Document:

chtl_10k-ex1016.htm

    EXHIBIT
10.16

     

     

     

    STOCK
PURCHASE AGREEMENT

    

    Dated as
of February 22, 2009

    

    between

    

     Mario Octavio
Navarro Alvarez and Rafael Isaías Samanez Zacarías

     (“Sellers”)

    

    and

    

    Gulfstream
Capital Partners, Ltd.

    (“Buyer”)

     

    relating
to the purchase and sale

     

    of

     

    95% of
the Outstanding Common Stock

     

    of

     

    Perusat
S.A.

     

    Dated
February 22, 2009

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
TABLE OF CONTENTS

     

    
    

    
      	 	 	
              Page

            
	
              ARTICLE
      I 

            	
              DEFINITIONS 

            	 2-6
	
              1.1

            	
              Definitions

            	
              2-6

            
	
              1.2

            	
              OTHER
      DEFINITIONS

            	
              6

            
	
              1.3

            	
              Langauge

            	
              6

            
	 
      	 
      	 
      
	
              ARTICLE
      II

            	
              PURCHASE
      AND SALE

            	
              6-7

            
	
              2.1

            	
              Purchase and Sale of the
    Shares

            	
              6

            
	
              2.2

            	
              Purchase Price

            	
              7

            
	
              2.3

            	
              Closing Date

            	
              7

            
	
              2.4

            	
              Transactions to be Effected at the
      Closing

            	
              7

            
	
               
      

            	 
      	 
      
	
              ARTICLE
      III

            	
              REPRESENTATIONS
      AND WARRANTIES OF SELLERS

            	
              8-23

            
	
              3.1

            	
              Organization and Good
    Standing

            	
              8

            
	
              3.2

            	
              Capitalization

            	
              8-9

            
	
              3.3

            	
              Subsidiaries and Affiliates of the
      Company.

            	
              9

            
	
              3.4

            	
              Authority and
Enforceability

            	
              9

            
	
              3.5

            	
              No Conflicts;
Authorizations

            	
              9

            
	
              3.6

            	
              Financial Statements

            	
              9

            
	
              3.7

            	
              No Undisclosed Liabilities

            	
              10

            
	
              3.8

            	
              Accounts Receivable

            	
              10

            
	
              3.9

            	
              Taxes

            	
              10

            
	
              3.10

            	
              Compliance with Law

            	
              11

            
	
              3.11

            	
              Authorizations

            	
              11

            
	
              3.12

            	
              Title to Personal Properties;
      Leases

            	
              12

            
	
              3.13

            	
              Condition of Tangible
Assets

            	
              12

            
	
              3.14

            	
              Real Property

            	
              12-13

            
	
              3.15

            	
              Intellectual Property.

            	
              13-16

            
	
              3.16

            	
              Absence of Certain Changes or
      Events

            	
              16-17

            
	
              3.17

            	
              Contracts

            	
              17-19

            
	
              3.18

            	
              Litigation.

            	
              19

            

    

    
      
         

      

      
        i 

        
          

        

      

      
         

      

    

     

    TABLE OF CONTENTS 

    (CONTINUED)

    
 

    
      	 	 	
               Page

            
	
              3.19

            	
              Employee Benefits

            	
              20

            
	
              3.20

            	
              Labor and Employment
Matters

            	
              20

            
	
              3.21

            	
              Environmental

            	
              21

            
	
              3.22

            	
              Insurance

            	
              21-22

            
	
              3.23

            	
              Books and Records

            	
              22

            
	
              3.24

            	
              Suppliers and Customers

            	
              22

            
	
              3.25

            	
              Brokers or Finders

            	
              22

            
	
              3.26

            	
              Bank Accounts

            	
              23

            
	
              3.27

            	
              Powers of Attorney

            	
              23

            
	
              3.28

            	
              Support Services

            	
              23

            
	
              3.29

            	
              Completeness of Disclosure

            	
              23

            
	 
      	 
      	
               
      

            
	
              ARTICLE
      IV

            	
              REPRESENTATIONS
      AND WARRANTIES OF BUYER

            	
              23-24

            
	
              4.1

            	
              Organization and Good
    Standing

            	
              23

            
	
              4.2

            	
              Authority and
Enforceability

            	
              23

            
	
              4.3

            	
              Brokers or Finders

            	
              24

            
	 
      	 
      	
               
      

            
	
              ARTICLE
      V

            	
              COVENANTS
      OF SELLERS

            	
              24-29

            
	
              5.1

            	
              Conduct of Business

            	
              24

            
	
              5.2

            	
              Negative Covenants

            	
              24-26

            
	
              5.3

            	
              Access to Information

            	
              26

            
	
              5.4

            	
              Resignations

            	
              26

            
	
              5.5

            	
              Indebtedness; Release of
    Liens

            	
              26

            
	
              5.6

            	
              Confidentiality

            	
              26

            
	
              5.7

            	
              Records Retention

            	
              27

            
	
              5.8

            	
              Consents

            	
              27

            
	
              5.9

            	
              Notification of Certain
    Matters

            	
              27

            
	
              5.10

            	
              Restrictive Covenants

            	
              28

            
	
              5.11

            	
              Insurance

            	
              29

            
	
              5.12

            	
              Security Interest

            	
              29

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      TABLE OF CONTENTS 

      (CONTINUED)

       

    

    
      	 	 	
              Page 

            
	
              ARTICLE
      VI

            	
              COVENANTS
      OF BUYER AND SELLERS

            	
              30-32

            
	
              6.1

            	
              Regulatory Approvals.

            	
              30

            
	
              6.2

            	
              Public Announcements

            	
              30

            
	
              6.3

            	
              Tax Matters.

            	
              30-31

            
	
              6.4

            	
              Employee Matters.

            	
              31-32

            
	
              6.5

            	
              Further Assurances

            	
              32

            
	
              6.6

            	
              Payment of Debt to Telefónica del Perú
      S.A.A

            	
              32

            
	 
      	 
      	
               
      

            
	
              ARTICLE
      VII

            	
              CONDITIONS
      TO CLOSING

            	
              32-34

            
	
              7.1

            	
              Conditions to Obligations of Buyer and
      Sellers

            	
              32

            
	
              7.2

            	
              Conditions to Obligation of
      Buyer

            	
              32-34

            
	
              7.3

            	
              Conditions to Obligation of
      Sellers

            	
              34

            
	 
      	 
      	
               
      

            
	
              ARTICLE
      VIII

            	
              TERMINATION

            	
              34-35

            
	
              8.1

            	
              Termination

            	
              34-35

            
	
              8.2

            	
              Effect of Termination

            	
              35

            
	
              8.3

            	
              Remedies.

            	
              35

            
	 
      	 
      	
               
      

            
	
              ARTICLE
      IX

            	
              INDEMNIFICATION

            	
              36-42

            
	
              9.1

            	
              Survival.

            	
              36

            
	
              9.2

            	
              Indemnification by Sellers

            	
              36-37

            
	
              9.3

            	
              Indemnification by Buyer

            	
              37

            
	
              9.4

            	
              Indemnification Procedure for Third Party
      Claims

            	
              38-40

            
	
              9.5

            	
              Indemnification Procedures for Non-Third Party
      Claims.

            	
              40

            
	
              9.6

            	
              Contingent Claims

            	
              40

            
	
              9.7

            	
              Effect of Investigation;
      Waiver.

            	
              40

            
	
              9.8

            	
              Tax Indemnification

            	
              40-41

            
	
              9.9

            	
              Procedures Relating to Indemnification of Tax
      Claims

            	
              41

            
	
              9.10

            	
              Tax Treatment of Indemnification
      Payments

            	
              41

            
	
              9.11

            	
              Other Rights and Remedies Not
      Affected

            	
              41

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    

      TABLE OF CONTENTS 

      (CONTINUED)

    

     

    

    
      	 
      	 
      	
              Page

            
	
              ARTICLE
      X

            	
              MISCELLANEOUS

            	
              42-45

            
	
              10.1

            	
              Notices

            	
              42

            
	
              10.2

            	
              Amendments and Waivers

            	
              42

            
	
              10.3

            	
              Expenses

            	
              43

            
	
              10.4

            	
              Successors and Assigns

            	
              43

            
	
              10.5

            	
              Governing Law

            	
              43

            
	
              10.6

            	
              Consent to Jurisdiction

            	
              43

            
	
              10.7

            	
              Counterparts

            	
              43

            
	
              10.8

            	
              Third Party Beneficiaries

            	
              44

            
	
              10.9

            	
              Entire Agreement

            	
              44

            
	
              10.10

            	
              Captions

            	
              44

            
	
              10.11

            	
              Severability

            	
              44

            
	
              10.12

            	
              Specific Performance

            	
              44

            
	
              10.13

            	
              Interpretation

            	
              44-45

            

    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    STOCK PURCHASE
AGREEMENT

    

    STOCK
PURCHASE AGREEMENT, dated as of February 22, 2009 (the "Agreement"),
between:

    

    
      ·            
Gulfstream Capital
Partners Ltd., a Republic
of Seychelles corporation with offices at Hong Kong, Peoples Republic of China
("Buyer"), and

    

    

    ·             Mario Octavio Navarro
Alvarez, identified with
Foreign Identity Card No. 000280774 (together with his spouse Gisella Tsuchikame Nakamoto, identified
with Peruvian Identity Card No. 09387084) (jointly “Navarro”), and Rafael Isaías
Samanez Zacarías,
identified with Peruvian Identity Card No. 07967650, (together with his spouse Jesus Margot Magan Guiterrez,
identified with Peruvian Identity Card No. 07554742) (jointly “Samanez”), all of them domiciled for these
purposes at Av. Camino Real 493, Piso 11,San Isidro, Lima, Peru, (each,
individually, is a “Seller” and they are collectively the
“Sellers”).

    

    WHEREAS,
Perusat S.A. is a corporation (‘sociedad anónima’) organized
and existing under the laws of the Republic Peru, registered in the Electronic
File No. 00380911 of the Companies’ Registry of Lima, with head office at Av.
Camino Real 493, Piso 11,San Isidro, Lima, Peru ( “Perusat”
or the “Company”),
which has issued 13,190,800 (thirteen million one hundred ninety thousand eight
hundred) shares of common stock S/.1.00 (one and 00/100 Peruvian Nuevos Soles)
each; and

     

    WHEREAS,
Perusat is engaged in the business of providing all type of telecommunication
services. It can also carry out activities of local or long distance telephones
services, land line telephony, mobile phones, IP telephony, internet, cable
television, rental of networks and equipments, data transmission,
commercialization of telecommunication equipments, among others;

     

    WHEREAS, Navarro is the holder of record of
12,941,839 shares issued by Perusat, and Samanez is the holder of record of
248,961 shares issued by Perusat, who together are the sole beneficial and
registered owners of all the outstanding shares of the common stock of Perusat;
and

     

    WHEREAS,
Navarro desires to sell 12,414,207 of his shares to Buyer, and Samanez desires
to sell 117,053 of his shares to Buyer; and Buyer desires to buy 12,531,260
outstanding shares of common stock of Perusat from Sellers (the “Shares”),
such that the respective ownership of the outstanding shares of Perusat
following the transaction will be Buyer 95%, Navarro 4% and Samanez 1%, upon the
terms and subject to the conditions set forth in this Agreement.

     

    NOW,
THEREFORE, in consideration of the foregoing premises and the respective
representations and warranties, covenants and agreements contained herein and
the sufficiency of which is hereby acknowledged by the parties, the parties
hereto agree as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
ARTICLE
I

     

    DEFINITIONS

     

    1.1 Definitions. When
used in this Agreement, the following terms shall have the meanings assigned to
them in this Section 1.1, or in the applicable Section of this Agreement to
which reference is made in this Section 1.1.

     

    "Affiliate"
means, with respect to any specified Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
specified Person.

     

    “Agreement”
means this Stock Purchase Agreement and all schedules, exhibits and instruments
in amendment or confirmation of it.

     

    "Authorization"
means, with respect to any Person, any order, authorization, concession,
approval, waiver, consent, certificate, license, permit or franchise or similar
authorization of or from any Governmental Entity or similar entity having
jurisdiction over the Person or pursuant to any Law. This term includes the two
telecommunications concessions granted by the Peruvian Government to Perusat for
providing long distance bearer services and local fixed telephony
services.

     

    "Benefit
Plan" means any "employee benefit plan" as defined in ERISA Section 3(3),
including any (a) nonqualified deferred compensation or retirement plan or
arrangement which is an Employee Pension Benefit Plan (as defined in ERISA
Section 3(2)), (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan (as defined in ERISA Section 3(37)), (d)
Employee Welfare Benefit Plan (as defined in ERISA Section 3(1)) or material
fringe benefit plan or program, or (e) stock purchase, stock option, severance
pay, employment, change-in-control, vacation pay, company awards, salary
continuation, sick leave, excess benefit, bonus or other incentive compensation,
life insurance, or other employee benefit plan, contract, program, policy or
other arrangement, whether or not subject to ERISA.

     

    “Business
Day” means any day of the year, other than a Saturday, Sunday or any day
on which banks are required or authorized to close in Lima, Peru.

     

    “Buyer”
has the meaning set forth in the preamble to this Agreement.

     

    "Common
Stock" means the shares of the stock of a corporation, and any other
interest that confers on a Person the right to receive a share of the profits
and losses, or distribution of assets, of the issuing entity.

     

    "Charter
Documents" means, with respect to any entity, the certificate of
incorporation, the articles of incorporation, by-laws, articles of organization,
limited liability company agreement, partnership agreement, formation agreement,
joint venture agreement or other similar organizational documents of such entity
(in each case, as amended).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    "Contract"
means any agreement, contract, lease, commitment, arrangement or understanding,
written or oral, including any sales order or purchase order.

     

    "Equity
Securities" means (a) shares of Common Stock, and (b) options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights or other Contracts that, directly or indirectly, could require the issuer
thereof to issue, sell or otherwise cause to become outstanding shares of Common
Stock.

     

    “Environmental
Laws” means all applicable Laws and agreements or arrangement with
Governmental Entities and all other statutory requirements relating to public
health or the protection of environment, prevention of pollution, remediation of
contamination or restoration of environmental quality, protection of human
health or the environment (including natural resources), or workplace health and
safety, including all applicable Laws relating to the management, containment,
manufacture, possession, presence, use, processing, generation, transportation,
treatment, storage, disposal, Release, abatement, removal, remediation or
handling of or exposure to any Hazardous Materials, and all Authorizations
issued pursuant to such Laws, agreements, arrangements or statutory
requirements.

     

    "ERISA"
means the Employee Retirement Income Security Act of 1974 as enacted in the
United States of America.

     

    "Final
Determination" means a decision, resolution, judgment, decree, award or
other order by any judge, Governmental Entity, arbitrator, arbitration panel or
court of competent jurisdiction, which decision, resolution, judgment, decree,
award or other order has become final after all allowable appeals by either
party to the action have been exhausted or the time for filing such appeals has
expired and is not subject to further review or modification.

     

    "Governmental
Entity" means any executive, judicial, legislative, political,
regulatory, governmental, public or administrative entity, institution or
organization, autonomous institution, central, regional, provincial, municipal
or local government or authority, municipality, central bank, tax agency, court,
commission, board, bureau, agency or instrumentality of the country, state,
department, province or similar geographic or political circumscription having
jurisdiction over any Person referred to in the context in which such word is
used, including any (i) subdivision or authority of any of the foregoing, (ii)
quasi-governmental or private body exercising any regulatory, expropriation or
taxing authority under or for the account of any of the above; and (iii) other
entities and agencies that perform administrative duties, which are authorized
under any applicable Law, to issue or construe rules, decisions, general
regulations or private administrative acts, with binding effect on the parties
subject to the scope thereof.

     

    "Grossed-Up
Basis" means, when used to describe the basis on which the payment of a
specified sum is to be made, a basis such that the amount of such payment, after
being reduced by the amount of all Taxes imposed on the recipient of such
payment as a result of the receipt or accrual of such payment, will equal the
specified sum.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    "Hazardous
Substances" means all explosive materials, radioactive materials,
hazardous materials, toxic materials, wastes, chemicals, substances, petroleum,
petroleum by-products and petroleum products (including crude oil or any
fraction thereof), asbestos and asbestos containing materials, pollutant,
contaminant, or product that, because of its hazardous, toxic or other harmful
characteristic, presents a risk or threat to human health, safety, natural
resources or the indoor or outdoor environment, and all other materials,
chemicals and substances that are regulated by, form the basis of liability or
are defined as hazardous, extremely hazardous, toxic or words of similar import,
under any Environmental Law.

     

    "Indebtedness"
means any of the following: (a) any indebtedness for borrowed money, (b) any
obligations evidenced by bonds, debentures, notes or other similar instruments,
(c) any obligations to pay the deferred purchase price of property or services,
except trade accounts payable and other current Liabilities arising in the
ordinary course of business, (d) any obligations as lessee under capitalized
leases, (e) any indebtedness created or arising under any conditional sale or
other title retention agreement with respect to acquired property, (f) any
obligations, contingent or otherwise, under acceptance credit, letters of credit
or similar facilities, and (g) any guaranty of any of the
foregoing.

     

    "Indemnitee"
means any Person that is seeking indemnification from an Indemnitor pursuant to
the provisions of this Agreement.

     

    "Indemnitor"
means any Party hereto from which any Indemnitee is seeking indemnification
pursuant to the provisions of this Agreement.

     

    "Knowledge"
of Sellers or any similar phrase means, with respect to any fact or matter, the
actual knowledge of the Sellers, together with such knowledge that the Sellers
could be expected to discover after due investigation concerning the existence
of the fact or matter in question.

     

    "Law”
or “Laws"
means any statute, law (including common law), constitution, treaty, ordinance,
code, order, decree, case law, judgment, resolution, decision, rule, regulation,
supreme decree, legislative decree, provision or principle of any kind that is a
part a legal system in force, and any other binding requirement or determination
of any Governmental Entity.

     

    "Lien"
means any attachment, mortgage, charge, pledge, guaranty, security interest,
garantía mobiliaria,
adverse claim, assignment, trust, lien (statutory or otherwise), title retention
agreement or arrangement, restrictive covenant or other encumbrance of any kind
and nature or any other arrangement or condition which, in substance, secures
payment or performance of an obligation.

     

    “Material” or “Materially”
or “Adversely” or “Material
Adverse Change” or “Material
Adverse Effect” means any action,
omission or change with a significant impact or essential to any Person or to
the business, operations, assets, financials, performance of the activities, or
fulfillment of the purpose of any such Person. Any such action, omission or
change shall only be considered to produce a significant impact or to be
essential to any such Person if its effects, consequences or results are likely
to imply or involve more than US$10,000 (Ten Thousand and 00/100 U.S. Dollars).
The effects, consequences or results derived from or arising out of (i) any act
or omission by such Person taken with the prior consent or at the direction of
the other Parties hereto; or (ii) any Act of God or Force Majeure impacting
Buyer or Seller, provided that the effects of the Act of God or Force Majeure
event prevent performance of an obligation under this Agreement, were not
foreseeable and could not have been prevented or diminished by the Party
affected by the Act of God or Force Majeure, shall not be considered within this
definition. It also means, when used in this Agreement with respect to any
representation or warranty in this Agreement, which the breach of said
representation results in Damages of more than US$10,000 (Ten Thousand and
00/100 U.S. Dollars).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    "Order"
means any award, injunction, judgment, resolution, decision, decree, order,
ruling, subpoena or verdict or other decision issued, promulgated or entered by
or with any Governmental Entity of competent jurisdiction.

     

    “Ordinary
Course” an action taken by a Person will be deemed to have been taken in
the “Ordinary Course” only if such action is consistent with the usual customs
and practices of the Person and is taken in the ordinary course of the normal
day-to-day operations of the Person.

     

    “Parties”
means the Sellers and Buyer, collectively.

     

    “Party”
means any of the Sellers and Buyer, individually.

     

    "Person"
means any individual, corporation, a partnership, a limited liability company, a
trust, association, legal entity (whether public or private), joint venture,
consortium, an unincorporated association, a Governmental Entity or any agency,
instrumentality or political subdivision of a Governmental Entity, or any other
entity or body, and pronouns that have a similarly extended
meaning.

     

    “PGAAP” means the
accounting principles and practices generally accepted in Peru, consistently
applied.

     

    "Pre-Closing
Environmental Liabilities" means Liabilities based upon or arising out of
(a) the ownership or operation of the businesses of the Company at any time on
or prior to the Closing, or (b) the ownership, operation or condition of any
real property currently or formerly owned, operated or leased by the Company at
any time on or prior to the Closing, in each case to the extent based upon or
arising out of (i) Environmental Laws, (ii) a failure to obtain, maintain or
comply with any Order or Authorization, (iii) the presence or Release of any
Hazardous Substance at, on or under any real property currently or formerly
owned, operated or leased by the Company at any time on or prior to the Closing
or (iv) the use, generation, storage, transportation, treatment, sale or other
off-site disposal of Hazardous Substances generated by or otherwise used in the
businesses of the Company.

     

    "Release"
means any depositing, spilling, leaking, pumping, pouring, emitting, placing,
emptying, discharging, injecting, escaping, migrating, abandoning, leaching,
dumping, or disposing of Hazardous Substances into the environment.

     

    "Tax"
or "Taxes"
means any and all taxes, charges and levies of any kind (including any and all
interest, penalties, additions to tax and additional amounts thereon), or
foreign net or gross income, gross receipts, net proceeds, sales, use,
ad valorem, value added, franchise, bank shares, withholding, payroll,
employment, excise, property, deed, stamp, alternative or add-on minimum,
environmental, profits, windfall profits, transaction, license, lease, service,
service use, occupation, severance, energy, unemployment, social security,
workers' compensation, capital, premium, and other taxes, assessments, customs,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to
tax, or additional amounts with respect thereto.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    "Tax
Claim" means any claim with respect to Taxes made by any Taxing Authority
or other Person that, if pursued successfully, could serve as the basis for a
claim for indemnification of a Tax Indemnitee or Sellers under this
Agreement.

     

    "Tax
Indemnitee" means Buyer (including, upon Closing, the
Company).

     

    "Tax
Returns" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

     

    "Taxing
Authority" means any Governmental Entity having jurisdiction with respect
to any Tax.

     

    "Transfer
Taxes" means sales, use, transfer, real property transfer, recording,
documentary, stamp, registration and stock transfer taxes and fees.

     

    "$" or “US$”
means dollars of the United Sates of America.

     

    1.2 Other Definitions.
Other terms defined in this Agreement and indicated as such by quotation marks
shall have the meaning ascribed thereto next to the definition, throughout the
text hereof.

     

    1.3 Language. This
Agreement has been entered into in English language and, notwithstanding any
translation thereof, the English language version shall control the construction
and interpretation of this Agreement. All material communications between the
Parties with respect to this Agreement shall be in English
language.

     

    ARTICLE
II

     

    PURCHASE AND
SALE

     

    2.1 Purchase and Sale of the
Shares.

     

    (a) Upon
the terms and subject to the conditions of this Agreement, at the Closing,
Sellers shall sell to Buyer, and Buyer shall purchase from Sellers, the Shares
free and clear of all Liens except those created pursuant to this
Agreement.

     

    (b) The
sale of the Shares by Sellers to Buyer includes any other interest related to
the Shares that confers on a Person the right to receive a share of the profits
and losses, or distribution of assets or of other shares of Perusat and any
other interest or right related to the Shares.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    2.2 Purchase
Price.

     

    (a) The
Purchase Price of the Shares is US$2,775,000 (two million seven hundred
seventy-five thousand and 00/100 U.S. dollars (the "Purchase
Price").

     

    (b) The
Parties agree that the Purchase Price will be paid as follows:

     

    (i) At
the Closing Date, Sellers will shall receive from Buyer 1,000,000 (one million)
shares issued by China Tel Group Inc. free and clear of all Liens except those
created pursuant to this Agreement, valued at $2.50 per share, equivalent to
US$2,500,000.00 (two million five hundred thousand and 00/100 U.S.
dollars).

     

    (ii)
US$275,000 (two hundred seventy-five thousand and 00/100 U.S. dollars) in cash,
paid as follows: (x) US$50,000.00 (fifty thousand and 00/100 U.S. Dollars) on
the Closing Date; (y) US$50,000.00 (fifty thousand and 00/100 U.S. Dollars) each
following quarter commencing June 30, 2009, and (z) a final installment of
$25,000.

     

     (iii)
Both the stock portion and the cash portion of the Purchase Price shall be paid
to each Seller in the same ratio representing the percentage holdings of each
Seller in the outstanding stock of Perusat, which is: Navarro 98.11% and Samanez
1.89%, with all shares of China Tel Group Inc. rounded to the nearest whole
share, and all cash rounded to the nearest dollar.

     

    (c) The
purchase and sale of the Shares is referred to in this Agreement as the "Acquisition".

     

    2.3 Closing Date. The
closing of the Acquisition (the "Closing")
shall take place at the offices of Estudio Oleachea on a date to be specified by
the Parties which shall be no later than Three Business Days after satisfaction
(or waiver as provided herein) of the conditions set forth in Article VII
(other than those conditions that by their nature will be satisfied at the
Closing), unless another time, date and/or place is agreed to by the parties.
The date upon which the Closing occurs is herein referred to as the "Closing
Date."

     

    2.4 Transactions to be Effected
at the Closing.

     

    (a) At
the Closing, Buyer shall (i) deliver to Sellers stock certificates representing
the ownership of 1,000,000 (one million) shares issued by China Tel Group Inc.
free and clear of all Liens and all documents, instruments or certificates
required to be delivered by Buyer at or prior to the Closing pursuant to this
Agreement, and (ii) pay to Sellers US$50,000 applicable to the Purchase
Price.

     

    (b) At
the Closing, Sellers shall each deliver to Buyer (i)  stock certificates
for the 12,531,260 shares of Perusat that they own, duly endorsed, (ii) the
Company’s shares registry book in which the entry evidencing the transfer of the
Shares from Sellers to Buyer is included and signed by the general manager of
the Company, (iii) all other documents and instruments necessary to vest in
Buyer all of Sellers' rights, title and interest in and to the Shares, free and
clear of all Liens, and (iv) all other documents, instruments or certificates
required to be delivered by Sellers at or prior to the Closing pursuant to this
Agreement.

     

    
      
        
        

      

      
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    ARTICLE
III

     

    REPRESENTATIONS AND
WARRANTIES OF SELLERS

     

    Sellers
represents and warrants to Buyer as of the date hereof that the statements
contained in this Article III are true and correct.

     

    3.1 Organization and Good
Standing.

     

    (a) The
Company is a corporation (‘sociedad anónima’) duly
organized, validly existing and in good standing under the Laws of the Republic
of Peru, has all requisite power to own, lease and operate its properties and to
carry on its business as currently conducted and as proposed to be conducted,
and is duly qualified, licensed or registered to do business.

     

    (b) The
Company is not in default under its Charter Documents or applicable
Laws.

     

    3.2 Capitalization.

     

    (a) The
Stock of the Company consists of 13,190,800 shares of common stock, S/.1.00 (one
and 00/100 Peruvian Nuevos Soles) par value each. All of the these shares are
duly authorized, validly issued, fully paid and are non-assessable, and are
owned of record and beneficially by Sellers free and clear of all Liens. Upon
transfer of the Shares to Buyer in accordance with the terms of Article II,
Buyer will receive valid title to the Shares, free and clear of all
Liens.

     

    (b) All
of said 13,190,800 shares were issued in compliance with applicable Laws. None
of the 13,190,800 shares was issued in violation of any Law or Contract to which
any Seller or the Company is a party or is subject or in violation of any
preemptive or similar rights of any Person other than the rights of first
refusal set out in article 9 of the bylaws of Perusat to which the Sellers
hereby expressly waive to exercise.

     

    (c) Other
than the 13,190,800 shares, the Company does not have outstanding any Equity
Securities or any other securities. The Company is not a party or subject to any
Contract obligating the Company to issue any Equity Securities or any other
securities and there is no circumstance or condition that may give rise to a
claim by any Person that such Person is entitled to acquire any securities of
the Company. The Company does not have outstanding any bonds, debentures, notes
or other obligations or debt securities the holders of which have the right to
vote (or convertible into, or exercisable or exchangeable for, securities having
the right to vote) on any matter.

     

    (d) The
Company does not have outstanding or authorized any stock appreciation, phantom
stock, profit participation, or similar rights.

     

    (e)
Neither Sellers nor the Company is a party or subject to any stockholder
agreement, voting agreement, voting trust or any other similar arrangement which
has the effect of restricting or limiting the transfer, voting or other rights
associated with the Shares.

     

    
      
        
        

      

      
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    (f) There
are no obligations, contingent or otherwise, of the Company to provide funds to
or make any investment (in the form of a loan, capital contribution or
otherwise) in any Person.

     

    (g) Each
Seller is a holder of record in the shares registry book of the Company and
holds valid title to its respective Shares, as set forth in the WHEREAS to this Agreement, all
of which shares are free and clear of Liens.

     

    (h) There
is no agreement, arrangement, option, security, right, or commitment of any kind
whatsoever currently in force pertaining to the issue, sale, purchase, or
redemption of the Shares or otherwise affecting the Shares.

     

    3.3 Subsidiaries and Affiliates
of the Company. The Company does not have any subsidiary or affiliated
companies, and is not a partner in any partnership.

     

    3.4 Authority and
Enforceability. Sellers have the requisite power and authority to enter
into this Agreement and to consummate the Acquisition. This Agreement has been
duly executed and delivered by Sellers and, assuming due authorization,
execution and delivery by Buyer, constitutes a valid and binding obligation of
Sellers, enforceable against them in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting or relating to creditors' rights
generally, and (b) the availability of injunctive relief and other equitable
remedies.  

     

    3.5 No Conflicts;
Authorizations

     

    (a) The
execution and delivery of this Agreement by Sellers do not, and the performance
by Sellers of its obligations hereunder and the consummation by Sellers of the
transactions contemplated hereby (in each case, with or without the giving of
notice or lapse of time, or both), will not, directly or indirectly, (i) violate
the provisions of any of the Charter Documents of the Company, (ii) violate or
constitute a default, an event of default or an event creating rights of
acceleration, termination, cancellation, imposition of additional obligations or
loss of rights, or require a consent to assignment, under any Contract (A) to
which the Company is a party, (B) of which the Company is a beneficiary or (C)
by which the Company or any of its assets is bound, (iii) violate or conflict
with any Law, Authorization or Order applicable to the Company or give any
Governmental Entity or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy, obtain
any relief under or revoke or otherwise modify any rights held under, any such
Law, Authorization or Order, or (iv) result in the creation of any Liens upon
any of the assets owned or used by the Company.

     

    (b) No
Authorization or Order of, registration, declaration or filing with, or notice
to, any Governmental Entity or other Person is required by or with respect to
the Company in connection with the execution and delivery of this Agreement and
the consummation of the Acquisition; except for the fillings or notifications
that relates solely to the identity of the Buyer or the nature of the business
carried on by the Buyer that need to be made to any Governmental Entity under
the applicable Laws.

     

    3.6 Financial
Statements. Sellers have delivered to Buyer during due diligence true and
complete copies of the Company's audited financial statements and tax returns
for each of the year 2007, along with other financial records of the Company.
The financial statements and other financial records are true, complete and
correct, are based on the books and records of the Company, fairly present the
financial condition and operations of the Company as of the respective dates
they were prepared for the periods indicated and have been prepared in
accordance with PGAAP.  At the Closing Date, a copy of the 2007
audited financial statement and the 2007 tax return of the Company shall be
attached as Schedule A to this Agreement.

     

    
      
        
        

      

      
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    3.7 No Undisclosed
Liabilities. The Company has no liabilities, debts, obligations or
commitments of any nature whatsoever, asserted or unasserted, known or unknown,
absolute or contingent, accrued or unaccrued, matured or unmatured, determined
or determinable or otherwise arising under the applicable Laws, an Order,
Authorization or under any undertaking, arrangement, act or Contract ("Liabilities").

     

    3.8 Accounts Receivable.
All accounts receivable of the Company, to the extent not paid in full by the
account debtor prior to the date hereof, are (a) valid and genuine and have
arisen solely out of bona fide sales and deliveries of goods, performance of
services and other business transactions in the Ordinary Course of business
consistent with past practice, (b) not subject to valid defenses, set-offs or
counterclaims, and (c) collectible within 90 days after billing at the full
recorded amount thereof.  

     

    3.9 Taxes.

     

    (a) The
Company has filed or caused to be filed, within the times and within the manner
prescribed by applicable Law, all tax returns and tax reports which are required
to be filed by or with respect to the Company.

     

    (b) All
taxes, imposts, social securities and other mandatory contributions and
assessments (including interest and penalties) that are required to be paid by
the Company, have been paid or fully provided for in the books and records of
Perusat.

     

    (c) The
income tax liability of the Company has been reported to the taxing authorities
for all fiscal years to and including its fiscal year ended on December 31,
2008. No examination of any tax return of the Company is currently in progress,
threatened or pending, there are no outstanding agreements or waivers extending
the statutory period providing for an extension of time with respect to the
assessment or reassessment of Tax or the filing of any tax return by, or any
payment of any Tax by the Company, and there are no actions, audits or claims
now threatened or pending against the Company in respect of Taxes or any matters
under discussion with any Governmental Entity relating to Taxes.

     

    (d) The Company has withheld from each
payment made by it the amount of all Taxes and other deductions required to be
withheld therefrom, has paid the same to the proper taxing or other authority
within the time prescribed under any applicable Law and filed all required
documents to support the amounts withheld and/or paid.

     

    (e) There is no dispute or claim
concerning any liability for Taxes with respect to the Company for which notice
has been provided, or which is asserted or threatened, or which is otherwise
known to the Company or any of the Sellers. No issues have been raised in any
Taxes examination with respect to the Company which, by application of similar
principles, could be expected to result in liability for Taxes for any other
period not so examined. The Company has delivered to Buyer correct and complete
copies of all federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by the Company. The Company has not
waived (or is subject to a waiver of) any statute of limitations in respect of
Taxes or has agreed to (or is subject to) any extension of time with respect to
a Tax assessment or deficiency.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    3.10
Compliance with
Law.

     

    (a) The
Company has complied in all respects with each, and is not in violation in any
respect of, any applicable Law to which the Company or its business, operations,
assets or properties is or has been subject.

     

    (b) No
event has occurred and no circumstances exist that (with or without the passage
of time or the giving of notice) may result in a violation of, conflict with or
failure on the part of the Company to comply with, any Law. The Company has not
received notice regarding any violation of, conflict with, or failure to comply
with, any Law.

     

    3.11
Authorizations.

     

    (a) The
Company owns, holds or lawfully uses in the operation of its business all
Authorizations which are necessary for it to conduct its business as currently
conducted or as proposed to be conducted or for the ownership and use of the
assets owned or used by the Company in the conduct of its business free and
clear of all Liens. Such Authorizations are
valid and in full force and effect and none of such Authorizations will be
terminated or impaired or become terminable as a result of the transactions
contemplated by this Agreement.

     

    (b) No
event has occurred and no circumstances exist that (with or without the passage
of time or the giving of notice) may result in a violation of, conflict with,
failure on the part of the Company to comply with the terms of, or the
revocation, withdrawal, termination, cancellation, suspension or modification of
any Authorization. The Company has not received notice regarding any violation
of, conflict with, failure to comply with the terms of, or any revocation,
withdrawal, termination, cancellation, suspension or modification of, any
Authorization. The Company is not in default, nor has the Company received
notice of any claim of default, with respect to any Authorization.

     

    (c) No
Person other than the Company owns or has any proprietary, financial or other
interest (direct or indirect) in any Authorization which the Company owns or
uses in the operation of its business as currently conducted or as proposed to
be conducted.

     

    (d) All
dues, fees, rates, Taxes, rights, duties or similar payments to any Person or
Governmental Entity necessary for maintaining the Authorizations as to carry out
the business of the Company have been paid on due time.

     

    
      
        
        

      

      
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    3.12
Title to Personal
Properties; Leases.

     

    (a)
During due diligence, the Company has produced to the Buyer a complete and
accurate list of all the personal properties and assets owned, leased or used by
the Company as of the date of this Agreement, specifying whether and by whom
each such asset is owned or leased and, in the case of leased assets, indicating
the parties to, execution dates of and annual payments under, the
lease.  At the Closing Date, the list of personal properties and
assets owned will be attached as Schedule B to this Agreement.

     

    (b) With
respect to such personal properties and assets, the Company has good and valid
title to all of such properties and assets, free and clear of all
Liens.

     

    3.13
Condition of Tangible
Assets. All such personal properties and assets are in good operating
condition and repair (subject to normal wear and tear given the use and age of
such assets), are usable in the Ordinary Course of business and conform to all
Laws and Authorizations relating to their construction, use and operation.

     

    3.14
Real
Property.

     

    (a) The
Company does not own any real property, right or interest therein, except for
the rights obtained under the Leases pursuant to which the Company uses the
Leased Real Property.

     

    (b)
During due diligence, the Seller has produced to the Buyer a complete list of
all real property, rights and interests in real property leased by the Company
(the "Leased
Real Property"). The Leased Real Property includes all rights and
interests in real property used in or necessary for the conduct of the
businesses and operations of the Company as currently conducted and as proposed
to be conducted.  At the Closing Date, the list of Leased Real
Property will be attached as Schedule C to this Agreement.

     

    (c) With
respect to Leased Real Property, the Sellers have delivered to Buyer a true and
complete copy of every lease and sublease pursuant to which the Company is a
party or by which it is bound (each, a "Lease").
The Company has peaceful, undisturbed and exclusive possession of the Leased
Real Property.

     

    (d) The
uses for which the buildings, facilities and other improvements located on the
Leased Real Property are zoned do not restrict, or impair, the use of the Leased
Real Property for purposes of the businesses of the Company.

     

    (e) No
Governmental Entity having the power of expropriation or eminent domain over the
Leased Real Property has commenced or, to the Sellers’ Knowledge, intends to
exercise the power of expropriation, eminent domain or a similar power with
respect to all or any part of the Leased Real Property. There are no pending or,
to the Sellers’ Knowledge, threatened condemnation, fire, health, safety,
building, zoning or other land use regulatory proceedings, lawsuits or
administrative actions relating to any portion of the Leased Real Property or
any other matters which do or may adversely affect the current use, occupancy or
value thereof. The Company has not received notice of any pending or threatened
proceedings affecting any portion of the Leased Real Property.

     

    
      
        
        

      

      
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    (f) The
Leased Real Property and all present uses and operations of the Leased Real
Property comply with all Laws, covenants, conditions, restrictions, easements,
disposition agreements and similar matters affecting the Leased Real Property.
The Leased Real Property and its continued use, occupancy and operation as used,
occupied and operated in the conduct of the businesses of the Company do not
constitute a nonconforming use and is not the subject of a special use permit
under any Law.

     

    (g) The
Leased Real Property is in suitable condition for the Company's business as
currently conducted and as proposed to be conducted. The Company has good and
valid rights of ingress and egress to and from all Leased Real Property from and
to the public street systems for all usual street, road and utility
purposes.

     

    (h) No
Person other than the Company is in possession of any of the Leased Real
Property or any portion thereof, and there are no leases, subleases, licenses,
concessions or other agreements, written or oral, granting to any Person other
than the Company the right of use or occupancy of the Leased Real Property or
any portion thereof. No easement, utility transmission line or water main
located on the Leased Real Property adversely affects the use of the Leased Real
Property or any improvement on the Leased Real Property.

     

    (i) All
water, sewer, gas, electric, telephone and drainage facilities, and all other
utilities required by any Law or by the use and operation of the Leased Real
Property in the conduct of the businesses of the Company are installed to the
property lines of the Leased Real Property, are connected pursuant to valid
permits to municipal or public utility services or proper drainage facilities,
are fully operable and are adequate to service the Leased Real Property in the
operation of the businesses of the Company  and to permit compliance
with the requirements of all Laws in the operation thereof. No fact or condition
exists which could result in the termination or material reduction of the
current access from the Leased Real Property to existing roads or to sewer or
other utility services presently serving the Leased Real Property.

     

    3.15
Intellectual
Property. 

     

    (a) As
used in this Agreement, "Intellectual
Property" means: (i) inventions (whether or not patentable), trade
secrets, technical data, databases, customer lists, designs, tools, methods,
processes, technology, ideas, know-how, source code, product road maps and other
proprietary information and materials ("Proprietary
Information"); (ii) trademarks and service marks (whether or not
registered), trade names, logos, trade dress, slogans, domain names and other
proprietary indicia and all goodwill associated therewith; (iii) documentation,
advertising copy, marketing materials, web-sites, specifications, mask works,
drawings, graphics, databases, recordings and other works of authorship, whether
or not protected by Copyright; (iv) computer programs, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code, design documents, flow-charts, user manuals and
training materials relating thereto and any translations thereof (collectively,
"Software");
and (v) all forms of legal rights and protections that may be obtained for, or
may pertain to, the Intellectual Property set forth in clauses (i) through (iv)
in any country of the world ("Intellectual
Property Rights"), including all letters patent, patent applications,
provisional patents, design patents, PCT filings, invention disclosures and
other rights to inventions or designs ("Patents"),
all registered and unregistered copyrights in both published and unpublished
works ("Copyrights"),
all trademarks, service marks, trade names, logos, slogans, domain names and
other proprietary indicia (whether or not registered) ("Marks"),
trade secret rights, mask works, moral rights or other literary property or
authors rights, and all applications, registrations, issuances, divisions,
continuations, renewals, reissuances and extensions of the
foregoing.

     

    
      
        
        

      

      
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    (b) At
the Closing Date, there shall be attached to this Agreement as Schedule D a list
(by name, owner and, where applicable, registration number and jurisdiction of
registration, application, certification or filing) of all Intellectual Property
that is owned by the Company (whether exclusively, jointly with another Person
or otherwise) ("Owned
Intellectual Property"). The Company owns the entire right, title and
interest to all Owned Intellectual Property free and clear of all
Liens.

     

    (c) There
are no licenses, sublicenses and other agreements ("In-Bound
Licenses") pursuant to which a third party authorizes the Company to use,
practice any rights under, or grant sublicenses with respect to, any
Intellectual Property owned by such third party including the incorporation of
any such Intellectual Property into the Company's products and, with respect to
each In-Bound License, whether the In-Bound License is exclusive or
non-exclusive.

     

    (d) There
are no licenses, sublicenses and other agreements ("Out-Bound
Licenses") pursuant to which the Company authorizes a third party to use,
practice any rights under, or grant sublicenses with respect to, any Owned
Intellectual Property or pursuant to which the Company grants rights to use or
practice any rights under any Intellectual Property owned by a third party and,
with respect to each Out-Bound License, whether the Out-Bound License is
exclusive or non-exclusive.

     

    (e) The
Company exclusively owns the entire right, interest and title to all
Intellectual Property that is used in or necessary for the businesses of the
Company as they are currently conducted or proposed to be conducted free and
clear of Liens (including the design, manufacture, license and sale of all
products currently under development or in production) ( the " Company
Intellectual Property"), Company Intellectual
Property constitutes all the Intellectual Property used in or necessary
for the operation of the Company's businesses as they are currently conducted
and as proposed to be conducted.

     

    (f) All
registration, maintenance and renewal fees related to Patents, Marks, Copyrights
and any other certifications, filings or registrations that are owned by the
Company ("Company
Registered Items") that are currently due have been paid and all
documents and certificates related to such Company Registered Items have been
filed with the relevant Governmental Entity or other authorities in the Republic
of Peru or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Company Registered Items. All Company Registered Items are in
good standing, held in compliance with all applicable Law and enforceable by the
Company. All Patents that have been issued to the Company are
valid.

     

    (g) There
are no challenges (or any basis therefore) with respect to the validity or
enforceability of any Company Intellectual Property The Company has not taken
any action or failed to take any action that could reasonably be expected to
result in the abandonment, cancellation, forfeiture, relinquishment,
invalidation, waiver or unenforceability of any Company Intellectual Property.
There are no Registered Items that the Company has abandoned, cancelled,
forfeited or relinquished during the 12 months prior to the date of this
Agreement.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (h) None
of the products or services currently or formerly developed manufactured, sold,
distributed, provided, shipped or licensed, by the Company, or which are
currently under development, has infringed or infringes upon, or otherwise
unlawfully used or uses, the Intellectual Property Rights of any third
party.  The Company, by conducting its business as currently conducted
or as proposed to be conducted, has not infringed or infringes upon, or
otherwise unlawfully used or uses, any Intellectual Property Rights of a third
party. The Company has not received any communication alleging that the Company
or any of its respective products, services, activities or operations infringe
upon or otherwise unlawfully use any Intellectual Property Rights of a third
party nor, to the Sellers’ Knowledge, is there any basis therefore. No
opposition or Action has been instituted, or, to the Sellers’ Knowledge,
threatened, relating to any Intellectual Property formerly or currently used by
the Company and none of the Company Intellectual Property is subject to any
outstanding Order. To the Company’s Knowledge, no Person has infringed or is
infringing any Intellectual Property Rights of the Company or has otherwise
misappropriated or is otherwise misappropriating any Company Intellectual
Property.

     

    (i) With
respect to the Company's Proprietary Information, the documentation relating
thereto is current, accurate and sufficient in detail and content to identify
and explain it and to allow its full and proper use without reliance on the
special knowledge or memory of others. The Company has taken commercially
reasonable steps to protect and preserve the confidentiality of all Proprietary
Information owned by the Company that is not covered by an issued Patent.
Without limiting the generality of the foregoing, the Proprietary Information of
the Company (other than Proprietary Information that is covered by an issued
Patent) is not part of the public knowledge and has not been used or divulged
for the benefit of any Person other than the Company. Any receipt or use by, or
disclosure to, a third party of Proprietary Information owned by the Company has
been pursuant to the terms of binding written confidentiality agreement between
the Company and such third party ("Nondisclosure
Agreements"). True and complete copies of the Nondisclosure Agreements
and any amendments thereto, have been provided to Buyer. The Company is, and to
the Sellers’ Knowledge, all other parties thereto are, in compliance with the
provisions of the Nondisclosure Agreements. The Company is in compliance with
the terms of all Contracts pursuant to which a third party has disclosed to, or
authorized the Company to use, Proprietary Information owned by such third
party.

     

    (j) All
current and former employees, consultants, advisors and contractors of the
Company have executed and delivered, and are in compliance with, enforceable
agreements regarding the protection of Proprietary Information and providing
valid written assignments of all Intellectual Property conceived or developed by
such employees, consultants, advisors or contractors in connection with their
services for the Company ("Work
Product Agreements"). No current or former employee, consultant, advisor
or contractor or any other Person has any right, claim or interest to any of the
Company Intellectual Property.

     

    (k) No
employee, consultant, advisor or contractor of the Company has been, is or will
be, by performing services for the Company, in violation of any term of any
employment, invention disclosure or assignment, confidentiality, non-competition
agreement or other restrictive covenant or any Order as a result of such
employee's, consultant's, advisor’s or independent contractor's employment by
the Company or any services rendered by such employee, consultant, advisor or
independent contractor.

     

    
      
        
        

      

      
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    (l) All
Intellectual Property that has been distributed, sold or licensed to a third
party by the Company that is covered by a warranty conformed to or conforms to,
and performed or performs in accordance with, the representations and warranties
provided with respect to such Intellectual Property by or on behalf of the
Company for the time period during which such representations and warranties
apply.

     

    (m) The
execution and delivery of this Agreement by the Company does not, and the
consummation of the Acquisition (in each case, with or without the giving of
notice or lapse of time, or both), will not, directly or indirectly, result in
the loss or impairment of any Company Intellectual Property, or give rise to any
right of any third party to terminate or reprice or otherwise renegotiate any of
the Company’s rights to own any of its Intellectual Property or its respective
rights under any Out-Bound License or In-Bound License, nor require the consent
of any Governmental Entity or other third party in respect of any such
Intellectual Property.

     

    3.16
Absence of Certain
Changes or Events. Since the date of this Agreement (with respect to the
representation and warranty made as of the date of this Agreement) and to the
Closing Date (with respect to the representation and warranty made as of the
Closing Date):

     

    (a) there
has not been any Material Adverse Change in the condition (financial or
otherwise), operations, prospects or results of operations of the Company taken
as a whole;

     

    (b) the
Company has not amended or changed its Charter Documents;

     

    (c) the
Company has not declared, set aside or paid any dividend or other distribution
(whether in cash, stock or property) with respect to any Equity Security or any
other security;

     

    (d) the
Company has not split, combined or reclassified any Equity Security or other
security, or issued, or authorized for issuance, any Equity Security or other
security;

     

    (e) the
Company has not altered any term of any outstanding Equity Security or other
security;

     

    (f) the
Company has not (i) increased or modified the compensation or benefits payable
or to become payable by the Company to any of its current or former directors,
employees, contractors, advisors or consultants, (ii) increased or modified any
bonus, severance, termination, pension, insurance or other employee benefit
plan, payment or arrangement made to, for or with any current or former
directors, employees, contractors, advisors or consultants of the Company, or
(iii) entered into any employment, severance or termination
agreement;

     

    (g) the
Company has not sold, leased, transferred or assigned any property or assets of
the Company;

     

    
      
        
        

      

      
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    (h) the
Company has not incurred, assumed or guaranteed any Indebtedness;

     

    (i) the
Company has not created or assumed any Lien on any asset;

     

    (j) the
Company has not made any loan, advance or capital contribution to, or investment
in, any Person other than advances in the Ordinary Course of business consistent
with past practice;

     

    (k) the
Company has not entered into any Material Contract;

     

    (l) no
Material Contract has been modified, (ii) no rights under any Contract have been
waived or accelerated and (iii) no Contract that would be required to be listed
as a Material Contract pursuant to Section 3.17 hereof if such Contract were in
effect on the date hereof has been terminated or cancelled;

     

    (m) the
Company has not sold, transferred, pledged or assigned, and there has been no
Material reduction in the value of, any Company Intellectual
Property;

     

    (n) there
has not been any labor dispute or proceeding by a labor union or representative
thereof to organize any employees of the Company;

     

    (o) there
has not been any violation of or conflict with any Law to which the business,
operations, assets or properties of the Company are subject;

     

    (p) The
Company has not agreed or entered into any arrangement to take any action which,
if taken prior to the date hereof, would have made any representation or
warranty set forth in this Article III untrue or incorrect;

     

    (q) there
has not been any Material damage, destruction or loss with respect to the
property and assets of the Company, whether or not covered by
insurance;

     

     (r)
the Company has not made any change in accounting practices;

     

    (s) the
Company has made not any Tax election, changed its method of Tax accounting or
settled any claim for Taxes; or

     

    (t) the
Company has not agreed, whether in writing or otherwise, to do any of the
foregoing.

     

    3.17
Contracts.

     

    (a) At
the Closing Date, there shall be attached to this Agreement as Schedule E a
complete and accurate list of each Contract or series of related Contracts to
which the Company is a party or is subject, or by which any of their respective
assets are bound:

     

    (i) for
the purchase of materials, supplies, goods, services, equipment or other assets
and that involves or would reasonably be expected to involve payments by the
Company of ten thousand and 00/100 dollars ($10,000) or more;

     

    (ii) (A)
for the sale by the Company of materials, supplies, goods, services, equipment
or other assets, and that involves a specified annual minimum dollar sales
amount by the Company of ten thousand and 00/100 dollars ($10,000) or more, or
(B) pursuant to which the Company has received or expects to receive payments of
more than ten thousand and 00/100 dollars ($10,000) in the year ended December
31, 2008;

     

    
      
        
        

      

      
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    (iii)
that requires the Company to purchase its total requirements of any product or
service from a third party or that contains "take or pay"
provisions;

     

    (iv) that
(A) continues over a period of more than six months from the date hereof or (B)
involves payments to or by the Company exceeding ten thousand and 00/100 dollars
($10,000), other than arrangements disclosed pursuant to the preceding
subsections (i) and (ii);

     

    (v) that
is an employment, consulting, termination or severance Contract, other than any
such Contract that is terminable at-will by the Company without liability to the
Company;

     

    (vi) that
is a partnership, joint venture, consortium or similar Contract;

     

    (vii)
that is a distribution, dealer, representative or sales agency
Contract;

     

    (viii)
that is a (A) Lease or (B) Contract for the lease of personal or real property,
and which in either case provides for payments to or by the Company in any one
case of ten thousand and 00/100 dollars ($10,000) or more or more over the term
of the lease;

     

    (ix) that
provides for the indemnification by the Company of any Person, the undertaking
by the Company to be responsible for damages, or the assumption by the Company
of any Tax, environmental or other Liability;

     

    (x) with
any Governmental Entity;

     

    (xi) that
is a note, debenture, bond, equipment trust, letter of credit, loan or other
Contract for Indebtedness or lending of money (other than to employees for
travel expenses in the Ordinary Course of business) or Contract for a line of
credit or guarantee, pledge or undertaking of the Indebtedness of any other
Person;

     

    (xii) for
a charitable or political contribution in any one case;

     

    (xiii)
for any capital expenditure or leasehold improvement in any one case in excess
of ten thousand and 00/100 dollars ($10,000);

     

    (xiv)
that restricts or purports to restrict the right of the Company to engage in any
line of business, acquire any property, develop or distribute any product or
provide any service (including geographic restrictions) or to compete with any
Person or granting any exclusive distribution rights, in any market, field or
territory;

     

    (xv) that
is an Out-Bound License or an In-Bound License;

     

    (xvi)
that relates to the acquisition or disposition of any Material business (whether
by merger, sale of stock, sale of assets or otherwise);

     

    
      
        
        

      

      
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    (xvii)
that is a collective bargaining Contract or other Contract with any labor
organization, union or association;

     

    (xviii)
that is related to telecommunications services, interconnection or
similar.

     

    (xix)
that is otherwise Material to the Company as a whole and not previously
disclosed pursuant to this Section 3.17.

     

    (b) Each
Contract required to be listed in Schedule E (collectively, the "Material
Contracts") is in full force and effect and valid and enforceable in
accordance with its terms.

     

    (c) The
Company is, and no other party thereto is, in default in the performance,
observance or fulfillment of any obligation, covenant, condition or other term
contained in any Material Contract, and neither the Company has given or
received notice to or from any Person relating to any such alleged or potential
default that has not been cured. No event has occurred which, with or without
the giving of notice or lapse of time, or both, may conflict with or result in a
violation or breach of, or give any Person the right to exercise any remedy
under or accelerate the maturity or performance of, or cancel, terminate or
modify, any Material Contract.

     

    (d) The
Company has delivered accurate and complete copies of each Material Contract to
Buyer.

     

    (e) All
Contracts other than Material Contracts to which the Company is a party or is
subject, or by which any of their respective assets are bound (collectively, the
"Minor
Contracts"), are in all Material respects valid and enforceable in
accordance with their terms. The Company is not, and no other party thereto is
not, in default in the performance, observance or fulfillment of any obligation,
covenant or condition contained therein, and no event has occurred which with or
without the giving of notice or lapse of time, or both, would constitute a
default thereunder by the Company or any other Person.

     

    3.18
Litigation.

     

    (a) There
is no action, suit or proceeding, claim, arbitration, litigation or
investigation (each, an "Action")
(i) pending or, to the Sellers’ Knowledge, threatened against or which may
affect the Company, or (ii) that challenges or seeks to prevent, enjoin, or
otherwise delay the transactions contemplated by this Agreement or affect the
validity, effectiveness or enforceability of this Agreement or the consummation
of the transactions contemplated hereby. No event has occurred or circumstances
exist that may give rise or serve as a basis for any such Action. There is no
Action against any current or former director, employee, consultant, advisor or
independent contractor of the Company with respect to which the Company has or
is reasonably likely to have an indemnification obligation.

     

    (b) There
is no unsatisfied judgment, penalty or award against or which may affect the
Company or any of its respective properties or assets. There is no Order to
which the Company or any of their respective properties or assets is
subject.

     

    
      
        
        

      

      
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    3.19
Employee
Benefits. The Company does not have any Benefit Plans sponsored,
maintained or contributed to or required to be contributed to by the Company for
the benefit of any present or former directors, employees, contractors, advisors
or consultants of the Company.

     

    3.20
Labor and Employment
Matters.

     

    (a) The
Company is not a party or subject to any labor union or collective bargaining
agreement.

     

    (b) The
Company has complied with each, and is not, and has not been, in violation of any, Law relating to
anti-discrimination and equal employment opportunities and there are, and have
been, no violations of any other Law respecting the hiring, hours, wages,
occupational safety and health, employment, promotion, termination or benefits
of any employee or other Person.

     

    (c) The
Company has paid or properly accrued in the Ordinary Course of business all
wages and compensation due to employees, including all vacations or vacation
pay, holidays or holiday pay, sick days or sick pay, overtime, bonuses and labor
benefits.

     

    (d) The
Company is not a party to any Contract which restricts the Company from
relocating, closing or terminating any of its operations or facilities or any
portion thereof.

     

    (e) The
Company has made all payments and met all legal and conventional obligations to
be performed with, for the benefit of, on behalf of, as a result of the hiring
of, and as a result of the dismissal or resignation and final payment of its
employees or any other employee who has worked in the Company in the past,
whether under non-fixed term, part-time, fixed-term of another form of contract,
as well as to such persons subject to the provisions on pre-professional
practices and youth occupational training, on any account, including but not
limited to: remuneration, allocation, bonuses, overtime, vacation break at such
times established by law, life insurance, hazardous work insurance,
contributions to the Private Pension System, contributions to EsSalud (the
Peruvian Social Security), severance payments, profit sharing, withholdings
and/or payment of taxes, final payment and indemnification for dismissal, and
penalties and compensation for termination of contract, and interest, as
applicable.

     

    (f) The
Company has no outsourcing or labor intermediation contracts or similar
agreement or arrangements currently in force.

     

    (g) The
Company has no strikes, disputes, stoppages or any other form of collective
suspension of labor of the Company and Sellers reasonably do not expect that any
strike, dispute, stoppage or any other form of collective suspension will
arise.

     

    (h) The
Company is not and reasonably does not expect to be a party to any judicial,
arbitration or administrative proceedings related to, in connection with or
arising out of, labor matters, and no Order has been issued or Sellers
reasonably expect to be issued against the Company related to, in connection
with or arising out of, labor matters.

     

    
      
        
        

      

      
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    3.21
Environmental.

     

    (a) none
of the real properties currently or formerly owned, leased or used by the
Company or over which the Company has or had charge, management or control (i)
has ever been used by any Person as a licensed landfill or waste disposal site;
or (ii) has ever had asbestos, asbestos-containing materials, polychlorinated
biphenyls ("PCBs"), radioactive substances or aboveground or underground storage
systems, active or abandoned, located on, at or under them;

     

    (b) the
Company has not sent any Hazardous Substances for recycling, disposal, treatment
or other waste processing outside of any of its facilities;

     

    (c) the
Company has not been required by any Governmental Entity to (i) alter any of the
real or leased properties of/by the Company in order to be in compliance with
Environmental Laws; or (ii) perform any environmental closure, decommissioning,
rehabilitation, restoration or post-remedial investigations, on, about, or in
connection with any real property currently or formerly owned, leased or used by
the Company;

     

    (d) the
assets of the Company are capable of, and are not restricted by any
Authorization or Order from, being operated at maximum daily and annual
production levels while remaining in compliance with Environmental
Laws;

     

    (e) the
Company is conducting and has always conducted its business and any past
business in compliance with all applicable Laws (including Environmental Laws)
and, in particular, the Company has not discharged any substances in a manner
that is not in compliance with any applicable laws (including Environmental
Laws);

     

    (f) the
Company holds or possesses all governmental permits and Authorizations that are
necessary under Environmental Laws to carry on and conduct the business and
operations of the Company as currently conducted;

     

    (g) the
buildings and fixtures that the Company operate, use or has operated or used
have received proper maintenance and are currently in good operation conditions,
in fulfillment of the Environmental Laws;

     

    (h) the
Company is not currently in breach of, in default under, or in violation of any
Environmental Law, and is not aware of any circumstances which, with the passage
of time, will cause the Company to be in breach of, in default under, or in
violation of any Environmental Law; and

     

    (i) no
suit, claim, action, arbitration, legal, administrative or other proceeding is
pending or threatened against the Company with respect to any environmental
matter and no Governmental Entity has imposed fines and/or sanctions to, and/or
has initiated any inspection process on the Company for any default under, or
violation of, any applicable Environmental Law.

     

    3.22
Insurance.

     

    (a) At
the Closing Date, there shall be attached to this Agreement as Schedule F an
accurate and complete list of each insurance policy and fidelity bond which
covers the Company or its respective businesses, properties, assets, directors
or employees (the "Policies").
There are no pending claims under any of such Policies as to which coverage has
been questioned, denied or disputed by the insurer or in respect of which the
insurer has reserved its rights.

     

    
      
        
        

      

      
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    (b) There
is no self-insurance arrangement by or affecting the Company.

     

    (c) All
Policies are issued by an insurer that is financially sound and reputable, are
in full force and effect and are enforceable in accordance with their terms and
will continue in full force and effect with respect to the Company following the
Acquisition. Such Policies provide adequate insurance coverage for the Company
and its respective businesses, properties, assets and employees, and are
sufficient for compliance with all Laws and Contracts to which the Company is a
party or by which it is bound.

     

    (d) All
premiums due under the Policies have been paid in full or, with respect to
premiums not yet due, accrued. The Company has not received a notice of
cancellation of any Policy or of any Material changes that are required in the
conduct of the businesses of the Company as a condition to the continuation of
coverage under, or renewal of, any such Policy. There is no existing default or
event which, with the giving of notice or lapse of time or both, would
constitute a default under any Policy or entitle any insurer to terminate or
cancel any Policy. The Sellers have no Knowledge of any threatened termination
of, or Material premium increase with respect to, any Policy and none of such
Policies provides for retroactive premium adjustments.

     

    3.23
Books and
Records. The minute books (containing the records of the meetings, or
written consents in lieu of such meetings, of the stockholders and the board of
directors), the stock certificate books, and the stock record books of the
Company are correct and complete, and have been maintained in accordance with
sound business practices. The minute books of the Company contain accurate and
complete records of all meetings, or actions taken by written consent, of the
stockholders and the board of directors of the Company, and no meeting, or
action by written consent in lieu of such meeting, of any such stockholders or
board of directors, has been held for which minutes have not been prepared and
not contained in the minute books. At the Closing, all of the books and records
of the Company will be in the possession of the Company. At the Closing, Sellers
will deliver, or cause to be delivered, to Buyer or its designee all of the
minute books of the Company.

     

    3.24
Suppliers and
Customers. The relationships of each of the Company with each such
supplier and customer are good commercial working relationships: (a) each
supplier from whom purchases exceeded ten thousand and 00/100 dollars ($10,000)
in the year ended December 31, 2008, (b) each supplier who constitutes a sole
source of supply to the Company, and (c) with respect to the three-year period
ended on the date of this Agreement, each customer that has contributed in
excess of 10% percent of the Company’s revenues on a consolidated basis for such
period. No such supplier or customer has canceled or otherwise terminated, or
threatened to cancel or otherwise terminate, its relationship with the Company.
The Company has not received notice that any such supplier or customer may
cancel or otherwise Materially and Adversely modify its relationship with the
Company or limit its services, supplies or materials to the Company, either as a
result of the Acquisition or otherwise.

     

    3.25
Brokers or
Finders. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Sellers or the Company.

     

    
      
        
        

      

      
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    3.26
Bank Accounts.
At the Closing Date, there shall be attached to this Agreement as Schedule G a
list containing the name of each bank, safe deposit company or other financial
institution in which the Company has an account, lock box or safe deposit box
and the names of all persons authorized to draw thereon or have access
thereto.

     

    3.27
Powers of
Attorney. At the Closing Date, there shall be attached to this Agreement
as Schedule H a list of all outstanding powers of attorney executed by or on
behalf of the Company in favor of any Person. 

     

    3.28
Support
Services. Sellers provide no support or other services to the
Company.

     

    3.29
Completeness of
Disclosure. No representation or warranty by Sellers in this Agreement,
and no statement made in the Schedules, or any certificate or other document
furnished or to be furnished to Buyer pursuant hereto, or in connection with the
negotiation, execution or performance of this Agreement, contains or will at the
Closing contain any untrue statement of a Material fact or omits or will omit to
state a Material fact required to be stated herein or therein or necessary to
make any statement herein or therein not misleading. There are no facts or
circumstances that could be expected to have, individually or in the aggregate,
a Material Adverse Effect on the condition (financial or otherwise), operations,
prospects or results of operations of the Company taken as a whole.

     

    ARTICLE
IV

     

    REPRESENTATIONS AND
WARRANTIES OF BUYER

     

    Buyer
represents and warrants to Sellers that each statement contained in this Article
IV is true and correct as of the date hereof.

     

    4.1 Organization and Good
Standing. Buyer is a corporation duly organized, validly existing and in
good standing under the Laws of the Republic of Seychelles, and has all
requisite corporate power to own, lease and operate its properties and to carry
on its business as now being conducted. 

     

    4.2 Authority and
Enforceability. Buyer has the requisite power and authority to enter into
this Agreement and to consummate the Acquisition. The execution and delivery of
this Agreement and the consummation of the Acquisition have been duly authorized
by all necessary corporate action on the part of Buyer. This Agreement has been
duly executed and delivered by Buyer and, assuming due authorization, execution
and delivery by Sellers, constitutes the valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting or relating to creditors' rights
generally, and (b) the availability of injunctive relief and other equitable
remedies.  

     

    
      
        
        

      

      
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    4.3 Brokers or
Finders.  No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer or any Affiliate of Buyer.

     

    ARTICLE
V

     

    COVENANTS OF
SELLERS

     

    5.1 Conduct of Business.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Closing, except with the
prior written consent of Buyer, Sellers shall cause the Company to:

     

    (a)
maintain its corporate existence, pay its debts and Taxes when due, pay or
perform other obligations when due, and carry on its business in the usual,
regular and ordinary course in a manner consistent with past practice and in
accordance with the provisions of this Agreement and in compliance with all
Laws, Authorizations, Orders and Contracts;

     

    (b) use
its reasonable best efforts consistent with applicable Laws, past practices and
policies to preserve intact its present business organization, keep available
the services of its present employees and preserve its relationships with
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it, to the end that its goodwill and ongoing business be
substantially unimpaired on the Closing Date;

     

    (c)
maintain the facilities and assets owned, operated or used by it in the same
state of repair, order and conditions as they are on the date hereof, reasonable
wear and tear excepted;

     

    (d)
maintain its books and records in accordance with the applicable Law and past
practice, and use its reasonable best efforts to maintain in full force and
effect all Authorizations and Policies;

     

    (e)
promptly notify Buyer of any event or occurrence not in the Ordinary Course of
business;

     

    (f)
provide Buyer with a list of actions that must be taken by the Company within 60
days immediately following the Closing for the purposes of obtaining,
maintaining, perfecting, preserving or renewing any Company Registered Items;
and

     

    (g) use
its reasonable best efforts to conduct its business in such a manner that on the
Closing Date the representations and warranties of Sellers contained in this
Agreement shall be true and correct, as though such representations and
warranties were made on and as of such date, and Sellers shall use its
reasonable best efforts to cause all of the conditions to the obligations of
Buyer under this Agreement to be satisfied as soon as practicable following the
date hereof.

     

    5.2 Negative Covenants.
Except as expressly provided in this Agreement, Sellers shall not permit the
Company, without the prior written consent of Buyer, to:

     

    
      
        
        

      

      
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    (a) adopt
or propose any amendment to the Charter Documents of the Company;

     

    (b)
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or other property) with respect to any Equity Security or other
security;

     

    (c) issue
or authorize for issuance any Equity Security or other security, or make any
change in any issued and outstanding Equity Security or other security, or
redeem, purchase or otherwise acquire any Equity Security or other
security;

     

    (d) (i)
modify (A) the compensation or benefits payable or to become payable by the
Company to any of its current or former directors, employees, contractors,
advisors or consultants, or (B) any bonus, severance, termination, pension,
insurance or other employee Benefit Plan, payment or arrangement made to, for or
with any current or former directors, employees, contractors, advisors or
consultants of the Company, or (ii) enter into any employment, severance or
termination agreement;

     

    (e) sell,
lease, transfer or assign any property or assets of the Company;

     

    (f)
assume, incur or guarantee any Indebtedness, except for endorsements for
collection in the Ordinary Course of business, or modify the terms of any
existing Indebtedness;

     

    (g)
mortgage, pledge or permit to become subject to Liens any properties or assets
of the Company;

     

    (h) make
any loans, advances or capital contributions to, or investments in, any
Person;

     

    (i) not
cancel any debts or waive any claims or rights of substantial
value;

     

    (j) (i)
amend, modify or terminate, or waive, release or assign any rights under, any
Material Contract, (ii) enter into any Contract which, if in effect on the date
hereof, would have been required to be set forth in the Schedules as a Material
Contract, or (iii) otherwise take any action or engage in any transaction that
is Material to the Company taken as a whole;

     

    (k) (i)
make any capital expenditure, or commit to make any capital expenditure which in
any one case exceeds one hundred dollars ($100), or (ii) except as permitted by
clause (i), acquire any assets, properties or rights;

     

    (l) make
any filings or registrations, with any Governmental Entity, except routine
filings and registrations made in the Ordinary Course of business;

     

    (m) be
party to (i) any merger, acquisition, consolidation, recapitalization,
reorganization, liquidation, dissolution or similar transaction or (ii) any
purchase of all or any substantial portion of the assets or Equity Securities or
other securities of the Company;

     

    (n) take
any actions outside the Ordinary Course of business;

     

    (o) make
any changes in its accounting methods, principles or practices;

     

    
      
        
        

      

      
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    (p)
change its method of Tax accounting or settle any claim relating to
Taxes;

     

    (q) take
any action or omit to do any act which action or omission will cause it to
breach any obligation contained in this Agreement or cause any representation or
warranty of Sellers not to be true and correct as of the Closing Date;
or

     

    (r) agree
or otherwise commit, whether in writing or otherwise, to do any of the
foregoing.

     

    5.3 Access to
Information. Sellers shall, and shall cause the Company to, afford to
Buyer's officers, directors, employees, accountants, counsel, consultants,
advisors and agents ("Representatives")
free and full access to and the right to inspect, during normal business hours,
all of the Leased Real Property, properties, assets, records, Contracts and
other documents related to the Company, and shall permit them to consult with
the officers, employees, accountants, advisors, counsels and agents of the
Sellers for the purpose of making such investigation of the Company as Buyer
shall desire to make. Sellers shall furnish to Buyer all such documents and
copies of documents and records and information with respect to the Company and
copies of any working papers relating thereto as Buyer may request. Without
limiting the foregoing, Sellers shall permit Buyer and its Representatives to
conduct environmental due diligence of the Company and the Leased Real Property,
including the collecting and analysis of samples of indoor or outdoor air,
surface water, groundwater or surface or subsurface land on, at, in, under or
from the Company and the Leased Real Property. 

     

    5.4 Resignations. On the
Closing Date, Sellers shall cause to be delivered to Buyer duly signed
resignations of all members of the Board of Directors of their positions as
directors of the Company and of all officers of their positions as officers of
the Company. For this purpose, on the Closing Date the Company must hold a
Shareholders’ Meeting in which all the resignations presented by all of the
members of the Board of Directors and officers of the Company will be
accepted.

     

    5.5 Indebtedness; Release of
Liens. 

     

    (a) Prior
to the Closing Date, all Indebtedness of the Company and any guarantees of such
Indebtedness shall be extinguished.

     

    (b) Prior
to the Closing Date, the Company shall have caused to be released all Liens in
and upon any of the properties and assets of the Company.

     

    5.6 Confidentiality.  

     

    (a) From
and after the Closing, Sellers will hold, and will use its reasonable best
efforts to cause its respective Representatives to hold, in confidence any and
all information, whether written or oral, concerning the Company, except to the
extent that Sellers can show that such information (a) is in the public domain
through no fault of Sellers or (b) is lawfully acquired by Sellers after the
Closing from sources which are not prohibited from disclosing such information
by a legal, contractual or fiduciary obligation. If Sellers or any of its
Representatives are compelled to disclose any such information by judicial or
administrative process or by other requirements of Law, Sellers shall promptly
notify Buyer in writing and shall disclose only that portion of such information
which Sellers is advised by its counsel in writing is legally required to be
disclosed, provided that Sellers shall
exercise its reasonable best efforts to obtain an appropriate protective order
or other reasonable assurance that confidential treatment will be accorded such
information.

     

    
      
        
        

      

      
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    5.7 Record Retention
Sellers will retain any of its books and records that relate to the Company in
accordance with the Company record retention policies as presently in effect.
During the period commencing on the Closing Date and ending on the seventh
anniversary of the Closing Date, Sellers shall not dispose of or permit the
disposal of any such books and records not required to be retained under such
policies without first giving 60 days' prior written notice to Buyer offering to
surrender the same to Buyer at Buyer's expense.

     

    5.8 Consents. Sellers
shall cause the Company to obtain all Consents;
provided that no Indebtedness
shall be repaid, and no Contract shall be amended nor any right thereunder be
waived, and no money or other consideration shall be expended, to obtain any
such Consent.

     

    5.9 Notification of Certain
Matters.  

     

    (a)
Sellers shall give prompt notice to Buyer of (i) any fact, event or circumstance
known to any of them that individually or taken together with all other facts,
events and circumstances known to any of them, has had or is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on the
condition (financial or otherwise), operations, prospects or results of
operations of the Company taken as a whole, or that would cause or constitute a
breach of any of its representations, warranties, covenants or agreements
contained herein, (ii) any fact, event or circumstance known to any of them that
individually or taken together with all other facts, events and circumstances
known to any of them, has had or is reasonably likely to result in the failure
of any condition precedent to Buyer's obligations, (iii) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the Acquisition, (iv) any notice or
other communication from any Governmental Entity in connection with the
Acquisition, or (v) any Actions commenced relating to Sellers, the Company that,
if pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.18;  provided however, that (A) the
delivery of any notice pursuant to this Section 5.9 shall not limit or otherwise
affect any remedies available to Buyer or prevent or cure any
misrepresentations, breach of warranty or breach of covenant, and (B) disclosure
by Sellers shall not be deemed to amend or supplement the Schedules or
constitute an exception to any representation or warranty.

     

    (b) From
the date hereof to and including the Closing Date, the Company shall provide
Buyer with regular management reports on its operations.

     

     

    
      
        
        

      

      
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    5.10
Restrictive
Covenants.

     

    (a)
Sellers covenant that, commencing on the Closing Date and ending on the fifth
anniversary of the Closing Date (the "Noncompetition
Period"), they shall not engage in, directly or indirectly, in any
capacity, or have any direct or indirect ownership interest in, or permit the
Company's name to be used in connection with, any business anywhere in any South
American country, which is engaged, either directly or indirectly, in the
business of providing all type of telecommunication services or carrying out
activities of local or long distance telephones services, fixed telephony,
mobile phones, IP telephony, internet, cable television, rental of networks and
equipments, data transmission, commercialization of telecommunication
equipments, among others; or providing services which are competitive with
products or equipment leased, marketed, sold or under development by, or
services provided by, the Company (the "Restricted
Business"). It is recognized that the Restricted Business is expected to
be conducted throughout at least the Republic of Peru and that more narrow
geographical limitations of any nature on this non-competition covenant (and the
non-solicitation covenants set forth in Sections 5.10(b) and (c)) are therefore
not appropriate.

     

    (b)
Sellers covenant that, during the Noncompetition Period, they shall not directly
or indirectly, solicit or entice, or attempt to solicit or entice, any clients
or customers of the Company or potential clients or customers of the Company for
purposes of diverting their business or services from the Company.

     

    (c)
Sellers covenant that, during the Noncompetition Period, Sellers shall not
solicit the employment or engagement of services of any person who is or was
employed as an employee, contractor, advisor or consultant by the Company during
such period on a full or part-time basis.

     

    (d)
Sellers acknowledge that the restrictions contained in this Section 5.10 are
reasonable and necessary to protect the legitimate interests of Buyer and
constitute a Material inducement to Buyer to enter into this Agreement and
consummate the Acquisition. Sellers acknowledges that any violation of this
Section 5.10 will result in irreparable injury to Buyer and agrees that Buyer
shall be entitled to preliminary and permanent injunctive relief, without the
necessity of proving actual damages, as well as an equitable accounting of all
earnings, profits and other benefits arising from any violation of this Section
5.10, which rights shall be cumulative and in addition to any other rights or
remedies to which Buyer may be entitled. Without limiting the generality of the
foregoing, the Noncompetition Period shall be extended for an additional period
equal to any period during which either of the Sellers are in breach of their
obligations under this Section 5.10.

     

    (e) In
the event that any covenant contained in this Section 5.10 should ever be
adjudicated to exceed the time, geographic, product or service, or other
limitations permitted by applicable Law in any jurisdiction, then any court is
expressly empowered to reform such covenant, and such covenant shall be deemed
reformed, in such jurisdiction to the maximum time, geographic, product or
service, or other limitations permitted by applicable Law. The covenants
contained in this Section 5.10 and each provision thereof is severable and
distinct covenants and provisions. The invalidity or unenforceability of any
such covenant or provision as written shall not invalidate or render
unenforceable the remaining covenants or provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such covenant or provision in any other
jurisdiction.

     

    
      
        
        

      

      
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    5.11
Insurance.

     

    (a) To
the extent that Sellers shall be entitled under the terms and conditions of
"occurrence" based Policies in effect on the date hereof to coverage for losses
suffered by the Company after the Closing arising out of any occurrences covered
by such Policies occurring prior to the Closing, Sellers shall use such efforts
and take such actions to recover such losses on behalf of the Company pursuant
to such Policies as it would use or take in conducting its own business in the
Ordinary Course if such losses were suffered by Sellers, and shall deliver the
proceeds thereby recovered to the Company. In the event of any dispute regarding
the date of any loss or occurrence, the terms of the applicable Policy shall
govern. Sellers shall continue to maintain such Policies, to the extent they
apply on the date hereof to the Company, in full force and effect (and without
any amendment that would be adverse, in any Material respect, to the Company)
with respect to occurrences prior to and including the Closing. Sellers shall
continue to have the Company as a named insured party under each such Policy
with respect to occurrences prior to and including the Closing.

     

    (b)
Following the Closing, Buyer shall provide, and shall cause the Company to
provide, Sellers with all records and other information necessary for the
reporting, investigation, negotiation and, if applicable, prosecution of any
claim made by Sellers pursuant to this Section 5.11.

     

    5.12
Security
Interest.

     

    (a)
Sellers hereby grant Buyer a security interest on fifty percent (50%) of the
1,000,000 (one million) shares of China Tel Group Inc. (the “Pledged
Shares”) they will receive as consideration for the sale of the Shares in
accordance with Section 2.2 of this Agreement.

     

    (b) The
pledge on the Pledged Shares will secure each and all of the representations,
warranties, statements, agreements, covenants and obligations of the Sellers
under this Agreement, for which each Seller will be jointly and severally
liable.

     

    (c) The
Pledged Shares are pledged to the Buyer up to the amount of One Million One
Hundred Twenty-Five Thousand and 00/100 Dollars (US$1,125,000) for a term of
thirty-six (36) months following the Closing Date.

     

    (d) Buyer
may enforce the security interest and sell all of the Pledged Shares, or any
part thereof, upon breach by any of the Sellers of any of the representations,
warranties, statements, agreements, covenants or obligations of the Sellers
under this Agreement.

     

    (e) The
Pledged Shares will be released from their security interest immediately upon
expiration of the term set forth in subparagraph (c) hereinabove, provided that
all of the Pledged Shares or any part thereof have not been sold by Buyer as set
out in subparagraph (d) hereinabove.

     

     

    
      
        
        

      

      
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    ARTICLE
VI

     

    COVENANTS OF BUYER AND
SELLERS

     

    6.1 Regulatory Approvals.
Each of Buyer and Sellers shall promptly apply for, and take all reasonably
necessary actions to obtain or make, as applicable, all Authorizations, Orders,
declarations and filings with, and notices to, any Governmental Entity or other
Person required to be obtained or made by it for the consummation of the
Acquisition and the transactions contemplated by this Agreement.  Each
Party shall cooperate with and promptly furnish information to the other Party
necessary in connection with any requirements imposed upon such other Party in
connection with the consummation of the Acquisition. Parties shall be equally
responsible for all filings and other similar fees payable in connection with
such filings, and for any local counsel fees.

     

    6.2 Public Announcements.
Neither Buyer nor Sellers shall, and Sellers shall cause the Company not to,
issue any press releases or otherwise make any public statements with respect to
the transactions contemplated by this Agreement; provided that Buyer or Sellers
may, without such approval, make such press releases or other public
announcement as it believes are required pursuant to any listing agreement with
any national securities exchange or stock market or applicable securities Laws,
in which case the Party required to make the release or announcement shall allow
the other Party reasonable time to comment on such release or announcement in
advance of such issuance; provided, further, that each of
the parties may make internal announcements to their respective employees that
are consistent with the parties' prior public disclosures regarding the
Acquisition.

     

    6.3 Tax
Matters.

     

    (a) Preparation and Filing of
Pre-Closing and Post-Closing Period Tax Returns.

     

    (i) Tax Periods Ending on or
Before the Closing Date. Buyer shall prepare, or cause to be prepared,
and file, or cause to be filed, all Tax Returns of the Company for all periods
ending on or prior to the Closing Date which are filed after the Closing Date.
Buyer shall permit Sellers to review and comment on each such Tax Return
described in the preceding sentence prior to filing. Sellers shall pay to Buyer
the amount of the Taxes with respect to such Tax Returns within five days
following any demand by Buyer for such payment.

     

    (ii)
Tax Periods Beginning
Before and Ending After the Closing Date. Buyer shall prepare, or
cause to be prepared, and file, or cause to be filed, all Tax Returns of the
Company for Tax periods which begin before the Closing Date and end after the
Closing Date. Sellers shall pay to Buyer, within five days following any demand
by Buyer, with respect to such Tax Returns, an amount equal to the portion of
such Taxes which relates to the portion of such taxable period ending on the
Closing Date (as determined pursuant to Section 6.3(c) hereof). Buyer shall
permit Sellers to review and comment upon such Tax Returns.

     

    (b) Cooperation in Filing Tax
Returns. Buyer and Sellers shall provide to the other such cooperation
and information, as and to the extent reasonably requested, in connection with
the filing of any Tax Return, amended Tax Return or claim for refund,
determining liability for Taxes or a right to refund of Taxes, or in conducting
any audit, litigation or other proceeding with respect to Taxes. Such
cooperation and information shall include providing copies of all relevant
portions of relevant Tax Returns, together with relevant accompanying schedules
and relevant work papers, relevant documents relating to rulings and other
determinations by Taxing Authorities, and relevant records concerning the
ownership and Tax basis of property, which any such party may
possess.  Each party will retain all Tax Returns, schedules, work
papers, and all Material records and other documents relating to Tax matters, of
the Company for the Tax period first ending after the Closing Date and for all
prior Tax periods until the expiration of the applicable statute of limitations
for the Tax periods to which the Tax Returns and other documents relate.
Thereafter, the Party holding such Tax Returns or other documents may dispose of
them. Each Party shall make its employees, contractors, consultants and advisors
reasonably available on a mutually convenient basis at its cost to provide
explanation of any documents or information so provided.

     

    
      
        
        

      

      
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    (c) Carryovers, Refunds, and
Related Matters.

     

    (i) Any
refund of Taxes (including any interest thereon) that relates to the Company and
that is attributable to a post-Closing period shall be the property of the
Company, as applicable, and shall be retained by the Company (or promptly paid
by Sellers to the Company if any such refund (or interest thereon) is received
by any of the Sellers). Without limiting the generality of the preceding
sentence, any such refund or other benefit realized by the Company in a
post-Closing period that results from the carry forward of any Tax attribute
from a pre-Closing period shall be the property of the Company and shall be
retained by the Company.

     

    (ii) In
the event that the Company (or successor thereto) realizes any item of loss or
credit for Tax purposes for any post-Closing period, the Company may, in its
sole discretion, carry forward such loss or credit.

     

    (d) Payment of Taxes and
Fees. Sellers shall pay all Transfer Taxes and any other Taxes arising
out of or in connection with the transactions effected pursuant to this
Agreement, and shall indemnify, defend, and hold harmless Buyer with respect to
such Taxes. Sellers shall file all necessary documentation and Tax Returns with
respect to such Taxes.

     

    6.4 Employee
Matters.

     

    (a) Severance. Sellers
shall be jointly liable for any severance, separation, deferred compensation or
similar benefits that are payable to any employee of the Company as a result of
the Acquisition. Sellers shall indemnify Buyer for any claim by any such
employees that they are entitled to any such benefits as a result of the
Acquisition.

     

    (b) Certain Welfare Benefits
Matters. Sellers shall retain joint responsibility for and continue to
pay all medical, life insurance, disability and other welfare plan expenses and
benefits with respect to claims incurred by such employees or their covered
dependents on or prior to the Closing Date. Expenses and benefits with respect
to claims incurred by such employees or their covered dependents after the
Closing Date shall be the responsibility of Buyer, except if they are the result
of, or arise out of, the Company’s breach of the applicable Laws. For purposes
of this paragraph, a claim is deemed incurred when the services that are the
subject of the claim are performed; in the case of life insurance, when the
death occurs; in the case of long-term disability benefits, when the disability
occurs; and, in the case of a hospital stay, when the employee first enters the
hospital.

     

    
 

    
      
        
        

      

      
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    (c) Workers'
Compensation. Sellers shall be jointly responsible for all claims for
workers' compensation benefits which are incurred on or prior to the Closing
Date by such employees that are payable under the terms and conditions of the
Company  workers' compensation programs. Buyer's workers compensation
programs shall be responsible for all claims for benefits which are incurred
after the Closing Date by such employees that are payable under the terms and
conditions of Buyer's workers' compensation programs. For purposes of this
Section 6.4(c), a claim for workers' compensation benefits shall be deemed to be
incurred when the event giving rise to the claim occurs (each, a "Workers'
Compensation Event"). If a Workers' Compensation Event occurs over a
period both preceding and following the Closing, the claim shall be the joint
responsibility and liability of Sellers and Buyer and shall be equitably
apportioned between Sellers, on the one hand, and Buyer, on the other hand,
based upon the relevant periods of time that such Workers' Compensation Event
transpired preceding and following the Closing.

     

    6.5 Further Assurances.
Subject to the terms of this Agreement, each of Buyer and Sellers shall execute
such documents and other instruments and take such further actions as may be
reasonably required to carry out the provisions hereof and consummate the
Acquisition.

     

    6.6 Payment of Debt to
Telefónica del Perú S.A.A. Within 10 (ten) Business Days as of the
Closing Date, Buyer will pay to Telefónica del Perú S.A.A. US$100,000.00 (one
hundred thousand and 00/100 U.S. dollars) of the current debt that Perusat has
with Telefónica del Perú S.A.A.  Sellers shall use best efforts to
negotiate with Telefónica del Perú S.A.A to defer payment of the remaining
balance due by the Company to Telefónica del Perú S.A.A. a minimum of 90
(ninety) days following the Closing Date without penalty or
interests.

     

    ARTICLE
VII

     

    CONDITIONS TO
CLOSING

     

    7.1 Conditions to Obligations of
Buyer and Sellers. The obligations of Buyer and Sellers to consummate the
Acquisition are subject to the satisfaction on or prior to the Closing Date of
the following conditions:

     

    (a) No
temporary restraining order, preliminary or permanent injunction or other Order
preventing the consummation of the Acquisition shall be in effect. No Law shall
have been enacted or shall be deemed applicable to the Acquisition which makes
the consummation of the Acquisition illegal.

     

    7.2 Conditions to Obligation of
Buyer. The obligation of Buyer to consummate the Acquisition is subject
to the satisfaction (or waiver by Buyer in its sole discretion) of the following
further conditions, which are for the exclusive benefit of Buyer:

     

    
      
        
        

      

      
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    (a) The
representations and warranties of Sellers set forth in this Agreement shall have been true and
correct at and as of the date hereof and shall be true and correct at and as of
the Closing Date as if made at and as of the Closing Date, and the Sellers shall
have executed and delivered or cause to be delivered a certificate to Buyer to
that effect. The receipt of such certificate at the Closing Date shall not
constitute a waiver by Buyer of any of the representation and warranties of the
Sellers which are contained in this Agreement.

     

    (b)
Sellers shall have performed or complied with all obligations and
covenants required by this Agreement to be performed or complied by Sellers with
at or prior to the Closing Date, and the Sellers shall have executed and
delivered or cause to be delivered a certificate to Buyer to that effect. The
receipt of such certificate at the Closing Date shall not constitute a waiver by
Buyer of any of the covenants of the Sellers which are contained in this
Agreement.

     

    (c) There
shall have been no Material Adverse Change in the condition (financial or
otherwise), operations, prospects or results of operations of the Company taken
as a whole.

     

    (d) No
Action shall be pending or threatened before any court, judge, arbitrator,
arbitration panel or other Governmental Entity or other Person (i) seeking to
prevent consummation of any of the transactions contemplated by this Agreement,
(ii) seeking to impose any Material limitation on the right of Buyer to own the
Shares and to control the Company or (iii) seeking to restrain or prohibit
Buyer's ownership or operation of all or any Material portion of the business or
assets of the Company, taken as a whole, or compel Buyer to dispose of or hold
separate all or any Material portion of the business or assets of the Company,
taken as a whole. No such Order shall be in effect.

     

    (e) No
Law shall have been enacted or shall be deemed applicable to the Acquisition
which has any of the effects set forth in clauses (i) through (iii) in Section
7.2(d).

     

    (f)
Sellers shall have obtained the Consent of each Person whose Consent is required
under the Contracts set forth in Section 7.2(g) and shall have provided evidence
of each such Consent in form and substance satisfactory to Buyer.

     

    (g)
Sellers shall have delivered to Buyer evidence of (i) the release of all Liens
with respect to the property and assets of the Company, (ii) the repayment of
all outstanding Indebtedness of the Company, (iii) the repayment or other
cancellation of all intercompany accounts between Sellers (other than the
Company), on the one hand, and the Company, on the other hand, and (iv) the
release of all guarantees by the Company of any Indebtedness or other obligation
of any third party, including Sellers, in each case in form and substance
satisfactory to Buyer.

     

    (h)
Sellers shall have delivered to Buyer true and complete copies of all
resolutions adopted by the Board of Directors and/or the Shareholders’
Meeting of the
Company in connection with the Acquisition.

     

    (i)
Sellers shall have delivered to Buyer (i) copies of the Charter Documents of the
Company currently in force, (ii) original stock certificates representing the
ownership of the Shares, duly endorsed, as set forth in Section 2.4(b) of this
Agreement, (iii) all other documents and instruments necessary to vest in Buyer
all of Sellers' rights, title and interest in and to the Shares, free and clear
of all Liens, as set forth in Section 2.4(b) of this Agreement, (iv) duly signed
resignations of all members of the Board of Directors to their positions as
directors of the Company and of all officers to their positions as officers of
the Company, as set fort in Section 5.4 of this Agreement, and (v) all other
documents, instruments or certificates required to be delivered by Sellers at or
prior to the Closing pursuant to this Agreement.

     

    
      
        
        

      

      
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    (j) Each
Seller shall have delivered to Buyer, or cause to be delivered to Buyer, an
original signed receipt evidencing payment of the Purchase Price.

     

    7.3 Conditions to Obligation of
Sellers. The obligation of Sellers to consummate the Acquisition is
subject to the satisfaction (or waiver by Sellers in its sole discretion), of
the following further conditions, which are for their exclusive
benefit:

     

    (a) The
representations and warranties of Buyer set forth in this Agreement shall have been true and
correct at and as of the date hereof and shall be true and correct at and as of
the Closing Date as if made at and as of the Closing Date, and Buyer shall have
executed and delivered or cause to be delivered a certificate to Sellers to that
effect. The receipt of such certificate at the Closing Date shall not constitute
a waiver by the Sellers of any of the representation and warranties of the Buyer
which are contained in this Agreement.

     

    (b) Buyer
shall have performed or complied in all Material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by Buyer at or prior to the Closing Date, and Buyer shall have
executed and delivered or cause to be delivered a certificate to Sellers to that
effect. The receipt of such certificate at the Closing Date shall not constitute
a waiver by the Sellers of any of the covenants of the Buyer which are contained
in this Agreement.

     

    (c) No
Action shall be pending or threatened before any court, judge, arbitrator or
arbitration panel or other Governmental Entity or other Person wherein an
unfavorable Order would (i) prevent consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation. No such
Order shall be in effect.

     

    ARTICLE
VIII

     

    TERMINATION

     

    8.1 Termination.

     

    (a) This
Agreement may be terminated and the Acquisition abandoned at any time prior to
the Closing:

     

    (i) by
mutual written consent of Buyer and Sellers;

     

    (ii) by
Buyer or Sellers if:

     

    
      
        
        

      

      
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    (A) the
Closing does not occur on or before March 6, 2009 provided that the right to
terminate this Agreement under this clause (ii)(A) shall not be available to any
Party whose breach of a representation, warranty, covenant or agreement under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur on or before such date; or

     

    (B) a
Governmental Entity shall have issued an Order or taken any other action, in any
case having the effect of restraining, enjoining or otherwise prohibiting the
Acquisition, which Order or other action is final and
non-appealable;

     

    (iii) by
Buyer if:

     

    (A) any
condition to the obligations of Buyer hereunder becomes incapable of fulfillment
other than as a result of a breach by Buyer of any covenant or agreement
contained in this Agreement, and such condition is not waived by Buyer;
or

     

    (B) there
has been a breach by Sellers of any representation, warranty, covenant or
agreement contained in this Agreement or Schedules, or if any representation or
warranty of Sellers shall have become untrue, in either case such that the
conditions set forth in Section 7.2(a) or Section 7.2(b) would not be satisfied;
or

     

    (iv) by
Sellers if:

     

    (A) any
condition to the obligations of Sellers hereunder becomes incapable of
fulfillment other than as a result of a breach by Sellers of any covenant or
agreement contained in this Agreement, and such condition is not waived by
Sellers; or

     

    (B) there
has been a breach by Buyer of any representation, warranty, covenant or
agreement contained in this Agreement, or if any representation or warranty of
Buyer shall have become untrue, in either case such that the conditions set
forth in Section 7.3(a) or Section 7.3(b) would not be satisfied.

     

    (b) The
Party desiring to terminate this Agreement pursuant to Section 8.1(a) (ii),
(iii) or (iv)  shall give written notice of such termination to the
other Party hereto.

     

    8.2 Effect of
Termination. In the event of termination of this Agreement as provided in
Section 8.1, this Agreement shall immediately become null and void and there
shall be no liability or obligation on the part of Buyer or Sellers, except as
set forth in Section 8.3; provided that the provisions
of Section 6.2 (Public Announcements) and Section 8.3 (Remedies) and Article X
of this Agreement shall remain in full force and effect and survive any
termination of this Agreement.

     

    8.3 Remedies. Any Party
terminating this Agreement pursuant to Section 8.1 shall have the right to
recover damages sustained by such Party as a result of any breach by the other
Party of any representation, warranty, covenant or agreement contained in this
Agreement or fraud or willful misrepresentation; provided, however, that the
Party seeking relief is not in breach of any representation, warranty, covenant
or agreement contained in this Agreement under circumstances which would have
permitted the other Party to terminate the Agreement under
Section 8.1.

     

    
      
        
        

      

      
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    ARTICLE
IX

     

    INDEMNIFICATION

     

    9.1 Survival.

     

    (a)
Except as set forth in Section 9.1(b), all representations and warranties
contained in this Agreement, or in any Schedule, certificate or other document
delivered pursuant to this Agreement, shall survive the Closing for a period of
two years.

     

    (b) The
representations and warranties of Sellers contained in Sections 3.1
(Organization and Good Standing), 3.2 (Capitalization), 3.4 (Authority and
Enforceability), 3.25 (Brokers or Finders), and the representation and
warranties of Buyer contained in Sections 4.1 (Organization and Good Standing),
4.2 (Authority and Enforceability) and 4.3 (Brokers or Finders) shall survive
the Closing indefinitely. The representations and warranties of Sellers
contained in Sections 3.9 (Taxes), 3.19 (Employee Benefits), 3.20 (Labor and
Employment Matters) and 3.21 (Environmental) shall survive the Closing until 90
Business Days after the expira­tion of the applicable statute of limitations
period (after giving effect to any waivers and extensions thereof).

     

    (c) The
period for which a representation or warranty, covenant or agreement survives
the Closing is referred to herein as the "Applicable
Survival Period". In the event a Notice of Claim for indemnification
under Section 9.2 or 9.3 is given within the Applicable Survival Period, the
representation or warranty, covenant or agreement that is the subject of such
indemnification claim (whether or not formal legal action shall have been
commenced based upon such claim) shall survive with respect to such claim until
such claim is finally resolved. The Indemnitor shall indemnify the Indemnitee
for all Losses (subject to the limitations set forth herein, if applicable) that
the Indemnitee may incur in respect of such claim, regardless of when
incurred.

     

    9.2 Indemnification by
Sellers.

     

    (a)
Sellers shall jointly and severally indemnify and defend Buyer and its
Affiliates (including, following the Closing, the Company) and their respective
stockholders, members, managers, officers, directors, employees, agents,
successors and assigns (the "Buyer
Indemnitees") against, and shall hold them harmless from, any and all
losses, damages, claims (including third party claims), charges, interest,
penalties, Taxes, diminution in value, costs and expenses (including legal,
consultant, accounting and other professional fees, costs of sampling, testing,
investigation, removal, treatment and remediation of contamination and fees and
costs incurred in enforcing rights under this Section 9.2) (collectively, "Losses")
resulting from, arising out of, or incurred by any Buyer Indemnitee in
connection with, or otherwise with respect to:

     

    (i) the
failure of any representation and warranty or other statement by Sellers
contained in this Agreement, the Schedules, or any other document furnished or
to be furnished to Buyer in connection with the transactions contemplated by
this Agreement, to be true and correct in all respects as of the date of this
Agreement or as of the Closing Date;

     

    
      
        
        

      

      
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    (ii) any
breach of any covenant or agreement of Sellers contained in this Agreement, the
Schedules, or any other document furnished or to be furnished to Buyer in
connection with the transactions contemplated by this Agreement;

     

    (iii) any
fees, expenses or other payments incurred or owed by Sellers or the Company to
any agent, broker, investment banker or other firm or person retained or
employed by it in connection with the transactions contemplated by this
Agreement;

     

    (iv) any
Pre-Closing Environmental Liabilities and any Action arising out of or in
connection therewith; provided that (A) this Section
9.2 shall not apply with respect to any Loss relating to Taxes to the extent
that indemnification payments for such Loss have been made pursuant to Section
9.8, and (B) for purposes of this Section 9.2, the representations and
warranties herein shall be deemed to have been made without any qualifications
as to Knowledge or materiality and, accordingly, all references herein and
therein to "Knowledge," "material," "in all material respects" and similar
qualifications as to Knowledge and materiality shall be deemed to be deleted
therefrom (except where any such provision requires disclosure of lists of items
of a material nature or above a specified threshold). Any and all Losses
hereunder shall bear interest from the date incurred until paid at the rate of
8% per annum.

     

    (b)
Sellers shall not be liable for any Loss or Losses pursuant to Section 9.2(a)(i)
("Buyer
Warranty Losses") (i) unless and until the aggregate amount of all Buyer
Warranty Losses incurred by the Buyer Indemnitees exceeds Fifty Thousand and
00/100 dollars ($50,000), in which event Sellers shall be jointly liable for all
Buyer Warranty Losses from the first dollar; provided that nothing
contained in this Section 9.2(b) shall be deemed to limit or restrict in any
manner any rights or remedies which Buyer has, or might have, at Law, in equity
or otherwise, based on fraud or a willful misrepresentation or willful breach of
warranty hereunder.

     

    9.3 Indemnification by
Buyer.

     

    (a) Buyer
shall indemnify and defend Sellers (the "Sellers
Indemnitees") against, and shall hold them harmless from, any and all
Losses resulting from, arising out of, or incurred by any Sellers Indemnitee in
connection with, or otherwise with respect to:

     

    (i) the
failure of any representation and warranty or other statement by Buyer contained
in this Agreement or any other document furnished or to be furnished by Buyer to
Sellers in connection with the transactions contemplated by this Agreement, to
be true and correct in all respects as of the date of this Agreement or as of
the Closing Date; and

     

    (ii) any
breach of any covenant or agreement of Buyer contained in this Agreement or any
other document furnished or to be furnished by Buyer to Sellers in connection
with the transactions contemplated by this Agreement.

     

    (b) Buyer
shall not be liable for any Loss or Losses pursuant to 9.3(a)(i) ("Sellers
Warranty Losses") (i) unless and until the aggregate amount of all
Sellers Warranty Losses incurred by the Sellers Indemnitees exceeds Fifty
Thousand and 00/100 dollars ($50,000), in which event Buyer shall be liable for
all Sellers Warranty Losses from the first dollar.

     

    
      
        
        

      

      
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    9.4 Indemnification Procedures
for Third Party Claims.

     

    (a) In
the event that an Indemnitee receives notice of the assertion of any claim or
the commencement of any Action by a third party in respect of which indemnity
may be sought under the provisions of this Article IX ("Third
Party Claim"), the Indemnitee shall promptly notify the Indemnitor in
writing ("Notice of
Claim") of such Third Party Claim. Failure or delay in notifying the
Indemnitor will not relieve the Indemnitor of any liability it may have to the
Indemnitee, except and only to the extent that such failure or delay causes
actual harm to the Indemnitor with respect to such Third Party Claim. The Notice
of Claim shall set forth the amount, if known, or, if not known, an estimate of
the foreseeable maximum amount of claimed Losses (which estimate shall not be
conclusive of the final amount of such Losses) and a description of the basis
for such Third Party Claim.

     

    (b)
Subject to the further provisions of this Section 9.4, the Indemnitor will have
10 (ten) days (or less if the nature of the Third Party Claim requires) from the
date on which the Indemnitor received the Notice of Claim to notify the
Indemnitee that the Indemnitor will assume the defense or prosecution of such
Third Party Claim and any litigation resulting therefrom with counsel of its
choice (reasonably satisfactory to the Indemnitee) and at its sole cost and
expense (a "Third
Party Defense"). If the Indemnitor assumes the Third Party Defense in
accordance with the preceding sentence, the Indemnitor shall be conclusively
deemed to have acknowledged that the Third Party Claim is within the scope of
its indemnity obligation hereunder and shall hold the Indemnitee harmless from
and against the full amount of any Losses resulting therefrom (subject to the
terms and conditions of this Agreement). Any Indemnitee shall have the right to
employ separate counsel in any such Third Party Defense and to participate
therein, but the fees and expenses of such counsel shall not be at the expense
of the Indemnitor unless (A) the Indemnitor shall have failed, within the time
after having been notified by the Indemnitee of the exist­ence of the Third
Party Claim as provided in the first sentence of this paragraph (b), to assume
the defense of such Third Party Claim, or (B) the employment of such counsel has
been specifically authorized in writing by the Indemnitor, which authorization
shall not be unreasonably withheld.

     

    (c) The
Indemnitor will not be entitled to assume the Third Party Defense
if:

     

    (i) the
Third Party Claim seeks, in addition to or in lieu of monetary damages, any
injunctive or other equitable relief (except where non-monetary relief is merely
incidental to a primary claim or claims for monetary damages);

     

    (ii) the
Third Party Claim relates to or arises in connection with any criminal
proceed­ing, action, indictment, allegation or investigation;

     

    (iii) the
Third Party Claim relates to or arises in connection with any Action related to
Environmental Laws;

     

    (iv)
under applicable standards of professional conduct, a conflict on any
significant issue exists between the Indemnitee and the Indemnitor in respect of
the Third Party Claim;

     

    (v) the
Third Party Claim involves a Material customer or supplier of the
Company;

     

    
      
        
        

      

      
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    (vi) the
Indemnitee reasonably believes an adverse determination with respect to the
Third Party Claim would be detrimental to or injure the Indemnitee's reputation
or future business prospects;

     

    (vii) the
Indemnitor has failed or is failing to vigorously prosecute or defend such Third
Party Claim; or

     

    (viii)
the Indemnitor fails to provide reasonable assurance to the Indemnitee of its
financial capacity to prosecute the Third Party Defense and provide
indemnification in accordance with the provisions of this
Agreement.

     

    (d) If by
reason of the Third Party Claim a Lien, attachment, garnishment or execution is
placed upon any of the property or assets of the Indemnitee, the Indemnitor, if
it desires to exercise its right to assume such Third Party Defense, must
furnish a satisfactory indemnity bond to obtain the prompt release of such Lien,
attachment, garnishment or execution.

     

    (e) If
the Indemnitor assumes a Third Party Defense, it will take all steps necessary
in the defense, prosecution, or settlement of such claim or litigation and will
hold all Indemnitees harmless from and against all Losses caused by or arising
out of such Third Party Claim. The Indemnitor will not consent to the entry of
any judgment or enter into any settlement except with the written consent of the
Indemnitee; provided that the consent of
the Indemnitee shall not be required if all of the following conditions are met:
(i) the terms of the judgment or proposed settlement include as an unconditional
term thereof the giving to the Indemnitees by the third party of a release of
the Indemnitees from all liability in respect of such Third Party Claim, (ii)
there is no finding or admission of (A) any violation of Law by the Indemnitees
(or any Affiliate thereof), (B) any violation of the rights of any Person and
(C) no effect on any other Action or claims of a similar nature that may be made
against the Indemnitees (or any Affiliate thereof), and (iii) the sole form of
relief is monetary damages which are paid in full by the Indemnitor. The
Indemnitor shall conduct the defense of the Third Party Claim actively and
diligently, and the Indemnitee will provide reasonable cooperation in the
defense of the Third Party Claim. So long as the Indemnitor is reasonably
conducting the Third Party Defense in good faith, the Indemnitee will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnitor
(not to be unreasonably withheld or delayed). Notwithstanding the foregoing, the
Indemnitee shall have the right to pay or settle any such Third Party Claim,
provided that in such event it
shall waive any right to indemnity therefore by the Indemnitor for such claim
unless the Indemnitor shall have consented to such payment or settlement (such
consent not to be unreasonably withheld or delayed). If the Indemnitor is not
reasonably conducting the Third Party Defense in good faith, the Indemnitee
shall have the right to consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior written
consent of the Indemnitor and the Indemnitor shall reimburse the Indemnitee
promptly for all Losses incurred in connection with such judgment or
settlement.

     

    (f) In
the event that (i) an Indemnitee gives Notice of Claim to the Indemnitor and the
Indemnitor fails or elects not to assume a Third Party Defense which the
Indemnitor had
the right to assume under this Section 9.4 or (ii) the Indemnitor is not
entitled to assume the Third Party Defense pursuant to this Section 9.4, the
Indemnitee shall have the right, with counsel of its choice, to defend, conduct
and control the Third Party Defense, at the sole cost and expense of the
Indemnitor. In each case, the Indemnitee shall conduct the Third Party Defense
actively and diligently, and the Indemnitor will provide reasonable cooperation
in the Third Party Defense. The Indemnitee shall have the right to consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim on such terms as it may deem appropriate; provided, however, that the amount of
any settlement made or entry of any judgment consented to by the Indemnitee
without the consent of the Indemnitor shall not be determinative of the validity
of the claim, except with the consent of the Indemnitor (not to be unreasonably
withheld or delayed). Notwithstanding Section 10.6 hereof, in connection with
any Third Party Claim, the Indemnitor hereby consents to the nonexclusive
jurisdiction of any court in which an Action in respect of a Third-Party Claim
is brought against any Indemnitee for purposes of any claim that the Indemnitee
may have under this Article IX with respect to such Action or the matters
alleged therein and agrees that process may be served on the Indemnitor with
respect to such a claim anywhere in the world. If the Indemnitor does not elect
to assume a Third Party Defense which it has the right to assume hereunder, the
Indemnitee shall have no obligation to do so.

     

    
      
        
        

      

      
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    (g) Each
Party to this Agreement shall use its commercially reasonable efforts to
cooperate and to cause its employees, contractors, advisors and consultants to
cooperate with and assist the Indemnitee or the Indemnitor, as the case may be,
in connection with any Third Party Defense, including attending conferences,
discovery proceedings, hearings, trials and appeals and furnishing records,
information and testimony, as may reasonably be requested; provided that each Party shall
use its best efforts, in respect of any Third Party Claim of which it has
assumed the defense, to preserve the confidentiality of all confidential
information and the attorney-client and work-product privileges.

     

    9.5 Indemnification Procedures
for Non-Third Party Claims. In the event of a claim that does not involve
a Third Party Claim being asserted against it, the Indemnitee shall send a
Notice of Claim to the Indemnitor. The Notice of Claim shall set forth the
amount, if known, or, if not known, an estimate of the foreseeable maximum
amount of claimed Losses (which estimate shall not be conclusive of the final
amount of such Losses) and a description of the basis for such claim. The
Indemnitor will have 30 days from receipt of such Notice of Claim to dispute the
claim and will reasonably cooperate and assist the Indemnitee in determining the
validity of the claim for indemnity. If the Indemnitor does not give notice to
the Indemnitee that it disputes such claim within 30 days after its receipt of
the Notice of Claim, the claim specified in such Notice of Claim will be
conclusively deemed a Loss subject to indemnification hereunder.

     

    9.6 Contingent Claims.
Nothing herein shall be deemed to prevent an Indemnitee from making a claim
hereunder for potential or contingent claims or demands; provided that the Notice of
Claim sets forth the specific basis for any such contingent claim to the extent
then feasible and the Indemnitee has reasonable grounds to believe that such a
claim may be made.

     

    9.7 Effect of Investigation;
Waiver. 

     

    (a) An
Indemnitee's right to execute the security interest on the Pledged Shares,
indemnification or other remedies based upon the representations and warranties
and covenants and agreements of the Indemnitor will not be affected by any
investigation or knowledge of the Indemnitee or any waiver by the Indemnitee of
any condition based on the accuracy of any representation or warranty, or
compliance with any covenant or agreement. Such representations and warranties
and covenants and agreements shall not be affected or deemed waived by reason of
the fact that the Indemnitee knew or should have known that any representation
or warranty might be inaccurate or that the Indemnitor failed to comply with any
agreement or covenant. Any investigation by such Party shall be for its own
protection only and shall not affect or impair any right or remedy
hereunder.

     

    (b)
Sellers acknowledge and agree that, upon and following the Closing, the Company
shall not have any liability or obligation to indemnify, save or hold harmless
or otherwise pay, reimburse or make Sellers whole for or on account of any
indemnification or other claims made by any Buyer Indemnitees hereunder. Sellers
shall have no right of contribution against the Company with respect to any such
indemnification or other claim.

     

    9.8 Tax
Indemnification.

     

    (a) From
and after the Closing Date, Sellers shall be jointly responsible for, shall pay
or cause to be paid, and shall jointly indemnify, defend and hold harmless each
Tax Indemnitee against, and reimburse such Tax Indemnitee for, on a Grossed-Up
Basis, any Losses resulting from, arising out of, relating to, in the nature of,
or caused by:

     

    
      
        
        

      

      
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    (i) any
Tax imposed on or relating to the Company with respect to any Pre-Closing
Period;

     

    (ii) any
Tax imposed upon or relating to the Company as a transferee or successor, by
contract, or otherwise; and

     

    (iii) any
Tax arising directly or indirectly from a breach or inaccuracy of a
representation or warranty set forth in Section 3.9.

     

    (b)
Except as otherwise provided in Section 9.8, payment in full of any amount due
under Section 9.8(a) shall be made to the Tax Indemnitee in immediately
available funds at least five Business Days before the date for payment of the
Taxes to which such payment relates is due. The Tax indemnities contained in
Section 9.8 shall not be subject to any threshold or other limitations contained
in this Agreement.

     

    9.9 Procedures Relating to
Indemnification of Tax Claims.

     

    (a) If
any Taxing Authority or other Person asserts a Tax Claim, then the Party hereto
first receiving notice of such Tax Claim promptly shall provide written notice
of such Tax Claim to the other Party hereto; provided that the failure of
Buyer to give such prompt notice to Sellers of any such Tax Claim shall not
relieve Sellers of any of its obligations under this Section 9.9. Such notice
shall specify in reasonable detail the basis for such Tax Claim and shall
include a copy of any relevant correspondence received from the Taxing Authority
or other Person.

     

    (b)
Sellers shall have the right to defend or prosecute, at its sole cost, expense
and risk, only those Tax Claims with respect to Taxes set forth in Section
9.8(a). In order to defend or prosecute any such Tax Claim, Sellers shall notify
Buyer that it elects to defend or prosecute such Tax Claim ("Election
Notice") within 30 days after (i) the date on which Sellers receives
notice of any such Tax Claim from Buyer (with respect to Tax Claims as to which
Buyer first received notice from a Taxing Authority or any other Person), or
(ii) the date on which Sellers delivered to Buyer notice of any such Tax Claim
(with respect to Tax Claims as to which Sellers first received notice from a
Taxing Authority or any other Person). With respect to any Tax Claim as to which
Sellers has provided an Election Notice to Buyer, Sellers shall defend or
prosecute such Tax Claim by all appropriate proceedings, which proceedings shall
be defended or prosecuted diligently by Sellers to a Final Determination; provided that Sellers shall
not, without the prior written consent of Buyer, enter into any compromise or
settlement of such Tax Claim that would result in any Tax detriment to any Tax
Indemnitee. Sellers shall inform Buyer of all developments and events relating
to such Tax Claim (including providing to Buyer copies of all written materials
relating to such Tax Claim), and Buyer or its authorized representatives shall
be entitled, at the expense of Buyer, to attend, but not participate in or
control, all conferences, meetings and proceedings relating to such Tax
Claim.

     

    (c) If,
with respect to any Tax Claim, Sellers fails to deliver an Election Notice to
Buyer within the period provided in Section 9.9(b) or fails diligently to
defend or prosecute such Tax Claim to a Final Determination, then Buyer shall at
any time thereafter have the right (but not the obligation) to defend or
prosecute such Tax Claim, at the sole cost, expense and risk of Sellers. Buyer
shall have full control of such defense or prosecution and such proceedings,
including any settlement or compromise thereof. Sellers shall cooperate in good
faith with Buyer and its authorized representatives in order to contest
effectively such Tax Claim. Sellers may attend, but not participate in or
control, any defense, prosecution, settlement, or compromise of any Tax Claim
controlled by Buyer pursuant to this Section 9.9(c), and shall bear its own
costs and expenses with respect thereto. In the case of any Tax Claim that is
defended or prosecuted by Buyer pursuant to this Section 9.9(c), Buyer
shall be entitled upon demand to prompt payment from Sellers for any and all
costs and expenses incurred by Buyer in connection with such defense or
prosecution (including attorneys', accountants', and experts' fees and
disbursements, settlement costs, court costs, and any other costs or expenses
for investigating, defending or prosecuting such Tax Claim), in each case on a
Grossed-Up Basis.

     

    9.10
Tax Treatment of
Indemnification Payments. Except as otherwise required by applicable Law,
the Parties shall treat any indemnification payment made hereunder as an
adjustment to the Purchase Price.  

     

    9.11
Other Rights and
Remedies Not Affected. The indemnification rights of the Parties under
this Article IX are independent of and in addition to such rights and remedies
as the Parties may have at Law or in equity or otherwise for any
misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any Party hereto, including the right to seek
specific performance, rescission or restitution, none of which rights or
remedies shall be affected or diminished hereby.

     

    
      
        
        

      

      
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    ARTICLE
X

     

    MISCELLANEOUS

     

    10.1
Notices. Any
notice, request, demand, waiver, consent, approval or other communication which
is required or permitted hereunder shall be in writing and shall be deemed given
(a) on the date established by the sender as having been delivered personally,
(b) on the date delivered by a private courier as established by the sender by
evidence obtained from the courier, (c) on the date sent by facsimile, with
confirmation of transmission, if sent during normal business hours of the
recipient, if not, then on the next Business Day, or (d) on the fifth day after
the date mailed, by certified or registered mail, return receipt requested,
postage prepaid. Such communications, to be valid, must be addressed as
follows:

     

    If to Buyer, to:

     

    Gulfstream Capital Partner
Ltd.

    c/o China Tel Group, Inc.

    8105 Irvine Center Drive, Suite
800

    Irvine, CA  92618
USA

    Attn: Kenneth Waggoner

    

    If to Sellers, to:

     

    Mario Navarro

    Av. Camino Real 493

    Piso 11, San Isidro

    Lima, Peru

     

    or to
such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth
above shall control.

     

    10.2 Amendments and
Waivers.

     

    (a) Any
provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective.

     

    (b) No
failure or delay by any Party in exercising any right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.

     

    (c) To
the maximum extent permitted by Law, (i) no waiver that may be given by a Party
shall be applicable except in the specific instance for which it was given and
(ii) no notice to or demand on one party shall be deemed to be a waiver of any
obligation of such Party or the right of the Party giving such notice or demand
to take further action without notice or demand.

     

    
      
        
        

      

      
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    10.3 Expenses. Each Party
shall bear its own costs and expenses in connection with this Agreement and the
transactions contemplated by this Agreement, including all legal, accounting,
financial advisory, consulting and all other fees and expenses of third parties,
whether or not the Acquisition is consummated.

     

    10.4 Successors and
Assigns. This Agreement may not be assigned by either Party hereto
without the prior written consent of the other Party; provided that, without such
consent, Buyer may transfer or assign, in whole or in part or from time to time,
to one or more of its Affiliates, the right to purchase all or a portion of the
Shares, but no such transfer or assignment will relieve Buyer of its obligations
hereunder.  Subject to the foregoing, all of the terms and provisions
of this Agreement shall inure to the benefit of and be binding upon the Parties
hereto and their respective successors and assigns.

     

    10.5 Governing Law. This
Agreement and the Exhibits and Schedules hereto and thereto shall be governed by
and interpreted and enforced in accordance with the Laws of the State of
California, United States of America, without giving effect to any choice of Law
or conflict of Laws rules or provisions (whether of the State of California or
any other jurisdiction) that would cause the application of the Laws of any
jurisdiction other than the State of California, United States of
America.

     

    10.6  Consent to
Jurisdiction. Each Party irrevocably submits to the exclusive
jurisdiction of (a) the Orange County Superior Court, State of California,
United States of America, and (b) the United States District Court for Southern
District of California, United States of America, for the purposes of any Action
arising out of this Agreement or any transaction contemplated by this Agreement.
Each Party agrees to commence any such Action either in the Orange County
Superior Court, State of California, United States of America or if such Action
may not be brought in such court for jurisdictional reasons, in the United
States District Court for the Southern District of California, United States of
America. Each Party further agrees that service of any process, summons, notice
or document by registered mail to such Party's respective address set forth
above shall be effective service of process with respect to any matters to which
it has submitted to jurisdiction in this Section 10.6. Each Party irrevocably
and unconditionally waives any objection to the laying of venue of any Action
arising out of this Agreement or the transactions contemplated by this Agreement
in (i) the Orange County Superior Court, State of California, United States of
America, or (ii) the United States District Court for the Southern District of
California, United States of America, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Action brought in any such court has been brought in an inconvenient
forum. Each Party hereby irrevocably waives all right to trial by jury in any
Action (whether based on contract, tort or otherwise) arising out of or relating
to this Agreement or the actions of such Party in the negotiation,
administration, performance and enforcement hereof.

     

    10.7  Counterparts. This
Agreement may be executed in counterparts, and either Party hereto may execute
any such counterpart, each of which when executed and delivered shall be deemed
to be an original and both of which counterparts taken together shall constitute
but one and the same instrument. This Agreement shall become effective when each
Party hereto shall have received a counterpart hereof signed by the other Party
hereto. The Parties agree that the delivery of this Agreement may be effected by
means of an exchange of facsimile signatures with original copies to follow by
mail or courier service.

     

    
      
        
        

      

      
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    10.8  Third Party
Beneficiaries. No provision of this Agreement is intended to confer upon
any Person other than the parties hereto any rights or remedies hereunder;
except that in the case of Article IX hereof, the other Indemnitees and their
respective heirs, executors, administrators, legal representatives, successors
and assigns, are intended third party beneficiaries of such sections and shall
have the right to enforce such sections in their own names.

     

    10.9 
Entire
Agreement. This Agreement, the Schedules and the documents, instruments
and other agreements specifically referred to herein or delivered pursuant
hereto set forth the entire understanding of the Parties hereto with respect to
the Acquisition. All Schedules referred to herein are intended to be and hereby
are specifically made a part of this Agreement. Any and all previous agreements
and understandings between or among the Parties regarding the subject matter
hereof, whether written or oral, are superseded by this Agreement.

     

    10.10  Captions. All
captions contained in this Agreement and on the Schedules are for convenience of
reference only, do not form a part of this Agreement and shall not affect in any
way the meaning or interpretation of this Agreement and of the Schedules.

     

    10.11  Severability. Subject
to Section 5.10(d), any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

     

    10.12  Specific Performance.
Buyer and Sellers each agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed by them in
accordance with the terms hereof and that each Party shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at Law
or equity.

     

    10.13  Interpretation.

     

    (a) The
meaning assigned to each term defined herein shall be equally applicable to both
the singular and the plural forms of such term and vice versa, and words
denoting either gender shall include both genders as the context requires. Where
a word or phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning.

     

    (b) The
terms "hereof", "herein" and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and
not to any particular provision of this Agreement.

     

    
      
        
        

      

      
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    (c) When
a reference is made in this Agreement to an Article, Section, paragraph, Exhibit
or Schedule, such reference is to an Article, Section, paragraph, Exhibit or
Schedule to this Agreement unless otherwise specified.

     

    (d) The
word "include", "includes", and "including" when used in this Agreement shall be
deemed to be followed by the words "without limitation", unless otherwise
specified.

     

    (e) The
phrase “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar
meaning means “the aggregate (or total or sum), without duplication,
of”.

     

    (f) In
the computation of periods of time from a specified date to a later specified
date , unless otherwise expressly stated, the word “from” means “from and
including” and the words “to” and “until” each mean “to but
excluding”.

     

    (g) A
reference to any Party to this Agreement or any other agreement or document
shall include such Party's predecessors, successors and permitted
assigns.

     

    (h)
Reference to any Law means such Law as amended, modified, codified, replaced or
reenacted, and all rules and regulations promulgated thereunder.

     

    (i) The
Parties have participated jointly in the negotiation and drafting of this
Agreement. Any rule of construction or interpretation otherwise requiring this
Agreement to be construed or interpreted against any Party by virtue of the
authorship of this Agreement shall not apply to the construction and
interpretation hereof.

     

    (j) All
accounting terms used and not defined herein shall have the respective meanings
given to them under PGAAP.

     

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

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

     

     

    
      	 	BUYER 
	 	 
	 	GULFSTREAM CAPITAL PARTNERS
      LTD. 
	 	 
	 	By:      /s/ Colin
      Tay                         
	 	
              Colin Tay, its
      Secretary 

            
	 	 
	 	 
	 	SELLERS 
	 	 
	 	/s/ Mario Octavio Navarro Álvarez 
	 	Mario Octavio Navarro
      Álvarez 
	 	 
	 	 
	 	/s/
      Rafael
      Isaías Samanez Zacarías 
	 	Rafael Isaías Samanez
      Zacarías 
	 	 
	 	 
	 	/s/ Gisella Tsuchikame
      Nakamoto 
	 	Gisella Tsuchikame
      Nakamoto 
	 	 
	 	 
	 	/s/ Jesus Margot Magan
      Gutierrez 
	 	Jesus Margot Magan
      Gutierrez 

    

     

     

     

     

    46PROMISSORY NOTE

BORROWER:     AvStar Aviation Services, Inc., 3600 South Gessner Road, Suite
220, Houston, Texas 77063

LENDER:     TexCom, Inc.

PRINCIPAL AMOUNT:     $235,000.00

1.     FOR VALUE RECEIVED, AvStar Aviation Services, Inc. promises to pay to
TexCom, Inc. at 3600 South Gessner Road, Suite 200, Houston, Texas 77063, or at
such address as may later be provided in writing to AvStar Aviation Services,
Inc., the principal sum of Two Hundred Thirty Five Thousand ($235,000.00)
Dollars, with interest payable on the unpaid principal at the rate of 8.25
percent per annum.

In accordance with the terms of the Stock Purchase Agreement between Borrower
and Lender dated November 11, 2006 by which Borrower is purchasing the
outstanding capital stock of San Diego Airmotive from Lender, Borrower has
agreed to assume current payables not to exceed Ninety Thousand ($90,000.00)
Dollars.  In the event that the current payables of San Diego Airmotive exceed
Ninety Thousand ($90,000.00) at the time of closing, the note referenced above
will be reduced by the amount in excess of ($90,000.00).  The Lender agrees to
reduce the note amount and the monthly payment amount to satisfy this condition.

2.     This Note will be repaid in 24 equal consecutive monthly installments of
principal and interest on the 17th day of each month commencing January 17, 2007
with the balance owing under this Note being paid at the end of its term.

3.     At any time while not in default under this Note, AvStar Aviation
Services, Inc. may pay the outstanding balance then owing under this Note to
TexCom, Inc. without further bonus or penalty.

4.     Notwithstanding anything to the contrary in this Note, if AvStar Aviation
Services, Inc. defaults in the payment of this Note or in the performance of any
obligation under this Note, then Lender may declare the principal amount owing
and interest due under this Note at that time to be immediately due and payable.
Borrower waives all demand for payment, presentation for payment, notice of
intention to accelerate maturity, notice of acceleration of maturity, protest,
and notice of protest, to the extent permitted by law.

5.     This Note will be construed in accordance with and governed by the laws
of the State of Texas.

6.     If any term, covenant, condition or provision of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, it is
the parties' intent that such provision be reduced in scope by the court only to
the extent deemed necessary by that court to render the provision reasonable and
enforceable and the remainder of the provisions of this Agreement will in no way
be affected, impaired or invalidated as a result.

7.     All costs, expenses and expenditures including, and without limitation,
the complete legal costs incurred by TexCom, Inc. in enforcing this Note as a
result of any default by AvStar Aviation Services, Inc., will be added to the
principal then outstanding and will immediately be paid by AvStar Aviation
Services, Inc.

8.     This Note will enure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and assigns of AvStar Aviation
Services, Inc. and TexCom, Inc.

9.     This note is secured by a Pledge of Stock of this date from the maker of
this Note to the Payee.

10.     This Note is issued pursuant to the terms of section 1 of the Stock
Purchase Agreement dated as of November 11, 2006.

IN WITNESS WHEREOF AvStar Aviation Services, Inc. has duly affixed its signature
by a duly authorized officer under seal on this 22nd day of November 2006.

                                   AvStar Aviation Services, Inc.

                                   By: ________________________________
                                   Robert P. Gaidousek, Vice President

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