**Exhibit4.7**

 

 

 

UTSTARCOM, INC.(a Delaware corporation)           Shares of CommonStock

 

UNDERWRITINGAGREEMENT

 

 

Dated:                    

 

 

 

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**TABLE OFCONTENTS**

 
| Section 1.  *Representations and  Warranties*                                 |                                                          |
|-----------------------------------------------------------------------------------------|---------------------------------------------------------------|
| Section 2.  *Sale and Delivery to  Underwriters; Closing*                     |                                                          |
| Section 3.  *Covenants of the Company*                                        |                                                          |
| Section 4.  *Payment and Expenses*                                            |                                                          |
| Section 5.  *Conditions of  Underwriters’ Obligations*                   |                                                          |
| *Section 6.  Indemnification*                                                 |                                                          |
| Section 7.  *Contribution*                                                    |                                                          |
| Section 8.  *Representations,  Warranties and Agreements to Survive Delivery* |                                                          |
| Section 9.  *Termination of Agreement*                                        |                                                          |
| Section 10.  *Default by One or More  of the Underwriters*                    |                                                          |
| Section 11.  *Default by the Company*                                         |                                                          |
| Section 12.  *Notices*                                                        |                                                          |
| Section 13.  *Parties*                                                        |                                                          |
| Section 14.  *Governing Law and Time*                                         |                                                          |
| Section 15.  *The Headings*                                                        |                                                          |
| Section 16.   *Counterparts*                                             |                                                          |
|                                                                                    |                                                          |
| SCHEDULES                                                                               |                                                          |
|                                                                                    |                                                          |
| Schedule A                                                                         | Underwriters                                                  |   |
| Schedule B                                                                         | Company                                                       |   |
| Schedule C                                                                         | List of Significant Subsidiaries                              |   |
| Schedule D                                                                         | Pricing Information                                           |   |
| Schedule E                                                                         | List of Directors and Executive Officers                      |   |
|                                                                                    |                                                          |
| EXHIBITS                                                                                |                                                          |
|                                                                                    |                                                          |
| Exhibit A                                                                               | Form of Opinion of Counsel for the Company                    |   |
| Exhibit B                                                                               | Form of Lockup Agreement for Directors and Executive Officers |   |
| Exhibit C                                                                               | Form of Lockup Agreement for SOFTBANK America, Inc            |   |

 

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UTSTARCOM, INC.

(a Delaware corporation)

12,100,000 Shares of CommonStock

(Par Value $.00125 Per Share)

 

UNDERWRITING AGREEMENT

 
| BANC OF AMERICA SECURITIES LLC | January 8,  2004 |
|--------------------------------|------------------|

600 Montgomery StreetSan Francisco, California  94111     As Representative of the several Underwriters

 

Ladies and Gentlemen:

 

UTStarcom,Inc., a Delaware corporation (the “**Company**”),confirms its agreement with Banc of America Securities LLC and each of theother Underwriters named in Schedule A hereto (collectively, the “**Underwriters**,” which term shall also include any underwritersubstituted as hereinafter provided in Section 10 hereof), for whom Bancof America Securities LLC is acting as representative (in such capacity, the “**Representative**”), with respect to the (i) issuance and saleby the Company and the purchase by the Underwriters, acting severally and notjointly, of the 12,100,000 shares of Common Stock, par value $.00125 per share,of the Company (“**Common Stock**”) and (ii) the grantby the Company to the Underwriters of the option described in Section 2(b)hereof to purchase, acting severally and not jointly, all or any part of 1,815,000additional shares of Common Stock to cover over-allotments, if any.  The aforesaid 12,100,000 shares of CommonStock (the “**Initial Securities**”) to bepurchased by the Underwriters and all or any part of the 1,815,000 shares ofCommon Stock subject to the option described in Section 2(b) hereof (the “**Option Securities**”) are hereinafter called, collectively,the “**Securities**.”

 

The Companyunderstands that the Underwriters propose to make a public offering of theSecurities as soon as the Representative deems advisable after this Agreementhas been executed and delivered.

 

The Companyhas filed with the Securities and Exchange Commission (the “**Commission**”) a registration statement on Form S-3 (No.333-107723) covering the registration of the Securities under the SecuritiesAct of 1933, as amended (the “**1933 Act**”),including a prospectus relating to the Common Stock (the “**BasicProspectus**”).  Promptly afterexecution and delivery of this Agreement, the Company will prepare and file aprospectus supplement in accordance with the provisions of paragraph (b)of Rule 424 of the rules and regulations of the Commission under the 1933Act (the “**1933 Act Regulations**”).   Such registration statement, including theexhibits thereto, schedules thereto, if any, and the documents incorporated byreference therein pursuant to Item 12 of Form S-3 under the 1933 Act, asamended as of the date of this Agreement, and, in the event any post-effectiveamendment thereto becomes effective prior to the Closing Time (as defined inSection 2(c) hereof), is herein called the “**RegistrationStatement**.”  Any registrationstatement filed pursuant to Rule 462(b) of the 1933 Act Regulations is hereinreferred to as the “**Rule 462(b) RegistrationStatement**,” and after such filing the term “**RegistrationStatement**” shall include the Rule 462(b) Registration Statement.

 

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As used herein, the term “**Final Prospectus**”means the final prospectus supplement to the Basic Prospectus relating to theSecurities in the form first used to confirm sales of the Securities, togetherwith the Basic Prospectus and including the documents incorporated by referencetherein pursuant to Item 12 of Form S-3 under the 1933 Act .  For purposes of this Agreement, allreferences to the Registration Statement, the Basic Prospectus, the Final Prospectusor any amendment or supplement to any of the foregoing shall be deemed toinclude the copy filed with the Commission pursuant to its Electronic DataGathering, Analysis and Retrieval system (“**EDGAR**”).

 

All referencesin this Agreement to financial statements and schedules and other informationwhich is “contained,” “included,” “stated,” “disclosed,” “set forth,” or“described” in the Registration Statement or the Final Prospectus (or otherreferences of like import) shall be deemed to mean and include all suchfinancial statements and schedules and other information which is incorporatedby reference in the Registration Statement as of the effective date of theRegistration  Statement or the date ofthe Basic Prospectus or the Final Prospectus, as the case may be; and allreferences in this Agreement to amendments or supplements to the RegistrationStatement, the Basic Prospectus or the Final Prospectus shall be deemed to meanand include the filing of any document under the Securities Exchange Act of1934 (the “**1934 Act**”) which is incorporatedby reference in the Registration Statement, the Basic Prospectus or the FinalProspectus, as the case may be.

 

Section 1*.  Representations andWarranties. *The Companyrepresents and warrants to each Underwriter as of the date hereof, as of theClosing Time referred to in Section 2(c) hereof, and as of each Date ofDelivery (if any) referred to in Section 2(b) hereof, and agrees with eachUnderwriter, as follows:

 

(i)                                     *Compliance with Registration Requirements*.  The Company meets the requirements for use ofForm S-3 under the 1933 Act.  Each of theRegistration Statement and any Rule 462(b) Registration Statement has becomeeffective under the 1933 Act and no stop order suspending the effectiveness ofthe Registration Statement or any Rule 462(b) Registration Statement has beenissued under the 1933 Act and no proceedings for that purpose have beeninstituted or are pending or, to the knowledge of the Company, are contemplatedby the Commission, and any request on the part of the Commission for additionalinformation has been complied with.

 

At therespective times the Registration Statement, any Rule 462(b) RegistrationStatement and any post-effective amendments thereto became effective and at theClosing Time (and, if any Option Securities are purchased, at the Date ofDelivery), the Registration Statement, the Rule 462(b) Registration Statementand any amendments and supplements thereto complied and will comply in allmaterial respects with the requirements of the 1933 Act and the 1933 ActRegulations and did not and will not contain an untrue statement of a materialfact or omit to state a material fact required to be stated therein ornecessary to make the statements therein not misleading.  Neither the Final Prospectus nor anyamendments or supplements thereto, at the time the Final Prospectus or anyamendments or supplements were issued and at the Closing Time (and, if anyOption Securities are purchased, at the Date of Delivery), included or willinclude an untrue statement of a material fact or omitted or will omit to statea material fact necessary in order to make the statements therein, in the lightof the circumstances under

 

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which they were made, not misleading.  The representations and warranties in thissubsection shall not apply to statements in or omissions from theRegistration Statement or the Final Prospectus made in reliance upon and inconformity with information furnished to the Company in writing by anyUnderwriter through the Representative expressly for use in the RegistrationStatement or the Final Prospectus.

 

The prospectusfiled as part of the Registration Statement as originally filed or as part ofany amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,complied when so filed in all material respects with the requirements of the1933 Act and the 1933 Act Regulations and the Final Prospectus delivered to theUnderwriters for use in connection with this offering was identical to theelectronically transmitted copies thereof filed with the Commission pursuant toEDGAR, except to the extent permitted by Regulation S-T.

 

(ii)                                  *Incorporated Documents*. The documents incorporated or deemed to be incorporated by reference inthe Registration Statement and the Final Prospectus, at the time they were orhereafter are filed with the Commission, complied and will comply in allmaterial respects with the requirements of the 1934 Act and the rules andregulations of the Commission thereunder (the “**1934 ActRegulations**”), and, when read together with the other information inthe Final Prospectus, at the time the Registration Statement became effective,at the time the Final Prospectus was issued and at the Closing Time (and, ifany Option Securities are purchased, at the Date of Delivery), did not and willnot contain an untrue statement of a material fact or omit to state a materialfact required to be stated therein or necessary to make the statements thereinnot misleading.

 

(iii)                               *Independent Accountants*. The accountants who certified the financial statements and supportingschedules included in the Registration Statement are independent publicaccountants as required by the 1933 Act and the 1933 Act Regulations; each ofthe Company and its subsidiaries maintains a system of internal accountingcontrols sufficient to provide reasonable assurance that (A) transactions areexecuted in accordance with management’s general or specific authorizations;(B) transactions are recorded as necessary to permit preparation of financialstatements in conformity with generally accepted accounting principles (“**GAAP**”) in China with a reconciliation to GAAP in the UnitedStates; (C) access to assets is permitted only in accordance with management’sgeneral or specific authorization; (D) the recorded accountability for assetsis compared with existing assets at reasonable intervals and appropriateactions taken with respect to any differences; and (E) each of the Company andits subsidiaries has made and kept books, records and accounts which, inreasonable detail, accurately and fairly reflect the transactions anddispositions of assets of such entity and provide a sufficient basis for thepreparation of combined financial statements in accordance with Chinese GAAP,with a reconciliation thereof to U.S. GAAP.

 

(iv)                              *Financial Statements*. The financial statements included in the Registration Statement and theFinal Prospectus, together with the related schedules and notes present fairlythe financial position of the Company and its consolidated subsidiaries at thedates indicated and the statement of operations, stockholders’ equity and cashflows of the Company and its consolidated subsidiaries for the periodsspecified; said financial statements have been prepared in conformity with U.S.GAAP

 

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applied on aconsistent basis throughout the periods involved, except as may be expresslystated in the related notes thereto.  Thesupporting schedules, if any, included in the Registration Statement presentfairly in accordance with U.S. GAAP the information required to be statedtherein.  The selected financial data,the summary financial information and all other financial data or informationincluded in the Final Prospectus present fairly the information shown thereinand have been compiled on a basis consistent with that of the audited financialstatements included in the Registration Statement.  The consolidated statements of net assets ofCommWorks, an operating segment of 3Com Corporation (“**CommWorks**”), as of February 28, 2003and May 31, 2002 and the related consolidated statements of revenues anddirect expenses for the nine months ended February 28, 2003 and the yearsended May 31, 2002 and June 1, 2001, present fairly the net assets ofCommWorks at the dates indicated and the related revenues and direct expensesof CommonWorks for the periods specified, in conformity with U.S. GAAP.  The pro forma financial statements and therelated notes thereto included in the Registration Statement and the FinalProspectus present fairly the information shown therein, have been prepared inaccordance with the Commission’s rules and guidelines with respect to pro formafinancial statements and have been properly compiled on the bases describedtherein, and the assumptions used in the preparation thereof are reasonable andthe adjustments used therein are appropriate to give effect to the transactionsand circumstances referred to therein.

 

(v)                                 *No Material Adverse Change in Business*.  Since the respective dates as of whichinformation is given in the Registration Statement and the Final Prospectus,except as otherwise stated therein, (A) there has been no material adversechange in the condition, financial or otherwise, or in the earnings, businessaffairs or business prospects of the Company and its subsidiaries, taken as awhole, whether or not arising in the ordinary course of business (a “**Material Adverse Effect**”), (B) there have been notransactions entered into by the Company, or any of its subsidiaries, otherthan those in the ordinary course of business, which are material with respectto the Company and its subsidiaries, considered as one enterprise, and (C)there has been no dividend or distribution of any kind declared, paid or madeby the Company on any class of its capital stock at any time.

 

(vi)                              *Good Standing of the Company*.  The Company has been duly organized and isvalidly existing as a corporation in good standing under the laws of the Stateof Delaware and has corporate power and authority to own, lease and operate itsproperties and to conduct its business as described in the Final Prospectus andto enter into and perform its obligations under this Agreement; and the Companyis duly qualified as a foreign corporation to transact business and is in goodstanding in each other jurisdiction in which such qualification is required,whether by reason of the ownership or leasing of property or the conduct ofbusiness, except where the failure so to qualify or to be in good standingwould not result in a Material Adverse Effect.

 

(vii)                           *Good Standing of Subsidiaries*.  The entities listed on Schedule C hereto(each, a “**Subsidiary**” and collectively, the “**Subsidiaries**”) are the only significant subsidiaries (asdefined in Rule 1-02 of Regulation S-X) of the Company, and each Subsidiary hasbeen duly organized and is validly existing as a corporation in good standingunder the laws of the jurisdiction of its incorporation, has corporate powerand

 

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authority toown, lease and operate its properties and to conduct its business as describedin the Final Prospectus and is duly qualified as a foreign corporation totransact business and is in good standing in each jurisdiction in which suchqualification is required, whether by reason of the ownership or leasing ofproperty or the conduct of business, except where the failure so to qualify orto be in good standing would not result in a Material Adverse Effect; except asotherwise disclosed in the Registration Statement, all of the issued andoutstanding capital stock of each Subsidiary has been duly authorized andvalidly issued, is fully paid and non–assessable and is owned by the Company,directly or through subsidiaries, free and clear of any security interest,mortgage, pledge, lien, encumbrance, claim or equity; with respect to eachSubsidiary, none of the outstanding shares of capital stock of the Subsidiarywas issued in violation of the preemptive rights of any securityholder of theSubsidiary pursuant to the Subsidiary’s charter documents or applicable law orany agreement or instrument to which the Subsidiary is a party or by which theSubsidiary is bound which has not otherwise been waived by such securityholder.

 

(viii)                        *Capitalization*.  Theauthorized, issued and outstanding capital stock of the Company, as ofSeptember 30, 2003, is as set forth in the Final Prospectus under thecaption “Capitalization” (except for subsequent issuances, if any, pursuant tothis Agreement, pursuant to reservations, agreements or employee benefit plansdisclosed or incorporated by reference in the Final Prospectus or pursuant tothe exercise of convertible securities, warrants or options disclosed orincorporated by reference in the Final Prospectus).  The shares of issued and outstanding capitalstock have been duly authorized and validly issued and are fully paid andnon-assessable; none of the outstanding shares of capital stock was issued inviolation of any preemptive rights of any securityholder of the Companypursuant to the Company’s Certificate of Incorporation or Bylaws or applicablelaw or any agreement or instrument to which the Company is a party or by whichthe Company is bound which has not otherwise been waived by such securityholder.

 

(ix)                                *Authorization of Agreement and Registration Statement*.  This Agreement has been duly authorized,executed and delivered by the Company. The Registration Statement and the Final Prospectus and the filing ofthe Registration Statement and the Final Prospectus with the Commission havebeen duly authorized by and on behalf of the Company, and the RegistrationStatement has been duly signed by and on behalf of the Company pursuant to suchauthorization.

 

(x)                                   *Authorization and Description of Securities*.  Any Option Securities purchased by theUnderwriters from the Company have been duly authorized for issuance and saleto the Underwriters pursuant to this Agreement and, when issued and deliveredby the Company pursuant to this Agreement against payment of the considerationset forth herein, will be validly issued, fully paid and non-assessable; theCommon Stock conforms in all material respects to all statements relatingthereto contained in the Final Prospectus and such description conforms in allmaterial respects to the rights set forth in the instruments defining the same;no holder of the Securities will be subject to personal liability by reason ofbeing such a holder; and the issuance of the Securities is not subject to anypreemptive rights of any securityholder of the Company pursuant to theCompany’s Certificate of Incorporation or Bylaws or applicable law or anyagreement or

 

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instrument towhich the Company is a party or by which the Company is bound which has nototherwise been waived by such securityholder.

 

(xi)                                *Absence of Defaults and Conflicts*.  Neither the Company nor any of itssubsidiaries is in violation of its articles, charter, by laws or similarorganizational document or in default in the performance or observance of anyobligation, agreement, covenant or condition contained in any contract,indenture, mortgage, deed of trust, loan or credit agreement, note, lease orother agreement or instrument to which the Company or any of its subsidiariesis a party or by which it or any of them may be bound, or to which any of theproperty or assets of the Company or any subsidiary is subject (collectively, “**Agreements and Instruments**”), except for such defaults thatwould not result in a Material Adverse Effect; and the execution, delivery andperformance of this Agreement and the consummation of the transactionscontemplated herein and in the Registration Statement (including the issuanceand sale of the Securities and the use of the proceeds from the sale of theSecurities as described in the Final Prospectus under the caption “**Use of Proceeds**”) and compliance by the Company with itsobligations hereunder have been duly authorized by all necessary corporateaction and do not and will not, whether with or without the giving of notice orpassage of time or both, conflict with or constitute a breach of, or default orRepayment Event (as defined below) under, or result in the creation orimposition of any lien, charge or encumbrance upon any property or assets ofthe Company or any subsidiary pursuant to, the Agreements and Instruments(except for such conflicts, breaches or defaults or liens, charges orencumbrances that would not result in a Material Adverse Effect), nor will suchaction result in any violation of the provisions of the articles, charter,by-laws, as applicable, of the Company or any subsidiary or any applicable law,statute, rule, regulation, judgment, order, writ or decree, known to theCompany of any government, government instrumentality or court, domestic orforeign, having jurisdiction over the Company or any subsidiary or any of theirassets, properties or operations.  Asused herein, a “**Repayment Event**” means any eventor condition which gives the holder of any note, debenture or other evidence ofindebtedness (or any person acting on such holder’s behalf) the right torequire the repurchase, redemption or repayment of all or a portion of suchindebtedness by the Company or any subsidiary.

 

(xii)                             *Absence of Labor Dispute*. No labor dispute with the employees of the Company or any subsidiaryexists or, to the knowledge of the Company, is imminent, and the Company is notaware of any existing or imminent labor disturbance by the employees of any ofits or any subsidiary’s principal suppliers, manufacturers, customers orcontractors, which, in either case, may reasonably be expected to result in aMaterial Adverse Effect.

 

(xiii)                          *Absence of Proceedings*. Other than as set forth in the Final Prospectus, there is no action,suit, proceeding, inquiry or investigation before or brought by any company orgovernmental agency or body, domestic or foreign, now pending, or, to theknowledge of the Company, threatened, against the Company or any subsidiary,which is required to be disclosed in the Registration Statement (other than asdisclosed therein), or which might reasonably be expected to result in aMaterial Adverse Effect, or which might reasonably be expected to materiallyand adversely affect the properties or assets thereof or the consummation ofthe transactions contemplated in this Agreement or the

 

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performance bythe Company of its obligations hereunder; the aggregate of all pending legal orgovernmental proceedings to which the Company or any subsidiary is a party orof which any of their respective property or assets is the subject which arenot described in the Registration Statement, including ordinary routinelitigation incidental to the business, could not reasonably be expected toresult in a Material Adverse Effect.

 

(xiv)                         *Accuracy of Exhibits*. There are no contracts or documents which are required to be describedin the Registration Statement, the Final Prospectus or the documentsincorporated by reference therein or to be filed as exhibits thereto which havenot been so described and filed as required.

 

(xv)                            *Possession of Intellectual Property*.  The Company and its subsidiaries own orpossess, or can acquire on reasonable terms, adequate patents, patent rights,licenses, inventions, copyrights, know-how (including trade secrets and otherunpatented and/or unpatentable proprietary or confidential information, systemsor procedures), trademarks, service marks, trade names or other intellectualproperty (collectively, “**Intellectual Property**”)necessary to carry on the business now operated by them, and neither theCompany nor any of its subsidiaries has received any notice or is otherwiseaware of any infringement of or conflict with asserted rights of others withrespect to any Intellectual Property or of any existing facts or circumstanceswhich would render any Intellectual Property invalid or inadequate to protectthe interest of the Company or any of its subsidiaries therein, and whichinfringement or, conflict (if the subject of any unfavorable decision, rulingor finding) or invalidity or inadequacy singly or in the aggregate, wouldresult in a Material Adverse Effect.

 

(xvi)                         *Absence of Further Requirements*.  No filing with, or authorization, approval,consent, license, order, registration, qualification or decree of, any court orgovernmental authority or agency is necessary or required for the performanceby the Company of its obligations hereunder in connection with the offering,issuance or sale of the Securities or the consummation of the transactionscontemplated herein, except such as have been already obtained or as may berequired under the 1933 Act or the 1933 Act Regulations or state securitieslaws.

 

(xvii)                      *Possession of Licenses and Permits*.  Except as otherwise stated in the FinalProspectus and the Registration Statement, the Company and its subsidiariespossess such permits, licenses, approvals, consents and other authorizations(collectively, “**Governmental Licenses**”) issued bythe appropriate federal, state, local or foreign regulatory agencies or bodies(including the People’s Republic of China (“**PRC**”)State Council, the PRC Ministry of Information Industry, the State DevelopmentPlanning Commission, the State Economic Trade Commission, the China SecuritiesRegulatory Commission (the “**CSRC**”), theMinistry of Foreign Commerce (“**MOC**”), theMinistry of Land and Resources, the State Administration of Foreign Exchange (“**SAFE**”), the General Administration of Customs, the relevantPosts and Telecommunications Administrations (“**PTA**”)and the relevant Commodity Pricing Administration Bureau) necessary to conductthe business now operated by them; the Company and its subsidiaries are incompliance with the terms and conditions of all such Governmental Licenses,except where the failure so to comply would not, singly or in the aggregate,have a Material Adverse Effect; all of the Governmental Licenses are valid andin full

 

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force andeffect, except when the invalidity of such Governmental Licenses or the failureof such Governmental Licenses to be in full force and effect would not have aMaterial Adverse Effect; and neither the Company nor any of its subsidiarieshas received any notice of proceedings relating to the revocation, suspensionor modification of any such Governmental Licenses which, singly or in theaggregate, if the subject of an unfavorable decision, ruling or finding, wouldresult in a Material Adverse Effect.

 

(xviii)                   *Title to Property*. The Company and its subsidiaries have good and marketable title to allreal property owned by the Company and its subsidiaries and good title to allother properties owned by them, in each case, free and clear of all mortgages,pledges, liens, security interests, claims, restrictions or encumbrances of anykind except such as (a) are described in the Final Prospectus or (b) do not,singly or in the aggregate, materially affect the value of such property and donot interfere with the use made and proposed to be made of such property by theCompany or any of its subsidiaries; and all of the leases and subleasesmaterial to the business of the Company and its subsidiaries, considered as oneenterprise, and under which the Company or any of its subsidiaries holdsproperties described in the Final Prospectus, are in full force and effect, andneither the Company nor any subsidiary has any notice of any material claim ofany sort that has been asserted by anyone adverse to the rights of the Companyor any subsidiary under any of the leases or subleases mentioned above, oraffecting or questioning the rights of the Company or such subsidiary to thecontinued possession of the leased or subleased premises under any such leaseor sublease.

 

(xix)                           *Repatriation of Dividends and Other Distributions*.  All dividends and other distributionsdeclared and payable on the equity or other interests in each of theSubsidiaries may, under the laws and regulations of the PRC, be paid to theCompany and may be converted into foreign currency that may be freelytransferred out of the PRC, and except as disclosed in the RegistrationStatement and the Final Prospectus, all such dividends and distributions willnot be subject to withholding or other taxes under the laws and regulations ofthe PRC and are otherwise free and clear of any other tax, withholding ordeduction in the PRC and may be so paid without the necessity of obtaining anygovernmental authorization, whether local, provincial or national, in the PRC.

 

(xx)                              *PRC Taxes*.  Other thanas described in the Final Prospectus, no stamp or other issuance or transfertaxes or duties and no capital gains, income, withholding or other taxes arepayable by or on behalf of the Company to the PRC or any political subdivisionor taxing authority thereof or therein in connection with the issuance, saleand delivery of the Securities or the execution, delivery and performance ofthis Agreement.  No stamp or otherissuance or transfer taxes or duties and no capital gains, income orwithholding other taxes are payable by or on behalf of the Underwriters to thePRC or any political subdivision or taxing authority thereof or therein inconnection with the sale and delivery of the Securities to the Underwriters orby the Underwriters to the initial purchasers thereof, or the execution,delivery and performance of this Agreement.

 

(xxi)                           *Taxes*.  Each of theCompany and its subsidiaries has filed all reports or filings required thereoffor taxation purposes, including those required by the PRC or any politicalsubdivision thereof, and has paid all taxes required to be paid by it and anyother

 

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assessment,fine or penalty levied against it, to the extent that any of the foregoing isdue and payable, except for any such assessment, fine or penalty that iscurrently being contested in good faith or would not have a Material AdverseEffect.

 

(xxii)                        *Sovereign Immunity*. Under the laws of the PRC, neither the Company nor any of itssubsidiaries, or any of their properties, assets or revenues are entitled toany right of immunity on the grounds of sovereignty from any legal action, suitor proceeding, from set off or counterclaim, from the jurisdiction of anycourt, from service of process, from attachment to or in aid of execution ofjudgment or from other legal process or proceeding for the giving of any reliefor for the enforcement of any judgment.

 

(xxiii)                     *Choice of Law*.  Underthe laws of the PRC, the courts of the PRC recognize and give effect to thechoice of law provisions set forth herein and enforce judgments of U.S. courtsobtained against the Company to enforce this Agreement, provided that thejudgment (A) was not obtained by fraud; (B) was final and conclusive; (C) inthe opinion of the relevant PRC court after the review of such judgmentpursuant to international treaties concluded or acceded to by the PRCgovernment or in accordance with the principle of reciprocity, or otherwise inaccordance with the Civil Procedure Law of the PRC, did not contradict thebasic principles of PRC law; and (D) in the opinion of the relevant PRC courtafter its review of such judgment pursuant to international treaties concludedor agreed to by the PRC government or in accordance with the principle ofreciprocity, or otherwise in accordance with the Civil Procedure Law of thePRC, did not violate state sovereignty, security or public interest.

 

(xxiv)                    *Investment Company Act*. The Company is not, and upon the issuance and sale of the Securities asherein contemplated and the application of the net proceeds therefrom asdescribed in the Final Prospectus will not be, required to be registered as an“**investment company**” under theInvestment Company Act of 1940, as amended (the “**1940 Act**”).

 

(xxv)                       *Environmental Laws*. Except as described in the Registration Statement and except as wouldnot, singly or in the aggregate, reasonably be expected to result in a MaterialAdverse Effect, (A) neither the Company nor any of its subsidiaries is inviolation of any federal, state, local or foreign statute, law, rule,regulation, ordinance, code, policy or rule of common law or any judicial oradministrative interpretation thereof, including any judicial or administrativeorder, consent decree or judgment, relating to pollution or protection of humanhealth, the environment (including, without limitation, ambient air, surfacewater, groundwater, land surface or subsurface strata) or wildlife, including,without limitation, laws and regulations relating to the release or threatenedrelease of chemicals, pollutants, contaminants, wastes, toxic substances,hazardous substances, petroleum or petroleum products (collectively, “**Hazardous Materials**”) or to the manufacture, processing,distribution, use, treatment, storage, disposal, transport or handling ofHazardous Materials (collectively, “**Environmental Laws**”),(B) the Company and its subsidiaries have all permits, authorizations andapprovals required under any applicable Environmental Laws and are each incompliance with their requirements, (C) there are no pending or, to theCompany’s knowledge, threatened administrative, regulatory or judicial actions,suits, demands, demand letters, claims, liens, notices of noncompliance orviolation, investigation or proceedings relating

 

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to anyEnvironmental Law against the Company or any of its subsidiaries and (D) theCompany is not aware of any events or circumstances that might reasonably beexpected to form the basis of an order for clean up or remediation, or anaction, suit or proceeding by any private of or governmental body or agency,against the Company or any of its subsidiaries relating to Hazardous Materialsor any Environmental Laws.

 

(xxvi)                    *Foreign Corrupt Practices Act*.  Neither the Company, any of its subsidiaries,nor any officer, director, employee or agent thereof or any stockholder thereofacting on behalf of the Company or any of its subsidiaries, has done any act orauthorized, directed or participated in any act, in violation of any provisionof the United States Foreign Corrupt Practices Act of 1977, as amended, appliedto such entity or person.

 

(xxvii)                 *Registration Rights*. Except as described in the Registration Statement or as have been waivedin writing, there are no persons with registration rights or other similarrights to have any securities registered pursuant to the Registration Statementor otherwise registered by the Company under the 1933 Act.

 

Section 2*.  Sale and Delivery toUnderwriters; Closing.*

 

(a)                        *Initial Securities*. On the basis of the representations and warranties herein contained andsubject to the terms and conditions herein set forth, the Company agrees toissue and sell to each Underwriter, severally and not jointly, and eachUnderwriter, severally and not jointly, agrees to purchase from the Company, atthe price per share set forth in Schedule D, that proportion of the numberof Initial Securities set forth in Schedule B opposite the name of theCompany which the number of Initial Securities set forth in Schedule Aopposite the name of such Underwriter, plus any additional number of InitialSecurities which such Underwriter may become obligated to purchase pursuant tothe provisions of Section 10 hereof, bears to the total number of InitialSecurities, subject, in each case, to such adjustments among the Underwritersas the Representative in their sole discretion shall make to eliminate anysales or purchases of fractional securities.

 

(b)                       *Option Securities*.  Inaddition, on the basis of the representations, warranties and agreements hereincontained and subject to the terms and conditions herein set forth, the Companyhereby grants an option to the Underwriters, severally and not jointly, topurchase up to an additional 1,815,000 shares of Common Stock at the price pershare set forth in Schedule D, less an amount per share equal to anydividends or distributions declared by the Company and payable on the InitialSecurities but not payable on the Option Securities.  The option hereby granted will expire 30 daysafter the date hereof and may be exercised in whole or in part from time totime only for the purpose of covering over-allotments which may be made inconnection with the offering and distribution of the Initial Securities uponnotice by the Representative to the Company setting forth the number of OptionSecurities as to which the several Underwriters are then exercising the optionand the time and date of payment and delivery for such Option Securities.  Any such time and date of delivery (a “**Date of Delivery**”) shall be determined by theRepresentative, but shall not be later than seven full business days after theexercise of said option, nor in any event prior to the Closing Time, ashereinafter defined.  If the option isexercised as to all or any portion of the Option Securities, each of theUnderwriters, acting severally and not jointly, will purchase that proportionof the total number

 

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of Option Securities then being purchased which the number of InitialSecurities set forth in Schedule A opposite the name of such Underwriterbears to the total number of Initial Securities, subject in each case to suchadjustments as the Representative in their discretion shall make to eliminateany sales or purchases of fractional shares.

 

(c)                        *Payment*.  Payment ofthe purchase price for, and delivery of certificates for, the InitialSecurities shall be made at the offices of Shearman & Sterling LLP, 1080Marsh Road, Menlo Park, CA 94025, or at such other place as shall be agreed uponby the Representative and the Company at 6:00 A.M. (California time) on thethird (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on anygiven day) business day after the date hereof (unless postponed in accordancewith the provisions of Section 10), or such other time not later than tenbusiness days after such date as shall be agreed upon by the Representative andthe Company (such time and date of payment and delivery being herein called “**Closing Time**”).

 

In addition,in the event that any or all of the Option Securities are purchased by theUnderwriters, payment of the purchase price for, and delivery of certificatesfor, such Option Securities shall be made at the above-mentioned offices, or atsuch other place as shall be agreed upon by the Representative and the Company,on each Date of Delivery as specified in the notice from the Representative tothe Company.

 

Payment shallbe made to the Company by wire transfer of immediately available funds to abank account designated by the Company against delivery to the Representativefor the respective accounts of the Underwriters of certificates for theSecurities to be purchased by them.  Itis understood that each Underwriter has authorized the Representative, for itsaccount, to accept delivery of, receipt for, and make payment of the purchaseprice for, the Initial Securities and/or the Option Securities, if any, whichit has agreed to purchase.  Banc ofAmerica Securities LLC, individually and not as representative of theUnderwriters, may (but shall not be obligated to) make payment of the purchaseprice for the Initial Securities or the Option Securities, if any, to bepurchased by any Underwriter whose funds have not been received by the ClosingTime or the relevant Date of Delivery, as the case may be, but such paymentshall not relieve such Underwriter from its obligations hereunder.

 

(d)                       *Denominations; Registration*. Certificates for the Initial Securities and the Option Securities, ifany, shall be in such denominations and registered in such names as theRepresentative may request in writing at least two full business days beforethe Closing Time or the relevant Date of Delivery, as the case may be.  The certificates for the Initial Securities andthe Option Securities, if any, will be made available for examination andpackaging by the Representative in The City of New York not later than 10:00A.M. (Eastern time) on the business day prior to the Closing Time or therelevant Date of Delivery, as the case may be.

 

Section 3*.  Covenants of the Company. *The Company covenants with eachUnderwriter as follows:

 

(a)                        *Compliance with Securities Regulations and Commission Requests*.  The Company, subject to Section 3(b),will notify the Representative immediately, and confirm the notice in writing,(i) when any post-effective amendment to the Registration Statement shallbecome effective, or any supplement to the Basic Prospectus or any amendedFinal Prospectus shall have been filed, (ii) of the receipt of any commentsfrom the Commission, (iii) of any request by the

 

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Commission for any amendment to the Registration Statement or anyamendment or supplement to the Final Prospectus or any document incorporated byreference therein or for additional information, and (iv) of the issuance bythe Commission of any stop order suspending the effectiveness of theRegistration Statement, or of the suspension of the qualification of theSecurities for offering or sale in any jurisdiction, or of the initiation orthreatening of any proceedings for any of such purposes.  The Company will promptly file the FinalProspectus with the Commission within the time periods specified byRule 424(b) and will take such steps as it deems necessary to ascertainpromptly whether the form of Final Prospectus transmitted for filing under Rule424(b) was received for filing by the Commission and, in the event that it wasnot, it will promptly file such Final Prospectus.  The Company will make every reasonable effortto prevent the issuance of any stop order and, if any stop order is issued, toobtain the lifting thereof at the earliest possible moment.  The Company will prepare and file with theCommission the Rule 462(b) Registration Statement, if necessary, in a formapproved by the Representative (which approval shall not be unreasonablywithheld or delayed) in order for the Underwriters to exercise theover-allotment option granted to them pursuant to Section 2(b) hereof.

 

(b)                       *Filing of Amendments*. The Company will give the Representative notice of its intention to fileor prepare any amendment to the Registration Statement (including any filingunder Rule 462(b)) or any amendment, supplement or revision to either the BasicProspectus included in the Registration Statement at the time it becameeffective or to the Final Prospectus, whether pursuant to the 1933 Act, the1934 Act or otherwise, will furnish the Representative with copies of any suchdocuments a reasonable amount of time prior to such proposed filing or use, asthe case may be, and will not file or use any such document to which theRepresentative or counsel for the Underwriters shall object.

 

(c)                        *Delivery of Registration Statements*.  The Company has furnished or will deliver tothe Representative and counsel for the Underwriters, without charge, signedcopies of the Registration Statement as originally filed and of each amendmentthereto (including exhibits filed therewith or incorporated by referencetherein and documents incorporated or deemed to be incorporated by referencetherein) and signed copies of all consents and certificates of experts, andwill also deliver to the Representative, without charge, a conformed copy ofthe Registration Statement as originally filed and of each amendment thereto(without exhibits) for each of the Underwriters.  The copies of the Registration Statement andeach amendment thereto furnished to the Underwriters will be identical to theelectronically transmitted copies thereof filed with the Commission pursuant toEDGAR, except to the extent permitted by Regulation S-T.

 

(d)                       *Delivery of Prospectuses*. The Company will furnish to each Underwriter, without charge, during theperiod when the Final Prospectus is required to be delivered under the 1933 Actor the 1934 Act, such number of copies of the Final Prospectus (as amended orsupplemented) as such Underwriter may reasonably request.  The Final Prospectus and any amendments orsupplements thereto furnished to the Underwriters will be identical to theelectronically transmitted copies thereof filed with the Commission pursuant toEDGAR, except to the extent permitted by Regulation S-T.

 

(e)                        *Continued Compliance with Securities Laws*.  The Company will comply with the 1933 Act andthe 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as topermit the completion of the distribution of the Securities as contemplated inthis Agreement and

 

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in the Final Prospectus.  If atany time when a prospectus is required by the 1933 Act to be delivered inconnection with sales of the Securities, any event shall occur or conditionshall exist as a result of which it is necessary, in the opinion of counsel forthe Underwriters or for the Company, to amend the Registration Statement oramend or supplement the Final Prospectus in order that the Final Prospectuswill not include any untrue statements of a material fact or omit to state amaterial fact necessary in order to make the statements therein not misleadingin the light of the circumstances existing at the time it is delivered to apurchaser, or if it shall be necessary, in the opinion of such counsel, at anysuch time to amend the Registration Statement or amend or supplement the FinalProspectus in order to comply with the requirements of the 1933 Act or the 1933Act Regulations, the Company will promptly prepare and file with theCommission, subject to Section 3(b), such amendment or supplement as maybe necessary to correct such statement or omission or to make the RegistrationStatement or the Final Prospectus comply with such requirements, and theCompany will furnish to the Underwriters such number of copies of suchamendment or supplement as the Underwriters may reasonably request.

 

(f)                          *Blue Sky Qualifications*. The Company will use its best efforts, in cooperation with theUnderwriters, to qualify the Securities for offering and sale under theapplicable securities laws of such states and other jurisdictions (domestic orforeign) as the Representative may designate and to maintain suchqualifications in effect for a period of not less than one year from the laterof the effective date of the Registration Statement and any Rule 462(b)Registration Statement; provided, however, that the Company shall not beobligated to file any general consent to service of process or to qualify as aforeign corporation or as a dealer in securities in any jurisdiction in whichit is not so qualified or to subject itself to taxation in respect of doingbusiness in any jurisdiction in which it is not otherwise so subject.

 

(g)                       *Rule 158*.  The Companywill timely file such reports pursuant to the 1934 Act as are necessary inorder to make generally available to its security holders as soon aspracticable an earnings statement for the purposes of, and to provide thebenefits contemplated by, the last paragraph of Section 11(a) of the 1933Act.

 

(h)                       *Use of Proceeds*.  TheCompany will use the net proceeds received by it from the sale of theSecurities in the manner specified in the Final Prospectus under “**Use of Proceeds**.”

 

(i)                           *Listing*.  The Companywill use its best efforts to effect and maintain the quotation of theSecurities on the Nasdaq National Market and will file with the Nasdaq NationalMarket all documents and notices required by the Nasdaq National Market ofcompanies that have securities that are traded in the over-the-counter marketand quotations for which are reported by the Nasdaq National Market.

 

(j)                           *Restriction on Sale of Securities*.  During a period of 90 days from the date ofthe Final Prospectus (the “**Lockup Period**”),the Company will not, without the prior written consent of Banc of AmericaSecurities LLC, (i) directly or indirectly, offer, pledge, sell, contract tosell, sell any option or contract to purchase, purchase any option or contractto sell, grant any option, right or warrant to purchase or otherwise transferor dispose of any share of Common Stock or any securities convertible into orexercisable or exchangeable for Common Stock or file any registration statementunder the 1933 Act with respect to any of the foregoing or publicly disclosethe intention to do any of the foregoing, (ii) enter into any swap or any otheragreement or any transaction that transfers, in whole or in part, directly orindirectly, the economic

 

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consequence of ownership of the Common Stock, whether any such swap ortransaction described in clause (i) or (ii) above is to be settled by deliveryof Common Stock or such other securities, in cash or otherwise.  The foregoing sentence shall not apply to (A)the Securities to be sold hereunder, (B) any shares of Common Stock issued bythe Company upon the exercise of an option or warrant or the conversion of asecurity outstanding on the date hereof and referred to in the FinalProspectus, (C) any shares of Common Stock issued or options to purchase CommonStock granted pursuant to existing employee benefit plans of the Companyreferred to in the Final Prospectus, (D) any shares of Common Stock issued pursuantto any non-employee director stock plan or dividend reinvestment plan, (E) anyshares of Common Stock or securities convertible into or exchangeable forCommon Stock issued in connection with acquisitions (by purchase, merger orotherwise) of other entities (or substantially all of the assets or operationsof other entities) if the recipients of such securities each executes a lockupagreement with Banc of America Securities LLC in form and substancesubstantially similar to the lockup set forth in this Section 3(i), or (F)any filing of any registration statement on Form S-8 under the 1933 Act.

 

(k)                        *Reporting Requirements*. The Company, during the period when Final Prospectuses are required tobe delivered under the 1933 Act or the 1934 Act, will file all documentsrequired to be filed with the Commission pursuant to the 1934 Act within thetime periods required by the 1934 Act and the 1934 Act Regulations.

 

(l)                           *No Amendment of 10b5-1 Plans*.  During the Lockup Period, the Company willnot permit the amendment of any 10b5-1 Plan unless such amendment does notbecome effective until after the expiration of Lockup Period.  For purposes of this Agreement, a “**10b5-1 Plan**” is a contract adopted prior to the date hereofunder Rule 10b5-1 under the Exchange Act between the Company and any of itsexecutive officers or directors, a copy of which has been provided to Banc ofAmerica Securities LLC.

 

Section 4*.  Payment and Expenses.*

 

(a)                        *Expenses*.  The Companywill pay or cause to be paid all expenses incident to the performance of theCompany’s obligations under this Agreement, including (i) the preparation,printing and filing of the Registration Statement (including financialstatements and exhibits) as originally filed and of each amendment thereto,(ii) the preparation, printing and delivery to the Underwriters of thisAgreement and such other documents as may be required in connection with theoffering, purchase, sale, issuance or delivery of the Securities, (iii) thepreparation, issuance and delivery of the certificates for the Securities tothe Underwriters, including any stock or other transfer taxes and any stamp orother duties payable upon the sale, issuance or delivery of the Securities tothe Underwriters, (iv) the fees and disbursements of the Company’s counsel,accountants and other advisors, (v) the qualification of the Securities undersecurities laws in accordance with the provisions of Section 3(f) hereof,including filing fees and the reasonable fees and disbursements of counsel forthe Underwriters in connection therewith and in connection with the preparationof the Blue Sky Survey and any supplement thereto, (vi) the printing anddelivery to the Underwriters of copies of the Final Prospectus and anyamendments or supplements thereto, (vii) the preparation, printing and deliveryto the Underwriters of copies of the Blue Sky Survey and any supplementthereto, (viii) the fees and expenses of any transfer agent or registrar forthe Securities, (ix) the filing fees incident to, and the reasonable fees anddisbursements of counsel to the Underwriters in connection with, the review bythe National Association of Securities Dealers, Inc. (the “**NASD**”)of the terms of the sale of the Securities,

 

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(x) any stamp duties, capital duties and stock transfer taxes, if any,payable upon the sale of the Securities to the Underwriters and their transferbetween the Underwriters pursuant to an agreement between such Underwriters and(xi) the fees and expenses incurred in connection with the inclusion of theSecurities in the Nasdaq National Market.

 

(b)                       *Termination of Agreement*. If this Agreement is terminated by the Representative in accordance withthe provisions of Section 5, Section 9(a)(i) or Section 11hereof, the Company shall reimburse the Underwriters for all of theirout-of-pocket expenses, including the reasonable fees and disbursements ofcounsel for the Underwriters.

 

Section 5*.  Conditions of Underwriters’Obligations. *The obligationsof the several Underwriters hereunder are subject to the accuracy of therepresentations and warranties of the Company contained in Section 1hereof or in certificates of any officer of the Company or any subsidiary ofthe Company delivered pursuant to the provisions hereof, to the performance bythe Company of its covenants and other obligations hereunder, and to thefollowing further conditions:

 

(a)                        *Effectiveness of Registration Statement*.  The Registration Statement, including anyRule 462(b) Registration Statement, has become effective and at Closing Time nostop order suspending the effectiveness of the Registration Statement shallhave been issued under the 1933 Act or proceedings therefor initiated orthreatened by the Commission, and any request on the part of the Commission foradditional information shall have been complied with to the reasonablesatisfaction of counsel to the Underwriters. The Final Prospectus shall have been filed with the Commission inaccordance with Rule 424(b).

 

(b)                       *Opinion of Counsel for the Company*.  At Closing Time, the Representative shallhave received the favorable opinion, dated as of Closing Time, ofShearman & Sterling LLP, counsel for the Company substantially in theform attached hereto as Exhibit A.

 

(c)                        *Opinion of PRC Counsel for the Company*.  At Closing Time, the Representative shallhave received the favorable opinion, dated as of Closing Time, of Jun He LawOffices, PRC counsel for the Company, in form and substance satisfactory to theRepresentative and counsel for the Underwriters, together with signed orreproduced copies of such letter for each of the other Underwriters to theeffect that:

 

(i)                                     Eachof UTStarcom China, Ltd. and UTStarcom Telecom Co., Ltd. (each, a “**PRC Subsidiary**” and collectively the “**PRCSubsidiaries**”) has been duly organized and is validly existing andduly qualified as a foreign investment enterprise with limited liability underPRC law, and its business license is in full force and effect; each has fullpower and authority (corporate and other) and has all consents, approvals,authorizations, orders, registrations, clearances and qualifications of or withany court, governmental agency or body having jurisdiction over it or any ofits properties required for the ownership or lease of property by it and theconduct of its business, and has the legal right and authority to own, use,lease and operate its assets and to conduct its business as described in theFinal Prospectus; each of the Company and the PRC Subsidiaries can sue and besued in its own name under the laws of the PRC;

 

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(ii)                                  TheCompany, as a foreign corporation for transaction of business in the PRC, hasall necessary licenses, consents, authorizations, approvals, orders,certificates and permits of and from, and has made all declarations and filingswith all governmental agencies to own, use or lease its properties and conductbusiness as described in the Final Prospectus;

 

(iii)                               Theequity interests of the Company in each of the PRC Subsidiaries have been dulyand validly authorized and issued, are fully paid and nonassessable and arelegally owned directly or indirectly by the Company, free and clear of allliens, encumbrances, equities or claims; no additional governmental approval orauthorization of or filing with any governmental agency is required under PRClaw for the ownership by the Company of its equity interests in each of the PRCSubsidiaries, except the approval from or registration with the relevantgovernmental authorities, including, without limitation, the relevant localbranches of the Ministry of Commerce (“**MOC**”), theState Administration of Industry and Commerce (“**SAIC**”),the State Administration for Foreign Exchange (“**SAFE**”),the State Administration of Taxation and the General Administration of Customs,which has been obtained and is in full force and effect; the liability of theCompany in respect of its equity interests in each of the PRC Subsidiaries islimited to its investment therein;

 

(iv)                              Basedon our general review of the title documents and without independent check orverification thereof, the PRC Subsidiaries have valid title to, or validleasehold interests in, all of their material real and personal property ownedby them, in each case free and clear of all liens, encumbrances, third partyrights or interests, defects or any other restrictions except such as do notmaterially affect the value of such property and do not interfere with the usemade and proposed to be made of such property by them; and any real propertyand buildings held under lease by the PRC Subsidiaries are held by them undervalid and enforceable leases in full force and effect, with such exceptions asare not material and do not interfere with the use made and proposed to be madeof such property and buildings by them;

 

(v)                                 Tothe best of our knowledge and other than as set forth in the Final Prospectus,there are no pending actions, suits or proceedings by or before any court orgovernmental agency, authority or body or any arbitrator in the PRC to whichany of the Company, the PRC Subsidiaries is a party or of which any property ofthe Company, the PRC Subsidiaries is subject which, if determined adversely tothe Company, the PRC Subsidiaries, would individually or in the aggregateresult in any material adverse change or any event involving a prospectivematerial adverse change, in or affecting the general affairs, management,financial position, stockholders’ equity or results of operations of theCompany and its subsidiaries, taken as a whole; and, to the best of ourknowledge, no such actions, suits or proceedings are threatened orcontemplated;

 

(vi)                              Theissue and sale of the Securities to be sold by the Company and the execution,delivery and performance by the Company of this Agreement and the consummationof the transactions herein contemplated will not conflict with or result in abreach or violation of any of the terms or provisions of, or constitute adefault under, any indenture, mortgage, deed of trust, loan agreement or otheragreement or instrument known to us to which any of the PRC Subsidiaries is aparty or by which any of the PRC

 

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Subsidiariesis bound or to which any of the property or assets of the PRC Subsidiaries issubject, nor will such action result in any violation of the provisions ofarticles of association or business licenses of any of the PRC Subsidiaries orany law or statute or any order, rule or regulation known to us of anygovernmental agency having jurisdiction over the PRC Subsidiaries or any oftheir properties;

 

(vii)                           Nogovernmental authorization, approval or consent of or filing with anygovernmental agency is required under PRC law for the consummation by theCompany of the transactions contemplated by this Agreement;

 

(viii)                        Except asdescribed in the Registration Statement or the Final Prospectus or asincorporated by reference therein, the PRC Subsidiaries have all necessarylicenses, consents, authorizations, approvals, orders, certificates and permitsof and from, and have made all declarations and filings with all governmentalagencies to own, lease, license and use their properties and assets and conducttheir business as described in the Final Prospectus.  Except as described in the Final Prospectus,neither the Company nor any of the PRC Subsidiaries has any reason to believethat the Ministry of Information Industry or any other regulatory body isconsidering modifying, suspending or revoking any such licenses, consents,authorizations, approvals, orders, certificates or permits and each of theCompany, the PRC Subsidiaries is in compliance with the provisions of all suchlicenses, consents, authorizations, approvals, orders, certificates or permitsin all material respects;

 

(ix)                                Tothe best of our knowledge, none of the PRC Subsidiaries is in violation of itsconstituent documents (including, without limitation, articles of association)or in default in the performance or observance of any material obligation,agreement, covenant or condition contained in any indenture, mortgage, deed oftrust, loan, lease or other agreement or instrument to which it is a party orby which it or any of its properties may be bound; the business and operationsconducted by the PRC Subsidiaries are in compliance with any PRC laws andregulations applicable to the PRC Subsidiaries;

 

(x)                                   CurrentPRC laws and regulations permit foreign investment in the telecommunicationsservices industry, subject to certain ownership and geographicrestrictions.  After due inquiry, we haveno legal basis to form an opinion that any of the Subsidiaries invests in,operates, or participates in the operation of, any telecommunications servicesin the PRC as restricted by current PRC laws and regulations;

 

(xi)                                Allnecessary licenses, approvals, certificates or permits for the connection ofproducts to telecommunications networks within the PRC have been duly obtainedfor each of the products of the Company and the PRC Subsidiaries sold,distributed and marketed in the PRC for which such licenses, approvals,certificates or permits are required, except such as described in the FinalProspectus;

 

(xii)                             Thestatements set forth in the Final Prospectus under the captions “Risk Factors”to the extent such statements relate to matters of PRC law or regulation or tothe provisions of documents therein described, are fair summaries of suchmatters and are correct in all material respects;

 

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(xiii)                          No stampor other issuance or transfer taxes or duties and no capital gains, income,withholding or other taxes are payable by or on behalf of the Underwriters tothe PRC or to any political subdivision or taxing authority thereof or thereinin connection with (i) the issuance, sale and delivery by the Company of theSecurities to or for the respective accounts of the Underwriters or (ii) thesale and delivery outside the PRC by the Underwriters of the Securities to theinitial purchasers thereof in the manner contemplated in this Agreement;

 

(xiv)                         Theentering into, performance and enforcement of this Agreement in accordance withits terms and conditions will not subject the Underwriters to a requirement tobe licensed or otherwise qualified to do business in the PRC, nor will anyUnderwriter be deemed to be resident, domiciled, carrying on business throughan establishment or place in the PRC or in breach of any laws or regulations ofthe PRC by reason of entering into, performance or enforcement of thisAgreement;

 

(xv)                            Alldividends and other distributions declared and payable upon the equityinterests in the PRC Subsidiaries to the Company may be converted into foreigncurrency that may be freely transferred out of the PRC, and all such dividendsand other distributions are not and, except as disclosed in the RegistrationStatement and the Final Prospectus, will not be subject to withholding or othertaxes under the laws and regulations of the PRC and, except as disclosed in theRegistration Statement and the Final Prospectus, are otherwise free and clear ofany other tax, withholding or deduction under PRC law, in each case without thenecessity of obtaining any governmental approval or authorization in the PRC,except such as have been obtained;

 

(xvi)                         TheCompany’s stock option, stock purchase and other similar plans (including theplans of the Company’s subsidiaries and acquired Companies) and the sale,issuance and grant of any securities under any of the aforementioned plans tothe date hereof, to the extent applicable to employees of any of the PRC Subsidiaries,do not violate any provisions of the foreign exchange laws and regulations ofthe PRC or any other applicable PRC laws and regulations, provided that anypayment made under any of the aforementioned plans by any PRC citizen has beenaccepted in a cashless manner;

 

(xvii)                      Under theapplicable PRC tax law, UTStarcom (China), Ltd. is entitled to reduced taxes atthe rate of 10% in 2003.  UTStarcomTelecom Co., Ltd. is entitled to reduced taxes at the rate of 15% in 2003; tothe best of our knowledge, we are not aware of any event or  circumstance which may result in such ratesbeing invalid or ineffective or capable of being revoked;

 

(xviii)                   Insofar asmatters of the law of the PRC are concerned, the Registration Statement and thefiling of the Registration Statement with the Commission has been dulyauthorized by and on behalf of the Company, and the Registration Statement hasbeen executed pursuant to such authorization by or on behalf of the Company;

 

(xix)                           Althoughwe do not assume any responsibility for the accuracy, completeness or fairnessof the statements contained in the Registration Statement or the FinalProspectus, except for those referred to in the opinion insubsection (xii) of this opinion, nothing has come to our attention that ledus to believe that, as of its effective

 

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date, theRegistration Statement or any further amendment thereto made by the Companyprior to the later date of the Closing Time and the last Date of Delivery (otherthan the financial statements, as to which we need express no opinion)contained an untrue statement of a material fact or omitted to state a materialfact required to be stated therein or necessary to make the statements therein,insofar as they relate to matters of PRC laws and regulations and theprovisions of the documents entered into by each of the Company and the PRCSubsidiaries in connection with the business conducted by each of them in thePRC, not misleading or that, as of its date, the Final Prospectus or anyfurther amendment or supplement thereto made by the Company prior to the laterdate of the Closing Time and the last Date of Delivery (other than thefinancial statements and related schedules therein, as to which we need expressno opinion) contained an untrue statement of a material fact or omitted tostate a material fact necessary to make the statements therein, insofar as theyrelate to matters of PRC laws and regulations and the provisions of thedocuments entered into by each of the Company and the PRC Subsidiaries inconnection with the business conducted by each of them in the PRC, in the lightof the circumstances under which they were made, not misleading or that, as ofthe later date of the Closing Time and the last Date of Delivery, theRegistration Statement, the Final Prospectus or any further amendment orsupplement thereto made by the Company prior to such date (other than thefinancial statements and related schedules therein as to which we need expressno opinion) contains an untrue statement of a material fact or omits to state amaterial fact necessary to make the statements therein, insofar as they relateto matters of PRC laws and regulations and the provisions of the documentsentered into by each of the Company and the PRC Subsidiaries in connection withthe business conducted by each of them in the PRC, in the light of thecircumstances under which they were made, not misleading;

 

(xx)                              Exceptas described in the Final Prospectus, insofar as matters of PRC laws and regulationsare concerned, each of the Company and the PRC Subsidiaries owns, possesses, orotherwise has the right to use, and has made all necessary registration andapplications with all governmental agencies to own, possess and use, theIntellectual Property necessary to carry on the business currently operated byit and as described in the Final Prospectus, and to the best of our knowledge,has not received any notice of infringement or conflict with asserted rights ofothers with respect to any such intellectual property rights that, ifdetermined adversely to the Company or any of the PRC Subsidiaries, wouldindividually or in the aggregate have a Material Adverse Effect.

 

(d)                       *Opinion of Counsel for the Underwriters. *At Closing Time, theRepresentative shall have received the favorable opinion, dated as of ClosingTime, of Davis Polk & Wardwell, counsel for the Underwriters, in form andsubstance satisfactory to the Representative, together with signed orreproduced copies of such letter for each of the other Underwriters, and suchcounsel shall have received or been permitted access to such papers andinformation as they may reasonably request to enable them to give such opinion.

 

(e)                        *Officers’ Certificate. *AtClosing Time, there shall not have been, since the date hereof or since therespective dates as of which information is given in the Final Prospectus, anymaterial adverse change in the condition, financial or otherwise, or in theearnings, business affairs or business prospects of the Company and itssubsidiaries taken as a whole, whether or not arising in ordinary course ofbusiness, and the Representative shall have received a certificate

 

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of the President or a Vice President of theCompany and of the chief financial or chief accounting officer of the Company,dated as of Closing Time, to the effect that (i) there has been no suchmaterial adverse change, (ii) the representations and warranties inSection 1(a) hereof are true and correct in all material respects with thesame force and effect as though expressly made at and as of Closing Time, (iii)the Company has complied in all material respects with all agreements andsatisfied in all material respects all conditions on its part to be performedor satisfied at or prior to Closing Time and (iv) to the knowledge of suchofficers, based on due inquiry, no stop order suspending the effectiveness ofthe Registration Statement has been issued and no proceedings for that purposehave been instituted by the Commission.

 

(f)                          *Accountant’s Comfort Letter. *Atthe time of the execution of this Agreement, the Representative shall havereceived from PricewaterhouseCoopers LLP a letter dated such date, in form andsubstance satisfactory to the Representative, together with signed orreproduced copies of such letter for each of the other Underwriters containingstatements and information of the type ordinarily included in accountants’“comfort letters” to underwriters with respect to the financial statements andcertain financial information contained in the Registration Statement and theFinal Prospectus.

 

(g)                       *Bring-down Comfort Letter. *AtClosing Time, the Representative shall have received fromPricewaterhouseCoopers LLP a letter, dated as of Closing Time, to the effectthat they reaffirm the statements made in the letter furnished pursuant tosubsection (h) of this Section, except that the specified date referred toshall be a date not more than three business days prior to Closing Time.

 

(h)                       *Lockup Agreements. *AtClosing Time, the Representative shall have received an agreement substantiallyin the form of Exhibit B hereto from each of the Company’s directors andexecutive officers, each of whom is listed in Schedule E, and an agreementsubstantially in the form of Exhibit C hereto from SOFTBANK America, Inc.

 

(i)                           *Conditions to Purchase of Option Securities. *In the event that the Underwritersexercise their option provided in Section 2(b) hereof to purchase all orany portion of the Option Securities, the representations and warranties of theCompany contained herein and the statements in any certificates furnished bythe Company or any subsidiary of the Company hereunder shall be true andcorrect in all material respects as of each Date of Delivery and, at therelevant Date of Delivery, the Representative shall have received:

 

(i)                                     *Officers’ Certificate*. A certificate, dated such Date of Delivery, of the President or a VicePresident of the Company and of the chief financial or chief accounting officerof the Company confirming that the certificate delivered at the Closing Timepursuant to Section 5(e) hereof remains true and correct as of such Date of Delivery;

 

(ii)                                  *Opinion of Counsel for the Company*.  The favorable opinion of Shearman &Sterling LLP, counsel for the Company, dated such Date of Delivery, relating tothe Option Securities to be purchased on such Date of Delivery and otherwise tothe same effect as the opinion required by Section 5(b) hereof.

 

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(iii)                               *Opinion of PRC Counsel for the Company*.  The favorable opinion of Jun He Law Offices,PRC counsel for the Company, dated such Date of Delivery, relating to theOption Securities to be purchased on such Date of Delivery and otherwise to thesame effect as the opinion required by Section 5(c) hereof.

 

(iv)                              *Opinion of Counsel for the Underwriters*.  The favorable opinion of Davis Polk &Wardwell, counsel for the Underwriters, dated such Date of Delivery, relatingto the Option Securities to be proposed on such Date of Delivery and otherwiseto the same effect as the opinion required Section 5(d) hereof.

 

(v)                                 *Bring-down Comfort Letter*. A letter from PricewaterhouseCoopers LLP, in form and substancesatisfactory to the Representative and dated such Date of Delivery,substantially in the same form and substance as the letter furnished to theRepresentative pursuant to Section 5(f) hereof, except that the “specifieddate” in the letter furnished pursuant to this paragraph shall be a date notmore than five days prior to such Date of Delivery.

 

(j)                           *Additional Documents.* At Closing Time and at each Date of Delivery,counsel for the Underwriters shall have been furnished with such documents andopinions as they may require for the purpose of enabling them to pass upon theissuance and sale of the Securities as herein contemplated, or in order toevidence the accuracy of any of the representations or warranties, or thefulfillment of any of the conditions, herein contained; and all proceedingstaken by the Company in connection with the issuance and sale of the Securitiesas herein contemplated shall be satisfactory in form and substance to theRepresentative and counsel for the Underwriters.

 

(k)                        *Termination of Agreement.* If any condition specified in this Section shallnot have been fulfilled when and as required to be fulfilled, this Agreement,or, in the case of any condition to the purchase of Option Securities, on aDate of Delivery which is after the Closing Time, the obligations of theseveral Underwriters to purchase the relevant Option Securities, may beterminated by the Representative by notice to the Company at any time at orprior to Closing Time or such date of Delivery, as the case may be, and suchtermination shall be without liability of any party to any other party exceptas provided in Section 4 and except that Sections 1, 6, 7 and 8 shallsurvive any such termination and remain in full force and effect.

 

Section 6*.  Indemnification.*

 

(a)                        *Indemnification of the Underwriters by the Company*.  The Company agrees to indemnify and holdharmless each Underwriter and each person, if any, who controls any Underwriterwithin the meaning of Section 15 of the 1933 Act or Section 20 of the1934 Act as follows:

 

(i)                                     againstany and all loss, liability, claim, damage and expense whatsoever, as incurred,arising out of any untrue statement or alleged untrue statement of a materialfact contained in the Registration Statement (or any amendment thereto) or theomission or alleged omission therefrom of a material fact required to be statedtherein or necessary to make the statements therein not misleading or arisingout of any untrue statement or alleged untrue statement of a material factincluded in the Final Prospectus (or any

 

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amendment orsupplement thereto), or the omission or alleged omission therefrom of amaterial fact necessary in order to make the statements therein, in the lightof the circumstances under which they were made, not misleading;

 

(ii)                                  againstany and all loss, liability, claim, damage and expense whatsoever, as incurred,to the extent of the aggregate amount paid in settlement of any litigation, orany investigation or proceeding by any governmental agency or body, commencedor threatened, or of any claim whatsoever based upon any such untrue statementor omission, or any such alleged untrue statement or omission; provided that(subject to Section 6(d) below) any such settlement is effected with thewritten consent of the Company; and

 

(iii)                               againstany and all expense whatsoever, as incurred (including the fees anddisbursements of a single counsel chosen by Banc of America Securities LLC),reasonably incurred in investigating, preparing or defending against anylitigation, or any investigation or proceeding by any governmental agency orbody, commenced or threatened, or any claim whatsoever based upon any suchuntrue statement or omission or any such alleged untrue statement or omission,to the extent that any such expense is not paid under (i) or (ii) above;

 

*provided, however*,that the indemnity agreement contained in this Section 6(a) shall notapply to any loss, liability, claim, damage or expense to the extent arisingout of any untrue statement or omission or alleged untrue statement or omissionmade in reliance upon and in conformity with written information furnished tothe Company by any Underwriter through the Representative expressly for use inthe Registration Statement (or any amendment thereto), or the Final Prospectus.

 

(b)                       *Indemnification of the Company, Directors and Officers*.  Each Underwriter severally agrees toindemnify and hold harmless the Company, its directors, each of its officerswho signed the Registration Statement, and each person, if any, who controlsthe Company within the meaning of Section 15 of the 1933 Act orSection 20 of the 1934 Act against any and all loss, liability, claim,damage and expense described in the indemnity contained in subsection (a)of this Section, as incurred, but only with respect to untrue statements oromissions, or alleged untrue statements or omissions made in the RegistrationStatement (or any amendment thereto) or the Final Prospectus in reliance uponand in conformity with written information furnished to the Company by suchUnderwriter through the Representative expressly for use in the RegistrationStatement (or any amendment thereto) or the Final Prospectus.

 

(c)                        *Actions Against Parties*. Notification.  Each indemnifiedparty shall give notice as promptly as reasonably practicable to eachindemnifying party of any action commenced against it in respect of whichindemnity may be sought hereunder, but failure to so notify an indemnifyingparty shall not relieve such indemnifying party from any liability hereunder tothe extent it is not materially prejudiced as a result thereof and in any eventshall not relieve it from any liability which it may have otherwise than onaccount of this indemnity agreement.  Inthe case of parties indemnified pursuant to subsection (a) above, counselto the indemnified parties shall be selected by Banc of America Securities LLC,and, in the case of parties indemnified pursuant to Section 6(b) above,counsel to the indemnified parties shall be selected by the Company.  An indemnifying party may participate at itsown expense in the defense of any such

 

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action; provided, however, that counsel to the indemnifying party shallnot (except with the consent of the indemnified party) also be counsel to theindemnified party.  In no event shall theindemnifying parties be liable for fees and expenses of more than one counsel(in addition to any local counsel) separate from their own counsel for allindemnified parties in connection with any one action or separate but similaror related actions in the same jurisdiction arising out of the same generalallegations or circumstances.  Noindemnifying party shall, without the prior written consent of the indemnifiedparties, settle or compromise or consent to the entry of any judgment withrespect to any litigation, or any investigation or proceeding by anygovernmental agency or body, commenced or threatened, or any claim whatsoeverin respect of which indemnification or contribution could be sought under thisSection 6 or Section 7 hereof (whether or not the indemnified partiesare actual or potential parties thereto), unless such settlement, compromise orconsent (i) includes an unconditional release of each indemnified party fromall liability arising out of such litigation, investigation, proceeding orclaim and (ii) does not include a statement as to or an admission of fault,culpability or a failure to act by or on behalf of any indemnified party.

 

(d)                       *Settlement Without Consent If Failure to Reimburse*.  If at any time an indemnified party shallhave requested an indemnifying party to reimburse the indemnified party forfees and expenses of counsel, such indemnifying party agrees that it shall beliable for any settlement of the nature contemplated by Sections 6(a)(ii) and6(b)(ii) above effected without its written consent if (i) such settlement isentered into more than 45 days after receipt by such indemnifying party of theaforesaid request, (ii) such indemnifying party shall have received notice ofthe terms of such settlement at least 30 days prior to such settlement beingentered into and (iii) such indemnifying party shall not have reimbursed suchindemnified party in accordance with such request prior to the date of suchsettlement.

 

Section 7*.  Contribution. *If the indemnification providedfor in Section 6 hereof is for any reason unavailable to or insufficientto hold harmless an indemnified party in respect of any losses, liabilities,claims, damages or expenses referred to therein, then each indemnifying partyshall contribute to the aggregate amount of such losses, liabilities, claims,damages and expenses incurred by such indemnified party, as incurred, (i) insuch proportion as is appropriate to reflect the relative benefits received bythe Company on the one hand and the Underwriters on the other hand from theoffering of the Securities pursuant to this Agreement or (ii) if the allocationprovided by clause (i) is not permitted by applicable law, in such proportionas is appropriate to reflect not only the relative benefits referred to inclause (i) above but also the relative fault of the Company on the one hand andof the Underwriters on the other hand in connection with the statements oromissions which resulted in such losses, liabilities, claims, damages orexpenses, as well as any other relevant equitable considerations.

 

The relativebenefits received by the Company on the one hand and the Underwriters on theother hand in connection with the offering of the Securities pursuant to thisAgreement shall be deemed to be in the same respective proportions as the totalnet proceeds from the offering of the Securities pursuant to this Agreement(before deducting expenses) received by the Company and the total underwritingdiscount received by the Underwriters, in each case as set forth on the coverof the Final Prospectus, bear to the aggregate initial public offering price ofthe Securities as set forth on such cover.

 

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The relativefault of the Company on the one hand and the Underwriters on the other handshall be determined by reference to, among other things, whether any suchuntrue or alleged untrue statement of a material fact or omission or allegedomission to state a material fact relates to information supplied by theCompany or by the Underwriters and the parties’ relative intent, knowledge,access to information and opportunity to correct or prevent such statement oromission.

 

The Companyand the Underwriters agree that it would not be just and equitable ifcontribution pursuant to this Section 7 were determined by pro rataallocation (even if the Underwriters were treated as one entity for suchpurpose) or by any other method of allocation which does not take account ofthe equitable considerations referred to above in this Section 7.  The aggregate amount of losses, liabilities,claims, damages and expenses incurred by an indemnified party and referred toabove in this Section 7 shall be deemed to include any legal or otherexpenses reasonably incurred by such indemnified party in investigating,preparing or defending against any litigation, or any investigation orproceeding by any governmental agency or body, commenced or threatened, or anyclaim whatsoever based upon any such untrue or alleged untrue statement oromission or alleged omission.

 

Notwithstandingthe provisions of this Section 7, no Underwriter shall be required tocontribute any amount in excess of the amount by which the total price at whichthe Securities underwritten by it and distributed to the public were offered tothe public exceeds the amount of any damages which such Underwriter hasotherwise been required to pay by reason of any such untrue or alleged untruestatement or omission or alleged omission.

 

No personguilty of fraudulent misrepresentation (within the meaning ofSection 11(f) of the 1933 Act) shall be entitled to contribution from anyperson who was not guilty of such fraudulent misrepresentation.

 

For purposesof this Section 7, each person, if any, who controls an Underwriter withinthe meaning of Section 15 of the 1933 Act or Section 20 of the 1934Act shall have the same rights to contribution as such Underwriter, and eachdirector of the Company, each officer of the Company who signed the RegistrationStatement, and each person, if any, who controls the Company within the meaningof Section 15 of the 1933 Act or Section 20 of the 1934 Act shallhave the same rights to contribution as the Company, as the case may be.  The Underwriters’ respective obligations tocontribute pursuant to this Section 7 are several in proportion to thenumber of Initial Securities set forth opposite their respective names inSchedule A hereto and not joint.

 

Section 8*.  Representations, Warrantiesand Agreements to Survive Delivery. *Allrepresentations, warranties and agreements contained in this Agreement or incertificates of officers of the Company or any of its subsidiaries submittedpursuant hereto, shall remain operative and in full force and effect,regardless of any investigation made by or on behalf of any Underwriter orcontrolling person, or by or an behalf of the Company, and shall survivedelivery of the Securities to the Underwriters.

 

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Section 9*.  Termination of Agreement.*

 

(a)                        *Termination; General*. The Representative may terminate this Agreement, by notice to theCompany, at any time at or prior to Closing Time (i) if there has been, sincethe time of execution of this Agreement or since the respective dates as of whichinformation is given in the Final Prospectus (exclusive of any supplementthereto), any material adverse change in the condition, financial or otherwise,or in the earnings, business affairs or business prospects of the Company andits subsidiaries considered as one enterprise, whether or not arising in theordinary course of business, or (ii) if there has occurred any material adversechange in the financial markets in the United States, China or in theinternational financial markets, any outbreak of hostilities or escalationthereof or other calamity or crisis or any change or development involving aprospective change in national or international political, financial oreconomic conditions, in each case the effect of which is such as to make it, inthe judgment of the Representative, impracticable or inadvisable to market theSecurities or to enforce contracts for the sale of the Securities, or (iii) iftrading in any securities of the Company has been suspended or materiallylimited by the Commission or the Nasdaq National Market, or if tradinggenerally on the American Stock Exchange or the New York Stock Exchange or inthe Nasdaq National Market has been suspended or materially limited, or minimumor maximum prices for trading have been fixed, or maximum ranges for priceshave been required, by any of said exchanges or by such system or by order ofthe Commission, the National Association of Securities Dealers, Inc. or anygovernmental authority, or a material disruption has occurred in commercial bankingor securities settlement or clearance services in the United States, (iv) if abanking moratorium has been declared by Federal or New York or PRC authorities,(v) if a change or development involving a prospective change in United Statesor PRC taxation affecting the Company or the Securities or the transfer thereofor the imposition of exchange controls by the United States or any change ordevelopment involving a prospective change in the PRC exchange controls wouldmaterially and adversely affect the financial markets or the market for theSecurities and other equity securities, or (vi) if the outbreak or escalationof hostilities involving the United States or the PRC or the declaration by theUnited States or the PRC of a national emergency or war makes it impracticableor inadvisable to proceed with the public offering or the delivery of theSecurities being delivered at such Date of Delivery on the terms and in themanner contemplated in this Agreement and the Final Prospectus.

 

(b)                       *Liabilities*.  If thisAgreement is terminated pursuant to this Section, such termination shall bewithout liability of any party to any other party except as provided inSection 4 hereof, and provided further that Sections 1, 6, 7 and 8 shallsurvive such termination and remain in full force and effect.

 

Section 10*.  Default by One or More of theUnderwriters. *If one or moreof the Underwriters shall fail at Closing Time or a Date of Delivery topurchase the Securities which it or they are obligated to purchase under thisAgreement (the “**Defaulted Securities**”), theRepresentative shall, within 24 hours thereafter, make arrangements for one ormore of the non-defaulting Underwriters, to purchase all, but not less thanall, of the Defaulted Securities in such amounts as may be agreed upon and uponthe terms herein set forth; if, however, the Representative shall not havecompleted such arrangements within such 24 hour period, then:

 

(a)                        if thenumber of Defaulted Securities does not exceed 10% of the number of Securitiesto be purchased on such date, each of the non-defaulting Underwriters shall beobligated, severally and not jointly, to purchase the full amount thereof inthe proportions that

 

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their respective underwriting obligations hereunder bear to theunderwriting obligations of all non defaulting Underwriters, or

 

(b)                       if thenumber of Defaulted Securities exceeds 10% of the number of Securities to bepurchased on such date, this Agreement or, with respect to any Date of Deliverywhich occurs after the Closing Time.  Thenon-defaulting Underwriters shall have the right to purchase all, but shall notbe under any obligation to purchase any , of the Securities, and if such non-defaultingUnderwriters do not purchase all the Securities at the Delivery Date, theobligation of the Underwriters to purchase and of the Company to sell theOption Securities to be purchased and sold on such Date of Delivery shallterminate without liability on the part of any non defaulting Underwriter.

 

No actiontaken pursuant to this Section shall relieve any defaulting Underwriterfrom liability in respect of its default.

 

In the eventof any such default which does not result in a termination of this Agreementor, in the case of a Date of Delivery which is after the Closing Time, whichdoes not result in a termination of the obligation of the Underwriters topurchase and the Company to sell the relevant Option Securities, as the casemay be, either (i) the Representative or (ii) the Company together shall havethe right to postpone Closing Time and the Company shall have the right topostpone the relevant Date of Delivery, as the case may be, for a period notexceeding seven days in order to effect any required changes in theRegistration Statement or Final Prospectus or in any other documents orarrangements.  As used herein, the term“Underwriter” includes any person substituted for an Underwriter under thisSection 10.

 

Section 11*.  Default by the Company.*

 

(a)                        If theCompany shall fail at Closing Time to sell the number of Securities that it isobligated to sell hereunder, then this Agreement shall terminate without anyliability on the part of any nondefaulting party; provided, however, that theprovisions of Sections 1, 4, 6, 7 and 8 shall remain in full force andeffect.  No action taken pursuant to thisSection 11(a) shall relieve the Company from liability, if any, in respectof such default.

 

(b)                       If theCompany shall fail at a Date of Delivery to sell the number of OptionSecurities that it is obligated to sell hereunder, then this Agreement shallterminate without any liability on the part of any nondefaulting party;provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shallremain in full force and effect.  Noaction taken pursuant to this Section 11(b) shall relieve the Company fromliability, if any, in respect of such default.

 

Section 12*.  Notices. *All notices and othercommunications hereunder shall be in writing and shall be deemed to have beenduly given if mailed or transmitted by any standard form oftelecommunication.  Notices to theUnderwriters shall be directed to the Representative at Banc of AmericaSecurities LLC, 9 West 57th Street, New York, New York 10019,attention Nicholas Ganz, with a copy to Davis Polk & Wardwell, 1600 ElCamino Real, Menlo Park, California 94025, attention of Alan Denenberg; andnotices to the Company shall be directed to it at UTStarcom, Inc., 1275 HarborBay Parkway, Suite 100, Alameda, California 94502, attention of Hong Lu, with acopy to Shearman & Sterling LLP, 1080 Marsh Road, Menlo Park,California 94025, attention of Carmen Chang.

 

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Section 13*.  Parties. *This Agreement shall each inure tothe benefit of and be binding upon the Underwriters and the Company and theirrespective successors.  Nothing expressedor mentioned in this Agreement is intended or shall be construed to give anyperson, firm or corporation, other than the Underwriters and the Company andtheir respective successors and the controlling persons and officers anddirectors referred to in Sections 6 and 7 and their heirs and legalrepresentatives any legal or equitable right, remedy or claim under or inrespect of this Agreement or any provision herein contained.  This Agreement and all conditions andprovisions hereof are intended to be for the sole and exclusive benefit of theUnderwriters and the Company and their respective successors, and saidcontrolling persons and officers and directors and their heirs and legalrepresentatives, and for the benefit of no other person, firm orcorporation.  No purchaser of Securitiesfrom any Underwriter shall be deemed to be a successor by reason merely of suchpurchase.

 

Section 14*.  Governing Law and Time. *THIS AGREEMENT SHALL BE GOVERNEDBY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  EXCEPT AS OTHERWISE SET FORTH HEREIN,SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

Section 15*. The Headings. *TheArticle and Section headings herein and the Table of Contents are forconvenience only and shall not affect the construction hereof.

 

Section 16.   *Counterparts. *This Agreement may be executed byany one or more of the parties hereto in any number of counterparts, each ofwhich shall be deemed an original, but all such counterparts shall togetherconstitute one and the same instrument.

 

Section 17.  *No Other Agreements*.  The parties hereto acknowledge that thisagreement represents the sole understanding and agreement between the partieswith respect to the subject matter hereof and supersedes any priorunderstandings or agreements that may have existed.

 

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If theforegoing is in accordance with your understanding of our agreement, pleasesign and return to the Company, a counterpart hereof, whereupon thisinstrument, along with all counterparts, will become a binding agreementbetween the Underwriters and the Company in accordance with its terms.

 
|   | Very truly yours, |
|--------|-------------------|
|   |              |
|   | UTSTARCOM, INC.   |
|   |              |
|   |              |
|   | By:               | /s/ Michael Sophie |   |
|   |              | Name: | Michael Sophie |
|   |              | Title: | Senior Vice President of Finance &  Chief Financial Officer |
|        |                   |  |  |  |

 

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| CONFIRMED AND ACCEPTED,             |                 |
|-------------------------------------|----------------------|
| as of the date first above written: |                 |
|                                |                 |
|                                |                 |
| BANC OF AMERICA SECURITIES LLC      |                 |
|                                |                 |
|                                |                 |
| By:                                 |                 |
|                                |                 |
| By:                                 | /s/                  |   |   |
|                                | Authorized Signatory |   |   |

 

For themselvesand as Representative of the other Underwriters named in Schedule Ahereto.

 

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SCHEDULE A

 
| **Name of Underwriter**         | ** ** | **Number of Initial  Securities** | ** ** |
|---------------------------------|------------|-----------------------------------|------------|
| Banc of  America Securities LLC |       | 12,100,000                        |       |
|                            |       |                              |       |
|                            |       |                              |       |
| Total                           |       |                              |       |
|                            |       | 12,100,000                        |       |

 

Sch A-1

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SCHEDULE B

 
| ** ** | ** ** | **Number of  Initial  Securities to be  Sold** | ** ** | **Maximum  Number of  Option Securities  to be Sold** | ** ** |
|------------|------------|------------------------------------------------|------------|-------------------------------------------------------|------------|
| Company    |       | 12,100,000                                     |       | 1,815,000                                             |       |

 

Sch B-1

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SCHEDULE C

 

List of SignificantSubsidiaries

 
| **Name**                                                 | ** ** | **Jurisdiction of Incorporation** | ** ** | **%  Ownership** | ** ** |
|----------------------------------------------------------|------------|-----------------------------------|------------|------------------|------------|
| UTStarcom  (China) Co., Ltd.                             |       | China                             |       | 100              | %          |
| UTStarcom  Telecom Co., Ltd.                             |       | China                             |       | 100              | %          |
| Hangzhou  Starcom Telecom Co., Ltd.                      |       | China                             |       | 100              | %          |
| Universal  Communication Technology (Hangzhou) Co., Ltd. |       | China                             |       | 49               | %          |
| UTStarcom  Hong Kong, Ltd.                               |       | Hong Kong                         |       | 100              | %          |
| UTStarcom  Japan KK                                      |       | Japan                             |       | 100              | %          |

 

Sch C-1

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SCHEDULE D

 

UTSTARCOM, INC.

          Shares of Common Stock

(Par Value $.00125 Per Share)

 

 

The purchaseprice per share for the Securities to be paid by the several Underwriters shallbe $39.25; provided that the purchase price per share for any Option Securitiespurchased upon the exercise of the over-allotment option described inSection 2(b) shall be reduced by an amount per share equal to anydividends or distributions declared by the Company and payable on the InitialSecurities but not payable on the Option Securities.

 

Sch D-1

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SCHEDULE E

 

List of Directors and ExecutiveOfficers

 

 

Directors:

 
| Hong Liang Lu | Chairman |
|---------------|----------|
| Ying Wu       | Director |
| Masayoshi Son | Director |
| Thomas J. Toy | Director |
| Betsy Atkins  | Director |
| Larry Horner  | Director |

 

Executive Officers:

 
| Hong Liang Lu  | President, Chief Executive Officer and Chairman of the Board                            |
|----------------|-----------------------------------------------------------------------------------------|
| Michael Sophie | Senior Vice President of Finance, Chief Financial Officer and  Assistant Secretary      |
| Ying Wu        | Vice Chairman, Chairman and Chief Executive Officer of China Operations                 |
| Johnny Chou    | Executive Vice President and President and Chief Operating Officer of  China Operations |
| Gerald Soloway | Senior Vice President, Engineering                                                      |
| William Huang  | Senior Vice President and Chief Technology  Officer                                     |
| Howard Kwock   | Vice President, Engineering                                                             |

 

Other:

 
| David Robison |   |
|---------------|--------|

 

Sch E-1

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EXHIBIT A

 

Form of Opinion of Counsel forthe Company

 

(i)                                     TheCompany is validly existing as a corporation in good standing under the laws ofthe State of Delaware with corporate power and authority to own, lease andoperate its properties and to conduct its business as described in theProspectus and to enter into and perform its obligations under the UnderwritingAgreement.

 

(ii)                                  TheCompany is qualified as a foreign corporation to transact business and is ingood standing in California.

 

(iii)                               Theauthorized capital stock of the Company is as set forth in the Prospectus underthe caption “Capitalization” and the Company’s Common Stock conforms as tolegal matters to the description thereof contained in the Prospectus.

 

(iv)                              TheShares have been duly authorized for issuance and sale to the Underwriterspursuant to the Underwriting Agreement and, when issued and delivered by theCompany pursuant to the Underwriting Agreement against payment of theconsideration set forth in the Underwriting Agreement, will be validly issued,fully paid and non-assessable and the issuance of the Shares will not besubject to any preemptive rights under the Company’s Certificate of Incorporationor Bylaws, the General Corporation Law of the State of Delaware or, to ourknowledge, any agreement or instrument described in or referred to in theRegistration Statement.

 

(v)                                 TheUnderwriting Agreement has been duly authorized, executed and delivered by theCompany.

 

(vi)                              Toour knowledge, and without inquiring into dockets of any court, commission,regulatory body, administrative agency or other governmental body, and otherthan as set forth in, or incorporated by reference into, the Prospectus, in theUnited States, there is not pending or threatened any legal or governmentalproceedings to which the Company or any subsidiary is a party, or to which theproperty of the Company or any subsidiary is subject, before or brought by anyU.S. court or governmental agency or body, which could reasonably be expectedto materially and adversely affect the consummation of the transactionscontemplated in the Underwriting Agreement or the performance by the Company ofits obligations thereunder.

 

(vii)                           To ourknowledge, no consent, approval, authorization or order of or qualificationwith any United States federal, New York State court or California State court,governmental agency or body is required for the performance by the Company ofits obligations under the Underwriting Agreement, except such consents,approvals, authorizations, orders or qualifications as have been obtained underthe Securities Act and the Securities Exchange Act of 1934, as amended, and asmay be required under state securities or Blue Sky laws in connection with thepurchase and distribution of the Shares by the Underwriters (as to which weexpress no opinion).

 

(viii)                        Theexecution, delivery and performance by the Company of the UnderwritingAgreement, the issuance and sale of the Shares pursuant to the UnderwritingAgreement and the performance by the Company of the terms and provisionsthereof will not result in a breach or

 

A-1

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violation of any of the terms and provisions of, or constitute adefault under, (A) the Certificate of Incorporation or Bylaws of the Company,(B) to our knowledge, any material U.S. law, statute, rule, regulation or ordercustomarily applicable to transactions of this nature or any judgment, order, writor decree known to us of any governmental agency or body or any court havingjurisdiction over the Company or any of its properties, or (C) any agreement orinstrument to which the Company or its subsidiaries is a party or by which theCompany or its subsidiaries is bound or to which any of the properties of theCompany or its subsidiaries is subject, and which agreement or instrument isincluded as an exhibit filed pursuant to Item 601(b)(4) and 601(b)(10) ofRegulation S-K to the Registration Statement, or which is listed on Exhibit Ahereto.

 

(ix)                                Exceptas disclosed in the Prospectus, there are no contracts, agreements orunderstandings known to us between the Company and any person granting suchperson the right to require the Company to include such securities in thesecurities registered pursuant to the Registration Statement.

 

(x)                                   Thestatements set forth in the Prospectus under the captions “Description ofCommon Stock” and “Underwriting” (except for such statements provided in suchsection by the Underwriters) insofar as such statements constitute asummary of matters of legal matters or documents referred to therein, fairlysummarize such information in all material respects.

 

(xi)                                TheCompany is not required to be registered as an investment company under theInvestment Company Act of 1940, as amended.

 

(xii)                             Subjectto certain limitations set forth in this opinion, we advise you that, on thebasis of the information we gained in the course of performing the servicesreferred to above, in our opinion, (a) each of the documents incorporatedby reference in the Prospectus (other than the financial statements and otherfinancial data contained or incorporated by reference therein or omittedtherefrom, as to which we express no opinion), at the time it was filed withthe Commission, appears on its face to have been appropriately responsive inall material respects to the requirements of the Securities Exchange Act of1934, as amended, and the applicable rules and regulations of the Commissionthereunder and (b) each of the Registration Statement and the Prospectus (otherthan the financial statements and other financial data contained orincorporated by reference therein or omitted therefrom, as to which we expressno opinion) appears on its face to be appropriately responsive in all materialrespects to the requirements of the Securities Act and the applicable rules andregulations of the Commission thereunder.

 

(xiii)                          Wefurther advise you that subject to the limitations set forth in this opinion,on the basis of the information we gained in the course of performing theservices referred to above no facts came to our attention which gave us reasonto believe that (i) the Registration Statement (other than the financialstatements and other financial data contained or incorporated by referencetherein or omitted therefrom, as to which we have not been requested tocomment), as of the date of the Prospectus Supplement, contained an untruestatement of a material fact or omitted to state a material fact required to bestated therein or necessary to make the statements therein not misleading, or(ii) the Prospectus (other than the financial statements and other financialdata contained or incorporated by reference therein or omitted therefrom, as towhich we have not been requested to comment), as of the date of the ProspectusSupplement or the date hereof, contained or contains an untrue statement of amaterial fact or omitted or omits to state a

 

A-2

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material fact necessary in order to make the statements therein, in thelight of the circumstances under which they were made, not misleading.

 

A-3

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EXHIBIT B

 

Form of Lockup Agreement forDirectors and Executive Officers

 

B-1

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EXHIBIT C

 

Form of Lockup Agreement forSOFTBANK America, Inc.

 

C-1

 

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EXECUTION COPY

CONFIDENTIAL

 

 

UTSTARCOM, INC.

(a Delaware corporation)

12,100,000 Shares of CommonStock

 

 

**AMENDMENTNO. 1 TO**

**UNDERWRITINGAGREEMENT**

 

 

Dated: January 14, 2004

 

 

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**AMENDMENTNO. 1 TO**

 

**UNDERWRITINGAGREEMENT**

 

This AmendmentNo. 1 (this “**Amendment**”) tothe Underwriting Agreement dated January 8, 2004 (the “**Original Agreement**”) by and between UTStarcom, Inc.(the “**Company**”) and Banc of AmericaSecurities LLC (the “**Representative**”or the “**Underwriter**”) is made and entered intoas of January 14, 2004 by and between the Company and the Underwriter.

 

WHEREAS, pursuant to the Original Agreement,the Representative proposed to make a public offering of the Securities as soonas the Representative deemed advisable;

 

WHEREAS, as of the Closing Time, theRepresentative has not made a public offering of the Securities or determined apublic offering price (or method of such determination) for the Securities;

 

WHEREAS, in accordance with the foregoing,the Company and the Representative wish to amend the Original Agreement (asamended pursuant to this Amendment, the “**Amended Agreement**”)in accordance with this Amendment.

 

NOW, THEREFORE, in consideration of thepremises and the mutual covenants contained herein, and for good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged, theparties hereto, intending to be legally bound hereby, agree to amend theOriginal Agreement as follows:

 

Section 1. Definitions.  (a)        Capitalizedterms used but not defined herein shall have the meanings assigned to suchterms in the Original Agreement.  Capitalizedterms defined in the preamble to this Amendment or in the recitals hereto shallhave the meanings assigned to such terms in such preamble or recitals.

 

(b)                                 For purpose of theAmended Agreement, (i) the term “**Final Prospectus**”,to the extent such term is used in the Original Agreement in Section 1, inparagraph (j) of Section 3 and in paragraphs (b), (c), (d), (e), (f), (g) and(1) of Section 5, in each case shall be deemed as of, or at, theClosing Time (but not as of the Bring-down Date or any Date of Delivery) to bethe form of Final Prospectus attached hereto as Exhibit A asdelivered by the Company to the Underwriter on the date hereof, together withthe Basic Prospectus and including the documents that would be incorporated byreference pursuant to Item 12 of Form S-3 under the 1933 Act thereinif such Final Prospectus were first used to confirm sales of Securities on thedate hereof, and (ii) at all other times (including the Bring-down Dateand any Date of Delivery), the term “Final Prospectus” shall have the meaningascribed to such term in the Original Agreement.

 

(c)                                  “**Bring-downDate**” shall mean a date to be mutually agreed between theUnderwriter and the Company, *provided* thatsuch date (i) shall not be later than the third business day following thereceipt of the notice from the Underwriter specified in Section 7 of thisAmendment and (ii) shall not occur after July 14, 2004.

 

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Section 2. Representations and Warranties.  (a)                         Reference is made to thefollowing language at the beginning of Section 1 of the OriginalAgreement:

 

“The Companyrepresents and warrants to each Underwriter, as of the Closing Time referred toin Section 2(c) hereof and as of each Date of Delivery (if any)referred to in Section 2(b) hereof, and agrees with the Underwriter,as follows:”

 

The foregoing language shall be deleted fromthe Original Agreement and replaced in its entirety with the followinglanguage:

 

“The Companyrepresents and warrants to the Underwriter, as of the Closing Time referred toin Section 2(c) hereof, as of the Bring-down Date and as of each Dateof Delivery (if any) referred to in Section 2(b) hereof, and agreeswith the Underwriter, as follows:”

 

(b)                                 Paragraphs (i) and(ii) of Section 1 shall be deleted from the Original Agreement andreplaced in their entirety as follows:

 

“(i)                               *Compliance with Registration Requirements*.  The Company meets the requirements for use of Form S-3under the 1933 Act.  Each of theRegistration Statement and any Rule 462(b) Registration Statement hasbecome effective under the 1933 Act and no stop order suspending theeffectiveness of the Registration Statement or any Rule 462(b) RegistrationStatement has been issued under the 1933 Act and no proceedings for thatpurpose have been instituted or are pending or, to the knowledge of theCompany, are contemplated by the Commission, and any request on the part of theCommission for additional information has been complied with.

 

At the respective times the RegistrationStatement, any Rule 462(b) Registration Statement and anypost-effective amendments thereto became effective, at the Closing Time, at January 8,2004, at the issue date of the Final Prospectus and at the Bring-down Date(and, if any Option Securities are purchased, at the Date of Delivery), theRegistration Statement, the Rule 462(b) Registration Statement andamendments and supplements thereto complied and will comply in all materialrespects with the requirements of the 1933 Act and 1933 Act Regulations (otherthan, at the Closing Time, the omission of pricing-related information) and didnot and will not contain an untrue statement of a material fact or omit tostate a material fact required to be stated therein or necessary to make thestatements therein not misleading (other than, at the Closing Time, the omissionof pricing-related information).  Neitherthe Final Prospectus nor any amendments or supplements thereto, at the time theFinal Prospectus or any amendments or supplements are issued, at the ClosingTime, at January 8, 2004 and at the Bring-down Date (and, if any OptionSecurities are purchased, at the Date of Delivery), included or will include anuntrue statement of a material fact or omitted or will omit to state a materialfact necessary in order to make the statements therein, in the light of thecircumstances under which they were made, not misleading (other than, at theClosing Time, the omission of pricing-related information).  The representations and warranties in this subsection shallnot

 

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apply to statements in or omissions from theRegistration Statement or the Final Prospectus made in reliance upon and inconformity with information furnished to the Company in writing by anyUnderwriter through the Representative expressly for use in the RegistrationStatement or the Final Prospectus.

 

The prospectus filed as part of theRegistration Statement as originally filed or as part of any amendment thereto,or to be filed pursuant to Rule 424 under the 1933 Act, complied, or willcomply, when so filed in all material respects with the requirements of the1933 Act the 1933 Act Regulations and the Final Prospectus to be delivered tothe Underwriters for use in connection with this offering will be identical tothe electronically transmitted copies thereof filed with the Commissionpursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

(ii)                                  *IncorporatedDocuments*.  The documentsincorporated or deemed to be incorporated by reference in the RegistrationStatement and Final Prospectus, at the time they were or hereafter are filedwith the Commission, complied and will comply in all material respects with therequirements of the 1934 Act and the rules and regulations of theCommission thereunder (the “**1934 Act Regulations**”),and, when read together with the other information in the Final Prospectus, atthe time of Registration Statement became effective, at the time the FinalProspectus was issued, at the Closing Time, at January 8, 2004 and at theBring-down Date (and, if any Option Securities are purchased, at the Date ofDelivery), did not and will not contain an untrue statement of a material factor omit to state a material fact required to be stated therein or necessary tomake the statements therein not misleading.”

 

(c)                                  All other paragraphsof Section 1 of the Original Agreement, except as aforesaid, shallotherwise remain unchanged in the Original Agreement.

 

Section 3.  Covenants of the Company.  (a) Paragraph (a) of Section 3of the Original Agreement is deleted and replaced in its entirety with thefollowing:

 

“(a)                            *Compliance with Securities Regulations and Commission Request*. The Company, subject to Section 3(b),will notify the Representative immediately, and confirm the notice in writing, (i) whenany post-effective amendment to the Registration Statement shall becomeeffective, or any supplement to the Basic Prospectus or any amended FinalProspectus shall have been filed, (ii) of the receipt of any comments fromthe Commission, (iii) of any request by the Commission for any amendmentto the Registration Statement or any amendment or supplement to the FinalProspectus or any document incorporated by reference therein or for additionalinformation, and (iv) of the issuance by the Commission of any stop ordersuspending the effectiveness of the Registration Statement, or of thesuspension of the qualification of the Securities for offering or sale in anyjurisdiction, or of the initiation or threatening of any proceedings for any ofsuch purposes.  Upon notice from theRepresentative of the Representative’s determination of a public offering priceof the Securities (or a method for determining the same) or the Representative’sfirst use of the Final Prospectus

 

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after effectiveness in connection with apublic offering or sale of the Securities, the Company will promptly file theFinal Prospectus with the Commission within the time periods specified by Rule 424(b) andwill take such steps as it deems necessary to ascertain promptly whether theform of Final Prospectus transmitted for filing under Rule 424(b) wasreceived for filing by the Commission and, in the event that it was not, itwill promptly file such Final Prospectus.  The Final Prospectus filed pursuant to Rule 424(b) shallreflect the pricing related information and plan of distribution as advised tothe Company by the Representative.  TheCompany will make every reasonable effort to prevent the issuance of any stoporder and, if any stop order is issued, to obtain the lifting thereof at theearliest possible moment.  The Companyhas prepared and filed with the Commission the Rule 462(b) RegistrationStatement in order for the Underwriters to exercise the over-allotment optiongranted to them pursuant to Section 2(b) hereof.”

 

(b)                                 Paragraph (e) of Section 3of the Original Agreement is deleted and replaced in its entirety with thefollowing:

 

“(e)                            *ContinuedCompliance with Securities Laws*.  The Company will comply with the 1933 Act andthe 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as topermit the completion of the distribution of the Securities as contemplated inthis Agreement and in the Final Prospectus. If at any time when a prospectus isrequired by the 1933 Act to be delivered in connection with sales of theSecurities, any event shall occur or condition shall exist as a result of whichit is necessary, in the opinion of counsel for the Underwriters or for theCompany, to amend the Registration Statement or amend or supplement the FinalProspectus in order that the Final Prospectus will not include any untruestatements of a material fact or omit to state a material fact necessary inorder to make the statements therein not misleading in the light of thecircumstances existing at the time it is delivered to a purchaser, or if itshall be necessary, in the opinion of such counsel, at any such time to amendthe Registration Statement or amend or supplement the Final Prospectus in orderto comply with the requirements of the 1933 Act or the 1933 Act Regulations,the Company will promptly prepare and file with the Commission, subject to Section 3(b),such amendment or supplement as may be necessary to correct such statement oromission or to make the Registration Statement or the Final Prospectus complywith such requirements, and the Company will furnish to the Underwriters suchnumber of copies of such amendment or supplement as the Underwriters mayreasonably request; provided however that the Company may suspend suchobligation to comply with the 1933 Act and the 1933 Act Regulations and the1934 Act and the 1934 Act Regulations and to prepare and file any suchamendment or supplement for a period not to exceed an aggregate of 45 days inany 90-day period or an aggregate of 60 days in any 180-day periodif the Board of Directors of the Company, or the Chief Executive Officer or theChief Financial Officer of the Company, shall have determined in good faiththat because of valid business reasons (not including avoidance of the Company’sobligations hereunder), including, without limitation, the acquisition ordivestiture of assets, pending corporate developments and similar events, it isin the best

 

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interest of the Company to suspend suchobligation, and prior to suspending such obligation the Company provides theRepresentative with written notice at least two hours in advance of suchsuspension, which notice need not specify the nature of the event giving riseto such suspension; provided further, however, that the Company may notsuspend such obligation until after February 13, 2004.  The Company agrees to use its reasonable bestefforts to end the suspension period referred to in this Section 3(e) aspromptly as practicable.”

 

(c)                                  Paragraph (j) of Section 3of the Original Agreement is deleted and replaced in its entirely with thefollowing:

 

“(j)”                         *Restrictionon Sale of Securities*.  Duringthe period from (and including) January 8, 2004 through (and including) April 7,2004 (the “**Lockup Period**”), the Company willnot, without the prior written consent of Banc of America Securities LLC, (i) directlyor indirectly, offer, pledge, sell, contract to sell, sell any option orcontract to purchase, purchase any option or contract to sell, grant anyoption, right or warrant to purchase or otherwise transfer or dispose of anyshare of Common Stock or any securities convertible into or exercisable orexchangeable for Common Stock or file any registration statement under the 1933Act with respect to any of the foregoing or publicly disclose the intention todo any of the foregoing, (ii) enter into any swap or any other agreementor any transaction that transfers, in whole or in part, directly or indirectly,the economic consequence or ownership of the Common Stock, whether any suchswap or transaction described in clause (i) or (ii) above is to besettled by delivered of Common Stock or such other securities, in cash orotherwise.  The foregoing sentence shallnot apply to (A) the Securities to be sold hereunder, (B) any sharesof Common Stock issued by the Company upon the exercise of an option or warrantor the conversion of security outstanding on the date hereof and referred to inthe Final Prospectus, (C) any shares of Common Stock issued or options topurchase Common Stock granted pursuant to existing employee benefit plans ofthe Company referred to in the Final Prospectus, (D) any shares of CommonStock issued pursuant to any non-employee director stock plan or dividendreinvestment plan, (E) any shares of Common Stock or securitiesconvertible into or exchangeable for Common Stock issued in connection withacquisitions (by purchase, merger or otherwise) of other entities (orsubstantially all of the assets or operations of other entities) if therecipients of such securities each executes a lockup agreement with Banc ofAmerica Securities LLC in form and substance substantially similar to thelockup set forth in this Section 3(i), or (F) any filing of anyregistration statement on Form S-8 under the 1933 Act.”

 

Section 4. Conditions.  (a)                            The Underwriter herebywaives, as of the date of this Amendment, the conditions contained in (i) thelast sentence of paragraph (a) of Section 5 of the Original Agreementand (ii) the second sentence of the third paragraph of the OriginalAgreement.  The foregoing waivers shallhave no effect on the Company’s obligation, pursuant to the Amended Agreement,to file the Final Prospectus pursuant to Rule 424(b) of the 1933 ActRegulations in accordance with the terms of the Amended Agreement.

 

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(b)                                 Paragraphs (f) and(g) of Section 5 of the Original Agreement are deleted and placed intheir entirety with the following:

 

“(f)                              *Accountants’Comfort Letters*.  At January 8,2004, the Representative shall have received from each ofPricewaterhouseCoopers LLP and Deloitte & Touche LLP a letter datedsuch date, in form and substance satisfactory to the Representative, togetherwith signed or reproduced copies of such letter for each of the otherUnderwriters containing statements and information of the type ordinarilyincluded in accountants’ “comfort letters” to underwriters with respect to thefinancial statements and certain financial information contained in theRegistration Statement and the Final Prospectus.

 

(g)                                 *Bring-downComfort Letters*.  At ClosingTime, the Representative shall have received from each ofPricewaterhouseCoopers LLP and Deloitte & Touche LLP a letter, datedas of Closing Time, to the effect that they reaffirm the statements made in theletter furnished pursuant to subsection (f) of this Section, exceptthat the specified date referred to shall be a date not more than threebusiness days prior to Closing Time.”

 

(c)                                  The followingparagraph shall be inserted at the end of Section 5 of the OriginalAgreement as paragraph (l):

 

“*Opinion of General Counselof the Company*.  At ClosingTime, the Representative shall have received the favorable opinion, dated as ofClosing Time, of Russell L. Boltwood, General Counsel of the Company,substantially in the form attached hereto as Exhibit D.”

 

The form of opinion of Mr. Boltwood referred to in Section 5(l)of the Amended Agreement is attached to this amendment as Schedule l.

 

Section 5.  Additional Covenants of the Company.  In addition of the covenants in the OriginalAgreement, as amended by this Amendment, the Company covenants with theUnderwriter as follows:

 

On the Bring-down Date (provided that theBring-down Date occurs on or before July 14, 2004), the representationsand warranties of the Company contained herein and the statements in anycertificates furnished by the Company or any subsidiary of the Companyhereunder shall be true and correct in all material respects as of theBring-down Date and, at the Bring-down Date, the Company shall cause theRepresentative to receive:

 

(a)                                  *Officers’Certificate.*  A certificate,dated the Bring-down Date, of the President or a Vice President of the Companyand of the chief financial or chief accounting officer of the Companyconfirming that the certificate delivered at the Closing Time pursuant to Section 5(e) ofthe Original Agreement remains true and correct as of the Bring-down Date.

 

(b)                                 *Opinion ofCounsel for the Company.*  Thefavorable opinion of Shearman & Sterling LLP, counsel for the Company,dated the Bring-down Date to the same effect as the opinion required by Section 5(b) ofthe Original Agreement.

 

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(c)                                  *Opinion ofPRC Counsel for the Company.*  The favorable opinion of Jun He Law Offices,PRC counsel for the Company, dated the Bring-down Date to the same effect asthe opinion required by Section 5(c) of the Original Agreement.

 

(d)                                 *Opinion ofCounsel for the Underwriters.*  The favorable opinion of Davis Polk &Wardwell, counsel for the Underwriters, dated the Bring-down Date to the sameeffect as the opinion required Section 5(d) of the OriginalAgreement.

 

(e)                                  *Bring-downComfort Letter.*  A letter formeach of PricewaterhouseCoopers LLP and Deloitte & Touche LLP, in formand substance satisfactory to the Representative and dated the Bring-down Date,substantially in the same form and substance as the letter furnished to theRepresentative pursuant to Section 5(f) of the Original Agreement,except that the “specified date” in the letter furnished pursuant to thisparagraph shall be a date not more than five days prior to the Bring-down Date.

 

(f)                                    *Opinion of General Counsel of the Company.*  The favorable opinion, dated the Bring-downDate, or Russell L. Boltwood, General Counsel of the Company to the same effectas the opinion required by Section 5(1) of the Original Agreement, asamended by this Amendment.

 

(g)                                 *AdditionalDocuments.*  At the Bring-downDate, counsel for the Underwriter shall have been furnished with such documentsand opinions as they may require for the purpose of enabling them to pass uponthe issuance and sale of the Securities as contemplated in the OriginalAgreement, or in order to evidence the accuracy of any of the representationsor warranties, or the fulfillment of any of the conditions, contained in theOriginal Agreement; and all proceedings taken by the Company in connection withthe issuance and sale of the Securities as contemplated in the OriginalAgreement shall be satisfactory in form and substance to the Representative andcounsel for the Underwriters.

 

(h)                                 *Referencesto the Final Prospectus.*  Forpurposes of the certificates, opinions and comfort letters to be provided onthe Bring-down Date, “Final Prospectus”, when such term is used with respect tothe Bring-down Date, shall have the meaning ascribed to such term in Section 1(b)(ii) ofthis Amendment.

 

Section 6.  Representations Warranties and Agreementsto Survive Delivery.  Allrepresentations, warranties and agreements contained in this Amendment, theOriginal Agreement or in certificates of officers of the Company or any of itssubsidiaries submitted pursuant hereto or thereto, shall remain operative andin full force and effect, regardless of any investigation made by or on behalfof any Underwriter or controlling person, or by or on behalf of the Company,and shall survive delivery of the Securities to the Underwriter.

 

Section 7.  Representations and Warranties andAgreements of the Underwriter.  TheUnderwriter represents and warrants to the Company that through the date ofthis Amendment, neither the Underwriter nor any of its affiliates has made anyoffer or sale of the Securities and the offering price in connection with theSecurities has not been determined.  TheRepresentative covenants with the Company that it will promptly notify theCompany in writing following any offer or sale of the Securities or thedetermination of the offering price of the Securities.

 

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Section 8.  Confidentiality.  The Company agrees that (i) thisAmendment and all the information contained therein (together, the “**Confidential Information**”) will be kept confidential andshall not be disclosed, in whole or in part, to any person other than to itscounsel, its independent auditors and any party that is required to deliverdocumentation in connection with any closing pursuant to the Amended Agreement(each, a “**Company Representative**”), (ii) theCompany will require each Company Representative to keep the Confidential Informationconfidential and not to disclose the Confidential Information to any person and(iii) the Company shall be responsible for any breach of Section 8 byeach Company Representative.

 

In the event the Company is requested orrequired to disclose any of the Confidential Information, (i) the Companywill provide the Underwriter with prompt notice of such request or requirement,(ii) the Company will furnish only that portion of the ConfidentialInformation which is legally required, in the opinion of its counsel, and (iii) theCompany will exercise its reasonable best efforts to obtain a protective order,confidential treatment or other reliable assurance that confidential treatmentwill be accorded such portion of the Confidential Information furnishedpursuant to clause (ii) unless such portion of the ConfidentialInformation is required, in the opinion of its counsel, to be disclosed to thepublic.

 

Section 9.  Governing Law and Time.  THIS AGREEMENT SHALL BE GOVERNED BY ANDCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  EXCEPT AS OTHERWISE SET FORTH HEREIN,SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

Section 10.  The Headings.  The Article and Section headingsherein and the Table of Contents are for convenience only and shall not affectthe construction hereof.

 

Section 11.  Counterparts.  This Amendment may be executed by any one ormore of the parties hereto in any number of counterparts, each of which shallbe deemed an original, but all such counterparts shall together constitute oneand the same instrument.

 

Section 12.  No Other Agreements.  The parties hereto acknowledge that theOriginal Agreement, as amended by this Amendment, represents the soleunderstanding and agreement between the parties with respect to the subjectmatter hereof and supersedes any prior understandings or agreements that mayhave existed.

 

Section 13.  Original Agreement Effectiveness.  Other than the modifications of the OriginalAgreement contemplated herein, all other terms and provisions of the OriginalAgreement shall remain in full force and effect.

 

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If the foregoing is in accordance with yourunderstanding of our agreement, please sign and return to the Company, acounterpart hereof, whereupon this instrument, along with all counterparts,will become a binding agreement between the Underwriter and the Company inaccordance with its terms.

 
|   | Very truly yours, |
|--------|-------------------|
|   |              |   |
|   | UTSTARCOM, INC.   |
|   |              |   |
|   |              |   |
|   | By:               |   | /s/ Michael Sophie |   |
|   |              | Name: | Michael Sophie |
|   |              | Title: |  Senior Vice President of Finance & |
|   |              |   |   Chief Financial Officer |
|        |                   |  |  |  |  |

 

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| CONFIRMED AND ACCEPTED,             |                                |   |
|-------------------------------------|-------------------------------------|--------|
| as of the date first above written: |                                |   |
|                                |                                |   |
|                                |                                |   |
| BANC OF AMERICA SECURITIES LLC      |                                |   |
|                                |                                |   |
|                                |                                |   |
| By:                                 | Paul A. Phillips, Managing Director |   |   |   |
|                                |                                |   |   |   |
| By:                                 | /s/ Paul A. Phillips                |   |   |   |
|                                | Authorized Signatory                |   |   |   |
|                                     |                                     |        |  |  |  |

 

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**Exhibit A**

 

[**The FinalProspectus, as defined in Section 1(a)(i) of the Amendment, isattached hereto as Exhibit A.**]

 

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