**Exhibit 10.105**

 

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

 

**ASSET PURCHASE AGREEMENT**

 

This is an ASSET PURCHASE AGREEMENT (this ”Agreement”),dated October 29, 2004 by and between UTStarcom CDMA TechnologiesKorea Limited, a limited liability company *(yuhan hoesa)*organizedunder the laws of Korea (“Purchaser”) and Giga Telecom, Inc., acorporation organized under the laws of Korea (“Seller”). Purchaser and Sellershall sometimes each be referred to as a “Party” and collectively as the ”Parties”.

 

**RECITALS:**

 

**WHEREAS,**Seller is the owner of certain assets relating to theresearch and development of CDMA wireless products;

 

**WHEREAS,**Purchaser wishes to establish a research anddevelopment center in Korea to provide certain design services for its overseassubsidiaries and Affiliates to manufacture and sell CDMA wireless products;

 

**WHEREAS,**Seller desires to sell, and Purchaser desires topurchase, the Transferred Assets (as defined below) upon terms and conditionsset forth herein (“Asset Transfer”);

 

**WHEREAS,**as a separate arrangement, Seller and UTStarcom Inc. (“UTSI”)have entered into an agreement dated March 8, 2004 whereby UTSI hasengaged Seller to design three (3) products (i.e., C2000, C3000 andC5000) (“Existing Projects”) for which UTSI has fully paid the amount of thecontract price of United States Dollars [***]. The amount and timing of the payment by Purchaser of a portion of thepurchase price for the Asset Transfer shall depend upon the completion of theExisting Projects as set forth herein;

 

**WHEREAS,**as a separate arrangement, Seller and UTSI have enteredinto certain agreements dated August 6, 2004 whereby UTSI has engagedSeller to design certain entry-level handsets using [***] for which UTSI hasfully paid the amount of the contract price of United States Dollars [***].

 

**WHEREAS,**as a separate arrangement, Seller and UTSI have enteredinto certain agreements dated September 17, 2004 whereby UTSI hasengaged Seller to design three (3) products (i.e., C12000, C1200B andCI 100B) for which UTSI has paid the amount of US$800,000 out of the totalamount of US$[***].

 

**NOW THEREFORE,**in consideration of the mutual agreements, covenants,representations and warranties contained herein, and in reliance thereon,Purchaser and Seller hereby agree as follows:

 

**DEFINITIONS:**

 

“Affiliate” or “Affiliates” means any Person(s)directly or indirectly controlling, controlled by or under common control withsuch Person. As used in this definition, “controlling” (including, with its 

 

1

----

 

correlative meanings, “controlledby” and “under common control with”) means possession, directly or indirectly,of power to direct or cause the direction of management or policies, whetherthrough ownership of securities, partnership or other ownership interests, bycontract or otherwise.

 

“Asset List” has the meaning as described in Section 1.1.

 

“Asset Transfer” has the meaning as described in theRecitals Section.

 

“Authority” means any national or local or foreigngovernmental or regulatory entity, or any department, agency, authority orpolitical subdivision thereof.

 

“Balance Sheet” has the meaning as described in Section 2.4.“Balance Sheet Date” has the meaning as described in Section 2.4.

 

“Business Day” shall mean Monday through Friday,except those days on which commercial banks are authorized or required by lawto close in either the United States of America or Korea.

 

“Calendar Day” shall mean all days of the week,including national holidays. “CDMA” shall mean Code Division Multiple Accessdigital wireless technology. “Closing” and “Closing Date” have the meanings asdescribed in Section 1.12.

 

“Complete”, “Completed” and “Completion” mean resultssatisfactory to Purchaser with respect to (i) CDG approval fro Stages 1, 2and 3, (ii) customer acceptance by at least one carrier, (iii) manufacturingengineering acceptance test and (iv) qualification test.

 

“Confidential Information” has the meaning asdescribed in Section 1.14(g).

 

“C2000” means the tri-mode (CDMA 1x / AMPS / GPS)handsets with features of [***] which Seller has agreed to develop for Purchaserpursuant to an agreement therefor dated March 8, 2004.

 

“C3000” means the tri-mode (CDMA lx / AMPS / GPS)handsets with features of [***] which Seller has agreed to develop forPurchaser pursuant to an agreement therefor dated March 8, 2004.

 

“C5000” means the tri-mode (CDMA Ix / AMPS / GPS)handsets with features of [***] which Seller has agreed to develop forPurchaser pursuant to an agreement therefor dated March 8, 2004.

 

“Damages” means the aggregate amount of all damages,claims, losses, obligations, liabilities (including any governmental penalty,fines or punitive damages), deficiencies, interest, costs and expenses arisingout of or relating to a matter and any actions, judgments, costs and expenses(including reasonable attorneys’ fees and all other expenses incurred ininvestigating, preparing or defending any litigation or proceeding, commencedor threatened) incident to such matter or to the enforcement of this Agreementand any ancillary agreements thereto, including, but not limited to, reasonablelegal fees incurred by the Party entitled to indemnification under thisAgreement and any ancillary agreements thereto.

 

“Employee Releases” has the meaning as described in Section 1.11(f).“Environmental Laws” has the meaning as described in Section 2.12(a).

 

“Environmental Liabilities” means any liabilities(including costs of re-mediation) known or unknown, foreseen or unforeseen,whether contingent or otherwise, fixed or absolute, present or future, assertedagainst or incurred by Purchaser arising out of or relating to (i) environmentalconditions first occurring or existing prior to the Closing (whether disclosedor undisclosed) including, without limitation, the presence, Release, threat ofRelease, Management or exposure of or to Hazardous Substances (each as definedherein) at, on, in or under any property relating to or connected with theR&D now or previously owned, operated or leased by Seller or any of itsAffiliates or predecessors (whether into the air, soil, ground or surface waterson-site or off-site); (ii) the off site transportation, storage,treatment, recycling or 

 

2

----

 

disposal of HazardousSubstances Managed, Released or generated related to or connected with theR&D prior to the, Closing by Seller or any of its Affiliates orpredecessors or generated in connection with any of their operations; or (iii) anyviolation of any Environmental Law in relation to or connected with the R&Dfirst occurring or existing prior to the Closing (including, withoutlimitation, costs and expenses for pollution control equipment required tobring the R&D into compliance with Environmental Laws and fines, penaltiesand defense costs incurred for such reasonable time after the Closing as ittakes Purchaser to come into compliance).

 

“Environmental Permits” has the meaning as describedin Section 2.12(b). “Excluded Assets” has the meaning as described in Section 1.2.

 

“Existing Projects” has the meaning as described inthe Recitals Section.

 

“Financial Institution” has the same meaning asascribed to “creditor financial institution” in Article 2, Item 1 ofthe Corporate Restructuring Promotion Act (Act No. 6991, established on August 14, 2001as last amended as of December 11, 2003).

 

“Financial Statements” has the meaning as described inSection 2.4.

 

“Hazardous Substances” means any hazardous, toxic orpolluting materials, substances, wastes, pollutants or contaminants (including,without limitation, petroleum and petroleum products, PCBs, radioactive materials,asbestos or asbestos-containing materials).

 

“Holdback Amount” has the meaning as described in Section 1.4(a).

 

“Indemnified Party” and “Indemnifying Party” have themeanings as described in Section 4.5(b)(iv).

 

“Initial Payment” has the meaning as described in Section 1.4(a).“Installments” has the meaning as described inSection 1.4(c).

 

“Intellectual Property” means any or all of thefollowing and all rights relating to or otherwise necessary to the operation ofthe R&D, whether owned by, licensed to or otherwise used by Seller, in,arising out of, or associated therewith: (i) all United States, Korean andforeign patents and utility models and applications therefor and all reissues,divisions, renewals, extensions, provisionals, continuations and continuations-in-partthereof, and equivalent or similar rights anywhere in the world in inventionsand discoveries; (ii) all inventions (whether patentable or not),invention disclosures, improvements, trade secrets, proprietary information,know how, technology, technical data, tools and product designs, and alldocumentation embodying or evidencing any of the foregoing; (iii) allcopyrights, copyrights registrations and applications therefor and all otherrights corresponding thereto throughout the world; (iv) all industrialdesigns and any registrations and applications therefor throughout the world; (v) alldatabases and data collections and all rights therein throughout the world; (vi) allcomputer software including all source code, object code, firmware, developmenttools, files, records and data, all media on which any of the foregoing isrecorded; and (vii) any similar, corresponding or equivalent rights to anyof the foregoing anywhere in the world.

 

[***] has the meaning as described in the RecitalsSection.

 

[***] has the meaning as described in the RecitalsSection.

 

“Key Employees” has the meaning as described in Section 1.1(g).

 

“Knowledge” and words of similar import mean, withrespect to any Party, actual knowledge of a particular fact or other matterbeing possessed by any officer or other individual now or formerly havingprincipal responsibility for a business or administrative function of suchParty, 

 

3

----

 

including individualsservicing in such a capacity in or for the R&D, and the knowledge thatreasonably could be expected to be obtained in the course of conducting areasonably comprehensive investigation concerning the subject matter.

 

“Korea” means the Republic of Korea.

 

“Labor Standards Act” means the Labor Standards Act ofKorea.

 

“Law” means all laws, statutes, ordinances,regulations, and other pronouncements having the effect of law of the Republicof Korea or any other country or territory, commonwealth, city, county,municipality, protectorate, possession, court, tribunal, agency, government,department, commission, arbitrator, board, bureau, or instrumentality thereof.

 

“Liability” means all debt, liabilities, losses,claims, damages, costs, expenses and obligations of every kind, whether fixedor contingent, mature or unmatured, or liquidated or unliquidated, including,without limitation, those arising under any law and those arising under anycontract, commitment or undertaking.

 

“Licensed Intellectual Property” has the meanings asdescribed in Section 2.16(d).

 

“Lien” or “Liens” means any lien, charge, claim,pledge, security interest, conditional sale agreement or other title retentionagreement, lease, tenancy, ground rent, license, mortgage, security agreement,covenant, condition, restriction, right-of-way, easement, encroachment, option,judgment or of other encumbrance of matter of title.

 

“Loss” or “losses” means any and all deficiencies,judgments, settlements, demands, claims, actions, assessments, liabilities,losses, damages (other than consequential damages), interest, fines, penalties,costs and expenses, including without limitation, reasonable legal, accountingand other costs and expenses incurred in connection with investigating,defending, settling or satisfying any and all demands, claims, actions, causesof action, suit, proceedings, assessment, judgments or appeals.

 

“Management” has the meaning as described in Section 2.12(d).“Managed” has a similar meaning appropriate for the context.

 

“Material Adverse Effect” means an effect that ismaterially adverse (i) to the properties, business, operations, earnings,assets, liabilities or financial condition, or prospects of Seller taken as awhole, (ii) the ability of Seller to perform its obligations under thisAgreement, or (iii) the enforceability of this Agreement, as the case maybe.

 

“National Tax Basic Law” means the statute (Act No. 2679),established on December 27, 1974, as last amended by Act No. 7008 on December 30, 2003.

 

“Person” means any individual, a corporation, apartnership, an association, a trust or other entity or organization, includingan Authority.

 

“Personal Property Permitted Encumbrances” has themeaning as described in Section 2.14. “Purchase Price” has the meaning asdescribed in Section 1.3. “Purchase Price Balance” has the meaning asdescribed in Section 1.4(c). “Purchase Price Escrow Agreement” has themeaning as described in the Section 1.8.

 

“Raw Materials” means the raw materials being used foror which are substantially related to the R&D for development of all themodels that are under development as of the Closing Date, including but notlimited to the following models: C2000, C3000, C5000, C1 100A, C1100B; C1200B,C12000 and GSH-810. Those raw materials will include, but will not be limitedto, parts, PCBs, moldings, assemblies, tools, and samples that are mobilizedfor and/or resulted from R&D activities for each stage of 

 

4

----

 

development for mock-upsamples, prototype samples, engineering samples, mechanical samples, pre-productionsamples, and mass production samples.

 

“R&D” means the research and developmentactivities of Seller in respect of CDMA wireless products, including but notlimited to all registered rights, copyrights, trade secrets, and manufacturingprocesses related thereto.

 

“R&D Employees” has the meaning as described in Section 1.1(g).

 

“Released” means released, spilled, leaked, pumped,poured, emitted, emptied, discharged, injected, escaped, leached, disposed, or dumpedand other similar terms. “Release” when used as a verb, has the same meaning,but in the present tense, and when used as a noun, has a similar meaningappropriate for the context.

 

“Schedules to be-Prepared” has the meaning of suchschedules to this Agreement which have not yet been attached hereto as of thedate of this Agreement, but which shall be prepared to Purchaser’s satisfactionand delivered by Seller within a reasonable time after the date hereof.

 

“Taxes” and “Tax” have the meanings as described in Section 2.7.“Third Party Claim” has the meaning as described in Section 4.5(b)(i). “TransferredAssets” has the meaning as described in Section 1.1.

 

“United States Dollars” and “US$” means the officialcurrency of the United States of America.

 

“Walk Away Date” has the meaning as described in Section 5.12(b).“Won” means the official currency of the Republic of Korea.

 

**SECTION 1**

 

THE TRANSACTION

 

1.1                                 Saleand Purchase of Assets.  Subject tothe terms and conditions hereof, at Closing referred to in Section 1.12below, Seller will sell, transfer, convey and assign to Purchaser, free andclear of all Liens of every kind, nature and description, except for theExcluded Assets (as defined in Section 1.2) or as otherwise disclosed andagreed in this Agreement, and Purchaser will purchase from Seller, all of theassets as shall be listed on **Schedule 1.1(a) through(g) **(the ”Asset List”) and any other assets that arebeing used for or are substantially related to the R&D on the date hereofor as of Closing, wherever such assets are located and whether real, personalor mixed, tangible or intangible, and whether or not any of such assets haveany value for accounting purposes or are carried or reflected on orspecifically referred to in its books or Financial Statement (collectively,the ”Transferred Assets”). The Transferred Assets shall include, withoutlimitation, all of Seller’s right, title and interest in and to the following,as the same may exist on the Closing Date (as defined in Section 1.12):

 

### (a)          all of the Seller’s right, title and interest in, to andunder the Intellectual Property related to the R&D including withoutlimitation the Intellectual Property listed on **Schedule (a) **to the Asset List, copies and tangible embodiments thereofin whatever form or medium, and all rights to sue and recover damages for past,present and future infringements, dilution, misappropriate, violation, unlawfulimitation or breach thereof;

###  

### (b)         the Raw Materials and all of Seller’s machinery, equipment,and tools being used for or substantially related to the R&D, includingwithout limitation, the items listed on **Schedule 1.1(b) **to the Asset List;

###  

### (c)          all of Seller’s other tangible assets being used for orsubstantially related to the R&D, including office equipment and supplies,computer hardware and software, including without 

 

5

----

 

limitation, the itemslisted on **Schedule (c) **to theAsset List;

###  

### (d)         all literature and graphical or written expressions, inwhatever form, related to the Intellectual Property, including technicaldocumentation, user manuals and development documents;

###  

### (e)          the rights and interest to the lease agreements with respectto certain equipment as listed on**Schedule 1.1(e)**to the Asset List;

###  

### (f)            all of Seller’s interest ingovernmental permits, licenses, registrations, orders and approvalsubstantially relating to the R&D and Transferred Assets to the extent suchpermits, licenses, registrations, orders and approvals are separatelytransferable to Purchaser; and

###  

### (g)         the relevant employees of the Seller listed on **Schedule (g) **to the Asset List (which list maybe modified one (1) weekprior to Closing as provided under Section 4.2), who have been identifiedas working for the R&D and may be hired by Purchaser as of Closing (“R&DEmployees”), including those employees who are identified as key employees tothe R&D (“Key Employees”).

###  

To theextent that there are any tangible or intangible assets used by Seller inconnection with or otherwise necessary to the operation of the R&D that arenot included in this Section 1.1 and are not specifically designated asExcluded Assets in Section 1.2, the Transferred Assets shall include anirrevocable, nonexclusive, perpetual, paid-up, royalty-free, transferable license,contract or lease to utilize such assets in connection with the operation ofthe R&D after the Closing Date, To the extent that any such assets may notbe licensed, contracted or leased, Seller shall take all steps required toassure that Purchaser obtains the benefit of such assets.

 

For theavoidance of doubt, any and all rights and interest in the products relating tothe Existing Projects, [***],whether or not such products have been fully Completed, shall be part of theTransferred Assets and transferred to Purchaser.

 

1.2                                 ExcludedAssets. Notwithstanding any other provision of this Agreement, Seller shallretain all property of any nature, kind and description other than theTransferred Assets and for the avoidance of doubt, the Transferred Assets shallnot include the following assets of the R&D (collectively, the ”ExcludedAssets”):

 

### (a)          all of Seller’s existing agreements with third parties(including its customers and venders) (other than license agreements of theLicensed Intellectual Property included as part of the Transferred Assets) forthe design and production of CDMA wireless products specific to certaincustomers which were entered into prior to Closing;

###  

### (b)         all inventory or other raw materials relating to the R&Din existence prior to Closing except for certain raw materials as set forth in Section 1.1(c) hereof;

###  

### (c)          all notes and accounts receivables owing to Seller on theClosing Date;

###  

### (d)         all key money deposits for the lease of the buildingoccupied by Seller as of the date hereof;

###  

### (e)          any account payables and third party claims related to theR&D;

###  

### (f)            all trademarks and trade namesof Seller; and

###  

### (g)         all assets listed in **Schedule 1.2**.

###  

1.3                                 PurchasePrice. The total aggregate purchase price for the Transferred Assets,exclusive of VAT, shall be US$18,600,000 (the ”Purchase Price”).

 

6

----

 

1.4                                 Paymentof Purchase Price. The Purchase Price shall be paid by Purchaser to Seller as follows:

 

### (a)          The amount *of*US$13,000,000shall be paid by Purchaser at Closing by wire transfer in accordance with theinstructions of Seller (the ”Initial Payment”), *provided*that,the amount of US$2,000,000 out of US$13,000,000 above shall be held-back inescrow pursuant to Section 1.8 below (the ”Holdback Amount”) and, *provided further***that*,*theamount of the Purchase Price maybe reduced as set forth in Section 1.11(i) below;

###  

### (b)         The amount of US$1,600,000 out of [***], which was paid byPurchaser in respect of the [***]shall be applied against the Purchase Price; and

###  

### (c)          The amount of US$4,000,000 (“Purchase Price Balance”) shallbe paid in three (3) separate installments (“Installments”), subjectto adjustments, upon Completion of each of the Existing Projects as provided inSection 1.6 below.

###  

1.5                                 Allocationof Purchase Price. Purchaser and Seller agree that the Purchase Price shallbe allocated among the Transferred Assets in accordance with the principles ofallocation which shall be set forth in **Schedule 1.5*,****provided*that*,*the Parties shall, on or prior to Closing, update **Schedule 1.5** to show therespective amounts allocated to each asset and liabilities (if any). Purchaserand Seller agree that each will report all Tax consequences of the purchase andsale contemplated hereby in a manner consistent with such allocation.

 

1.6                                 Paymentand Adjustment to Purchase Price Balance. Each Installment of the Purchase Price Balance may be reduced by [***] or [***]as the case may be, if the Existing Projects are not Completed to Purchaser’ssatisfaction as follows:

 

### (a)          Firstinstallment. If the C2000 MP is Completed by December 29, 2004,Purchaser shall pay Seller the amount of US$2,000,000 within two (2) BusinessDays after such Completion or at Closing, whichever is later. If the C2000 MPis Completed between December 30, 2004 to January 31, 2005and the reason for such delay is due to causes primarily attributable toSeller, the amount of the First Installment shall be reduced by [***] andPurchaser shall pay the Seller the amount of [***] within two (2) BusinessDays after such Completion or at Closing, whicheveris later. If the C2000 MP is Completed after January 31, 2005 and thereason for such delay is due to causes primarily attributable to Seller, theamount of the First Installment shall be reduced by [***] and the Purchaser [***].  Notwithstanding the preceding sentences, ifthe C2000 MP is not Completed due to causes which are primarily attributable toPurchaser, Purchaser shall pay the appropriate amount on the relevant milestonedate as set forth in this Section.

###  

### (b)         Secondinstallment. If the C3000 MP is Completed by January 30, 2005,Purchaser shall pay Seller the amount of US$1,000,000 within two (2) BusinessDays after such Completion or at Closing, whichever is later. If the C3000 MPis Completed between January 31, 2005 to February 28, 2005and the reason for such delay is due to causes primarily attributable toSeller, the amount of the Second Installment shall be reduced by [***] andthe Purchaser shall pay the Seller the amount of [***] within two (2) BusinessDays after such Completion or at Closing, whichever is later. If the C3000 MPis Completed after February 28, 2005 and the reason for such delay isdue to causes primarily attributable to Seller, the amount of the SecondInstallment shall be reduced by [***] and the Purchaser [***]. Notwithstanding the precedingsentences, if the C3000 MP is not Completed due to causes which are primarilyattributable to Purchaser, Purchaser shall pay the appropriate amount on therelevant milestone date as set forth in this Section.

###  

### (c)          Thirdinstallment. If the C5000 MP is Completed by February 24, 2005,Purchaser shall pay Seller the amount of US$1,000,000 within two (2) BusinessDays after such Completion or at Closing, whichever is later. If the C5000 MPis Completed between February 25, 2005 to March 25, 2005and the reason for such delay is due to causes primarily attributable toSeller, the amount of the Third Installment shall be reduced by [***] andthe Purchaser shall pay the Seller the amount of [***] within 

 

7

----

 

two (2) BusinessDays after such Completion or at Closing, whichever is later. If the C5000 MPis Completed after March 25, 2005 and the reason for such delay isdue to causes primarily attributable to Seller, the amount of the ThirdInstallment shall be reduced by [***] and the Purchaser [***].Notwithstanding the preceding sentences, if the C5000 MP is not Completed dueto causes which are primarily attributable to Purchaser, Purchaser shall paythe appropriate amount on the relevant milestone date as set forth in thisSection.

###  

1.7                                 Seller’sLiabilities. Purchaser is not assuming any liabilities of Seller inconnection with or related to the Transferred Assets (except for theobligations under the lease agreements that have been assigned to Purchaserunder Section 1.1(e)). Seller shall retain, and shall be responsible forpaying, performing and discharging all of Seller’s liabilities when due,including without limitation, any obligation under existing agreements withSeller’s customers, any debt or liability owed to creditors of Seller and anyliability owed to the R&D Employees.

 

1.8                                 PurchasePrice Escrow. Among the Purchase Price amount to be paid at the Closing,the amount of US$2,000,000 shall be placed into escrow by, and in the name of,Purchaser with a third party escrow agent mutually agreed by the Parties for aperiod of six (6) months after Closing to secure Seller’s obligationsto indemnify Purchaser under this Agreement. The escrow shall be established byexecution of an escrow agreement substantially in the form attached hereto as **Schedule 1.8**(“Purchase PriceEscrow Agreement”).

 

1.9                                 Conditionsto Each Party’s Obligations. The obligations of both Purchaser and Sellerto consummate the transactions contemplated hereby are subject to thefulfillment of each of the following conditions on or before the Closing Date.

 

### (a)          No provisions of any applicable law of Korea, and nojudgment, injunction, writ, preliminary restraining order or any other order ordecree of any nature issued by a court of competent jurisdiction or anygovernmental body shall (i) prohibit the consummation of the transactionscontemplated hereby or (ii) restrain, prohibit or otherwise interfere withthe effective operation or enjoyment by Purchaser of all or any materialportion of the Transferred Assets.

###  

### (b)         Purchaser and Seller shall have each received all materialconsents, authorizations or approvals from their respective boards ofdirectors, shareholders, governmental agencies (including but not limited to anapproval by the Fair Trade Commission of Korea), and third parties that are apre-requisite to the Closing as a matter of law, in form and substancesatisfactory to the other Party, and no such consent, authorization or approvalshall have been revoked.

###  

### (c)          Purchaser, Seller and the relevant escrow agent shall haveexecuted the Purchase Price Escrow Agreement on or prior to Closing.

###  

1.10                           Conditionsto Seller’s Obligations. The obligations of Seller to consummate thetransaction contemplated hereby are subject to fulfillment of all of thefollowing conditions on or prior to the Closing Date.

 

### (a)          Each and every representation and warranty made by Purchasercontained in this Agreement shall have been true in all material respects as ofthe date when made and shall be true in all material respects at and as of theClosing Date as if originally made on and as of the Closing Date.

###  

### (b)         All obligations of Purchaser to be performed on or beforethe Closing Date shall have been performed in all material respects.

###  

### (c)          No action shall be threatened or pending before any court orgovernmental agency the probable outcome of which would result in the restraintor prohibition of the consummation of the 

 

8

----

 

transactions contemplatedhereby.

###  

### (d)         On the Closing Date, there shall be no injunction, writ,preliminary restraining order or any order of any nature in effect issued by acourt of competent jurisdiction directing that the transactions contemplatedhereby, or any of them, not be consummated as herein provided and no suit,action, investigation, inquiry or other legal or administrative proceeding byany governmental body or other Person shall have been instituted which questionsof validity or legality of the transactions contemplated hereby or which ifsuccessfully asserted might otherwise have a Material Adverse Effect on theTransferred Assets.

###  

### (e)          Purchaser shall have obtained the approval from Purchaser’sboard of directors approving the purchase of the Transferred Assets on theterms of this Agreement and authorizing any one of its directors or officers toexecute this Agreement for and on behalf of Purchaser.

###  

### (f)            Purchaser shall have obtainedthe approvals and/or clearance for the transactions contemplated hereby fromthe Fair Trade Commission of Korea.

###  

### (g)         Seller shall have received to its satisfaction the favorablelegal opinion of the counsel for Purchaser substantially in the form attachedhereto as **Schedule 1.10(g).**

###  

1.11                           Conditionsto Purchaser’s Obligations. The obligations of Purchaser to consummate thetransactions contemplated hereby are subject to the fulfillment of all of thefollowing conditions on or prior to the Closing Date (or other date as specifiedhereunder).

 

### (a)          Each and every representation and warranty made by Sellercontained in this Agreement and in any certificate or other writing deliveredby Seller pursuant hereto shall be true in all material respects as of the datewhen made and shall be true in all material respects at and as of the ClosingDate as if originally made on and as of the Closing Date.

###  

### (b)         All obligations of Seller to be performed hereunder on orbefore the Closing Date shall have been performed in all material respects.

###  

### (c)          No action shall be threatened or pending before any court orgovernmental agency as of the Closing Date the probable outcome of which wouldresult in (i) the restraint or prohibition of the consummation of thetransactions contemplated hereby or (ii) the restraint or prohibition of,or interference with, the effective operation of enjoyment by Purchaser of allor any material portion of the Transferred Assets. Among others, no creditor towhich Seller has a minimum indebtedness of three hundred million (300,000,000)Won shall have any claims against the assets or business of Purchaser as aresult of the Asset Transfer, and the Asset Transfer shall not be subject tothe application of fraudulent conveyance by such creditors, avoidanceprinciples and other similar laws.

###  

### (d)         On the Closing Date, there shall be no injunction, writ,preliminary restraining order or any order of any nature in effect issued by acourt of competent .jurisdiction directing that the transactions contemplatedhereby, or any of them, not be consummated as herein provided and no suit,action, investigation, inquiry or other legal or administrative proceeding byany governmental body or other Person shall have been instituted whichquestions of validity or legality of the transactions contemplated hereby orwhich if successfully asserted might otherwise have a Material Adverse Effecton the Transferred Assets.

###  

### (e)          Between the date hereof and the Closing Date, there shallhave been no change which could have a Material Adverse Effect on theTransferred Assets.

###  

### (f)            Any and all notices to R&DEmployees, as required under applicable employment laws, shall have beenprovided by Seller. At least (i) 77 engineers out of the total 105 R&DEmployees and (ii) 100% of the Key Employees, shall have accepted newemployment with Purchaser and such employees 

 

9

----

 

shall have confirmed inwriting that all obligations of Seller have been fully satisfied or dischargedat or prior to Closing in the form provided in **Schedule 1.11(f) **(“EmployeeRelease”), and Purchaser shall have entered into arrangements with KeyEmployees based on terms and conditions as set forth in Section 4.2(d) satisfactoryto Purchaser in its sole discretion. If the number of R&D Employees is lessthan 105, Seller shall hire such additional personnel prior to Closing withsufficient experience and competence as may be approved by Purchaser in advanceso that the number of R&D Employees shall be at least 105.

###  

### (g)         Seller shall have obtained the approvals and/or clearancesfor the transactions contemplated hereby from any governmental agencies(including but not limited to (i) the necessary approvals/clearances fromthe Ministry of Commerce, Industry and Energy (“MOCIE”) aid the Ministry of Scienceand Technology (“MOST”) under the Foreign Trade Law (Act No. 6977,established on December 31, 1986 as last amended as of September 29, 2003)and the Technology Development Promotion Law (Act No. 715, established on December 28,1972 as last amended as of January 29, 2004), respectively, fortransfer of the Transferred Assets overseas and (ii) the necessary filingswith the Financial Supervisory Commission and Korea Securities Dealers’Association), such that no further approval, clearance or filing with anygovernmental authority under applicable laws is required for the transfer ofthe Transferred Assets overseas as contemplated in Purchaser’s business planset forth in **Schedule 1.11(g)***, provided*that*,*Seller shall obtain further approval/clearance from theMOCIE and MOST with respect to the transfer of the project models GDB 570, GDM-100,GDM-101, GDM-530, GDM-550, GSD-551, GSD-560, GSD-556, GSD-570, GDB-558, Goias,G-PCS, GSP-556, GSD-430, GSD-456, GDB-M700, CM-800, GPM-200, GPM-3000 and CM-1900Aoverseas as contemplated in Purchaser’s business plan set forth in **Schedule 1.11(g) **prior to theSeller’s shareholders’ meeting to approve the transaction contemplated herein.Seller hereby agrees not to convene the shareholders’ meeting until suchfurther approval/clearance from the MOCIE and MOST as provided in the precedingsentence have been obtained, and the Parties shall discuss in good faithwhether such further approval/clearance from the MOCIE and MOST aresatisfactory to the Purchaser, and if not satisfactory to the Purchaser,whether Purchaser shall terminate this Agreement pursuant to Section 5.12below. The Purchaser shall determine within five (5) Business Days ofreceipt of the approval/clearance from MOCIE and MOST whether suchapproval/clearance are satisfactory to the Purchaser. Further, Purchaser shallhave obtained assurance to its reasonable satisfaction that any contemplatedchange of existing laws or adoption of new laws in connection with the exportand/or use of the concerned CDMA technology will not have a Material AdverseEffect as of the Closing on Purchaser’s business in Korea as contemplated inPurchaser’s business plan in respect of the Transferred Assets set forth in **Schedule 1.11(g);*****provided*that**Purchasershall determine by five (5) days prior to the date of the Seller’sshareholders’ meeting whether Purchaser obtained such assurance. In addition,Seller shall have obtained its shareholders’ approval for the transactionscontemplated herein.

###  

### (h)         Seller shall have obtained consent from its creditors, andsuch consenting creditors shall comprise (i) not less than 70% of theaggregate debt amount of Seller (exclusive of the advance payment fromPurchaser) prior to the shareholders’ meeting of Seller approving the AssetTransfer and (ii) not less than 80% of the aggregate debt amount, which**amountshould include not less than 100% of the aggregate debt amount of the FinancialInstitutions listed in **Schedule 1.11(h)(3),**no later than two (2) Business Days prior to Closing. Each of theconsenting creditors shall submit to Seller and Purchaser the consent in theform provided in **Schedule 1.11(h)(1)**.Attached hereto as **Schedule 1.11(h)(2) **isa complete list of all creditors of Seller and the amounts owed to eachcreditor as of the date hereof. The list of creditors and amount owed providedin **Schedule 1.11(h)(2) **shallbe updated, as necessary, as of Closing.

###  

### (i)             Seller shall have obtainedconsent from any licensor or co-owners of any Intellectual Property, orLicensed Intellectual Property, (excluding software relating to non-developmentaltools) in the form satisfactory to Purchaser with respect to the assignment ortransfer of such Intellectual Property or Licensed Intellectual Property fromSeller to Purchaser. For those Licensed Intellectual Property listed in **Schedule 1.11(i),**Seller shall useits best efforts to obtain the necessary consent from appropriate licensors orco-owners on or prior to the Closing. In the event such consent is not obtainedon or prior to the Closing, and the value of the relevant IntellectualProperty, or Licensed Intellectual Property, (excluding software relating tonon-developmental tools) for which consent has not been obtained exceedsUS$400,000, the Purchase Price shall be deducted by the amount equal to (a) thetotal value of the relevant Intellectual 

 

10

----

 

Property or LicensedIntellectual Property for which consent has not been obtained minus (b) US$400,000.

###  

### (j)             Purchaser shall have received toits satisfaction the favorable legal opinion of the counsel for Sellersubstantially in the form attached hereto as **Schedule 1.11(j).**

###  

### (k)          Purchaser shall have completed all of its legal, accounting,financial, employee, and creditor due diligence with respect to Seller andshall in its reasonable business judgment have decided that the results of suchdue diligence from the date hereof until Seller’s shareholders’ meeting for theAsset Transfer, together which such due diligence completed on or prior to thedate hereof, do not and will not lead to a frustration of its purposes of thetransactions contemplated in this Agreement.

###  

### (l)             Purchaser shall have receivedfrom Seller, to its reasonable satisfaction, evidence that the investmentagreements entered into with (i) Kibo Capital Co., Ltd. dated September 11,1999 and (ii) Saewon Telecom Co., Ltd., dated October 12,1999, February 23, 2000and July 10, 2001 have been terminated.

###  

### (m)       Seller shall have obtained a waiver from KTB Network Co.,Ltd. (“KTB”) with respect to KTB’s rights under the investment agreementbetween Seller and KTB, dated March 10, 2000, arising with respect tothe restrictions under such investment agreement on the transfer oftechnologies to third parties by Seller and its guarantors. Such waiver shallbe in a form substantially similar to the form provided in **Schedule 1.11(m)**.

###  

### (n)         Seller shall have provided notice of the transactions to beperformed under this Agreement to each of its lenders and, if applicable,consulted with each of such lenders, in each case that such notice orconsultation is required under the relevant loan or similar credit documentwith respect to any changes in the Seller’s property or any sale or transfer ofthe business or any material assets of Seller.

###  

### (o)         Seller shall have given notice to Daehan Investment TrustCo., Ltd. (“Daehan”) under the subscription agreement entered into betweenSeller and Daehan on September 3, 2003 of the transactions to beperformed under this Agreement.

###  

### (p)         Seller shall provide the updated **Schedule 1.5** as set forth in Section 1.5to Purchaser’s satisfaction.

###  

### (q)         The board of directors of Purchaser shall have approved thetransaction contemplated under this Agreement.

###  

1.12                           Closing.The closing under this Agreement will take place twenty two (22) daysafter the shareholders meeting to approve the Asset Transfer at the time andplace as the Parties shall mutually agree or at such other time, date or placeas the Parties shall mutually agree (the ”Closing”), *provided*that,such date shall be no later than January 31, 2005, which date maybeextended by mutual agreement between the Parties. The date on which Closingoccurs is sometimes referred to herein as the ”Closing Date.”

 

1.13                           Deliveriesand Proceedings at Closing. At the Closing:

 

### (a)          Deliveries by Seller. Seller shall deliver or causeto be delivered to Purchaser:

###  

#### (i)                                       Incase of Transferred Assets (including Intellectual Properties) that are ownedby Seller and are subject to registration with the relevant governmentalauthorities, the duly executed applications and documentation required to befiled by Seller to duly transfer title to such Transferred Assets;

####  

#### (ii)                                    Incase of Transferred Assets (including Intellectual Properties) that are 

 

11

----

 

owned by Seller and arenot subject to registration, actual possession of such Transferred Assets(including title certificates and any other documents necessary to effectivelytransfer title and ownership of such Transferred Assets to the Purchaser);

####  

#### (iii)                                 Incase of Transferred Assets (including Licensed Intellectual Property, excludingsoftware relating to non-developmental tools) that are licensed or leased toSeller and are subject to registration with the relevant governmentalauthorities, the duly executed applications and documentation required to befiled by Seller to duly transfer title to such Transferred Assets, togetherwith any other documents necessary to effectively transfer such TransferredAssets to the Purchaser, including without limitations, the consent ofassignment of such Transferred Assets to Purchaser from the relevant licensor,lessor, etc.;

####  

#### (iv)                                Incase of Transferred Assets (including Licensed Intellectual Property, excludingsoftware relating to non-developmental tools) that are licensed to Seller andare not subject to registration, the consent of assignment of such TransferredAssets to Purchaser from the relevant licensor, lessor, etc.;

####  

#### (v)                                   copiesof the Employee Releases and the employment contracts with respect to theR&D Employees (including the Key Employees);

####  

#### (vi)                                consentletters from creditors of Seller substantially in the form as provided in**Schedule 1.11(h)(1)**, whichshall include a waiver by the creditor of any claim against the Asset Transferwith respect to the application of fraudulent conveyance, avoidance principlesand other similar laws;

####  

#### (vii)                             certifiedcopies of resolutions of Seller’s board of directors and shareholders meeting,both approving the sale of the Transferred Assets and authorizing any one ofits officers to execute this Agreement for and on behalf of Seller;

####  

#### (viii)                          suchother instruments of conveyance as shall be necessary to vest in Purchasergood, valid and marketable title to the Transferred Assets;

####  

#### (ix)                                  acertificate dated the Closing Date, from the Representative Director of Sellerto the effect that Seller has fulfilled the conditions set forth in Section 1.11;

####  

#### (x)                                     acertificate dated the Closing Date, from the Representative Director of Sellerto the effect that Seller has cleared all Liens or other types of encumbranceson the Transferred Assets, except as otherwise expressly provided herein;

####  

#### (xi)                                  areceipt for the Initial Payment less the Holdback Amount;

####  

#### (xii)                               copiesof the government approvals/clearances as set forth by Section 1.11(g);and

####  

#### (xiii)                            afairness opinion from a reputable accounting firm in Korea that the PurchasePrice agreed to herein by the Parties is no less than the fair value of theTransferred Assets.

####  

### (b)         Deliveries by Purchaser. At the Closing, Purchaser willdeliver to Seller:

###  

#### (i)                                     theInitial Payment less the Holdback Amount to the bank account designated bySeller three (3) days prior to Closing by wire transfer;

####  

#### (ii)                                  acertificate evidencing *the*deposit ofthe Holdback Amount with the Purchase Price Escrow;

 

12

----

 

#### (iii)                               acertified copy of a resolution of Purchaser’s board of directors approving thepurchase of the Transferred Assets on the terms of this Agreement andauthorizing any one of its directors or officers to execute this Agreement forand on behalf of Seller;

####  

#### (iv)                              acertificate dated the Closing Date, from an authorized officer of Purchaser tothe effect that Purchaser has fulfilled the conditions set forth in Section 1.10;and

####  

#### (v)                                 adocument evidencing approval and/or clearance for the transactions contemplatedhereby from the Fair Trade Commission of Korea,

####  

### (c)          Other Deliveries. Any other documents oragreements required to be executed and/or delivered pursuant to this Agreementor otherwise necessary for the consummation of the transaction contemplatedhereby will be exchanged.

###  

1.14                           Covenantsof Seller. From and after the date hereof and until the Closing Date,Seller hereby covenants and agrees that:

 

### (a)          Business in Ordinary Course. Seller will carry on theR&D in the ordinary and normal . course and in substantially the samemanner as heretofore, except as otherwise expressly provided herein, and shallnotify Purchaser immediately in writing of any changes or deviations from theordinary and normal course of business.

###  

### (b)         Maintain Properties. Seller will maintain and keepthe Transferred Assets in as good repair, working order and condition as atpresent, except for depreciation due to ordinary wear and tear.

###  

### (c)          Insurance. Seller will keep in full forceand effect insurance and bonds comparable in amount and scope of coverage towhat is now covering the R&D and all assets related thereto.

###  

### (d)         Perform Contracts. Seller will perform in allmaterial respects the obligations to be performed under all the contracts anddocuments of or relating to the R&D. Furthermore, Seller shall devotereasonable effort and resources towards the completion of the ExistingProjects, [***]until the Closing. Seller shall place all output from the Existing Projects, [***] into escrow in the name ofPurchaser with a third-party escrow agent mutually agreed by the Parties forultimate release to the Purchaser upon the earlier of Completion of eachProject or the commencement of bankruptcy proceedings in respect of the Seller.The escrow shall be established by execution of an escrow agreementsubstantially in the form attached hereto as **Schedule 1.14(d)(1).**For the avoidance of doubt, ifthe Closing does not occur and this Agreement is thus terminated, Seller shallremain obligated to complete the Existing Projects, [***] as provided in their respectiveagreements. Seller shall provide a letter of guarantee to Purchaser whereby, inthe event Seller has failed to fulfill its obligations under the ExistingProjects, [***], Seller shall transfer to Purchaser without consideration andwith no cost to the Purchaser all necessary intellectual property rights(the ”Designs”) so as to allow Purchaser to manufacture, use and sell CDMA450Mhz products, (Model Nos. GSD-430, GSD-456) and PCMCIA Card (Model No. GPM200). For the purpose of this letter of guarantee, upon the execution of thisAgreement or as soon as practicable but no later than five (5) BusinessDays from the execution of this Agreement, Seller agrees to transfer the titlesto the Designs to a third-party escrow agent chosen by Purchaser as collateral,and Purchaser shall then grant or shall cause the escrow agent to grant toSeller without consideration and with no cost to Seller an exclusive,transferable (such transfer is subject to Purchaser’s consent which shall notbe unreasonably withheld or delayed), and royalty-free license to use theDesigns without any restrictions unless and until Seller fails to Complete theExisting Projects, [***]by the due date under the relevant agreement for each product, at which time,subject to the terms and conditions of the escrow agreement, the escrow agentshall transfer the titles to the Designs to Purchaser; *provided,however,*that Purchaser shall transfer or shall cause the escrowagent to transfer the title to the Designs back to Seller upon the Completionof the Existing Projects, [***].The foregoing escrow shall be established by execution of an escrow agreementmutually agreed upon by the Parties no later than five (5) BusinessDays from the execution of this Agreement.

 

13

----

 

### (e)          Approvals and Consents. As soon as practicable afterthe execution of this Agreement, Seller shall take all reasonable actionrequired to obtain all waivers, consents, approvals, including but not limitedto (i) an approval from the shareholders meeting and Authorities and (ii) allconsents and approvals from co-owners and licensors of the IntellectualProperty, and Licensed Intellectual Property (excluding software relating tonon-developmental tools), respectively, as provided in Section 1.11(i);and promptly to give all notices, effect all registrations pursuant to and makeall other filings with or submissions to, any third parties, including governmentalauthorities, necessary or advisable to authorize, approve or permit thetransactions contemplated hereby.

###  

### (f)            Confidentiality. Seller hereby covenants andagrees that, except as may be required by law, rule or regulation or courtorder, unless this Agreement is terminated, it will not at any time reveal,divulge or make known to any Person (other than (i) the creditors ofSeller to the extent necessary to obtain such creditor’s consent pursuant to Section 1.11(h),(ii) to KTB to the extent necessary to obtain KTB’s waiver pursuant to Section 1.11(m),(iii) Seller’s employees, officers, directors and outside advisors whoneed to know the Confidential Information and (iv) Purchaser, theirAffiliates or their agents) any information that relates to this Agreement, thetransactions contemplated hereby or the R&D (whether now possessed bySeller or furnished by Purchaser after the Closing Date), including, but notlimited to, customer lists or other customer information, trade secrets orformulae, marketing plans or proposals, financial information or any data,written material, records or documents used by or relating to the R&D thatare of a confidential nature (collectively, the ”Confidential Information”).

###  

### (g)         Advice of Changes. Seller hereby covenants andagrees that it will advise Purchaser promptly in writing of any fact that, ifpreviously known, would have been required to be set forth or disclosed in orpursuant to this Agreement, or which would result in breach in any materialrespect by Seller of any of its representations and warranties, covenants oragreements hereunder or which would have a Material Adverse Effect on theTransferred Assets or the transactions contemplated hereby.

###  

### (h)         All Necessary Filings. Seller hereby covenants thatit has made and will make all necessary filings with the relevant governmentagencies which are required for the completion of the transactions contemplatedin this Agreement.

###  

### (i)             Access to Information;Cooperation.Seller hereby covenants and agrees that it shall give Purchaser and theirrepresentatives, counsel, accountants and consultants reasonable access, duringnormal business hours, to such of the properties, books, accounts, contractsand records of Seller as Purchaser deem relevant to the Transferred Assets andthe R&D, and furnish or otherwise make available to Purchaser all suchinformation concerning the Transferred Assets and the R&D as Purchaser mayrequest.

###  

### (j)             Intentional Misrepresentations. Without express writtenconsent of Purchaser, Seller shall not take or omit any action with theintention to cause any of its representations and warranties under thisAgreement to be inaccurate in material respect at, or any time prior to, theClosing.

###  

### (k)          Vacating Premises. On or prior to the ClosingDate, Seller shall vacate the office space currently used by Seller as of thedate hereof and shall leave the premises in the same condition as currentlyused by Seller as of the date hereof except for Removal of the Excluded Assets.Seller will take all necessary action to effect the assignment of the currentlease agreement with respect to the office space to Purchaser includingobtaining the consent from the lessor of the office space with respect to suchassignment, *provided*that, Purchaser shall have paidthe key money deposit for such assignment to Seller on the Closing Date; *provided further***thatif the key money deposit with the lessor of the office space above is notreturned to Purchaser upon the expiration/termination of such assignmentagreement due to causes primarily attributable to Seller prior to Closing,Seller shall refund such amount within five (5) Business Days fromthe date of Purchaser’s written notice thereof to Seller.

###  

### (l)             Fair Value. Prior to the Closing DateSeller shall have obtained a fairness opinion from a reputable accounting firmin Korea that the Purchase Price agreed to herein by the Parties is no lessthan the fair value of the Transferred Assets.

 

14

----

 

1.15                           Covenantsof PurchaserFrom and after the date hereof and until the Closing Date,Purchaser hereby covenants and agrees that it shall in good faith cooperatewith Seller and provide Seller with reasonable resources necessary forCompletion of the Existing Projects, [***].

 

1.16                           Adjustmentand Apportionment. All utilities, service charges, fees and other expensesrelating to the Transferred Assets for all periods up to but excluding theClosing Date shall be the obligation of Seller and for all other periodsincluding and following the Closing Date shall be the obligation of Purchaser.All utilities, service charges, fees and other expenses relating to theTransferred Assets, whether prepaid or due after the Closing Date, shall beadjusted ratably as of the Closing Date and, if and to the extent that it isnot possible to do so at the Closing, Purchaser and Seller shall continue towork together in good faith and to make any remaining adjustments as soon aspracticable after the Closing Date. Any such prorated utilities, service charges,fees and other expenses shall be paid directly to a Party entitled to suchreimbursement by wire transfer in immediately available funds to the accountdesignated by such Party, within five (5) days after thedetermination thereof in accordance with this Section.

 

**SECTION 2**

 

REPRESENTATIONS ANDWARRANTIES OF SELLER

 

Seller hereby represents and warrants to and withPurchaser as follows, which representation and warranties are, as of the dateof this Agreement, and will be, as of the Closing Date, true and correct,except for those representations and warranties which speak as to a certaindate (as far as any of the following representations and warranties areconditioned upon the preparation of the Schedules to-be Prepared,such representations and warranties shall be deemed to have been made as of thedate when the relevant Schedules to be Prepared are delivered to Purchaser, andobtained their written consents thereto):

 

2.1                                 Organization.Seller is a corporation duly incorporated and validly existing under the lawsof Korea. Seller has all requisite corporate power and authority to own orlease its properties and assets as now owned or leased, to carry on itsbusinesses as and where now being conducted and to enter into this Agreement,and perform its obligations hereunder. The copies of Seller’s articles ofincorporation and bylaws, as amended to date, which have been delivered toPurchaser, are correct and complete and are in full force and effect.

 

2.2                                 Authorizationand Enforceability. The execution, delivery and performance of thisAgreement has been, and all other agreements, documents and instruments towhich Seller is a party or otherwise obligated which are to be executed,delivered or performed pursuant to this Agreement have been duly authorized byall necessary corporate action on the part of Seller, including the approvalsby the board of directors (other than the shareholders approval which Sellershall obtain before the Closing). This Agreement has been, and at Closing anyand all ancillary agreements thereto shall have been duly executed anddelivered by Seller, and this Agreement constitutes, and at Closing anyancillary agreements thereto will constitute, the legal, valid and bindingobligations of Seller, enforceable in accordance with their respective terms.

 

2.3                                 NoViolation of Laws or Agreements. Except as set forth on **Schedule 2.3**, the executionand delivery of this Agreement do not, and the consummation of the transactionscontemplated by this Agreement and the compliance with the terms, conditionsand provisions of this Agreement by Seller, will not (a) contravene anyprovision of Seller’s articles of incorporation; (b) conflict with orresult in a breach of or constitute a default (or an event which might, withthe passage of time or the giving of notice or both, constitute a default)under any of the terms, conditions or provisions of any indenture, mortgage,loan or credit agreement or any other agreement or instrument to which Selleris a party or by which it or any of its assets may be bound or affected, or anyjudgment or order of any court or governmental department, commission, board,agency or instrumentality, domestic or foreign, or any applicable law, rule orregulation, or (c) result in the termination of or loss of any right (orgive others the right to cause such a termination or loss) under any contractsto be assigned to Purchaser.

 

2.4                                 FinancialStatements. The books of account and related records of Seller fairlyreflect in 

 

15

----

 

reasonable detail theassets, liabilities and transactions related to Seller and are in adequatecondition for the preparation of the Financial Statement (as defined below andwhich shall be limited only to a balance sheet and a statement of profits andlosses) in accordance with Korean GAAP applied on a consistent basis. Sellerhas delivered to Purchaser its audited financial statements for the fiscalyears as of 2001, 2002, 2003, respectively, and shall provide theunaudited financial statements for the past three (3) quarters forthe year 2004 (the ”Financial Statements”). The Financial Statements: (a) fairlypresents and will present the financial condition, assets and liabilities ofSeller as of the dates thereof; and (b) has been and will be prepared inaccordance with Korean GAAP consistently applied. All references in thisAgreement to the ”Balance Sheet” shall mean the balance sheet of Seller asof December 31, 2003 included in the Financial Statement and allreferences to the ”Balance Sheet Date” shall mean December 31, 2003.

 

2.5                                 UndisclosedLiabilities. Seller has no liability or obligation of any nature, whetherdue or to become due, absolute, contingent or otherwise, including liabilitiesfor or in respect of national, local or foreign Taxes, customs duties and anyinterest or penalties related hereto, except for liabilities that are (a) fullyreflected on the Balance Sheet or (b) incurred in the ordinary course ofbusiness since the Balance Sheet Date and fully reflected as liabilities on Seller’sbooks of account, none of which individually or in the aggregate, has beenmaterially adverse.

 

2.6                                 NoChanges. Except as disclosed on **Schedule 2.6**,since the Balance Sheet Date and until the Closing, Seller has conducted itsbusiness only in the ordinary course. Except as otherwise disclosed on **Schedule 2.6**, there has notbeen:

 

### (a)          any change in the financial condition, assets, liabilities,net worth of Seller, except changes in the ordinary course of business, none ofwhich, individually or in the aggregate has been or could materially affect thePurchaser’s ability to fully utilize the Transferred Assets;

###  

### (b)         any damage, destruction or loss, whether or not covered byinsurance, which could materially affect the Purchaser’s ability to fully utilizethe Transferred Assets;

###  

### (c)          any mortgage, pledge or subjection to Lien, charge orencumbrance of any kind on the Transferred Assets;

###  

### (d)         any strike, walkout, labor trouble or any other new orcontinued event, development or condition of any character which has or couldhave a Material Adverse Effect;

###  

### (e)          any increase in the salaries or other compensation(excluding increases in the ordinary course of business and consistent withpast practice) payable or to become payable to, or any advance (excludingadvances for ordinary business expenses) or loan to, any R&D Employees, orany increase in, or any addition to, other benefits (including withoutlimitation any bonus, profit-sharing, pension or other plan) to which any ofthe R&D Employees maybe entitled, or. any payments to any pension,retirement, profit-sharing, bonus or similar plan except payments in theordinary course of business and consistent with past practice made pursuant toany employee benefit plan, or any other. payment of any kind to (or on behalfof) any such R&D Employee other than payment of base compensation andreimbursement for reasonable business expenses in the ordinary course ofbusiness;

###  

### (f)            any making or authorization ofany capital expenditures which are not in the ordinary course of business or inexcess of 10 million Won to the R&D;

###  

### (g)         any cancellation or waiver of any right material to theoperation of Seller’s business or any cancellation or waiver of any debts orclaims of substantial value or any cancellation or waiver of any debts orclaims against any Affiliate;

###  

### (h)         any sale, transfer or other disposition of any of theTransferred Assets,

###  

### (i)             any payment, discharge orsatisfaction of any liability or obligation (whether 

 

16

----

 

### accrued, absolute, contingent or otherwise) by Seller other than thepayment, discharge or satisfaction, in the ordinary course of business, ofliabilities or obligations shown or reflected on the Balance Sheet or incurredin the ordinary course of business since the Balance Sheet Date;

###  

### (j)             any adverse change or any threatof any adverse change in Seller’s relations with, or any loss or threat of lossof, Seller’s suppliers, clients or customers, which change or loss could have aMaterial Adverse Effect on the Transferred Assets;

###  

### (k)          any write-offs as uncorrectable of any notes receivable ofSeller or write-downs of the value of any of the Transferred Assets or otherthan in immaterial amounts or in the ordinary course of business consistentwith past practice and at a rate no greater than during the twelve months endedon the Balance Sheet Date;

###  

### (l)             any change by Seller in anymethod of accounting or keeping its books of account or accounting practices;

###  

### (m)       any creation, incurrence, assumption or guarantee by Sellerof any obligations or liabilities that would have a Material Adverse Effect onthe Transferred Assets (whether absolute, accrued, contingent or otherwise andwhether due or to become due), or any creation, incurrence, assumption or guaranteeby Seller of any indebtedness for money borrowed;

###  

### (n)         any payment, loan or advance of any amount to or in respectof, or the sale, transfer or lease of any properties or assets (whether real,personal or mixed, tangible or intangible) to, or entering into of anyagreement, arrangement or transaction with, any Affiliate, except for (i) compensationto its officers and employees at rates not exceeding the rates of compensationdisclosed on **Schedule 2.6(n)**hereto, (ii) reimbursements of or advances for expenses incurred forbusiness-related purposes not exceeding 10 million Won outstanding in theaggregate at any given time and (iii) payment, in the ordinary course ofbusiness, of liabilities or obligations shown or reflected on the Balance Sheetor incurred in the ordinary course of business since the Balance Sheet Date.

###  

### (o)         any disposition of or failure to keep in effect any rightsin, to or for the use of Intellectual Property included in the TransferredAssets, or any disclosure to any person not an employee or other disposal ofany trade secret, process or know-how relating to the R&D.

###  

### (p)         any transaction, agreement or event to which Seller is aparty or a participant outside the ordinary course of the R&D orinconsistent with past practice.

###  

### (q)         Seller has become subject to any newly enacted or adoptedlaw of Korea which may reasonably be expected to materially affect thePurchaser’s ability to fully utilize the Transferred Assets.

###  

2.7                                 Taxes.Seller has (a) timely filed all national or local, payroll, withholding,VAT, excise, sales, use, customs duties, personal property, use and occupancy,business and occupation, mercantile, real estate, capital stock and franchiseor other tax returns of any kind whatsoever (all the foregoing taxes, includinginterest and penalties thereon and including estimated taxes, being hereinaftercollectively called “Taxes” and individually a “Tax”), (b) has paid allTaxes which are due pursuant to such returns and (c) paid all other Taxesfor which a notice of assessment or demand for payment has been received. Allsuch returns have been prepared in accordance with all applicable laws andrequirements of Korea and accurately reflect the taxable income (or othermeasure of Tax) of the Party filing the same. The accruals for Taxes containedin the Balance Sheet are adequate to cover all liabilities for Taxes of Sellerfor all periods ending on or before the Balance Sheet Date and nothing hasoccurred subsequent to that date to make any of such accruals inadequate as ofthe Balance Sheet Date. All Taxes for periods beginning after the Balance SheetDate have been paid or are adequately reserved against on the books of Seller.Seller has timely filed all information returns or reports which are requiredto be filed and has accurately reported all information required to be includedon such returns or reports. To Seller’s Knowledge, there are no proposedassessments of Tax against Seller or proposed adjustments to any Tax returnsfiled, pending 

 

17

----

 

against Seller. Sellerhas not received notice that any Tax return is under examination by any taxingauthority. Seller has not executed a waiver or consent extending any statute oflimitation for any Tax liability which remains outstanding. Seller has not (a) joinedin or been required to join in filing a consolidated income Tax return, or (b) enteredinto a closing agreement with any taxing authority.

 

2.8                                 LeaseAgreements. All lease agreements that are subject to the Asset Transferpursuant to Section 1.1(c) are in full force and effect and no partyto such lease agreement is in default under any of the terms thereof; and noevent has occurred that with the passage of time or the giving of notice orboth would constitute a default by any party under any provision thereof.Seller has obtain all necessary consents from the relevant lessors in respectof assignment of the rights, interests and obligations under the leaseagreement to the Purchaser pursuant to this Agreement.

 

2.9                                 NoPending Litigation or Proceedings. Except as set forth on **Schedule 2.9** hereto, there areno actions, suits, investigations, proceedings or claims pending or affecting,or to Seller’s Knowledge, threatened against Seller or Seller’s agents or theirassets, by or before any court or governmental department, agency orinstrumentality, and to Seller’s Knowledge, there is no basis for any suchaction, suit, investigation, proceeding or claim. There are presently nooutstanding judgments, decrees or orders of any court or any governmental oradministrative agency, against the Seller.

 

2.10                           Contracts,Compliance.  **Schedule 2.10**hereto is a true, correct and complete list of all contracts or commitmentswith the contract amount in excess of 100 million Won, oral or written,formal or informal. All such contracts and other commitments are in full forceand effect; all parties to such contracts and other commitments have compliedwith the provisions thereof; no such party is in default under any of the termsthereof; and no event has occurred that with the passage of time or the givingof notice or both would constitute a default by any party under any provisionthereof.

 

2.11                           Compliancewith Laws.  **Schedule 2.11**hereto sets forth a list of all material permits, certificates, licenses,orders, registrations, franchises, authorizations and other approvals from allnational, local and foreign governmental and regulatory bodies held by Seller.Seller holds and is in compliance with all material permits, certificates,licenses, orders, approvals, registrations, franchises and authorizationsrequired under all laws of Korea, and, to Seller’s Knowledge, all of suchpermits, certificates, licenses, orders, approvals, registrations, franchisesand authorizations are in full force and effect. Seller has complied with allapplicable statutes, rules, and regulations of Korea, and orders, national andlocal, which, if not complied with, would have a Material Adverse Effect on theTransferred Assets. No notice, citation, summons or order has been issued, nocomplaint has been filed, no penalty has been assessed and, to Seller’sKnowledge, no investigation or review is pending or threatened by anygovernmental or other entity (a) with respect to any alleged violation bySeller of any law of Korea of any governmental entity or (b) with respectto any alleged failure by Seller to have any permit, certificate, license,approval, registration or authorization required in connection with itsbusiness operation which have a Material Adverse Effect on the TransferredAssets.

 

2.12                           EnvironmentalMatters. Except where the failure of a representation contained hereinwould not have a Material Adverse Effect:

 

### (a)          Seller is in compliance with all applicable national orlocal statutory or regulation, rule, order, ordinance, guideline, direction, ornotice, relating to the environment, public health and safety, and employeehealth and safety, including those relating to hazardous substances (“EnvironmentalLaws”).

###  

### (b)         Seller holds and is in compliance with all necessary orrequired environmental permits, certificates, consent or other settlementagreements, licenses, approvals, registrations and authorizations requiredunder all Environmental Laws (“Environmental Permits”) as being used as of thedate of this Agreement, and all of such Environmental Permits are valid and infull force and effect. All such Environmental Permits held by Seller are listedon **Schedule 2.12**hereto and any that are nottransferable are so designated. Seller has made or will make before the Closingtimely application for renewals of all such Environmental Permits for whichEnvironmental Laws require that applications must be filed on or before theClosing to maintain the Environmental Permits in full force and effect afterthe 

 

18

----

 

### Closing Date. Purchaser shall bear any fees, cost or other expensesincurred in making such filings or applications to the extent to whichPurchaser receives a benefit from the Environmental Permit obtained as a resultof such filing or application.

###  

### (c)          No consent, approval or authorization of, or registration orfiling with any Person, including any environmental governmental Authority orregulatory agency, is required in connection with the execution and delivery ofthis Agreement or the consummation of the transactions contemplated hereby.

###  

### (d)         No notice, citation, summons or order has been issued orserved upon, no complaint has been filed, no penalty has been assessed and noinvestigation or review is pending or to Seller’s Knowledge, threatened by anyAuthority or Person: (a) with respect to any alleged violation by Sellerof any Environmental Law; or (b) with respect to any alleged failure bySeller to have any Environmental Permit; or (c) with respect to any use,possession, generation, treatment, storage, recycling, transportation ordisposal (collectively “Management”) of any Hazardous Substances by or onbehalf of Seller or, to Seller’s Knowledge, its predecessors.

###  

### (e)          Seller has not received any request for information, noticeof claim, demand, order or notification for which it or any of its predecessorsare or may be potentially responsible with respect to any investigation orclean-up of any threatened or actual Release of any Hazardous Substance.

###  

### (f)            There are no environmental Lienson the Transferred Assets which would materially impair Purchaser’s ability tolawfully operate the R&D as such R&D was operated prior to the ClosingDate and, to Seller’s Knowledge, no government actions have been taken or arein process or pending which could subject any of such properties to such Liens.

###  

### (g)         To Seller’s Knowledge, there are no facts or circumstancesrelated to environmental matters concerning the Transferred Assets that couldreasonably be expected to lead to any future environmental claims againstSeller, or Purchaser under current law.

###  

2.13                           Consents.Except as set forth on **Schedule 2.13**,no consent, approval or authorization of, or registration or filing with, anyPerson, is required in connection with the execution and delivery of thisAgreement or the consummation of the transactions contemplated hereby.

 

2.14                           PersonalProperty. Seller owns all of its tangible personal property and assetssubstantially relating to or affecting the R&D, including the propertiesand assets reflected in the Balance Sheet (except those disposed of in theordinary course of business since the Balance Sheet Date); and at Closing noneof such properties or assets will be subject to any mortgage, pledge, lien,restriction, encumbrance, claim, security interest, charge or any other matteraffecting title, except, (a) minor imperfections of title, none of which,individually or in the aggregate, materially detracts from the value of orimpairs the use of the affected properties or impairs any operations of Seller,(b) liens for current Taxes not yet due and payable, or (c) asdisclosed on **Schedule 2.14** hereto(the ”Personal Property Permitted Encumbrances”). All tangible personalproperty, assets, equipment or other personal property consigned or leased toSeller which are used in the operation of the R&D are listed on Schedule 1.14.

 

2.15                           CDMAHandset Models.  **Schedule 2.15**sets forth all of the CDMA handset models and PCMCIA cards (including withoutlimitation W-CDMA and CDMA 2000) that have been developed and sold by Sellerfor the past three (3) years, including the identity of thecustomer(s), number of units sold to such customer(s) and the total amount ofsales.

 

2.16                           IntellectualProperties

 

### (a)          Attached hereto as **Schedule 2.16(a) **is a correct and complete listof all Intellectual Property owned by or licensed to Seller. **Schedule 2.16(a) **includes all of the IntellectualProperty used in the ordinary day-to-day operation of the R&D, and thereare no other items of Intellectual Property that are regularly used in theordinary day-to-day operation of the R&D. Seller does not use anyIntellectual 

 

19

----

 

### Property owned or licensed by any Affiliates of Seller.

###  

### (b)         Except as set forth on **Schedule 2.16(b),**neither the manufacture, sale, use of any products now or heretoforemanufactured or sold by Seller nor the operation of the R&D did and doesinfringe (nor has any claim been made that any such action infringes) thepatents or other Intellectual Property rights of others.

###  

### (c)          With respect to the portion of the Intellectual Propertythat is owned by Seller (“Owned Intellectual Property”), except as disclosed in**Schedule 2.16(c),**Seller is the exclusive owner of the entire and unencumbered right, title andinterest in and to the Owned Intellectual Property, and to the Knowledge ofSeller, Seller has a valid right to use the Owned Intellectual Property asnecessary to conduct the R&D as now conducted or as contemplated to beconducted. Except as disclosed in **Schedule 2.16(c),**Seller is the applicant or assignee of record in all applications and ownerof record in all registrations set forth in **Schedule 2.16(a),**and no opposition, extension oftime to oppose, interference, rejection, or refusal to register has beenreceived by Seller in connection with any such applications.

###  

### (d)         With respect to the portion of the Intellectual Propertythat is not owned by Seller (“Licensed Intellectual Property”), Seller owns orpossesses adequate licenses or other rights to use the same as necessary toconduct the R&D as now conducted. Except as set forth on **Schedule 2.16(d),**there is noagreement to which Seller is a party or to which Seller is legally bound and norestriction or Liens, materially and adversely affecting the use by Seller and,after the Closing, the use by Purchaser, of any of the Licensed IntellectualProperties.

###  

### (e)          There is no pending litigation or other legal action withrespect to any of the Intellectual Properties, and no order, holding, decisionor judgment has been rendered by any Authority, and no agreement, consent orstipulation exists to which, in any such event, Seller is a party or of whichSeller has Knowledge, which would prevent Seller, or after the Closing,Purchaser, from using any of the Intellectual Properties. The IntellectualProperty, to the Knowledge of Seller, are subsisting, valid and enforceable,and have not been adjudged invalid or unenforceable in whole or part.

###  

### (f)            The acquisition of theTransferred Assets by Purchaser will not result in Purchaser being requiredeither (i) to pay any royalties, other payments or consideration, or (ii) togrant any right, to any third parties, either directly or indirectly or throughSeller, with respect to the Intellectual Property rights of such third parties.

###  

### (g)         **Schedule 2.16(g) **lists all actions that must betaken by Purchaser within sixty (60) days of the Closing Date, includingthe payment of any registration, maintenance or renewal fees or the filing ofany documents, applications or certificates for the purposes of maintaining,perfecting or preserving or renewing any of the Intellectual Property.

###  

### (h)         To the Knowledge of Seller, no Person is engaging in anyactivity that infringes the Intellectual Property of Seller. Except asdisclosed in **Schedule ****2.16(h)**, Seller has not granted anylicense or other right to any third party with respect to IntellectualProperty.

###  

### (i)             Seller has taken reasonablemeasures in accordance with normal industry practice to maintain the confidentialityof the trade secrets and other confidential Intellectual Property.

###  

### (j)             Each employee, contractor andconsultant of Seller who contributed to or participated in the creation ordevelopment of any intellectual Property on behalf of Seller: (i) is aparty to a “work-for-hire” agreement under which the Company is deemed to bethe original owner/author of all property rights therein; or (ii) hasexecuted an assignment or an agreement to assign in favor of Seller (or suchpredecessor in interest, as applicable) of all right, title and interest insuch material. Each such agreement and assignment complies with, and is legallyvalid, effective and enforceable under, applicable Law, and such employee,contractor or consultant would not have any basis for any claim with respect tosuch Intellectual Property.

 

20

----

 

2.17                           Transactionswith Related Parties. Except as disclosed on **Schedule 2.17**,no Affiliate has, in excess of 10 million Won,:

 

### (a)          borrowed money or loaned money to Seller which remainsoutstanding against Seller;

###  

### (b)         any contractual or other claims, express or implied, of anykind whatsoever

###  

### (c)          any interest in any property or assets used by Seller; or

###  

### (d)         is engaged in any other transaction with Seller.

###  

2.18                           Conditionof Assets. The Transferred Assets used in or related to or affecting theR&D, including those reflected in the Balance Sheet, are adequate for theoperation of the R&D as it has been previously conducted by Seller.

 

2.19                           CompensationArrangements. **Schedule 2.19**hereto sets forth the following information:

 

### (a)          The names and current annual salary, including any bonus, ifapplicable, of all R&D Employees together with a statement of the fullamount of all remuneration paid by Seller to each such person during the 12month period preceding the date hereof.

###  

### (b)         **Schedule 2.19** hereto contains a true and complete list of all currentR&D Employees of Seller that Seller asserts are necessary to the operationof the R&D, together with their respective job titles and current annualcompensation and bonuses or bonus eligibility (if any), as of the date hereof. **Schedule 2.19** shall have been updated as of the Closing, if necessary.Except for those individuals identified on **Schedule 2.19**, there are no employees hiredby and currently working for Seller who has devoted a material part of his/hertime with the Seller in the operation of the R&D.

###  

2.20                           LaborRelations.

 

### (a)          Schedule **2.20** contains a list of all writtenemployment policies, practices, manuals, handbooks, procedures, and terms andconditions of employment of Seller, including wages, pension benefit plan, anemployee welfare benefit plan or any bonus, incentive compensation, profitsharing, retirement, pension, group insurance, death benefit, health,cafeteria, flexible benefit, medical expense reimbursement, dependent care,stock option, stock purchase, stock appreciation rights, savings, deferredcompensation, consulting, severance pay or termination pay, vacation pay, lifeinsurance, welfare or other employee benefit or fringe benefit plan, program orarrangement, or any other similar things that are applicable to employees ofSeller. Except as listed on **Schedule 2.20**, there are no employment policies, practices, manuals,handbooks, procedures or terms or conditions of employment that are applicableto employees of Seller.

###  

### (b)         **Schedule 2.20** contains a list of all current,or if expired and not renewed, the most recent, employment, labor or collectivebargaining agreements with any of the R&D Employees. Except as listed on **Schedule 2.20**, there is no employment, laboror collective bargaining agreement, or governmental or administrative charges,affecting or concerning the R&D Employees, pending or to Seller’s knowledgethreatened against Seller.

###  

### (c)          Except as set forth on **Schedule 2.20**, there are no consulting,contracting or independent contracting agreements with any person retained oremployed in connection with the Transferred Assets.

###  

### (d)         The overall relations of Seller with its employees are good.There are no unfair labor practice complaints against Seller pending or, toSeller’s best Knowledge, threatened, There is no labor strike, dispute, slowdown or stoppage actually pending or, to Seller’s best Knowledge,threatened against 

 

21

----

 

### or involving Seller. No employee grievance which might to Seller’sKnowledge have an adverse effect on Seller is pending. No private agreementrestricts Seller from relocating, closing or terminating any of its operationsor facilities. Except as disclosed in **Schedule 2.20**, Seller has not in the pasttwelve (12) months experienced any work stoppage or slow down or, tothe best of Seller’s Knowledge committed any unfair labor practice.

###  

### (e)          As of Closing, all actual or to Seller’s Knowledge,potential liabilities of Seller in respect of the R&D Employees have beenfully satisfied and discharged, including any accrued severance obligations.

###  

2.21                           ProductsLiability. There are no (a) liabilities of Seller, fixed orcontingent, asserted or, to Seller’s Knowledge, unasserted, with respect to anyproduct liability or any similar claim that relates to any product manufacturedand sold by Seller to others, or (b) liabilities of Seller, fixed orcontingent, asserted or, to Seller’s Knowledge, unasserted, with respect to anyclaim for the breach of any express or implied product warranty or any othersimilar claim with respect to any product manufactured and sold by Seller toothers other than standard warranty obligations (to replace, repair or refund)made by Seller in the ordinary course of business to Purchasers of itsproducts.

 

2.22                           Insurance.Attached hereto as **Schedule 2.22**is a complete and correct list of all policies of insurance relating to theTransferred Assets of which Seller is the owner, insured or beneficiary, orcovering any of the Transferred Assets, true, correct and complete copies ofwhich have been delivered to Purchaser, indicating for each policy the carrier,the insured, type of coverage, the amounts of coverage, deductible, premiumrate, cash value if any, expiration date and any pending claims thereunder. Allsuch policies are in full force and effect. The coverage provided by suchpolicies is reasonable and consistent with the CDMA industry standard in Korea.Seller has paid-in-full all premiums due on such policies as of the ClosingDate. There is no default with respect to any provision contained in any suchpolicy, nor has there been any failure to give any notice or present any claimunder any such policy in a timely fashion or in the manner or detail requiredby the policy. There are no outstanding unpaid premiums or claims under suchpolicies. No notice of cancellation or non-renewal with respect to, ordisallowance of any claim under, any such policy has been received by Seller.Seller has not been refused any insurance, nor has its coverage been limited byany insurance carrier to which it has applied for insurance or with which ithas carried insurance during the last five years.

 

2.23                           Brokerage.Except as disclosed in **Schedule 2.23**,Seller has not made any agreement or taken any other action which might causeanyone to become entitled to a broker’s fee or commission as a result of thetransaction contemplated hereunder.

 

2.24                           Disclosure.No representation or warranty by Seller in this Agreement, and no exhibit,certificate or schedule furnished or to be furnished to Purchaser pursuanthereto, or in connection with the transactions contemplated hereby, contains orwill contain any untrue statement of a material fact, or omits or will omit tostate a material fact necessary to make the statements or facts containedherein or therein not misleading or necessary to provide Purchaser with properinformation as to Seller and the Transferred Assets. Seller shall disclose toPurchaser at Closing any information then in the possession of Seller thatindicates that Purchaser is in breach of this Agreement or which may providethe basis for a claim by Seller that Purchaser has breached this Agreement.

 

2.25                           Mitigation.The Parties acknowledge that the representations and warranties set forth aboveshall, in any case not be interpreted as limiting or restricting Purchaser’sgeneral obligation at law, if any, to prevent and/or mitigate any loss ordamages which it may incur after the Closing in connection with or involvingthe transfer of the R&D or the Transferred Assets.

 

2.26                           Solvency.Seller warrants and represents that, between the date of this Agreement and theClosing Date that Seller has not been unable and is not unable to pay its debtsas they become due.

 

2.27                           KiboCapital Co., Ltd. and Saewon Telecom Co., Ltd.Seller warrants andrepresents that the investment agreements entered into with (i) KiboCapital Co., Ltd. dated September 11, 1999 and 

 

22

----

 

(ii) Saewon TelecomCo., Ltd., dated October 12, 1999, February 23, 2000 and July 10, 2001have been terminated by the Closing Date.

 

2.28                           FinancialCreditors of Seller.  **Schedule 2.28** is a completelist of all of the Financial Institutions to which Seller is indebted.

 

**SECTION 3**

 

REPRESENTATIONS ANDWARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller asfollows, which representations and warranties are, as of the date of thisAgreement, and will be, of the Closing Date, true and correct, except for thoserepresentations and warranties which speak as to a certain date:

 

3.1                                 Organizationand Good Standing. Purchaser is a corporation duly incorporated, validlyexisting and in good standing under the laws of Korea.

 

3.2                                 CorporatePower and Authority. Purchaser has all requisite corporate power andauthority to make, execute, deliver and perform this Agreement and all otheragreements, documents and instruments to which it is a party or is otherwiseobligated which are executed, delivered or performed pursuant to thisAgreement.

 

3.3                                 DueAuthorization. The execution, delivery and performance of this Agreementand all other agreements, documents and instruments to which Purchaser is aparty or is otherwise obligated which are to be executed, delivered orperformed pursuant to this Agreement have been duly authorized by all necessarycorporate action on the part of Purchaser, and this Agreement constitutes andany other instruments to be delivered by Purchaser at Closing, when executedand delivered at Closing, will constitute, the legal, valid and bindingobligations of Purchaser, enforceable against it in accordance with theirrespective terms.

 

3.4                                 NoViolations of Laws or Agreements. The execution, delivery and performanceof this Agreement and the other agreements contemplated by this Agreement andthe consummation of the transactions contemplated by this Agreement do not andwill not result in any breach or acceleration of any of the terms or conditionsof its articles of incorporation or bylaws, or of any mortgage, bond,indenture, contract, agreement, license or other instrument or obligation towhich Purchaser is a party. The execution, delivery and performance of thisAgreement or the other agreements contemplated by this Agreement will notresult in the material violation of any law, statute, regulation, judgment,writ, injunction or decree of any court, threatened or entered in a proceedingor action in which Purchaser is, was or may be bound.

 

3.5                                 Disclosure.No representation or warranty by Purchaser in this Agreement, and no exhibit,certificate or schedule furnished or to be furnished to Seller pursuanthereto, or in connection with the transactions contemplated hereby, contains orwill contain any untrue statement of a material fact, or omits or will omit tostate a material fact necessary to make the statements or facts containedherein or therein not misleading or necessary to provide Seller with properinformation as to Purchaser and the Purchase Assets. Purchaser shall discloseto Seller at Closing any information then in the possession of Purchaser thatindicates that Seller is in breach of this Agreement or which may provide thebasis for a claim by Purchaser that Seller has breached this Agreement.

 

3.6                                 Mitigatin.The Parties acknowledge that the representations and warranties set forth aboveshall, in any case not be interpreted as limiting or restricting Seller’sgeneral obligation at law, if any, to prevent and/or mitigate any loss ordamages which it may incur after the Closing in connection with or involvingthe transfer of the R&D or the Transferred Assets.

 

3.7                                 Brokerage.Except as set forth on **Schedule 3.7**,Purchaser has not made any agreement or taken any other action which mightcause anyone to become entitled to a broker’s fee or commission as a result ofthe transaction contemplated hereunder.

 

23

----

 

**SECTION 4**

 

CERTAIN ADDITIONAL.COVENANTS

 

4.1                                 Costs,Expenses and Taxes Unless otherwise provided for herein, Purchaser andSeller will each pay all their own expenses incurred in connection with thisAgreement and the transactions contemplated hereby, including (a) allcosts, expenses and Taxes to the extent levied to each Party, and (b) allaccounting, legal and appraisal fees and settlement charges, *provided*that, Seller shall be liable for and shall holdPurchaser harmless against any Value Added Tax (“VAT”) which become payable inconnection with the transactions contemplated by this Agreement, *provided further*that, Purchaser shall deliver to Seller bywire transfer to an account designated by Seller any amount received from anytax authorities in connection with payment of such VAT by the Seller within five(5) Business Days from receipt and if the amount returned to Seller byPurchaser is less than the amount of VAT actually paid by Seller to the’relevant tax authorities, Purchaser shall pay Seller the amount of suchshortfall within five (5) Business Days from receipt of any payment from anytax authorities in connection with VAT. For the avoidance of doubt, Purchasershall have no obligation to deliver to Seller any amounts refunded by the taxauthorities until such time as Seller has fully paid the VAT to the relevanttax authorities. Purchaser and Seller shall each bear [***] of all costs and expenses associated with the transfer and/orassignment of the Intellectual Property to Purchaser, including anyregistration fees payable in connection thereto.

 

4.2                                 R&DEmployees. Not later than one (1) week prior to the Closing, theParties shall finalize a list of R&D Employees (including Key Employees)(as listed in the Asset List) to be hired by Purchaser. The hire by Purchaserof the R&D Employees shall be subject to the following basic principles:

 

### (a)          All of the R&D Employees shall elect to be formallyterminated as employees of Seller and commence new employment relation withPurchaser. Seller shall pay, in a timely manner in accordance with therequirements of the Labor Standards Act and current company practices, allsalary, bonuses, allowances, severance, unused leave (including the pro rataportion of accrued but unused leave attributable to the portion of the 2004calendar year prior to the Closing) and any other monetary obligations orclaims relating to the R&D Employees’ employment with Seller that may haveaccrued to those personnel prior to their separation. Seller represents andwarrants that the amount paid by it to such personnel will be adequate to fullyatisfy all of their claims relating to each of their terms of employment atSeller or any Affiliate of Seller.

###  

### (b)         Prior to the Closing, Seller shall obtain the EmployeeReleases from the R&D Employees confirming their election to terminatetheir employment with Seller to the effect that they will waive any right, ifany, against Purchaser regarding any severance, unused leave and otherobligations or claims arising from their employment relation with Seller beforethe Closing

###  

### (c)          Prior to or on the Closing, each the R&D Employees to behired by Purchaser shall have executed an employment agreement with Purchaser,to the satisfaction of Purchaser and effective as of the Closing Date, wherebysuch R&D Employee agrees to continue his/her employment with Purchaser for aperiod of at least 1.5 years from his/her commencement of new employment withPurchaser. Purchaser shall negotiate in good faith the terms and conditions ofthe employment agreement with each R&D Employee to be hired by Purchaserand shall promptly commence such negotiations with each R&D Employee assoon as practicable after the execution of this Agreement.

###  

### (d)         Purchaser shall favorably consider the implementation ofschemes to encourage the R&D Employees to remain with Purchaser followingthe Closing, such as [***].

###  

### (e)          For a period of [***] after Closing, Seller shall not solicit the employment of,or employ, any of the R&D Employees that have been hired by Purchaserpursuant to this Agreement or any other employees of Purchaser.

###  

4.3                                 Non-Competition.For a period of [***] following theClosing, Seller shall not engage in R&D, except that Seller may sellcertain CDMA products which have been Completed prior to Closing in 

 

24

----

 

each of the followingcases:

 

### (a)          With respect to the CDMA 450 products, in case ofcontractual obligations which were in existence at the time of signing of thisAgreement, Seller may satisfy such obligations provided that such obligationswill be Completed no later than June 30, 2005;

###  

### (b)         With respect to the CDMA 450 and CDMA 800/1900 productsCompleted prior to Closing, in case of contractual obligations with thirdparties entered into between signing of this Agreement and Closing and theaggregate amount of such contract(s) is equal to or less than [***], Seller may enter into suchcontractual obligations, *provided*thatsuch products will be shipped no later than June 30, 2005.

###  

### (c)          With respect to the CDMA 450 and CDMA 800/1900 productsCompleted prior to Closing, in case of contractual obligations with thirdparties entered into between signing of this Agreement and Closing in excess of US$[***] Seller may only enter into such contractual obligationswith the prior written consent of Purchaser, which consent shall not beunreasonably withheld or delayed by Purchaser, and so long as such productswill be shipped no later than June 30, 2005.

###  

### (d)         With respect to the PCMCIA card products to be sold, Sellermay sell such products up to [***] *provided*that (i) the relevantagreement with the third party is executed prior to the Closing and (ii) suchproducts will be delivered to the customer no later than June 30, 2005.Seller has no obligation to provide technical support with respect to thePCMCIA products.

###  

### (e)          With respect to existing contractual obligations withInquam, Seller shall seek the termination of such obligations prior to Closingand allow Purchaser to discuss with Inquam the possibility of establishing anew business relationship.

 

4.4                                 TechnicalSupport.  Recognizing that Sellerwill not be able to provide technical support to its existing and pastcustomers to whom it previously sold the CDMA products as a result of the AssetTransfer, Purchaser shall agree to provide technical support (limited to laborsupport) to Seller for a period of [***]following the earlier of (a) the last shipment with respect to CDMA 450products only or (b) June 30, 2005, and Purchaser shall bereimbursed for such support at [***]. Forthe avoidance of doubt, Purchaser shall have no obligation to provide materialsor repair services in connection with the foregoing technical support.

 

4.5                                 Indemnification.

 

#### (i)                                       Indemnificationby Seller. Seller hereby agrees to indemnify and hold harmless Purchaserfrom and against:

####  

##### (1)          any and all Damagesarising out of or resulting from any misrepresentation, breach of warranty ornon-fulfillment of any agreement on the part of Seller contained in thisAgreement or in any certificate, instrument, agreement or other documentfurnished or to be furnished to Purchaser pursuant hereto or in connection withthe transactions contemplated hereby;

#####  

##### (2)          anyand all Damages arising out of or resulting from any liabilities of Seller ofany nature, whether due or to become due, whether accrued, absolute, contingentor otherwise existing on the Closing Date or arising out of any transactionsentered into, or any state of facts existing,prior to such date;

#####  

##### (3)          any and all Damages arising from claims brought byR&D Employees with respect to (x) the termination or resignation oftheir employment with Seller in relation to these employees’ terms ofemployment with Seller or any Affiliate of Seller, including but not limited toclaims resulting from the increase in any employee’s wage during his or herperiod of employment with Seller, (y) any unpaid compensation for workduring overtime, days off and nighttime, and (z) any compensation forunused day(s) of annual and/or monthly leave; and

 

25

----

 

##### (4)          any secondary Tax liability of Purchaser under theNational Tax Basic Law and the Local Tax Law for the Taxes of Seller that haveaccrued prior to the Closing Date.

#####  

#### (ii)                                    Indemnificationby Purchaser. Purchaser hereby agrees to indemnify and hold harmless Sellerfrom and against any Damages arising out of or resulting from anymisrepresentation, breach of warranty or non-fulfillment of any agreement onthe part of Purchaser contained in this Agreement or in any certificate,instrument, agreement or other document furnished or to be furnished to Sellerin connection with the transactions contemplated hereby.

####  

### (b)         General IndemnificationProcedures.

###  

#### (i)                                       Purchaserand Seller shall cooperate in the defense or prosecution of any claim, action,suit or proceeding asserted against either of them by a party other than aParty hereto or an Affiliate of any Party hereto in respect of which indemnitymay be sought hereunder (a “Third Party Claim”) and shall furnish such records,information and testimony, and attend such conferences, discovery proceedings,hearings, trials and appeals, as may be reasonably requested in connectiontherewith.

####  

#### (ii)                                    Exceptas otherwise provided in this Agreement, no action or claim for Damagesresulting from breaches of the representations and warranties of Seller orPurchaser shall be brought or made after one (1) year following the Closing,except that such time limitation shall not apply to (1) claims formisrepresentations or breaches of warranty relating to Section 2.7(relating to Taxes) which may be asserted until 90 days after the running ofthe applicable statute of limitations with respect to the taxable period towhich the particular claims relates and Section 2.20 (relating to LaborRelations) which may be asserted until 90 days after the running of theapplicable statute of limitations with respect to any claims that may bebrought by a R&D Employee, (2) claims relating to EnvironmentalLiabilities that have been brought against Purchaser by third parties within five(5) years following the Closing Date and (3) any claims which have beenthe subject of a written notice from Purchaser to Seller prior to theexpiration of the applicable period under this Section 4.5(b)(vi), whichnotice specifies in reasonable detail the nature of the claim.

####  

#### (iii)                                 Notwithstandinganything to the contrary in this Section 4.4, no limitation or conditionof liability provided in this Section shall apply to the breach of any ofthe representations and warranties contained herein if such representation orwarranty was made with actual knowledge that it contained an untrue statementof a material fact or omitted to state a material fact necessary to make thestatements or facts contained therein not misleading.

####  

#### (iv)                                Ifthere shall be a judicial determination that any Party (the ”IndemnifiedParty”) seeking indemnification from another Party (the ”IndemnifyingParty”) under this Agreement is not entitled to such indemnification in theamount originally claimed by a third party, then the Indemnifying Party shallbe entitled to reimbursement from the Indemnified Party for its costs andexpenses, including reasonable attorneys’ fees, incurred in the defense of theclaim for such indemnity pro rata, to the extent that the amount awarded isless than the amount originally claimed.

####  

#### (v)                                   Followingthe receipt by either Party of a complaint initiating a lawsuit in respect of aThird Party Claim in respect of which indemnity may be sought from either Partyhereunder, within a reasonable time after such receipt, the receiving Partyshall give the other Party notice of such Third Party Claim.

####  

#### (vi)                                Purchasershall notify Seller and Seller shall notify Purchaser of any claim for Damages.Such notice shall describe, to the extent reasonably available, the nature ofthe claim, the proposed remedy and the cost to remedy or to satisfy the claim.Purchaser and Seller shall, in good faith, consult with the other Party andgive the other Party a reasonable opportunity to propose an alternative methodto remedy or satisfy the claim. Provided, however, that if the nature of theclaim is such that, in Purchaser and Seller’s judgment, the above notice andopportunity provisions could reasonably be expected to cause further Damages orwould otherwise not be appropriate under the circumstances, then the priornotice and opportunity shall not be required. Neither Purchaser nor Sellershall be required in any 

 

26

----

 

#### event to adopt the methodproposed by the other Party. Purchaser and Seller’s failure to give the otherParty the prior notice and opportunity or to adopt the method proposed, shallnot bar in any event either Party from asserting an indemnification claimagainst the other under and subject to the terms and conditions described inthis Section 4.5, but, in any such claim, the failure of either Party togive prior notice and opportunity, or to adopt the method proposed shall beadmissible evidence if either Party shall contest the reasonableness of theamount of the Damages that it may recover from the other Party.

 

#### (vii)                             Anyamounts due to Purchaser as a result of Seller’s indemnification obligationsunder this Agreement, arising from the transactions contemplated hereby,arising from any breach of any representation or warranty of Seller orotherwise may be drawn by Purchaser from the Purchase Price Escrow. If theamount of the Purchase Price Escrow is not sufficient to pay the amounts due toPurchaser, Purchaser may set off such amount from any amounts owed at any timeto Seller or its affiliates to the extent permissible under Korean law.

 

4.6                                 Confidentiality.              Fromand after the Closing, Seller shall, and shall cause its Affiliates andrepresentatives to, keep confidential and not disclose to any other Person oruse for his or its own benefit or the benefit ofany other Person any trade secrets or other confidential proprietaryinformation in its possession or control relating to the Transferred Assets.The obligations of Seller under this Section 4.6 shall not apply toinformation which (a) is or becomes generally available to the publicwithout breach of the commitment provided for in this Section; or (b) isrequired to be disclosed by law, order or regulation of a court or tribunal orgovernmental authority; *provided, however,*that,in any such case, Seller shall notify Purchaser as early as reasonablypracticable prior to disclosure to allow Purchaser to take appropriate measuresto preserve the confidentiality of such information.

 

4.7                                 Access

 

### (a)                                  Information. Seller and Purchaser shallreasonably cooperate with each other after the Closing so that (subject to anylimitations that are reasonably required to preserve any applicable attorney-clientprivilege) each Party has access without causing excessive hardship to normaloperations to the business records, contracts and other information existing atthe Closing Date and relating to Seller (whether in the possession of Seller orPurchaser) (including copies thereof) as is reasonably necessary *for*the (i) preparation *for*orthe prosecution or defense of any suit, action, litigation or administrative,arbitration or other proceeding or investigation (other-than one by *or*on behalf of a Party to this Agreement) by or againstPurchaser or Seller (ii) preparation and filing of any Tax return orelection relating to Seller and any audit by any taxing authority of anyreturns of Purchaser or Seller relating thereto, (iii) preparation andfiling of any other documents required by governmental or regulatory bodies, (iv) transferof data to Purchaser relating to Seller and (v) the preparation of anyreports necessary for their financial reporting purposes including thatrequired in connection with any registration statement or report filed byPurchaser with any governmental agency, The Party requesting such informationand assistance shall reimburse the other Party for all out-of-pocket costs andexpenses incurred by such Party in providing such information and in renderingsuch assistance. The access to files, books and records contemplated by this Section 4.7shall be during normal business hours and upon not less than two (2) BusinessDays prior written request, and shall identify the scope of the information tobe reviewed and shall be subject to such further reasonable limitations as theParty having custody or control thereof may impose to preserve theconfidentiality of information contained therein, and shall not extend tomaterial subject to a claim of privilege unless expressly waived by the Partyentitled to claim the same. The Parties mutually agree to use theircommercially reasonable efforts to cause their independent public accountantsto provide each other with any necessary or required consents in connectionwith audit of Seller.

###  

### (b)                                 Facility. For Completion of the ExistingProjects, [***]after the Closing, Seller shall be allowed to oversee the design and productionof the Existing Projects, [***].In this regard, Mr. Ho Young Kim, President of Seller or any onedesignated by him shall have reasonable access, during normal business hours,to the research and development department of Purchaser, *provided*that,(i) such access shall be limited to only the work related to the ExistingProjects, [***]and (ii) such access shall not interfere with the normal businessoperation of Purchaser.

 

27

----

 

4.8                                 Repaymentof Debt. If any acceleration clause in any -of the agreementsbetween Seller and Financial Institutions listed in Schedule 2.28****is triggered by the consummation of the transactioncontemplated by the Parties herein, Seller covenants to use that portion of thePurchase Price set forth in Section 1.3 hereto or any of its funds torepay in full such obligations unless such Financial Institution(s) that seeksacceleration and Seller enters into a new agreement for the payment of theunderlying debt, in which event Seller agrees to make payment based on the newagreement. **Schedule 4.8** lists allpayment due to creditors of Seller six (6) month after the Closing(assuming the Closing Date of December 7, 2004), which Schedule willbe updated as of the Closing Date. Seller covenants to make timely payment tothose creditors listed in **Schedule 4.8**,unless Seller and creditor(s) agree to change the payment term, in which eventSeller covenants to make payment based on the new payment term.

 

4.9                                 Assignment.This Agreement may not be assigned by operation of law or otherwise without theexpress written consent of Seller and Purchaser (which consent may be grantedor withheld in the sole discretion of Seller or Purchaser), *provided, however,*that with a prior written notice toSeller, Purchaser may assign this Agreement (including any ancillary agreementsthereto) or any of its rights and obligations hereunder to one or moreAffiliates of Purchaser without the consent of Seller. In the event of suchconsented or permitted assignment, Purchaser shall continue to remain liableunder this Agreement.

 

4.10                           Noticesof Certain Events. Following the Closing, Seller shall promptly notifyPurchaser of (a) any notice or other communication from any personalleging that the consent of such person is or may be required in connectionwith the transactions contemplated by this Agreement and any ancillaryagreements thereto, (b) any notice or other communication from anygovernmental agency in connection with the transactions contemplated by thisAgreement and any ancillary agreements thereto, and (c) any claimscommenced or, to Seller’s best Knowledge, threatened against, relating to orinvolving or otherwise affecting the R&D or the Transferred Assets that, ifpending on the ‘date of this Agreement, would have been required to have beendisclosed pursuant to this Agreement or that relate to the consummation of thetransactions contemplated by this Agreement and any ancillary agreementsthereto.

 

4.11                           FurtherAction with respect to Transferred Assets. If, after the Closing Date,Seller becomes aware of, or the Purchaser brings to the attention of Seller,any assets of Seller that should have been transferred as of the Closing Datebut were not so transferred, then such assets shall be transferred, or causedto be transferred, to the Purchaser (or to one or more Affiliates of thePurchaser designated by the Purchaser) as soon as possible. This provision,however, shall not limit, in any way, the rights and remedies of the Purchaserunder this Agreement.

 

4.12                           GoodFaith Obligations. The Parties agree to use their best efforts to take, orcause to be taken, diligently and in good faith all actions, and to do, orcause to be done, all things necessary, proper or advisable to consummate thecontemplated transaction under this Agreement.

 

**SECTION 5**

 

MISCELLANEOUS

 

5.1                                 FurtherAssurances; Cooperation. At and after the Closing, Seller will execute anddeliver such further instruments of conveyance and transfer as Purchaser mayreasonably request to convey and transfer effectively to Purchaser theTransferred Assets or to put Purchaser in actual possession and control of theR&D.

 

5.2                                 Nature-and Survival of Representations. The representations, warranties, covenantsand agreements of Purchaser and Seller contained in this Agreement, and allstatements contained in this Agreement or any Exhibit or Schedule heretoor any certificate delivered pursuant to this Agreement or in connection withthe transactions contemplated hereby, shall be deemed to constituterepresentations, warranties, covenants and agreements of the respective Partydelivering the same. Subject to Sections 4.2(e), 4.3 and 4.5, all suchrepresentations, warranties, covenants and agreements shall survive the Closingfor [***]. Except for the representationand warranties expressly contained in this Agreement, the Parties make no otherrepresentations or warranties and no additional representations and warranties 

 

28

----

 

may be implied.

 

5.3                                 Notices.All notices, requests, demands elections and other communications which eitherParty to this Agreement may desire or be required to give hereunder shall be inwriting and shall be deemed to have been duly given if delivered personally, bya reputable courier service which requires a signature upon delivery, bymailing the same by registered or certified first class mail, postage prepaid,return receipt requested, or by telecopying with receipt confirmation (followedby a first class mailing of the same) to the Party to whom the same is so givenor made. Such notice, request, demand, waiver, election or other communicationwill be deemed to have been given as of the date so delivered or electronicallytransmitted or seven days after mailing thereof.

 

If to Seller, to:                                                                      Giga Telecom, Inc.5th Floor, Sewha Building156-3 Samsung-Dong, Gangnam-GuSeoul, Korea 135-091Attn: H.Y. Kim, PresidentFacsimile: 822-558-3196

 

If to Purchaser, to:                                              UTStarcom, Inc.1275 Harbor Bay ParkwayAlameda, CA 94502Telecopy: 510-864-8802Attn: Russell L Boltwood Esq., General CounselFacsimile: 510-864-8802

 

or tosuch other address as such Party shall have specified by notice to the otherParty hereto.

 

5.4                                 Successorsand Assigns. This Agreement, and all rights and powers granted hereby, willbind and inure to the benefit of the Parties hereto and their respectivesuccessors and assigns.

 

5.5                                 GoverningLaw. This Agreement shall be governed by and construed in accordance withthe laws of Korea, without regard to its conflict of law provisions.

 

5.6                                 Heading.The headings preceding the text of the sections and subsections hereof areinserted solely for convenience of reference, and shall not constitute a partof this Agreement, nor shall they affect its meaning, construction or effect.

 

5.7                                 Amendmentand Waiver. The Parties may by mutual agreement amend this Agreement in anyrespect, and any Party, as to such Party, may (a) extend the time for theperformance of any of the obligations of any other Party, (b) waive anyinaccuracies in representations by any other Party, (c) waive complianceby any other Party with any of the agreements contained herein and performanceof any obligations by such other Party, and (d) waive the fulfillment ofany condition that is precedent to the performance by such Party of any of itsobligations under this Agreement. To be effective, any such amendment or waivermust be in writing and be signed by the Party against whom enforcement of thesame is sought.

 

5.8                                 EntireAgreement. This Agreement and the Schedules hereto, each of which is herebyincorporated herein, set forth all of the promises, covenants, agreements,conditions and undertakings between the Parties hereto with respect to thesubject matter hereof, and supersede all prior and contemporaneous agreementsand understandings, inducements or conditions, express or implied, oral orwritten.

 

5.9                                 Counterparts.This Agreement may be executed (including by facsimile transmission) in two ormore counterparts, each of which shall be deemed an original, but whichtogether shall constitute one and the same instrument.

 

29

----

 

5.10                           GoverningLanguage. The English language text of the Agreement shall prevail over anytranslation thereof.

 

5.11                           DisputeResolution. For any dispute arising under this Agreement which is notsettled after good faith attempts by the Parties to amicably resolve suchdispute, Seoul Central District Court shall have exclusive jurisdiction oversuch matters.

 

5.12                           Termination.This Agreement may be terminated upon the occurrence of any of the following events:

 

### (a)          The mutual agreement of all the Parties to terminate theAgreement;

###  

### (b)         By Purchaser in its sole discretion at any time, with orwithout cause, from the date of this Agreement until [***] before Seller’s shareholders’meeting to approve the Asset Transfer (“Walk Away Date”). Immediately followingSeller’s board of directors meeting for convening the shareholders’ meeting,Seller shall inform Purchaser of the scheduled date of the shareholders’meeting. Prior to the Walk Away Date, Purchaser shall not incur any penalty forterminating the Agreement. For the avoidance of doubt, Seller agrees not togive to the shareholders the notice for convening the shareholders’ meetinguntil further approvals/clearance from the MOCIE and MOST (including projectmodels GDB 570, GPM-3000, GDM-100, GDM-101 and GDM-530) have been obtained asprovided under Section 1.11(g).

###  

### (c)          By Purchaser in its sole discretion (i) at any timeprior to the date of the Seller’s shareholders’ meeting to approve the AssetTransfer if Purchaser determines that the MOCIE and MOST approvals/clearance(as provided in Section 1.11(g) above) is not satisfactory or (ii) by[***] prior to the date of the Seller’sshareholders’ meeting if Purchaser determine that it has not obtained assuranceto its reasonable satisfaction that any contemplated change of existing laws oradoption of new laws in connection with the export and/or use of the concernedCDMA technology (as provided in Section 1.11(g) above). Suchtermination by Purchaser shall be deemed to be termination with cause, butshall not be deemed to be (i) a breach by Seller or Purchaser and (ii) causeattributable to Seller. Neither Purchaser nor Seller shall be obligated to payany amount or reimburse the other Party for any loss incurred by it as a resultof such termination. If Purchaser fails to notify Seller of the termination ofthe Agreement under this Section 5.12(c) prior to the date of such Seller’sshareholders’ meeting, Purchaser shall be deemed to have accepted theapprovals/clearance obtained from the MOCIE and MOST and shall not terminatethis Agreement pursuant to this Section 5.12(c). Regardless of whether ornot Purchaser exercises its right to terminate this Agreement pursuant to this Section 5.12(c),it shall not in any way affect its right to terminate this Agreement under anyother provisions of this Section 5.12.

###  

### (d)         By Purchaser, without cause, after the Walk Away Date untilthe date of the shareholders’ meeting for approving this transaction, *provided*that, Purchaser shall pay Seller reasonable costsand expenses incurred by Seller as a result of terminating the Agreement in anamount not to exceed [***]and *provided further***that, if Purchaser terminates the Agreement with causeduring this period, Purchaser shall have no obligation to pay Seller the costsand expenses.

###  

### (e)          By Purchaser, without cause, after the date of theshareholder’s meeting for approving this transaction until [***] prior to Closing, *provided*that, Purchaser shall pay Seller reasonable costsand expenses incurred by Seller as a result of terminating the Agreement in anamount not to exceed [***]and *provided further***that, if Purchaser terminates the Agreement with causeduring this period, Purchaser shall have no obligation to pay Seller the costsand expenses. Purchaser may not terminate this Agreement without cause after [***] prior to the Closing exceptwhere Closing does not occur by January 31, 2005, in which case,Purchaser may at its discretion terminate this Agreement as provided under Section 5.12(f) belowunless the Parties mutually agree to extend such date.

###  

### (f)            Prior to the shareholdersmeeting to approve the Asset Transfer, Seller may terminate this transactionwithout penalty in the event that [***] or more of the total outstanding shares of Seller notifySeller of its dissent to the Asset Transfer. Seller shall use its best effortsto minimize the number of shareholders who dissent to the Asset Transfer.Except -as provided above, Seller has no right to terminate 

 

30

----

 

### this transaction prior to Closing except if Purchaser has failed tomeet a condition precedent under Section 1.10 prior to the Closing. Ifthis Agreement is terminated by Purchaser due to a material breach by Seller ofthis Agreement or if Closing does not occur by January 31, 2005 dueto causes primarily attributable to Seller (in which case, Purchaser mayterminate this Agreement at its sole discretion), Seller shall pay Purchaser abreak-up fee of [***].

 

5.13                           Severability.If at anytime subsequent to the date hereof, any term or provision of thisAgreement shall be determined by any court of competent jurisdiction to bepartially or wholly illegal, void or unenforceable, such provision shall be ofno force and effect to the extent so determined, but the illegality orunenforceability of such term or provision shall have no effect upon and shallnot impair the legality or enforceability of any other term or provision ofthis Agreement.

 

5.14                           Construction.The Parties acknowledge that each Party and its counsel have reviewed andrevised this Agreement and that any rule of construction to the effectthat any ambiguities are to be resolved against the drafting Party shall not beemployed in the interpretation of this Agreement or any amendments, schedulesor exhibits hereto.

 

5.15                           ForceMajeure. Neither Party shall be considered in default or liable for anydelay or failure to perform under this Agreement due to causes beyond itsreasonable control. Such causes may include, but not be limited to, an act ofnature, acts of the public enemy, labor disputes, strikes, unusually severe weather conditions, insurrection,riot, war (whether an actual declaration is made or not), civil commotion andother causes beyond the Party’s reasonable control. Without prejudice to Section 5.12,if force majeure prevents or delays the obligation under this Agreement, thenthe Party claiming force majeure shall promptly notify the other Party inwriting and shall use reasonable efforts and due diligence to resumeperformance of its obligations.

 

[THEREMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

31

----

 

**IN WITNESS WHEREOF,**the Parties have caused thisAgreement to be signed in their respective names by an officer thereof dulyauthorized as of the date first above written.

 

 
| UTSTARCOM  CDMA TECHNOLOGIES KOREA LIMITED |
|--------------------------------------------|
|                                       |
| By:                                        |   |   |
| Name:                                      |
| Title:                                     |
|                                       |
|                                       |
| GIGA  TELECOM, INC.                        |
|                                       |
| By:                                        | /s/ Hoyoung  Kem |   |
| Name:Hoyoung  Kem                          |
| Title:  CEO and President                  |

 

 

[SIGNATURE PAGE FOR ASSETPURCHASE AGREEMENT]

----