<PAGE>

                                                                    Exhibit 4.11

QUALCOMM/Techfaith                                                  CONFIDENTIAL
Series A Preferred Share Purchase and Sale Agreement           EXECUTION VERSION





                              DATED MARCH 22, 2006

              SERIES A PREFERRED SHARE PURCHASE AND SALE AGREEMENT

                                     AMONGST

                   TECHFAITH SOFTWARE (CHINA) HOLDING LIMITED

                                       AND

                              QUALCOMM INCORPORATED

                                       AND

            CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
1. DEFINITIONS...........................................................     1
   1.1  Certain Defined Terms............................................     1
   1.2  Exhibits and Schedules...........................................     5
   1.3  Interpretation...................................................     6

2. AGREEMENT TO PURCHASE AND SELL SERIES A PREFERRED SHARES..............     6
   2.1  Agreement to Purchase and Sell...................................     6
   2.2  Authorization....................................................     7
   2.3  Closings; Delivery...............................................     7

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................     8
   3.1  Organization, Good Standing, Corporate Power and Qualification...     9
   3.2  Capitalization...................................................     9
   3.3  Subsidiaries.....................................................    10
   3.4  WFOE Subsidiary..................................................    10
   3.5  Authorization....................................................    11
   3.6  Valid Issuance of Shares.........................................    12
   3.7  Governmental Consents and Filings................................    12
   3.8  Litigation.......................................................    12
   3.9  Intellectual Property............................................    13
   3.10 Compliance with Other Instruments................................    13
   3.11 Agreements; Actions..............................................    14
   3.12 Conflicts of Interest............................................    16
   3.13 Absence of Liens.................................................    17
   3.14 Financial Statements.............................................    17
   3.15 Changes..........................................................    18
   3.16 Employee Matters.................................................    19
   3.17 Tax Returns and Payments.........................................    21
   3.18 Permits..........................................................    22
   3.19 Corporate Documents..............................................    22
   3.20 Disclosure.......................................................    22
   3.21 Breach of Warranty...............................................    22

4. CONDITIONS TO THE INVESTORS' OBLIGATIONS AT CLOSING...................    22
   4.1  The Initial Closing..............................................    23
   4.2  The Subsequent Closing...........................................    25
   4.3  The Final Closing................................................    25
   4.4  No Closing Obligation............................................    26

5. MISCELLANEOUS.........................................................    26
   5.1  Survival of Warranties...........................................    26
   5.2  Transfer; Successors and Assigns.................................    26
   5.3  Governing Law....................................................    26
   5.4  Counterparts.....................................................    26
   5.5  Titles and Subtitles.............................................    27
   5.6  Notices..........................................................    27
   5.7  No Finder's Fees.................................................    27
</TABLE>

<PAGE>

                                       -2-


<TABLE>
<S>                                                                         <C>
   5.8  Confidentiality Obligations......................................    27
   5.9  Fees and Expenses................................................    29
   5.10 Attorney's Fees..................................................    29
   5.11 Amendments and Waivers...........................................    30
   5.12 Severability.....................................................    30
   5.13 Delays or Omissions..............................................    30
   5.14 Moratorium.......................................................    30
   5.15 Entire Agreement.................................................    31
   5.16 Dispute Resolution...............................................    31

SCHEDULE 1 - PARTICULARS OF THE COMPANY..................................    33
PART A: PARTICULARS OF COMPANY PRE-CLOSING...............................    33
PART B: PARTICULARS OF THE WFOE SUBSIDIARY...............................    34
SCHEDULE 2 - CAPITALIZATION OF THE COMPANY POST-CLOSING..................    35
EXHIBIT A - FORM OF AMENDED MEMORANDUM AND ARTICLES OF ASSOCIATION.......    36
EXHIBIT B - FORM OF INVESTORS' RIGHTS AGREEMENT..........................    37
EXHIBIT C - DISCLOSURE SCHEDULE..........................................    38
EXHIBIT D - FORM OF SOFTWARE LICENSE AGREEMENT BETWEEN QUALCOMM AND WFOE
SUBSIDIARY...............................................................    39
EXHIBIT E - FORM OF SOFTWARE LICENSE AGREEMENT BETWEEN TECHFAITH AND WFOE
SUBSIDIARY...............................................................    40
EXHIBIT F - FORM OF DEVELOPMENT AND LICENSE AGREEMENT  AMONG WFOE
SUBSIDIARY, TECHFAITH AND QUALCOMM.......................................    41
</TABLE>
<PAGE>

                            SERIES A PREFERRED SHARE

                           PURCHASE AND SALE AGREEMENT

This SERIES A PREFERRED SHARE PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is
made as of the 22nd day of March 2006 by and among:

(1)  TECHFAITH SOFTWARE (CHINA) HOLDING LIMITED, a company incorporated in the
     Cayman Islands, whose registered office is located at Century Yard, Cricket
     Square, Hutchins Drive, O.P. Box 2681GT, George Town, Grand Cayman, British
     West Indies (the "COMPANY"); and

(2)  QUALCOMM INCORPORATED, a Delaware limited partnership, whose main office is
     located at 5775 Morehouse Drive, San Diego, CA 92121 ("QUALCOMM"); and

(3)  CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED, a company
     incorporated in the Cayman Islands, whose registered office is located at
     Century Yard, Cricket Square, Hutchins Drive, O.P. Box 2681GT, George Town,
     Grand Cayman, British West Indies ("Techfaith"), and principal executive
     offices are located at 3/F M8 West, No. 1 Jiu Xian Qiao East Road, Chao
     Yang District, Beijing 100016, PRC ("TECHFAITH").

QUALCOMM and Techfaith are herein referred to as "INVESTORS" collectively and
individually as an "INVESTOR".

WHEREAS:

The Company proposes to allot and issue to the Investors the Series A Preferred
Shares (as defined below) marked against each such Investor's name in Schedule
2, and each of the Investors has agreed to purchase and subscribe for the Series
A Preferred Shares, on the terms and subject to the conditions of this
Agreement.

The parties hereby agree as follows:

1.   DEFINITIONS

1.1  Certain Defined Terms

     The following terms used in this Agreement shall be construed to have the
     meanings set forth or referenced below:

     "AFFILIATE" means any Person that directly or indirectly, through one or
     more intermediaries, controls such other Person, is controlled by, or is
     under common control with such other Person.

     "AMENDED ARTICLES" has the meaning given to such term in subsection 2.2(a).

     "APPLICABLE LAWS" means in relation to any Person, any relevant laws,
     regulations, administrative regulations, rules, notices, and other
     legislative, executive or judicial decisions or pronouncements which are
     publicly promulgated and in force for the time being.

     "APPROVAL" means any consent [CHINESE CHARACTERS], operating license
     [CHINESE CHARACTERS]), permit [CHINESE CHARACTERS],

<PAGE>

                                      -2-


     approval [CHINESE CHARACTERS], ratification [CHINESE CHARACTERS],
     registration [CHINESE CHARACTERS] or other form of permission to engage in
     a specific activity issued by any PRC regulatory or government body or
     agency.

     "BOARD" means the Company's Board of Directors, as constituted from time to
     time.

     "BUSINESS PLAN" has the meaning given to such term in Section 3.20.

     "COMPANY INTELLECTUAL PROPERTY" has the meaning given to such term in
     Section 3.9.

     "COMPANY SECRETARY" means the secretary of the Company for the time being.

     "CONFIDENTIAL INFORMATION" means all confidential and/or proprietary
     business or technical information, in whatever form recorded, that a Party
     does not wish to disclose without restriction.

     "CONTROL" or its cognate terms in relation to any Person means either of
     the following:

     (i)  the power or right to set or determine the management of the affairs
          of that Person or to select, appoint or determine the composition of a
          majority of the directors of the board or members of any management
          committee or similar body, or to otherwise direct the management of
          that Person; or

     (ii) the ownership of not less than fifty percent (50%) of the total issued
          equity interests, voting shares or stock in that Person.


     "CONVERSION SHARES" has the meaning given to such term in subsection
     2.2(b).

     "ENCUMBRANCE" means any charge, pledge, claim, mortgage, security, lien,
     option, equity, power of sale, hypothecation, retention of title, right of
     pre-emption, other third party rights or security interest of any kind.

     "ESOP" has the meaning given to such term in the Investors' Rights
     Agreement.

     "ESOP SHARES" means the Ordinary Shares reserved for issuance under the
     ESOP.

     "FINAL CLOSING" has the meaning given to such term in subsection 2.3(c).

     "FINANCING TERMS" has the meaning given to such term in subsection 5.8(e).

     "HONG KONG" means the Hong Kong Special Administrative Region of the
     People's Republic of China.

     "INITIAL CLOSING" has meaning given to such term in subsection 2.3(a).

     "INTELLECTUAL PROPERTY RIGHTS" or "IPR" means any and all rights in any
     invention, discovery, improvement, utility, model, copyrightable work,
     industrial design or mask work, algorithm, data structure, trade secrets or
     know-how, patents, Confidential Information, or any idea having commercial
     value, any trademark, trade dress, trade name, domain name, or other marks
     that serve to identify and distinguish goods or services as coming from, or
     falling under the control of, a single source, all rights of whatsoever
     nature in computer software

<PAGE>

                                      -3-


     and data, all intangible rights or privileges of a nature similar to any of
     the foregoing in every case in any part of the world and whether or not
     registered, and all rights in any applications and granted registrations
     for any of the foregoing rights.

     "INVESTORS' RIGHTS AGREEMENT" has the meaning given to such term in Section
     4.7.

     "IPO" means the Company's first public offering of Ordinary Shares, which
     is a firm commitment underwritten public offering of Ordinary Shares on a
     recognized stock exchange, registered under the relevant securities laws
     and managed and/or underwritten by a lead underwriter of reputable
     international standing.

     "KEY EMPLOYEES" means any member of the Company's or the WFOE Subsidiary's
     senior management and any employee of the Company or the WFOE Subsidiary
     who either alone, or in concert with others, develops, invents, programs or
     designs any Company Intellectual Property, and "KEY EMPLOYEE" means any of
     them.

     "LICENSE AGREEMENTS" means (i) the Software License Agreement between
     QUALCOMM and the WFOE Subsidiary, (ii) the Software License Agreement
     between Techfaith and the WFOE Subsidiary, (iii) the Development and
     License Agreement among the WFOE Subsidiary, Techfaith and QUALCOMM (the
     "DEVELOPMENT AND LICENSE AGREEMENT"), in substantially the form set out in
     Exhibits D, E and F, respectively.

     "LOSSES" means losses, damages, costs, expenses, liabilities or claims,
     including reasonable legal costs.

     "LOVELLS BEIJING OFFICE" means the offices of Lovells International Law
     Firm Office in Beijing, China, located at Level 2, Office Tower C2, The
     Towers, Oriental Plaza, No.1 East Chang An Avenue, Beijing 100738, China.

     "MATERIAL ADVERSE EFFECT" means in respect of any Person, a material
     adverse effect on the business, assets (including intangible assets),
     liabilities, financial condition, property, prospects or results of
     operations of that Person.

     "MATERIAL CONTRACT" means a contract with a total value over its lifetime
     in excess of US$25,000 or which involves an aggregate liability of over
     US$25,000 on the part of the Company.

     "MILESTONE #1" means the successful delivery by the WFOE Subsidiary and
     acceptance in writing by QUALCOMM of the Feature Complete Versions, as such
     term is defined in the Development and License Agreement, of the MSM
     Software Applications by August 31, 2006.

     "MILESTONE #2" means the successful delivery by the WFOE Subsidiary and
     acceptance in writing by QUALCOMM of the Production Ready Versions, as such
     term is defined in the Development and License Agreement, of the MSM
     Software Applications by the date occurring six months following the date
     on which Milestone #1 was achieved.

     "MILESTONES" means Milestone #1 and Milestone #2 collectively and
     "MILESTONE" means either of them.

     "MSM" means mobile station modem.

<PAGE>

                                      -4-


     "MSM SOFTWARE APPLICATIONS" has the meaning giving to such term in the
     Development and License Agreement.

     "MOFCOM" means [CHINESE CHARACTERS], the PRC Ministry of Commerce and the
     approval authority for most foreign invested enterprises in China.

     "ORDINARY SHARES" means ordinary shares in the Company with a par value of
     US$0.001 per share.

     "PARTY" means any party to this Agreement for the time being, and "PARTIES"
     means all the parties to this Agreement for the time being, and shall
     include a reference to their successors in title and permitted assigns.

     "PERSON" means any natural person, corporation, joint venture, partnership,
     association, company, or other legal entity (whether incorporated or
     unincorporated and whether or not having separate legal personality).

     "PRC" or "CHINA" means the People's Republic of China, which for the
     purposes of this Agreement excludes Hong Kong, the Macau Special
     Administrative Region of the People's Republic of China and Taiwan.

     "PREFERRED SHARES" means shares of any class or series in the Company other
     than Ordinary Shares.

     "PURCHASE PRICE" has the meaning given to such term in Section 2.1.

     "QUALCOMM DIRECTOR" has the meaning given to such term in the Investors'
     Rights Agreement

     "QUALIFIED IPO" means an IPO reasonably acceptable to holders of at least
     fifty percent (50%) of the Series A Preferred Shares, with aggregate
     proceeds (net of underwriters discounts and commissions) to the Company in
     excess of US$20 million and at a listing price which implies a total market
     capitalization in excess of US$50 million.

     "RMB" means Renminbi [CHINESE CHARACTERS] or the lawful currency of the PRC
     for the time being.

     "SAFE" means [CHINESE CHARACTERS], the PRC State Administration of Foreign
     Exchange or its local branches as the context may require.

     "SAFE CIRCULAR" means [CHINESE CHARACTERS] [[CHINESE CHARACTERS] (2005) 75
     [CHINESE CHARACTERS]] the SAFE Circular on Issues relating to the
     Administration of Foreign Exchange of Company Financing through Offshore
     Special Purpose Vehicles and Round-Tripping Investment by PRC Resident
     issued by SAFE with effect from 1 November 2005 and any Applicable Laws of
     the PRC in force from time to time which operate to restate, amend or
     repeal the aforesaid circular or any part thereof.

     "SERIES A PREFERRED SHARES" means the Series A Preference Shares in the
     Company with a par value of US$0.001 per share.

<PAGE>

                                      -5-


     "SHARES" means all shares issued in the capital of the Company, including,
     but not limited to Ordinary Shares and Series A Preferred Shares.

     "SUBSIDIARY" means a company or corporation in which more than fifty
     percent (50%) of the equity interests, shares, voting stock (or equivalent)
     (including without limitation, by ownership or control of any exercisable
     option to obtain a controlling stake in,) is owned or controlled, directly
     or indirectly, by the relevant Person, and the term "SUBSIDIARIES" shall be
     construed accordingly.

     "SUBSEQUENT CLOSING" has the meaning given to such term in subsection
     2.3(b).

     "TAXATION" means all forms of taxation whether direct or indirect and
     whether levied by reference to income, profits, gains, net wealth, asset
     values, turnover, added value or other reference and statutory, state,
     provincial, local governmental or municipal impositions, duties,
     contributions, rates and levies (including without limitation social
     security contributions and any other payroll taxes), whenever imposed
     (whether imposed by way of a withholding or deduction for or on account of
     tax or otherwise) and in respect of any Person and all penalties, charges,
     costs and interest relating thereto, and references to "TAXES" shall be
     construed accordingly.

     "TECHFAITH DIRECTORS" has the meaning given to such term in the Investors'
     Rights Agreement.

     "THREE CLOSINGS" means the Initial Closing, the Subsequent Closing and the
     Final Closing collectively and "CLOSING" refers to any one of them.

     "TRANSACTION DOCUMENTS" means this Agreement, the Investors' Rights
     Agreement, the Amended Articles and their respective schedules and
     exhibits.

     "US$" means the official currency of the United States of America for the
     time being.

     "WFOE" means a wholly foreign owned enterprise established pursuant to the
     PRC Wholly Foreign Owned Enterprise Law [CHINESE CHARACTERS] passed on 12
     April, 1986 by the National People's Congress of the PRC and the PRC Wholly
     Owned Enterprise Law Implementation Regulations [CHINESE CHARACTERS]
     approved by the PRC State Council on 28 October 1990 and other relevant PRC
     laws and regulations.

     "WFOE SUBSIDIARY" has the meaning given to such term in Section 3.4.

1.2  Exhibits and Schedules

     The following schedules and exhibits are a part of this Agreement:

     Schedule 1 Particulars of the Company
        Part A    Particulars of Company Pre-Closing
        Part B    Particulars of Company's WFOE Subsidiary (to be completed
                  prior to the Initial Closing)

     Schedule 2 Capitalization of the Company Post-Closing


<PAGE>

                                      -6-


     Exhibit A Form of Amended Memorandum and Articles of Association

     Exhibit B Form of Investors' Rights Agreement

     Exhibit C Disclosure Schedule

     Exhibit D Form of Software License Agreement between QUALCOMM and WFOE
               Subsidiary

     Exhibit E Form of Software License Agreement between Techfaith and WFOE
               Subsidiary

     Exhibit F Form of Development and License Agreement among WFOE Subsidiary,
               Techfaith and QUALCOMM

1.3  Interpretation

     References to Applicable Laws in this Agreement shall include a reference
     to such Applicable Laws as amended, reissued or any replacement Applicable
     Laws. References to the word "including", "includes" or cognate terms shall
     be construed without limitation. References to any PRC Ministry or
     governmental regulatory body or government agency shall include a reference
     to any local branches or administrative sub-divisions under it, and to any
     successor body or bodies assuming responsibility for the administration of
     the power or function in question.

2.   AGREEMENT TO PURCHASE AND SELL SERIES A PREFERRED SHARES

2.1  Agreement to Purchase and Sell

     (a)  Subject to the terms and conditions of this Agreement, each of
          QUALCOMM and Techfaith agrees to purchase at the Initial Closing (as
          defined below), and the Company agrees to sell and issue to each of
          them, such number of Series A Preferred Shares as is set out against
          its name below, at a purchase price of US$1.00 per share (the
          "PURCHASE PRICE"):

<TABLE>
<CAPTION>

          Investor    No. of Subscription Shares   Investment Amount
          --------    --------------------------   -----------------
<S>                   <C>                          <C>
          QUALCOMM             3 million             US$ 3 million
          Techfaith            7 million             US$ 7 million
          Total               10 million             US$10 million
</TABLE>

     (b)  Upon the completion of Milestone #1 and subject to the terms and
          conditions of this Agreement, each of QUALCOMM and Techfaith agrees to
          purchase at the Subsequent Closing (as defined below), and the Company
          agrees to sell and issue to each of them such number of Series A
          Preferred Shares as is set out against its name below, at the Purchase
          Price:

<PAGE>

                                      -7-


<TABLE>
<CAPTION>
          Investor    No. of Subscription Shares   Investment Amount
          --------    --------------------------   -----------------
<S>                   <C>                          <C>
          QUALCOMM             3 million             US$ 3 million
          Techfaith            7 million             US$ 7 million
          Total               10 million             US$10 million
</TABLE>

     (c)  Upon the completion of Milestone #2 and subject to the terms and
          conditions of this Agreement, each of QUALCOMM and Techfaith agrees to
          purchase at the Final Closing (as defined below), and the Company
          agrees to sell and issue to each of them such number of Series A
          Preferred Shares as is set out against its name below, at the Purchase
          Price:

<TABLE>
<CAPTION>
          Investor    No. of Subscription Shares   Investment Amount
          --------    --------------------------   -----------------
<S>                   <C>                          <C>
          QUALCOMM            1.5 million            US$1.5 million
          Techfaith           3.5 million            US$3.5 million
          Total                 5 million            US$  5 million
</TABLE>

2.2  Authorization

     (a)  The Company shall adopt and file with the Registrar of Companies in
          the Cayman Islands on or before the Initial Closing (as defined below)
          the Amended Memorandum and Articles of Association of the Company in
          or substantially in the form attached as Exhibit A to this Agreement
          (the "AMENDED ARTICLES").

     (b)  On or prior to the Initial Closing, the Company shall have authorized
          (i) the sale and issuance to the Investors of the relevant number of
          Series A Preferred Shares required by the proposed Three Closings, and
          (ii) the issuance of the Ordinary Shares to be issued upon conversion
          of such Series A Preferred Shares (the "CONVERSION SHARES"). The
          Series A Preferred Shares and the Conversion Shares shall have the
          rights, preferences, privileges and restrictions set forth in the
          Investors' Rights Agreement and the Amended Articles.

2.3  Closings; Delivery

     (a)  Subject to the satisfaction of the conditions set out in Section 2.1
          and Section 4.1 respectively, the initial sale and purchase of the
          Series A Preferred Shares shall take place via the exchange of
          documents and signatures at Lovells Beijing Office, or at such other
          time and place and in such manner as the Company and the Investors
          mutually agree upon, orally or in writing (which time and place are
          designated as the "INITIAL CLOSING").

     (b)  Subject to the satisfaction of the conditions set out in Section 2.1
          and Section 4.2 respectively, the subsequent sale and purchase of the
          Series A Preferred Shares shall

<PAGE>

                                      -8-


          take place subject to:

          (i)  the exchange of a bring-down compliance certificate dated as of
               the Subsequent Closing (as defined below), provided that such
               date shall be on or before August 31, 2006;

          (ii) the issue of written certification by a director of each of the
               Investors that Milestone # 1 has been satisfied;

          (iii) the issue of written certification by a director of each of the
               Investors that the there has been no material breach to the
               Investment Documents, the WFOE Articles of Association or the
               License Agreements;

          at the law offices of Lovells Beijing Office, or at such other time
          and place and in such manner as the Company and the Investors mutually
          agree upon, orally or in writing (which time and place are designated
          as the "SUBSEQUENT CLOSING").

     (c)  Subject to the satisfaction of the conditions set out in Section 2.1
          and Section 4.3 respectively, the final sale and purchase of the
          Series A Preferred Shares shall take place subject to:

          (i)  the exchange of a bring-down compliance certificate dated as of
               the Final Closing (as defined below), provided that such date
               shall be within six months of the Subsequent Closing;

          (ii) the issue of written certification by a director of each of the
               Investors that Milestone # 2 has been satisfied;

          (iii) the issue of written certification by a director of each of the
               Investors that the there has been no material breach to the
               Investment Documents, the WFOE Articles of Association or the
               License Agreements;

          at the law offices of Lovells Beijing Office, or at such other time
          and place and in such manner as the Company and the Investors mutually
          agree upon, orally or in writing (which time and place are designated
          as the "FINAL CLOSING")

     (d)  At each Closing, the Company shall deliver to each of the Investors a
          share certificate representing the Series A Preferred Shares being
          purchased by such Investors at such Closing duly executed by the
          Company in accordance with the provisions of the Amended Articles
          against payment of the purchase price therefore by check payable to
          the Company, by wire transfer to a bank account designated by the
          Company, by cancellation or conversion of indebtedness of the Company
          to such Investor, or by any combination of such methods.

3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby represents and warrants to each Investor that the
     representations and warranties contained in this Section 3 are true,
     accurate and complete as of the date of each Closing (as the case may be),
     subject to the disclosures (if any) set out in the Disclosure

<PAGE>

                                      -9-


     Schedule in the form attached as Exhibit C to this Agreement (the
     "DISCLOSURE SCHEDULE").

     For the purposes of those representations and warranties, the phrase "TO
     THE COMPANY'S KNOWLEDGE" shall mean the actual knowledge, after making due
     inquiry, of its then duly appointed and elected officers. In addition, for
     the purposes of those representations and warranties contained in Section 3
     (other than those in Sections 3.1, 3.2, 3.4, 3.5 and 3.6), the term "the
     COMPANY" shall include a reference to any Subsidiaries, branches or other
     entities formed by the Company (whether or not having separate legal
     personality) and include a reference to the WFOE Subsidiary, unless the
     context otherwise requires, or otherwise noted herein.

3.1  Organization, Good Standing, Corporate Power and Qualification

     The Company is a corporation duly organized, validly existing and in good
     standing under the Applicable Laws of the Cayman Islands and has all
     requisite corporate power and authority to carry on its business as
     presently conducted and as proposed to be conducted. The Company is duly
     qualified to transact business and is in good standing in each jurisdiction
     in which the failure to so qualify would have a Material Adverse Effect.

3.2  Capitalization

     (a)  Immediately prior to the Initial Closing, the authorized capital of
          the Company, consists of:

          (i)  50,000,000 Ordinary Shares, 10 shares of which are issued and
               outstanding;

          (ii) 25,000,000 Preferred Shares, all of which have been designated as
               Series A Preferred Shares, and up to all of which will be sold
               pursuant to this Agreement. The rights, privileges and
               preferences of the Series A Preferred Shares are as stated in the
               Investors' Rights Agreement, the Amended Articles and as provided
               by the general corporation law of the Cayman Islands; and

          (iii) Options to acquire 2,777,778 Ordinary Shares, all of which are
               reserved for issuance under the ESOP.

     (b)  Except for:

          (i)  the conversion privileges of the Series A Preferred Shares to be
               issued under this Agreement; and

          (ii) the 2,777,778 Ordinary Shares reserved for issuance upon exercise
               of options issued pursuant to the ESOP,

          there are no outstanding options, pledges, guarantees, warrants,
          rights (including conversion or preemptive rights and rights of first
          refusal or similar rights) or agreements, orally or in writing, to
          purchase or acquire from the Company any shares of Ordinary Shares or
          Preferred Shares, or any securities convertible into or exchangeable
          for shares of Ordinary Shares or Preferred Shares.

<PAGE>

                                      -10-


3.3  Subsidiaries

     Except for the WFOE Subsidiary (as defined below), the Company does not
     presently own or control, directly or indirectly, any interest in any other
     Person.

3.4  WFOE Subsidiary

     (a)  The Company holds 100% of the registered capital of Techfaith Software
          (China) Limited [CHINESE CHARACTERS] (the "WFOE SUBSIDIARY"). The
          Company's interest in the WFOE Subsidiary is directly owned by it,
          free and clear of all Encumbrances, and no Person has any right to
          participate in, or receive any payment based on any amount relating
          to, the revenue, income, value or net worth of the WFOE Subsidiary or
          any component or portion thereof, or any increase or decrease in any
          of the foregoing.

     (b)  The amount of registered capital of the WFOE Subsidiary is 100% duly
          vested in the Company. There are no outstanding options, warrants,
          rights (including conversion or preemptive rights), agreements,
          commitments whatsoever for the purchase or acquisition from the WFOE
          Subsidiary of any registered capital or any securities convertible
          into or ultimately exchangeable or exercisable for any such registered
          capital.

     (c)  The WFOE Subsidiary has been duly established and validly exists under
          Applicable Laws of the PRC. The establishment documents relating to
          the WFOE Subsidiary are lawful and valid and have been duly approved
          or issued (as applicable) by the competent PRC authorities in
          accordance with Applicable Laws of the PRC.

     (d)  The WFOE Subsidiary does not have any Affiliates (other than the
          Company) subsidiaries or investee entities, and neither owns or
          controls, directly or indirectly, any interest in any other Person,
          nor does it have in place any joint venture, joint operation [CHINESE
          CHARACTERS] or similar arrangements with any other Person, nor does it
          maintain or operate any offices or branches or Subsidiaries, except
          for its office premises as set out in its PRC business license.

     (e)  The WFOE Subsidiary has full corporate power and authority to operate
          its properties and assets and to carry on its business as currently
          conducted and as presently proposed to be conducted, and all Approvals
          needed for the operations of its business as presently operated or
          contemplated to be operated have been duly obtained in accordance with
          Applicable Laws of the PRC from the relevant competent PRC authorities
          and are in full force and effect. No examination and approval
          authority in the PRC exceeded its power or otherwise acted unlawfully
          in approving the establishment or operations of the WFOE Subsidiary.

     (f)  All post-establishment filings and registrations with the PRC
          authorities required in respect of the WFOE Subsidiary and its
          operations, including the registration with the State Administration
          of Industry and Commerce, the SAFE, the State Administration of
          Taxation and local tax bureau, customs authorities, and social
          security and insurance authorities, have been duly completed in
          accordance with, and within the time limits stipulated under,
          Applicable Laws of the PRC.

<PAGE>

                                      -11-


     (g)  The WFOE Subsidiary has not received any letter or notice from any
          relevant PRC governmental or regulatory authority notifying it of the
          suspension, revocation, or threatened revocation, of any Approvals
          issued to it for non-compliance, or of the need for compliance or
          remedial actions to be taken in respect of the activities carried out
          directly or indirectly by the WFOE Subsidiary.

     (h)  With respect to the land use rights, building ownership rights or
          rights to use any of the foregoing (if any) held by the WFOE
          Subsidiary, the WFOE Subsidiary has exclusive, full and unimpaired
          legal ownership of such rights, building ownership rights or rights to
          use free from any Encumbrances, conditions, orders or other
          restrictions, and has obtained all necessary Approvals with government
          authorities with respect thereto, including effecting registration of
          its office lease with the relevant land resources administration
          authorities in accordance with Applicable Laws of the PRC.

     (i)  All requisite formalities and legal requirements in respect of the
          implementation of the machinery, equipment, parts, tools and materials
          by the WFOE Subsidiary have been and will be complied with in
          accordance with Applicable Laws of the PRC.

     (j)  The WFOE Subsidiary has been conducting and will conduct its business
          activities within the permitted scope of business and is otherwise
          operating its business in full compliance with all Applicable Laws of
          the PRC, including producing, processing and/or distributing products
          with all requisite Approvals granted by the relevant competent PRC
          governmental or regulatory authorities.

     (k)  All Applicable Laws of the PRC with respect to the opening and
          operation of foreign exchange accounts and foreign exchange activities
          of the WFOE Subsidiary, where applicable have been and will continue
          to be fully complied with, and all requisite Approvals including any
          from SAFE required under the SAFE Circular in relation thereto have
          been duly and lawfully obtained and are in full force and effect and
          there exist no grounds on which any such Approval may be cancelled or
          revoked or the WFOE Subsidiary or its legal representative may be
          subject to liability or penalties for material misrepresentation or
          failure to disclose material information to the issuing SAFE
          authority.

     (l)  With regard to employment and staff or labour management, the WFOE
          Subsidiary has complied with all Applicable Laws of the PRC, including
          Applicable Laws pertaining to contributions to local welfare funds,
          social benefits, medical benefits, insurance, retirement benefits,
          pension or the like.

3.5  Authorization

     All corporate action required to be taken by the Board and allot and in
     order to authorize the Company:

          (i)  to enter into the Transaction Documents;

          (ii) to allot and issue Preferred Shares and to designate any such
               Preferred Shares as Series A Preferred Shares at the Closing; and

<PAGE>

                                      -12-


          (iii) to allot and issue any Ordinary Shares including but not limited
               to any ESOP Shares or any Conversion Shares, has been taken or
               shall be taken prior to the Closing. All action on the part of
               the officers of the Company necessary for the execution and
               delivery of the Transaction Documents, the performance of all
               obligations of the Company under the Transaction Documents to be
               performed as of the Closing, and the issuance and delivery of the
               Series A Preferred Shares has been taken or shall be taken prior
               to the Closing. The Transaction Documents, when executed and
               delivered by the Company, shall constitute lawful, valid and
               legally binding obligations of the Company, enforceable against
               the Company in accordance with their respective terms except:

               (1)  as limited by Applicable Laws relating to bankruptcy,
                    insolvency, reorganization, moratorium, fraudulent
                    conveyance, or other laws of general application relating to
                    or affecting the enforcement of creditors' rights generally;
                    or

               (2)  as limited by Applicable Laws relating to the availability
                    of specific performance, injunctive relief, or other
                    equitable remedies.

3.6  Valid Issuance of Shares

     The Series A Preferred Shares, when issued, sold and delivered in
     accordance with the terms and for the consideration set forth in this
     Agreement, shall be validly issued, fully paid and non-assessable and free
     of restrictions on transfer other than restrictions on transfer under this
     Agreement, the Investors' Rights Agreement, Applicable Laws and
     Encumbrances created by or imposed by the Investors. Subject to the filings
     described in Section 3.7 below, the Series A Preferred Shares shall be
     issued in compliance with all Applicable Laws. The ESOP Shares and the
     Conversion Shares have been duly reserved for issuance, and upon issuance
     in accordance with the terms of the Amended Articles and the Investors'
     Rights Agreement, shall be validly issued, fully paid and non-assessable
     and free of restrictions on transfer other than restrictions on transfer
     under the Transaction Documents, Applicable Laws and Encumbrances created
     by or imposed by the Investors. Subject to Section 3.7 below, the ESOP
     Shares and the Conversion Shares shall be issued in compliance with all
     Applicable Laws.

3.7  Governmental Consents and Filings

     No consent, approval, order or authorization of, or registration,
     qualification, designation, declaration or filing with, any governmental
     authority in any jurisdiction is required on the part of the Company in
     connection with the consummation of the transactions contemplated by this
     Agreement, except for the filing of the Amended Articles, which shall have
     been filed in accordance with Applicable Laws at the time of or after
     Closing.

3.8  Litigation

     There is no claim, action, suit, proceeding, arbitration, complaint, charge
     or investigation pending or, to the Company's knowledge, currently
     threatened:

<PAGE>

                                      -13-


          (i)  against the Company or any of its officers or directors;

          (ii) questions the validity of any of the Transaction Documents or the
               right of the Company to enter into them, or to consummate the
               transactions contemplated by the Transaction Documents; or

          (iii) would reasonably be expected to have, either individually or in
               the aggregate, a Material Adverse Effect on the Company.

     Neither the Company nor, to the Company's knowledge, any of its officers or
     directors, is a party or is named as subject to the provisions of any
     order, writ, injunction, judgment or decree of any court or government
     agency or instrumentality. There is no action, suit, proceeding or
     investigation by the Company pending or which the Company intends to
     initiate.

3.9  Intellectual Property

     The Company owns or possesses sufficient legal rights to:

          (i)  all trademarks, service marks, trade names, copyrights, trade
               secrets, licenses, information and proprietary rights and
               processes; and

          (ii) to the Company's knowledge, all patents and patent rights (such
               rights are collectively referred to herein as the "COMPANY
               INTELLECTUAL PROPERTY") as are necessary to the conduct of the
               Company's business as now conducted and as presently proposed to
               be conducted, without any known conflict with, or infringement
               of, the rights of others.

     To the Company's knowledge, no product or service marketed or sold (or
     proposed to be marketed or sold) by the Company violates or shall violate
     any license or infringe any Intellectual Property Rights of any other
     Person. Save as expressly contemplated by any Transaction Document and
     other than with respect to commercially available software products under
     standard end-user object code license agreements, there are no outstanding
     options, licenses, agreements, claims, Encumbrances or shared ownership
     interests of any kind relating to the foregoing, nor is the Company bound
     by or a party to any options, licenses or agreements of any kind with
     respect to the Intellectual Property Rights of any other Person. The
     Company has not received any communications alleging that the Company has
     violated or, by conducting its business, would violate any of the
     Intellectual Property Rights of any other Person. Section 3.9 of the
     Disclosure Schedule lists all Intellectual Property Rights of the Company.
     The Company has not embedded any open source or community source code in
     any of its products generally available or in development, including but
     not limited to any libraries or codes licensed under any general public
     license or similar license arrangement. For the purposes of this Section
     3.9, the Company shall be deemed to have knowledge of a patent right if the
     Company has actual knowledge of the patent right or would be found to be on
     notice of such patent right as determined by reference to applicable patent
     laws.

3.10 Compliance with Other Instruments

<PAGE>

                                      -14-


     The Company is not in violation or default under:

          (i)  any provisions of the Amended Articles, the WFOE Subsidiary
               Articles of Association or the Investors' Rights Agreement;

          (ii) any applicable instrument, judgment, order, writ or decree;

          (iii) any note, indenture or mortgage; or

          (iv) any lease, agreement, contract or purchase order to which it is a
               party, or by which it is bound, or that is required to be listed
               on the Disclosure Schedule, or of any provision of any Applicable
               Law applicable to the Company, the violation of which would have
               a Material Adverse Effect on the Company.

     Neither the execution, delivery and performance of any of the Transaction
     Documents and the consummation of the transactions contemplated by the
     Transaction Documents, nor the conduct or carrying on of the Company's
     business as presently conducted or proposed to be conducted shall result in
     any such violation or be in conflict with or constitute, with or without
     the passage of time and giving of notice, either:

          (i)  a default under any such provision, instrument, judgment, order,
               writ, decree, contract or agreement or any Applicable Law in
               relation to the Company; or

          (ii) an event which results in the creation of any Encumbrance upon
               any assets of the Company, or the suspension, revocation,
               forfeiture, or non-renewal of any material Approval held by the
               Company.

3.11 Agreements; Actions

     (a)  Except for the Transaction Documents and matters arising in connection
          with this financing, there are no agreements, understandings,
          instruments, contracts or proposed transactions to which the Company
          is a party or by which it is bound that involve:

          (i)  obligations (contingent or otherwise) of, or payments to, the
               Company;

          (ii) the license of any Intellectual Property Rights to or from the
               Company;

          (iii) the grant of rights to manufacture, produce, assemble, license,
               market, or sell its products to any other Person, or which affect
               the Company's exclusive right to develop, manufacture, assemble,
               distribute, market or sell its products anywhere in the world; or

          (iv) indemnification by the Company with respect to infringements of
               proprietary rights.

     (b)  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
               share capital or capital stock;

<PAGE>

                                      -15-


          (ii) incurred any indebtedness for money borrowed or incurred any
               other liabilities;

          (iii) made any loans or advances to any Person, other than ordinary
               advances for travel expenses; or

          (iv) sold, exchanged or otherwise disposed of any of its assets or
               rights, other than the sale of its inventory in the ordinary
               course of business. For the purposes of subsections (b) and (c)
               of this Section 3.11, all indebtedness, liabilities, agreements,
               understandings, instruments, contracts and proposed transactions
               involving the same Person (including any Persons the Company has
               reason to believe are affiliated with each other) shall be
               aggregated for the purpose of meeting the individual minimum
               dollar amounts of such subsection.

     (c)  The Company is not a guarantor of or indemnitor of, the indebtedness
          of any other Person.

     (d)  The Company is not in breach of any contracts, agreements or
          arrangements to which it is a party, and has no knowledge of the
          invalidity of, or grounds for rescission, avoidance or repudiation of
          any such contract, agreement, arrangement or transaction to which the
          Company is a party, nor has it received notice of any intention to
          terminate any such contract, agreement or arrangements, or to
          repudiate or disclaim any such transaction.

     (e)  No party with whom the Company has entered into any contract,
          agreement or arrangement is in default thereunder, being a default
          which would have a Material Adverse Effect on the Company, and there
          are no circumstances likely to give rise to any such default.

     (f)  The Company is not a party to any agreement, contract or arrangement
          which, by reason of the sale of the Series A Preferred Shares, or by
          reason of any Party or any of its Affiliates entering into or
          performing any provision of this Agreement and/or of the Transaction
          Documents, gives any other contracting party the right to terminate
          such contract, agreement or arrangement, or to create or increase any
          obligation on the Company (whether to make payment or otherwise) to
          any Person.

     (g)  Save as expressly provided in or contemplated by the Transaction
          Documents, the Company has no material or long term agreements,
          contracts, arrangements or commitments binding upon it including but
          not limited to:

          (i)  any contract, agreement or arrangement entered into otherwise
               than in the ordinary course of business;

          (ii) any contract, agreement or arrangement otherwise than by way of
               bargain at arm's length;

          (iii) involving licensing or transfer of technology or IPR to or by
               the Company;

<PAGE>

                                      -16-


          (iv) any sale or purchase option or similar contract or arrangement
               affecting any assets owned or used by the Company or by which the
               Company is bound;

          (v)  any agreement, contract or arrangement which cannot readily be
               fulfilled or performed by the Company on time or without undue or
               unusual expenditure of money or effort;

          (vi) any agreement, contract or arrangement whereby the Company is, or
               has agreed to become, a member of any joint venture, consortium
               or partnership or other unincorporated association; and

          (vii) any agreement, contract or arrangement whereby the Company is,
               or has agreed to become, a party to any distributorship or agency
               agreement.

     (h)  There are no agreements in force restricting the freedom of the
          Company to provide and take goods and services or to manage its own
          business affairs by such means and from and to such Persons as it may
          from time to time think fit.

     (i)  Save for any condition or warranty implied by law or contained in its
          standard terms of business or otherwise given in the ordinary course
          of business, the Company has not given any guarantee condition or
          warranty or made any representation in respect of goods (including
          trading stock) or services supplied or contracted to be supplied by
          it, nor has it accepted any obligation that could give rise to any
          liability after any such goods or services has been supplied by it.

     (j)  Other than pursuant to or as expressly contemplated by any Transaction
          Document, the Company has not entered into any agreement, contract or
          arrangement with, or given any undertaking or assurance to, any of the
          existing shareholders of the Company or their Affiliates.

     (k)  Other than as required by or as expressly contemplated by any
          Transaction Document, there are no agreements, contracts or
          arrangements binding on the Company which prohibit or restrict the
          sale, disposal or transfer of any equity or debt securities (or any
          interests therein) owned by the Company.

3.12 Conflicts of Interest

     (a)  Other than:

          (i)  standard employee benefits generally made available to all
               employees;

          (ii) standard director and officer indemnification agreements approved
               by the Board; and

          (iii) the purchase of the Company's Ordinary Shares and the issuance
               of options to purchase the Company's Ordinary Shares pursuant to
               the ESOP, in each instance, approved by the Board,

          there are no agreements, understandings or proposed transactions
          between the
<PAGE>

                                      -17-


          Company and any of its officers, directors, employees or Key
          Employees, or any Affiliate thereof.

     (b)  The Company is not indebted, directly or indirectly, to any of its
          directors, officers or employees, or to their respective spouses or
          children, or to any Affiliate of any of the foregoing, other than in
          connection with expenses or advances of expenses incurred in the
          ordinary course of business. None of the Company's directors, officers
          or employees, or any members of their immediate families, or any
          Affiliate of the foregoing:

          (i)  are, directly or indirectly, indebted to the Company; or

          (ii) to the Company's knowledge, have any direct or indirect ownership
               interest in any Person which is an Affiliate of the Company, or
               with which the Company has a business relationship, or any Person
               which competes with the Company. To the Company's knowledge, none
               of the Company's directors, officers or employees or any members
               of their immediate families or any Affiliate of any of the
               foregoing are, directly or indirectly, interested in any contract
               with the Company. None of the directors or officers, or any
               members of their immediate families, has any material commercial,
               industrial, banking, consulting, legal, accounting, charitable or
               familial relationship with any of the Company's major business
               relationship partners, service providers, joint venture partners,
               licensees and competitors.

3.13 Absence of Liens

     The property and assets that the Company owns are free and clear of all
     loans and Encumbrances, except for statutory liens for the payment of
     current Taxation obligations that are not yet delinquent and Encumbrances
     that arise in the ordinary course of business and do not materially impair
     the Company's ownership or use of such property or assets. With respect to
     the property and assets it leases, the Company is in compliance with the
     terms of such leases and, to its knowledge, holds a valid leasehold
     interest free of any Encumbrances other than those of the lessors of such
     property or assets.

3.14 Financial Statements

     (a)  Financial Statements

          The Company has been incorporated for less than a full fiscal year and
          has not prepared any financial statements. The Company maintains and
          will continue to maintain a standard system of accounting established
          and administered in accordance with generally accepted accounting
          principles. The Company shall prepare and deliver to each Investor a
          copy of its audited and unaudited financial statements as they become
          available in accordance with Section 5.3 of the Investors' Rights
          Agreement.

     (b)  Management Accounts

          The management accounts of the Company have been prepared in
          accordance with

<PAGE>

                                      -18-


          International Accounting Standards, and on a consistent basis as those
          used in the audited accounts of the Company and show a true and fair
          view of the assets and liabilities, profits and losses of the Company
          and its subsidiaries as a group as of the management accounts date.

     (c)  Books and Financial Records

          All the accounts, books, registers, ledgers and financial and other
          material records of whatsoever kind of the Company have been fully
          properly and accurately kept and completed; there are no inaccuracies
          or discrepancies of any kind contained or reflected therein; and they
          give and reflect a true and fair view of the financial, contractual
          and trading position of the Company and of its plant and machinery,
          fixed and current assets and liabilities (actual and contingent),
          debtors, creditors and works-in-progress.

3.15 Changes

     Since the Company's establishment, there has not been:

     (a)  any change in the business assets, liabilities, financial condition,
          trading prospects or operating results of the Company, except changes
          in the ordinary course of business that have not caused singly, or in
          the aggregate, a Material Adverse Effect on the Company, and the
          business of the Company has been carried on so as to maintain the same
          as a going concern;

     (b)  any damage, destruction or loss, whether or not covered by insurance,
          that would have a Material Adverse Effect on the Company;

     (c)  any waiver or compromise by the Company of a valuable right or of a
          material debt owed to it;

     (d)  any satisfaction or discharge of any claim, or Encumbrance or payment
          of any obligation by the Company, except in the ordinary course of
          business and the satisfaction or discharge of which would not have a
          Material Adverse Effect on the Company;

     (e)  any material change to a Material Contract or agreement or arrangement
          by which the Company or any of its assets is bound or subject;

     (f)  any material change in any compensation agreement or arrangement with
          any employee, officer, director or shareholder;

     (g)  any resignation or termination of employment of any officer or Key
          Employee of the Company;

     (h)  any Encumbrance created by the Company, with respect to any of its
          material properties or assets, except liens for taxes not yet due or
          payable and liens that arise in the ordinary course of business and do
          not materially impair the Company's ownership or use of such property
          or assets;

<PAGE>

                                      -19-


     (i)  any loans or guarantees made by the Company to, or for the benefit of,
          its employees, officers or directors, or any members of their
          immediate families, other than travel advances and other advances made
          in the ordinary course of its business;

     (j)  any declaration, setting aside or payment or other distribution in
          respect of any of the Company's share capital, or any direct or
          indirect redemption, purchase, or other acquisition of any of such
          shares by the Company;

     (k)  any sale, assignment or transfer of any Company Intellectual Property
          Rights;

     (l)  receipt of notice that there has been a loss of, or material order
          cancellation by, any major customer of the Company, or loss of source
          of supply to or by any abnormal factor, not affecting similar
          businesses to a like extent;

     (m)  to the Company's knowledge, any other event or condition of any
          character, other than events affecting the economy or the Company's
          industry sector generally, that could reasonably be expected to result
          in a Material Adverse Effect on the Company;

     (n)  the Company has not disposed of any asset (including trading stock) or
          supply of any service or business facility of any kind (including a
          loan of money or the letting, hiring or licensing of any property
          whether tangible or intangible) in circumstances where the
          consideration actually received, or receivable for such disposal or
          supply was less than the consideration which would be deemed to have
          been received for tax purposes;

     (o)  save as otherwise expressly provided for in the Transaction Documents,
          the Company has not assumed or incurred any liabilities (actual or
          contingent) or expenditure otherwise than in the ordinary course of
          carrying on its business, or entered into any transaction which is not
          in its ordinary course of business;

     (p)  any payment made by the Company which shall not be deductible for tax
          purposes either in computing the profits of the Company or in
          computing the tax chargeable on the Company and its subsidiaries as a
          group;

     (q)  any change to the Company's financial year end;

     (r)  save for resolutions, copies of which have been delivered to each
          Investor prior to the date hereof, or which are required to be passed
          by the Company prior to any Closing in order to satisfy the conditions
          set out in previous or following sections, any board or shareholders'
          resolutions passed by the Company; or

     (s)  any arrangement or commitment by the Company to do any of the things
          described in this Section 3.15, and the Company is not aware of any
          facts which shall likely give rise to the occurrence of any of the
          foregoing.

3.16 Employee Matters

     (a)  To the Company's knowledge, none of its employees is obligated under
          any contract (including licenses, covenants or commitments of any
          nature) or other agreement, or

<PAGE>

                                      -20-


          subject to any judgment, decree or order of any court or
          administrative agency, that would materially interfere with such
          employee's ability to perform its obligations under its contract of
          employment with the Company, to promote the interest of the Company,
          or that would conflict with the Company's business. Neither the
          execution or delivery of the Transaction Documents, nor the carrying
          on of the Company's business by the employees of the Company, nor the
          conduct of the Company's business as now conducted and as presently
          proposed to be conducted, shall, 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 contract, covenant or instrument
          under which any such employee is now obligated.

     (b)  Without prejudice to the generality of subsection (a) above, to the
          Company's knowledge, none of the current or former officers, employees
          or consultants of the Company (including the Key Employees) are in
          violation of any term of any written employment contract, patent
          disclosure agreement, proprietary information agreement,
          non-competition agreement, non-solicitation agreement, confidentiality
          agreement, or any other similar contract or agreement or any
          restrictive covenants relating to the right of that officer, employee
          or consultant to be employed or engaged by the Company, or relating to
          the use of trade secrets or proprietary information of others, and no
          former employer of any such Person has any rights in respect of the
          Company Intellectual Property.

     (c)  The Company is not delinquent in payments to any of its employees,
          consultants, or independent contractors for any wages, salaries,
          commissions, bonuses, or other direct compensation for any service
          performed for it to the date hereof or amounts required to be
          reimbursed to such employees, consultants, or independent contractors.
          The Company has complied with all applicable equal employment
          opportunity laws and with other laws related to employment, including
          those related to wages, hours, worker classification, collective
          bargaining, and the payment and withholding of Taxes and other sums as
          required by law except where non-compliance with any Applicable Laws
          would not result in a Material Adverse Effect on the Company. The
          Company has withheld and paid to the appropriate governmental entity
          or is holding for payment not yet due to such governmental entity all
          amounts required to be withheld from employees of the Company by way
          of Taxation and is not liable for any arrears of Taxation or other
          sums for failure to comply with any of the foregoing. The WFOE
          Subsidiary has withheld all amounts required to be withheld by it, as
          a withholding agent, by way of Taxation, and has contributed to all
          stationary welfare and social security funds as required under
          Applicable Laws of the PRC in respect of all employees of the WFOE
          Subsidiary.

     (d)  To the Company's knowledge, no Key Employee has terminated or intends
          to terminate employment with the Company or is otherwise likely to
          become unavailable to continue as a Key Employee, nor does the Company
          have a present intention to terminate the employment of any of the
          foregoing. Except for statutory compensation as required under
          Applicable Laws, upon termination of the employment of any such
          employees, no severance or other payments shall become due. Except as
          disclosed in the Disclosure Schedule, the Company has no policy,
          practice, plan, or program of

<PAGE>

                                      -21-


          paying severance pay or any form of severance compensation to any of
          its employees in connection with the termination of their employment
          services.

     (e)  The Company has not made any representations regarding equity
          incentives to any officer, employees, director or consultant that are
          inconsistent with the share amounts and terms set forth in the Board
          minutes or which are inconsistent with provisions of any Transaction
          Document.

     (f)  There are no claims against the Company arising out of the termination
          of employment of any former Key Employee.

     (g)  The Company does not maintain, and has not established, sponsored, or
          participated in or contributed to, any employee benefit plan other
          than the ESOP.

     (h)  To the Company's knowledge, none of the officers or directors of the
          Company is disqualified from holding office under any Applicable Laws,
          nor has any such Person, during the previous five (5) years, been:

          (i)  subject to voluntary or involuntary petition under applicable
               bankruptcy or insolvency laws or the appointment of a receiver,
               fiscal agent or similar officer by a court for his business or
               property;

          (ii) convicted in a criminal proceeding or named as a subject of a
               pending criminal proceeding (excluding traffic violations and
               other minor offences);

          (iii) subject to any order, judgment, or decree (not subsequently
               reversed, suspended, or vacated) of any court of competent
               jurisdiction permanently or temporarily enjoining him from
               engaging, or otherwise imposing limits or conditions on his
               engagement in any securities, investment advisory, banking,
               insurance, or other type of business or acting as an officer or
               director of a company;

          (iv) found by a court of competent jurisdiction in a civil action or
               by the Securities and Exchange Commission or the Commodity
               Futures Trading Commission to have violated any United States
               federal or state securities, commodities, or unfair trade
               practices law, which such judgment or finding has not
               subsequently been reversed, suspended, or vacated, or

          (v)  found by a court of competent jurisdiction to have violated any
               other Applicable Laws which such judgment or finding has not
               subsequently been reversed, suspended or vacated.

3.17 Tax Returns and Payments

     There are no Taxes due and payable by the Company which have not been paid
     in a timely fashion. There are no accrued and unpaid Taxes of the Company
     which are due, whether or not assessed or disputed. There have been no
     examinations or audits of any tax returns or reports by any applicable
     governmental agency. The Company has duly and in a timely fashion filed all
     federal, state, county, local and foreign tax returns required to have been
     filed

<PAGE>

                                      -22-


     by it and there are in effect no waivers of applicable statutes of
     limitations with respect to Taxes for any year.

3.18 Permits

     The Company has all Approvals necessary for the conduct of its business,
     the lack of which could reasonably be expected to have a Material Adverse
     Effect. The Company is not in default in any material respect under any of
     such Approvals and has not received notice of default in respect of any of
     the foregoing from any Person.

3.19 Corporate Documents

     The copy of the minute books of the Company provided to the Investors
     contains minutes of all meetings of directors and stockholders and all
     actions by written consent without a meeting by the directors and
     stockholders since the date of incorporation and accurately reflects in all
     material respects all actions by the directors (and any committee of
     directors) and shareholders with respect to all transactions referred to in
     such minutes.

     The Amended Articles are in the form provided to the Investors.

3.20 Disclosure

     The Company has made available to the Investors all the material
     information reasonably available to the Company that the Investors have
     requested or which would reasonably be required by the Investors for
     deciding whether to acquire the Series A Preferred Shares and any Ordinary
     Shares, including certain of the Company's projections describing the
     proposed business plan for the WFOE Subsidiary (the "BUSINESS PLAN"). The
     Company has not withheld, deleted, modified or otherwise altered any
     material information relating to the Company, and none of the information
     provided to the Investors is false, untrue or misleading. To the Company's
     knowledge, no representation or warranty of the Company contained in this
     Agreement, as qualified by the Disclosure Schedule, and no certificate
     furnished or to be furnished to the Investors at any Closing contains any
     untrue statement of a material fact or omits to state a material fact
     necessary in order to make the statements contained herein or therein not
     misleading in light of the circumstances under which they were made. The
     Business Plan was prepared in good faith; however, the Company does not
     warrant that it shall achieve any results projected in the Business Plan.
     It is understood that this representation is qualified by the fact that the
     Company has not delivered to the Investor, and has not been requested to
     deliver, a private placement or similar memorandum or any written
     disclosure of the types of information customarily furnished to purchasers
     of securities.

3.21 Breach of Warranty

     The Company agrees that in the event that any of the warranties or
     representations set out in this Agreement proves to be misleading or untrue
     as at Closing, then it shall indemnify and hold harmless the Investors
     against any Losses that each such Investor may suffer as a result of the
     breach of such warranties or representations.

4.   CONDITIONS TO THE INVESTORS' OBLIGATIONS AT CLOSING

<PAGE>

                                      -23-


4.1  The Initial Closing

     The rights and obligations of each of the Investors to purchase any shares
     of the Series A Preferred Shares at the Initial Closing are subject to the
     fulfilment, on or before such Closing, of each of the following conditions
     precedent, unless otherwise waived by each of the Investors:

     (a)  Representations and Warranties

          Save as disclosed in the Disclosure Schedule, the representations and
          warranties of the Company contained in Section 3 shall be true and
          correct in all material respects as of the Closing, except that any
          such representations and warranties shall be true and correct in all
          respects where such representation and warranty is qualified with
          respect to materiality in Section 3, as the case may be in writing.

     (b)  Performance

          The Company shall have performed and complied with all covenants,
          agreements, obligations and conditions contained in this Agreement
          that are required to be performed or complied with by it on or before
          the Closing.

     (c)  Compliance Certificate

          Each of the President or Chief Executive of the Company and the Legal
          Representative of the WFOE Subsidiary shall have delivered to each of
          the Investors at the Closing a certificate signed by themselves on
          behalf of their respective entities in a form satisfactory to the
          Investors certifying that the conditions specified in Sections 4.1(a)
          and (b) have been fulfilled.

     (d)  Opinion of Cayman Islands Counsel

          Each of the Investors shall have received from Conyers Dill & Pearman,
          Cayman Islands counsel for the Company, an opinion, dated as of the
          Closing, in a form satisfactory to the Investors in their sole
          discretion.

     (e)  Opinion of PRC Counsel

          Each of the Investors shall have received from PRC counsel for the
          Company, an opinion, dated as of the Closing, in a form satisfactory
          to the Investors in their sole discretion.

     (f)  Board of Directors of the Company and the WFOE Subsidiary

          As of the Closing, the authorized size of the Board shall be three (3)
          members, consisting of one (1) representative from QUALCOMM and two
          (2) representatives from Techfaith.

          The authorized size of the board of directors of the WFOE Subsidiary
          shall also be three (3) members, consisting of one (1) representative
          from QUALCOMM and two

<PAGE>

                                      -24-


          (2) representatives from Techfaith.

     (g)  Investors' Rights Agreement

          At the Initial Closing, the Investors' Rights Agreement (and/or any
          relevant document documenting and confirming the relevant party's
          accession to the Investors' Rights Agreement) shall have been executed
          and delivered by QUALCOMM and Techfaith and the Company.

     (h)  Amended Articles

          At the Initial Closing, the Company shall have filed the Amended
          Articles with the relevant government body in compliance with
          Applicable Laws of the Cayman Islands on or prior to the Closing, and
          the Amended Articles shall continue to be in full force and effect as
          of the Closing.

     (i)  License Agreements

          At the Initial Closing, each of the License Agreements shall have been
          executed and delivered by QUALCOMM, Techfaith, and/or the WFOE
          Subsidiary, as required by such agreements.

     (j)  Establishment of WFOE Subsidiary

          At or prior to the Initial Closing, the WFOE Subsidiary shall have
          been duly established and all post-establishment filings and
          registrations with the PRC authorities required with respect to the
          WFOE Subsidiary and its operation as contemplated by the Business Plan
          have been duly completed in accordance with, and within the time
          limits stipulated under, Applicable Laws of the PRC.

     (k)  Secretary's Certificate

          The Company Secretary shall have delivered to each Investor at the
          Closing a certificate certifying as true copies of originals:

          (i)  the Amended Articles;

          (ii) resolutions of the Board approving the Transaction Documents and
               the transactions contemplated under the Transaction Documents;
               and

          (iii) resolutions of the shareholders in the Company approving the
               Amended Articles and, where so required, pursuant to the Amended
               Articles, the Transaction Documents and the transactions
               contemplated by the Transaction Documents.

     (l)  Proceedings and Documents

          All corporate and other proceedings and approvals in connection with
          the transactions contemplated hereby at the Closing and all documents
          incident thereto, including but not limited to board and shareholder
          approvals and registration

<PAGE>

                                      -25-


          approvals, shall have been obtained in form and substance reasonably
          satisfactory to the Investors, and each of such Investors (or its
          counsel) shall have received all such counterpart original and
          certified or other copies of such documents as it may reasonably have
          requested. Such documents may include good standing certificates.

     (m)  Compliance with Laws

          Each Investor warrants and represents to the other Investors that as
          of the date of Closing, it has fully and duly complied with, and is
          not, and neither it, nor any Affiliates of such Investor, the Company,
          and/or the Subsidiary shall become, in connection with, or as a result
          of its execution or performance of this Agreement and/or its entering
          into or performing any of its obligations under the Transaction
          Documents or the transactions contemplated thereby, in contravention
          of any Applicable Laws. In this Section 4.1(m), Applicable Laws
          includes, without limitation, a reference to the SAFE Circular as well
          as a reference all other Applicable Laws of the PRC as may be issued
          or promulgated by from time to time.

4.2  The Subsequent Closing

     The rights and obligations of each of the Investors to purchase any shares
     of the Series A Preferred Shares at the Subsequent Closing are subject to
     the fulfilment, on or before such Closing, of each of the following
     conditions precedent, in addition to the conditions precedent set forth in
     Section 4.1 (except for Sections 4.1(g), (h), (i) and (j)), unless
     otherwise waived by each of the Investors:

     (a)  a written certification by a director of each of the Investors that
          Milestone #1 has been satisfied;

     (b)  a written certification by a director of each of the Investors that
          there has not been any material breach by the Company, the WFOE
          Subsidiary, QUALCOMM or Techfaith, as the case may be, to any of the
          Transaction Documents and/or the WFOE Articles of Association; and

     (c)  a written certification by a director of each of the Investors that
          there has not been any material breach by the Company, the WFOE
          Subsidiary, QUALCOMM or Techfaith, as the case may be, to any of the
          License Agreements.

4.3  The Final Closing

     The rights and obligations of each of the Investors to purchase any shares
     of the Series A Preferred Shares at the Final Closing are subject to the
     fulfilment, on or before such Closing, of each of the following conditions
     precedent, in addition to the conditions precedent set forth in Section 4.1
     (except for Sections 4.1(g), (h), (i) and (j)), unless otherwise waived by
     each of the Investors:

     (a)  a written certification by a director of each of the Investors that
          Milestone #2 has been satisfied;

<PAGE>

                                      -26-


     (b)  a written certification by a director of each of the Investors that
          there has not been any material breach by the Company, the WFOE
          Subsidiary, QUALCOMM or Techfaith, as the case may be, to any of the
          Transaction Documents and/or the WFOE Articles of Association; and

     (c)  a written certification by a director of each of the Investors that
          there has not been any material breach by the Company, the WFOE
          Subsidiary, QUALCOMM or Techfaith, as the case may be, to any of the
          License Agreements.

4.4  No Closing Obligation

     In the event that there has been material breach by the Company, the WFOE
     Subsidiary, QUALCOMM or Techfaith, as the case may be, to any of the
     Transaction Documents or License Agreements, and such breach has not been
     remedied during the applicable cure period, then any non-breaching party
     may immediately terminate this Agreement. Any termination of this Agreement
     shall not prejudice any cause of action or claim of a Party on account of
     any breach or default by another Party.

5.   MISCELLANEOUS

5.1  Survival of Warranties

     Unless otherwise set forth in this Agreement, the representations and
     warranties of the Company contained in or made pursuant to this Agreement
     shall survive the execution and delivery of this Agreement and the Closing
     and shall in no way be affected by any investigation of the subject matter
     thereof made by or on behalf of any of the Investors.

5.2  Transfer; Successors and Assigns

     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.
     Nothing in this Agreement, express or implied, is intended to confer upon
     any party other than the Parties or their respective successors and assigns
     any rights, remedies, obligations, or liabilities under or by reason of
     this Agreement, except as expressly provided in this Agreement.

5.3  Governing Law

     This Agreement shall be governed by, and construed in accordance with, the
     laws of the Hong Kong as to matters within the scope thereof, without
     regard to its principles of conflicts of laws.

5.4  Counterparts

     This Agreement may be executed in any number of counterparts, each of which
     shall be deemed an original, but all of which together shall constitute one
     and the same instrument. This Agreement may also be executed and delivered
     by facsimile signature and any number of counterparts, each of which shall
     be deemed an original, but all of which together shall constitute one and
     the same instrument.

<PAGE>

                                      -27-


5.5  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.

5.6  Notices

     All notices and other communications given or made pursuant to this
     Agreement shall be in writing and shall be deemed effectively given:

          (i)  upon personal delivery to the Party to be notified;

          (ii) when sent by "read" receipt confirmed electronic mail or
               facsimile (subject to confirmation of completed uninterrupted
               transmission) if sent during normal business hours of the
               recipient, and if not so confirmed, then on the next business
               day;

          (iii) five (5) days after having been sent by registered or certified
               mail, return receipt requested, postage prepaid; or

          (iv) one (1) day after deposit with a nationally recognized overnight
               courier, specifying next day delivery, with written verification
               of receipt.

     All communications shall be sent to the respective Parties at their address
     as set forth above or on the signature page, or to such e-mail address,
     facsimile number or address as subsequently modified by written notice
     given in accordance with this Section 5.6. If notice is given to the
     Company, a copy shall also be sent to the registered address of the Company
     and if notice is given to any Investors, a copy shall also be given to
     Lovells Beijing Office.

5.7  No Finder's Fees

     Each Party represents that it neither is, nor shall it be obligated for any
     finder's fee or commission in connection with this transaction nor has it
     procured that the Company shall be liable for any such finder's fee. The
     Company agrees to indemnify and hold harmless each Investor from any
     liability for any commission or compensation in the nature of a finder's or
     broker's fee arising out of this transaction (and the costs and expenses of
     defending against such liability or asserted liability) for which the
     Company or any of its officers, directors or representatives is
     responsible.

5.8  Confidentiality Obligations

     (a)  All Confidential Information shall remain the property of the
          furnishing Party. The furnishing Party grants the receiving Party or
          Parties the right to use such Confidential Information only as
          follows. Such Confidential Information (i) shall not be reproduced or
          copied, in whole or part, except for use as expressly authorized in
          this Agreement; (ii) shall, together with any full or partial copies
          thereof, be returned or destroyed when no longer needed or upon any
          termination of this Agreement; and (iii) shall only be disclosed to
          employees of the receiving Party or Parties who have a need to know
          (and such Party or Parties shall advise such employees of the
          obligations assumed

<PAGE>

                                      -28-


          herein and shall ensure their compliance herewith). Moreover, such
          Confidential Information shall be used by the receiving Party or
          Parties only for the purpose of performing under this Agreement.
          Unless the furnishing Party consents in writing, such Confidential
          Information shall be held in confidence by the receiving Party or
          Parties. These restrictions shall not apply to any Confidential
          Information (i) which can be proven to be or have been independently
          developed by the receiving Party or Parties or lawfully received free
          of restriction from another source having the right to so furnish such
          Confidential Information; (ii) after it has become generally available
          to the public without breach of this Agreement by the receiving Party
          or Parties or its/their Affiliates; (iii) which at the time of
          disclosure to the receiving Party or Parties was known to such Party
          or Parties free of restriction and evidenced by documentation in such
          Party's or Parties' possession; or (iv) which the disclosing Party
          agrees in writing is free of such restrictions.

     (b)  Confidential Information is subject to this Section 5.8 whether
          delivered orally or in tangible form and without regard to whether it
          has been identified or marked as confidential or proprietary. Each
          Party agrees to use its best efforts to mark or otherwise identify as
          confidential or proprietary all Confidential Information that it
          desires to be subject to the terms of this clause before furnishing it
          to the other Party or Parties. Upon request, a Party shall promptly
          identify whether specified information must be held by the receiving
          Party or Parties subject to this Section 5.8.

     (c)  Each Party agrees that the QUALCOMM Director and Techfaith Directors
          shall be entitled to report all matters concerning the Company or the
          WFOE Subsidiary, including but not limited to matters discussed at any
          meeting of the Board and of any committee of the Board, to his/her
          appointer, and that such QUALCOMM Director or any Techfaith Directors
          may take advice and obtain instructions from his/her appointer,
          without prejudice to the QUALCOMM Director's or Techfaith Directors'
          obligation (as the case may be) to act at all times in the best
          interests of the Company or the WFOE Subsidiary.

     (d)  Each Party acknowledges that the terms and conditions of this
          Agreement, other Transaction Documents, and all exhibits, restatements
          and amendments hereto and thereto (collectively, the "Financing
          Terms"), including their existence, shall be considered Confidential
          Information and shall not be disclosed by it to any third party except
          in accordance with the provisions set forth in this Section 5.8.

     (e)  Notwithstanding anything in the foregoing to the contrary, the Company
          may disclose any of the Financing Terms to its current or bona fide
          directors, officers, employees, investment bankers, lenders,
          accountants, auditors, insurers and attorneys, in each case only where
          such Persons have a need to know and are under non-disclosure
          obligations imposed by contract, professional ethics, law or otherwise
          that are at least as restrictive as this Section 5.8.

     (f)  The obligations contained in this Section 5.8 shall endure, even after
          the termination of this Agreement, without limit in point of time
          except to the extent that and until any Confidential Information
          enters the public domain as set out above.

<PAGE>

                                      -29-


5.9  Fees and Expenses

     (a)  Subject to the provisions of subsection (b) below:

          (i)  the Company shall bear, and shall reimburse and pay each of the
               Investors all costs and expenses (including all legal, accounting
               and out of pocket costs and expenses) incurred in relation to the
               proposed investment by the Investors, including for the
               restructuring of the Company and preparation of the Company for
               offshore investors, and the negotiation, preparation and
               execution of the definitive documentation relating thereto, up to
               the maximum amount of US$200,000. In the event that such
               aggregate costs and expenses of the Investors exceed US$200,000,
               each Investor shall be reimbursed such amount as shall be
               determined as follows:

               R = US$200,000 x I/T

               Where

               R is the amount in US$ that such Investor shall receive as
               reimbursement for its costs and expenses hereunder,

               I is the total amount of costs and expenses incurred by such
               Investor, and

               T is the total amount of costs and expenses incurred by all the
               Investors; and

          (ii) such amount referred to in subsection (a)(i) above shall be
               deducted from and set-off against the total investment amount
               payable by each of the Investors for the Series A Preferred
               Shares under this Agreement.

     (b)  In the event that the sale and purchase of shares under this Agreement
          is not completed, and the Parties agree in writing to terminate this
          Agreement for reasons attributable to:

          (i)  the Company, the provisions of subsection (a) above shall
               continue to apply, and the Company shall continue to be bound by
               its obligations therein, save that the amount to be reimbursed
               and paid to the Investors under subsection (a) above shall be
               paid to each of the Investors, in such form as may be acceptable
               to such Investor within thirty (30) days of the termination of
               this Agreement.

          (ii) the Investors, the provisions of subsection (a) above shall not
               apply, and each Party shall bear its own professional and other
               costs and expenses incurred by it in relation to the investment
               contemplated hereunder.

5.10 Attorney's Fees

     Without prejudice to the provisions of Section 5.9, if any action at law or
     in equity (including arbitration) is necessary to enforce or interpret the
     terms of any of the Transaction

<PAGE>

                                      -30-


     Documents, 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.

5.11 Amendments and Waivers

     Any term of this Agreement may be amended, terminated or waived with the
     written consent of each Party. Any amendment or waiver effected in
     accordance with this Section 5.11 shall be binding upon each Investor and
     each transferee of the Series A Preferred Shares (or of the Ordinary Shares
     issuable upon conversion thereof), each future holder of all such
     securities, and the Company.

5.12 Severability

     The invalidity of unenforceability of any provision hereof shall in no way
     affect the validity or enforceability of any other provision.

5.13 Delays or Omissions

     No delay or omission to exercise any right, power or remedy accruing to any
     Party under this Agreement, upon any breach or default of any other Party
     under this Agreement, shall impair any such right, power or remedy of such
     non-breaching or non-defaulting Party nor shall it be construed to be a
     waiver of any such breach or default, or an acquiescence therein, or of or
     in any similar breach or default thereafter occurring; nor shall any waiver
     of any single breach or default be deemed a waiver of any other breach or
     default theretofore or thereafter occurring. Any waiver, permit, consent or
     approval of any kind or character on the part of any Party of any breach or
     default under this Agreement, or any waiver on the part of any Party of any
     provisions or conditions of this Agreement, must be in writing and shall be
     effective only to the extent specifically set forth in such writing. All
     remedies, either under this Agreement or under Applicable Law or otherwise
     afforded to any Party, shall be cumulative and not alternative.

5.14 Moratorium

     (a)  In the event that the Initial Closing does not take place on the date
          of this Agreement:

          (i)  each of the Parties shall use its best efforts to complete the
               due diligence, restructuring and all other work contemplated
               under and in connection with this Agreement, including the
               fulfilment of the conditions precedent, so as to facilitate
               effecting Closing as soon as possible; and

          (ii) the Company shall not, unless otherwise agreed to in writing by
               each Investor, solicit for or engage with other outside parties
               on any fund raising efforts until the date of the Closing.

     (b)  For the avoidance of doubt, each Investor reserves the right, and the
          Company acknowledges that such Investor being in the business of
          making venture investments have the right to receive information of,
          meet with employees of, and discuss or invest in any company whether
          or not such company has products or services which compete with those
          of the Company, and without informing the

<PAGE>

                                      -31-


          Company.

5.15 Entire Agreement

     This Agreement (including the Schedules and Exhibits hereto, if any),
     together with the other Transaction Documents constitute the full and
     entire understanding and agreement between the Parties with respect to the
     subject matter hereof, and any other written or oral agreement relating to
     the subject matter hereof existing between the Parties are expressly
     cancelled.

5.16 Dispute Resolution

     (a)  Any dispute arising out of or in connection with this Agreement,
          including any question regarding its existence, validity or
          termination, shall be referred to representatives of the Parties for
          settlement through friendly consultations between the Parties hereto.
          In case no agreement can be reached through consultation within thirty
          (30) days from either Party's written notice to the other for
          commencement of such consultations, the dispute may be submitted to
          arbitration for settlement by either Party. Any and all such disputes
          shall be finally resolved by arbitration in accordance with the
          Arbitration Rules of the United Nations Commission on International
          Trade Law (UNCITRAL) in force at the relevant time and as may be
          amended by the rest of this section. The place of arbitration shall be
          the Hong Kong International Arbitration Centre ("HKIAC"). The official
          language of the arbitration shall be English and the tribunal shall
          consist of one arbitrator to be appointed by HKIAC. The sole
          arbitrator appointed by HKIAC shall have experience in handling China
          cross-border financing disputes.

     (b)  In the course of arbitration, all the Parties shall continue to
          implement the terms of this Agreement except for those matters subject
          to arbitration.

     (c)  Notwithstanding the above, the Parties hereby consent to and agree
          that, in addition to any recourse to arbitration as set out above, any
          Party may seek a temporary or permanent injunction from a court or
          other authority with competent jurisdiction and, notwithstanding that
          this Agreement is governed by the laws of the Hong Kong, a court or
          authority hearing an application for injunctive relief may apply the
          law of the jurisdiction where the court or other authority is located
          in determining whether to grant the injunction.

                  [Remainder of Page Left Blank Intentionally]
<PAGE>

                                      -32-


IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.


          TECHFAITH SOFTWARE (CHINA) HOLDING LIMITED


          By: /s/ Frank Meng
              ---------------------------------
          Name: Frank Meng
          Title: Director
          Address: Century Yard, Cricket Square, Hutchins Drive,
                   O.P. Box 2681GT, George Town, Grand Cayman,
                   British Indies West


          QUALCOMM INCORPORATED


          By: /s/ William E. Keitel
              ---------------------------------
          Name: William E. Keitel
          Title: EVP and CFO
          Address: 5775 Morehouse Drive, San Diego, CA 92121 USA


          CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED


          By: /s/ Junhon Huang
              ---------------------------------
          Name: Junhon Huang
          Title: Vice President
          Address: 3/F M8 West, No. 1 Jiu Xian Qiao East Road,
                   Chao Yang District, Beijing 100016, PRC

          SIGNATURE PAGE TO SERIES A SHARE PURCHASE AND SALE AGREEMENT


<PAGE>

                                      -33-


                     SCHEDULE 1 - PARTICULARS OF THE COMPANY

                   PART A: PARTICULARS OF COMPANY PRE-CLOSING

<TABLE>
<S>                                     <C>
AUTHORISED SHARE CAPITAL:               75,000,000
   ORDINARY SHARES:                     50,000,000
   SERIES A PREFERRED SHARES:           25,000,000
NUMBER OF ORDINARY SHARES IN ISSUE:     10
PAR VALUE OF ORDINARY SHARES IN
   ISSUE:                               US$0.001 PER ORDINARY SHARE

NUMBER OF SERIES A PREFERRED SHARES
   IN ISSUE:                            0
PAR VALUE OF SERIES A PREFERRED
   SHARES IN ISSUE:                     US$0.001 PER SERIES A PREFERRED SHARE

DIRECTORS:                              JUNHOU HUANG AND FRANK MENG

REGISTERED OFFICE OF COMPANY:           CENTURY YARD, CRICKET SQUARE,
                                        HUTCHINS DRIVE, O.P. BOX 2681GT,
                                        GEORGE TOWN, GRAND CAYMAN,
                                        BRITISH WEST INDIES
</TABLE>

<PAGE>

                                      -34-


                   PART B: PARTICULARS OF THE WFOE SUBSIDIARY

                 [to be completed prior to the Initial Closing]

<TABLE>
<S>                              <C>
NAME: English and Chinese
REGISTERED CAPITAL:              US$10,000,000
TOTAL INVESTMENT AMOUNT:         US$25,000,000
PAID-UP REGISTERED CAPITAL:
BUSINESS LICENCE NO. AND DATE:
MOFCOM APPROVAL NO:
DATE OF APPROVAL CERTIFICATE:
SHAREHOLDERS:
DIRECTORS: [__________]
LEGAL ADDRESS: [____________]
</TABLE>
<PAGE>

                                      -35-


             SCHEDULE 2 - CAPITALIZATION OF THE COMPANY POST-CLOSING

PART A: AT INITIAL CLOSING

AUTHORISED CAPITAL: 50,000,000 ORDINARY SHARES AND 25,000,000 SERIES A PREFERRED
SHARES

<TABLE>
<CAPTION>
                                                     PAR VALUE OF
                                    SERIES A       SHARES IN ISSUE     PERCENTAGE
SHAREHOLDER   ORDINARY SHARES   PREFERRED SHARES       (IN US$)      SHAREHOLDING*
-----------   ---------------   ----------------   ---------------   -------------
<S>           <C>               <C>                <C>               <C>
QUALCOMM              3             3 million           0.001             30%
Techfaith             7             7 million           0.001             70%
                    ---            ----------                            ---
Total                10            10 million                            100%
                    ===            ==========                            ===
</TABLE>

*    OF TOTAL NUMBER OF SHARES ISSUED IN THE CAPITAL OF THE COMPANY (ON A
     FULLY-CONVERTED BASIS)

PART B: AT SUBSEQUENT CLOSING

<TABLE>
<CAPTION>
                                                     PAR VALUE OF
                                    SERIES A       SHARES IN ISSUE     PERCENTAGE
SHAREHOLDER   ORDINARY SHARES   PREFERRED SHARES       (IN US$)      SHAREHOLDING*
-----------   ---------------   ----------------   ---------------   -------------
<S>           <C>               <C>                <C>               <C>
QUALCOMM              3             6 million           0.001             30%
Techfaith             7            14 million           0.001             70%
                    ---            ----------                            ---
Total                10            20 million                            100%
                    ===            ==========                            ===
</TABLE>

PART C: AT FINAL CLOSING

<TABLE>
<CAPTION>
                                                     PAR VALUE OF
                                    SERIES A       SHARES IN ISSUE     PERCENTAGE
SHAREHOLDER   ORDINARY SHARES   PREFERRED SHARES       (IN US$)      SHAREHOLDING*
-----------   ---------------   ----------------   ---------------   -------------
<S>           <C>               <C>                <C>               <C>
QUALCOMM              3            7.5 million          0.001              30%
Techfaith             7           17.5 million          0.001              70%
                    ---           ------------                            ---
Total                10             25 million                            100%
                    ===           ============                            ===
</TABLE>

<PAGE>

                                      -36-


       EXHIBIT A - FORM OF AMENDED MEMORANDUM AND ARTICLES OF ASSOCIATION

                            [INTENTIONALLY OMITTED.]

<PAGE>

                                      -37-


                 EXHIBIT B - FORM OF INVESTORS' RIGHTS AGREEMENT

                            [INTENTIONALLY OMITTED.]
<PAGE>

                                      -38-


                         EXHIBIT C - DISCLOSURE SCHEDULE

                 [TO BE UPDATED AT EACH OF THE INITIAL CLOSING,
                     SUBSEQUENT CLOSING AND FINAL CLOSING.]

<PAGE>

                                      -39-


             EXHIBIT D - FORM OF SOFTWARE LICENSE AGREEMENT BETWEEN
                          QUALCOMM AND WFOE SUBSIDIARY

                            [INTENTIONALLY OMITTED.]


<PAGE>

                                      -40-


             EXHIBIT E - FORM OF SOFTWARE LICENSE AGREEMENT BETWEEN
                         TECHFAITH AND WFOE SUBSIDIARY

                            [INTENTIONALLY OMITTED.]



<PAGE>

                                      -41-


              EXHIBIT F - FORM OF DEVELOPMENT AND LICENSE AGREEMENT
                  AMONG WFOE SUBSIDIARY, TECHFAITH AND QUALCOMM

                            [INTENTIONALLY OMITTED.]