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Published: 2008-03-26

Contract of Loan - Bank of China and UTStarcom (Hangzhou) Telecom Co. Ltd.



                             BANK OF CHINA

                            CONTRACT OF LOAN



                     BORROWER: UTSTARCOM (HANGZHOU)
                            TELECOM CO.,LTD
                  LENDER: BANK OF CHINA ZHEJIANG BRANCH



                        Contract No.: 99BRJ195



Name of borrower: UTStarcom (Hangzhou)  Name of lender: Bank of China 
                  Telecom Co.,Ltd.                      Zhejiang Branch

Legal address:                Legal address: 320 Yan'an Rd., Hangzhou

Legal rep.:                   Legal rep.:

Bank of deposit: Bank of China Zhejiang Branch

Account No.: [*]

Tel: 8856112                  Tel: 0571-7077996

Fax: 8855203                  Fax: 0571-7132286

Telex:                        Telex: 35019 BOCHZ CN

P.C.: 310012                  P.C.: 310006


      Any notice, legal documentary as well as payment order hereunder is 
required to be made in written form. Once the telex, telegraph and fax send 
out, or seven days after the letters mail out, or once the correspondence 
that must be delivered by hand send off, those documents are considered to 
arrive the opposing party.

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY 
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT 
TO THE OMITTED PORTIONS.



                           CONTRACT OF LOAN
                        Contract No.: 99BRJ195

Borrower: UTStarcom (Hangzhou) Telecom Co.,Ltd
Lender: Bank of China Zhejiang Branch

      Whereas Borrower and Lender agree to make and fulfill this contract 
under the General Lending Rules and Regulations of Loan Contract and other 
Chinese laws and regulations concerned, it is hereby agreed as follows:

1.  Content under this contract:
   a.  Lending category: Short-term Loan
   b.  Use of Lending: Circulating
   c.  Principal RMB20,000,000(in words)
   d.  Rate of interest
      i.  RMB loan [*]
      ii. Foreign currency loan:
      Where the rate of interest is adjusted by the government, it is decided 
according to the relevant regulations.
   e.  Life of loan: Six months, (From August 17, 1999 to Feb. 16, 2000).

2.  After this Contract takes effect, the borrower shall apply for drawing 
according to the detailed drawing plan in case of using the loan in batches.

3.  Repayment. The borrower shall repay the principal and interest during the 
aforesaid conventional term. In case of installment, the borrower shall 
comply with the plan as follows:
Date:______________________, Repayment amount: _____________________
      The borrower may apply to the lender for a grace period 30 days before 
the maturity, and it can be extended with the lender's consent and the 
fulfillment of the corresponding procedure.
      The borrower may make prepayment with the consent of the lender, and 
the interest on the amount of prepayment is calculated according to the 
relevant regulations.

4.  Interest calculation.
   a.  The interest hereunder is calculated from the first day of utilizing 
on the amount that the borrower actually has used. The interest is calculated 
daily and paid quarterly.
   b.  The interest is collected actively at the interest payment day by the 
lender from the running account or any other saving account which is opened 
in the lender or one of the lender's branches.

5.  The principal, interest and corresponding fee are jointly and severally 
guaranteed by UTStarcom (China) Telecom Co.,Ltd in full, the number of the 
guarantee contract is 98BRB069. _______________ provides assets as a 
mortgage, the number of the mortgage contract is ____________. _____________
provides chattels as a pledge, the number of the pledge contract is _________.

6.  Borrower's obligations

6.1  The borrower shall open an account for settlement in the lender or in 
one of the lender's branches. Any settlement arising from this contract shall 
be processed through the aforesaid account.

6.2  The borrower shall provide monthly the lender with authentic balance 
sheet, profit and loss sheet, financial statement and the true information 
such as the name of the bank with which the borrower's account is opened, 
account number, balances of its outstanding deposits and loans, etc.

6.3  The borrower shall accept the lender's inspection and supervision on 
utilizing the loan, status of business and the financial affairs. The 
borrower shall provide the lender with the documents at the lender's request.

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY 
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT 
TO THE OMITTED PORTIONS.



6.4  The borrower shall utilize the loan according to the agreed purpose 
stipulated in this contract.

6.5  The borrower shall pay the loan interest on time and render the 
repayment on time.

6.6  In case that the borrower provides any warranty for the third party, the 
borrower shall notify the lender in advance and such warranty shall not 
affect the borrower's repayment to the lender on time.

6.7  During the period of this contract, in case that the borrower changes 
the pattern of management or the ownership construction by the means of 
contracting, leasing, pooling, transforming to stock company, establishing 
joint venture, separating, merger, foreign investment, transferring of 
ownership, resolving or any other action, the borrower shall seek the 
lender's consent and ascertain the new source of repayment or provide new 
warranties.
      If the borrower transfers partial or all the obligations under this 
contract to a third party, the borrower should obtain the lender's consent in 
writing and ascertain exactly the rights and obligations.

6.8  During the period of this contract, if the borrower changes its legal 
representative, legal address or business address the borrower shall notify 
the lender in advance.

6.9  During the period of this period, if there arises any circumstances that 
is to cause damage to the lender's credit, the borrower shall inform the 
lender in time and take measures to protect the lender's right.

7.   Default responsibilities

7.1  If the borrower breaches any part of the aforesaid obligations, the 
lender has the right of collecting all amounts payable hereunder by the 
borrower before it's due, freezing the balance of the loan which the borrower 
has not utilized, taking the measures of credit punishment as well as 
bringing a lawsuit.

7.2  The lender has the right of charging a penalty fine according to 
stipulations promulgated by the People's Bank of China or the Bank of China 
if the borrower can not render the repayment during the loan period or the 
extension of the loan.

7.3  If the borrower do not utilize the loan for purpose specified in this 
contract or engross and embezzle the loan, the lender can impose additional 
interest according to the stipulations promulgated by the People's Bank of 
China or the Bank of China.

7.4  The borrower shall pay interest calculated on the basis of the unpaid 
due interest at the exact interest rate of this loan or if the borrower do 
not pay the due interest in full, the lender has the right of charging the 
interest calculated on the basis of unpaid due interest according to the 
stipulations promulgated by the People's Bank of China or the Bank of China.

8.   The borrower shall pay all expenses arising out of or in connection with 
the contract, as well as the expenses incurred by the lender in collecting 
its loan. Such expenses shall include, but shall not be limited to the 
assessment fee, auction fee, lawyer's fee, investigation fee, and costs for 
assignment of assets, taxes, etc.

9.   During the period of this contract, the lender may collect all amounts 
payable hereunder by the borrower before it is due or terminate the contract, 
where the borrower or the guarantor is or may be in financial difficulties, 
or withdraws or transfers its capital and assets without consent of the 
lender, or involves in any disputes with a third party and the estates under 
mortgage/pledge destroyed or lose, or any such events may endanger the safety 
of the loan. Where the lender collects partial or all amount hereunder before 
due according to this contract, laws and regulations, the borrower and the 
guarantor voluntarily waiver the right of defense against the lender, and the



lender has the right to transfer the amount directly to its own from the 
borrower's or the guarantor's bank account.

10.  The loan receipt, guarantee/mortgage/pledge contract, application for 
loan and any other documents hereunder are parts of this contract, and have 
the same legal effect as this contract.

11.  Other agreements upon by and between parties.
    a.
    b.
    c.

12.  The contract is governed by China law and under the jurisdiction of the 
court in the lender's domicile place.

13.  The contract takes effect from and after the legal representatives or 
agents of all parties sign and affix their companies' seal, and terminates as 
soon as the borrower pays off the amount hereunder in full.

14.  The original of the contract is triplicate which the lender takes two 
and the borrower takes one.

The borrower:                      The lender: Bank of China Zhejiang Branch

Legal rep.(agent):                 Legal rep.(agent):

Sign(Seal):                        Sign(Seal):

Date of the Contract: August 17, 1999

Place of the Contract: Hangzhou