Sales Agreement - Japan Radio Co. Ltd. and UTStarcom (Hangzhou) Co. Ltd.


UTStarcom                                                                    JRC

                                 Sales Agreement

                                     between

                                 JAPAN RADIO CO.

                                       and

                                    UTSTARCOM




                                TABLE OF CONTENTS



                                                                      
1.       Definitions .........................................................5
2.       General .............................................................5
3.       Marketing arrangement ...............................................6
4.       Forecasts ...........................................................6
5.       Deliveries ..........................................................7
6.       TERMS OF PAYMENT ....................................................8
7.       INSPECTION AND ACCEPTANCE ...........................................9
8.       SAFETY STANDARDS AND REGULATIONS ....................................9
9.       PRODUCT SPECIFICATIONS .............................................10
10.      Support ............................................................11
11.      SPARE PARTS ........................................................11
12.      WARRANTY ...........................................................12
13.      TRADEMARKS .........................................................14
14.      PATENTS ETC ........................................................14
15.      DURATION OF THE AGREEMENT ..........................................15
16.      TERMINATION OF THE AGREEMENT .......................................15
17.      COMPENSATION FOR DAMAGES ...........................................17
18.      DISCLOSURE OF INFORMATION ..........................................17
19.      PUBLICITY ..........................................................18
20.      ASSIGNMENT .........................................................18
21.      NOTICES.............................................................19
22.      EXCEPTIONS .........................................................19
23.      ENTIRE AGREEMENT ...................................................20
24.      ARBITRATION ........................................................20
25.      GOVERNING LAW AND TRADE TERMS ......................................20
26.      MISCELLANEOUS ......................................................21
Exhibit A Product Specifications ............................................23
Exhibit B Delivery order rescheduling and cancellation ......................29
Exhibit C PRICE LIST and NRE ................................................31
Exhibit D Support ...........................................................33
Exhibit E Manufacturing Support .............................................35
Exhibit F Schedule ..........................................................37
Exhibit G Inspection standard and procedures ................................39




                                    AGREEMENT

         This Agreement is made and entered into as of this 16th day of MARCH, 
2000, by and between Japan Radio Company, Ltd., a corporation organized under
the laws of Japan, with its principal place of business at Akasaka Twin Tower,
17-22, Akasaka 2 chome, Minato-ku, Tokyo 107-8432, Japan ('JRC' or 'THE
COMPANY') and UTStarcom (Hangzhou) Co., Ltd., a China registered corporation
having its principal place of business at 3 Yile Industry Park, No. 129, Wenyi
Road, Hangzhou 310012, Peoples Republic of China ('UTStarcom' or 'THE BUYER').

         The BUYER desires to purchase from the COMPANY, and the COMPANY is
willing to sell to the BUYER, certain products manufactured by the COMPANY under
the UTStarcom brand and described in Exhibit A attached hereto (the 'PRODUCT'),
for resale in certain territories, on the terms and conditions contained in this
Agreement.

         In consideration of the foregoing and of the mutual agreements and
covenants contained below, the parties agree as follows:

1.       DEFINITIONS

         For purposes of this Agreement, the following terms have the following
respective meanings:

          1.1  'DOCUMENTATION' means the explanatory material commonly
               distributed by the COMPANY with the PRODUCT and any
               modifications, translations or updates thereto.

          1.2  'PRODUCTS' means the [*] corresponding SO writer and accompanying
               software, and products described in Exhibit A and any
               enhancements, updates or all future generations of product
               offerings thereto.

          1.3  'TERRITORY' means [*].

2.       GENERAL

          2.1  The parties hereto agree to implement the initial phase of this
               Agreement as specified in Exhibit F attached hereto and made an
               integral part hereof in respect to the date of delivery and
               quantity of prototypes, preproduction samples, first production
               units and exchange of documentation, and other matters relating
               to the performance of the initial phase of this Agreement.

          2.2  The BUYER shall at its own expense direct its vigorous activities
               for the sale of the PRODUCTS under the BUYER's name and
               trademarks. The BUYER will send to the COMPANY as much market
               information as possible useful for the

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               development and manufacture of the PRODUCTS. The COMPANY will
               make every effort within its power to meet the BUYER's
               requirements in respect of quantities and delivery dates of the
               PRODUCTS to be purchased by the BUYER hereunder. Both parties
               shall cooperate with each other in good faith to establish a
               mutually close and prosperous relationship. If problems should be
               encountered with respect to any aspect of marketing or technical
               matters concerning the PRODUCTS for any reason whatsoever or if
               the parties should encounter any problems not covered by this
               Agreement, the COMPANY and the BUYER shall discuss them in a
               cooperative and sincere spirit and attempt to arrive at a mutual
               understanding in the spirit of building a close collaborative
               relationship.

3.       MARKETING ARRANGEMENT

          3.1  The BUYER shall have the right to sell and distribute the
               PRODUCTS only within the TERRITORY. Should the BUYER in the
               future desire to market the PRODUCTS outside the TERRITORY, the
               BUYER shall so notify the COMPANY for mutual discussion about
               such outside marketing. The BUYER shall be responsible for all
               losses, damages, expenses or other liabilities incurred or
               sustained by the COMPANY arising out of resale or reexport of the
               PRODUCTS made directly or indirectly by the BUYER or its
               distributors in or to any place outside the TERRITORY in breach
               of this Agreement or any applicable laws or regulations.

          3.2  The BUYER agrees not to sell, or knowingly allow the resale of
               the PRODUCT to military organizations.

          3.3  It is expressly understood and agreed that the COMPANY may freely
               sell any PRODUCTS, whether identical with or similar to the
               PRODUCTS, under any trademarks other than those of the BUYER to
               any third party or parties in any country in the world.

4.       FORECASTS

          4.1  The BUYER agrees to purchase and the COMPANY agrees to sell the
               PRODUCTS in the quantities and at the prices set forth in Exhibit
               C attached hereto and made an integral part hereof.

          4.2  The COMPANY will promptly effect shipment of the PRODUCTS after
               the manufacture thereof shall have been completed in each month
               of production as agreed. Delivery terms shall be on the basis of
               FOB Japan (or country of manufacture).

          4.3  The BUYER's good faith forecast for its expected purchases of
               PRODUCTS for the twelve month period beginning from April 1, 2000
               is [*] Beginning [*] after the first delivery order, the BUYER
               shall then deliver to

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               the COMPANY a revised forecast at least once per [*] on a rolling
               [*] basis.

          4.4  Forecasts provided under the paragraph (4.3) above are for
               planning purposes only and do not constitute an order commitment
               or obligation on the part of the BUYER or the COMPANY. To the
               extent reasonably possible, however, the BUYER agrees to place
               orders consistent with such forecasts. The volume ordered by the
               BUYER in any given month may be increased or decreased from the
               volume included in the forecast and there shall be no fee
               associated with such variance. If the BUYER submits any forecast
               or places any order in which the quantity of PRODUCTS forecasted
               or ordered for any month deviates by more than [*] from the
               forecasted quantity of PRODUCTS for such [*] contained in the
               most recent prior forecast submitted to the COMPANY, then the
               parties shall negotiate in good faith to determine a mutually
               agreeable delivery schedule, taking into account BUYER's delivery
               requirements and the required lead time for any modifications to
               the COMPANY's procurement, manufacturing and testing processes.

          4.5  In addition to the formal procedures set forth above, the parties
               agree that they will promptly inform each other of any material
               change in their expectations or capabilities relating to the
               manufacturing, ordering or delivery of PRODUCTS hereunder, such
               as altered requirements and difficulties in productions.

5.       DELIVERIES.

          5.1  Delivery terms are FOB Japan or country of manufacture in
               accordance with INCOTERMS 2000. Title and the risk of loss of the
               PRODUCTS shall pass to the BUYER when delivered by the COMPANY at
               FOB point.

          5.2  Lead time for delivery of the first lot of the PRODUCTS is as
               specified in Exhibit F. Lead time for deliveries of the second
               lot onwards of the PRODUCTS shall not exceed [*] from the
               acknowledgement by the COMPANY of the delivery orders of the
               BUYER.

          5.3  The BUYER shall before the [*] provide the COMPANY with delivery
               orders showing the number of the PRODUCT which shall be delivered
               in accordance with the delivery lead time as specified in article
               5.2, including the PSIDs, country code and operator ID to be
               programmed in said PRODUCTS to be delivered, the color or option
               configuration of the PRODUCTS and also including whether the
               PRODUCT shall be shipped [*] form. The COMPANY shall acknowledge
               or reject the delivery orders placed by the BUYER within [*]
               after the receipt thereof.

          5.4  The BUYER shall have the right to change or terminate delivery
               orders within the limits defined in Exhibit B.

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          5.5  When the COMPANY has acknowledged the delivery orders, the
               COMPANY will send to the BUYER an individual sales contract to
               the PRODUCTS (hereinafter called the 'Sales Contract'). The BUYER
               shall immediately upon receipt of the Sales Contract sign and
               return the duplicate copy of it but failure of the BUYER to do so
               shall not affect the validity of such Sales Contract. It is
               specifically agreed, however, that if any export license or
               permission is required for the export of the PRODUCTS the Sales
               Contract shall come into effect and the delivery of the PRODUCTS
               shall be made only when such export license or permission (if
               conditional upon conditions reasonably satisfactory to the
               COMPANY) shall have been obtained by the COMPANY. The BUYER
               agrees that if due to delays in obtaining such license or
               permission the shipping date of PRODUCTS as set forth in the
               Sales Contract is delayed, such delay shall not constitute a
               breach by the COMPANY of the Sales Contract; provided however
               that the COMPANY shall promptly notify the BUYER of such delay
               and will ship the PRODUCTS as soon as practicable after obtaining
               such license or permission.

          5.6  Any terms or conditions printed on the face or the reverse side
               of the delivery order sheet and/or the Sales Contract shall not
               be part of this Agreement unless both parties expressly agree in
               writing otherwise.

6.       TERMS OF PAYMENT

          6.1  The BUYER [*] establish with a reputable bank satisfactory to the
               COMPANY an irrevocable and, if so requested by the COMPANY,
               confirmed letter of credit (not restricted, unless otherwise
               agreed upon) in the full amount of the purchase price as stated
               in the COMPANY's pro forma invoice, in Japanese currency, under
               the Sales Contract in favor of the COMPANY available against the
               COMPANY's sight draft to de drawn on the said establishing bank,
               to reach the COMPANY at least [*] before the last day of the
               month of production as set forth in the Sales Contract. The
               letter of credit shall be payable to COMPANY [*] after the
               Shipment Date and must allow TT reimbursement. A confirming bank
               shall be a leading and first class international bank acceptable
               to the COMPANY and, unless otherwise agreed upon, be a bank other
               than the establishing bank of the letter of credit. Such letter
               of credit shall provide for partial shipments and shall remain
               valid for not less than [*] after the last day specified for
               shipment. In the event that the letter of credit is to be advised
               by facsimile, the BUYER shall cause a written confirmation
               thereof to be air-mailed to the COMPANY via the advising bank.

          6.2  The COMPANY reserves the right to demand compensation from the
               BUYER for all losses and damages incurred by the COMPANY if such
               losses or damages have been caused by the failure of the BUYER to
               establish the letter of credit by the time specified hereinabove.

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7.       INSPECTION AND ACCEPTANCE

          7.1  The BUYER shall have the right to conduct [*] an incoming
               inspection of the PRODUCTS at the destination specified in the
               bill of lading in accordance with the inspection standards and
               procedures set forth in Exhibit G attached hereto and made an
               integral part hereof. The BUYER shall notify the COMPANY of a
               result of inspection judgment (acceptance or rejection) in
               accordance with the said inspection standards and procedures by
               facsimile or email within [*] after the date of arrival of the
               PRODUCTS at the said destination. Should the BUYER fail to so
               notify the COMPANY within said [*] period, the BUYER's right of
               rejection of the PRODUCTS shall then lapse and the said PRODUCTS
               shall be deemed to have been accepted by the BUYER.

          7.2  If any PRODUCTS are rejected by the BUYER in the said incoming
               inspection and such fact is clearly confirmed by the COMPANY,
               then the procedure mentioned below shall follow:

               The COMPANY will [*]
               i)   rework the rejected PRODUCTS, or
               ii)  replace same with the acceptable PRODUCTS, or
               iii) request the BUYER to rework the PRODUCTS. In this case, the
                    COMPANY will furnish to the BUYER repair or replacement
                    parts necessary for the rework of the rejected PRODUCTS
                    performed by the BUYER. In case the BUYER conducts a 100%
                    inspection of the lot in which the rejected PRODUCTS are
                    included, the COMPANY agrees to pay the BUYER the labor
                    charge at the rate separately agreed upon between the
                    parties hereto. There are no other or additional expenses or
                    liabilities the COMPANY is to assume in connection
                    therewith.

8.       SAFETY STANDARDS AND REGULATIONS

          8.1  Upon the BUYER's request, the COMPANY shall, [*] take all
               necessary steps so that the PRODUCTS shall pass the safety
               standard or regulations in the TERRITORY or part of the TERRITORY
               and effective as of the date of this Agreement, in which the
               BUYER agrees to render to the COMPANY every possible assistance.
               Otherwise, the BUYER shall, [*] take all necessary steps so that
               the PRODUCTS shall pass the safety standards or regulations in
               the TERRITORY or part of the TERRITORY and effective as of the
               date of this Agreement, in which the COMPANY agrees to render to
               the BUYER every possible assistance. The standards or regulations
               set forth in this paragraph shall be hereinafter collectively
               called the 'STANDARDS'.

          8.2  In the event that after the date of this Agreement any of the
               STANDARDS should be changed or modified or any other safety
               standards applicable to the

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               PRODUCTS under any laws, regulations or official directive having
               the force of law in the TERRITORY or any other standards or
               requirements applicable to the PRODUCTS which have not the force
               of law but the observance of which is in accordance with the
               reasonable practice of the industry in the TERRITORY shall be
               established (such other safety standards, standards and
               requirements being hereinafter collectively called the 'OTHER
               STANDARDS'), the BUYER shall be responsible to furnish to the
               COMPANY such information well in advance and the BUYER agrees to
               bear [*] incurred in connection with or arising out of
               modifications of the specifications of the PRODUCTS or reworking
               the PRODUCTS as well as [*] arising out of or relating to
               clearance of or passing such modified STANDARDS or OTHER
               STANDARDS or listing the PRODUCTS by a competent organization or
               authority under such modified STANDARDS or OTHER STANDARDS.

          8.3  If the COMPANY suffers damages due to the delay in the COMPANY's
               shipment of the PRODUCTS caused by the PRODUCTS failure to pass
               the STANDARDS, modified STANDARDS or OTHER STANDARDS for a cause
               attributable to the BUYER, the BUYER shall indemnify the COMPANY
               from such damages; however, the parties specifically agree that
               such damages shall not exceed [*].

          8.4  No PRODUCTS shall be shipped unless and until the PRODUCTS have
               cleared or passed the STANDARDS, modified STANDARDS or OTHER
               STANDARDS or have been listed by a competent organization or
               authority thereunder; provided, however, that the COMPANY shall
               be entitled to ship, if the BUYER so directs or gives consent,
               any portion of the PRODUCTS, without incurring any liability on
               the part of the COMPANY, before such clearance or listing is
               final.

9.       PRODUCT SPECIFICATIONS

          9.1  All PRODUCTS supplied to the BUYER by the COMPANY shall be
               manufactured in conformance to the specifications described in
               Exhibit A. If either party requests the other for a change of the
               specification or standards or for special specifications of the
               PRODUCTS, such matters shall be determined upon mutual
               discussions of the parties. If any such change or special
               specifications result, in the reasonable judgment of the COMPANY,
               in an increase in the cost of the PRODUCTS or in the length of
               time required for the manufacture or shipment to the BUYER, then
               a price increase of the PRODUCTS due to said cost increase shall
               be accordingly charged to the BUYER and an extension of the time
               for shipment agreed. Similarly, if any such change or special
               specifications result, in the reasonable judgment of the BUYER
               after consultation with the COMPANY, in a decrease in the cost of
               the PRODUCTS or in the length of time required for the
               manufacture or shipment to the BUYER, then a price decrease of
               the PRODUCTS due to said cost decrease shall be accordingly
               applied to the BUYER and a reduction of the time for shipment
               agreed.

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          9.2  No changes shall be made by the COMPANY in the form, fit, or
               function of the PRODUCT to be purchased hereunder without BUYER's
               prior written approval. The BUYER will in good faith attempt to
               respond to the COMPANY's proposed change within [*] of notice of
               such proposed change. No changes shall be deemed approved by
               BUYER unless and until the COMPANY receives written notice of
               BUYER's acceptance thereof. If no response is given by BUYER
               within [*] of notice of the change then the change will be deemed
               accepted.

10.      SUPPORT

          10.1 TECHNICAL SUPPORT. The COMPANY agrees to provide reasonable
               technical support as defined in Exhibit D. The COMPANY represents
               that it presently has adequately trained technical personnel to
               provide the support set forth in Exhibit D.

          10.2 DEVELOPMENT SUPPORT. The COMPANY shall provide the BUYER with
               technical specifications, hardware interface documentation and
               other technical assistance concerning the PRODUCTS as reasonably
               required by the BUYER.

          10.3 PRODUCT PACKAGING. The COMPANY will ship tangible items of
               PRODUCT to the BUYER in bulk packaging consistent with industry
               standards and sufficient to avoid damage to the Product during
               shipment. The COMPANY will supply labeling information of bulk
               packaging to the BUYER.

          10.4 MANUFACTURING SUPPORT DOCUMENTATION, The COMPANY will provide to
               the BUYER manufacturing support documentation as described in
               Exhibit E.

11.      SPARE PARTS

          11.1 In lieu of spare parts, the COMPANY shall include at no
               additional cost to the BUYER an extra [*] of units for each
               delivery order, rounded down to the next lowest unit quantity.

          11.2 The BUYER's subsidiary shall be entitled to place an order with
               the COMPANY for spare parts in conformity with the provisions of
               this Agreement. The BUYER's subsidiary, as used in this Agreement
               shall mean the company or entity 50% or more of the shares or
               equity of which is owned or controlled by the BUYER.

          11.3 The COMPANY shall be prepared to supply to the BUYER the
               following parts for the PRODUCTS for the following period from
               the time of the last production or of discontinuance of
               production, of each model of the PRODUCTS:
               i)   [*] for appearance or cosmetic parts
               ii)  [*] for mechanical parts

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               iii) [*] for electrical parts

               In this connection, the BUYER shall place the last order with the
               COMPANY for any spare parts required by the BUYER for the future
               at least [*] before the expiration of each period stated above. 
               If such requirements have been shipped out, the COMPANY may
               thereafter cease to supply any spare parts for the relevant
               PRODUCTS. However, if the supply of repair parts becomes
               infeasible for the COMPANY for some inevitable reason during
               aforementioned period, the period may be altered subject to prior
               notice of at least [*] to the effect by the COMPANY to the BUYER.

12.      WARRANTY

          12.1 The COMPANY warrants that title to the PRODUCTS when conveyed to
               the BUYER on an FOB basis is good, that the transfer is lawful
               and that the PRODUCTS are delivered free from any security
               interest or encumbrance except as otherwise agreed upon between
               the parties in writing.

          12.2 The COMPANY further warrants that the PRODUCTS do not have any
               software or hardware components that incorrectly process date
               and/or time data or calculations after 31 December 1999.

          12.3 The warranty of the PRODUCTS to be given under this Agreement
               shall be the following:

                           If, within a period of [*] after shipment by the
               COMPANY of the PRODUCTS, any of the PRODUCTS or component parts
               thereof exhibit defects of the same kind and nature at the same
               place in the PRODUCTS and at an unusual frequency of not less
               than [*] of the total quantity of the PRODUCTS sold by the BUYER
               in the TERRITORY and such defects are the result of faulty
               workmanship on the part of the COMPANY or defects in materials
               arising from any cause for which the COMPANY is responsible, then
               the COMPANY agrees to give compensation, and render assistance,
               to the BUYER to such extent as is specified below,

               i)   Free supply (freight prepaid) by the COMPANY of replacement
                    component parts for the component parts found to be 
                    defective [*] of the COMPANY's verification of such defect,
                    to be done in [*] upon written notice to the COMPANY by the
                    BUYER of such defect, and

               ii)  Rendition of technical assistance or advice to the BUYER in
                    repairing such defective PRODUCTS or component parts thereof
                    as may be decided by the COMPANY from time to time within
                    [*] of the COMPANY's verification of such defect to be done
                    in [*] upon written notice to the COMPANY by the BUYER of
                    such defect.

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12.4 The foregoing warranty shall apply to PRODUCTS repaired or replaced under
     paragraph 12.3 for the longer of (i) [*] from the date of repair or
     replacement, or (ii) [*] applicable to the PRODUCT being repaired or
     replaced.

12.5 Provided, however, that the foregoing BUYER's remedy shall only be
     available subject always to the following conditions being met, and in the
     event of failure of the BUYER to so meet, the BUYER's right to claim remedy
     as provided in subparagraphs i) and ii) of paragraph 12.3 above shall
     lapse:

     i)   any particulars as to the PRODUCTS or the component parts thereof
          alleged or found to be defective shall be furnished to the COMPANY in
          writing within [*] of discovery by the BUYER of such defect.

     ii)  the contents of defects stated in i) above shall be subject to the
          COMPANY's verification

     iii) no PRODUCTS or component parts alleged or found to be defective shall
          be disposed of by the BUYER until it receives the COMPANY's
          directions, and

     iv)  such defective PRODUCTS or component parts shall forthwith be returned
          to the COMPANY by the BUYER, freight payable at destination, if the
          COMPANY so requests.

Except as provided in this article, THERE IS NO WARRANTY THAT THE PRODUCTS SOLD
HEREUNDER SHALL BE MERCHANTABLE OR FIT FOR ANY PARTICULAR PURPOSE. NOR IS THERE
ANY OTHER WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE PRODUCTS. NEITHER PARTY'S
RESPONSIBILITY FOR LOSSES OR LIABILITIES ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE PRODUCTS SOLD AND SOFTWARE LICENSED HEREUNDER SHALL EXCEED 1.0
TIMES THE AGGREGATE PURCHASE PRICE PAID BY THE BUYER FOR THE PRODUCTS. IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES, LOST PROFITS, REVENUES OR COSTS OF CAPITAL, ARISING OUT OF
OR RELATING IN ANY WAY TO THIS AGREEMENT, REGARDLESS OF WHETHER THE OTHER PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED HEREIN OR ELSEWHERE, INCLUDING THE CAP ON LIABILITY SET
FORTH ABOVE, EACH PARTY WILL BE RESPONSIBLE FOR ALL DAMAGES INCURRED BY THE
OTHER PARTY AS A RESULT OF ANY DAMAGE OR INJURY CAUSED BY OR RESULTING FROM THE
FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE OTHER PARTY.

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13.      TRADEMARKS

     13.1 The products shall in accordance with instructions of the BUYER bear
          the trade name of 'UTStarcom' owned by the BUYER which shall be a
          registered trademark in Japan or other countries where the products
          are offered for sale. The BUYER agrees that any disputes or troubles
          filed by any third party with respect to the said trademark or other
          trademarks directed by the BUYER for use onto the PRODUCTS shall be
          settled at the BUYER's sole responsibility and expense. Where it is
          required by any laws or regulations in the TERRITORY to manifest the
          name of the manufacturers of PRODUCTS, the COMPANY may place the name
          or symbol of the COMPANY or any contraction, abbreviation or
          simulation thereof or other necessary marks onto the PRODUCTS in such
          a manner as determined after consultation with the BUYER.

14.      PATENTS ETC.

     14.1 The COMPANY warrants that the importation, sale or distribution, or
          use of the PRODUCTS will not infringe on any patent rights, utility
          model rights, design rights, copyrights or any other intellectual
          property rights of whatever kind (hereinafter referred to as the
          'Intellectual Property Rights') of any third party. The COMPANY shall
          be responsible and liable to the BUYER in respect to any such claim of
          infringement and the COMPANY agrees to defend, indemnify and hold
          harmless the BUYER, its successors, assigns, officers, employees and
          agents from (X) any and all such claims, provided the COMPANY is given
          authority and such reasonable assistance and information from the
          BUYER as the COMPANY requests in writing for the defense of such
          claims and from (Y) reasonable costs and expenses incurred by the
          BUYER in defense of such claims, if the COMPANY does not undertake the
          defense thereof.

     14.2 Notwithstanding the foregoing, the COMPANY will not be liable for any
          damages or costs resulting from any claim or suit that arises from:
          (A) the COMPANY's compliance with the detailed designs dictated by the
          BUYER; (B) use of any Software in combination with products not
          supplied by the COMPANY, to the extent the infringement is caused by
          such combination; or (C) a manufacturing or other process carried out
          by or through the BUYER and using any Software, to the extent the
          infringement is caused by such manufacturing or other process, (such
          claims being collectively referred to herein as 'OTHER CLAIMS'). The
          BUYER agrees to defend, indemnify and hold harmless the COMPANY, its
          successors, assigns, officers, employees and agents from (X) any and
          all such OTHER CLAIMS, provided the BUYER is given authority and such
          reasonable assistance and information from the COMPANY as the BUYER
          requests in writing for the defense of such OTHER CLAIMS and from (Y)
          reasonable costs and expenses incurred by the COMPANY in defense of
          such OTHER CLAIMS, if the BUYER does not undertake the defense
          thereof.



     14.3 The BUYER shall promptly notify the COMPANY of any and all
          infringements, imitations or illegal use of the COMPANY's Intellectual
          Property Rights, and of any statements or actions made or done by any
          third party disputing or impairing the COMPANY's interest in and title
          to any of the above rights. Whenever in the opinion of the COMPANY,
          any action is necessary or advisable to insure the protection or
          prevention against such infringements, imitations or illegal use of
          any of the COMPANY's Intellectual Property Rights, the COMPANY may
          take such action in the courts, administrative agencies or otherwise,
          but shall not be obligated to take any such action and shall have no
          liability to the BUYER for failure to do so. The BUYER shall only upon
          the request of the COMPANY and subject to the COMPANY's agreement to
          reimburse the BUYER for any expense to be incurred by the BUYER, take
          whatever action is deemed necessary by the COMPANY to insure such
          protection or prevention.

15.      DURATION OF THE AGREEMENT

     15.1 This agreement shall be deemed to come into force on the effective
          date and unless earlier terminated in accordance with the provisions
          of this Agreement shall continue in force and effect for [*]. This
          Agreement shall be automatically renewed for [*] and thereafter from
          year to year unless either of the parties hereto gives the other party
          at least [*] prior written notice to terminate this Agreement before
          the expiration of the initial or any renewed term of this Agreement.
          If such prior written notice is made by either party then this
          Agreement shall terminate on the initial or, as the case may be, duly
          renewed expiry date hereof.

16.      TERMINATION OF THE AGREEMENT

     16.1 In the event of the occurrence of any of the following events to
          either party, the other party may forthwith terminate, wholly or
          partly, this Agreement and/or Sales Contract and/or any other contract
          concluded under or in connection with this Agreement by forthwith
          sending a written notice to the first party by registered airmail:

          i)   if either party hereto continues in default of any material
               obligation imposed on it herein and/or therein for more than [*]
               after written notice has been dispatched by registered airmail by
               the other party requesting the party in default to remedy such
               default;

          ii)  if either party hereto is subjected to compulsory execution,
               public auction, coercive collection for its arrearage of taxes or
               public imposts, or suspension of business by public authorities,
               or appointment of any receiver or trustee of itself or any
               substantial portion of its property, or if an application or
               petition is submitted for bankruptcy, corporate arrangement or
               commencement of corporate reorganization, or if either

[*] * 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.



               party hereto files voluntarily against it an application or
               petition for bankruptcy, corporate arrangement or commencement of
               corporate reorganization or composition, or if either party
               hereto adopts a resolution for discontinuance of its business or
               transfer to another company of all or important parts of its
               assets or business or for a substantial decrease of its capital
               or for dissolution or merger into another company, or makes
               general assignment for the benefit of creditors or if either
               party hereto becomes unable to pay debts, or if either party is
               declared in default of any material contract between it and any
               third party and such contract is canceled or its payment
               obligation under such contract is accelerated;

          iii) if, in the reasonable judgment of the COMPANY, there exists or is
               any ground to suspect the existence of obstacles to effectively
               continue this Agreement in any aspect of technological
               development, manufacture, sales or marketing of the PRODUCTS
               including but not limited to failure by the BUYER to achieve any
               agreed upon minimum requirement or targeted volume or the case
               where such failure is expected in the reasonable judgment of the
               COMPANY; or

          iv)  if there is any other material cause justifying either party to
               terminate this Agreement, such as material and irreparable injury
               to goodwill or reputation of the other party, commission by the
               other party of a fraud on or betrayal of confidence in or
               criminal act against the first party or disclosure or divulgence
               by the other party of the first party's confidential information.

     16.2 In the event of termination or cancellation of this Agreement for any
          reason whatsoever:

          i)   The COMPANY may at its sole discretion cancel any Sales Contract
               for the PRODUCTS which have not been shipped at the date of such
               termination or cancellation. If any Sales Contract is canceled
               for any reason whatsoever, the COMPANY may sell or otherwise
               dispose, of the PRODUCTS covered under the Sales Contract so
               canceled elsewhere in any manner by removing, at the COMPANY's
               costs and expenses, all of the BUYER's signs, marks and labels
               from the PRODUCTS. If the COMPANY is unable to sell or otherwise
               dispose of the PRODUCTS, the BUYER shall pay that portion of the
               purchase price within the limits defined in Exhibit B.2, and

          ii)  Each party hereto shall promptly return to the other party any
               materials or property in its possession or custody supplied by
               and belonging to the other party in connection with this
               Agreement.

     16.3 Except as otherwise clearly provided herein, any termination of this
          Agreement shall be without prejudice to any rights which shall have
          accrued to either party hereunder prior to such termination.



     16.4 The parties shall enter into a separate agreement where the COMPANY
          grants to the BUYER to use complete and current design and
          manufacturing information for the products upon the COMPANY's
          inability to deliver PRODUCTS to the BUYER due to the COMPANY's
          acquisition, break-up or bankruptcy.

17.      COMPENSATION FOR DAMAGES

     17.1 Any defaulting or breaching party hereto or a party terminated
          pursuant to the provisions of Article 16 (termination) hereof shall
          pay all reasonable compensation for losses and damages incurred by the
          other party as a result of default of its obligations or termination
          of this Agreement. In any event, neither party shall be liable for any
          incidental, consequential or punitive damages as a result of default
          on its obligation or termination of this Agreement.

     17.2 Any defaulting or breaching party hereto shall defend, indemnify and
          hold harmless the other party from and against any and all actions,
          claims, demands, suits, losses, damages, costs, expenses and judgments
          (including attorney's fees) by whomever made, brought or prosecuted
          and in any manner based upon, arising out of, related to, occasioned
          by or attributable to any breach by any defaulting or breaching party
          of any provisions of this Agreement or any negligence or fault on the
          part of any defaulting or breaching party, its employees or agents in
          the performance thereof.

     17.3 In the event of any delay by the BUYER in taking delivery of the
          PRODUCTS, the BUYER agrees to pay to the COMPANY, i) interest on any
          overdue payment of the purchase price of the relevant PRODUCTS at the
          rate of twelve (12) percent per annum for the period of such delay,
          ii) the additional storage charges of the relevant PRODUCTS in Japan
          or any other country where such PRODUCTS are stored for the period of
          such delay and iii) any other expenses and damages sustained by the
          COMPANY due to such delay. The foregoing provisions of this article
          shall not prejudice the right of the COMPANY to terminate this
          agreement and/or Sales Contract on account of breach by the BUYER of
          its obligation to take delivery of the relevant PRODUCTS as agreed and
          any other rights and remedies of the COMPANY contained herein or in
          the Sales Contract.

18.      DISCLOSURE OF INFORMATION

     18.1 All information, suggestions or ideas transmitted by either party to
          the other party in connection with this Agreement or the performance
          hereunder and designated by the transmitting party as secret or
          confidential shall be treated as secret or confidential by the
          receiving party and shall not be divulged or disclosed to any third
          party, person, firm or agency, governmental or private, without the
          prior written consent of the disclosing party except to the extent
          that such information



          is: (a) known at the time of its receipt as documented in written
          records; (b) properly in the public domain; (c) subsequently disclosed
          to the receiving party, without any obligation to keep such
          information confidential, by a third party that may lawfully do so;
          (d) required to be disclosed by law, including but not limited to any
          requirements imposed by either United States Securities and Exchange
          Commission or any other security and exchange commission on BUYER; or
          (e) disclosed to potential financing or insurance sources, as long as
          any such third parties agree to be bound by the provisions of this
          section.

     18.2 'Confidential Information' may include: business or marketing plans,
          strategies, concepts, and data (including costs and pricing); research
          and development activities; products, product plans, technical
          specifications, technology, hardware, software, systems, and designs;
          trade secrets, formulas, copyrighted materials, packaging, and
          trademarks; manufacturing processes and methods (including line
          speeds, manning requirements and layout); existing or potential
          customers, suppliers, methods, and techniques; and other accumulated
          technical knowledge or information, which is disclosed by one party to
          the other and is identified as confidential when disclosed. It is
          specifically agreed that any technical know-how and marketing
          information (such as price and other sales conditions) shall be hereby
          regarded as secret and confidential PER SE without making such
          designation.

19.      PUBLICITY

     19.1 The COMPANY and the BUYER will jointly discuss and agree, on the
          release of any statement to the public regarding the execution and the
          subject matter of this Agreement, subject in each case to disclosure
          otherwise required by law or regulation. The parties will work
          together on a joint statement announcing their relationship and the
          execution and subject matter of this Agreement as soon as practicable
          following the execution hereof. Either party may disclose the
          execution of this Agreement to any third parties that are subject to a
          confidentiality and non-disclosure agreement with such disclosing
          party that is at least as restrictive as the provisions in Article 18.

20.      ASSIGNMENT

     20.1 Neither party shall assign, transfer or otherwise dispose of this
          Agreement in whole or in part or any right hereunder to any third
          party without the prior written consent of the other party.



21.      NOTICES

     21.1 Except as otherwise provided herein all notices to be given or made
          under this Agreement shall be in writing and hand-delivered in person
          or sent by facsimile followed by mail or courier services and
          addressed to the principal office of the parties as indicated above in
          this Agreement or to such other address as either party may hereafter
          furnish to the other party in writing.

     21.2 All notices shall be deemed to have been given (a) when delivered
          personally, (b) upon confirmation of receipt if sent via telecopy or
          electronic mail, (c) 3 days after being deposited in the United States
          mail or Japanese mail, registered or certified with return receipt
          postage prepaid, or (d) 1 day after being sent by courier or overnight
          delivery service requiring proof of receipt.

22.      EXCEPTIONS

     22.1 FORCE MAJEURE The COMPANY shall not be liable for any delay in
          shipment or delivery, non-delivery, or destruction or deterioration,
          of all or any part of the PRODUCTS, or for any other default in
          performance of this Agreement or Sales Contract or any other contract
          concluded under or in connection with this Agreement, which arises
          from any lockout, strike, labor trouble or other industrial
          disturbance, inevitable accident, export cartel by governmental
          authorities or industry or trade associations of whatever nature to
          limit its export of the PRODUCTS, fire, explosion, transportation
          difficulty, or from any cause beyond the control of the COMPANY,
          including without limitation, war, blockade, embargo, governmental,
          administrative or public direction or guidance or order of any country
          including any reasonably anticipated direction or guidance or order
          thereof, legal restriction imposed in any country, including any
          reasonably anticipated restriction thereof, riot, civil commotion,
          warlike condition, prolonged failure or shortage of electric power,
          gas or oil, epidemic, earthquake, flood, typhoon or other Act of God.

     22.2 In the event of any delay or failure due to the cause or causes given
          in the preceding paragraph 22.1, the COMPANY shall send by fax, email
          or otherwise a written notice stating the reason therefor to the BUYER
          as promptly as possible. The performance of the COMPANY shall be
          deemed suspended as long as and to the extent that any such cause(s)
          continue, but with this Agreement and/or Sales Contract and/or any
          other contract concluded under or in connection with this Agreement
          then executory shall not be regarded as terminated, frustrated or
          canceled simply as a result of such delay or failure and the parties
          hereto shall continue once more with its performance when the cause or
          causes of such delay or failure have ceased or have been eliminated,
          provided, however, that if such delay or failure extends or is
          reasonably anticipated to extend for a period of more than 3 months,
          the COMPANY may without any liability on its part terminate or cancel
          this Agreement and/or the said Sales Contract and/or any other
          contracts



          concluded under or in connection with this Agreement by sending a
          written notice to the BUYER to the extent that the COMPANY's
          performance has been prevented or delayed.

     22.3 It is specifically understood and agreed that if the COMPANY cancels
          any Sales Contract pursuant to paragraph 22.2 above, the COMPANY may
          sell the PRODUCTS elsewhere and in any manner by removing, at the
          COMPANY's cost and expense, all of the BUYER's signs, marks and labels
          on the PRODUCTS destined for the BUYER. In such event, the COMPANY
          shall bear all the expenses and costs incurred by the COMPANY in
          connection with changing or remodeling the PRODUCTS as the COMPANY
          deems fit for the purpose of sale elsewhere, as well as the costs for
          signs, marks, labels, packages and other printing materials having
          then already been prepared in accordance with the BUYER's directions.

23.      ENTIRE AGREEMENT

     23.1 This Agreement constitutes the entire and only agreement between the
          parties hereto and supersedes all previous understandings, commitments
          and agreements, whether oral or written, relating to the subject
          matter hereof, and no modification, amendment supplement of this
          Agreement shall be binding upon the parties hereto except by mutual
          express written consent of subsequent date signed by an authorized
          representative or officer of each of the parties hereto.

24.      ARBITRATION

     24.1 Any dispute arising from the execution of or in connection with this
          Agreement shall be settled through friendly consultation between the
          parties. If the dispute cannot be settled within 60 days from the
          first date of consultation, the dispute shall be settled by consulting
          of 3 arbitrators, Arbitration shall be held in San Francisco,
          California under the International Arbitration Rules of the American
          Arbitration Association if initiated by the COMPANY, and shall be held
          in Tokyo, Japan under the Commercial Arbitration Rules of the Japan
          Commercial Arbitration Association if initiated by the BUYER. The
          award rendered by the arbitration shall be final and binding upon the
          parties and may be entered by any court having jurisdiction.

25.      GOVERNING LAW AND TRADE TERMS

     25.1 It is mutually agreed that, except as otherwise required by mandatory
          provisions of applicable laws of the TERRITORY, the terms of this
          Agreement and the performance hereunder shall in all respects be
          governed and interpreted by and



          under the laws of the State of California, USA, excluding its
          provisions regarding conflict of laws.

     25.2 If applicable, the trade terms used in this Agreement shall have the
          meaning given to such terms in the Incoterms 2000.

26.      MISCELLANEOUS

     26.1 AMENDMENTS: This Agreement may only be amended or modified by an
          instrument in writing executed by both parties.

     26.2 WAIVER: a waiver by a party hereto of any particular provision hereof
          shall not be deemed to constitute a waiver in the future of the same
          or any other provision of this Agreement.

     26.3 SEPARABILITY: The parties hereto agree that, in the event of one or
          more of the provisions hereof being subsequently declared invalid or
          unenforceable by court or administrative decision, such invalidity or
          unenforceability of any of the provisions shall not in any way affect
          the validity or enforceability of any other provisions hereof except
          those invalidated or unenforceable provisions which comprise an
          integral part of or are otherwise clearly inseparable from such other
          provisions.

     26.4 APPLICABLE LANGUAGE: This Agreement has been executed by the parties
          hereto in the English language and no translated version of this
          Agreement into any other language shall be controlling and binding
          upon any of the parties hereto.

     26.5 TITLES: The Article titles in this Agreement have been inserted for
          convenience only and shall in no way be used in the interpretation
          hereof.

     26.6 EXPENSES: Unless otherwise expressly agreed herein or otherwise in
          writing by the parties hereto, each party shall bear all expenses and
          disbursements incurred or made by itself or any other investment made
          by itself in connection with or in pursuance of this Agreement, and
          neither party shall be entitled to compensation from the other party
          for said expenses, disbursements or investment whether on termination
          of this Agreement for any reason whatsoever or otherwise unless
          otherwise expressly agreed upon in writing by the other party.

     26.7 PARTIES INDEPENDENT: In making and performing this Agreement, the
          parties are acting and shall act as independent contractors, and
          nothing contained in this Agreement shall be construed or implied to
          create any agency, partnership or employer and employee relationship
          between the COMPANY and the BUYER.

     26.8 CAPACITY TO ENTER INTO AGREEMENT: Both parties represent and warrant
          that, irrespective of any other contractual commitment of any kind to
          any



          other third party, the parties hereto possess the capacity and right
          to enter into this Agreement, and to substantially perform the
          material obligations contained within the terms of this Agreement. If
          any other contractual commitments to any other third party cause
          either of the parties to fail to substantially perform their material
          obligations pursuant to this Agreement (as determined in the
          reasonable judgment of the aggrieved party), the aggrieved party shall
          be indemnified for and held harmless against any third-party claims,
          actions or lawsuits pursuant to Section 17.1 and 17.2 of this
          Agreement, in addition to any other remedies provided for in this
          Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective representatives or officers duly authorized thereunto as of
the date first above written,

Japan Radio Company, Ltd.                        UTStarcom (Hangzhou) Co., Ltd.

Authorized Signature                             Authorized Signature

By: /s/ KIYOMI SHINTANI                          By: /s/ illegible
   ----------------------------------               ---------------------------
Name printed: KIYOMI SHINTANI                    Name printed: illegible
             ------------------------                         -----------------
Title: DIVISION EXECUTIVE
       COMMUNICATIONS EQUIPMENT DIV.             Title: CHAIRMAN
       ------------------------------                  ------------------------
Date: MARCH 16, 2000                             Date:               8 FEB 2000
      ----------------------------------              --------------------------



                        EXHIBIT A PRODUCT SPECIFICATIONS

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         EXHIBIT B DELIVERY ORDER RESCHEDULING AND CANCELLATION

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                          EXHIBIT C PRICE LIST AND NRE

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                                EXHIBIT D SUPPORT

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THE OMITTED PORTIONS.



                         EXHIBIT E MANUFACTURING SUPPORT

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                               EXHIBIT F SCHEDULE

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                  EXHIBIT G INSPECTION STANDARD AND PROCEDURES

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