Exhibit10.98

 

[***].  Confidential Treatment Requested – Certaininformation in this exhibit has been omitted and filed separately with thecommission.  Confidential treatment hasbeen requested with respect the omitted portions.

 

SUBSCRIBER UNITLICENSE AGREEMENT

 

ThisSubscriber Unit License Agreement (the ”Agreement”)is entered into on January 30, 2004 by and between QUALCOMM Incorporated,a Delaware corporation, and UTStarcom, Inc., a Delaware corporation, withrespect to the following facts:

 

RECITALS

 

WHEREAS,QUALCOMM has developed certain proprietary Code Division Multiple Access(“CDMA”) technology which may be useful in providing greater capacity andimproved quality and reliability compared to other cellular telephonetechnologies, and QUALCOMM manufactures and sells CDMA components andequipment;

 

WHEREAS,LICENSEE desires to obtain a license of QUALCOMM’s Intellectual Property tomanufacture and sell Subscriber Units, and QUALCOMM desires to grant suchlicense in exchange for the license fees, royalties and other provisions hereofin accordance with the terms and conditions set forth in this Agreement; and

 

WHEREAS,QUALCOMM desires to obtain a license of LICENSEE’s Intellectual Property tomanufacture, use and sell Subscriber Units and Components, and LICENSEE desiresto grant such license in accordance with the terms and conditions set forth inthis Agreement.

 

AGREEMENT

 

NOWTHEREFORE, the Parties hereby agree as follows:

 

# 1.                                       HEADINGS AND DEFINITIONS.

#  

Allheadings used in this Agreement are inserted for convenience only and are notintended to affect the meaning or interpretation of this Agreement or anyclause.  Reference to “third party” or“third parties” shall not mean either Party or their Affiliates.  For the purpose of this Agreement, thefollowing definitions apply:

 

“Affiliates”means, as to a Party, any present or future Parent of the Party and any presentor future Subsidiary of the Party and/or its Parent, but only for so long asthe Parent remains the Parent of the Party and the Subsidiary remains aSubsidiary of the Party and/or its Parent. The term “Parent” means any corporation or other legal entity that ownsor controls, directly or indirectly, (i) more than 50% of the shares or othersecurities of the Party entitled to vote for election of directors (or othermanaging authority) of the Party or (ii) if such Party does not have

 

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outstanding shares or securities, more than 50% of theequity interest in such Party, but only for so long as such ownership orcontrol exists in (i) or (ii) above.  Theterm “Subsidiary” of a party means any corporation or other legal entity (i)the majority (more than 50%) of whose shares or other securities entitled tovote for election of directors (or other managing authority) is now orhereafter owned or controlled by such party either directly or indirectly or(ii) which does not have outstanding shares or securities but the majority(more than 50%) of the equity interest in which is now or hereafter owned orcontrolled by such party either directly or indirectly, but only for so long assuch ownership or control exists in (i) or (ii) above.

 

“AuthorizedLicensees” shall have the meaning described in Section 6.3 below.

 

“CDMAApplications” means all communication applications (regardless of the transmissionmedium) that operate using code division multiple access (“CDMA”) technology,whether or not based on IS-95, cdma2000 or W-CDMA, and irrespective offrequency band.

 

“CDMAASIC” means QUALCOMM’s mobile station modem (MSM) CDMA application specificintegrated circuit (including the hardware, firmware and/or associated softwarethat runs on the ASIC), and any revision, generation, modifications orintegration to or of the MSM, purchased by LICENSEE from QUALCOMM.

 

“Chipset”means a CDMA ASIC and all companion application specific integrated circuitsdesigned and offered for sale by QUALCOMM for use with such CDMA ASIC in aSubscriber Unit (and future evolutions, combinations or versions of any of theforegoing) and which are purchased by LICENSEE from QUALCOMM.

 

“CommerciallyNecessary IPR” means those Intellectual Property Rights which (i) the Party orits Affiliates has the right to license to the other Party without payment ofroyalties or any other consideration to any third party, (ii) are not essentialto the manufacture, use or sale of a usable Subscriber Unit and/or Componentthat complies with the specifications of the CAI and (iii) provide SubscriberUnits and/or Components with a competitive advantage (e.g., cost, lead-time orquality advantages) or which add to Subscriber Units or Components a feature orother characteristic which may be reasonably required by the marketplace; butthe term Commercially Necessary IPR does not include any trade name, trademark,service mark, or similar symbols, abbreviations, contractions or simulationsidentifying the Party and its Affiliates (except as set forth inSection 8, if the Party is QUALCOMM).

 

“CommonAir Interface” or “CAI” means (i) the TIA’s IS-95 digital cellular standard andother CDMA standards which specify the same Physical Layer as lS-95 if approvedby QUALCOMM and adopted by other international standards bodies throughout theworld, and (ii) the technical description of any third generation CDMA airinterface standard for communication between cell site or other base stationtransceivers and Subscriber units which (a) is adopted as an industry standardby the Telecommunications Industry Association (“TIA”), the EuropeanTelecommunication Standards Institute (“ETSI”), Japan’s Association of RadioIndustries and Businesses (“ARIB”) or other recognized international standardsbodies, (b) has been approved by QUALCOMM (i.e., QUALCOMM voted in favorof adopting such standard), (c) supports operation with both GSM MAP andANSI-41 networks in all operational (whether optional or

 

2

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not) modes or configurations, and (d) includes amulti-carrier, FDD CDMA mode of operation and/or a direct sequence, FDD CDMAmode of operation.

 

“Components”means application specific integrated circuits (ASICs), electronic devices,integrated circuits, including firmware thereon and accompanying or associatedsoftware, and/or families of devices for use in wireless telecommunicationsequipment.

 

“Costs”as such term is used in the definition of [***] shall include all actual labor,material and other direct costs, expenses and associated burdens, includingoverheads and general and administrative expenses, a reasonable amortization ofassociated research and development expenses, and warranty costs, all asconsistently applied in accordance with U.S. generally accepted accountingprinciples (GAAP).

 

“DualMode CDMA” means, as applied to Subscriber Units, having a capability tooperate with CDMA technology and existing analog FM cellular technology forbackward compatibility with analog FM cellular infrastructure and subscriberunits.

 

“EffectiveDate” means the date first set forth above.

 

“EligibleSubscriber Unit” means only those Subscriber Units that:  [***].

 

“Ericsson”means Telefonaktiebolaget LM Ericsson (publ), a Swedish corporation and any ofits subsidiaries in which it owns or controls fifty percent (50%) or moreof the voting power.

 

“FutureCommercially Necessary IPR” means all claims of any patents (foreign anddomestic) which fall within the definition of Commercially Necessary IPR, butwhich do not fall within the definition of Included Commercially Necessary IPR.

 

“HaveMade” means the right of LICENSEE under Ericsson’s Patents to have a thirdparty make a Subscriber Unit for CDMA Applications for the use and benefit ofLICENSEE, provided that:

 

(i)                                     LICENSEEowns and supplies the designs, or specifications, or working drawings to suchthird party;

 

(ii)                                  such designs, specifications, and working drawings are insufficient detail that no substantial additional design by such third party isrequired;

 

(iii)                               such third party is not allowed to sell such Subscriber Unitto other third parties; and

 

(iv)                              each such Subscriber Unit sold by LICENSEE shall bear the trademarks,trade names, or other commercial indicia of LICENSEE, although such SubscriberUnits may be co-branded with the trademarks, trade names, or other commercialindicia of the reseller or distributor of such Subscriber Units.  The requirements of this subparagraph (iv) shall not apply where a customer requires that theSubscriber Unit bear only such customer’s trademarks, trade names, or othercommercial indicia.

 

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“IncludedCommercially Necessary IPR” means (1) with respect to the Intellectual PropertyRights being licensed by QUALCOMM, (a) all claims of any patents (foreign anddomestic) which were issued or applied for on or before the Effective Date andwhich constitute Commercially Necessary IPR and (b) all copyright, tradesecret, know-how, technical assistance and other intellectual property rightswhich constitute Commercially Necessary IPR and which may be furnished byQUALCOMM to LICENSEE pursuant to and during the term of this Agreement and (2)with respect to the Intellectual Property Rights being licensed by LICENSEE,(a) all claims of any patents (foreign and domestic) which are now issued orwhich are applied for on or before the Effective Date and which constituteCommercially Necessary IPR and (b) all copyright, trade secrets, know-how,technical assistance and other intellectual property rights which constituteCommercially Necessary IPR and which may be furnished by LICENSEE to QUALCOMMpursuant to and during the term of this Agreement.

 

“IntellectualProperty Rights” means patents, copyrights, trade secrets, know-how and otherintellectual property rights.

 

“InterDigital”means InterDigital Communications Corporation, InterDigital Patents Corporationand/or InterDigital Technology Corporation.

 

“InterDigital’sExcluded Patents” means those claims of each of InterDigital’s [***].

 

“InterDigital’sFive Patents” means [***].

 

“InterDigitalIncluded Patents” means [***].

 

“InterDigital’sPatents” means [***].

 

“IS-95Related Systems” means I-95 and any single carrier system with a spreadingbandwidth not greater than 1.25 MHz and based on or derived from IS-95.

 

“LicensedCustomer” means a person or entity that is licensed by QUALCOMM under any orall of QUALCOMM’s Intellectual Property to make and sell Subscriber Units thatcomply with or implement one or more of the air interface standards included inthe CAI (each such license agreement between QUALCOMM and a Licensed Customershall hereinafter be referred to as an ”LCLicense Agreement”).

 

“LICENSEE”means UTStarcom, Inc., a Delaware corporation.

 

“LICENSEE’sIntellectual Property” means LICENSEE’s Technically Necessary IPR andLICENSEE’s Included Commercially Necessary IPR.

 

“Masks”and “Mask Sets” mean the mask sets for Components and/or the computer outputdata used to generate the mask sets for Components.

 

“NetSelling Price”, with respect to each Subscriber Unit Sold by LICENSEE, shallmean one of the following, whichever is applicable:

 

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(a)                                  When Sold by LICENSEE to aPurchaser (a ”Purchaser” being a person or entitythat does not control LICENSEE, is not controlled by LICENSEE or is not incommon control with LICENSEE; and the term “control” for the above purposesshall mean the direct or indirect ownership or control of more than a [***]),the Net Selling Price shall be [***]; or

 

(b)                                 When Sold by LICENSEE to aRelated Carrier or to a person or entity that is not a Purchaser (in eithercase, a ”Related Buyer”), the Net Selling Price shallbe [***]; or

 

(c)                                  When retained by LICENSEEfor its own use or lease, or when Sold by LICENSEE to a Related Buyer for itsown use or lease, the Net Selling Price shall be [***].

 

“Non-EligibleSubscriber Unit” means a Subscriber Unit that is not an Eligible SubscriberUnit.

 

“Party”shall individually mean QUALCOMM or LICENSEE and the term “Parties” shallcollectively mean QUALCOMM and LICENSEE.

 

“Philips”shall mean Philips Electronics N.V., a company existing under the laws of theNetherlands.

 

“Philips’CDMA Technically Necessary Patents” means [***].

 

“PhysicalLayer” shall have the same meaning given to it in the TIA’s IS-95 digitalcellular standard.

 

“QUALCOMM”means QUALCOMM Incorporated, a Delaware corporation.

 

“QUALCOMM’sIntellectual Property” means QUALCOMM’s Technically Necessary IPR andQUALCOMM’s Included Commercially Necessary IPR and InterDigital’s Patents;provided that, notwithstanding the foregoing, the term “QUALCOMM’s IntellectualProperty” shall not include any intellectual property owned by SnapTrack, Inc.,including but not limited to its patents.

 

“QualifyingSubscriber Unit” means a Subscriber Unit which contains and incorporates a CDMAASIC purchased by LICENSEE from QUALCOMM.

 

“RelatedCarrier” means a wireless communications system operator that (i) owns orcontrols, either directly or indirectly, a Significant Interest in LICENSEE,(ii) a Significant Interest of which is owned or controlled, either directly orindirectly, by LICENSEE, or (iii) a Significant Interest of which is owned orcontrolled, either directly or indirectly, by a third party that also owns orcontrols, either directly or indirectly, a Significant Interest in LICENSEE;and for purposes of this definition, the term “Significant Interest” shall mean[***].

 

“SellingPrice” means the gross selling price and/or value of other considerationcharged by the LICENSEE or its final vendee Related Buyer for each SubscriberUnit in the form in which it is Sold (whether or not assembled and withoutexcluding therefrom any Components or subassemblies thereof which are includedwith such Subscriber Unit) deducting therefrom only the following items [***].

 

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“Sold,”“Sale,” “Sell” means put into use, sold, leased or otherwise transferred and asale shall be deemed to have occurred upon first use, shipment or invoicing,whichever shall first occur.

 

“SubscriberUnit” means a complete CDMA and/or Dual Mode CDMA telephone, including but notlimited to mobile, transportable and portable telephones, which incorporatesall or any part of QUALCOMM’s Intellectual Property and can be used, withoutany additional equipment or components being attached thereto, to initiateand/or receive Wireless telecommunications transmissions in accordance with theCAI.

 

“TechnicallyNecessary IPR” means all claims of any patents (foreign and domestic), issuedon, prior to or after the Effective Date which (i) the Party and/or itsAffiliates has the right to license to the other Party without payment ofroyalties or any other consideration to any third party and (ii) are essentialto the manufacture, use or sale of Subscriber Units and/or Components whichcomply with the specifications of the CAI (i.e., must be infringed upon inorder to comply with the CAI); but the term Technically Necessary IPR does notinclude any trade name, trademark, service mark, or similar symbols,abbreviation, contractions or simulations identifying the Party and itsAffiliates (except as set forth in Section 8, if the Party is QUALCOMM).

 

“UnlicensedCustomer” means a person or entity that is not a Licensed Customer.

 

“Wireless” and “Wireless Applications” means terrestrial-based,land mobile, wireless telecommunications applications which are based upon theCAI, including but not limited to cellular, personal communications services(PCS), wireless local loop and wireless PBX applications.  Notwithstanding the foregoing, the terms“Wireless” and/or “Wireless Applications” shall not include (i) satelliteapplications (defined as any application which utilizes a direct connectionbetween the Subscriber Unit and any satellite), and/or (ii) Cordless TelephoneApplications (defined as applications not dependent on use of a switch,including but not limited to a PABX switch, for interface to the publicnetwork).

 

# 2.                                       TERM OF AGREEMENT.

#  

ThisAgreement shall commence upon the Effective Date and, unless otherwiseterminated or canceled as provided herein, shall continue in full force andeffect thereafter.

 

# 3.                                       LICENSE FEES TO QUALCOMM.

#  

Inpartial consideration of the rights granted to LICENSEE under this Agreement,LICENSEE shall pay [***].

 

# 4.                                       TECHNICAL ASSISTANCE.

#  

## 4.1                                 Technical Meetings and Assistance.  Upon LICENSEE’s reasonableadvance written request, QUALCOMM shall provide reasonable amounts of technicalassistance to LICENSEE on an as available basis and at QUALCOMM’s then standardrates for providing such technical assistance. In such event, QUALCOMM shall be permitted to invoice LICENSEE for suchcharges on a bi-weekly basis.  Payment byLICENSEE with respect to such invoices shall be on [***] basis after the dateof the invoice.  QUALCOMM may terminatesuch additional technical assistance at any time upon written notice toLICENSEE.  This Agreement

##  

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## shall not require QUALCOMM to provide any technical assistance relating tothe design of Components or any technical assistance not related to SubscriberUnits.

##  

## 4.2                                 Limitation on Deliverables.  Nothing herein shall requirethe delivery of any documentation, including but not limited to:  (a) any Mask Sets developed by QUALCOMM, (b)any micro-code for embedded processors or (c) any of the detailed algorithmsfor the Components or the Subscriber Unit microprocessor.

##  

## 4.3                                 Representations and Limitations on Furnished Information. QUALCOMM shall use reasonable commercial efforts to verify the accuracyof the information furnished by it hereunder, but QUALCOMM shall not be liablefor damages arising out of or resulting from anything made available hereunderor the use thereof nor be liable to LICENSEE for consequential, special orincidental damages under any circumstances. The sole obligation of QUALCOMM with respect to such information shall,subject to the other provisions herein or in other written agreements betweenthe Parties, be to furnish it to LICENSEE. QUALCOMM shall have no responsibility for the ability of LICENSEE to usesuch information, the quality or performance of the products produced therefromby LICENSEE, or the claims of third parties arising from the use of suchproducts or information.  QUALCOMM doesnot warrant and shall not be responsible for any design, specification,drawing, blueprint, reproduced tracing, or other data or information furnishedby it to LICENSEE, except that it shall furnish such in good faith to the bestof QUALCOMM’s knowledge and ability.

##  

# 5.                                       QUALCOMM LICENSE.

#  

## 5.1                                 Grant of License From QUALCOMM. Subject to the terms and conditions of this Agreement, including but notlimited to timely payment of the license fees and royalties set forth herein,QUALCOMM hereby grants to LICENSEE a personal, nontransferable, worldwide andnonexclusive license under QUALCOMM’s Intellectual Property solely for WirelessApplications to (a) make (and have made), import and use Subscriber Units,(b) Sell Subscriber Units, but only to Unlicensed Customers (i.e., thisprovision does not grant LICENSEE a license or any rights to directly orindirectly sell Subscriber Units to Licensed Customers), and (c) to make (and havemade) Components (provided such Components have been designed exclusively byLICENSEE and which design is owned and used exclusively by LICENSEE) andimport, use, sell, lease and otherwise dispose of such Components but only ifsuch Components are included as part of and within complete Subscriber UnitsSold by LICENSEE in accordance with this Section 5.1 (or as replacementparts for such Subscriber Units previously sold by LICENSEE). No other, furtheror different license is hereby granted or implied.

##  

### 5.1.1                        Sales to Licensed Customers.  Although LICENSEE is notlicensed by QUALCOMM hereunder to Sell Subscriber Units to Licensed Customers,nothing in this Agreement shall be construed to prohibit LICENSEE from makingor Selling Subscriber Units to a Licensed Customer solely in accordance withthe ”have made” rights of such Licensed Customer as set forth in suchLicensed Customer’s LC License Agreement and no royalty shall be payable byLICENSEE hereunder for such Sales, Notwithstanding anything in the foregoing,nothing herein is intended to modify or amend the terms and conditions of anyLC License Agreement, including but not limited to the scope of such LicensedCustomer’s “have made” rights or the royalties payable thereunder.  LICENSEE hereby represents and warrants that

 

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### LICENSEE will not engage in anytransaction(s) that facilitate the Sale, whether directly or indirectly, of anySubscriber Units to a Licensed Customer, except as expressly provided for inthis Section 5.1.1.

###  

### 5.1.2                        InterDigital’s Patents.  The license granted byQUALCOMMM under Section 5.1 with respect to InterDigital’s Patents issubject to all other limitations set forth in this Agreement which areapplicable to all of QUALCOMM’s Intellectual Property licensed hereunder and isalso subject to the following limitations:

###  

[***].

 

## 5.2                                 Royalties.  In partial consideration for the license fromQUALCOMM, LICENSEE shall pay to QUALCOMM, [***]:

##  

### 5.2.1                        Royalties For Eligible Subscriber Units. For each Eligible Subscriber Unit Sold by LICENSEE, LICENSEE shall payroyalties in an amount equal to [***]

###  

### 5.2.2                        Royalties For Non-Eligible Subscriber Units. For each Non-Eligible Subscriber Unit Sold by LICENSEE, LICENSEE shallpay royalties to QUALCOMM in an amount equal to [***].

###  

Royaltiesshall be payable on all Subscriber Units Sold by LICENSEE regardless of whetherthe use or incorporation of QUALCOMM’s Intellectual Property arises from theuse of one or more Components from whomsoever purchased by LICENSEE.  [***].

 

QUALCOMMwill credit to LICENSEE the amount of any overpayment of royalties madehereunder in error provided that such overpayment is identified and fullyexplained in a written notice from LICENSEE to QUALCOMM delivered no later than[***] after the due date of the payment which included such allegedoverpayment, provided further that QUALCOMM is able to verify to its ownsatisfaction the existence and extent of such overpayment. The foregoingprocedure shall constitute the sole basis for LICENSEE to claim overpaymentsunder this Agreement and shall not be affected by any statement appearing onany check, royalty report, cover letter, or other document, except to theextent agreed upon by QUALCOMM in a writing signed by an authorizedrepresentative of QUALCOMM.

 

## 5.3                                 Right To Sublicense Affiliates.  LICENSEE shall have the rightto grant sublicenses only to Affiliates of LICENSEE with respect to any rightsconferred upon LICENSEE under this Agreement; provided, however, that (i) LICENSEEshall not have the right to grant sublicenses to [***] without first obtainingQUALCOMM’s written approval, which approval shall be at QUALCOMM’s solediscretion, and (ii) any such sublicense shall be subject in all respects tothe restrictions, exceptions, royalty and other payment obligations, reports,termination provisions, and other provisions contained in this Agreement.  LICENSEE shall also pay or cause itsAffiliates to pay the same royalties on all Subscriber Units Sold by itsAffiliates as if LICENSEE had Sold such SubscriberUnits.  LICENSEE shall report to QUALCOMMthe [***] for all Subscriber Units Sold by each such Affiliate.  LICENSEE, in addition to its Affiliates,shall be responsible and liable to QUALCOMM in the event that any of

##  

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## its Affiliates fails under any such sublicense to honor and comply withall obligations of LICENSEE as though said obligations were made expresslyapplicable to the Affiliate.  Anysublicense by LICENSEE to an Affiliate of LICENSEE shall terminate immediatelyif such Affiliate ceases to be an Affiliate of LICENSEE.  Except as set forth above, LICENSEE shallhave no right to sublicense any of QUALCOMM’s Intellectual Property or any ofthe rights conferred upon LICENSEE under this Agreement.

##  

## 5.4                                 [***].

##  

## 5.5                                 Taxes.  Any taxes, duties or imposts other thanincome or profits taxes assessed or imposed upon the sums due hereunder in theUnited States, shall be borne and discharged by [***].  Notwithstanding the foregoing, in the eventsums payable under this Agreement (other than the [***]) become subject toincome or profits taxes under the tax laws of any country and applicabletreaties between the United States and such country, [***].

##  

## 5.6                                 Conversion to U.S. Dollars.  Royalties shall be paid inU.S. dollars.  To the extent that the[***] for Subscriber Units Sold by LICENSEE outside of the United States ispaid to LICENSEE other than in U.S. dollars, LICENSEE shall convert the portionof the royalty payable to QUALCOMM from such [***] into U.S. dollars at theofficial rate of exchange of the currency of the country from which the [***]was paid, as quoted by the U.S. Wall Street Journal (or the Chase ManhattanBank or another agreed-upon source if not quoted in the Wall Street journal)for the last business day of the calendar quarter in which such SubscriberUnits were Sold.  If the transfer of orthe conversion into U.S. dollars is not lawful or possible, the payment of suchpart of the royalties as is necessary shall be made by the deposit thereof, inthe currency of the country where the sale was made on which the royalty wasbased to the credit and account of QUALCOMM or its nominee in any commercialbank or trust company of QUALCOMM’s choice located in that country, promptnotice of which shall be given by LICENSEE to QUALCOMM.

##  

## 5.7                                 [***].

##  

## 5.8                                 Ericsson Patents.

##  

### 5.8.1                        Ericsson Patents [***].

###  

### 5.8.2                        [***] Under Ericsson’s Patents. [***]

###  

### 5.8.3                        [***].

###  

## 5.9                                 [***]

##  

# 6.                                       LICENSEE’S LICENSE.

#  

## 6.1                                 Grant of License from LICENSEE.  Subject to the terms andconditions of this Agreement, LICENSEE hereby grants to (a) QUALCOMM apersonal, nontransferable, worldwide, nonexclusive, fully-paid and royalty freelicense under LICENSEE’s Intellectual Property to make (and have made), import,use and sell, lease or otherwise dispose of Subscriber Units, and (b) QUALCOMMand a Successor (as defined below) a personal, nontransferable,

##  

## 9

## 

##  

## worldwide, nonexclusive, fully-paid and royalty freelicense under LICENSEE’s Intellectual Property to make (and have made), import,use, sell, lease or otherwise dispose of Components. No other, further ordifferent license is hereby granted or implied. For purposes of this Section 6, a ”Successor”means any successor (by purchase, divestiture, merger or otherwise) to all orsubstantially all of QUALCOMM’s Components business.

##  

## 6.2                                 Right To Sublicense Affiliates.  In addition toSection 6.3, QUALCOMM and the Successor shall have the right to grant sublicensesonly to Affiliates of QUALCOMM or the Successor, respectively, with respect toany rights conferred upon QUALCOMM or the Successor under this Agreement;provided, however, that way such sublicense shall be subject in all respects tothe restrictions, exceptions, termination provisions, and other provisionscontained in this Agreement.  QUALCOMM(or the Successor), in addition to its Affiliates, shall be responsible andliable to LICENSEE in the event that any of its Affiliates fails under any suchsublicense to honor and comply with all obligations of QUALCOMM (or theSuccessor) as though said obligations were made expressly applicable to theAffiliate.  Except as set forth above,QUALCOMM and the Successor shall have no right to sublicense any of LICENSEE’sIntellectual Property.  Any sublicense byQUALCOMM or the Successor to an Affiliate of QUALCOMM or the Successor shallterminate immediately if such Affiliate ceases to be an Affiliate of QUALCOMMor the Successor, as the case may be.

##  

## 6.3                                 [***].

##  

## 6.4                                 License Of Future Commercially Necessary IPR. Each Party agrees that, to the extent it makes licenses of FutureCommercially Necessary IPR generally available to third parties, it will, ifrequested by the other Party, offer such licenses tothe other Party on commercially reasonable terms and conditions.

##  

## 6.5                                 LICENSEE Representation and Warranty.  LICENSEE hereby represents andwarrants that LICENSEE has the authority on its own behalf and on behalf ofLICENSEE’s Affiliates to grant the licenses and covenants provided under thisSection 6.

##  

# 7.                                       BEST EFFORTS TO MARKET AND SELL.

#  

LICENSEEshall use its best efforts to market, promote and sell Subscriber Units on aworldwide basis.

 

# 8.                                       MARKING; LABEL.

#  

## 8.1                                 Patent Markings.  LICENSEE agrees to affix to the exterior orthe interior of the transceiver unit of each Subscriber Unit and the packagecontaining such Subscriber Unit a legible notice reading:  “Licensed by QUALCOMM Incorporated under oneor more of the following Patents,” followed by a list of applicable patentnumbers taken from the list of QUALCOMM’s patents or as may otherwise beinstructed by QUALCOMM.

##  

## 8.2                                 Logo.  Attached hereto as Exhibit A is the CDMAdesignated logo (the ”Logo”).  The Parties agree that QUALCOMM is the ownerof the Logo.  QUALCOMM claims all commonlaw trademarks in the Logo and has filed, or will file, applications to obtaintrademark registration for the Logo.  If,for whatever reason, registrations are not granted or use of the Logo

##  

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## is deemed by QUALCOMM to be inadvisable,QUALCOMM shall have the right to either designate a new logo, subject toLICENSEE’s approval, which approval shall not be unreasonably withheld, orterminate LICENSEE’s right to use the Logo, or continue LICENSEE’s right to usethe Logo under QUALCOMM’s common law rights. Until the Logo is properly registered, LICENSEE shall acknowledgeQUALCOMM’s ownership of same by displaying a superscript “TM” to the Logo(e.g., Logo TM), or stating that “the Logo is a trademark of QUALCOMMIncorporated.

##  

## 8.3                                 Logo Display.  Unless otherwise notified by QUALCOMM as setforth in Section 8.2 above, LICENSEE shall prominently display the Logo onthe exterior of each Subscriber Unit Sold by it.  The exact exterior location and size shall besubject to LICENSEE’s reasonable discretion, provided that the Logo shall bereadable and shall be permanently affixed. The Logo shall be designed to remainvisibly displayed on the exterior of the Subscriber Unit

##  

## 8.4                                 Trademark Limitation.  LICENSEE does not hereby acquire, and shallnot attempt to acquire, by registration, use or otherwise, the Logo, or anyconfusingly similar mark, or any other trademark, service mark or trade name ofor used by QUALCOMM, or any confusingly similar mark.

##  

# 9.                                       QUALITY CONTROL.

#  

## 9.1                                 General Quality of Subscriber Units.  Throughout the term of thisAgreement, LICENSEE shall maintain, for the Subscriber Units manufactured orSold by it, at least the same manufacturing, servicing and quality standardscurrently utilized by LICENSEE in connection with its other subscriber units.

##  

## 9.2                                 Standards Compliance Testing.  LICENSEE represents andwarrants that the Subscriber Units and Components that it makes or has made willadhere with and conform to, in all respects, the specifications contained inthe CAI implemented by such Subscriber Units and adopted in the territory inwhich such Subscriber Units are intended to be used and that LICENSEE shallcomply with the rules, regulations or other requirements set by such authorizedstandards body.  LICENSEE shall, atQUALCOMM’s reasonable written request, permit QUALCOMM or entities designatedby QUALCOMM and accepted by LICENSEE, which acceptance shall not beunreasonably withheld or delayed, to perform tests of LICENSEE’s SubscriberUnits to ensure compliance and conformity with the applicable CAI.  If such tests indicate material noncomplianceor nonconformity therewith, such tests shall be at LICENSEE’s cost and LICENSEEshall reimburse QUALCOMM for any such reasonable tests performed by QUALCOMM atQUALCOMM’s then standard rates for such services; provided that the total feesfor each such test performed shall not exceed [***] for each test.  Nonconforming Subscriber Units, if any, shallnot be sold or marketed by LICENSEE until the non-conformity is corrected.

##  

# 10.                                 INFORMATION.

#  

## 10.1                           Restrictions on Disclosure and Use.  All documentation andtechnical and business information and intellectual property in whatever formrecorded that a Party does not wish to disclose without restriction(“Information”) shall remain the property of the furnishing

##  

## 11

## 

##  

## Party and may be used by the receivingParty only as follows.  Such Information (a) shallnot be reproduced or copied, in whole or part, except for use as expresslyauthorized in this Agreement; and (b) shall, together with any full orpartial copies thereof, be returned or destroyed when no longer needed or uponany termination of this Agreement, and (c) shall be disclosed only toemployees or agents of a Party with a need to know. Moreover, such Informationshall be used by the receiving Party only for the purpose of performing underthis Agreement or in the exercise of its rights it may receive under theprovisions of this Agreement.  Unless thefurnishing Party consents in this Agreement or otherwise in writing, suchInformation shall be held in strict confidence by the receiving Party.  The receiving Party may disclose such Informationto other persons, upon the furnishing Party’s prior written authorization, butsolely to perform acts which this clause expressly authorizes the receivingParty to perform itself and further provided such other person agrees inwriting (a copy of which writing will be provided to the furnishing Party atits request) to the same conditions respecting use of Information contained inthis clause and to any other reasonable conditions requested by the furnishingParty.  These restrictions on the use ordisclosure of Information shall not apply to any Information:  (i) which can be proven to be or have beenindependently developed by the receiving Party or lawfully received free ofrestriction from another source having the right to so furnish such Information;or (ii) after it has become generally known to the public without breach ofthis Agreement by the receiving Party; or (iii) which at the time ofdisclosure to the receiving Party was known to such Party free of restrictionand clearly evidenced by documentation in such Party’s possession; or (iv)which the disclosing Party agrees in writing is free of such restrictions; or(v) which is the subject of a subpoena or other legal or administrative demandfor disclosure or is disclosed in response to a valid order of a court or othergovernmental body, but only to the extent of and for the purposes of suchdemand or order; provided, however, that such receiving Party shall firstnotify the furnishing Party in writing of the demand or order and permit and cooperatewith the furnishing party in seeking an appropriate protective order (or anequivalent mechanism for protecting such Information in the relevantjurisdictions).

##  

## 10.2                           Scope of Information.  Information is subject to thisSection 10 whether delivered orally or in tangible form and without regardto whether it has been identified or marked as confidential or otherwisesubject to this Section 10.  EachParty agrees to use its best efforts to mark or otherwise identify proprietaryall Information they desire to be subject to the terms of this clause beforefurnishing it to the other Party.  And,upon request, a Party shall promptly identify whether specified informationmust be held by the requesting Party subject to this clause.

##  

## 10.3                           Furnishing Information to Third Parties. Nothing herein shall be deemed to bar disclosure of Information by areceiving Party to third parties, with written consent of the furnishing Party,if such disclosure is reasonably necessary for enjoyment of the disclosingParty’s rights to use Intellectual Property Rights licensed under thisAgreement, and provided that each such third party agrees in writing to protectthe Information under terms and conditions comparable, in all materialrespects, to the terms contained in this Section 10 and Section 18with respect to survivability.

##  

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# 11.                                 DISCLAIMER/ LIMITATION OF LIABILITY.

#  

## 11.1                           EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, QUALCOMM MAKES NOWARRANTIES IN THIS AGREEMENT AS TO PRODUCTS, TECHNOLOGY, MATERIALS, SERVICES,INFORMATION OR OTHER ITEMS IT FURNISHES TO LICENSEE, EXPRESS OR IMPLIED,INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR APARTICULAR PURPOSE, OR THAT SUCH ITEMS ARE FREE FROM THE RIGHTFUL CLAIM OF ANYTHIRD PARTY, BY WAY OF INFRINGEMENT OR THE LIKE.

##  

QUALCOMMSHALL NOT BE LIABLE TO LICENSEE FOR ANY [***]. LICENSEE SHALL BE PERMITTED TO ENJOIN THE UNAUTHORIZED USE BY QUALCOMMOF ANY OF LICENSEE’S INFORMATION.

 

## 11.2                           Negation of Representation and Warranties. Except as expressly provided herein, nothing contained in this Agreementshall be construed as (a) requiring the filing of any patent application, thesecuring of any patent or the maintaining of any patent in force; (b) awarranty or representation by either Party as to the validity or scope of anypatent, copyright or other intellectual property right; (c) a warranty orrepresentation that any manufacture, sale, lease, use or importation will befree from infringement of patents, copyrights or other intellectual propertyrights of others, and it shall be the sole responsibility of LICENSEE to makesuch determination as is necessary with respect to the acquisition of licensesunder patents and other intellectual property of third parties; (d) anagreement to bring or prosecute actions or suits against third parties forinfringement; (e) an obligation to furnish any manufacturing assistance; or (f)conferring any right to use, in advertising, publicity or otherwise, any name,trade name or trademark, or any contraction, abbreviation or simulation thereof(other than as set forth in Section 8).

##  

# 12.                                 INDEMNITY FOR DAMAGE TO PERSONS, PROPERTY OR BUSINESS.

#  

## 12.1                           Indemnification by LICENSEE.  LICENSEE shall indemnify,defend and hold QUALCOMM harmless from, any and all claims, judgments,liabilities, costs and expenses (including attorneys’ fees) arising out of orrelated, directly or indirectly, to any injury, loss or damage to persons,property or business arising from, relating to, or in any way connected with,any Subscriber Units or Components which LICENSEE or its Affiliatesmanufactures or has manufactured and sells to a third party or itsAffiliates.  LICENSEE agrees to indemnifyand hold harmless QUALCOMM against all liability or responsibility to LICENSEEor to others for any failure in production, design, operation or otherwise ofproducts manufactured by or on behalf of LICENSEE and Sold to third parties.

##  

## 12.2                           Indemnification by QUALCOMM.  QUALCOMM shall indemnify,defend and hold LICENSEE harmless from, any and all claims, judgments,liabilities, costs and expenses (including attorneys’ fees) arising out of orrelated, directly or indirectly, to any injury, loss or damage to persons,property or business arising from, relating to, or in any way connected with,any Subscriber Units or Components which QUALCOMM manufactures or hasmanufactured and sells to a third party or its Affiliates.  QUALCOMM agrees to indemnify and holdharmless LICENSEE against all liability or responsibility to QUALCOMM or toothers for any failure in

##  

## 13

## 

##  

## production, design, operation or otherwise ofproducts manufactured by or on behalf of QUALCOMM and Sold to third parties.

##  

## 12.3                           Notice, Defense and Cooperation. The party seeking indemnification under Section 12.1 or 12.2above shall provide the indemnifying party with prompt notice of any claimwithin such provisions, shall give the indemnifyingparty the full right to defend any such claim and shall cooperate fully in suchdefense.

##  

# 13.                                 TERMINATION.

#  

## 13.1                           Termination For Cause by QUALCOMM. QUALCOMM may terminate this Agreement, by written notice to LICENSEE, ifLICENSEE shall at any time default in the payment hereunder or the making ofany report hereunder, or shall commit any material breach of any covenant,representation, warranty or agreement herein contained, or shall make any falsereport to QUALCOMM; provided, however, that in the case of any such breachwhich is capable of being cured, QUALCOMM shall not have a right to terminatethis Agreement for cause unless and until LICENSEE shall have failed to remedyany such default, breach or report within thirty (30) days after written noticethereof by QUALCOMM.  LICENSEE shall beable to effectuate such cure with respect to a default in the making of anyreport or payment of any amounts due hereunder no more than three times duringthe term of his Agreement.  Upontermination of this Agreement for cause, LICENSEE shall duly account toQUALCOMM for all royalties and other payments within ten days of suchtermination.

##  

## 13.2                           Termination For Cause by LICENSEE. LICENSEE may terminate this Agreement, by written notice to QUALCOMM, ifQUALCOMM shall commit any material breach of any material covenant,representation, warranty or agreement herein contained; provided, however, thatin the case of any such breach which is capable of being cured, LICENSEE shallnot have a right to terminate this Agreement for cause unless and untilQUALCOMM shall have failed to remedy any such material breach withinthirty (30) days after receipt by QUALCOMM of written notice thereof byLICENSEE.

##  

## 13.3                           Bankruptcy, Dissolution or Liquidation. A Party shall provide written notice(the ”Notice”) to the other Party immediately upon the occurrence of anyof the following events (the ”Events”): (a) insolvency, bankruptcy or liquidation or filing of any applicationtherefor, or other commitment of an affirmative act of insolvency; (b)attachment, execution or seizure of substantially all of the assets or filingof any application therefor; (c) assignment or transfer of that portion of thebusiness to which this Agreement pertains to a trustee for the benefit ofcreditors; (d) disposition, by sale or assignment of all of its rights, of thatportion of the business or the material assets to which this Agreement pertainsor of the majority of the equity or voting stock of LICENSEE, in violation ofSection 15 of this Agreement; or (e) termination of its business ordissolution.  Either Party shall alsohave the right to terminate this Agreement with immediate effect by givingwritten notice of termination to the other Party at any time upon or before thelater of (i) sixty (60) days after the occurrence of any of the Events withrespect to such other Party (unless such event ceases within such period), or(ii) sixty (60) days after receipt of the Notice (unless such event ceaseswithin such period).

##  

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## 13.4                           Termination in the Event of Litigation. QUALCOMM at its option may terminate the license from QUALCOMM toLICENSEE in the event that LICENSEE initiates any litigation against QUALCOMMor its Affiliates which includes any claim for intellectual propertyinfringement and LICENSEE does not prevail on all such intellectual propertyinfringement claims.

##  

## 13.5                           Rights Upon Termination. Upon any termination of this Agreement all licenses granted by QUALCOMMhereunder shall also terminate and LICENSEE shall immediately cease using anyof QUALCOMM’s Intellectual Property and return or destroy all information anddocumentation furnished by QUALCOMM to LICENSEE. The licenses granted byLICENSEE hereunder shall survive the termination of this Agreement and remainin full force and effect thereafter until all of LICENSEE’s IntellectualProperty has expired; except that, upon termination of this Agreement byLICENSEE for cause, all licenses granted by LICENSEE hereunder shall alsoterminate and QUALCOMM shall immediately cease using any of LICENSEE’sIntellectual Property.  Any terminationor expiration of this Agreement under this Section 13 shall not relieveLICENSEE from its obligation under Section 14 hereof to make a report orfrom its liability for payment of royalties on Subscriber Units Sold on orprior to the date of such termination and shall not prejudice the right torecover the full amount of the Up-Front License Fee and any royalties or othersums due or accrued at the time of such termination and shall not prejudice anycause of action or claim accrued or to accrue on account of any breach ordefault.  Furthermore, any termination ofthis Agreement under this Section shall not prejudice the right ofQUALCOMM to conduct a final audit of the records of LICENSEE in accordance withthe provisions of Section 14 hereof. No termination hereunder shall limit the rights of LICENSEE to sellthose Subscriber Units in inventory or in process at the time of termination,subject to payment of the royalty applicable to the sale of such SubscriberUnits and continued compliance with the other provisions of this Agreement.

##  

# 14.                                 RECORDS AND AUDITS.

#  

## 14.1                           Records. LICENSEEshall keep accurate and complete books and records concerning any SubscriberUnits it may sell, under this Agreement. As applicable, such books and records shall include the date oftransaction involving sales of Subscriber Units, including the number of itemsSold.  LICENSEE shall require in itsagreements with sublicensees that each sublicensee agree to record keeping andaudits substantially the same as described in this Section 14.  LICENSEE hereby agrees to conduct periodicaudits of its sublicensees as requested by QUALCOMM.  The results of such audits (together with allsupporting information) shall be included in the records described herein andsubject to audit by QUALCOMM as provided in this Section.  QUALCOMM shall be an intended third partybeneficiary of LICENSEE’s rights of audit with respect to its sublicensees,with all proper authority to enforce such rights directly against any suchsublicensee.  LICENSEE’s agreements withits sublicensees shall expressly state these third party beneficiaryrights.  LICENSEE shall furnish QUALCOMMwithin thirty (30) days after the end of each calendar quarter a certificate,in the form attached hereto as Exhibit B, signed by a responsible officialof LICENSEE showing the transactions and corresponding amounts during saidcalendar quarter and any other information as may be reasonably requested byQUALCOMM.

##  

## 15

## 

##  

## 14.2                           Audits.  QUALCOMM may, no more than once each calendaryear, conduct (itself and/or through its agent) an audit on reasonable noticeof LICENSEE’s applicable books and records to confirm that LICENSEE has notunderpaid the royalties due to QUALCOMM in fulfilling LICENSEE’s obligationsunder the terms and conditions set forth in Section 5.2 above. QUALCOMM’swritten notice to LICENSEE of QUALCOMM’s intention to audit LICENSEE’s booksand records shall include a proposed commencement date for such audit, suchproposed commencement date to be no earlier than thirty (30) days afterthe date of such notice.  LICENSEE agreesto allow the audit to commence no later than thirty (30) days after QUALCOMM’sproposed audit commencement date. LICENSEE further agrees to have assembled in a single location thenecessary books and records for such audit to be carried out and shall makeavailable such personnel as are reasonably necessary to interpret and explainsuch books and records.  The cost of suchaudit shall be borne by QUALCOMM, other than LICENSEE’s cost of providing itsbooks, records and personnel, unless such audit determines that the LICENSEEhas underpaid the royalties due hereunder by [***]; in which case, LICENSEEshall, in addition to paying the deficiency plus late payment charges, pay thecost of such audit. LICENSEE shall preserve and maintain all such books andrecords required for audit for a period of five (5) years after thecalendar quarter for which the books and records apply.

##  

# 15.                                 ASSIGNMENT.

#  

Exceptas provided in this clause, LICENSEE shall not assign this Agreement or anyright or interest under this Agreement, nor delegate any work or obligation tobe performed under this Agreement (an ”assignment”),without QUALCOMM’s prior written consent, which consent shall be at QUALCOMM’ssole discretion.  Any attemptedassignment in contravention of this Section 15 shall be void andineffective.  For purposes of this Agreement,an ”assignment” by LICENSEE under thisSection shall be deemed to include, without limitation, thefollowing:  (a) a change in thebeneficial ownership of LICENSEE of greater than fifty percent (50%) (whetherin a single transaction or a series of related transactions) if LICENSEE is apartnership, trust, limited liability company or other like entity;(b) the acquisition of more than fifty percent (50%) of any class ofLICENSEE’s voting stock (or any class of non-voting security convertible intovoting stock) by a third party (whether in a single transaction or series ofrelated transactions) resulting in an effective change of control of LICENSEE;or (c) the sale of more than fifty percent (50%) of LICENSEE’s assets(whether in a single transaction, or series of related transactions).

 

# 16.                                 COMPLIANCE WITH U.S. REGULATIONS.

#  

Nothingcontained in this Agreement shall require or permit LICENSEE or QUALCOMM to doany act inconsistent with the requirements of (a) the regulations of the UnitedStates Department of Commerce, or (b) the foreign assets controls or foreigntransactions controls regulations of the United States Treasury Department, or(c) of any similar United States law, regulation or executive order as the samemay be in effect from time to time.  Toenable QUALCOMM to export QUALCOMM’s Intellectual Properly or technical data toLICENSEE in compliance with the requirements of the Export AdministrationRegulations (EAR), LICENSEE hereby gives its assurance to QUALCOMM thatLICENSEE will not re-export or otherwise disclose, directly or indirectly, anyof QUALCOMM’s Intellectual Property or “technical data” received from QUALCOMM,nor allow the direct product thereof to be shipped

 

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directly or indirectly to any ofthe following countries, unless permitted by U.S. law in effect at the time ofsuch export:

 
| Albania     |   | Libya                           |
|-------------|--------|---------------------------------|
| Afghanistan |   | Lithuania                       |
| Angola      |   |                            |
| Armenia     |   | Macau                           |
| Azerbaijan  |   | Moldova                         |
| Belarus     |   | Mongolia                        |
| Bulgaria    |   | North Korea                     |
| Cambodia    |   | People’s Republic of China |
| Cuba        |   | Romania                         |
| Estonia     |   | Russia                          |
| Georgia     |   | Sudan                           |
| Iran        |   | Syria                           |
| Iraq        |   | Tajikistan                      |
| Kazakhstan  |   | Turkmenistan                    |
| Kyrgystan   |   | Ukraine                         |
| Laos        |   | Uzbekistan                      |
| Latvia      |   | Vietnam                         |

 

LICENSEEagrees that no products, proprietary data, know-how, software, or otherinformation received from QUALCOMM will be directly employed in missiletechnology, sensitive nuclear, or chemical biological weapons end uses or bysuch end users.  The foregoingobligations are U.S. legal requirements, and therefore, such obligations shallsurvive any termination of this Agreement.

 

# 17.                                 PUBLICITY.

#  

EachParty shall submit to the other proposed copy of all advertising wherein thename, trademark, code, specification or service mark of the other Party ismentioned; and neither Party shall publish or use such advertising without theother’s prior written approval.  Suchapproval shall be granted or withheld as promptly as possible (usually withinten (10) days), and may be withheld only for good cause.

 

# 18.                                 SURVIVAL OF OBLIGATIONS.

#  

TheParties’ rights and obligations which, by their nature, would continue beyondthe termination, cancellation, or expiration of this Agreement, including butnot limited to those rights and obligations of the parties set forth inSection 10 entitled “INFORMATION,” shall survive such termination,cancellation, or expiration.

 

# 19.                                 SEVERABILITY.

#  

Ifany provision in this Agreement shall be held to be invalid or unenforceable,the remaining portions shall remain in effect. In the event such invalid or unenforceable provision is

 

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considered an essential element ofthis Agreement, the Parties shall promptly negotiate a replacement provision.

 

# 20.                                 NON-WAIVER

#  

Nowaiver of the terms and conditions of this Agreement, or the failure of eitherParty strictly to enforce any such term or condition on one or more occasionsshall be construed as a waiver of the same or of any other term or condition ofthis Agreement on any other occasion.

 

# 21.                                 NOTICES.

#  

Allnotices, requests, demands, consents, agreements and other communicationsrequired or permitted to be given under this Agreement shall be in writing andshall be mailed to the Party to whom notice is to be given, by facsimile, andconfirmed by first class mail, postage prepaid, and properly addressed asfollow (in which case such notice shall be deemed to have been duly given onthe day the notice is first received by the Party):

 
| QUALCOMM Incorporated  5775 Morehouse Drive  San Diego, CA  92121-1714                      |   | UTStarcom, Inc. 1275  Harbor Bay Parkway  Alameda, CA  94502                                       |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|
|                                                                                             |   |                                                                                                    |
| Facsimile No.:   (858) 658-2500  Telephone No.:  (858) 587-1121  Attn:  President |   | Facsimile No.:   (510) 864-8802  Telephone No.:  (510) 864-8800  Attn:  Russell Boltwood |
|                                                                                             |   |                                                                                                    |
| with a copy to:  General Counsel                                                                 |   | with a copy to:  General Counsel                                                                        |

 

Theabove addresses can be changed by providing notice to the other Party inaccordance with this Section.

 

# 22.                                 PUBLICATION OF AGREEMENT.

#  

Exceptas may otherwise be required by law or as reasonably necessary for performancehereunder, each Party shall keep this Agreement and its provisionsconfidential, and shall not disclose this Agreement or its provisions withoutfirst obtaining the written consent of the other Party, which consent shall notbe unreasonably withheld.  Theconfidentiality obligations hereunder do not apply to the existence of thisAgreement or the fact that QUALCOMM and LICENSEE have executed this Agreement,but do apply to the terms and conditions of this Agreement.  Any press release or other announcement byeither Party concerning the entering into of this Agreement shall be subject tothe prior written approval of other Party, which approval shall not beunreasonably withheld.  In case a pressrelease or other public announcement to the effect of the Parties’ enteringinto of this Agreement is issued by either Party pursuant to the precedingsentence, (i) QUALCOMM may thereafter make a press release or other publicannouncement to the effect that LICENSEE is one of QUALCOMM’S licensees forSubscriber Units without prior written approval of LICENSEE and (ii) LICENSEEmay

 

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thereafter make a press release orother public announcement to the effect that LICENSEE is licensed by QUALCOMMfor Subscriber Units without prior written approval of QUALCOMM.Notwithstanding anything to the contrary herein, QUALCOMM may identify LICENSEEon its public web site and other public documents as a QUALCOMM Subscriber UnitLicensee or authorized supplier.

 

# 23.                                 APPLICABLE LAW; VENUE.

#  

ThisAgreement is made and entered into in the State of California and shall begoverned by and construed and enforced in accordance with the laws of the Stateof California without regard to conflict of laws principles.  Any dispute, claim or controversy arising outof or relating to this Agreement, or the breach or validity hereof, except forthose disputes expressly addressed in Section 24 hereof, shall beadjudicated only by a court of competent jurisdiction in the county of SanDiego, State of California.

 

# 24.                                 DISPUTES RELATING TO FOREIGN PATENTS.

#  

Anycontroversy, claim or dispute (separately or collectively, the ”Dispute”)as to whether a product manufactured and/or sold by LICENSEE outside the UnitedStates would, but for the license granted hereunder, infringe any foreignpatent of QUALCOMM licensed hereunder and therefore is subject to royaltieshereunder, shall be resolved in accordance with the procedures specified inthis Section 24 which shall be the sole and exclusive procedures for theresolution of any such Dispute.

 

TheParties will attempt in good faith to resolve promptly any Dispute bynegotiations between senior executives of the Parties who have the authority tosettle the Dispute.  If the Dispute isnot resolved within thirty (30) days of a party’s written request for negotiation,either party may initiate arbitration as hereinafter provided.

 

AParty desiring to commence arbitration shall provide written notice to theother Party setting forth the Dispute(s) to be arbitrated.  Within ten (10) days of receipt of suchwritten notice, the Parties will attempt in good faith to reach agreement on animpartial arbitrator having as nearly as practicable the followingqualifications in order of importance: (1) at least ten years experience in patent litigation, including substantialparticipation in at least two patent trials, and/or ten years experience inpatent prosecution in the telecommunications field and/or at least three yearsexperience as a Federal Court of Appeals or District Court Judge, (2) expertisein the field of digital spread spectrum communications as applied to thetelecommunications industry, and (3) some familiarity with the patent laws ofthe country or countries at issue in the Dispute. In the event the Parties areunable to agree upon an arbitrator within thirty (30) days of the above writtennotice, the arbitrator shall be selected by Judicial Arbitration and MediationService/Endispute, Inc. or some similar company if the Judicial Arbitration andMediation. Service/Endispute, Inc. is not available).  The selected arbitrator shall be impartialand shall have, as nearly as practicable, the qualifications set forthabove.  The Parties will share equallythe fees and expenses of the arbitrator.

 

Thearbitration hearing shall commence in San Diego within 60 days of theappointment of the arbitrator.  TheParties shall be entitled to conduct discovery prior to the arbitration

 

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hearing in accordance with theFederal Rules of Civil Procedure, subject to any limitations ordered bythe arbitrator.

 

Thearbitration hearing shall be conducted in accordance with the FederalRules of Civil Procedure and the Federal Rules of Evidence or suchother procedures and rules set by the arbitrator. The arbitrator shall beauthorized and empowered only to rule as to whether products manufacturedand/or Sold by LICENSEE in a foreign country or countries would, but for thelicense granted hereunder, infringe any claim of the applicable foreignpatent(s) of QUALCOMM, and if so, the amount of the royalties owed by LICENSEEas to such product(s) under Section 5.2 of this Agreement.  The arbitrator shall award attorneys’ feesand costs to the prevailing Party.  Thearbitrator shall have no authority to determine whether or not any product(s)of LICENSEE imported into or manufactured and/or Sold in the United States issubject to the payment of royalties under this Agreement or to determine anyother issue except those expressly set forth above.  The arbitrator shall have no authority tomake any finding or award as to the validity or enforceability of any patent.

 

Thefinal award of the arbitrator shall be rendered in writing and signed by thearbitrator. The final award shall be entered within thirty (30) days of the commence of the arbitration hearing.  Each Party agrees to abide by the arbitrationaward, and to the enforcement of the arbitration award in the UnitedStates.  Each Party further agrees thatjudgment may be entered upon the award in any court of competent jurisdictionin the United States.

 

# 25.                                 LATE CHARGE.

#  

EachParty may charge the other a late charge, with respect to any amounts that theother owes hereunder and fails to pay on or before the due date, in an amountequal to the [***]. The Parties agree that such late charges are administrativein nature and are intended to defray each Party’s costs in processing andhandling late payments.

 

# 26.                                 ATTORNEYS’ FEES.

#  

Inthe event of any proceeding to enforce the provisions of this Agreement, theprevailing Party (as determined by the court) shall be entitled to reasonableattorneys’ fees as fixed by the court.

 

# 27.                                 ENTIRE AGREEMENT.

#  

Theterms and conditions contained in this Agreement supersede all prior andcontemporaneous oral or written understandings between the Parties with respectto the subject matter thereof and constitute the entire agreement of theParties with respect to such subject matter. Such terms and conditions shall not be modified or amended except by awriting signed by authorized representatives of both Parties.

 

# 28.                                 INDEPENDENT CONTRACTORS.

#  

Therelationship between QUALCOMM and LICENSEE is that of independentcontractors.  QUALCOMM and LICENSEE arenot joint venturers, partners, principal and agent,

 

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master and servant, employer oremployee, and have no other relationship other than independent contractingparties.

 

# 29.                                 U.S. DOLLARS.

#  

Allpayments to be made hereunder shall be made in dollars of the United States ofAmerica by wire-transfer and at a bank to be designated by the payee.

 

# 30.                                 FORCE MAJEURE

#  

NeitherParty shall be in default or liable for any loss or damage resulting fromdelays in performance or from failure to perform or comply with terms of thisAgreement (other than the obligation to make payments, which shall not beaffected by this provision) due to any causes beyond its reasonable control,which causes include but are not limited to Acts of God or the public enemy;riots and insurrections; war; fire; strikes and other labor difficulties(whether or not the party is in a position to concede to such demands);embargoes; judicial action; lack of or inability to obtain export permits orapprovals, necessary labor, materials, energy, components or machinery; andacts of civil or military authorities.

 

INWITNESS WHEREOF, the Parties hereto have caused this Agreement to be executedas of the Effective Date. This Agreement may be signed in counterpart.

 
| QUALCOMM  Incorporated | UTStarcom,  Inc. |
|------------------------|------------------|
|                   |             |
| BY:                    |   /s/       |   | BY: |   /s/ Hong Liang Lu |   |
|                   |             |
| TITLE:                 |             |   | TITLE: |   |   |
|                        |                  |  |  |  |  |  |  |

 

21

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SubscriberUnit License Agreement

 

Section 6.3Notice

 

[***]

 

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SubscriberUnit License Agreement

 

Section 8.1Notice

 

Pleaseaffix to the exterior or the interior of the transceiver unit of eachSubscriber Unit and the packaging containing such Subscriber Unit a legiblenotice reading:

 

“Licensedby QUALCOMM Incorporated under one or more of the following Patents:

 
| 4,901,307 |   | 5,490,165 |   | 5,056,109 |   | 5,504,773       |   | 5,101,501 |   | 5,778,338 |
|-----------|--------|-----------|--------|-----------|--------|-----------------|--------|-----------|--------|-----------|
| 5,506,865 |   | 5,109,390 |   | 5,511,073 |   | 5,228,054       |   | 5,535,239 |   | 5,710,784 |
| 5,267,261 |   | 5,544,196 |   | 5,267,262 |   | 5,568,483       |   | 5,337,338 |   | 5,659,569 |
| 5,600,754 |   | 5,414,796 |   | 5,657,420 |   | 5,416,797” |   |      |   |      |

 

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