Hangzhou Nantian Starcom Communication Equipment Co. Ltd. Joint Venture Contract - Zhejiang Nantian Post and Telecommunication Development Group Co. Ltd. and UTStarcom Inc.


                    HANGZHOU NANTIAN STARCOM COMMUNICATION
                              EQUIPMENT CO. LTD.



                                   CONTRACT







CONTENT


1.    Chapter one                       General rules

2.    Chapter two                       Parties of joint venture

3.    Chapter three                     Establishment of the Joint Venture Company

4.    Chapter four                      The purpose, scope and scale of business

5.    Chapter five                      Total investment and the registered capital

6.    Chapter six                       Responsibilities of each party

7.    Chapter seven                     Craft and technology

8.    Chapter eight                     Sales of products

9.    Chapter nine                      Board of Directors

10.   Chapter ten                       Business management office

11.   Chapter eleven                    Labor management

12.   Chapter twelve                    Taxes, finance, audit and foreign currency

13.   Chapter thirteen                  Terms of joint venture

14.   Chapter fourteen                  Handle of assets when the joint venture expires

15.   Chapter fifteen                   Insurance

16.   Chapter sixteen                   Amendment, change and cancellation of contract

17.   Chapter seventeen                 Liabilities for breach of contract

18.   Chapter eighteen                  Force Majeure

19.   Chapter nineteen                  Governing laws and settlement of disputes

20.   Chapter twenty                    Language

21.   Chapter twenty-one                Validity of contract and others


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CHAPTER ONE: GENERAL RULES

In accordance with the Laws of the People's Republic of China on Joint Ventures
Using Chinese and Foreign Investment and other relevant laws and implemented
regulations, Zhejiang Nantian Post and Telecommunication Development Group Co.
Ltd. and UT Starcom Inc. of USA enter into agreement to invest jointly in
Hangzhou(China), set up joint venture company and formulate this contract on the
basis of the principle of equality and mutual benefit. The contract is amended
in Hangzhou in the year 1997.

CHAPTER TWO: PARTIES OF JOINT VENTURE

ARTICLE 1:     The parties of the contract:

1.   Zhejiang Nantian Post and Telecommunication Development Co. Ltd.
     (hereinafter referred to as Party A) has registered to the Administration
     of Industry and Commerce of Zhejiang Province, China. 
         Legal residence: 118 Mo ganshan Street, Hangzhou, Zhejiang Province, 
         China. Post code: 310005.
         Legal representative: Rong Ming-Bao.   Position: Chair of Board. 
         Nationality: China.

2.   UT Starcom Inc. of USA (hereinafter referred to as Party B) has registered
     in the United States. Legal residence: Suite 100 Alameda, Harbor Bay Park,
     CA 94502, USA. Legal representative: Ying-Wu. Position: Director
     Nationality: LISA.

CHAPTER THREE: ESTABLISHMENT OF THE JOINT VENTURE COMPANY

ARTICLE 2:     In accordance with the Laws of the People's Republic of China on
               Joint Ventures Using Chinese and Foreign Investment, Party A and
               Party B enter into agreement to set up a joint venture company of
               Hangzhou Nantian Starcom Communication Equipment Co. Ltd. in the
               territory of PRC.


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ARTICLE 3:     The full name of the company: Hangzhou Nantian Starcom
               communication Equipment Co. Ltd (hereinafter referred to as the
               Joint Venture Company). The legal residence of the Joint Venture
               Company: 70 Tian Mushan Street, Hangzhou, Zhejiang Province. Post
               code: 310013.

ARTICLE 4:     All activities of the Joint Venture company shall observe the
               laws, decrees and relevant regulations of the People's Republic
               of China.

ARTICLE 5:     The Joint Venture Company is a limited liability company. Party A
               and Party B shall undertake the debts liability of the Joint
               Venture company in proportion to their contribution to the
               registered company. Each party shares profits, risks and deficits
               in proportion to its contribution to the registered capital.

CHAPTER FOUR: BUSINESS PURPOSE, SCOPE AND SCALE

ARTICLE 6:     The purpose of the Joint Venture Company: According to the
               purpose or strengthen economic cooperation and technology
               exchange, the Joint Venture Company will adopt advanced
               international technologies and scientific management experiences
               to enhance the technology and quality level of the products of
               the Joint Venture Company, and will introduce and develop new
               products that are competitive in the international market in
               quality, price and service, etc. to achieve more economic
               profits.

ARTICLE 7:     The business scope of the Joint Venture: Designs, develops,
               assembles, installs telecommunication network systems, provides
               maintenance and technical services for its own products, and
               provides system integrating of telecommunication network, and
               undertake eight telecommunication systems every year.

CHAPTER FIVE: TOTAL INVESTMENT AND THE REGISTERED CAPITAL

ARTICLE 8:     The total investment of the Joint Venture Company is [*].

ARTICLE 9:     The contribution of Party A and Party B is altogether [*] and 
               it is used as the registered capital of the Joint Venture 
               Company. The contribution of Party A is RMB equal to [*] ( the 
               conversion rate of RMB and US dollar shall be determined on 
               the basis of the exchange quotation published by the National 
               Foreign Currency Administration Bureau of

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

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               PRC for the date of concern), accounting for 35% of the 
               registered capital; Party B contributes [*], accounting for 
               65% of the registered capital.

ARTICLE 10:    Party A and Party B shall pay the contribution in the following
               way:

               Party A: pays in RMB equals to [*] (the conversion rate of RMB 
               and US dollar shall be determined on the basis of the exchange 
               quotation published by the State Administration Bureau of the 
               PRC for the date of concern); Party B: spot exchange [*].

ARTICLE 11:    The registered capital of the Joint Venture Company shall be paid
               off in one time within two month from the date when the business
               license is signed and issued according to the proportion of
               contribution of Party A and Party B.

ARTICLE 12:    In case one party from Party A and Party B transfers all or part
               of its contributed capital to a third party besides Party A and
               Party B, it shall be agreed by the other party and shall be
               submitted to examination and approval authority for approval.

CHAPTER SIX: THE RESPONSIBILITIES OF EACH PARTY

ARTICLE 13:    Party A and Party, B shall fulfill the following duties: 

               The duties of Party A:

               l.   Applying for the approval of the relevant Chinese
                    Authorities concerned to register the establishment of the
                    Joint Venture Company and receive the business license;

               2.   Providing contributed capital according to the regulations
                    in Chapter Five; 

               3.   Handling the procedures of renting the places for handling 
                    official business and places for manufacturing;

               4.   Assisting the Joint Venture Company in choosing and
                    purchasing advanced foreign equipment for test and
                    production, assemble parts of SKD, raw materials, means of
                    transportation and articles used in office;

               5.   Assisting the Joint Venture Company in employing local
                    Chinese operation, management, technology and other staff
                    and workers;

               6.   Providing information of supply and demand of the domestic
                    communication market and actively opening up the market;

               7.   Handling other matters appointed by the Joint Venture
                    Company. 

               The duties of Party B:

               1.   Providing the contributed capital according to Chapter Five;

               2.   Assisting the Joint Venture Company in choosing and
                    purchasing advanced foreign equipment for test and
                    production, assemble parts of SKD, raw materials, means or
                    transportation and articles used in office;

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

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               3.   Providing free technological material of communication
                    products for the Joint Venture Company, training technical,
                    management and manipulating staff;

               4.   Actively opening up external sales channels, achieving
                    balance of foreign currency and economic profits;

               5.   Providing information of supply and demand of communication
                    equipment and technology in international market, and
                    opening up the international market;

               6.   Providing the Joint Venture Company with advanced
                    communication products and assemble parts of SKD, and
                    ascertaining the preference and timely delivery for the
                    whole set of wireless communication access network equipment
                    ordered by the Joint Venture Company;

               7.   Handling other matters appointed by the Joint Venture
                    Company.

CHAPTER SEVEN: CRAFT AND TECHNOLOGY

ARTICLE 14:    Party B must provide craft, technical service, test, design,
               quality standard and training staff for the Joint Venture Company
               to make the products reach the advanced international and
               domestic level.

CHAPTER EIGHT: SALES OF PRODUCTS

ARTICLE 15:    The products of the Joint Venture Company shall be sold to 
               markets [*]. In order to sell the products in [*] and 
               conducting repair services after sale, the Joint Venture 
               Company has get the permission of relevant authorities to set 
               up branches the sale, maintenance and repair services [*].

CHAPTER NINE: BOARD OF DIRECTORS

ARTICLE 16:    The Board of Directors is set up from the date when the Joint
               Venture Company registered. 

ARTICLE 17:    The Board of Directors consists of seven Directors, three from 
               Party A and four from Party B, including one Chair, one Vice 
               Chair and one Finance Supervisor. The Finance Supervisor will 
               attend the Board meetings as a nonvoting delegate. Chair, Vice 
               Chair, other Directors and Finance Supervisor shall hold the 
               office for a period of four years and may be reappointed 
               consecutively.

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

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ARTICLE 18:    The Board of Directors shall be the highest authority of the
               Joint Venture Company, deciding all important matters of the
               Joint Venture Company. The following matters shall be decided
               with the unanimous approval or the Directors who participate in
               the Board meetings:

               1.   Amendment of the article of association of the Joint Venture
                    Company;

               2.   Termination, dismissal of the Joint Venture Company and
                    prolonging of the joint venture time limits;

               3.   Increases and transfers of the registered capital of the
                    Joint Venture Company;

               4.   Merges or the Joint Venture Company with other economic
                    organizations. 

               Other matters shall be decided with the majority's approval of
               the Directors (including one from Party A) who attend the Board
               meetings.

ARTICLE 19:  The Chair is the legal representative of the Joint Venture 
Company. When the Chair is unable to fulfill his or her duties, he or she may 
appoint the Vice Chair or other Directors to take his place.

ARTICLE 20:  The Board meetings shall be held at least once in a year. All 
Directors shall be informed fifteen days before the meetings. The Chair shall 
preside the Board meetings, and may convene a special meeting suggested by 
one-third of the Directors. The file meetings shall be kept.

CHAPTER TWENTY-ONE: BUSINESS MANAGEMENT OFFICE

ARTICLE 21:  The Joint Venture Company shall set up a business management 
office, being responsible for the routine operation and management of the 
Joint Venture Company. The organization structure includes one General Manger 
and one Standing Deputy Manager who are appointed by the Board of Directors 
and shall hold the office for a period of four years.

ARTICLE 22:  The duty of the General Manager is to execute the resolutions of 
the board of Directors and the Standing Deputy Manager shall assist the 
General Manager.

ARTICLE 23:  In cases of graft, serious violation of the rules and 
regulations or grave neglect on the part of the General Manager and the 
Standing Deputy Manager, they shall be dismissed by the Board of Directors at 
any time.

CHAPTER ELEVEN: LABOR MANAGEMENT

ARTICLE 24:  After the consideration of the Board of Directors, the 
recruitment, employment, dismissal, wages, labor, insurance, welfare, awards 
and penalties of the staff and workers shall be stipulated in detail in the 
labor contracts made between the Joint Venture Company, the labor union and 
the staff and workers, in accordance with the Administration Regulations on 
Labors of Foreign Investment Enterprises and relevant Chinese regulations.

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ARTICLE 25:  The appointment, wages, insurance, welfare, and the expense 
standard of business trip of high-ranking management staff nominated by Party 
A and Party B shall be decided by the Board meetings.

CHAPTER TWELVE: TAXES, FINANCE, AUDITS AND FOREIGN CURRENCY

ARTICLE 26:  The Joint Venture Company and its staff and workers shall pay 
taxes according to the relevant Chinese laws and regulations.

ARTICLE 27:  The Joint Venture Company shall draw funds according to the 
relevant laws of the PRC. The proportion of drawing shall be decided by the 
Board of Directors on the basis of the operation status of the Joint Venture 
Company.

ARTICLE 28:  The fiscal year of the Joint Venture Company is from the first 
of January to the twenty-first of December. All vouchers, certificates, 
account books and reports shall be prepared in Chinese.

ARTICLE 29:  The Joint Venture Company shall invite accountants registered in 
China to examine and check the finance and submit the result to the Board of 
Directors and the General Manager. In case Party A and Party B need to invite 
other accountants or auditors to examine the annual finance, the Joint 
Venture Company shall give them the approval. The expenses shall be paid by 
the party who invites the accountants or auditors.

ARTICLE 30:  The General Manager shall prepare the balance sheets, the 
statements of loss and profit and the profit allocation plans within the 
first three months of every fiscal year and submit them to the Board of 
Directors for approval.

ARTICLE 31:  All the foreign currency matters of the Joint Venture Company 
shall be handled in accordance with the Regulations of the People's Republic 
of China on Foreign Currency Administration and stipulations. In case the 
income and expenses of foreign currency is imbalance, Party A and Party B 
shall allocate profits in RMB.

CHAPTER THIRTEEN: TERM OF JOINT VENTURE

ARTICLE 32:  The Joint Venture Company's term is 20 years, counted from the 
date on which the business license is signed and issued. After one party's 
nomination and the unanimous approval of the Board of Directors, the 
application for prolonging the joint venture time limits shall be submitted 
to the examination and approval authority in writing within six months before 
the end of the time limits.

CHAPTER FOURTEEN: HANDLE OF ASSETS WHEN JOINT VENTURE EXPIRES

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ARTICLE 33:  When the joint venture expires or is terminated, the Joint 
Venture Company shall conduct liquidation in accordance with the laws. After 
the income tax of the part of properties after liquidation (which exceeds the 
amount of actually-paid contribution) is paid, the properties shall be 
allocated in proportion to the contributed capital of Party A and Party B.

CHAPTER FIFTEEN: INSURANCE

ARTICLE 34:  The insurance of the Joint Venture Company shall be covered with 
the insurance organizations in Chinese territory. The coverage, insured value 
and insured terms shall be decided by the Board of Directors according to the 
stipulations of the insurance organizations in Chinese territory.

CHAPTER SIXTEEN: THE AMENDMENT, CHANGE AND CANCELLATION OF THE CONTRACT

ARTICLE 35:  The amendment of the contract and its supplements shall require 
written agreement signed by Party A and Party B, and shall be submitted to 
the original examination and approval authority for approval to become 
effective.

ARTICLE 36:  Owing to the failure to carry out the contract due to Force 
Majeure, or to continue operation due to the constant deficits of the Joint 
Venture Company, the termination of joint venture before its time limits or 
the cancellation of the contract shall be unanimously approved by the Board 
of Directors and shall be submitted to the examination and approval authority 
for approval.

ARTICLE 37:  The failure of operating the Joint Venture Company or achieving 
the business purpose stipulated by the contract due to one party's not 
fulfilling its obligations stipulated by the contract and the articles of 
association or seriously violating the contract and the articles of 
association shall be considered as unilaterally germinating the contract of 
the delinquent party. The observant party shall have rights to claim to the 
delinquent party and to terminate the Joint Venture Company with the approval 
of the examination and approval authority according to the stipulations of 
the contract. In case both parties agree to continue operation, the 
delinquent party shall compensate the economic losses of the Joint Venture 
Company.

CHAPTER SEVENTEEN: LIABILITIES FOR BREACH OF CONTRACT

ARTICLE 38:  In case any of the two parties doesn't pay off the contributed 
capital oil time according to the stipulations in Chapter Five of the 
contract, the delinquent party shall pay 1% of its contributed capital a 
month as penalty for to the observant party from the first month of exceeding 
the time limits. In case the

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delinquent party doesn't pay three months after the time limits, besides 
requiring it pay off the penalty fee which adds up to 3% of the contribution, 
the observant party shall have rights to apply for approval to terminate the 
contract and ask the delinquent party to compensate its losses.

CHAPTER EIGHTEEN: FORCE MAJEURE

ARTICLE 39:  Due to earthquake, typhoon, flood, acts of war and other 
unpredictable and unavoidable Force Majeure accidents which directly 
influence the fulfillment of the contract according to the agreed conditions, 
the party which suffers from the above mentioned Force Majeure accidents 
shall inform the other party of the situation by telegram or facsimile, and 
provide detailed report of the accident and valid certificates stating the 
reasons for not fulfilling part or all of the contract or prolonging to 
fulfill it within fifteen days. The certificates shall be presented by the 
local notary organizations where the accident happens. Two parties shall 
negotiate and decide whether to cancel the contract, or to relieve part of 
the liabilities to fulfill the contract, or to prolong the fulfillment of the 
contract according to the degree of the influence of the accident on the 
fulfillment of the contract.

CHAPTER NINETEEN: GOVERNING LAWS AND THE SETTLEMENT OF DISPUTES

ARTICLE 40:  The stipulation, effectiveness, explanation, fulfillment and 
settlement of disputes shall all de governed by the laws of the People's 
Republic of China.

ARTICLE 41:  All disputes caused by the fulfillment of the contract or 
related to the contract shall be settled through friendly negotiation. In 
case the dispute cannot be resolved through negotiation, it shall be 
submitted to China Foreign Economic and Trade Arbitration Commission for 
arbitration in accordance with its rules of procedures. The arbitral award is 
final and binding upon both parties.

CHAPTER TWENTY: CONTRACTUAL LANGUAGE

ARTICLE 42:  This contract shall be made in Chinese.

CHAPTER TWENTY-ONE: EFFECTIVENESS OF THE CONTRACT AND OTHERS

ARTICLE 43:  The articles of association of the Joint Venture Company 
stipulated according to the principals of the contract shall be regarded as 
part of the contract.

 
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ARTICLE 44:  This contract is subjected to the approval of the Ministry of 
Foreign Trade and Economic Cooperation of the People's Republic of China or 
the examination and approval authority it appointed, and shall enter into 
effect upon the date of approval.

ARTICLE 45:  The way of the two parties to dispatch a notice, such as by 
telegram or by facsimile, which is related to the rights and obligations of 
each party, shall be followed with a letter to inform the other party. The 
legal residences listed in the contract are the addresses of Party A and 
Party B.

ARTICLE 46:  This contract is signed by representatives appointed by Party
A and Party B in Hangzhou, China.

ARTICLE 47:  This contract is made into six copies, two of them shall be 
submitted to the authorities concerned and each party keeps two copies.

ARTICLE 48:  The matters which are not discussed in the contract shall be 
handled according to the Cooperation Law of the People's Republic of China.

Party A: Zhejiang Nantian Post and              Party B: UT Starcom Inc. of USA
         Telecommunication
         Development Group Co. Ltd.

         Representative:                        Representative: (Signature)
         (Signature)
                                                September 12, 1997

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