Exhibit
10.98


 


[***].  Confidential Treatment Requested – Certain
information in this exhibit has been omitted and filed separately with the
commission.  Confidential treatment has
been requested with respect the omitted portions.


 


SUBSCRIBER UNIT

LICENSE AGREEMENT


 


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


 


RECITALS


 


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


 


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


 


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


 


AGREEMENT


 


NOW
THEREFORE, the Parties hereby agree as follows:


 


1.                                       HEADINGS AND DEFINITIONS.


 


All
headings used in this Agreement are inserted for convenience only and are not
intended to affect the meaning or interpretation of this Agreement or any
clause.  Reference to “third party” or
“third parties” shall not mean either Party or their Affiliates.  For the purpose of this Agreement, the
following definitions apply:


 


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


 
















 


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


 


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


 


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


 


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


 


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


 


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


 


“Common
Air Interface” or “CAI” means (i) the TIA’s IS-95 digital cellular standard and
other CDMA standards which specify the same Physical Layer as lS-95 if approved
by QUALCOMM and adopted by other international standards bodies throughout the
world, and (ii) the technical description of any third generation CDMA air
interface standard for communication between cell site or other base station
transceivers and Subscriber units which (a) is adopted as an industry standard
by the Telecommunications Industry Association (“TIA”), the European
Telecommunication Standards Institute (“ETSI”), Japan’s Association of Radio
Industries and Businesses (“ARIB”) or other recognized international standards
bodies, (b) has been approved by QUALCOMM (i.e., QUALCOMM voted in favor
of adopting such standard), (c) supports operation with both GSM MAP and
ANSI-41 networks in all operational (whether optional or


 


2
















 


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


 


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


 


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


 


“Dual
Mode CDMA” means, as applied to Subscriber Units, having a capability to
operate with CDMA technology and existing analog FM cellular technology for
backward compatibility with analog FM cellular infrastructure and subscriber
units.


 


“Effective
Date” means the date first set forth above.


 


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


 


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


 


“Future
Commercially Necessary IPR” means all claims of any patents (foreign and
domestic) which fall within the definition of Commercially Necessary IPR, but
which do not fall within the definition of Included Commercially Necessary IPR.


 


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


 


(i)                                     LICENSEE
owns and supplies the designs, or specifications, or working drawings to such
third party;


 


(ii)                                  such designs, specifications, and working drawings are in
sufficient detail that no substantial additional design by such third party is
required;


 


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


 


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


 


3
















 


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


 


“Intellectual
Property Rights” means patents, copyrights, trade secrets, know-how and other
intellectual property rights.


 


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


 


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


 


“InterDigital’s
Five Patents” means [***].


 


“InterDigital
Included Patents” means [***].


 


“InterDigital’s
Patents” means [***].


 


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


 


“Licensed
Customer” means a person or entity that is licensed by QUALCOMM under any or
all of QUALCOMM’s Intellectual Property to make and sell Subscriber Units that
comply with or implement one or more of the air interface standards included in
the CAI (each such license agreement between QUALCOMM and a Licensed Customer
shall hereinafter be referred to as an ”LC
License Agreement”).


 


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


 


“LICENSEE’s
Intellectual Property” means LICENSEE’s Technically Necessary IPR and
LICENSEE’s Included Commercially Necessary IPR.


 


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


 


“Net
Selling Price”, with respect to each Subscriber Unit Sold by LICENSEE, shall
mean one of the following, whichever is applicable:


 


4
















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Physical
Layer” shall have the same meaning given to it in the TIA’s IS-95 digital
cellular standard.


 


“QUALCOMM”
means QUALCOMM Incorporated, a Delaware corporation.


 


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


 


“Qualifying
Subscriber Unit” means a Subscriber Unit which contains and incorporates a CDMA
ASIC purchased by LICENSEE from QUALCOMM.


 


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


 


“Selling
Price” means the gross selling price and/or value of other consideration
charged by the LICENSEE or its final vendee Related Buyer for each Subscriber
Unit in the form in which it is Sold (whether or not assembled and without
excluding therefrom any Components or subassemblies thereof which are included
with such Subscriber Unit) deducting therefrom only the following items [***].


 


5
















 


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


 


“Subscriber
Unit” means a complete CDMA and/or Dual Mode CDMA telephone, including but not
limited to mobile, transportable and portable telephones, which incorporates
all or any part of QUALCOMM’s Intellectual Property and can be used, without
any additional equipment or components being attached thereto, to initiate
and/or receive Wireless telecommunications transmissions in accordance with the
CAI.


 


“Technically
Necessary IPR” means all claims of any patents (foreign and domestic), issued
on, prior to or after the Effective Date which (i) the Party and/or its
Affiliates has the right to license to the other Party without payment of
royalties or any other consideration to any third party and (ii) are essential
to the manufacture, use or sale of Subscriber Units and/or Components which
comply with the specifications of the CAI (i.e., must be infringed upon in
order to comply with the CAI); but the term Technically Necessary IPR does not
include any trade name, trademark, service mark, or similar symbols,
abbreviation, contractions or simulations identifying the Party and its
Affiliates (except as set forth in Section 8, if the Party is QUALCOMM).


 


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


 


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


 


2.                                       TERM OF AGREEMENT.


 


This
Agreement shall commence upon the Effective Date and, unless otherwise
terminated or canceled as provided herein, shall continue in full force and
effect thereafter.


 


3.                                       LICENSE FEES TO QUALCOMM.


 


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


 


4.                                       TECHNICAL ASSISTANCE.


 


4.1                                 Technical Meetings and Assistance.  Upon LICENSEE’s reasonable
advance written request, QUALCOMM shall provide reasonable amounts of technical
assistance to LICENSEE on an as available basis and at QUALCOMM’s then standard
rates for providing such technical assistance. 
In such event, QUALCOMM shall be permitted to invoice LICENSEE for such
charges on a bi-weekly basis.  Payment by
LICENSEE with respect to such invoices shall be on [***] basis after the date
of the invoice.  QUALCOMM may terminate
such additional technical assistance at any time upon written notice to
LICENSEE.  This Agreement


 


6
















 


shall not require QUALCOMM to provide any technical assistance relating to
the design of Components or any technical assistance not related to Subscriber
Units.


 


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


 


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


 


5.                                       QUALCOMM LICENSE.


 


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


 


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


 


7
















 


LICENSEE will not engage in any
transaction(s) that facilitate the Sale, whether directly or indirectly, of any
Subscriber Units to a Licensed Customer, except as expressly provided for in
this Section 5.1.1.


 


5.1.2                        InterDigital’s Patents.  The license granted by
QUALCOMMM under Section 5.1 with respect to InterDigital’s Patents is
subject to all other limitations set forth in this Agreement which are
applicable to all of QUALCOMM’s Intellectual Property licensed hereunder and is
also subject to the following limitations:


 


[***].


 


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


 


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


 


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


 


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


 


QUALCOMM
will credit to LICENSEE the amount of any overpayment of royalties made
hereunder in error provided that such overpayment is identified and fully
explained in a written notice from LICENSEE to QUALCOMM delivered no later than
[***] after the due date of the payment which included such alleged
overpayment, provided further that QUALCOMM is able to verify to its own
satisfaction the existence and extent of such overpayment. The foregoing
procedure shall constitute the sole basis for LICENSEE to claim overpayments
under this Agreement and shall not be affected by any statement appearing on
any check, royalty report, cover letter, or other document, except to the
extent agreed upon by QUALCOMM in a writing signed by an authorized
representative of QUALCOMM.


 


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


 


8
















 


its Affiliates fails under any such sublicense to honor and comply with
all obligations of LICENSEE as though said obligations were made expressly
applicable to the Affiliate.  Any
sublicense by LICENSEE to an Affiliate of LICENSEE shall terminate immediately
if such Affiliate ceases to be an Affiliate of LICENSEE.  Except as set forth above, LICENSEE shall
have no right to sublicense any of QUALCOMM’s Intellectual Property or any of
the rights conferred upon LICENSEE under this Agreement.


 


5.4                                 [***].


 


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


 


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


 


5.7                                 [***].


 


5.8                                 Ericsson Patents.


 


5.8.1                        Ericsson Patents [***].


 


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


 


5.8.3                        [***].


 


5.9                                 [***]


 


6.                                       LICENSEE’S LICENSE.


 


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


 


9
















 


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


 


6.2                                 Right To Sublicense Affiliates.  In addition to
Section 6.3, QUALCOMM and the Successor shall have the right to grant sublicenses
only to Affiliates of QUALCOMM or the Successor, respectively, with respect to
any rights conferred upon QUALCOMM or the Successor under this Agreement;
provided, however, that way such sublicense shall be subject in all respects to
the restrictions, exceptions, termination provisions, and other provisions
contained in this Agreement.  QUALCOMM
(or the Successor), in addition to its Affiliates, shall be responsible and
liable to LICENSEE in the event that any of its Affiliates fails under any such
sublicense to honor and comply with all obligations of QUALCOMM (or the
Successor) as though said obligations were made expressly applicable to the
Affiliate.  Except as set forth above,
QUALCOMM and the Successor shall have no right to sublicense any of LICENSEE’s
Intellectual Property.  Any sublicense by
QUALCOMM or the Successor to an Affiliate of QUALCOMM or the Successor shall
terminate immediately if such Affiliate ceases to be an Affiliate of QUALCOMM
or the Successor, as the case may be.


 


6.3                                 [***].


 


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


 


6.5                                 LICENSEE Representation and Warranty.  LICENSEE hereby represents and
warrants that LICENSEE has the authority on its own behalf and on behalf of
LICENSEE’s Affiliates to grant the licenses and covenants provided under this
Section 6.


 


7.                                       BEST EFFORTS TO MARKET AND SELL.


 


LICENSEE
shall use its best efforts to market, promote and sell Subscriber Units on a
worldwide basis.


 


8.                                       MARKING; LABEL.


 


8.1                                 Patent Markings.  LICENSEE agrees to affix to the exterior or
the interior of the transceiver unit of each Subscriber Unit and the package
containing such Subscriber Unit a legible notice reading:  “Licensed by QUALCOMM Incorporated under one
or more of the following Patents,” followed by a list of applicable patent
numbers taken from the list of QUALCOMM’s patents or as may otherwise be
instructed by QUALCOMM.


 


8.2                                 Logo.  Attached hereto as Exhibit A is the CDMA
designated logo (the ”Logo”).  The Parties agree that QUALCOMM is the owner
of the Logo.  QUALCOMM claims all common
law trademarks in the Logo and has filed, or will file, applications to obtain
trademark registration for the Logo.  If,
for whatever reason, registrations are not granted or use of the Logo


 


10
















 


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


 


8.3                                 Logo Display.  Unless otherwise notified by QUALCOMM as set
forth in Section 8.2 above, LICENSEE shall prominently display the Logo on
the exterior of each Subscriber Unit Sold by it.  The exact exterior location and size shall be
subject to LICENSEE’s reasonable discretion, provided that the Logo shall be
readable and shall be permanently affixed. The Logo shall be designed to remain
visibly displayed on the exterior of the Subscriber Unit


 


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


 


9.                                       QUALITY CONTROL.


 


9.1                                 General Quality of Subscriber Units.  Throughout the term of this
Agreement, LICENSEE shall maintain, for the Subscriber Units manufactured or
Sold by it, at least the same manufacturing, servicing and quality standards
currently utilized by LICENSEE in connection with its other subscriber units.


 


9.2                                 Standards Compliance Testing.  LICENSEE represents and
warrants that the Subscriber Units and Components that it makes or has made will
adhere with and conform to, in all respects, the specifications contained in
the CAI implemented by such Subscriber Units and adopted in the territory in
which such Subscriber Units are intended to be used and that LICENSEE shall
comply with the rules, regulations or other requirements set by such authorized
standards body.  LICENSEE shall, at
QUALCOMM’s reasonable written request, permit QUALCOMM or entities designated
by QUALCOMM and accepted by LICENSEE, which acceptance shall not be
unreasonably withheld or delayed, to perform tests of LICENSEE’s Subscriber
Units to ensure compliance and conformity with the applicable CAI.  If such tests indicate material noncompliance
or nonconformity therewith, such tests shall be at LICENSEE’s cost and LICENSEE
shall reimburse QUALCOMM for any such reasonable tests performed by QUALCOMM at
QUALCOMM’s then standard rates for such services; provided that the total fees
for each such test performed shall not exceed [***] for each test.  Nonconforming Subscriber Units, if any, shall
not be sold or marketed by LICENSEE until the non-conformity is corrected.


 


10.                                 INFORMATION.


 


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


 


11
















 


Party and may be used by the receiving
Party only as follows.  Such Information (a) shall
not be reproduced or copied, in whole or part, except for use as expressly
authorized in this Agreement; and (b) shall, together with any full or
partial copies thereof, be returned or destroyed when no longer needed or upon
any termination of this Agreement, and (c) shall be disclosed only to
employees or agents of a Party with a need to know. Moreover, such Information
shall be used by the receiving Party only for the purpose of performing under
this Agreement or in the exercise of its rights it may receive under the
provisions of this Agreement.  Unless the
furnishing Party consents in this Agreement or otherwise in writing, such
Information shall be held in strict confidence by the receiving Party.  The receiving Party may disclose such Information
to other persons, upon the furnishing Party’s prior written authorization, but
solely to perform acts which this clause expressly authorizes the receiving
Party to perform itself and further provided such other person agrees in
writing (a copy of which writing will be provided to the furnishing Party at
its request) to the same conditions respecting use of Information contained in
this clause and to any other reasonable conditions requested by the furnishing
Party.  These restrictions on the use or
disclosure of Information shall not apply to any Information:  (i) which can be proven to be or have been
independently developed by the receiving Party or lawfully received free of
restriction from another source having the right to so furnish such Information;
or (ii) after it has become generally known to the public without breach of
this Agreement by the receiving Party; or (iii) which at the time of
disclosure to the receiving Party was known to such Party free of restriction
and clearly evidenced by documentation in such Party’s possession; or (iv)
which the disclosing Party agrees in writing is free of such restrictions; or
(v) which is the subject of a subpoena or other legal or administrative demand
for disclosure or is disclosed in response to a valid order of a court or other
governmental body, but only to the extent of and for the purposes of such
demand or order; provided, however, that such receiving Party shall first
notify the furnishing Party in writing of the demand or order and permit and cooperate
with the furnishing party in seeking an appropriate protective order (or an
equivalent mechanism for protecting such Information in the relevant
jurisdictions).


 


10.2                           Scope of Information.  Information is subject to this
Section 10 whether delivered orally or in tangible form and without regard
to whether it has been identified or marked as confidential or otherwise
subject to this Section 10.  Each
Party agrees to use its best efforts to mark or otherwise identify proprietary
all Information they desire to be subject to the terms of this clause before
furnishing it to the other Party.  And,
upon request, a Party shall promptly identify whether specified information
must be held by the requesting Party subject to this clause.


 


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


 


12
















 


11.                                 DISCLAIMER/ LIMITATION OF LIABILITY.


 


11.1                           EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, QUALCOMM MAKES NO
WARRANTIES IN THIS AGREEMENT AS TO PRODUCTS, TECHNOLOGY, MATERIALS, SERVICES,
INFORMATION OR OTHER ITEMS IT FURNISHES TO LICENSEE, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, OR THAT SUCH ITEMS ARE FREE FROM THE RIGHTFUL CLAIM OF ANY
THIRD PARTY, BY WAY OF INFRINGEMENT OR THE LIKE.


 


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


 


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


 


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


 


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


 


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


 


13
















 


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


 


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


 


13.                                 TERMINATION.


 


13.1                           Termination For Cause by QUALCOMM. 
QUALCOMM may terminate this Agreement, by written notice to LICENSEE, if
LICENSEE shall at any time default in the payment hereunder or the making of
any report hereunder, or shall commit any material breach of any covenant,
representation, warranty or agreement herein contained, or shall make any false
report to QUALCOMM; provided, however, that in the case of any such breach
which is capable of being cured, QUALCOMM shall not have a right to terminate
this Agreement for cause unless and until LICENSEE shall have failed to remedy
any such default, breach or report within thirty (30) days after written notice
thereof by QUALCOMM.  LICENSEE shall be
able to effectuate such cure with respect to a default in the making of any
report or payment of any amounts due hereunder no more than three times during
the term of his Agreement.  Upon
termination of this Agreement for cause, LICENSEE shall duly account to
QUALCOMM for all royalties and other payments within ten days of such
termination.


 


13.2                           Termination For Cause by LICENSEE. 
LICENSEE may terminate this Agreement, by written notice to QUALCOMM, if
QUALCOMM shall commit any material breach of any material covenant,
representation, warranty or agreement herein contained; provided, however, that
in the case of any such breach which is capable of being cured, LICENSEE shall
not have a right to terminate this Agreement for cause unless and until
QUALCOMM shall have failed to remedy any such material breach within
thirty (30) days after receipt by QUALCOMM of written notice thereof by
LICENSEE.


 


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


 


14
















 


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


 


13.5                           Rights Upon Termination. 
Upon any termination of this Agreement all licenses granted by QUALCOMM
hereunder shall also terminate and LICENSEE shall immediately cease using any
of QUALCOMM’s Intellectual Property and return or destroy all information and
documentation furnished by QUALCOMM to LICENSEE. The licenses granted by
LICENSEE hereunder shall survive the termination of this Agreement and remain
in full force and effect thereafter until all of LICENSEE’s Intellectual
Property has expired; except that, upon termination of this Agreement by
LICENSEE for cause, all licenses granted by LICENSEE hereunder shall also
terminate and QUALCOMM shall immediately cease using any of LICENSEE’s
Intellectual Property.  Any termination
or expiration of this Agreement under this Section 13 shall not relieve
LICENSEE from its obligation under Section 14 hereof to make a report or
from its liability for payment of royalties on Subscriber Units Sold on or
prior to the date of such termination and shall not prejudice the right to
recover the full amount of the Up-Front License Fee and any royalties or other
sums due or accrued at the time of such termination and shall not prejudice any
cause of action or claim accrued or to accrue on account of any breach or
default.  Furthermore, any termination of
this Agreement under this Section shall not prejudice the right of
QUALCOMM to conduct a final audit of the records of LICENSEE in accordance with
the provisions of Section 14 hereof. 
No termination hereunder shall limit the rights of LICENSEE to sell
those Subscriber Units in inventory or in process at the time of termination,
subject to payment of the royalty applicable to the sale of such Subscriber
Units and continued compliance with the other provisions of this Agreement.


 


14.                                 RECORDS AND AUDITS.


 


14.1                           Records. LICENSEE
shall keep accurate and complete books and records concerning any Subscriber
Units it may sell, under this Agreement. 
As applicable, such books and records shall include the date of
transaction involving sales of Subscriber Units, including the number of items
Sold.  LICENSEE shall require in its
agreements with sublicensees that each sublicensee agree to record keeping and
audits substantially the same as described in this Section 14.  LICENSEE hereby agrees to conduct periodic
audits of its sublicensees as requested by QUALCOMM.  The results of such audits (together with all
supporting information) shall be included in the records described herein and
subject to audit by QUALCOMM as provided in this Section.  QUALCOMM shall be an intended third party
beneficiary of LICENSEE’s rights of audit with respect to its sublicensees,
with all proper authority to enforce such rights directly against any such
sublicensee.  LICENSEE’s agreements with
its sublicensees shall expressly state these third party beneficiary
rights.  LICENSEE shall furnish QUALCOMM
within thirty (30) days after the end of each calendar quarter a certificate,
in the form attached hereto as Exhibit B, signed by a responsible official
of LICENSEE showing the transactions and corresponding amounts during said
calendar quarter and any other information as may be reasonably requested by
QUALCOMM.


 


15
















 


14.2                           Audits.  QUALCOMM may, no more than once each calendar
year, conduct (itself and/or through its agent) an audit on reasonable notice
of LICENSEE’s applicable books and records to confirm that LICENSEE has not
underpaid the royalties due to QUALCOMM in fulfilling LICENSEE’s obligations
under the terms and conditions set forth in Section 5.2 above. QUALCOMM’s
written notice to LICENSEE of QUALCOMM’s intention to audit LICENSEE’s books
and records shall include a proposed commencement date for such audit, such
proposed commencement date to be no earlier than thirty (30) days after
the date of such notice.  LICENSEE agrees
to allow the audit to commence no later than thirty (30) days after QUALCOMM’s
proposed audit commencement date. 
LICENSEE further agrees to have assembled in a single location the
necessary books and records for such audit to be carried out and shall make
available such personnel as are reasonably necessary to interpret and explain
such books and records.  The cost of such
audit shall be borne by QUALCOMM, other than LICENSEE’s cost of providing its
books, records and personnel, unless such audit determines that the LICENSEE
has underpaid the royalties due hereunder by [***]; in which case, LICENSEE
shall, in addition to paying the deficiency plus late payment charges, pay the
cost of such audit. LICENSEE shall preserve and maintain all such books and
records required for audit for a period of five (5) years after the
calendar quarter for which the books and records apply.


 


15.                                 ASSIGNMENT.


 


Except
as provided in this clause, LICENSEE shall not assign this Agreement or any
right or interest under this Agreement, nor delegate any work or obligation to
be performed under this Agreement (an ”assignment”),
without QUALCOMM’s prior written consent, which consent shall be at QUALCOMM’s
sole discretion.  Any attempted
assignment in contravention of this Section 15 shall be void and
ineffective.  For purposes of this Agreement,
an ”assignment” by LICENSEE under this
Section shall be deemed to include, without limitation, the
following:  (a) a change in the
beneficial ownership of LICENSEE of greater than fifty percent (50%) (whether
in a single transaction or a series of related transactions) if LICENSEE is a
partnership, trust, limited liability company or other like entity;
(b) the acquisition of more than fifty percent (50%) of any class of
LICENSEE’s voting stock (or any class of non-voting security convertible into
voting stock) by a third party (whether in a single transaction or series of
related transactions) resulting in an effective change of control of LICENSEE;
or (c) the sale of more than fifty percent (50%) of LICENSEE’s assets
(whether in a single transaction, or series of related transactions).


 


16.                                 COMPLIANCE WITH U.S. REGULATIONS.


 


Nothing
contained in this Agreement shall require or permit LICENSEE or QUALCOMM to do
any act inconsistent with the requirements of (a) the regulations of the United
States Department of Commerce, or (b) the foreign assets controls or foreign
transactions controls regulations of the United States Treasury Department, or
(c) of any similar United States law, regulation or executive order as the same
may be in effect from time to time.  To
enable QUALCOMM to export QUALCOMM’s Intellectual Properly or technical data to
LICENSEE in compliance with the requirements of the Export Administration
Regulations (EAR), LICENSEE hereby gives its assurance to QUALCOMM that
LICENSEE will not re-export or otherwise disclose, directly or indirectly, any
of QUALCOMM’s Intellectual Property or “technical data” received from QUALCOMM,
nor allow the direct product thereof to be shipped


 


16
















 


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


 


	
  Albania

  	
   

  	
  Libya

  
	
  Afghanistan

  	
   

  	
  Lithuania

  
	
  Angola

  	
   

  	
   

  
	
  Armenia

  	
   

  	
  Macau

  
	
  Azerbaijan

  	
   

  	
  Moldova

  
	
  Belarus

  	
   

  	
  Mongolia

  
	
  Bulgaria

  	
   

  	
  North Korea

  
	
  Cambodia

  	
   

  	
  People’s Republic of China

  
	
  Cuba

  	
   

  	
  Romania

  
	
  Estonia

  	
   

  	
  Russia

  
	
  Georgia

  	
   

  	
  Sudan

  
	
  Iran

  	
   

  	
  Syria

  
	
  Iraq

  	
   

  	
  Tajikistan

  
	
  Kazakhstan

  	
   

  	
  Turkmenistan

  
	
  Kyrgystan

  	
   

  	
  Ukraine

  
	
  Laos

  	
   

  	
  Uzbekistan

  
	
  Latvia

  	
   

  	
  Vietnam

  



 


LICENSEE
agrees that no products, proprietary data, know-how, software, or other
information received from QUALCOMM will be directly employed in missile
technology, sensitive nuclear, or chemical biological weapons end uses or by
such end users.  The foregoing
obligations are U.S. legal requirements, and therefore, such obligations shall
survive any termination of this Agreement.


 


17.                                 PUBLICITY.


 


Each
Party shall submit to the other proposed copy of all advertising wherein the
name, trademark, code, specification or service mark of the other Party is
mentioned; and neither Party shall publish or use such advertising without the
other’s prior written approval.  Such
approval shall be granted or withheld as promptly as possible (usually within
ten (10) days), and may be withheld only for good cause.


 


18.                                 SURVIVAL OF OBLIGATIONS.


 


The
Parties’ rights and obligations which, by their nature, would continue beyond
the termination, cancellation, or expiration of this Agreement, including but
not limited to those rights and obligations of the parties set forth in
Section 10 entitled “INFORMATION,” shall survive such termination,
cancellation, or expiration.


 


19.                                 SEVERABILITY.


 


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


 


17
















 


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


 


20.                                 NON-WAIVER


 


No
waiver of the terms and conditions of this Agreement, or the failure of either
Party strictly to enforce any such term or condition on one or more occasions
shall be construed as a waiver of the same or of any other term or condition of
this Agreement on any other occasion.


 


21.                                 NOTICES.


 


All
notices, requests, demands, consents, agreements and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be mailed to the Party to whom notice is to be given, by facsimile, and
confirmed by first class mail, postage prepaid, and properly addressed as
follow (in which case such notice shall be deemed to have been duly given on
the day the notice is first received by the Party):


 


	
  QUALCOMM Incorporated

  5775 Morehouse Drive

  San Diego, CA  92121-1714

  	
   

  	
  UTStarcom, Inc. 1275

  Harbor Bay Parkway

  Alameda, CA  94502

  
	
   

  	
   

  	
   

  
	
  Facsimile No.: 
  (858) 658-2500

  Telephone No.:  (858) 587-1121

  Attn:  President

  	
   

  	
  Facsimile No.: 
  (510) 864-8802

  Telephone No.:  (510) 864-8800

  Attn:  Russell Boltwood

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  General Counsel

  	
   

  	
  with a copy to:

  General Counsel

  



 


The
above addresses can be changed by providing notice to the other Party in
accordance with this Section.


 


22.                                 PUBLICATION OF AGREEMENT.


 


Except
as may otherwise be required by law or as reasonably necessary for performance
hereunder, each Party shall keep this Agreement and its provisions
confidential, and shall not disclose this Agreement or its provisions without
first obtaining the written consent of the other Party, which consent shall not
be unreasonably withheld.  The
confidentiality obligations hereunder do not apply to the existence of this
Agreement or the fact that QUALCOMM and LICENSEE have executed this Agreement,
but do apply to the terms and conditions of this Agreement.  Any press release or other announcement by
either Party concerning the entering into of this Agreement shall be subject to
the prior written approval of other Party, which approval shall not be
unreasonably withheld.  In case a press
release or other public announcement to the effect of the Parties’ entering
into of this Agreement is issued by either Party pursuant to the preceding
sentence, (i) QUALCOMM may thereafter make a press release or other public
announcement to the effect that LICENSEE is one of QUALCOMM’S licensees for
Subscriber Units without prior written approval of LICENSEE and (ii) LICENSEE
may


 


18
















 


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


 


23.                                 APPLICABLE LAW; VENUE.


 


This
Agreement is made and entered into in the State of California and shall be
governed by and construed and enforced in accordance with the laws of the State
of California without regard to conflict of laws principles.  Any dispute, claim or controversy arising out
of or relating to this Agreement, or the breach or validity hereof, except for
those disputes expressly addressed in Section 24 hereof, shall be
adjudicated only by a court of competent jurisdiction in the county of San
Diego, State of California.


 


24.                                 DISPUTES RELATING TO FOREIGN PATENTS.


 


Any
controversy, claim or dispute (separately or collectively, the ”Dispute”)
as to whether a product manufactured and/or sold by LICENSEE outside the United
States would, but for the license granted hereunder, infringe any foreign
patent of QUALCOMM licensed hereunder and therefore is subject to royalties
hereunder, shall be resolved in accordance with the procedures specified in
this Section 24 which shall be the sole and exclusive procedures for the
resolution of any such Dispute.


 


The
Parties will attempt in good faith to resolve promptly any Dispute by
negotiations between senior executives of the Parties who have the authority to
settle the Dispute.  If the Dispute is
not resolved within thirty (30) days of a party’s written request for negotiation,
either party may initiate arbitration as hereinafter provided.


 


A
Party desiring to commence arbitration shall provide written notice to the
other Party setting forth the Dispute(s) to be arbitrated.  Within ten (10) days of receipt of such
written notice, the Parties will attempt in good faith to reach agreement on an
impartial arbitrator having as nearly as practicable the following
qualifications in order of importance: 
(1) at least ten years experience in patent litigation, including substantial
participation in at least two patent trials, and/or ten years experience in
patent prosecution in the telecommunications field and/or at least three years
experience as a Federal Court of Appeals or District Court Judge, (2) expertise
in the field of digital spread spectrum communications as applied to the
telecommunications industry, and (3) some familiarity with the patent laws of
the country or countries at issue in the Dispute. In the event the Parties are
unable to agree upon an arbitrator within thirty (30) days of the above written
notice, the arbitrator shall be selected by Judicial Arbitration and Mediation
Service/Endispute, Inc. or some similar company if the Judicial Arbitration and
Mediation. Service/Endispute, Inc. is not available).  The selected arbitrator shall be impartial
and shall have, as nearly as practicable, the qualifications set forth
above.  The Parties will share equally
the fees and expenses of the arbitrator.


 


The
arbitration hearing shall commence in San Diego within 60 days of the
appointment of the arbitrator.  The
Parties shall be entitled to conduct discovery prior to the arbitration


 


19
















 


hearing in accordance with the
Federal Rules of Civil Procedure, subject to any limitations ordered by
the arbitrator.


 


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


 


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


 


25.                                 LATE CHARGE.


 


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


 


26.                                 ATTORNEYS’ FEES.


 


In
the event of any proceeding to enforce the provisions of this Agreement, the
prevailing Party (as determined by the court) shall be entitled to reasonable
attorneys’ fees as fixed by the court.


 


27.                                 ENTIRE AGREEMENT.


 


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


 


28.                                 INDEPENDENT CONTRACTORS.


 


The
relationship between QUALCOMM and LICENSEE is that of independent
contractors.  QUALCOMM and LICENSEE are
not joint venturers, partners, principal and agent,


 


20
















 


master and servant, employer or
employee, and have no other relationship other than independent contracting
parties.


 


29.                                 U.S. DOLLARS.


 


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


 


30.                                 FORCE MAJEURE


 


Neither
Party shall be in default or liable for any loss or damage resulting from
delays in performance or from failure to perform or comply with terms of this
Agreement (other than the obligation to make payments, which shall not be
affected by this provision) due to any causes beyond its reasonable control,
which causes include but are not limited to Acts of God or the public enemy;
riots and insurrections; war; fire; strikes and other labor difficulties
(whether or not the party is in a position to concede to such demands);
embargoes; judicial action; lack of or inability to obtain export permits or
approvals, necessary labor, materials, energy, components or machinery; and
acts of civil or military authorities.


 


IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the Effective Date. This Agreement may be signed in counterpart.


 


	
  QUALCOMM
  Incorporated

  	
  UTStarcom,
  Inc.

  
	
   

  	
   

  
	
  BY:

  	
    /s/ 

  	
   

  	
  BY:

  	
    /s/ Hong Liang Lu

  	
   

  
	
   

  	
   

  
	
  TITLE:

  	
   

  	
   

  	
  TITLE:

  	
   

  	
   

  
								



 


21
















 


Subscriber
Unit License Agreement


 


Section 6.3
Notice


 


[***]


 
















 


Subscriber
Unit License Agreement


 


Section 8.1
Notice


 


Please
affix to the exterior or the interior of the transceiver unit of each
Subscriber Unit and the packaging containing such Subscriber Unit a legible
notice reading:


 


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


 


	
  4,901,307

  	
   

  	
  5,490,165

  	
   

  	
  5,056,109

  	
   

  	
  5,504,773

  	
   

  	
  5,101,501

  	
   

  	
  5,778,338

  
	
  5,506,865

  	
   

  	
  5,109,390

  	
   

  	
  5,511,073

  	
   

  	
  5,228,054

  	
   

  	
  5,535,239

  	
   

  	
  5,710,784

  
	
  5,267,261

  	
   

  	
  5,544,196

  	
   

  	
  5,267,262

  	
   

  	
  5,568,483

  	
   

  	
  5,337,338

  	
   

  	
  5,659,569

  
	
  5,600,754

  	
   

  	
  5,414,796

  	
   

  	
  5,657,420

  	
   

  	
  5,416,797”