copies of all leases relating to the Leased Real Property (collectively, the “Real Property
 Leases”).

     (c) To the Seller’s Knowledge, all buildings, fixtures and other improvements located on the Leased Real Property are in good operating condition and repair, ordinary wear and tear excepted, and are in compliance with all applicable Laws, including those pertaining to health and safety, zoning and building. To the Seller’s knowledge, no Leased Real Property is in need of repair other than as
part of routine maintenance in the ordinary course of business that is within the responsibility of tenant under the applicable Real Property Lease. No Person other than the Company, or its authorized personnel (in the case of the rented residences), is in possession of any portion of the Leased Real Property.

     (d) The Company has a valid and enforceable leasehold interest under each Real Property Lease, subject to (i) Laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) Laws governing specific performance, injunctive relief and other equitable remedies. Each Real Property Lease is in full force and effect, and the Company is not in material default
thereof, and no condition exists that with notice or lapse of time, or both, would constitute a material default by the Company under any Real Property Lease. To the Knowledge of Seller, no other party to any Real Property Lease is in default thereof or has exercised any termination right with respect thereto.

     (e) To the Seller’s Knowledge, there does not exist any actual or threatened or contemplated condemnation or eminent domain Proceeding that could be reasonably expected to materially and adversely affect the Leased Real Property or any part thereof, and the Company has not received any written notice of the intention of any Governmental Authority to undertake any such Proceeding with respect to the Leased Real
 Property or any part thereof.

11

 

     Section 3.10 Intellectual Property.

     (a) Section 3.10 of the Seller Disclosure Schedule contains a list of each patent, patent application, copyright registration or application therefor, and trademark, trade name, service mark and domain name registration or application therefor of the Company that will be transferring with the Company at Closing (the “Company Intellectual Property”), and identifies each material license
that the Company has granted or received with respect to any of its Intellectual Property that will remain with the Company following Closing.

     (b) To the Seller’s Knowledge, no other Person is infringing, violating or misappropriating any of the Company Intellectual Property. To the Seller’s Knowledge, none of the activities or business presently conducted by the Company infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any Person.

     Section 3.11 Contracts.

     (a) Section 3.11(a) of the Seller Disclosure Schedule contains a complete and accurate list, and the Seller has made available to the Purchaser an accurate and complete copy of, each Contract (collectively, the “Material Contracts”) to which the Company is a party, or by which the Company or any of its assets is bound, and that singly or collectively with other contracts with the
 same counter-party:

     (i) involves performance of services or delivery of goods or materials, the performance of which extends over a period of more than one year or that otherwise involves an amount or value in excess of US$25,000;

     (ii) is for capital expenditures in excess of US$25,000;

     (iii) is a mortgage, indenture, loan or credit agreement, security agreement, guaranty, surety, bond or other Contract relating to the borrowing of money, other than accounts receivables and payables in the ordinary course of business, or otherwise purports to create or give rise to any Encumbrance, other than any Permitted Encumbrance, over or in respect of any material Company assets;

     (iv) is a lease of any real or personal property involving remaining payments by the Company of more than US$25,000;

     (v) is a license or other Contract under which the Company has obtained a license to use the Intellectual Property of another Person, which such license will be transferring with the Company at Closing (except for any license implied by the sale of a product and perpetual, paid-up licenses for commonly available software programs with a value of less than US$25,000 under which the
Company is the licensee);

     (vi) limits in any way the ability of the Company to engage in any line of business, to compete with any Person or to solicit any customer, employee, supplier or other Person;

     (vii) is a Contract of guarantee, support, indemnification, assumption or endorsement of, or any similar commitment to become liable for the obligations or other Liabilities of any other Person, other than support or warranty agreements in connection with the license or sale of products in the ordinary course of business;

12

 

     (viii) is a Contract with any labor union or other Employee representative of a group of Employees of the Company;

     (ix) involves any sharing of profits, losses, costs or other Liabilities by the Company with any other Person, including any joint venture or joint development Contract;

     (xi) is a Contract with any Governmental Authority;

     (xii)
is not entered into in the ordinary course of business of the Company and has an actual or anticipated value or cost to the Company following Closing of at least US$25,000; or

     (xiii)
is otherwise material to the business of the Company and which is terminable by the other party thereto upon a change of control of the Company or otherwise upon less than 60 days prior written notice to the Company.

     (b) With respect to each such Material Contract: (i) the Material Contract is in full force and effect except to the extent it has previously expired in accordance with its terms; and (ii) the Company, and, to the Seller’s Knowledge, any other party to the Material Contract, are not in material breach or material default under the Material Contract except for such breaches or defaults
as to which requisite waivers or consents have been obtained or which would not have a Material Adverse Effect.

     (c) Since the date of the Interim Balance Sheet, to the Seller’s Knowledge, the Company has not given to or received from any other Person any written notice announcing, contemplating or threatening termination or cancellation of any Material Contract, other than notice regarding expiration of such Material Contract in accordance with its terms.

     Section 3.12 Tax Matters.

     (a) In each case except as set forth in Section 3.12 of the Seller Disclosure Schedule, all Tax Returns required to be filed with respect to the Company have been timely filed and are true, correct and complete in all material respects. All Taxes shown on such Tax Returns have been paid when due. No adjustment relating to any of such Tax Returns has been proposed in writing to the Company by any
Governmental Authority. The Company does not have any Liability for any Tax obligation of any other Person under applicable Law as a transferee or successor, by Contract or otherwise. The Seller has made available to the Purchaser accurate and complete copies of all Tax Returns (including United States Internal Revenue Service Form 5471) filed by, on behalf of or with respect to the Company, for the prior three Tax years.

     (b) The Company has duly and timely paid all Taxes in relation to its business and assets to the extent that the same ought to have been paid.

     (c) Tax Returns of the Company have been audited by Governmental Authorities or are closed by the applicable statute of limitations for all taxable years though 2003. The Seller Disclosure Schedule contains a complete and accurate list of all audits of all such Tax Returns since 2000.

     (d) All Taxes that the Company is required by Law to withhold or collect have been duly withheld or collected, and, to the extent required by applicable Law, have been paid over to the proper Governmental Authority, and there are no Encumbrances for Taxes (other than Taxes not yet due and payable) with respect to the Company or on its respective assets.

13

 

     (e) The Company has and will have no additional Liability for Taxes with respect to any Tax Return which was required by applicable Laws to be filed on or before the Closing Date, other than those reflected as Liabilities (including any reserves) on the Balance Sheet and the Interim Balance Sheet.

     (f) The Company is not a party to, bound by or obligated under any Tax sharing Contract, Tax indemnification Contract, Tax allocation Contract, or similar Contract, arrangement or understanding, whether written or unwritten, pursuant to which the Company has or may have any obligation to make any payment after the Closing related to Taxes.

     (g) No federal, state, local or foreign audits or other Tax-related Proceedings are being conducted with respect to the Company, nor has the Company received any written notice from any Governmental Authority that any such audit or other Proceeding is pending, threatened or contemplated. The Company has not waived any statute of limitations with respect to Taxes or agreed to an extension of time with
respect to a Tax assessment or deficiency affecting the Company, which waiver or extension of time is currently outstanding. No deficiency or proposed adjustment which has not been settled or otherwise resolved for any amount of Taxes has been asserted or assessed by any Governmental Authority against the Company. No claim has ever been made by any Governmental Authority in a jurisdiction where the Company does not file Tax Returns that the Company may be subject to Taxes assessed by such jurisdiction.

     (h) Section 3.12(h) of the Seller Disclosure Schedule sets forth each federal, state, county, local and foreign jurisdiction with respect to which the Company currently files any corporate, income, property, transaction privilege, sales, value added, franchise or other Tax Return.

     Section 3.13 Employee Benefit Matters.

     (a) Section 3.13(a) of the Seller Disclosure Schedule sets forth an accurate and complete list of each Company Plan, and the Seller has made available to the Purchaser an accurate and complete copy of each Company Plan that has been reduced to writing. Each Company Plan has been operated and administered, and the Company has performed all of its obligations under each Company Plan, in each
case in all material respects in accordance with the terms of such Company Plan and applicable Law.

     (b) The Seller has made available to the purchaser copies of the following: (i) each employment, severance and change of control Contract with any executive officer; and (ii) each Contract or plan binding the Company, including, any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or other Company Plan.

     (c) For each Company Plan, the Seller has made available to the Purchaser (i) a copy of the annual report and actuarial report, if required under any applicable Law, with respect to such Company Plan for the last two (2) plan years ending prior to the date hereof, (ii) if any Company Plan is funded or managed through a trust or any funding vehicle, a copy of the trust or other funding
Contract (including all amendments thereto) and the latest financial statements with respect to the last reporting period ended immediately prior to the date thereof and (iii) a copy of the most recent “summary plan description,” together with each “summary of material modifications,” if required under any applicable Law, with respect to such Company Plan.

     (d) There are no pending or, to the Knowledge of the Seller, threatened audits, investigations, Proceedings or claims involving any Company Plan by any Governmental Authority or other Person, other than routine claims for benefits. Except as may be provided in any employment Contract currently in effect between the Company and any current or former Employee (a copy of which has been provided to the Purchaser), the
consummation of the transactions contemplated hereby shall not (i) result in the

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termination of any Company Plan, (ii) result in any payment becoming due, or increase the amount of compensation due, to any current or former Employee or director of the Company, (iii) increase any benefits payable under any Company Plan, or (iv) accelerate the time of payment or vesting, or increase the amount of, or otherwise enhance, any benefit due to any current or former Employee or director of the Company.

     (e) Except as set forth in Section 3.13(e) of the Seller Disclosure Schedule, each Employee pension or retirement fund (if any) included in the Company Plans is actuarially sound and adequately funded to satisfy all Liabilities accrued thereunder or in respect thereof.

     (f) The Company has complied in all material respects with all Laws and/or Contracts relating to employment, wages, employee benefits, health and safety of employees and withholding of taxes and social security contributions; has withheld and duly segregated, deposited and paid over to the appropriate authorities or other Persons all amounts required by Law or Contract to be withheld from the wages
of its employees, including but not limited to contributions to the Philippine Social Security System, National Health Insurance Program and Home Development Mutual Fund; and is not liable for any arrears of wages or benefits or any taxes or penalties for failure to comply with the foregoing.

     Section 3.14 Employment and Labor Matters.

     (a) On or prior to the date hereof, the Seller has provided the Purchaser with an accurate and complete list of the Company’s current Employees as of the date of this Agreement, and the following details for each such Employee: (i) name; (ii) part-time or full-time status; (iii) regular/permanent employment or probationary or temporary employment status; (iv) title and/or
job description; (v) annual base salary or hourly wage; (vi) available bonus, commission or other contingent compensation; (vii) participation in Company Plans; (viii) accrued and unused vacation days; (ix) accrued and unused sick days; (x) if on leave, the status of such leave (including reason for leave and expected return date), and (xi) any outstanding amounts due in respect of Company loans to such Employee. Except as set forth in Section 3.14
of the Seller Disclosure Schedule, to the Seller’s Knowledge, no Employee plans to terminate such employment or enter into any business which would compete with or would be similar to the business of the Company.

     (b) The Company is not party to or bound by any collective bargaining Contract with any group of Employees. The Company has not experienced any strikes, claims of unfair labor practices or other collective bargaining disputes. To the Seller’s Knowledge, there has been no organizational effort made or threatened, either currently or within the past two (2) years, by or on behalf of any labor
union with respect to Employees. Within the past two (2) years, the Company has not effectuated or contemplated a lock-out of any group of Employees.

     (c) Except as set forth on Section 3.14(c) of the Seller Disclosure Schedule, all salaries, wages, commissions and other compensation and benefits payable to each Employee, whether pursuant to applicable Law, Contract or Company policy/practice, have been accrued and paid by the Company when due for all periods through the date hereof, and, as of the Closing Date, shall have been paid by
the Company when due for all periods through the Closing Date, except for stub period payroll obligations resulting from the Closing Date occurring between normal paydays, which payroll obligations are properly accounted for in the Company’s financial records in accordance with Philippines Financial Accounting Standards.

     (d) The Company has provided the Purchaser with a complete list of all former Employees dismissed for any just or authorized cause for the past two (2) years from the date of this Agreement, together with a description of the reasons for such dismissals.

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     (e) The Company has provided the Purchaser a complete and accurate list of all labor cases, complaints or Proceedings filed against the Company for the past two (2) years with the Philippines Department of Labor and Employment, National Labor Relations Commission and other Government Authorities.

     Section 3.15 Compliance with Laws.

     (a) The Company is in compliance in all material respects with all Laws, including Environmental Laws, applicable to it or to the conduct of its business. The Company has not received any written notice stating that the operation or conduct of the business of the Company or the condition of any Leased Real Property is in violation of any Law, including any Environmental Law. No Proceedings
are pending against the Company or its assets alleging the Company has violated any Environmental Laws applicable to it or the conduct of its business, nor has the Company received any written notice of any such threatened Proceedings.

     (b) Section 3.15(b) of the Seller Disclosure Schedule contains a complete and accurate list of all material
Governmental Authorizations held by the Company that relate to the Company or any of the Company’s material assets.
To the Seller’s Knowledge, the Company holds all of the material Governmental Authorizations necessary to permit the
Company to lawfully operate its business in the manner in which it is currently operated and to permit the Company to own
and use the Company’s assets in the manner in which they are currently used. To the Seller’s Knowledge, each Governmental
Authorization listed in Section 3.15(b) of the Seller Disclosure Schedule is valid and in full force and effect, and
no event has occurred or circumstance exists that may (with or without notice or lapse of time) (i) constitute or result
directly or indirectly in a material violation of or a material failure to comply with any term or requirement of any
Governmental Authorization listed in Section 3.15(b) of the Seller Disclosure Schedule, or (ii) result directly or
indirectly in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any
Governmental Authorization listed in Section 3.15(b) of the Seller Disclosure Schedule.

     Section 3.16 Legal Proceedings. Set forth in Section 3.16 of the Seller Disclosure Schedule is an
accurate and complete list of all Proceedings pending against the Company or its assets in or before any court, arbitrator,
mediator or other Governmental Authority. The Company is not subject to any outstanding judgment, injunction or other
order or ruling of, or settlement issued or approved by, any court or other Governmental Authority. To the Knowledge of
the Seller, except as set forth in Section 3.16 of the Seller Disclosure Schedule, no event has occurred or circumstance
exists that is reasonably likely to give rise to or serve as a basis for, the commencement of any Proceeding against the Company or its assets that would reasonably be expected to result in a cost of at least US$100,000 to the Company. There is no Proceeding pending or, to the Seller’s Knowledge, threatened against the Seller which questions or challenges the validity of this Agreement or the ability of the Seller to consummate any of the transactions contemplated by this Agreement.
This Section 3.16 does not relate to employment, employee benefits or environmental matters, which are exclusively the subject matter of Sections 3.13, 3.14 and 3.15, respectively.

     Section 3.17 Insurance. Set forth in Section 3.17 of the Seller Disclosure Schedule is an accurate
and complete list of all insurance policies maintained by the Company, or under which the Company was a named insured or
otherwise the beneficiary of coverage at any time within the past year. Except as set forth in Section 3.17 of the Seller Disclosure Schedule, the Seller has provided the Purchaser with complete copies of all insurance policies maintained by the Company. All premiums due and payable under such insurance policies have been paid. The Company is covered by insurance in scope and amount customary and reasonable for the business in which it is engaged.

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     Section 3.18 Certain Relationships. To the Seller’s Knowledge, other than the Nominee Shares, no director or Corporate Officer of the Company (a) owns any material tangible or intangible property or right which is used in the business of the Company, (b) has any claim or cause of action against the Company, or (c) owes any money to the Company or is owed money by the Company (other
 than compensation and benefits owed to Employees and Corporate Officers under Contracts disclosed hereunder or amounts owed by Employees or Corporate Officers to the Company in the ordinary course of business pursuant to the Company’s employee loan program).

     Section 3.19 Brokers or Finders. Neither the Seller nor the Company has any Liability for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with any of the transactions contemplated by this Agreement.

     Section 3.20 Bank Accounts. Section 3.20 of the Seller Disclosure Schedule sets forth a list of all
bank and securities accounts and lockboxes maintained by the Company (identified by name and address of the applicable bank
or financial institution and account number), a list of Persons authorized to sign on behalf of the Company with respect to
each such account and a list of Persons with authorized access to each such lockbox. Section 3.20 of the Seller Disclosure Schedule also sets forth a list of each Person holding an outstanding power of attorney to act for, in the name and/or on behalf of the Company for any purpose. The Seller has provided the Purchaser with copies of all instruments and documents pursuant to which such powers of attorney have been granted.

     Section 3.21 Books and Records. To the Seller’s Knowledge, the minute books, corporate books and records, and financial, business and other records of the Company, originals or copies of which have been made available to the Purchaser, are complete and correct in all material respects and have been maintained in accordance with sound business practices.

     Section 3.22 Fiscal and Non-Fiscal Incentives. The Company is a Freeport zone locator registered with Clark Development Corporation appropriately meeting all the requirements set forth under such registration and, as a result thereof, is entitled to all the incentives arising from such registration as provided under all the applicable and existing Laws of the Republic of the Philippines.
The Company is duly qualified as of April 19, 2007, to avail itself of the fiscal and non-fiscal incentives granted under the provisions of applicable Laws covering Freeport locators in the Clark Special Economic Zone, including gross income taxation as provided under Republic Act No. 7227, as amended by Republic Act No. 9400.

     Section 3.23 Disclaimer. Except as expressly set forth in this Article 3, the Seller makes no representation or warranty, express or implied, relating to the Shares, the Company or any other matter, including any representation or warranty as to merchantability, habitability, workmanship, profitability, future performance, fitness for a particular purpose or non-infringement.
All of such additional representations and warranties are hereby disclaimed. Except as expressly set forth in this Article 3, the purchase and sale of the Shares is being made on an “as-is, where-is” basis and without recourse to the Seller with respect to any express or implied representation or warranty.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     The Purchaser represents and warrants to the Seller that, as of the date hereof and as of the Closing Date, the statements set forth in this Article 4 are true and correct, except as set forth on the

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disclosure schedule delivered by the Purchaser to the Seller concurrently with the execution and delivery of this Agreement and dated as of the date of this Agreement (the “Purchaser Disclosure Schedule”).

     Section 4.1 Organization and Good Standing. The Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the Republic of the Philippines, and has all requisite corporate power and authority to carry on its business as presently conducted.

     Section 4.2 Authority and Enforceability. The Purchaser has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser. Assuming the
 due authorization, execution and delivery of this Agreement by the Seller, this Agreement will constitute the valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to (i) Laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) Laws governing specific performance, injunctive relief and other equitable remedies.

     Section 4.3 No Conflict. Neither the Purchaser’s execution and delivery of this Agreement, nor the consummation or performance by the Purchaser of the transactions contemplated by this Agreement, will (a) conflict with or violate the Purchaser’s certificate of incorporation or bylaws, (b) require the Purchaser to make any filing with, or obtain any authorization from a Governmental
 Authority or other Person, (c) result in a breach or default under any material Contract to which the Purchaser is a party, or (d) violate any Law or Judgment applicable to the Purchaser or any of its assets.

     Section 4.4 Legal Proceedings. There is no Proceeding pending or, to the Purchaser’s Knowledge, threatened against the Purchaser that questions or challenges the validity of this Agreement or the ability of the Purchaser to consummate any of the transactions contemplated by this Agreement.

     Section 4.5 Investment Intent. The Purchaser is acquiring the Shares for the Purchaser’s own account and investment purposes and is not acquiring the Shares with a view to, or for sale in connection with, any distribution thereof within the meaning of any securities Law.

     Section 4.6 Brokers or Finders. Neither the Purchaser nor any Person acting on its behalf has incurred any Liability for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with any of the transactions contemplated by this Agreement.

     Section 4.7 Adequacy of Funds. The Purchaser has adequate financial resources to satisfy its monetary and other obligations under this Agreement including, but not limited to, the payment of the Purchase Price in accordance herewith.

     Section 4.8 No Knowledge of Inaccuracies. As of the date of this Agreement, the Purchaser has no Knowledge of any inaccuracies in any representation or warranty made by the Seller in this Agreement.

ARTICLE 5

COVENANTS

     Section 5.1 Access and Investigation.

     (a) From the date of this Agreement until the Closing and upon reasonable advance notice from the Purchaser, the Seller will afford the Purchaser and its representatives, at the Purchaser’s sole

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expense, full access during normal business hours to all of the Company’s properties, books, Contracts, personnel and records of or pertaining to the Company as the Purchaser may reasonably request, provided such access does not unreasonably interfere with the operation of the Company’s business.

     (b) The foregoing covenant will not require the Seller to provide the Purchaser or its representatives with access to any document or other communication that the Seller believes in good faith may be subject to any contractual confidentiality obligation or that may be covered by any attorney-client, work product or similar legal privilege or to permit the Purchaser or its representatives to conduct
any environmental testing procedures, including conducting soil, ground water, air emissions or other testing relating to any of the assets, property or facilities of the Company. It is further understood and agreed that neither the Purchaser nor its representatives will contact any of the Employees, customers or suppliers of the Company in connection with the transactions contemplated by this Agreement, whether in person or by telephone, mail or other means of communication, without the
specific prior written authorization of the Seller.

     Section 5.2 Operation of the Business of the Company. From the date of this Agreement until the Closing, other than as contemplated by this Agreement, the Seller will cause the Company to conduct its business in the ordinary course of business in material compliance with all applicable Laws and Governmental Authorizations held by the Company, and use its commercially reasonable
efforts to keep available the services of the Company’s Employees and to preserve the Company’s relationships with those doing business with the Company. Without limiting the generality of the foregoing, until the earlier to the Closing or the termination of this Agreement and except as specifically contemplated by this Agreement, the Seller shall cause the Company to:

     (a) not engage in any new line of business;

     (b) continue to maintain, service and protect the Company’s properties and assets on a basis consistent with past practice, and in any event in a commercially reasonable and prudent manner;

     (c) continue in full force and effect the insurance coverage under the Company’s policies of insurance;

     (d) satisfy and perform in all material respects all obligations of the Company under the Material Contracts to which the Company is a party or by which it is bound, and not, without Purchaser’s prior written consent, amend, modify or supplement, or agree to the amendment, modification or supplementing of, any Material Contract;

     (e) continue to maintain the books and records of the Company on a basis consistent with past practice, and in any event in a commercially reasonable and prudent manner;

     (f) continue to make all necessary and material filings and payments with Governmental Authorities (including, without limitation, Tax authorities) in a timely manner;

     (g) not, without the Purchaser’s prior written consent, or in the ordinary course of business consistent with past practice,
(i) sell, assign, convey, transfer or lease (as lessor) any of the Company’s properties or assets, (ii) move, relocate or
dispose of any of the Company’s properties or assets, (iii) grant, create, incur or suffer to exist any Encumbrance
(other than a Permitted Encumbrance) on any of the Company’s properties or assets which did not exist before the date
hereof, (iv) write-off, forgive, waive or otherwise cancel, in whole or in part, any account receivable,
(v) write-off, forgive, waive or otherwise cancel, in whole or in part, any other obligation owed to the Company,
(vi) enter into, modify or extend in any manner the terms of any employment, severance or similar Contract with any Employee, terminate

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the employment of any Employee, other than for cause, or grant any increase in the compensation of any Employee other than periodic increases in wages or salaries for Employees that do not exceed 5% of such Employees’ pre-increase wage or salary levels or as required by Law, (vii) enter into any compromise or settlement of any Proceeding or governmental investigation relating to or in any way affecting the Company, its
business or any of its properties or assets, (viii) except as required to comply with applicable Law or the provisions of any Company Plan, not amend, modify or terminate any Company Plan, or (ix) enter into any Contract or make any commitment to do any of the foregoing;

     (h) promptly notify the Purchaser in writing of any Proceeding commenced or threatened in writing by or against the Company or the Seller that relates to or affects (or could reasonably be expected to relate to or affect) the transactions contemplated hereby or the Company;

     (i) not commence or continue proceedings or actions for any merger, dissolution or winding-up of the Company; and

     (j) not forgive or cancel any outstanding loans to Employees or Corporate Officers or make any additional loans to Employees or Corporate Officers that exceed US$45,000 in the aggregate.

     Section 5.3 Consents and Filings; Reasonable Efforts. Subject to the terms and conditions of this Agreement, the parties agree to use their respective commercially reasonable efforts (i) to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement and (ii) as promptly as practicable after the date of this Agreement, to obtain all Governmental Authorizations from, and make all filings with, all Governmental Authorities, and to obtain all other consents, waivers, approvals and other authorizations from, all other third parties, that are necessary or advisable in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated by
this Agreement, including those listed in Sections 3.3(b) and 6.1(c) of the Seller Disclosure Schedule and Section 6.2(c) of the Purchaser Disclosure Schedule, if any.

     Section 5.4 Notification. From the date of this Agreement until the Closing, each of the parties will give prompt notice to the other parties of any development which, if not disclosed in Article 3 or Article 4 as of the Closing Date would result in a material breach of the representations and warranties in this Agreement made by such party. Should any such development require any change in
the Seller Disclosure Schedule, the Seller will promptly deliver to the Purchaser a supplement to the Seller Disclosure Schedule specifying such change. The Purchaser will be deemed to have accepted such supplement to the Seller Disclosure Schedule unless the Purchaser delivers written notice of its objection to the Seller within five business days following receipt of such supplement from the Seller. Upon the acceptance or deemed acceptance of any such supplement by the Purchaser, the information contained
 in such supplement will become part of the Seller Disclosure Schedule and will be deemed to qualify and constitute an exception to the representations and warranties of the Seller made as of the date of this Agreement and as of the Closing Date. If, within the above-noted five business day period, the Purchaser delivers a written notice of objection to the Seller with respect to such Seller Disclosure Schedule supplement or the Seller delivers a written notice of objection to the Purchaser in
response to the Purchaser’s notice of breach, the parties shall promptly confer with respect to any amendment to be made to this Agreement in respect of the event or matter covered by such supplement or notice of breach. If the parties are unable to reach an agreement on such amendment (if any) within thirty (30) days after the date of the Purchaser’s or Seller’s delivery of such objection notice (as the case may be), the non-breaching party shall have the right, exercisable for an additional thirty
(30) days, to terminate this Agreement. From the date of this Agreement until the Closing, each party will give prompt notice to the other party of the occurrence of any breach of any covenant made by such party in this Agreement or of the occurrence

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of any event that may make the satisfaction of their respective conditions in Article 6
impossible or unlikely.

     Section 5.5 Exclusivity. From the date of this Agreement until the
Closing, the Seller will not, and will cause the Company to not, take any action to
solicit, initiate, encourage or support any proposal or offer from, participate in any
negotiations with, or furnish any non-public information to, any Person (other than the
Purchaser), regarding any sale or business combination transaction involving the Company,
whether by merger, consolidation or acquisition of all or substantially all of the capital
stock or assets of the Company.

     Section 5.6 Confidentiality.

     (a) Each party agrees not to issue any press release or make any other public
announcement relating to this Agreement without the prior written approval of the other
party, except that each of the Seller and the Purchaser (including any Affiliate thereof)
reserves the right, without the other party’s prior consent, to make any public disclosure
it believes in good faith is required by applicable Laws, including applicable securities
Laws or securities listing standards (in which case the disclosing party agrees to use
reasonable efforts to advise the other party prior to making the disclosure).

     (b) Each party agrees to continue to abide by that certain confidentiality agreement
dated as of June 5, 2007, (the “Confidentiality Agreement”), by and between the
Seller and the Purchaser, the terms of which are incorporated by reference in this
Agreement, and which terms will survive until the Closing, at which time the
Confidentiality Agreement will terminate; provided, however, that if this
Agreement is, for any reason, terminated prior to the Closing, the Confidentiality
Agreement will continue in full force and effect.

     Section 5.7 Services Agreement. Prior to the Closing, the parties
agree to conclude a services agreement in substantially the form attached hereto as
Exhibit B (the “Services Agreement”), which Services Agreement will be
entered into by the parties simultaneously with the Closing.

     Section 5.8 Satisfaction of Conditions Precedent. Each party agrees to
use its respective commercially reasonable efforts to satisfy or cause to be satisfied all
the conditions precedent that are set forth in Article 6, and the parties will use their
respective commercially reasonable efforts to cause the transactions contemplated by this
Agreement to be consummated.

     Section 5.9 Intellectual Property Carve-Out. Each party hereby
acknowledges and agrees that the Purchaser shall not be acquiring certain Intellectual
Property that is currently owned by the Company or the Seller, and that following the date
hereof, but prior to Closing, the Seller shall cause all software other than the original
OEM licenses for Windows OS, to be removed from the computers of the Company, other than
as may be contemplated by the terms of the Services Agreement. For the avoidance of doubt,
Purchaser hereby expressly acknowledges and agrees that it is not acquiring: (a) the
servers, routers and switches that will remain on the Company’s site and support the
Seller’s network, which will be the Seller’s property and (b) any computer software from
the Seller or the Company in connection with this Agreement other than the original OEM
licenses for Windows OS that are included with the computers being acquired and that it
will not be the owner of any such Intellectual Property remaining on the computers of the
Company following Closing.

     Section 5.10 Further Actions. Subject to the other express provisions
of this Agreement, upon the request of either party to this Agreement, the other party will
(a) furnish to the requesting party any additional information, (b) execute and deliver, at
their own expense, any other documents and (c) take

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any other actions as the requesting
party may reasonably require to more effectively carry out the intent of this Agreement and
the transactions contemplated by this Agreement.

ARTICLE 6

CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE

     Section 6.1 Conditions to the Obligation of the Purchaser. The
obligation of the Purchaser to consummate the transactions contemplated by this Agreement
is subject to the satisfaction, on or before the Closing Date, of each of the following
conditions (any of which may be waived by the Purchaser, in whole or in part):

     (a) Performance of Covenants. All of the covenants and obligations that the
Seller is required to perform or comply with under this Agreement on or before the Closing
Date must have been duly performed and complied with in all material respects;

     (b) Accuracy of Seller Representations and Warranties. The representations
and warranties of the Seller contained in this Agreement that are qualified by materiality
shall be true, accurate and complete, and the representations and warranties of the Seller
contained in this Agreement that are not so qualified shall be true, accurate and complete
in all material respects, in each case on and as of the Closing Date with the same effect
as though made at such time, except for changes expressly contemplated by this Agreement
and except for any particular representation or warranty that specifically addresses
matters only as of a particular date (which shall remain true as of such date, to the
extent required above).

     (c) Consents. Each of the Governmental Authorizations and consents listed in
Section 6.1(c) of the Seller Disclosure Schedule, if any, must have been obtained
and must be in full force and effect;

     (d) No Action. There must not be in effect any Law or Judgment, and there
must not have been commenced or threatened any Proceeding, that would prohibit or make
illegal the consummation of the transactions contemplated by this Agreement or cause the
transactions contemplated by this Agreement to be rescinded following consummation; and

     (e) No Material Adverse Effect. No event, occurrence, fact, condition,
change, development or circumstance shall have arisen or occurred since the date of this
Agreement which has had or could reasonably be expected to have a Material Adverse
Effect.

     (f) Additional Documents. The Seller will have delivered or caused to be
delivered each document that Section 2.5(a) requires it to deliver.

     Section 6.2 Conditions to the Obligation of the Seller. The
obligation of the Seller to consummate the transactions contemplated by this Agreement is
subject to the satisfaction, on or before the Closing Date, of each of the following
conditions (any of which may be waived by the Seller, in whole or in part):

     (a) Performance of Covenants. All of the covenants and obligations that the
Purchaser is required to perform or comply with under this Agreement on or before the
Closing Date must have been duly performed and complied with in all material respects;

     (b) Accuracy of Purchaser Representations and Warranties. The representations
and warranties of the Purchaser contained in this Agreement that are qualified by
materiality shall be true, accurate and complete, and the representations and warranties
of the Purchaser contained in this

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Agreement that are not so qualified shall be true,
accurate and complete in all material respects, in each case at and as of the time of
Closing with the same effect as though made at such time, except for changes expressly
contemplated by this Agreement and except for any particular representation or warranty
that specifically addresses matters only as of a particular date (which shall remain true
as of such date, to the extent required above).

     (c) Consents. Each of the Governmental Authorizations and consents listed in
Section 6.2(c) of the Purchaser Disclosure Schedule, if any, must have been obtained and
must be in full force and effect;

     (d) No Action. There must not be in effect any Law or Judgment, and there
must not have been commenced or threatened any Proceeding, that would prohibit or make
illegal the consummation of the transactions contemplated by this Agreement or cause the
transactions contemplated by this Agreement to be rescinded following consummation; and

     (e) Additional Documents. The Purchaser shall have delivered or caused to be
delivered to the Seller each document that Section 2.5(b) requires it to deliver.

ARTICLE 7

TERMINATION

     Section 7.1 Termination Events. This Agreement may, by written
notice given before or at the Closing, be terminated:

     (a) by mutual consent of the Purchaser and the Seller;

     (b) by the Purchaser (i) if there has been a breach of any of the Seller’s covenants
or obligations contained in this Agreement, which would result in the failure of the
condition set forth in Section 6.1(a), and which breach has not been cured within 30 days
after the notice of such breach from the Purchaser, or (ii) subject to Section 5.4, if
there has been a breach of any of the Seller’s representations and warranties contained in
this Agreement, which would result in the failure of the condition set forth in Section
6.1(b);

     (c) by the Seller (i) if there has been a breach of any of the Purchaser’s covenants
or obligations contained in this Agreement, which would result in the failure of the
condition set forth in Section 6.2(a), and which breach has not been cured within 30 days
after the notice of such breach from the Seller, or (ii) if there has been a breach of any
of the Purchaser’s representations and warranties contained in this Agreement, which would
result in the failure of the condition set forth in Section 6.2(b);

     (d) by either the Purchaser or the Seller if any Governmental Authority of
competent jurisdiction has issued a nonappealable final Judgment or taken any other
nonappealable final action, in each case having the effect of permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this Agreement;

     (e) by either party strictly in accordance with the terms of Section 5.4; or

     (f) by either the Purchaser or the Seller for any reason if the Closing has not
occurred by the date that is ninety (90) days following the date of this Agreement, unless
otherwise mutually agreed in writing by the parties, or such later date as the parties may
agree in writing; provided, however, that a party cannot terminate under
this provision if the failure of the Closing to occur is the result of the failure on the
part of such party to perform any of its obligations hereunder (except the failure on the
part of such

23

 

party to satisfy a closing condition over which such party has no control);
provided, however, that such ninety (90)-day period will be tolled for an
additional period to the extent necessary for either party, as applicable, to satisfy the
condition set forth in Section 6.1(c) or Section 6.2(c), as applicable (except in
circumstances contemplated by Section 6.1(d) or 6.2(d)).

     Section 7.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 7.1, all obligations of the parties under this Agreement terminate
without Liability against any party or its Affiliates, except that (a) the provisions of
Section 5.6 (Confidentiality), this Section 7.2, Section 7.3 (Certain Effects of
Termination) and Article 11 (General Provisions (except for Section 11.12 (Specific
Performance)) will remain in full force and survive any termination of this Agreement and
(b) if this Agreement is terminated by a party because of the breach of this Agreement by
another party or because one or more of the conditions to the terminating party’s
obligations under this Agreement is not satisfied as a result of the other party’s failure
to comply with its obligations under this Agreement, the terminating party’s right to
pursue all legal remedies will survive such termination unimpaired.

     Section 7.3 Certain Effects of Termination. If the Purchaser or
the Seller terminates this Agreement pursuant to Section 7.1, each party will comply
with the Confidentiality Agreement regarding the return and/or destruction of any
information furnished to the other parties in connection with this Agreement.

ARTICLE 8

INDEMNIFICATION

     Section 8.1 Indemnification by the Seller. In the event the Closing
occurs, and subject to the limitations expressly set forth in Section 8.5, the Seller
will, during the Indemnification Period, defend, indemnify and hold harmless the Purchaser
and its Affiliates (including, after the Closing Date, the Company), and all directors,
officers, employees, agents and stockholders of the Purchaser and its Affiliates, and all
heirs, executors, personal representatives, successors and assigns of the foregoing
(collectively, the “Purchaser Indemnified Parties”) from and against any and all
Losses incurred or suffered by the Purchaser Indemnified Parties (or any of them) arising
or resulting from (a) any breach by the Seller of any representation or warranty set forth
in Article 3 or (b) any breach by the Seller of any covenant, obligation or agreement set
forth in this Agreement.

     Section 8.2 Indemnification by the Purchaser. In the event the Closing
occurs, and subject to the limitations expressly set forth in Section 8.5, the Purchaser
will, during the Indemnification Period, defend, indemnify and hold harmless the Seller and
its Affiliates, and all directors, officers, employees, agents and stockholders of the
Seller and its Affiliates, and all heirs, executors, personal representatives, successors
and assigns of the foregoing (collectively, the “Seller Indemnified Parties”) from
and against any and all Losses incurred or suffered by the Seller Indemnified Parties (or any of them) arising or
resulting from (a) any breach by the Purchaser of any representation or warranty set forth
in Article 4, (b) any breach by the Purchaser of any covenant, obligation or agreement set
forth in this Agreement or (c) any Liability relating to, caused by or arising out of the
ownership or operation of the Company by the Purchaser after the Closing Date to the extent
the Seller is not obligated to indemnify and hold harmless the Purchaser Indemnified
Parties against such Liability.

     Section 8.3 Claim Procedure.

     (a) A party that seeks indemnity under this Article 8 (an “Indemnified
Party”) will give prompt written notice (a “Claim Notice”) to the party from
whom indemnification is sought (an “Indemnifying Party”) containing (i) a
description and, if known, the estimated amount of any Losses incurred or reasonably
expected to be incurred by the Indemnified Party, (ii) a reasonable explanation of

24

 

the basis for the Claim Notice to the extent of the facts then known by the Indemnified Party
and (iii) a demand for payment of those Losses.

     (b) If the Indemnified Party seeks indemnity under this Article 8 relating to a claim
by another Person not a party to this Agreement (a “Third Party Claim”), then the
Indemnified Party will deliver a Claim Notice to the Indemnifying Party and will include in
the Claim Notice (i) the facts constituting the basis for such Third Party Claim and the
amount of the damages claimed by the other Person, in each case to the extent known to the
Indemnified Party, accompanied by reasonable supporting documentation submitted by such
third party (to the extent then in the possession of the Indemnified Party) and (ii) notice
of the commencement of any Proceeding relating to such Third Party Claim within five days
after the Indemnified Party has received written notice of the commencement of such
Proceeding. Notwithstanding the foregoing, no delay or deficiency on the part of the
Indemnified Party in so notifying the Indemnifying Party will relieve the Indemnifying
Party of any Liability or obligation under this Agreement except if such delay or
deficiency materially prejudices or otherwise materially and adversely affects the rights
of the Indemnifying Party with respect thereto.

     (c) Within 30 days after the Indemnified Party’s delivery of notice of such Third
Party Claim under this Section 8.3, the Indemnifying Party may assume control of the
defense of such Third Party Claim with counsel reasonably satisfactory to the Indemnified
Party by giving to the Indemnified Party written notice of the intention to assume such
defense. If the Indemnifying Party does not so assume control of such defense, the
Indemnified Party will control such defense.

     (d) The party not controlling such defense (the “Noncontrolling Party”) may
participate therein at its own expense. The party controlling such defense (the “Controlling Party”) will diligently pursue such defense and will reasonably
advise the Noncontrolling Party on an ongoing basis of the status and defense of the Third
Party Claim, and the Controlling Party will consider in good faith recommendations made by
the Noncontrolling Party. The Noncontrolling Party will furnish the Controlling Party with
such information as it may have with respect to the Third Party Claim (including copies of
any summons, complaint or other pleading which may have been served on such party and any
written claim, demand, invoice, billing or other document evidencing or asserting the
same) and will otherwise cooperate with and assist the Controlling Party in the defense of
the Third Party Claim.

     (e) The Indemnifying Party will not agree to any settlement of, or the entry of any
Judgment arising from, any such Third Party Claim without the prior written consent of the
Indemnified Party, which consent the Indemnified Party will not unreasonably withhold or
delay; provided, however, that the consent of the Indemnified Party will
not be required if the Indemnifying Party agrees in writing to pay any amounts payable
pursuant to such settlement or Judgment and such settlement or Judgment includes a full,
complete and unconditional release of the Indemnified Party from further Liability. The
Indemnified Party will not agree to any settlement of, or the entry of any Judgment
arising from, any such Third Party Claim without the prior written consent of the
Indemnifying Party, which will not be unreasonably withheld or delayed. Notwithstanding
the foregoing, if such settlement or Judgment would impose any restriction on the conduct
of the business of the Company or require the Company or the Purchaser to admit any
violation of law or other wrongdoing, the Seller will not agree to any settlement of, or
entry of any Judgment arising from, any such Third Party Claim without the prior written
consent of the Purchaser, which will not be unreasonably withheld or delayed.

     Section 8.4 Survival. All representations and warranties
contained in this Agreement shall survive the Closing, irrespective of any investigation at
any time made by or on behalf of any Indemnified Party. The waiver by either party hereto
of any of its conditions for Closing based upon the accuracy of any representation or
warranty of the other party or on the performance of or compliance with any covenant,
agreement or obligation of the other party shall terminate such waiving party’s right to

25

 

indemnification, reimbursement or other remedy based upon such representation, warranty,
covenant, agreement or obligation under this Article 8 or Article 9. All representations
and warranties contained in this Agreement shall expire on the date that is 12 months after
the Closing Date; provided, however, that the representations and warranties contained in
Sections 3.2 and 4.2 (Authority and Enforceability), Section 3.4(a) (Capitalization and
Ownership) and Section 3.8(a) (Assets) shall continue in effect until sixty (60) days after
the date which is the expiration of the applicable statute of limitations pertaining
thereto, and the representations and warranties contained in Section 3.12 (Tax Matters)
shall survive until the third (3rd) anniversary of the Closing Date (each such
period, as applicable, the “Indemnification Period”). If an Indemnified Party
delivers to an Indemnifying Party, before expiration of a representation or warranty,
either a Claim Notice based upon a breach of any such representation or warranty, or a
notice that, as a result of a Proceeding instituted or claim made by a Person not a party
to this Agreement, the Indemnified Party reasonably expects to incur Losses, then the
applicable representation or warranty will survive until the resolution of the matter
covered by such notice. If the Proceeding or written claim with respect to which such
notice has been given is definitively withdrawn or resolved in favor of the Indemnified
Party, the Indemnified Party will promptly so notify the Indemnifying Party.

     Section 8.5 Limitations on Liability.

     (a) Seller’s Liability.

(i) Subject to Section 8.5(b), in no event will the Seller’s indemnification Liability
under this Agreement (whether under this Article 8, Article 9 or otherwise) exceed forty
percent (40%) of the Purchase Price; provided, however that such limitation of the Seller’s
Liability shall not apply to any indemnification claim by Purchaser Indemnified Parties
under this Article 8 based on the Seller’s breach of any representation or warranty under
any of Section 3.1 (Organization and Good Standing) Section 3.2 (Authority and
Enforceability), Section 3.3 (No Conflict); Section 3.4 (Capitalization and Ownership),
Section 3.8(a) (Assets), Section 3.12 (Tax Matters) or Section 3.19 (Brokers or Finders)
(collectively, the “Uncapped Seller Representations”) or the covenants and
agreements of the Seller in Sections 2.1 (Purchase and Sale), 2.3 (Escrow), 2.5 (Closing
Deliveries), 5.2 (Operation of the Business of the Company), Article 9 (Certain Tax
Matters), Section 10.6 (Confidentiality) or Section 11.1(b) (Capital Gains Taxes) (the
“Uncapped Seller Covenants”). Notwithstanding anything to the contrary in
this Agreement other than Section 8.5(b), the Purchaser Indemnified Parties will not be
entitled to assert any claims for indemnification under this Article 8 unless and until the
aggregate Losses of the Purchaser Indemnified Parties are in excess of ten percent (10%) of
the Purchase Price (the “Deductible”) and, in such event, only for amounts in
excess of the Deductible; provided, however, that the Deductible requirement shall not
apply to any indemnification claim by Purchaser Indemnified Parties under this Article 8
based on the Seller’s breach of any of the Uncapped Seller Representations or Uncapped
Seller Covenants.

(ii) The parties acknowledge that, except as expressly provided in Article 3 or any
certificate delivered by the Seller pursuant to this Agreement, (i) the Seller has not made
or is not making any representations, warranties or commitments whatsoever regarding the
subject matter of this Agreement, express or implied, and (ii) the Purchaser is not relying
and has not relied on, any representations, warranties or commitments whatsoever regarding
the subject matter of this Agreement, express or implied.

26

 

(iii) Without limiting the effect of any other limitation contained in this Article 8, for
purposes hereof, no representation or warranty of the Seller is deemed to be or to have
been inaccurate if:

     (A) on or prior to the date of this Agreement, the Purchaser had specific Knowledge
of the inaccuracy of such representation or warranty; or

     (B) following the date of this Agreement and prior to the Closing, (I) the Purchaser
obtained specific Knowledge of the inaccuracy of such representation or warranty, (II)
such inaccuracy, considered together with all other inaccuracies of any representations or
warranties of which the Purchaser had specific Knowledge, was of a nature that would have
caused the condition set forth in Section 6.2(a) not to be satisfied, and (III) the
Purchaser elected nonetheless to proceed with the Closing.

     (b) No Limit for Fraud. Nothing in this Agreement will limit the Liability of
any Person to any other party for intentional fraud or willful misconduct.

     (c) Applicable Laws. All references to Laws and Philippines Financial
Reporting Standards contained in this Agreement refer to the applicable Laws and
Philippines Financial Reporting Standards, and the interpretations thereof, as in effect
as of the date of this Agreement. No party will have any Liability (for indemnification or
otherwise) to any other party for any Losses arising out of any changes in Laws or
Philippines Financial Reporting Standards, or the interpretations thereof, after the date
of this Agreement.

     (d) Insurance Proceeds, Tax Refunds and Other Payments. The amount of any and
all Losses for which indemnification is provided pursuant to this Article 8 or Article 9
will be net of any Tax benefit to which an Indemnified Party actually receives by reason
of payment of such obligation or Liability (taking into account any Tax cost or reduction
in such Tax benefits by reason of receipt of the indemnification payment) and any amounts
of any insurance proceeds, indemnification payments, contribution payments or reimbursements actually received by, or paid in kind to, the Indemnified Party with
respect to such Losses or any of the circumstances giving rise thereto. In connection
therewith, if, at any time following payment in full by the Indemnifying Party of any
amounts of Losses due under this Agreement, the Indemnified Party receives any insurance
proceeds, indemnification payments, contribution payments or reimbursements relating to
the circumstances giving rise to such Losses, the Indemnified Party will promptly remit to
the Indemnifying Party such proceeds, payments or reimbursements in an amount not to
exceed the amount of the corresponding indemnification payment made by the Indemnifying
Party. Notwithstanding the foregoing, no Indemnified Party or the Company shall be under
any obligation to apply for, seek, demand or otherwise obtain any of the Tax benefits or
insurance proceeds, indemnification payments, contribution payments or reimbursements
contemplated above.

     (e) Mitigation. Each Indemnified Party will use its commercially reasonable
efforts to mitigate any Losses with respect to which it may be entitled to seek
indemnification pursuant to this Agreement.

     (f) Subrogation. If the Purchaser or any Purchaser Indemnified Party is
indemnified for any Losses pursuant to this Agreement with respect to any claim by a
Person not party to this Agreement, then the Seller will be subrogated to all rights and
remedies of the Purchaser or the Purchaser Indemnified Party against such third party,
and Purchaser will, and will cause each of the Purchaser Indemnified Parties to,
cooperate reasonably with and assist the Seller in asserting all such rights and
remedies against

27

 

such third party, provided that the Purchaser or the applicable
Purchaser Indemnified Parties shall not be required to incur out-of-pocket costs in
providing such cooperation and assistance.

     Section 8.6 Exclusive Remedy. From and after the Closing, subject to
Section 11.12, the sole and exclusive remedy of any Indemnified Party with respect to any
and all Losses arising in connection with the representation, warranties, covenants and
agreements set forth in this Agreement will be pursuant to the indemnification obligations
set forth in this Article 8 and Article 9. Except as contemplated in this Article 8 and
Article 9, neither party hereto will have any Liability under this Agreement;
provided, however, that the foregoing will not prohibit (i) any Indemnified
Party from bringing a claim for fraud against the Seller or the Purchaser, subject in any
event to Section 8.7, or (ii) any party hereto from exercising its rights under Section
11.12.

     Section 8.7 Exercise of Remedies by Purchaser Indemnified Parties
other than the Purchaser. No Purchaser Indemnified Party (other than the
Purchaser or any successor or assignee of the Purchaser) is entitled to assert any
indemnification claim or exercise any other remedy under this Agreement unless the
Purchaser (or any successor or assignee of the Purchaser) consents to the assertion of the
indemnification claim or the exercise of any other remedy. No Seller Indemnified Party
(other than the Seller or any successor or assignee of the Seller) is entitled to assert
any indemnification claim or exercise any other remedy under this Agreement unless the
Seller (or any successor or assignee of the Seller) consents to the assertion of the
indemnification claim or the exercise of any other remedy.

ARTICLE 9

CERTAIN TAX MATTERS

     Section 9.1 Liability and Indemnification for Taxes.

     (a) The Seller will defend, indemnify and hold harmless the Purchaser Indemnified
Parties against any Liability or obligation of the Company for (i) any Taxes with respect
to any Pre-Closing Period (or for any Straddle Period to the extent allocable to the
portion of such period beginning before and ending on the Closing Date), except to the
extent accrued or reserved for as current Liabilities on the Balance Sheet and the Interim
Balance Sheet; or (ii) any Taxes incurred in any Post-Closing Period but arising from the
settlement or other resolution with a Governmental Authority of an asserted Tax Liability
which relates to any Pre-Closing Period or Straddle Period (to the extent allocable to the
portion of the Straddle Period beginning before and ending on the Closing Date). Such
indemnification obligation of the Seller shall continue in effect until the third
anniversary of the Closing Date.

     (b) The Purchaser will defend, indemnify, and hold harmless the Seller
Indemnified Parties against any Liability or obligation of the Company for all Taxes with
respect to any Post-Closing Period (or for any Straddle Period to the extent allocable to
the portion of such period beginning after the Closing Date), except to the extent that
such Losses for Taxes are attributable to any breach of representation, warranty, or
covenant of the Seller hereunder relating to Taxes. Such indemnification obligation of the
Purchaser shall continue in effect until the third anniversary of the Closing Date.

     (c) With respect to any Straddle Period, any Taxes attributable to the Company will
be allocated between the Pre-Closing Period and the Post-Closing Period by closing the
books at the end of the Closing Date, except that Tax items of a periodic nature, such as
property taxes or depreciation allowances calculated on an annual basis, will be
allocated by apportioning a pro-rata portion of such Taxes to each day in the relevant
Straddle Period.

     (d) The Seller will not be required to indemnify the Purchaser Indemnified Parties
against Losses for Taxes attributable to a Pre-Closing Period to the extent such Losses
for Taxes could be

28

 

reduced under applicable Law by reason of Tax Attributes arising in a
Pre-Closing Period (assuming for the purposes of this sentence that such Tax Attributes
are not used in the Post-Closing Period).

     Section 9.2 Tax Return Filing and Payment of Taxes.

     (a) The Purchaser will be responsible for the filing of all Tax Returns required to
be filed with respect to the Company after the Closing Date. All such Tax Returns will be
completed in accordance with applicable Law. The Purchaser will make all payments required
with respect to any such Tax Return. For any Tax Return of the Company that involves a
Straddle Period, the Purchaser will prepare, or cause to be prepared, such Tax Return in a
manner consistent with past practice to the extent permitted by applicable Law. The
Purchaser will deliver to the Seller for its review, comment and approval (not to be
unreasonably withheld, conditioned or delayed) a copy of such proposed Tax Return, along
with an allocation between the Pre-Closing Period and the Post-Closing Period of the Taxes
shown as due on such Tax Return, at least thirty (30) days prior to the deadline for
filing such Tax Return. The Purchaser will not amend or revoke any Tax Return relating to
a Straddle Period without the Seller’s prior written consent, which consent will not be
unreasonably withheld, conditioned or delayed.

     (b) In the event that the Seller or the Purchaser is liable under this Agreement for any Taxes paid by the other party with respect to any Tax Return prepared
and filed pursuant to this Section 9.2, prompt reimbursement will be made.

     (c) To the extent not inconsistent with the provisions of this Section 9.2, the
procedures of Article 8 will apply in the case of any claim for Losses related to Taxes.

     Section 9.3 Cooperation. Each of the Seller and the Purchaser agrees
that it will:

     (a) provide assistance to the other party as reasonably requested in preparing and
filing Tax Returns and responding to Tax Proceedings (hereinafter defined) or Governmental
Authority disputes;

     (b) make available and deliver when requested to the other party as
reasonably requested all information, records, and documents relating to Taxes
concerning the Company; and

     (c) retain any books and records that could reasonably be expected to be necessary
or useful in connection with any preparation by any other party of any Tax Return, or for
any Tax Proceeding. Such books and records will be retained until the expiration of the
applicable statute of limitations (including extensions thereof). Thereafter, the
Purchaser will not dispose of any such Tax Returns, books and records unless it first
offers in writing such Tax Returns, books and records to the Seller and the Seller fails
to accept such offer within 60 days of it being made.

     Section 9.4 Tax Proceedings.

     (a) The Seller will have the right to control, with respect the Company, any audit,
examination, contest, litigation or other Proceeding by or against any taxing authority
(a “Tax Proceeding”) for any Pre-Closing Period. The Seller will provide the Purchaser
with prompt written notice of any such Tax Proceeding and will provide the Purchaser with
copies of all correspondence and documentation related thereto. With respect to any such
Tax Proceeding, (i) the Seller will consult with the Purchaser before taking any
significant action in connection with such Tax Proceeding, (ii) the Seller will consult
with the Purchaser and offer the Purchaser an opportunity to comment before submitting
any written materials prepared or furnished in connection with such Tax Proceeding, (iii)
the Seller will defend such Tax Proceeding diligently and in good faith as if it were the
only party in interest in

29

 

connection with such Tax Proceeding and (iv) the Purchaser will
be entitled to participate in such Tax Proceeding, at its own expense.

     (b) The Purchaser will have the right to control any Tax Proceeding relating to the
Company for any Post-Closing Period.

     (c) In the case of a Tax Proceeding for a Straddle Period relating to the Company,
the Purchaser will have the right to control such Tax Proceeding; provided, however, that
(i) the Purchaser will provide the Seller with a timely and reasonably detailed account of
each phase of such Tax Proceeding, (ii) the Purchaser will consult with the Seller before
taking any significant action in connection with such Tax Proceeding, (iii) the Purchaser
will consult with the Seller and offer the Seller an opportunity to comment before
submitting any written materials prepared or furnished in connection with such Tax
Proceeding, (iv) the Purchaser will defend such Tax Proceeding diligently and in good
faith as if it were the only party in interest in connection with such Tax Proceeding, (v)
the Seller will be entitled to participate in such Tax Proceeding, at its own expense and
(vi) the Purchaser will not settle, compromise or abandon any such Tax Proceeding without
obtaining the prior written consent of the Seller (not to be unreasonably withheld,
conditioned or delayed).

     Section 9.5 Characterization of Indemnification Payment. All
indemnification payments made pursuant to Article 8 and Article 9 will be treated to the
extent permitted under applicable Law as adjustments to the Purchase Price for all Tax
purposes.

ARTICLE 10

OTHER AGREEMENTS

     Section 10.1 Employee Benefits. (a) The Purchaser will provide, or
cause the Company to provide, those Persons employed by the Company immediately prior to
the Closing, including those Employees on vacation, leave of absence, disability or sick
leave or temporary layoff (whether or not such Employees return to active employment with
the Company), with employee benefits that are substantially equivalent to, and no less
favorable than, those provided to such Employees immediately prior to the Closing in
accordance with applicable Law. The Purchaser will also maintain all bonus, profit sharing,
incentive, retention, severance and performance pay plans or arrangements and any other
Company Plan for applicable Employees participating in such plans immediately prior to the
Closing (subject to the terms of such plans or arrangements and applicable Law). To the
extent that duration of service is relevant for purposes of eligibility, vesting or benefit
accrual under any employee benefit plan, program or arrangement established or maintained
by the Purchaser or the Company for the benefit of Employees, such plan, program or
arrangement will credit such Employees or former Employees for the duration of service on
or prior to the Closing with the Company.

     (b) Upon the Closing Date, the Purchaser will assume and honor or cause the Company to
assume and honor in accordance with their terms all individual employment, severance,
retention and other compensation Contracts then existing between the Company and any
Employee or director thereof, except as otherwise agreed in writing by the Purchaser and
such Person. The Purchaser will cause the Company to continue to recognize all Employees’
and vacation benefits accrued as of the Closing Date and to proceed with any increase in
the compensation of any Employee that has been approved as of the Closing Date, provided
that such increases have been disclosed to the Purchaser before the Closing Date and are
consistent with the provisions of Section 5.1(g) hereof.

     Section 10.2 Indemnification; Insurance. The Purchaser will not, for
a period of six years after the Closing, take or permit any action to alter or impair any
exculpatory or indemnification provisions now existing in the charter or bylaws of the
Company for the benefit of any individual who

30

 

served as a director or officer of the
Company at any time prior to the Closing (each an “Affiliate Indemnified Party”), except
for any changes which may be required to conform with changes in applicable Law and any
changes which do not affect the application of such provisions to acts or omissions of
such individuals prior to the Closing. Without limiting the generality of this Section
10.2, the provisions of this Section 10.2 are intended for the benefit of, and may be
enforced by, each of the Affiliate Indemnified Parties and their respective heirs.

     Section 10.3 Seller’s Name, Assets and Information.

     (a) As soon as reasonably practicable, but in no event later than sixty (60) days
after the Closing, the Purchaser agrees to (i) remove or cause to be removed “AOL”,
“America Online” or other similar mark and any other trademark, design or logo previously
or currently used by the Seller or any of its Affiliates (the “Seller Marks”) from
all buildings, signs and vehicles of the Company, and (ii) cease using the Seller Marks in
electronic databases, web sites, product instructions, packaging and other materials,
printed or otherwise (all such materials, together with buildings, signs and vehicles of
the Company, the “Marked Assets”).

     (b) Immediately after the Closing, the Purchaser will cause the Company to cease
using the Seller Marks in all invoices, letterhead, advertising and promotional materials,
office forms and business cards; provided, however, that the Company may, for a period not
to exceed 120 days following the Closing Date, for transition or notification purposes
following the Closing, reference itself to contractors, Governmental Authorities
(including Tax authorities) and other third parties conducting business with the Company
as being formerly named AOL Member Services-Philippines, Inc.

     (c) From and after the Closing, the Purchaser will use commercially reasonable
efforts to remove the Seller Marks from all assets of the Company (including all Marked
Assets); provided, however, that in no event will the Purchaser allow the Company to use
the Seller Marks after the 60-day anniversary of the Closing Date, except as provided in
Section 10.3(b).

     (d) The Purchaser acknowledges and agrees that the Seller or an Affiliate of the
Seller is the owner of the Seller Marks and all goodwill attached thereto. This Agreement
does not give the Purchaser the right to use, or the right to cause the Company to use, the
Seller Marks except in accordance with this Agreement. The Purchaser agrees not to attempt
to register or allow the Company to attempt to register the Seller Marks nor to register or
allow the Company to register anywhere in the world a mark same as or similar to the Seller
Marks.

     (e) In no event will the Purchaser or any Affiliate of the Purchaser advertise or
hold itself out as the Seller or any Affiliate of the Seller.

     (f) If, at any time after the Closing, the Company possesses any non-public
information belonging to or concerning the Seller that is not necessary for the operation
of the business of the Company or for the reasonable maintenance of the Company’s
corporate, business or financial records (such information, the “Seller
Information”), the Purchaser will promptly transfer, or cause to be transferred, such
Seller Information to the Seller (without retaining a copy thereof). The Purchaser will
not, and will not cause the Company to, use any Seller Information or disclose such
information to any Person. For the purposes of this Agreement, Seller Information may
include written, graphical or machine-readable information that relates to trade secrets,
product plans, software, vendor and customer information, business plans and data stored
electronically. The Purchaser will, and will cause the Company to, use commercially
reasonable efforts to cooperate with the Seller to identify any Seller Information that is
in the possession of any such Person.

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     Section 10.4 Company Assets and Information.

     (a) If, at any time after the Closing, the Seller finds itself in possession of any
asset belonging to the Company, the Seller will promptly transfer, or cause to be
transferred, such asset to the Company. The Seller will not use any such asset. For
purposes of this provision, the parties acknowledge and agree that to the extent any
information relates to both the Company and the Seller or any of its Affiliates, the
Seller will be entitled to use and retain copies of such information as it sees fit.

     (b) If, at any time after the Closing, the Seller or the Purchaser identifies any
tangible asset that is legally owned by the Company (and was owned by the Company
immediately prior to Closing), but which is not located at the Company’s facilities and is
not used by the Company in conducting its business (and was not used by the Company in
conducting its business prior to Closing), then the parties agree to cooperate so as to
cause such asset to be transferred from the Company to the Seller or its designee at no
cost other than as set forth herein. To the extent any such asset is identified and
transferred from the Company and such asset was included in the calculation of the Net
Book Value of the Company pursuant to this Agreement, the Seller agrees to promptly
reimburse the Purchaser for the value attributed to such asset in the calculation of the
Net Book Value of the Company.

     Section 10.5 Non-Solicitation.

     (a) Unless otherwise agreed to in writing by the Seller, for a period commencing on
the Closing Date and ending on the second anniversary of the Closing Date (the
“Nonsolicitation Period”), the Purchaser will not, directly or indirectly, for itself or
on behalf of or in conjunction with any other Person (other than as a holder of not more
than one percent (1%) of the outstanding capital stock of a Person), nor will it permit
the Company or any of the Purchaser’s Subsidiaries, or any of its or their directors,
officers, employees, agents, advisors or representatives to, directly or indirectly,
call upon any Person who is, at the time the Person is called upon, an employee of the
Seller, for the purpose or with the intent of soliciting such employee away from or out
of the employ of the Seller, or employ or offer employment to any Person who was or is
employed by the Seller unless such Person will have ceased to be employed by the Seller
for a period of at least six months; provided, however, that the foregoing prohibition
shall not apply to Doreen Thibodeaux.

     (b) This Section 10.5 will not be deemed to prohibit the Purchaser or the Seller from
engaging in general media advertising or solicitation that may be targeted to a particular
geographic or technical area but that is not targeted towards employees of the Seller (in
the case of the Purchaser) or the Company or the Purchaser (in the case of the Seller).

     (c) For
purposes of this Section 10.5, references to “Seller” includes the Seller
and each of its Subsidiaries other than the Company.

     Section 10.6 Confidentiality.

     (a) The Seller hereby acknowledges and agrees that, through its ownership of the
Shares and its management of the affairs of the Company, the Seller has had access to and
become familiar with confidential and proprietary information of the Company, including
(without limitation) some or all of the following documents, materials and information of
the Company, to the extent such information does not also relate to the Seller or any of
its other Affiliates (collectively the “Confidential Information”): (i) financial
data and projections, capital spending budgets and operating budgets; (ii) Employee and
Corporate Officer personnel files; and (iii) regulatory filings and correspondence with
Governmental Authorities, including summaries, memoranda, reports, compilations or other
derivations thereof.

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     (b) The Seller hereby acknowledges and agrees that the protection of the
Confidential Information is necessary to protect and preserve the value of the Company,
and that without such protection, the Purchaser would not have entered into this
Agreement and would not consummate the transactions contemplated hereby. Accordingly, subject to the provisions of Section 10.6(c), the Seller hereby covenants and
agrees, for itself and its Affiliates and representatives that, following the Closing,
without the prior written consent of the Purchaser (which consent shall be at the
Purchaser’s absolute discretion to give or withhold), the Seller shall not, nor shall the
Seller cause or permit any of its Affiliates or representatives to, directly or indirectly,
disclose to any Person or use for its own account or benefit or for the account or benefit
of any other Person any Confidential Information.

     (c) The provisions of Section 10.6(b) shall not apply to (i) information that is
generally known to, and available for use by, the public other than as a result of the
breach of this Agreement by the Seller, (ii) information that becomes available to the
Seller on a non-confidential basis from a source (other than the Purchaser or the Company)
which, to the Seller’s Knowledge, is not prohibited from disclosing such information to the
Seller by a legal, contractual or fiduciary obligation to the Company or the Purchaser,
(iii) information that is required to be disclosed pursuant to applicable Law or court
order, or (iv) disclosure by the Seller that is reasonably necessary for the Seller to
exercise its rights or satisfy and perform its covenants and obligations under this
Agreement. If the Seller becomes compelled by applicable Law or a court order to disclose
any Confidential Information, the Seller shall provide the Purchaser with prompt written
notice of such requirement so that the Purchaser may seek a protective order or other
remedy in respect of such compelled disclosure. If such a protective order or other remedy
is not obtained by or is not available to the Purchaser, then the Seller shall use
commercially reasonable efforts to ensure that only the minimum portion of such
Confidential Information that is legally required to be disclosed is so disclosed, and the
Seller shall use commercially reasonable efforts to obtain assurances that confidential
treatment shall be given to such Confidential Information.

ARTICLE 11

GENERAL PROVISIONS

     Section 11.1 Transfer Taxes; Capital Gains Taxes.

     (a) Any sales, use, registration, transfer, stamp, value-added, GST, or other
transfer Taxes, and all notarial fees arising out of or incurred in connection with the
transfer of the Shares contemplated by this Agreement shall be borne by the Purchaser,
and the Purchaser shall timely make such payments, including payment of the necessary
documentary stamp tax no later than five (5) days after the close of the month in which
the Deed of Absolute Sale of Shares is executed.

     (b) Promptly following the date hereof, the Seller shall prepare, at its option, (i)
a draft of the request for tax treaty relief under the Philippines-United States Double
Taxation Agreement to be filed by the Seller with the International Tax Affairs Division
of the BIR (“Relief Application”) or (ii) a capital gains Tax Return, duly
completed and executed by the Seller, together with all necessary supporting documents in
sufficient copies for filing with the BIR and shall file such Relief Application or
capital gains Tax Return, as the case may be, with the necessary department of the BIR as
promptly as practicable following the date hereof. The Seller shall use all commercially
reasonable efforts to obtain the Certificate Authorizing Registration (“CAR”)
issued by the BIR expressly authorizing the Corporate Secretary of the Company to effect
in its corporate books the transfer of the Shares under the name of the Seller to the
Purchaser as soon as practicable following the date hereof; provided, however, that the parties hereby acknowledge that such CAR may not be issued by
the BIR prior to the Closing Date. To the extent tax treaty relief under the Philippines-United States Double Taxation Agreement is
finally determined by the BIR to not be available to the Seller, the Seller covenants and
agrees that it will prepare and file a capital gains Tax Return in connection with the
transaction contemplated hereby, together with

33

 

all necessary supporting documents, with
the BIR and pay the Philippine capital gains Tax (including any applicable interest and
penalties) due as promptly as practicable following such determination.

     (c) The parties hereby acknowledge and agree that in accordance with applicable Law,
the Secretary of the Company may not (i) evidence the transfer of the Shares to the
Purchaser in the Stock and Transfer Book of the Company or (ii) issue new stock
certificates for the Shares to the Purchaser and its nominee directors until the BIR (x)
has been satisfied that the capital gains Tax and documentary stamp Tax have been paid or
are not imposable, as evidenced by a duly issued confirmatory ruling by the BIR, and (y)
has issued (A) a tax clearance certificate and (B) the CAR authorizing the registration of
the Shares in the name of the Purchaser.

     Section 11.2 Notices. All notices and other communications under
this Agreement must be in writing and are deemed duly delivered when (a) delivered if
delivered personally or by nationally recognized overnight courier service (costs
prepaid), (b) sent by facsimile with confirmation of transmission by the transmitting
equipment (or, the first business day following such transmission if the date of
transmission is not a business day) or (c) received or rejected by the addressee, if
sent by certified mail, return receipt requested; in each case to the following
addresses or facsimile numbers and marked to the attention of the individual (by name
or title) designated below (or to such other address, facsimile number or individual
as a party may designate by notice to the other parties):

	 	(a)	 	If to the Seller:
	 
	 	 	 	AOL LLC

22265 Pacific Blvd.

Dulles, Virginia 20166

Attention: Executive Vice President and Chief Financial Officer

Fax: (703) 265-4250
	 
	 	 	 	with a copy (which will not constitute notice) to:
	 
	 	 	 	AOL LLC

22000 AOL Way

Dulles, VA 20166-9323

Attention: Deputy General Counsel for Transactions

Fax: (703) 265-8433
	 
	 	(b)	 	If to the Purchaser:
	 
	 	 	 	eTelecare Global Solutions, Inc.

8901 E. Raintree, Suite 100

Scottsdale, Arizona 85260

Attention: Michael Dodson, Chief Financial Officer

Fax: (480) 477-1279

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	 	 	 	with a copy (which will not constitute notice) to:
	 
	 	 	 	Snell & Wilmer L.L.P.

One Arizona Center

400 E. Van Buren

Phoenix,

Arizona 85004

Attention: Garth D. Stevens

Fax: (602) 382-6070

     Section 11.3 Amendment. This Agreement may not be amended,
supplemented or otherwise modified except in a written document signed by each party to
be bound by the amendment and that identifies itself as an amendment to this Agreement.

     Section 11.4 Waiver and Remedies. The parties may (a) extend the time
for performance of any of the obligations or other acts of any other party to this
Agreement, (b) waive any inaccuracies in the representations and warranties of any other
party to this Agreement contained in this Agreement or in any certificate, instrument or
document delivered pursuant to this Agreement or (c) waive compliance with any of the
covenants, agreements or conditions for the benefit of such party contained in this
Agreement. Any such extension or waiver by any party to this Agreement will be valid only
if set forth in a written document signed on behalf of the party or parties against whom
the waiver or extension is to be effective. No extension or waiver will apply to any time
for performance, inaccuracy in any representation or warranty, or noncompliance with any
covenant, agreement or condition, as the case may be, other than that which is specified
in the written extension or waiver. No failure or delay by any party in exercising any
right or remedy under this Agreement or any of the documents delivered pursuant to this
Agreement, and no course of dealing between the parties, operates as a waiver of such
right or remedy, and no single or partial exercise of any such right or remedy precludes
any other or further exercise of such right or remedy or the exercise of any other right
or remedy. Any enumeration of a party’s rights and remedies in this Agreement is not
intended to be exclusive, and a party’s rights and remedies are intended to be cumulative
to the extent permitted by law and include any rights and remedies authorized in law or in
equity.

     Section 11.5 Entire Agreement. This Agreement (including the
Schedules and Exhibits hereto and the documents and instruments referred to in this
Agreement that are to be delivered at the Closing) constitutes the entire agreement among
the parties and supersedes any prior understandings, agreements or representations by or
among the parties, or any of them, written or oral, with respect to the subject matter of
this Agreement. Notwithstanding the foregoing, the Confidentiality Agreement will remain
in effect in accordance with its terms as modified pursuant to Section 5.6.

     Section 11.6 Assignment and Successors. This Agreement binds and
benefits the parties and their respective successors and assigns. The Purchaser may not
assign any rights under this Agreement without the prior written consent of the Seller,
except that the Purchaser may at any time, without the Seller’s consent, assign its rights
hereunder to any Affiliate of the Purchaser. No party may delegate any performance of its
obligations under this Agreement, except that the Purchaser may at any time delegate the
performance of its obligations (other than the obligation to pay the Purchase Price) to any
Affiliate of the Purchaser so long as the Purchaser remains fully responsible for the
performance of the delegated obligation. Nothing expressed or referred to in this Agreement
will be construed to give any Person, other than the parties to this Agreement and the
Indemnified Parties who are not parties to this Agreement (who shall be third party
beneficiaries of this Agreement), any legal or equitable right, remedy or claim under or
with respect to this Agreement or any provision of this Agreement except such rights as may
inure to a successor or permitted assignee under this Section.

35

 

     Section 11.7 Severability. If any provision of this Agreement is
held invalid, illegal or unenforceable, the remaining provisions of this Agreement remain
in full force and effect, if the essential terms and conditions of this Agreement for
each party remain valid, binding and enforceable.

     Section 11.8 Exhibits and Schedules. The Exhibits and Schedules to
this Agreement are incorporated herein by reference and made a part of this Agreement. The
Seller Disclosure Schedule and the Purchaser Disclosure Schedule are arranged in sections
and paragraphs corresponding to the numbered and lettered sections and paragraphs of
Article 3, Article 4 and Article 6, as applicable. The statements in a section of such
Disclosure Schedules, and those in any amendment or supplement thereto, will be deemed to
relate to each other provision of Article 3 or 4 to the extent such relationship is
reasonably apparent.

     Section 11.9 Interpretation. The language used in this Agreement is
the language chosen by the parties to express their mutual intent, and no provision of
this Agreement will be interpreted for or against any party because that party or its
attorney drafted the provision.

     Section 11.10 Expenses. Except as otherwise expressly provided in this
Agreement, each party will bear its respective direct and indirect expenses incurred in
connection with the preparation and negotiation of this Agreement and the consummation of
the transactions contemplated by this Agreement, including all fees and expenses of its
advisors and representatives.

     Section 11.11 Governing Law. Unless any Exhibit or Schedule
specifies a different choice of law, the internal laws of the State of New York, United
States of America (without giving effect to any choice or conflict of law provision or
rule that would cause the application of laws of any other jurisdiction) govern all
matters arising out of or relating to this Agreement and its Exhibits and Schedules and
all of the transactions it contemplates, including its validity, interpretation,
construction, performance and enforcement and any disputes or controversies
arising therefrom.

     Section 11.12 Specific Performance. The parties 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. The parties
accordingly agree that, in addition to any other remedy to which they are entitled at law
or in equity, the parties are entitled to injunctive relief to prevent breaches of this
Agreement and otherwise to enforce specifically the provisions of this Agreement. Each
party expressly waives any requirement that any other party obtain any bond or provide any
indemnity in connection with any action seeking injunctive relief or specific enforcement
of the provisions of this Agreement.

     Section 11.13 Jurisdiction and Service of Process. Any action or
proceeding arising out of or relating to this Agreement or the transactions contemplated
by this Agreement must be brought in the courts of Manhattan, New York, United States of
America, or, if it has or can acquire jurisdiction, in the United States District Court
for the Southern District of New York. Each of the parties knowingly, voluntarily and
irrevocably submits to the exclusive jurisdiction of each such court in any such action or
proceeding and waives any objection it may now or hereafter have to venue or to
convenience of forum. Any party to this Agreement may make service on another party by sending or delivering a
copy of the process to the party to be served at the address and in the manner provided
for the giving of notices in Section 11.2. Nothing in this Section 11.13, however, affects
the right of any party to serve legal process in any other manner permitted by law. If any
Proceeding is brought in connection with this Agreement or the transactions contemplated
hereby, the prevailing party shall be entitled to recover reasonable attorneys’ fees,
accounting fees, and other costs incurred in connection with such Proceeding, in addition
to any other relief to which it may be entitled.

36

 

     Section 11.14 Waiver of Jury Trial. EACH OF THE PARTIES
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY TO
THIS AGREEMENT IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT.

     Section 11.15 Limitation of Liability. NOTWITHSTANDING
ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT WILL ANY PARTY OR ANY OF ITS AFFILIATES BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS, LOSS OF REVENUE
OR LOST SALES) IN CONNECTION WITH ANY CLAIMS, LOSSES,
DAMAGES OR INJURIES ARISING OUT OF THE CONDUCT OF SUCH PARTY PURSUANT TO THIS
AGREEMENT REGARDLESS OF WHETHER THE NONPERFORMING PARTY IS
ADVISED, HAS OTHER REASON TO KNOW, OR IN FACT KNOWS OF THE
POSSIBILITY OF SUCH DAMAGES OR NOT.

     Section 11.16 Counterparts. The parties may execute this
Agreement in multiple counterparts, each of which constitutes an original as
against the party that signed it, and all of which together constitute one
agreement. This Agreement is effective upon delivery of one executed counterpart
from each party to the other parties. The signatures of all parties need not appear
on the same counterpart. The delivery of signed counterparts by facsimile or email
transmission that includes a copy of the sending party’s signature is as effective
as signing and delivering the counterpart in person.

[Signature page follows.]

37

 

     The parties have executed and delivered this Agreement as of
the date indicated in the first sentence of this Agreement.

	 	 	 	 	 
	 	AOL LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ETELECARE GLOBAL SOLUTIONS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

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