EBay (EBAY)

2.4 Capitalization.

(a) The authorized capital stock of the Company consists of 300,000,000 Company Shares, of which 230,220,360 shares have been issued and were outstanding as of the date of this Agreement.

(b) All of the outstanding Company Securities have been duly authorized and validly issued, and are fully paid and nonassessable. The Company does not hold any Company Securities or any rights to acquire Company Securities. Except as set forth in the applicable provisions of the KCC: (i) none of the outstanding Company Securities is entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right; (ii) none of the outstanding Company Securities is subject to any right of first refusal in favor of the Company; and (iii) there is no Company Contract relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or from granting any option or similar right with respect to), any Company Securities. The Company is not under any obligation, and is not bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding Company Securities or other securities.

(c) As of the date of this Agreement, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any share capital or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any share capital or other securities of the Company; (iii) shareholder rights plan (or similar plan commonly referred to as a “poison pill”) or Contract under which the Company is or may become obligated to sell or otherwise issue any share capital or any other securities.

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Confidential

2.5 Financial Statements. The Company has made available to the Purchaser the audited balance sheet of the Company as of December 31, 2008 (the “Company Balance Sheet”) and the related audited statement of income, statement of changes in shareholders’ equity and statement of cash flows for the year ended December 31, 2008 (the “Company Balance Sheet Date”), together with the notes thereto. The financial statements referred to in this Section 2.5(e): (A) were prepared in accordance with Korean GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements); and (B) fairly present, in all material respects, the financial position of the Company as of the respective dates thereof and the results of operations and cash flows of the Company for the periods covered thereby.

2.6 Absence of Changes. Except as set forth in Part 2.6 of the Company Disclosure Schedule, since the Company Balance Sheet Date:

(a) there has not been any Company Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances, would have or would reasonably be expected to have or result in a Company Material Adverse Effect;

(b) there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the material assets of the Company (whether or not covered by insurance);

(c) the Company has not declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock or other securities;

(d) there has been no amendment to the Articles of Incorporation of the Company, and, other than the transactions contemplated by this Agreement, the Company has not effected or been a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split, issuance of bonus shares or similar transaction;

(e) the Company has not changed any of its methods of accounting or accounting practices in any material respect;

(f) the Company has not made any material Tax election or asked for or received any ruling in respect of any Tax, or entered into any Contract with any Governmental Body with respect to any Tax; and

(g) the Company has not agreed or committed to take any of the actions referred to in clauses “(c)” through “(f)” above.

2.7 Title to Assets. The Company owns, and has good and valid title to, all material assets purported to be owned by it, including all assets reflected on the Company Balance Sheet (except for assets sold or otherwise disposed of since the date of the Company Balance Sheet). To the Knowledge of the Company, all of said assets are owned by the Company free and clear of any Encumbrances, except for: (a) any lien for current taxes not yet due and payable; (b) liens for which an adequate reserve for payment has been established on the Company Balance Sheet; and (c) liens that have arisen in the ordinary course of business and that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of the Company. The Company is the lessee of, and holds valid leasehold interests in, all material assets purported to have been leased by it, including all material assets reflected as leased on the Company Balance Sheet (it being understood that the representations and warranties contained in this Section 2.7 do not apply to ownership of, or Encumbrances with respect to, Intellectual Property, which matters are addressed in the representations and warranties set forth in Section 2.9).

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Confidential

2.8 Equipment; Real Property Leases. All servers, other material hardware relating to any Company Service and other material items of equipment and other tangible assets owned by or leased to the Company are adequate in all material respects for the uses to which they are being put, are in good working condition and repair (ordinary wear and tear excepted) and, with due regard to the age thereof, taken as a whole are adequate in all material respects for the conduct of the business of the Company in the manner in which such business is currently being conducted. The Company does not own any real property or any interest in real property, except for the leaseholds created under the real property leases or subleases identified in Part 2.8 of the Company Disclosure Schedule (the “Company Real Property”). Except as set forth in the leases or subleases identified in Part 2.8 of the Company Disclosure Schedule, there is no Person in possession of any real property that is leased to the Company other than the Company. To the Knowledge of the Company: (a) all Company Real Property and any other property that is or was leased to or used by the Company is free of any material amount of any Materials of Environmental Concern or material environmental contamination; and (b) none of the Company Real Property or any other property that is or was used or leased by the Company contains any underground storage tanks, asbestos, equipment using PCBs or underground injection wells.

2.9 Intellectual Property.

(a) The Company exclusively owns all right, title and interest to and in the Company IP (other than: (i) Intellectual Property Rights or Intellectual Property licensed to the Company, as identified in Part 2.9(a)(i) of the Company Disclosure Schedule or pursuant to license agreements for third-party software that is generally available to the public for less than KRW 120,000,000; and (ii) Intellectual Property Rights or Intellectual Property co-owned by the Company and a third party, as identified in Part 2.9(a)(ii) of the Company Disclosure Schedule) free and clear of any Encumbrances (other than: (i) non-exclusive licenses granted by the Company in connection with the provision of Company Services in the ordinary course of business; and (ii) as would not, and would not reasonably be expected to, materially interfere with the use of such Company IP in providing any Company Services). No Person who has licensed Intellectual Property Rights or Intellectual Property to the Company has ownership rights or license rights to modifications, improvements or derivative works of such Intellectual Property or Intellectual Property Rights to the extent made by or on behalf of the Company. The Company owns or otherwise has, and immediately after the Closing will have, all Intellectual Property and Intellectual Property Rights that are material to the provision of any Company Service by the Company as currently provided.

(b) All Company Registered IP is subsisting, and to the Knowledge of Company is valid and enforceable (it being understood that this sentence applies to pending patent applications only to the extent such applications become issued patents).

(c) Neither the execution, delivery or performance of this Agreement nor the consummation of any of the transactions contemplated by this Agreement will, or could reasonably be expected to, with or without notice or the lapse of time, and as a result of any Company Contract, result in or give any other Person the right or option to cause, create, impose or declare: (i) a loss of, or Encumbrance on, any Company IP; or (ii) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any of the Company IP, except, in each case, as would not have and would not reasonably be expected to have or result in a Company Material Adverse Effect.

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Confidential

(d) The Company has not transferred ownership of (whether a whole or partial interest), or granted any exclusive right to use, any Company IP.

(e) To the Knowledge of the Company, no Person has infringed, misappropriated or otherwise violated, and to the Knowledge of the Company, no Person is infringing, misappropriating or otherwise violating, any Company IP that is (i) owned by, purported to be owned by, or exclusively licensed to, Company, or (ii) is material to any Company Service.

(f) Since January 1, 2006, the Company has not, and none of the Company Service Software has ever, as a result of its use in connection with a Company Service, infringed (directly, vicariously, contributorily, by inducement or otherwise), misappropriated or otherwise violated any Intellectual Property Right of any other Person.

(g) Except as set forth in Part 2.9(g) of the Company Disclosure Schedule, since January 1, 2006, the Company has not received any written notice or other written communication relating to any actual, alleged or suspected infringement, misappropriation, violation of or offer to license any Intellectual Property Right of another Person by the Company, the Company Services or the Company Service Software, and, to Knowledge of the Company, the Company has not received any non-written notice or other non-written communication relating to any actual, alleged or suspected infringement, misappropriation or violation of any Intellectual Property Right of another Person by the Company, the Company Services or the Company Service Software.

(h) To the Knowledge of Company, none of the Company Service Software contains any bug, defect or error (including any bug, defect or error relating to or resulting from the display, manipulation, processing, storage, transmission or use of date data) that materially and adversely affects (or that would reasonably be expected to materially and adversely affect) the use, functionality or performance of such Company Service Software or any Company Service using, containing or including such Company Service Software.

(i) The Company does not have any duty or obligation (whether present, contingent or otherwise) to deliver, license or make available the source code for any Company Service or Company Service Software to any escrow agent or other Person who is not an employee of the Company; nor has any event occurred or could reasonably be expected to occur that would result in the delivery, license or disclosure of any such source code for any Company Service or Company Service Software to any other Person who is not an employee of the Company.

(j) The Company has complied at all times and in all material respects with all of the Company Privacy Policies and with all applicable Legal Requirements pertaining to privacy or Personal Data. The execution, delivery or performance of this Agreement will not result in any violation of any Company Privacy Policy or any Legal Requirement pertaining to privacy or Personal Data.

(k) The Company’s security policy with respect to Personal Data complies in all material respects with the Korean Act on Promotion of Information and Communications Network Utilization and Information Protection, and the enforcement decree thereof, and the KCC Guideline on Protection of Personal Information and Guideline on Standards for Technical and Managerial Protective Measures of Personal Information. Except as set forth in Part 2.9(k) of the Company Disclosure Schedule, to the Knowledge of Company, since January 1, 2006, no breach or violation of any security policy has occurred or, to the Knowledge of the Company, is threatened, and there has been no unauthorized or illegal use of or access to any of the data or information in any of the Company’s databases.

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Confidential

2.3 Capitalization.

(a) The authorized capital stock of the Company consists of 200,000,000 Company Shares, of which 50,423,122 shares have been issued and were outstanding as of the date of this Agreement. Each Company ADS represents one Company Share and as of the date of this Agreement, 27,324,193 Company ADSs have been issued and are outstanding. As of the date of this Agreement, 2,081,002 Company Shares were subject to issuance pursuant to Company Options granted and outstanding.

(b) All of the outstanding Company Securities have been duly authorized and validly issued, and are fully paid and nonassessable. The Company does not hold any Company Securities or any rights to acquire Company Securities. Except as set forth in the Shareholders Agreement and in the applicable provisions of the KCC: (i) none of the outstanding Company Securities is entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right; (ii) none of the outstanding Company Securities is subject to any right of first refusal in favor of the Company; and (iii) there is no Company Contract relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or from granting any option or similar right with respect to), any Company Securities. The Company is not under any obligation, and is not bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding Company Securities or other securities.

(c) None of the outstanding Company Options were granted pursuant to a stock option plan or assumed by the Company. Part 2.3(c) of the Company Disclosure Schedule sets forth the following information with respect to each Company Option, in each case that was outstanding as of the date of this Agreement: (i) the number of Company Shares subject to such Company Option; (ii) the exercise price of such Company Option; (iii) the date on which such Company Option was granted; (iv) the applicable vesting schedule, and the extent to which such Company Option is vested and exercisable; (v) the date on which such Company Option expires; and (vi) whether the vesting of such Company Option would be accelerated, in whole or in part, as a result of the Offer, the Share Allocation or any of the other Contemplated Transactions, alone or in combination with any termination of employment or other event. The Company has made available to Parent accurate and complete copies of the forms of all stock option agreements evidencing Company Options. Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the Company Board (or a duly constituted and authorized committee thereof) and any required shareholder approval by the necessary number of votes or written consents, and: (i) the stock option agreement governing such grant was duly executed and delivered by the Company and, to the Knowledge of the Company, was duly executed and delivered by each other party thereto; (ii) each such grant was made in accordance with the terms of the agreement governing such option grant and all applicable Legal Requirements, including the applicable rules of the Nasdaq Global Select Market and its predecessor; (iii) the per share exercise price of each Company Option was equal to the fair market value of a share of Company Common Stock (in accordance with US GAAP) on the applicable Grant Date; and (iv) each such grant was properly accounted for in accordance with US GAAP in the financial statements (including the related notes) of the Company and disclosed in the Company SEC Documents in accordance with the Exchange Act and all other applicable Legal Requirements.

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(d) Except as set forth in Section 2.3(c) or in Part 2.3(c) of the Company Disclosure Schedule, as of the date of this Agreement, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any share capital or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any share capital or other securities of the Company; (iii) shareholder rights plan (or similar plan commonly referred to as a “poison pill”) or Contract under which the Company is or may become obligated to sell or otherwise issue any share capital or any other securities.