Exhibit 10.81

[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS

AMENDMENT

TO OEM AGREEMENT BETWEEN UTSTARCOM, INC. AND INTERWAVE

COMMUNICATIONS INTERNATIONAL, LTD., DATED JULY 14, 2000

This Amendment is dated and entered into as of the 27th day of September 2002 by
and between UTStarcom, Inc., a Delaware corporation with its place of business
at 1275 Harbor Bay Parkway, Alameda, CA 94502, USA (hereinafter referred to as
“UTStarcom”) and Interwave Communications International, Ltd., a Bermuda company
having offices at Clarendon House, 2 Church Street, Hamilton HM DX, Bermuda
(hereinafter referred to as “Interwave”) (collectively, the “Parties”).

WHEREAS, The Parties entered into a contractual relationship on July 14, 2000
(referred to herein as the “Original OEM Agreement”) for UTStarcom to purchase
certain products and for resale as defined in the Original OEM Agreement;

WHEREAS, UTStarcom has expressed an interest in making an equity investment in
Interwave in exchange for a) the development and production by Interwave of
certain technology relating to [***] compatible with UTStarcom’s [***]
specifications; and b) incorporation of said technology into [***], where
UTStarcom would purchase said products from Interwave pursuant to the terms of
the Original OEM Agreement and this Amendment;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
conditions herein contained, the Parties mutually agree as follows:

1.             [***] PURCHASE AGREEMENT

In consideration of Interwave’s provision of technical design and product
production services as described herein, UTStarcom shall purchase [***] pursuant
to the terms of a [***] Purchase Agreement (attached hereto as Exhibit A).

 

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2.             TECHNICAL DESIGN SERVICES

In return for UTStarcom’s equity investment in Interwave as described in
Section 1 of this Amendment, Interwave shall provide technical design services
with respect to [***] being made compatible with UTStarcom’s [***]
specifications. These technical design services shall be provided pursuant to
the specifications attached hereto as Exhibit B, and shall be completed pursuant
to the delivery schedule attached hereto as Exhibit C.

3.             PRODUCT PRODUCTION SERVICES

In further consideration of [***] as described in Section 1 of this Amendment,
Interwave shall produce, pursuant to the terms of this Amendment and the
Original OEM Agreement, [***] described in Section 2 of this Amendment.
Interwave shall provide these [***] to UTStarcom at [***]. Interwave
acknowledges and agrees that [***].

4.             SOFTWARE ESCROW

Interwave acknowledges the importance to UTStarcom of having access to the
technical designs created by Interwave pursuant to Section 2 of this Amendment
in the event that interWAVE goes into liquidation or ceases business.
Accordingly, Interwave agrees that it shall forthwith upon the completion of the
technical designs intended by Section 2 place all software (including source
code), firmware, documentation, and all other intellectual property necessary
for the manufacture of the [***] into an escrow reasonably acceptable to
UTStarcom, pursuant to terns and conditions expressed in the Software Escrow
Agreement attached hereto as Exhibit D of this Amendment. All items placed into
said escrow shall be used by UTStarcom only for the purpose of manufacturing the
[***] that incorporates such technical designs and for no other purpose.

5.             LIMITED EFFECT OF AMENDMENT

Aside from the modification in this Amendment, the remaining terms and
conditions of the Original OEM Agreement shall remain unaffected by this
Amendment.

 

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed
by their respective duly authorized representatives as of the date first above
written. All copies of this Amendment, signed by both Parties, shall be deemed
originals.

 

Interwave Communications

 

UTStarcom, Inc.

 

 

 

International, Ltd.

 

 

 

 

 

By:

/s/ PRISCILLA LU

 

By:

/s/ HONG LU

 

 

 

 

 

Name:

Priscilla Lu

 

Name:

Hong Lu

Title:

Chief Executive Officer

 

Title:

Chief Executive Officer

 

 

 

 

 

Date:

September __, 2002

 

Date:

September __, 2002

 

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Execution Copy

 

UTSTARCOM, INC.

AND

INTERWAVE COMMUNICATIONS INTERNATIONAL LTD.

STOCK PURCHASE AGREEMENT

SEPTEMBER 27, 2002

 

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STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT is made as of the ___ day of September 2002, by
and between UTStarcom, Inc. (“UTStarcom” or the “Investor”), a corporation
organized under the laws of the State of Delaware, USA, with its principal place
of business at 1275 Harbor Bay Parkway, Alameda, CA 94502 USA and interWAVE
Communications International, Ltd. (the “Company”), a corporation organized
under the laws of Bermuda, with its principal place of business at Clarendon
House, 2 Church Street, P.O. Box HM 1022, Hamilton, Bermuda.

WHEREAS, the parties have agreed in principle upon the purchase of shares of
Common Stock of the Company by the Investor.

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

1.             Purchase and Sale of Common Stock.

1.1          Sale of the Common Shares.  At the Closing (as defined below) and
subject to the terms and conditions of this Agreement, Company will issue and
sell for [***] the number of shares of the Company’s Common Stock obtained by
dividing the [***] into [***] (the “Common Stock”) to the Investor, and the
Investor will buy the Common Stock from the Company, at the Closing, for the per
share purchase price determined as set forth above (the “Purchase Price”). The
parties agree that the Investor may assign the right and obligation to purchase
the Common Stock for the Purchase Price, and all of its other rights and
obligations under this Agreement, to an “Affiliate,” in which case the term
“Investor” shall refer herein to such Affiliate.  “Affiliate” means, with
respect to any specified person, any other person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified person.  In the event that Investor assigns
this Agreement to an Affiliate, UTStarcom shall guarantee and remain liable for
the performance of such Affiliate’s obligations hereunder.  as reported by the
Nasdaq National Market (or, if such market is not the principal trading market
for the Common Stock, as reported by such principal trading market).

1.2          Closing.  The closing of purchase and sale of the Shares to be sold
and purchased hereunder (the “Closing”) shall occur on September 26, 2002 (the
“Closing Date”) at 10:00 a.m. at the offices Wilson, Sonsini, Goodrich and
Rosati, 650 Page Mill Road, Palo Alto, California 94304, USA.  The per share
price is calculated to be [***] US dollars, and the number of shares to be sold
is calculated to be [***] shares, as shown in the attached calculation in
Exhibit A.

2.             Closing Date, Delivery.

2.1          Closing Date.  The Closing shall be held on September 26, 2002 or
such other date as the Company and the Investor may agree upon (the “Closing
Date”).

 

 

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2.2          Delivery.  At the Closing, the Company will deliver to the Investor
a stock certificate, registered in the Investor’s name, representing the Shares,
against payment of the Purchase Price by certified or cashier’s check payable to
the Company, or by wire transfer of immediately available same day funds per the
Company’s wiring instructions.

2.3          Further Assurances.  The Company and the Investor hereby covenant
and agree without the necessity of any further consideration, to execute,
acknowledge and deliver any and all such other documents and take any such other
action as may be reasonably necessary to carry out the intent and purposes of
this Agreement.

3.             Representations and Warranties of the Company.  The Company
hereby represents and warrants to the Investor that, except as set forth on the
Schedule of Exceptions (the “Schedule of Exceptions,” attached hereto as
Exhibit A1) furnished to the Investor on the date hereof, which exceptions shall
be deemed to be representations and warranties as if made hereunder and which
shall be identified as exceptions to specific Sections of this Agreement:

3.1          Organization, Good Standing and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Bermuda.  The Company has all requisite corporate power and corporate
authority to own and operate its properties and assets, to carry on its business
as now conducted and as proposed to be conducted, to sell the Shares, to enter
into this Agreement, and to carry out the transactions contemplated hereunder
and thereunder.  The Company, and each of its subsidiaries, is qualified to
transact business and is in good standing in each jurisdiction in which the
failure to qualify would have, or could reasonably be expected to have, a
material adverse effect on the business, properties, financial condition or
results of operations of the Company and its subsidiaries taken as a whole (a
“Material Adverse Effect”).  The Company has delivered to the Investor true,
correct and complete copies of the Company’s Certificate of Incorporation (the
“Certificate”) and the Company’s By-laws in effect on the date hereof.

3.2          Capitalization and Voting Rights.

(a)           The capital stock of the Company as of September 5, 2002 consisted
of:

(i)             100,000,000 authorized shares of Common Stock, of which
58,130,029 shares are issued and outstanding

(ii)          10,000,000 authorized shares of Preferred Stock, of which zero
shares are issued and outstanding

(b)           Except as set forth in the Company’s report on Form 10-K for the
fiscal year ended June 30, 2001, the Company’s proxy statement for its 2001
annual general meeting of shareholders and the Company’s Quarterly Reports on
Form 10-Q for the periods ended September 30, 2001, December 31, 2002, and
March 31, 2001 (collectively, the “Company’s Public Filings”) or in Section 3.2
of the Schedule of Exceptions there are: (i) no outstanding options, warrants,
rights (including conversion or preemptive rights) or agreements pursuant to
which the

 

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Company is or may become obligated to issue, sell or repurchase any shares of
its capital stock or any other securities of the Company; (ii) no restrictions
on the transfer of capital stock of the Company imposed by the Certificate or
By-laws of the Company, or any agreement to which the Company is a party, any
order of any court or any governmental agency to which the Company is subject,
or any statute other than those imposed by relevant state and federal securities
laws; and (iii) no cumulative voting rights for any of the Company’s capital
stock.  The Company has, as of December 31, 2001, reserved up to Nineteen
Million Seven Hundred Thirty Thousand (19,730,000) shares of its Common Stock
for the issuance of Common Stock pursuant to the exercise of outstanding options
and warrants or options to be granted in the future under its stock option and
stock purchase plans listed on Section 3.2 of the Schedule of Exceptions.

(c)           Except as set forth in the Company’s Public Filings or in
Section 3.2 of the Schedule of Exceptions, the Company is not a party to any
agreement or understanding which affects or relates to, the voting of shares of
capital stock of the Company or the giving of written consents by a shareholder
or director of the Company.

3.3          Subsidiaries.  Except as set forth in the Company’s Public Filings
or in Section 3.3 of the Schedule of Exceptions, the Company has never owned and
does not presently own or control, directly or indirectly, any other
corporation, association, or other business entity and has never owned or
controlled and does not currently own or control, directly or indirectly, any
capital stock or other ownership interest, directly or indirectly, in any
corporation, association, partnership, trust, joint venture or other entity. 
Each of the Company’s subsidiaries is duly organized and existing under the laws
of its jurisdiction or organization and is in good standing under such laws. 
None of the Company’s subsidiaries owns or leases property or engages in any
activity in any jurisdiction that might require its qualification to do business
as a foreign corporation and in which failure to do so would have a Material
Adverse Effect.

3.4          Authorization.  All corporate action on the part of the Company and
its stockholders necessary, for the authorization, execution and delivery of the
Transaction Agreements, the performance of all obligations of the Company
hereunder and thereunder and the authorization, issuance and delivery of the
Shares to be sold hereunder, has been taken or will be taken prior to the
Closing.  The Transaction Agreements have been duly executed and delivered by
the Company and constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors rights).  The execution, delivery and
performance of the Transaction Agreements and compliance with the provisions
thereof by the Company, will not:

(a)           violate any provision of law, statute, ordinance, rule or
regulation or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body, the violation of which
would have a Material Adverse Effect;

(b)           conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of time, or
both) a default (or give rise to any

 

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right of termination, cancellation or acceleration) under (i) any material
agreement, document, instrument, contract, understanding, arrangement, note,
indenture, mortgage or lease to which the Company is a party or under which the
Company or any of its assets is bound or affected, (ii) the Company’s Restated
Certificate, or (iii) the By-laws of the Company; or

(c)           result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company.

3.5          Valid Issuance of Common Stock.

(a)           When issued, sold and delivered in accordance with the terms
hereof for the consideration expressed herein, the Shares will be validly issued
and outstanding, fully paid and nonassessable and not subject to any preemptive
rights, rights of first refusal or other similar rights imposed by the Company.

(b)           The outstanding shares of Common Stock are all duly authorized and
validly issued, fully paid and nonassessable.

3.6          Governmental Consents.  No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by the Agreement, except for registration or qualification, or
taking such action to secure exemption from such registration or qualification,
of the Shares under applicable state or federal securities laws, which actions
shall be taken, by and at the expense of the Company, on a timely basis as may
be required.

3.7          Litigation.  Except as set forth in Section 3.7 of the Schedule of
Exceptions, there is no action, suit, proceeding or investigation pending or, to
the Company’s knowledge, currently threatened against the Company which
questions the validity of the Transaction Agreements or the right of the Company
to enter into such agreements, or to consummate the transactions contemplated
thereby, or which reasonably would be expected to have, either individually or
in the aggregate, a Material Adverse Effect, nor is the Company aware that there
is any basis for the foregoing.  To the Company’s knowledge, there are no legal
actions or investigations pending or threatened in writing involving the
employment by or with the Company of any of the Company’s current or former
employees, their use in connection with the Company’s business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers or
alleging a violation of any federal, state or local statute or common law
relationship with the Company.  The Company is not a party to any order, writ,
injunction; judgment or decree of any court that has had, or could reasonably be
expected to have, a Material Adverse Effect.

 

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3.8          Employees and Consultants.  Except as set forth in Section 3.8 of
the Schedule of Exceptions:

(a)           To the Company’s knowledge; none of its employees is obligated
under any contract (including licenses, covenants or contracts of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his best efforts to
promote the interests of the Company or that would conflict with the Company’s
business as proposed to be conducted.  Neither the execution nor delivery of the
Transaction Agreements, nor the carrying on of the Company’s business by the
employees of the Company, nor the conduct of the Company’s business as proposed,
will, to the Company’s knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any material
contract, covenant or instrument under which any of such employees is now
obligated.

(b)           Each employee of, or consultant to, the Company, who has or is
proposed to have access to confidential or proprietary information of the
Company, is a signatory to, and is bound by, an agreement with the Company
relating to nondisclosure, proprietary information and, with respect to
employees, assignment of patent, copyright and other intellectual property
rights.

(c)           To the knowledge of the Company, no employee of, or consultant to,
the Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement between such individual
and the Company including, but not limited to, those matters relating to (i) the
relationship of any such employee with the Company or to any other party as a
result of the nature of the Company’s business as currently conducted, or
(ii) unfair competition, trade secrets or proprietary information.

3.9          Patents and Trademarks.  The Company owns or possesses all rights
to use all patents, patent rights or licenses, inventions, collaborative
research agreements, trade secrets, know-how, trademarks, service marks, trade
names and copyrights which are necessary to conduct its businesses as described
in the Company’s Public Filings.  Except as set forth in the Company’s Public
Filings or in Section 3.9 of the Schedule of Exceptions, The Company has not
received any written communications alleging that the Company has violated or,
by conducting its business as proposed, would violate any of the Intellectual
Property of any other person or entity.  Compliance with Other Instruments.  The
Company is not in violation or default of any provisions of the Restated
Certificate or the Company’s By-laws or of any instrument, judgment, order, writ
or decree.

3.10        Agreements; Action.

(a)           Except for agreements explicitly contemplated hereby and as set
forth in the Company’s Public Filings or in Section 3.10 of the Schedule of
Exceptions, there are no agreements, understandings, transactions or proposed
transactions between the Company and any of its officers, directors, or
affiliates, or any affiliate thereof of a nature required to be disclosed
pursuant to the provisions of Regulation S-K.

(b)           Except as set forth in the Company’s Public Filings or in
Section 3.10 of the Schedule of Exceptions, since December 31, 2001 the Company
has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its

 

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capital stock, or (ii) sold, exchanged or otherwise disposed of any of its
assets or rights, other than in the ordinary course of business.

(c)           The Company has not admitted in writing its inability to pay its
debts generally as they become due, filed or consented to the filing against it
of a petition in bankruptcy or a petition to take advantage of any insolvency
act, made an assignment for the benefit of creditors, consented to the
appointment of a receiver for itself or for the whole or any substantial part of
its property, or had a petition in bankruptcy filed against it, been adjudicated
a bankrupt, or filed a petition or answer seeking reorganization or arrangement
under the federal bankruptcy laws or any other laws of the United States or any
other jurisdiction.

(d)           The Company is in compliance in all material respects with all
obligations, agreements and conditions contained in any evidence of indebtedness
or any loan agreement or other contract or agreement (whether or not relating to
indebtedness) to which the Company is a party or is subject (collectively, the
“Obligations”), the lack of compliance with which could afford to any person the
right to (i) accelerate any indebtedness or (ii) terminate any right or
agreement of the Company, the termination of which would have a Material Adverse
Effect.  To the Company’s knowledge, all other parties to such Obligations are
in compliance with the terms and conditions of such Obligations.

3.11        Title to Property and Assets.  The Company has good title to all of
its assets, including all properties and assets reflected on its December 31,
2001 Balance Sheet, free and clear of all liens, claims, restrictions or
encumbrances, except those assets disposed of since the date of such Balance
Sheet in the ordinary course of business, none of which either alone or in the
aggregate are material, either in nature or amount, to the business of the
Company.  All machinery and equipment included in such properties which are
material to the business of the Company are in good condition and repair,
ordinary wear and tear excepted, and each lease of real or personal property to
which the Company is a party is effective, affords the Company peaceful and
undisturbed possession of the subject matter of the lease, and such lease is
free of any liens, claims restrictions or encumbrances.  Each such lease
constitutes a valid and binding obligation of, and is enforceable in accordance
with its terms against, the Company and, to the Company’s knowledge, the other
respective parties thereto.  Except as provided in the Company’s Public Filings
or in Section 3.11 of the Schedule of Exceptions; with respect to the property
and assets it leases, the Company is in all respects in compliance with such
leases, has not received notice of any allegations that it is in default
thereunder in any respect and holds a valid leasehold interest free of any
liens, claims or encumbrances.

3.12        Financial Statements.  The Company has delivered to the Investor
(i) its report on Form 10-K for the year ended June 30, 2001 containing its
audited Balance Sheets at June 30, 2000 and 2001 and its audited Statements of
Operations, Statements of Shareholder’s Equity and Statements of Cash Flow for
the years ended June 30, 1999, 2000 and 2001 (the “Audited Financial
Statements”); and (ii) the unaudited financial statements appearing in the
Company’s reports on Form 10-Q for the quarters ended September 30, 2001,
December 31, 2001 and March 31, 2002 (the “Unaudited Financial Statements”). 
The Audited Financial Statements and the Unaudited Financial

 

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Statements are collectively referred to as the “Financial Statements”.  The
Financial Statements have been prepared in accordance with the United States
generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods indicated and fairly present the financial condition and
consistent operating results of the Company as of the dates, and for the
periods, indicated therein, provided that the Unaudited Financial Statements may
not contain complete footnote disclosure which would be required by GAAP and are
subject to audit adjustments.  Since December 31, 2001, the Company has
conducted its business in the ordinary course, and there has not been any
material adverse change in the financial condition or operations of the
Company.  Except as set forth in the Financial Statements and in the material
agreements listed in Section 3.12 of the Schedule of Exceptions, the Company has
no material liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to September 30, 2001 and
(ii) obligations under contracts and commitments incurred in the ordinary course
of business and not required under GAAP to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company.  Except
as disclosed in the Financial Statements, the Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.  The
Company maintains and consistently applies and will continue to maintain and
consistently apply a standard system of accounting established and administered
in accordance with GAAP.

Since June 30, 2000, the Company has filed all required reports, schedules,
forms, statements and other documents (including exhibits and all other
information incorporated therein) with the SEC (“Company SEC Documents”).  As of
their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Securities Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Documents, and no Company SEC
Documents when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The financial statements of the Company
included in Company SEC Documents complied as to form, as of their respective
dates of filing with the SEC, in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case- of unaudited statements, to normal year-end audit
adjustments).

3.13        Employee Benefit Plans.  To the Company’s knowledge, the Company is
in compliance with applicable laws governing the Company’s “employee benefit
plans” as such term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, except where such failure to comply would not have a
Material Adverse Effect.

 

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3.14        Tax Returns, Payments and Elections.  The Company has filed all tax
returns and reports as required, and within the time prescribed, by law,
including without limitation, all federal, state and local income, excise or
franchise tax returns, real estate and personal property tax returns, sales and
use tax returns, payroll tax returns and other tax returns or reports required
to be filed by it.  These returns and reports are true and correct in all
material respects.  The Company has paid or made provision for the payment of
all accrued and unpaid taxes and other charges to which the Company is subject
and which are not currently due and payable.  The federal income tax returns of
the Company have never been audited by the Internal Revenue Service, and the
Company has not agreed to an extension of the statute of limitations with
respect to any of its tax years.  Neither the Internal Revenue Service nor any
other taxing authority is now asserting, nor is threatening in writing to
assert, against the Company any deficiency or claim for additional taxes or
interest thereon or penalties in connection therewith; nor does such deficiency
or claim or basis for such deficiency or claim exist.  The Company has not made
any elections pursuant to the Internal Revenue Code of 1986, as amended (the
“Code”) (other than elections which relate solely to methods of accounting,
depreciation or amortization) which would have a Material Adverse Effect as the
Company’s business is presently conducted or proposed to be conducted.

3.15        Insurance.  The Company has in full force and effect fire, casualty
and liability insurance policies, with coverage, in the case of property
insurance, sufficient in amount (subject to reasonable deductibles) to allow it
to replace any of its material properties or assets that might be damaged or
destroyed, and in the case of casualty and liability insurance, in amounts
customary and adequate for businesses similar to the business of the Company.

3.16        Labor Agreements and Actions.  The Company does not have any
collective bargaining agreements covering any of its employees, nor is the
Company bound by or subject to (and none of its assets or properties is bound by
or subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
knowledge of the Company, has sought to represent any of the employees,
representatives or agents of the Company.  There is no strike or other labor
dispute involving the Company pending, or to the knowledge of the Company
threatened in writing, which could have a Material Adverse Effect (as the
Company’s business is presently conducted and as it is proposed to be
conducted), nor is the Company aware of any labor organization activity
involving its employees.  Offering.  Subject to the accuracy of the Investor’s
representations set forth in Section 4 of this Agreement, the offer, sale and
issuance of the Shares to be issued in conformity with the terms of this
Agreement constitute transactions which are: (i) in compliance with applicable
federal and state securities laws; and (ii) exempt from the registration
requirements of the Securities Act and from all applicable state registration or
qualification requirements, other than those with which the Company has complied
or will comply.

3.17        Environmental Matters.

(a)           To the Company’s knowledge, the Company is not in violation of any
Environmental Law (as hereinafter defined) and to its knowledge, no material
expenditures are or will be required in order to comply with any Environmental
Law.  As used in this Agreement,

 

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“Environmental Law” shall mean any applicable federal, state and local law,
ordinance, rule or regulation that regulates, fixed liability for, or otherwise
relates to, the handling, use (including use in industrial processes, in
construction, as building materials, or otherwise), treatment, storage and
disposal of hazardous and toxic wastes and substances, and to the discharge,
leakage, presence, migration, actual Release (as hereinafter defined) or
threatened Release (whether by disposal, a discharge into any water source or
system or into the air, or otherwise) of any pollutant or effluent.

(b)           The Company has not used, generated, manufactured, refined,
treated, transported, stored, handled, disposed, transferred, produced,
processed or released (hereinafter together defined as “Release”) any Hazardous
Materials (as hereinafter defined) on, from or affecting any Property (as
hereinafter defined) in any manner or by any means in violation of any
Environmental Laws and to the best of the Company’s knowledge and belief after
due investigation, there is no threat of such Release.  As used herein, the term
“Property” shall include, without limitation, land, buildings and laboratory
facilities owned or leased by the Company or as to which the Company now has any
duties, responsibilities (for cleanup, remedy or otherwise) or liabilities under
any Environmental Laws, or as to which the Company or any subsidiary of the
Company may have such duties, responsibilities or liabilities because of past
acts or omissions of the Company or any such subsidiary or their predecessors,
or because the Company or any such subsidiary or their predecessors in the past
was such an owner or operator of, or bore some other relationship with, such
land, buildings or laboratory facilities.  The term “Hazardous Materials” shall
include, without limitation, any flammable explosives, petroleum products,
petroleum by-products, radioactive materials, hazardous wastes, hazardous
substances, toxic substances or related materials as defined by Environmental
Laws.

(c)           The Company has not received written notice that the Company is a
party potentially responsible for costs incurred at a cleanup site or corrective
action under any Environmental Laws.  The Company has not received any written
requests for information in connection with any inquiry by any Governmental
Authority (as hereinafter defined) concerning disposal sites or other
environmental matters.  As used herein, “Governmental Authority” shall mean any
nation or government, any federal, state, municipal, local, provincial, regional
or other political subdivision thereof, and any entity or person exercising
executive, legislative, judicial regulatory or administrative functions of or
pertaining to government.

(d)           The stockholders of the Company have had no control over, or
authority with respect to, the waste disposal operations of the Company.

3.18        Permits and Other Rights; Compliance with Laws.  The Company has all
franchises, permits, licenses and other rights and privileges necessary to
permit it to own its properties and to conduct its business as presently
conducted and is in compliance in all material respects thereunder.  The Company
is in compliance in all material respects with all laws and governmental rules
and regulations applicable to its business, properties and assets, and to the
products and services sold by it, including, without limitation, all such rules,
laws and regulations relating to fair employment practices, occupational safety
and health and public safety, except where the failure to comply would not have
a Material Adverse Effect.

 

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3.20        Corporate Records.  The minute books of the Company provided to the
Investor contain a complete summary of all meetings of directors and
stockholders since the time of incorporation and reflect all material
transactions of the Company accurately in all material respects.

3.21        Reliance.  The Company understands that the foregoing
representations and warranties shall be deemed material and to have been relied
upon by the Investor.  No representation or warranty by the Company in this
Agreement, and no written statement contained in any document, certificate or
other writing delivered by the Company to the Investor contains any untrue
statement of material fact or omits to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading.

3.22        Real Property Holding Corporation.  The Company is not a United
States real property holding corporation as defined in Section 897 of the Code.

4.             Representations and Warranties of the Investor.  UTStarcom hereby
represents and warrants the following:

4.1          Authorization, Governmental Consents and Compliance with Other
Instruments.  All corporate action on the part of the Investor necessary for the
authorization, execution and delivery of the Transaction Agreements and the
performance of all obligations of the Investor thereunder has been taken or will
be taken prior to the Closing.  The Transaction Agreements constitute valid and
legally binding obligations of the Investor, enforceable in accordance with
their terms, except as such enforcement is limited by bankruptcy, insolvency and
similar laws affecting creditor rights.  No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Investor is required in connection with the consummation of the transactions
contemplated by the Transaction Agreements.  The execution, delivery and
performance of the Transaction Agreements and the consummation of the
transactions contemplated thereby will not result in any violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any provision of the Investor’s corporate charter
or By-laws or any instrument, judgment, order, writ, decree or contract to which
the Investor is a party or by which it is bound.

4.2          Purchase Entirely for Own Account.  By the Investor’s execution of
this Agreement, the Investor hereby confirms that the Shares will be acquired
for investment for the Investor’s own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and the
Investor has no present intention of selling, granting any participation, or
otherwise distributing the Shares.  By executing this Agreement, the Investor
further represents that the Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Shares.

4.3          Disclosure of Information.  The Investor has received all the
information from the Company and its management that the Investor considers
necessary or appropriate for deciding

 

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whether to purchase the Shares hereunder.  The Investor further represents that
it has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Shares.  The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 3 of this Agreement.

4.4          Investment Experience and Accredited Investor Status.  The Investor
either (i) is an accredited investor (as defined in Regulation D promulgated
under the Securities Act) or (ii) is not a United States Person as that term is
defined in Regulation S of the Securities Act, as amended and is not acquiring
the Common Shares for the account or benefit of any United States Person.  The
Investor is an investor in securities of companies in the development stage and
acknowledges that it is able to fend for itself, and bear the economic risk of
its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Shares hereunder.

4.5          Restricted Securities.  The Investor understands that the Shares,
when issued, will be restricted securities under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances, including pursuant to Regulation S and
Rule 144 under the Securities Act.  In this connection, the Investor represents
that it is familiar with Regulation S and Rule 144 under the Securities Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act.  Notwithstanding the provisions of this section, Company
hereby agrees to register the subject securities pursuant to the terms and
conditions contained in the Securities Registration terms And Conditions, which
is attached hereto as Exhibit B, and incorporated into this Stock Purchase
Agreement by reference thereto.

4.6          Further Limitations on Disposition.  Without in any way limiting
the representations set forth above, the Investor further represents, warrants
and agrees that it will not make any disposition of all or any portion of the
Shares, except to an Affiliate, unless:

(a)           There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or

(b)           The disposition is made pursuant to Rule 144 or Regulation S or
similar provisions of federal securities laws as in effect from time to time; or

(c)           The Investor shall have notified the Company of the proposed
disposition; and if requested by the Company, the Investor shall have furnished
the Company with an opinion of counsel; reasonably satisfactory tot the Company,
that such disposition will not require registration of such Shares under the
Securities Act.

(a)

 

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4.7          Legends.  It is understood that the certificates evidencing the
Shares will bear legends to the effect of the following:

“These securities have not been registered under the Securities Act of 1933. 
They may not be sold, offered for sale, pledged or hypothecated in the absence
of a registration statement in effect with respect to the securities under such
Act or an opinion of counsel reasonably satisfactory to the Company that such
registration is not required or unless sold pursuant to Regulation S or Rule 144
of such Act.”

“The securities evidenced by this certificate are subject to restrictions on
transfer set forth in an agreement between the original purchaser thereof and
the corporation, a copy of which agreement is on file at the principal executive
offices of the corporation.”

5.             Conditions to Closing of Investor.  The Investor’s obligation to
purchase the Shares at the Closing is subject to the fulfillment as of the
Closing Date of the following conditions:

5.1          Representations and Warranties Correct.  The representations and
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects as of the Closing Date with the same force and effect as
though such representations and warranties had been made on the Closing Date,
except that representations and warranties that speak as of a particular date
shall be true and correct in all material respects as of such date.

5.2          Covenants.  All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.  All
proceedings to have been taken and all waivers and consents to be obtained in
connection with the transactions contemplated by this Agreement shall have been
taken or obtained, and all documents incidental thereto shall be satisfactory to
the Investor and its counsel, and the Investor and its counsel shall have
received copies (executed or certified, as may be appropriate) of all documents
which the Investor or its counsel may reasonably have requested in connection
with such transactions.

5.3          Compliance Certificate.  The Company shall have delivered to the
Investor a certificate of the Company in the form of Exhibit B hereto, executed
by the President and Chief Executive Officer of the Company or the Chief
Financial Officer of the Company, certifying to the fulfillment of the
conditions specified in Sections 5.1 and 5.2 of this Agreement.

5.4          Legal Opinion.  All legal matters incident to the purchase of the
Shares shall be satisfactory to the Investor’s counsel and the Investor shall
have received from Wilson, Sonsini, Goodrich & Rosati, P.C., counsel for the
Company, such firm’s opinion addressed to the Investor and dated the date of the
Closing, in form and substance satisfactory to counsel to the Investor.

5.5          Certification of Resolutions and Officers.  The Company shall have
delivered to the Investor a certificate or certificates, dated the date of the
Closing, of the Secretary of the Corporation certifying as to (a) the
resolutions of the Company’s Board of Directors authorizing the execution

 

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and delivery of the Transaction Agreements, the issuance to the Investor of the
Shares, the execution and delivery of such other documents and instruments as
may be required by this Agreement, and the consummation of the transactions
contemplated thereby, and certifying that such resolutions were duly adopted and
have not been rescinded or amended as of said date and (b) the name and the
signature of the officers of the, Company authorized to sign, as appropriate,
the Transaction Agreements and the other documents and certificates to be
delivered pursuant to this Agreement by either the Company or any of its
officers.

5.6          Certification of No Material Adverse Change.  The Company shall
have delivered to the Investor a certificate, dated the date of the Closing, of
the Chief Financial Officer of the Corporation certifying that since
December 31, 2001, there has not been any material adverse change in the
financial condition or operations of the Company.

5.7          Stock Certificates.  The Company shall have delivered to the
Investor a certificate or certificates representing the Shares purchased by the
Investor on the Closing Date.

5.8          Confirmation Letter.  A letter shall have been issued and delivered
by the Investor’s counsel that this agreement and other related agreements have
been duly executed by the parties concerned in the agreed forms.

6.             Conditions to Closing of the Company.  The Company’s obligation
to sell the Shares at the Closing is subject to the fulfillment as of the date
of the following condition:

6.1          Representations and Warranties Correct.  The representations and
warranties made by the Investor in Section 4 hereof shall be true and correct in
all material respects as of the date of the Closing with the same force and
effect as though such representations and warranties had been made on the
Closing Date.

7.             Mutual Conditions of Closing.  The obligations of each of the
Investor and the Company to consummate the Closing are subject to the
fulfillment as of the Closing Date of the following conditions:

7.1          Qualifications.  All consents, permits, approvals, qualifications
and registrations to be obtained or effected with any governmental authority,
including, without limitation, necessary Blue Sky law permits and qualifications
required by any state for the offer and sale to the investor of the Shares,
shall have been obtained or effected.

7.2          Absence of Litigation.  There shall be no injunction, actions,
suits, proceeding or investigations pending or currently threatened against the
Company or the Investor which questions the validity of the Transaction
Agreements or the right of the Company or the Investor to enter into such
agreements, or to consummate the transactions contemplated thereby.

 

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8.             Additional Covenants and Agreements.

8.1          Inspection of Books and Records.  The Company shall permit the
Investor from time to time, at the Investor’s expense, to visit and inspect the
Company’s properties, to examine its books of account and records and to discuss
the Company’s affairs, finances and accounts with its officers, all at such
reasonable times as may be requested by the Investor; provided, however, that
the Company shall not be obligated pursuant to this Section 8.1 to provide
access to any information which it reasonably considers to be a trade secret or
similar proprietary or confidential information.

8.2          Standstill.  The Investor shall not, at any time from and after the
date hereof until the tenth anniversary of the Closing Date (the “Restricted
Period”), acquire shares of Common Stock of the Company, or securities
convertible into, exchangeable for or exercisable for, Common Stock of the
Company such that the Investor would, at any time during the Restricted Period
own in excess of 19.9% of the Total Voting Power (as defined below) of the
Company’s securities.  For purposes hereof, the percentage of the Total Voting
Power of the Company’s securities shall be determined by dividing (x) by (y) and
expressing the resulting quotient as a percentage, where

(x) equals the number of shares of Common Stock of the Company held by the
Investor and the number of shares of Common Stock of the Company issuable upon
conversion, exercise or exchange of securities of the Company held by the
Investor which are convertible into, exchangeable for or exercisable for Common
Stock of the Company, either directly or indirectly; and

(y) equals the number of issued and outstanding shares of Common Stock of the
Company.

In the event that Investor’s ownership at any time exceeds the limits set forth
above, Investor shall be deemed, automatically and with no further action on the
part of Investor, to have granted the Company’s Chairperson an irrevocable proxy
to vote all shares of Company Common Stock held by Investor in excess of the
foregoing limits in such manner as may be recommended by the Board of Directors
of the Company with respect to any matter for which approval of the Company’s
shareholders is sought.  The remedy set forth in the preceding sentence shall
not be in lieu of, but shall be in addition to, any other remedies which Company
may have at law or pursuant to this Agreement or otherwise for breach of this
provision.

9.             Miscellaneous.

9.1          Survival of Warranties.  The warranties and representations of the
Company and the Investor contained in this Agreement shall survive the closing
until the first anniversary of the Closing Date.

9.2          Remedies.  In case any one or more of the covenants or agreements
set forth in this Agreement shall have been breached by any party hereto, the
party or parties entitled to the benefit of such covenants or agreements may
proceed to protect and enforce their rights either by suit in equity or action
at law, including, but not limited to, an action for damages as a result of any
such breach or an action for specific performance of any such covenant or
agreement contained in this

 

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Agreement.  The rights, powers and remedies of the parties under this Agreement
are cumulative and not exclusive of any other right, power or remedy which such
parties may have under any other agreement or law.  No single or partial
assertion or exercise of any right, power or remedy of a party hereunder shall
preclude any other or further assertion or exercise thereof.

9.3          Successors and Assigns.  Except as otherwise expressly provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.  This
Agreement and the rights and duties of the Company set forth herein may be
freely assigned, in whole or in part, upon the written consent of the Investor,
which consent may not be unreasonably withheld.  Notwithstanding the foregoing
sentence, the Company may assign this Agreement, and the rights and the duties
of the Company set forth herein, to an entity or person which purchases all or
substantially all of its assets or voting securities, so long as the successor
agrees in writing to be bound by all of the terms this Agreement.

9.4          Entire Agreement.  This Agreement and the other writings referred
to herein or delivered pursuant hereto which form a part hereof contain the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings, whether
written or oral, with respect thereto; provided, however, that this Agreement is
not intended to supersede the OEM Agreement or any other agreement not related
to the purchase and sale of the Company’s securities between the Company and the
Investor.

9.5          Governing Law and Consent to Jurisdiction.  This Agreement shall be
governed by and construed under the laws of the State of California, U.S.A.
(without regard to the conflict of law principles thereof).  Each of the parties
irrevocably submits to the exclusive jurisdiction of the state and federal
courts within the State of California, U.S.A. for the purposes of any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby.  Each of the parties agrees to commence any action, suit or
proceeding relating hereto in the federal courts within the State of California,
U.S.A. or if such suit, action or other proceeding may not be brought in such
court for jurisdictional purposes, in the state courts within the State of
California, U.S.A.

9.6          Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

9.7          Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

9.8          Nouns and Pronouns.  Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and
vice-versa.

9.9          Notices.  Unless otherwise provided, all notices, requests,
consents and other communications hereunder to any party shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified or duly sent by first class registered or

 

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certified mail, or other courier service, postage prepaid, or telecopied with a
confirmation copy by regular mail, and addressed or telecopied to the party to
be notified at the address or telecopier number indicated for such party, as the
case may be, set forth below or such other address or telecopier number, as the
case may be, as may hereafter be designated in writing by the addressees to the
addressor listing all parties:

 

To the Company:

Cal Hoagland, Chief Financial Officer

 

Interwave Communications International Ltd.

 

c/o Interwave Communications, Inc.

 

312 Constitution Drive

 

Menlo Park, CA 94025

 

Fax: 1-650-321-6570

 

 

With a copy to:

Robin E. Foor, Esq.

 

Vice President and General Counsel

 

Interwave Communications, Inc.

 

312 Constitution Drive

 

Menlo Park, CA 94025

 

Fax: 1-650 321-6381

 

 

To the Investor:

Michael Sophie

 

Vice President and Chief Financial Officer

 

UTStarcom, Inc.

 

1275 Harbor Bay Parkway

 

Alameda, CA 94502

 

Fax: 1-510-

All such notices, requests, consents and other communications shall be deemed to
have been received: (a) in the case of personal delivery, on the date of such
delivery; (b) in the case of sending by international overnight courier service,
on the fifth business day following the date of such sending by international
overnight courier service fully prepaid; and (c) in the case of facsimile
transmission, when confirmed by facsimile machine report.

9.10        Finder’s Fee.  The Investor agrees to indemnify and to hold harmless
the Company from any liability for any commission or compensation in the nature
of a finder’s fee (and the reasonable costs and expenses of defending against
such liability or asserted liability) for which the Investor or any of its
officers, partners, employees, or representatives is responsible.  The Company
agrees to indemnify and hold harmless the Investor from any liability for any
commission or compensation in the nature of a finder’s fee (and the reasonable
costs and expenses of defending against such liability or asserted liability)
for which the Company or any of its officers, employees or representatives is
responsible.

9.11        Expenses.  Each party shall pay its own fees and expenses with
respect to this Agreement.  If any action at law or in equity is necessary to
enforce or interpret the terms of this

 

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Agreement or the Research and Collaboration Agreement, the prevailing party
shall be entitled to reasonable attorney’s fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.

9.12        Amendments and Waivers.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Investor.

9.13        Severability.  If one or more provisions of this Agreement are held
to be unenforceable under applicable law, in any jurisdiction, such provision
shall be ineffective, as to such jurisdiction, and the balance of the Agreement
shall be interpreted as if such provision were so excluded, without invalidating
the remaining provisions of this Agreement; and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

9.14        Confidentiality and Publicity.  Neither the Company nor the Investor
will disclose to any person (other than its attorneys, accountants, employees,
officers, and directors) the existence or terms of this Agreement or any of the
transactions contemplated hereby without the prior written consent of the other
party, except as may, in the reasonable opinion of such party’s counsel, be
required by law (in which event the disclosing party will first consult with the
other party with respect to such disclosure).  Except to the extent public
disclosure is required by law, the Company and the Investor will consult and
reach agreement with one another as to the form and substance of any press
release or any other public disclosure of the existence or terms of this
Agreement or the transactions contemplated hereby prior to issuing any such
press release or making any such public disclosure.

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above Written.

 

 

UTSTARCOM, INC.

 

 

 

By:

/s/ HONG LU

 

Name:

Hong Lu

 

Title:

Chief Executive Officer

 

 

 

 

 

INTERWAVE COMMUNICATIONS

 

INTERNATIONAL LTD.

 

 

 

 

By:

/s/ PRISCILLA LU

 

Name:

Priscilla Lu

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

 

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Exhibit A

Stock Purchase Agreement

UTStarcom, Inc. and interWAVE Communications

[***]

 

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--------------------------------------------------------------------------------

Schedule of Exceptions

UTStarcom, Inc. and

interWAVE Communications International, Ltd.

Stock Purchase Agreement

September 27, 2002

[***]

 

1

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EXHIBIT B - SECURITIES REGISTRATION TERMS AND CONDITIONS

1.             Form D Filing; Registration; Compliance with the Securities Act,
Covenants.

1.1.1        Registration Statement; Expenses.  The Company shall:

(a)           file in a timely manner a Form D relating to the sale of the
Shares under this Agreement, pursuant to Securities and Exchange Commission
Regulation D.

(b)           as soon as practicable after the Closing Date, but in no event
later than the [***] day following the Closing Date, prepare and file with the
Commission a Registration Statement on Form F-3 relating to the sale of the
Shares by the Purchaser from time to time on the Nasdaq National Market (or the
facilities of any national securities exchange on which the Company’s Common
Stock is then traded) or in privately negotiated transactions (the “Registration
Statement”);

(c)           provide to the Purchaser any information required to permit the
sale of the Shares under rule 144A of the Securities Act;

(d)           subject to receipt of necessary information from the Purchaser,
use its best efforts to cause the Commission to notify the Company of the
Commission’s willingness to declare the Registration Statement effective on or
before 90 days after the Closing Date;

(e)           notify Purchaser promptly upon the Registration Statement, or any
post-effective amendment thereto, being declared effective by the Commission;

(f)            prepare and file with the Commission such, amendments and
supplements to the Registration Statement and the Prospectus (as defined in
Section 1.3.1 below) and take such other action, if any, as may be necessary to
keep the Registration Statement effective until the earlier of (i) one year
after the effective date of the Registration Statement, (ii) the date on which
the Shares may be resold by the Purchaser without registration or without regard
to any volume limitations by reason of Rule 144(k) under the Securities Act or
any other rule of similar effect or (iii) all of the Shares have been sold
pursuant to the Registration Statement or Rule 144(k) under the Securities Act
or any other rule of similar effect;

(g)           promptly furnish to the Purchaser with respect to the Shares
registered under the Registration Statement such reasonable number of copies of
the Prospectus, including any supplements to or amendments of the Prospectus, in
order to facilitate the public sale or other disposition of all or any of the
Shares by the Purchaser;

(h)           during the period when copies of the Prospectus are required to be
delivered under the Securities Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act, to the extent such

 

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requirements are applicable to the Company, within the time periods required by
the Exchange Act and the rules and regulations promulgated thereunder;

(i)            file documents required of the Company for customary Blue Sky
clearance in all states requiring Blue Sky clearance; provided, however, that
the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented; and

(j)            bear [***] expenses in connection with the procedures in
paragraphs (a) through (f) of this Section 1.1.1 and the registration of the
Shares pursuant to the Registration Statement, including fees and expenses
(whether external or internal) of up to [***] of the Purchaser, but not
including any fees and expenses of any other advisers to the Purchaser or
brokerage fees and commissions incurred by the Purchaser.

1.1.2        Delay in Effectiveness of Registration Statement.  [***]

1.2           Transfer of Shares After Registration.  The Purchaser agrees that
it will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act,
except as contemplated in the Registration Statement referred to in Section 1.1
or as otherwise permitted by law, and that it will promptly notify the Company
of any changes in the information set forth in the Registration Statement
regarding the Purchaser or its plan of distribution.

1.3           Indemnification.  For the purpose of this Section 1.3, the term
“Registration Statement” shall include any preliminary or final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 1.1.

1.3.1        Indemnification by the Company.  The Company agrees to indemnify
and hold harmless the Purchaser and each person, if any, who controls the
Purchaser within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses, joint or several, to which the Purchaser or
such controlling person may become subject, under the Securities Act, the
Exchange Act, or any other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company, which consent
shall not be unreasonably withheld), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, including the
Prospectus, financial statements and schedules, and all other documents filed as
a part thereof, as amended at the time of effectiveness of the Registration
Statement, including any information deemed to be a part thereof as of the time
of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to
Rule 434, of the Rules and Regulations, or the Prospectus, in the form first
filed with the Commission pursuant to Rule 424(b) of the Regulations, or filed
as part of the Registration Statement at the time of effectiveness if no
Rule 424(b) filing is required (the “Prospectus”), or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state in any of them a material fact required to be stated therein
or necessary to make the statements in any of them, in light of the

 

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circumstances under which they were made, not misleading, or arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained in this Agreement, or any failure of the
Company to perform its obligations under this Agreement or under law, and will
reimburse the Purchaser and each such controlling person for any legal and other
expenses as such expenses are reasonably incurred by the Purchaser or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the Prospectus
or any amendment or supplement of the Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser expressly for use in the Registration
Statement or the Prospectus, or (ii) the failure of the Purchaser to comply with
the covenants and agreements contained in Section 1.2 of this Agreement
respecting resale of the Shares, or (iii) the inaccuracy of any representations
made by the Purchaser in this Agreement or (iv) any untrue statement or omission
of a material fact required to make such statement not misleading in any
Prospectus that is corrected in any subsequent Prospectus that was delivered to
the Purchaser before the pertinent sale or sales by the Purchaser.

1.3.2        Indemnification by the Purchaser.  The Purchaser will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses to which the Company, each of its directors,
each of its officers who signed the Registration Statement or controlling
persona may become subject, under the Securities Act, the Exchange Act, or any
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Purchaser, which consent shall not be
unreasonably withheld) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon (i) any failure on the part of the Purchaser to comply with the
covenants and agreements contained in Section 1.2 of this Agreement respecting
the sale of the Shares or (ii) the inaccuracy of any representation made by the
Purchaser in this Agreement or (iii) any untrue or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement to the Registration Statement or Prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon, and in conformity with
written information furnished to the Company by or on behalf of the Purchaser
expressly for use therein; provided, however, that the Purchaser shall not be
liable for any such untrue or alleged untrue statement or omission or alleged
omission of which the Purchaser has delivered to the Company in writing a
correction before the occurrence of the transaction from which such loss was
incurred, and the Purchaser will reimburse the Company, each of its directors,
each of its officers who signed the Registration Statement or controlling person
for any legal and

--------------------------------------------------------------------------------

 

other expense reasonably incurred by the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action.

1.3.3        Indemnification Procedure.

(a)           Promptly after receipt by an indemnified party under this
Section 1.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 1.3, promptly notify the indemnifying
party in writing of the claim; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 1.3 or to the extent it is not prejudiced as a result
of such failure:

(b)           In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with all other indemnifying parties
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be a
conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be legal
defenses available to it or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 1.3 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless;

(i)    the indemnified party shall have employed such counsel in connection with
the assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by such
indemnifying party representing all of the indemnified parties who are parties
to such action) or

(ii)   the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of action, in each of which cases
the reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party. Notwithstanding the provisions of this Section 1.3, the
Purchaser shall not be liable for any indemnification obligation under this
Agreement in excess of the amount of gross proceeds received by the Purchaser
from the sale of the Shares.

 

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1.3.4        Contribution.  If the indemnification provided for in this
Section 1.3 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under this Section 1.3 in respect to any losses, claims, damages, liabilities or
expenses referred to in this Agreement, then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of any losses, claims, damages, liabilities or expenses referred to in
this Agreement

(a)           in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Purchaser from the placement of Common
Stock or

(b)           if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or.
inaccuracies in the representations and warranties in this Agreement that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by the Company on, the one hand and the Purchaser on the other shall be
deemed to be in the same proportion as the amount paid by the Purchaser to the
Company pursuant to this Agreement for the Shares purchased by the Purchaser
that were sold pursuant to the Registration Statement bears to the difference
(the “Difference”) between the amount the Purchaser paid for the Shares that
were sold pursuant to’ the Registration Statement and the amount received by the
Purchaser from such sale. The relative fault of the Company and the Purchaser
shall be determined by reference to, among other things, whether the untrue or
alleged statement of a material fact or the omission or alleged omission to
state a material fact or the inaccurate or the alleged inaccurate representation
or warranty relates to information supplied by the Company or by the Purchaser
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 1.3.3, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim,. The provisions set forth in Section 1.3.3 with respect to
the notice of the threat or commencement of any threat or action shall apply if
a claim for contribution is to be made under this Section 1.3.4; provided,
however, that no additional notice shall be required with respect to any threat
or action for which notice has been given under Section 1.3 for purposes of
indemnification. The Company and the Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 1.3 were determined
solely by pro rata allocation (even if the Purchaser were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 1.3, no Purchaser shall be
required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that the Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchaser’ obligations to contribute pursuant to this
Section 1.3 are several and not joint.

 

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1.4           Termination of Conditions and Obligations.  The restrictions
imposed by this Section 1 upon the transferability of the Shares shall cease and
terminate as to any particular number of the Shares upon [***] or at such time
as an opinion of counsel satisfactory in form and substance to the Company shall
have been rendered to the effect that such conditions are not necessary in order
to comply with the Securities Act.

1.5           Information Available.  So long as the Registration Statement is
effective covering the resale of Shares owned by the Purchaser, the Company will
furnish to the Purchaser;

(a)           as soon as practicable after available (but in the case of the
Company’s Annual Report to Stockholders, within [***] after the end of each
fiscal year of the Company), one copy of

(i)    its Annual Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants);

(ii)   if not included in substance in the Annual Report to Stockholders, its
Annual Report on Form 10-K;

(iii)  if not included in substance in its Quarterly Reports to Stockholders,
its quarterly reports on Form 10-Q; and

(iv)  a full copy of the particular Registration Statement covering the Shares
(the foregoing, in each case, excluding exhibits);

(v)   upon the request of the Purchaser, a reasonable number of copies of the
Prospectus to supply to any other party requiring the Prospectus.

1.6           Rule 144 Information.  For two years after the date of this
Agreement, the Company shall file all reports required to be filed by it under
the Securities Act, the Rules and Regulations and the Exchange Act and shall
take such further action to the extent required to enable the Purchaser to sell
the Shares pursuant to Rule 144 under the Securities Act (as such rule may be
amended from time to time).

1.7           Consultation Prior to the Issuance of Certain Securities.  The
Company shall not sell or issue shares of Common Stock or any other security of
the Company convertible, exercisable or exchangeable into shares of Common
Stock, for a purchase, conversion, exercise or exchange price per share which is
subject to adjustment based on the market price of the Common Stock at the time
of conversion, exercise or exchange of such security into Common Stock, without
first consulting the Purchaser immediately prior to the approval by the
Company’s Board of Directors of such sale or issuance; provided, however, that
(i) the Company’s obligation to enter into such consultations with the Purchaser
shall be subject to the Purchaser entering into a nondisclosure agreement in
form and substance appropriate for transactions of this nature, (ii) nothing in
this Section 1.7 shall prohibit the Company from consummating any such
transaction provided that it has

 

--------------------------------------------------------------------------------

 

complied with the consultation provisions hereof and (iii) the provisions of
this Section 1.7 shall not be applicable to transactions that are not effected
for the purpose of raising capital.

 

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Compliance Certificate

UTStarcom, Inc. and

interWAVE Communications International, Ltd.

Stock Purchase Agreement

September 27, 2002

                                                                                                                                               
September 27, 2002

I, Priscilla Lu, Chief Executive Officer of interWAVE Communications
International, Ltd. (“interWAVE”), certify as follows, as to the Stock Purchase
Agreement of September 27, 2002 between UTStarcom, Inc. and interWAVE:

 

1.                                      Representations and Warranties Correct. 
The representations and warranties made by the Company in Section 3 of the
Agreement are true and correct in all material respects as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on the Closing Date, except that representations and warranties that
speak as of a particular date are true and correct in all material respects as
of such date.

 

2.                                      Covenants.  All covenants, agreements
and conditions contained in the Agreement to be performed by the Company on or
prior to the Closing Date have been performed or complied with in all material
respects. All proceedings to have been taken and all waivers. and consents to be
obtained in connection with the transactions contemplated by this Agreement have
been taken. or obtained.

 

I certify that the foregoing is true and correct.

 

 

INTERWAVE COMMUNICATIONS

 

INTERNATIONAL, LTD.

 

 

 

 

 

/s/ PRISCILLA LU

 

Priscilla Lu

 

Chief Executive Officer

 

 

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Section 5.4

Certification of Resolutions and Officers

UTStarcom, Inc.

September 27, 2002

I, Robin E. Foor, Secretary of interWAVE Communications International, Ltd. (the
“Company”), certify that:

(a) the Board of Directors of the Company has adopted resolutions duly
authorizing the execution and delivery of the Agreement, the issuance to the
Investor of the Shares, the execution and delivery of such other documents and
instruments as may be required by the Agreement, and the consummation of the
transactions contemplated thereby, and such resolutions were duly adopted and
have not been rescinded or amended as of this date, and

(b) Priscilla Lu, Chief Executive Officer, is authorized to sign, as
appropriate, the Agreement and the other documents and certificates to be
delivered pursuant to this Agreement by either the Company or any of its
officers, and her signature appears on the Agreement.

I certify that the foregoing is true and correct.

 

INTERWAVE COMMUNICATIONS

 

INTERNATIONAL, LTD.

 

 

 

/s/ ROBIN E. FOOR

 

Robin E. Foor

 

Secretary

 

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Section 5.6

Certification of No Material Adverse Change

UTStarcom - interWAVE Amendment to OEM Agreement

September 27, 2002

I, Cal Hoagland, Chief Financial Officer of interWAVE Communications
International, Ltd. (the “Company”) represent, to the best of my knowledge and
belief, that since June 30, 2002, there has not been any material adverse change
in the financial position or results of operations of the Company other than
that described in Section 3.12 of the Stock Purchase Agreement and in the
Schedule of Exceptions.

 

 

INTERWAVE COMMUNICATIONS

 

INTERNATIONAL, LTD.

 

 

 

 

 

/s/ CAL HOAGLAND

 

Cal Hoagland

 

Chief Financial Officer

 

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Exhibit B

 

Specifications - Statement of Work

UTStarcom - interWAVE Amendment to OEM Agreement

September 27, 2002

 

                The parties will meet upon signing of the Amendment to OEM
Agreement to develop a detailed written Statement of Work (“SOW”), and a written
Product Specification from the SOW.  The SOW shall include the following:

 

[***]

 

                The parties will send people from [***] and from [***] to
develop the written SOW.

 

                Each party will appoint a project manager as the single point of
contact for the project.

 

                [***] will be the project manager for interWAVE.

 

                A preliminary SOW is attached and will be superceded by the SOW
created.

 

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Exhibit C

Delivery Schedule

UTStarcom - interWAVE Amendment to OEM Agreement

September 27, 2002 (= Amendment Effective Date)

The parties shall complete the Statement of Work and interWAVE shall develop the
interface between the UTSI iPAS, using a third party media gateway, as follows:

Development Milestones

 

[***] - Milestones

 

Completion Date

 

 

 

[***]

 

 

 

 

 

 

UTStarcom must provide [***] to work [***] on the project.

 

interWAVE/GBase will staff the project with [***].

 

UTStarcom must provide [***] for the project by [***].

 

                Development will begin, and all completion dates are measured
from [***]

 

Development will proceed in parallel to the preparation of the detailed written
Statement of Work and the written Product Specification, to be completed by
[***].

 

The development schedule for an alternative path shall be defined by the
Statement Work.

 

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PREFERRED ESCROW AGREEMENT

Account Number ____________________

 

This agreement (“Agreement”) is effective September 27, 2002 among DSI
Technology Escrow Services, Inc. (“DSI”), Interwave Communications
International, Ltd. (“Depositor”) and UTStarcom, Inc. (“Preferred Beneficiary”),
who collectively may be referred to in this Agreement as the parties
(“Parties”).

 

A.            Depositor and Preferred Beneficiary have entered or will enter
into a license agreement, development agreement, and/or other agreement
regarding certain proprietary technology of Depositor (referred to in this
Agreement as “the License Agreement”).

 

B.            Depositor desires to avoid disclosure of its proprietary
technology except under certain limited circumstances.

 

C.            The availability of the proprietary technology of Depositor is
critical to Preferred Beneficiary in the conduct of its business and, therefore,
Preferred Beneficiary needs access to the proprietary technology under certain
limited circumstances.

 

D.            Depositor and Preferred Beneficiary desire to establish an escrow
with DSI to provide for the retention, administration and controlled access of
the proprietary technology materials of Depositor.

 

E.             The parties desire this Agreement to be supplementary to the
License Agreement pursuant to 11 United States [Bankruptcy] Code,
Section 365(n).

ARTICLE 1 — DEPOSITS

1.1           Obligation to Make Deposit. Upon the completion of the development
agreed to by the parities in the September 27, 2002 Amendment to the OEM
Agreement between UTStarcom and Interwave Communications International, Ltd.
(the “License Agreement”), Depositor shall deliver to DSI the proprietary
technology and other materials (“Deposit Materials”) required to be deposited
pursuant to the terms and conditions of the License Agreement or, if the License
Agreement does not identify the materials to be deposited with DSI, then such
materials will be identified on Exhibit A. If Exhibit A is applicable, it is to
be prepared and signed by Depositor and Preferred Beneficiary. DSI shall have no
obligation with respect to the preparation, signing or delivery of Exhibit A.

1.2           Identification of Tangible Media. Prior to the delivery of the
Deposit Materials to DSI, Depositor shall conspicuously label for identification
each document, magnetic tape, disk, or other tangible media upon which the
Deposit Materials are written or stored. Additionally, Depositor shall complete
Exhibit B to this Agreement by listing each such tangible media by the item
label description, the type of media and the quantity. Exhibit B shall be signed
by Depositor and delivered to DSI with the Deposit Materials. Unless and until
Depositor makes the initial deposit with DSI, DSI shall have no obligation with
respect to this Agreement, except the obligation to notify the parties regarding
the status of the account as required in Section 2.2 below.

 

--------------------------------------------------------------------------------

 

1.3           Deposit Inspection. When DSI receives the Deposit Materials and
Exhibit B, DSI will conduct a deposit inspection by visually matching the
labeling of the tangible media containing the Deposit Materials to the item
descriptions and quantity listed on Exhibit B.  In addition to the deposit
inspection, Preferred Beneficiary may elect to cause a verification of the
Deposit Materials in accordance with Section 1.6 below.

1.4           Acceptance of Deposit. At completion of the deposit inspection, if
DSI determines that the labeling of the tangible media matches the item
descriptions and quantity on Exhibit B, DSI will date and sign Exhibit B and
mail a copy thereof to Depositor and Preferred Beneficiary. If DSI determines
that the labeling does not match the item descriptions or quantity on Exhibit B,
DSI will (a) note the discrepancies in writing on Exhibit B; (b) date and sign
Exhibit B with the exceptions noted; and (c) mail a copy of Exhibit B to
Depositor and Preferred Beneficiary. DSI’s acceptance of the deposit occurs upon
the signing of Exhibit B by DSI. Delivery of the signed Exhibit B to Preferred
Beneficiary is Preferred Beneficiary’s notice that the Deposit Materials have
been received and accepted by DSI.

1.5           Depositor’s Representations. Depositor represents as follows:

a.                                       Depositor lawfully possesses all of the
Deposit Materials deposited with DSI;

b.                                      With respect to all of the Deposit
Materials, Depositor has the right and authority to grant to DSI and Preferred
Beneficiary the rights as provided in this Agreement;

c.                                       The Deposit Materials are not subject
to any lien or other encumbrance;

d.                                      The Deposit Materials consist of the
proprietary technology and other materials identified either in the License
Agreement or Exhibit A, as the case may be; and

e.                                       The Deposit Materials are readable and
useable in their current form or, if any portion of the Deposit Materials is
encrypted, the decryption tools and decryption keys have also been deposited.

1.6           Verification. Preferred Beneficiary shall have the right, at
Preferred Beneficiary’s expense, to cause a verification of any Deposit
Materials. Preferred Beneficiary shall notify Depositor and DSI of Preferred
Beneficiary’s request for verification. Depositor shall have the right to be
present at the verification. A verification determines, in different levels of
detail, the accuracy, completeness, sufficiency and quality of the Deposit
Materials. If a verification is elected after the Deposit Materials have been
delivered to DSI, then only DSI, or at DSI’s election an independent person or
company selected and supervised by DSI, may perform the verification.

1.7           Deposit Updates. Unless otherwise provided by the License
Agreement, Depositor shall update the Deposit Materials within [***] of each
release of a new version of the product which is subject to the License
Agreement. Such updates will be added to the existing deposit. All deposit
updates shall be listed on a new Exhibit B and Depositor shall sign the new
Exhibit B. Each Exhibit B will be held and maintained separately within the
escrow account. An independent record will be created which will document the
activity for each Exhibit B. The processing of all deposit updates shall be in
accordance with Sections 1.2 through 1.6 above. All references in this Agreement
to the Deposit Materials shall include the initial Deposit Materials and any
updates.

 

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1.8           Removal of Deposit Materials. The Deposit Materials may be removed
and/or exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.

ARTICLE 2 — CONFIDENTIALITY AND RECORD KEEPING

2.1           Confidentiality. DSI shall maintain the Deposit Materials in a
secure, environmentally safe, locked facility which is accessible only to
authorized representatives of DSI. DSI shall have the obligation to reasonably
protect the confidentiality of the Deposit Materials. Except as provided in this
Agreement, DSI shall not disclose, transfer, make available, or use the Deposit
Materials. DSI and Preferred Beneficiary shall not disclose the content or
existence of this Agreement to any third party unless having been agreed to by
all parties in writing. If DSI receives a subpoena or any other order from a
court or other judicial tribunal pertaining to the disclosure or release of the
Deposit Materials, DSI will immediately notify the parties to this Agreement
unless prohibited by law. It shall be the responsibility of Depositor and/or
Preferred Beneficiary to challenge any such order; provided, however, that DSI
does not waive its rights to present its position with respect to any such
order. DSI will not be required to disobey any order from a court or other
judicial tribunal. (See Section 7.5 below for notices of requested orders.)

2.2           Status Reports. DSI will issue to Depositor and Preferred
Beneficiary a report profiling the account history [***]. DSI may provide copies
of the account history pertaining to this Agreement upon the request of any
party to this Agreement.

2.3           Audit Rights. During the term of this Agreement, Depositor and
Preferred Beneficiary shall each have the right to inspect the written records
of DSI pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.

ARTICLE 3 — GRANT OF RIGHTS TO DSI

3.1           Title to Media. Depositor hereby transfers to DSI the title to the
media upon which the proprietary technology and materials are written or stored.
However, this transfer does not include the ownership of the proprietary
technology and materials contained on the media such as any copyright, trade
secret, patent or other intellectual property rights.

3.2           Right to Make Copies. DSI shall have the right to make copies of
the Deposit Materials as reasonably necessary to perform this Agreement. DSI
shall copy all copyright, nondisclosure, and other proprietary notices and
titles contained on the Deposit Materials onto any copies made by DSI. With all
Deposit Materials submitted to DSI, Depositor shall provide any and all
instructions as may be necessary to duplicate the Deposit Materials including
but not limited to the hardware and/or software needed.

3.3           Right to Transfer Upon Release. Depositor hereby grants to DSI the
right to transfer the Deposit Materials to Preferred Beneficiary upon any
release of the Deposit Materials for use by Preferred Beneficiary in accordance
with Section 4.5. Except upon such a release or as otherwise provided in this
Agreement, DSI shall not transfer the Deposit Materials.

 

--------------------------------------------------------------------------------

 

ARTICLE 4 — RELEASE OF DEPOSIT

4.1           Release Conditions. As used in this Agreement, “Release Condition”
shall mean the following:

a.                                       Depositor’s failure to carry out a
material obligation imposed on it pursuant to the License Agreement, after [***]
written notice and opportunity to cure; or

b.                                      Depositor’s appointment of a receiver,
execution of an assignment for the benefit of creditors, going into liquidation
in bankruptcy, or ceasing to operate its business for a period of [***].

 

Where any dispute arises over the meaning and interpretation of the term
“Release Condition” as applied to the terms and conditions of the License
Agreement, the matter shall be submitted to arbitration before a retired judge
at Judicial Arbitration and Mediation Service (“JAMS”) in San Francisco,
California under the JAMS Rules.

4.2           Filing For Release. If Preferred Beneficiary believes in good
faith that a Release Condition has occurred, Preferred Beneficiary may provide
to DSI written notice of the occurrence of the Release Condition and a request
for the release of the Deposit Materials. Upon receipt of such notice, DSI shall
provide a copy of the notice to Depositor by commercial express mail.

4.3           Contrary Instructions. From the date DSI mails the notice
requesting release of the Deposit Materials, Depositor shall have [***] to
deliver to DSI contrary instructions (“Contrary Instructions”). Contrary
Instructions shall mean the written representation by Depositor that a Release
Condition has not occurred or has been cured. Upon receipt of Contrary
Instructions; DSI shall send a copy to Preferred Beneficiary by commercial
express mail. Additionally, DSI shall notify both Depositor and Preferred
Beneficiary that there is a dispute to be resolved pursuant to Section 7.3 of
this Agreement. Subject to Section 5.2 of this Agreement, DSI will continue to
store the Deposit Materials without release pending (a) joint instructions from
Depositor and Preferred Beneficiary; (b) dispute resolution pursuant to
Section 7.3; or (c) order of a court.

4.4           Release of Deposit. If DSI does not receive Contrary Instructions
from the Depositor, DSI is authorized to release the Deposit Materials to the
Preferred Beneficiary or, if more than one beneficiary is registered to the
deposit, to release a copy of the Deposit Materials to the Preferred
Beneficiary. However, DSI is entitled to receive any fees due DSI before making
the release. Any copying expense in excess of $300 will be chargeable to
Preferred Beneficiary. This Agreement will terminate upon the release of the
Deposit Materials held by DSI.

4.5           Right to Use Following Release. Unless otherwise provided in the
License Agreement, upon release of the Deposit Materials in accordance with this
Article 4, Preferred Beneficiary shall have the right to use the Deposit
Materials for the sole purpose of continuing the benefits afforded to Preferred
Beneficiary by the License Agreement. Preferred Beneficiary shall be obligated
to maintain the confidentiality of the released Deposit Materials.

 

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ARTICLE 5 — TERM AND TERMINATION

5.1           Term of Agreement. The initial term of this Agreement is for a
period of [***]. Thereafter, this Agreement shall automatically renew from
year-to-year unless (a) Depositor and Preferred Beneficiary jointly instruct DSI
in writing that the Agreement is terminated; or (b) DSI instructs Depositor and
Preferred Beneficiary in writing that the Agreement is terminated for nonpayment
in accordance with Section 5.2 or by resignation in accordance with Section 5.3.
If the Deposit Materials are subject to another escrow agreement with DSI, DSI
reserves the right, [***] to adjust the anniversary date of this Agreement to
match the then prevailing anniversary date of such other escrow arrangements.

5.2           Termination for Nonpayment. In the event of the nonpayment of fees
owed to DSI, DSI shall provide written notice of delinquency to all parties to
this Agreement. Any party to this Agreement shall have the right to make the
payment to DSI to cure the default. If the past due payment is not received in
full by DSI within one month of the date of such notice, then DSI shall have the
right to terminate this Agreement at any time thereafter by sending written
notice of termination to all parties. DSI shall have no obligation to take any
action under this Agreement so long as any payment due to DSI remains unpaid.

5.3           Termination by Resignation. DSI reserves the right to terminate
this Agreement, for any reason, by providing Depositor and Preferred Beneficiary
with [***] written notice of its intent to terminate this Agreement. Within the
[***], the Depositor and Preferred Beneficiary may provide DSI with joint
written instructions authorizing DSI to forward the Deposit Materials to another
escrow company and/or agent or other designated recipient. If DSI does not
receive said joint written instructions within [***] of the date of DSI’s
written termination notice, then DSI shall destroy, return or otherwise deliver
the Deposit Materials in accordance with Section 5.4.

5.4           Disposition of Deposit Materials Upon Termination. Subject to the
foregoing termination provisions, and upon termination of this Agreement, DSI
shall destroy, return, or otherwise deliver the Deposit Materials in accordance
with Depositor’s instructions. If there are no instructions, DSI may, at its
sole discretion, destroy the Deposit Materials or return them to Depositor. DSI
shall have no obligation to destroy or return the Deposit Materials if the
Deposit Materials are subject to another escrow agreement with DSI or have been
released to the Preferred Beneficiary in accordance with Section 4.4.

5.5           Survival of Terms Following Termination. Upon termination of this
Agreement, the following provisions of this Agreement shall survive:

a.                                       Depositor’s Representations
(Section 1.5);

b.                                      The obligations of confidentiality with
respect to the Deposit Materials;

c.                                       The rights granted in the sections
entitled Right to Transfer Upon Release (Section 3.3) and Right to Use Following
Release (Section 4.5), if a release of the Deposit Materials has occurred prior
to termination;

d.                                      The obligation to pay DSI any fees and
expenses due;

 

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e.                                       The provisions of Article 7; and

f.                                         Any provisions in this Agreement
which specifically state they survive the termination of this Agreement.

ARTICLE 6 — DSI’S FEES

6.1           Fee Schedule. DSI is entitled to be paid its standard fees and
expenses applicable to the services provided. DSI shall notify the party
responsible for payment of DSI’s fees [***] prior to any increase in fees. For
any service not listed on DSI’s standard fee schedule, DSI will provide a quote
prior to rendering the service, if requested.

6.2           Payment Terms. DSI shall not be required to perform any service
unless the payment for such service and any outstanding balances owed to DSI are
paid in full. Fees are due upon receipt of a signed contract or receipt of the
Deposit Materials whichever is earliest. If invoiced fees are not paid, DSI may
terminate this Agreement in accordance with Section 5.2.

ARTICLE 7 — LIABILITY AND DISPUTES

7.1           Right to Rely on Instructions. DSI may act in reliance upon any
instruction, instrument, or signature reasonably believed by DSI to be genuine.
DSI may assume that any employee of a party to this Agreement who gives any
written notice, request, or instruction has the authority to do so. DSI will not
be required to inquire into the truth or evaluate the merit of any statement or
representation contained in any notice or document. DSI shall not be responsible
for failure to act as a result of causes beyond the reasonable control of DSI.

7.2           Indemnification. Depositor and Preferred Beneficiary each agree to
indemnify, defend and hold harmless DSI from any and all claims, actions,
damages, arbitration fees and expenses, costs, attorney’s fees and other
liabilities (“Liabilities”) incurred by DSI relating in any way to this escrow
arrangement unless such Liabilities were caused solely by the negligence or
willful misconduct of DSI.

7.3           Dispute Resolution. Any dispute relating to or arising from this
Agreement shall be resolved by arbitration under the Commercial Rules of the
American Arbitration Association. Three arbitrators shall be selected. The
Depositor and Preferred Beneficiary shall each select one arbitrator and the two
chosen arbitrators shall select the third arbitrator, or failing agreement on
the selection of the third arbitrator, the American Arbitration Association
shall select the third arbitrator. However, if DSI is a party to the
arbitration, DSI shall select the third arbitrator. Unless otherwise agreed by
Depositor and Preferred Beneficiary, arbitration will take place in San Diego,
California, U.S.A. Any court having jurisdiction over the matter may enter
judgment on the award of the arbitrator(s). Service of a petition to confirm the
arbitration award may be made by First Class mail or by commercial express mail,
to the attorney for the party or, if unrepresented, to the party at the last
known business address.

7.4           Controlling Law. This Agreement is to be governed and construed in
accordance with the laws of the State of California, without regard to its
conflict of law provisions.

 

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7.5           Notice of Requested Order. If any party intends to obtain an order
from the arbitrator or any court of competent jurisdiction which may direct DSI
to take, or refrain from taking any action, that party shall:

a.                                       Give DSI at least [***] prior notice of
the hearing;

b.                                      Include in any such order that, as a
precondition to DSI’s obligation, DSI be paid in full for any past due fees and
be paid for the reasonable value of the services to be rendered pursuant to such
order; and

c.                                       Ensure that DSI not be required to
deliver the original (as opposed to a copy) of the Deposit Materials if DSI may
need to retain the original in its possession to fulfill any of its other
duties.

ARTICLE 8 — GENERAL PROVISIONS

8.1           Entire Agreement. This Agreement, which includes Exhibits
described herein, embodies the entire understanding among the parties with
respect to its subject matter and supersedes all previous communications,
representations or understandings, either oral or written. DSI is not a party to
the License Agreement between Depositor and Preferred Beneficiary and has no
knowledge of any of the terms or provisions of any such License Agreement. DSI’s
only obligations to Depositor or Preferred Beneficiary are as set forth in this
Agreement. No amendment or modification of this Agreement shall be valid or
binding unless signed by all the parties hereto, except that Exhibit A need not
be signed by DSI, Exhibit B need not be signed by Preferred Beneficiary and
Exhibit C need not be signed.

8.2           Notices. All notices, invoices, payments, deposits and other
documents and communications shall be given to the parties at the addresses
specified in the attached Exhibit C. It shall be the responsibility of the
parties to notify each other as provided in this Section in the event of a
change of address. The parties shall have the right to rely on the last known
address of the other parties. Unless otherwise provided in this Agreement, all
documents and communications may be delivered by First Class mail.

8.3           Severability. In the event any provision of this Agreement is
found to be invalid, voidable or unenforceable, the parties agree that unless it
materially affects the entire intent and purpose of this Agreement, such
invalidity, voidability or unenforceability shall affect neither the validity of
this Agreement nor the remaining provisions herein, and the provision in
question shall be deemed to be replaced with a valid and enforceable provision
most closely reflecting the intent and purpose of the original provision.

8.4           Successors. This Agreement shall be binding upon and shall inure
to the benefit of the successors and assigns of the parties. However, DSI shall
have no obligation in performing this Agreement to recognize any successor or
assign of Depositor or Preferred Beneficiary unless DSI receives clear,
authoritative and conclusive written evidence of the change of parties.

 

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8.5           Regulations. Depositor and Preferred Beneficiary are responsible
for and warrant compliance with all applicable laws, rules and regulations,
including but not limited to customs laws, import, export, and re-export laws
and government regulations of any country from or to which the Deposit Materials
may be delivered in accordance with the provisions of this Agreement,

 

Interwave Communications International, Ltd.

 

UTStarcom, Inc.

Depositor

 

Preferred Beneficiary

 

 

 

By:

/s/ PRISCILA LU

 

By:

/s/ HONG LU

 

 

 

 

 

Name:

Priscilla Lu

 

Name:

Hong Lu

 

 

 

 

 

Title:

Chief Executive Officer

 

Title:

Chief Executive Officer

 

 

 

 

 

Date:

September 27, 2002

 

Date:

September 27, 2002

 

 

DSI Technology Escrow Services, Inc.

 

 

 

 

 

By:

/s/ Grant Jones

 

 

 

 

 

 

Name:

Grant Jones

 

 

 

 

 

 

Title:

Regional Sales Manager

 

 

 

 

 

 

Date:

November 4, 2002

 

 

 

 

 

 

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EXHIBIT A

MATERIALS TO BE DEPOSITED

Account Number ____________________

 

Depositor represents to Preferred Beneficiary that Deposit Materials delivered
to DSI shall consist of the following:

 

[***]

 

 

 

 

Interwave Communications International, Ltd.

 

UTStarcom, Inc.

Depositor

 

Preferred Beneficiary

 

 

 

By:

/s/ PRISCILA LU

 

By:

/s/ Hong Lu

 

 

 

 

 

Name:

Priscilla Lu

 

Name:

Hong Lu

 

 

 

 

 

Title:

Chief Executive Officer

 

Title:

Chief Executive Officer

 

 

 

 

 

Date:

September 27, 2002

 

Date:

September 27, 2002

 

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EXHIBIT B

DESCRIPTION OF DEPOSIT MATERIALS

 

Depositor Company Name: interWAVE Communications International, Ltd.

 

Account Number
                                                                                                                                                                                       

 

Product Name:              [***]
(Product Name will appear as the Exhibit B Name on Account History report)

 

DEPOSIT MATERIAL DESCRIPTION:

Quantity

 

Media Type & Size

 

Label Description of Each Separate Item

 

 

 

Disk 3.5” or _____

 

 

 

 

 

DAT tape _____mm

 

 

 

 

 

CD-ROM

 

 

 

 

 

Data cartridge tape _____

 

 

 

 

 

TK 70 or _____ tape

 

 

 

 

 

Magnetic tape _____

 

 

 

 

 

Documentation

 

 

 

 

 

Other____________________

 

 

 

PRODUCT DESCRIPTION:

 

Environment

 

 

DEPOSIT MATERIAL INFORMATION:

 

 

Is the media or are any of the files encrypted? Yes / No If yes, please include
any passwords and the decryption tools.

Encryption tool name

 

Version

 

Hardware required

 

Software required

 

Other required information

 

 

I certify for Depositor that the above described
Deposit Materials have been transmitted to DSI:

 

DSI has inspected and accepted the above
materials (any exceptions are noted above):

 

 

 

 

 

Signature

 

 

Signature

 

 

 

 

 

 

Print Name

 

 

Print Name

 

 

 

 

 

 

Date

 

 

Date Accepted

 

 

 

 

Exhibit B#

 

 

Send materials to: [***]

 

 

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EXHIBIT C

DESIGNATED CONTACT

Account Number ____________________

 

Notices, deposit material returns and communications to Depositor should be
addressed to:

 

Invoices to Depositor should be addressed to:

 

 

 

Company Name:

Interwave Advanced

 

Robin Foor

 

Communications, Inc.

 

Vice President and General Counsel

Address:

420 Widget Lane

 

Interwave Communications, Inc.

 

Walnut Creek, CA 94598

 

312 Constitution Drive,

 

 

 

Menlo Park, CA 94025

Designated Contact: Kiomars Anvari

 

Tel 650-838-2168

Telephone: 925-287-4441

 

Contact:

Febi Herrera 650-838-2212

Facsimile: 925-935-8597

 

 

E-mail: anvarik@gbasecom.com

 

P.O.#, if required:

 

Verification Contact: Bob Nakata

 

E-mail:

rfoor@iwv.com  faquino@iwv.com

              650-838-2054

 

 

 

 

 

Notices and communications to Preferred Beneficiary should be addressed to:

 

Invoices to Preferred Beneficiary should be addressed to:

 

 

 

Company Name:

UTStarcom, Inc.

 

Same

Address:

1275 Harbor Bay Parkway

 

 

 

Alameda, CA  94502 

 

 

 

 

 

 

Designated Contact:

Russell Boltwood

 

Contact:

 

Telephone:

(510) 864-8800

 

 

Facsimile:

(510) 864-8802

 

P.O.#, if required:

 

E-mail:

Russell@utstar.com

 

E-mail:

 

 

 

 

Requests from Depositor or Preferred Beneficiary to change the designated
contact should be given in writing by the designated contact or an authorized
employee of Depositor or Preferred Beneficiary.

 

Contracts, Deposit Materials and notices to

DSI should be addressed to:

 

Invoice inquiries and fee remittances to DSI should be addressed to:

 

 

 

DSI Technology Escrow Services, Inc.

Contract Administration

9265 Sky Park Court, Suite 202

San Diego, CA  92123

 

DSI Technology Escrow Services, Inc.

PO Box 45156

San Francisco, CA  94145-0156

Telephone: (858) 499-1600

Facsimile: (858) 694-1919

E-mail: ca@dsiescrow.com

 

(858) 499-1636

(848) 499-1637

Date:

 

 

 

 

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