{"id":43383,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/distribution-agreement-utstarcom-inc-and-directouch.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"distribution-agreement-utstarcom-inc-and-directouch","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/distribution-agreement-utstarcom-inc-and-directouch.html","title":{"rendered":"Distribution Agreement &#8211; UTStarcom Inc. and DirecTouch Communications Ltd."},"content":{"rendered":"<pre>\n                            DISTRIBUTION AGREEMENT\n\n                                   between\n\n                              UTSTARCOM, INC.\n\n                                     and\n\n                      DIRECTOUCH COMMUNICATIONS LIMITED\n\n                                 dated as of\n\n                                July 30, 1999\n\n\n\n\n                              TABLE OF CONTENTS\n\n\n\n                                                                                                           PAGE\n                                                                                                        \nARTICLE I - DEFINITIONS......................................................................................2\n\n   Section 1.01      General.................................................................................2\n\nARTICLE II - ASSUMPTION AND SATISFACTION OF LIABILITIES......................................................6\n\n   Section 2.01      Assumption and Satisfaction of Liabilities..............................................6\n\nARTICLE III - CAPITAL CONTRIBUTION OF UTS....................................................................6\n\nARTICLE IV - THE DISTRIBUTION................................................................................6\n\n   Section 4.01      Cooperation Prior to the Distribution...................................................6\n   Section 4.02      Transfers Not Effected Prior to the Distribution; Transfers Deemed Effective\n                     as of the Distribution Date.............................................................7\n   Section 4.03      No Representations or Warranties; Consents..............................................7\n   Section 4.04      Conveyancing and Assumption Instruments.................................................8\n   Section 4.05      UTS Board Action; Conditions Precedent to the Distribution..............................8\n   Section 4.06      The Distribution........................................................................9\n\nARTICLE V - INDEMNIFICATION..................................................................................9\n\n   Section 5.01      Indemnification by UTS..................................................................9\n   Section 5.02      Indemnification by DirecTouch...........................................................9\n   Section 5.03      Insurance Proceeds.....................................................................10\n   Section 5.04      Procedure for Indemnification..........................................................10\n   Section 5.05      Remedies Cumulative....................................................................12\n   Section 5.06      Survival of Indemnities................................................................12\n\nARTICLE VI - CERTAIN ADDITIONAL MATTERS.....................................................................13\n\n   Section 6.01      DirecTouch Board.......................................................................13\n   Section 6.02      Employee Matters.......................................................................13\n\nARTICLE VII - ACCESS TO INFORMATION AND SERVICES............................................................13\n\n   Section 7.01      Provision of Corporate Records.........................................................13\n   Section 7.02      Access to Information..................................................................14\n   Section 7.03      Production of Witnesses................................................................14\n   Section 7.04      Reimbursement..........................................................................14\n   Section 7.05      Retention of Records...................................................................14\n   Section 7.06      Confidentiality........................................................................15\n   Section 7.07      Privileged Matters.....................................................................15\n\nARTICLE VIII - MISCELLANEOUS................................................................................17\n\n   Section 8.01      Complete Agreement; Construction.......................................................17\n   Section 8.02      Expenses...............................................................................17\n\n\n                                      -1-\n\n\n                              TABLE OF CONTENTS\n                                 (CONTINUED)\n\n   Section 8.03      Governing Law..........................................................................17\n   Section 8.04      Notices................................................................................17\n   Section 8.05      Amendments.............................................................................18\n   Section 8.06      Successors and Assigns.................................................................18\n   Section 8.07      Termination............................................................................18\n   Section 8.08      Subsidiaries...........................................................................18\n   Section 8.09      No Third-Party Beneficiaries...........................................................18\n   Section 8.10      Titles and Headings....................................................................18\n   Section 8.11      Exhibits and Schedules.................................................................18\n   Section 8.12      Legal Enforceability...................................................................19\n   Section 8.13      Arbitration of Disputes................................................................19\n\n\n\nLIST OF EXHIBITS\n\nExhibit A:        DirecTouch Bylaws\n\nExhibit B:        DirecTouch Certificate\n\nExhibit C:        DirecTouch Financial Statements\n\nExhibit D:        Inter-company Option Agreement\n\nExhibit E:        Stock Transfer Restriction Agreement\n\nExhibit F:        UTS Financial Statements\n\n\n                                      -2-\n\n\n                             DISTRIBUTION AGREEMENT\n\n     This DISTRIBUTION AGREEMENT (this 'Agreement') is made as of this 30th \nday of July, 1999 between UTStarcom, Inc., a Delaware corporation ('UTS'), \nand DirecTouch Communications Limited, a British Virgin Islands corporation \nand wholly-owned subsidiary of UTS ('DirecTouch')\n\n                                 RECITALS\n\n     A. WHEREAS, UTS is the holder of all of the issued and outstanding \nshares of capital stock of DirecTouch;\n\n     B. WHEREAS, the Board of Directors of UTS has determined that it is in \nthe best interests of UTS and the stockholders of UTS to separate DirecTouch \nfrom UTS and to effect such separation, to distribute all of the outstanding \nshares of DirecTouch common stock held by UTS to the holders of record of (i) \nUTS capital stock in the ratio of one share of DirecTouch common stock for \nevery one share of UTS capital stock held by UTS stockholders and (ii) vested \noptions to purchase shares of UTS common stock in the ratio of one vested \noption to purchase a share of DirecTouch common stock for every one vested \noption to purchase UTS common stock held by UTS optionholders ((i) and (ii) \ncollectively, the 'Distribution');\n\n     C. WHEREAS, the exercise price of UTS' options to purchase shares of UTS \nstock (the 'UTS Options') must be adjusted to account for the issuance of \nthe options to purchase shares of DirecTouch (the 'DirecTouch Options') \nconsistent with Treasury Regulation Section 1.425-(e)(5)(ii)(b) (the 'UTS \nOption Price Adjustment') as follows: (i) after the Distribution, the \naggregate exercise price of the UTS Option and the DirecTouch Option will \nequal the aggregate exercise price of the UTS Option immediately prior to the \nDistribution; and (ii) the adjustment shall be calculated so that the \npre-Distribution exercise price per share of the UTS Option will be allocated \namong the adjusted UTS Options and the DirecTouch Options on the basis of the \nrelative fair market values of the underlying Common Stock of UTS and \nDirecTouch after the Distribution (the valuation of the DirecTouch Common \nStock will be based on a post-Distribution market valuation).\n\n     D. WHEREAS, in connection with the Distribution, the Board of Directors \nof UTS has determined that it is in the best interests of UTS, DirecTouch, \nand the stockholders of each, respectively, to amend certain provisions of \nthe vested options to purchase shares of UTS common stock held by the \nemployees of DirecTouch as of the Distribution Record Date so that these \noptions will continue for the term of the option and will not terminate 90 \ndays after these DirecTouch employees terminate their employment from UTS; and\n\n\n\n\n     E. WHEREAS, in connection with the Distribution, UTS and DirecTouch have \ndetermined that it is necessary and desirable to set forth the principal \ncorporate transactions required to effect the Distribution, and to set forth \nthe agreements that will govern certain matters following the Distribution.\n\n     NOW, THEREFORE, in consideration of the mutual agreements, provisions \nand covenants contained in this Agreement, the parties hereby agree as \nfollows:\n\n                                   ARTICLE I\n\n                                  DEFINITIONS\n\n     Section 1.01 GENERAL. As used in this Agreement, the following terms \nshall have the following meanings:\n\n                  ACTION: Any action, claim, suit, arbitration, inquiry, \nproceeding or investigation by or before any court, any governmental or other \nregulatory or administrative agency or commission or any arbitration tribunal.\n\n                  AFFILIATE: With respect to any specified Person, any other \nPerson directly or indirectly controlling or controlled by, or under direct \nor indirect common control with, such specified Person. For purposes of this \ndefinition, 'control,' when used with respect to any Person, means the \npower to direct the management and policies of such Person, directly or \nindirectly, whether through the ownership of voting securities, by contract \nor otherwise; and the terms 'controlling' and 'controlled' shall have \nmeanings correlative to the foregoing. Notwithstanding the foregoing, (i) the \nAffiliates of UTS shall not include DirecTouch, the DirecTouch Subsidiaries \nor any other Person which would be an Affiliate of UTS by reason of UTS's \nownership of the capital stock of DirecTouch prior to the Distribution or the \nfact that any officer or director of DirecTouch or any of the DirecTouch \nSubsidiaries shall also serve as an officer or director of UTS, and (ii) the \nAffiliates of DirecTouch shall not include UTS or any other Person which \nwould be an Affiliate of DirecTouch by reason of UTS's ownership of capital \nstock of DirecTouch prior to the Distribution or the fact that any officer or \ndirector of DirecTouch or any of the DirecTouch Subsidiaries shall also serve \nas an officer or director of UTS.\n\n                  DIRECTOUCH ASSETS: The assets of the DirecTouch Group, \nincluding without limitation (i) assets relating to the DirecTouch Business, \ndetermined on a basis consistent with the determination of assets included on \nthe DirecTouch Financial Statements, and (ii) any other assets of the \nDirecTouch Group relating to the DirecTouch Business.\n\n                  DIRECTOUCH BOARD: The Board of Directors of DirecTouch.\n\n\n                                      -2-\n\n\n                  DIRECTOUCH BOOKS AND RECORDS: The books and records \n(including computerized records) of DirecTouch and the DirecTouch \nSubsidiaries and all books and records owned by UTS which relate to the \nDirecTouch Business or are necessary to operate the DirecTouch Business, \nincluding, without limitation, all such books and records relating to \nDirecTouch Employees, all files relating to any Action being assumed by \nDirecTouch as part of the DirecTouch Liabilities, original corporate minute \nbooks, stock ledgers and certificates and corporate seals, and all licenses, \nleases, agreements and filings, relating to DirecTouch, the DirecTouch \nSubsidiaries or the DirecTouch Business (but not including the UTS Books and \nRecords, provided that DirecTouch shall have access to, and have the right to \nobtain duplicate copies of the UTS Books and Records in accordance with the \nprovisions of Article VI).\n\n                  DIRECTOUCH BYLAWS: The Bylaws of DirecTouch, substantially \nin the form of EXHIBIT A, to be in effect at the Distribution Date.\n\n                  DIRECTOUCH CERTIFICATE: The Restated Certificate of \nIncorporation of DirecTouch, substantially in the form of EXHIBIT B, to be in \neffect at the Distribution Date.\n\n                  DIRECTOUCH COMMON STOCK: The common stock, par value $0.01 \nper share, of DirecTouch.\n\n                  DIRECTOUCH EMPLOYEES: All of the employees of DirecTouch at \nthe time of the Distribution; PROVIDED HOWEVER, that James Miller and \nChauncey Shey shall be employees of both UTS and DirecTouch.\n\n                  DIRECTOUCH GROUP: DirecTouch and the DirecTouch \nSubsidiaries, collectively.\n\n                  DIRECTOUCH LIABILITIES: (i) All of the Liabilities of the \nDirecTouch Group under, or to be retained or assumed by DirecTouch or any of \nthe DirecTouch Subsidiaries pursuant to this Agreement or any of the Related \nAgreements, (ii) all Liabilities for payment of outstanding loans of UTS \nattributable to the DirecTouch Business existing as of the Distribution Date, \n(iii) all Liabilities arising out of or in connection with any of the \nDirecTouch Assets or the DirecTouch Business, determined on a basis \nconsistent with the determination of the Liabilities of DirecTouch included \non the DirecTouch Financial Statement, and (iv) all Liabilities arising out \nof or in connection with any claims made by former DirecTouch officers or \nemployees, whether brought against UTS or DirecTouch.\n\n                  DIRECTOUCH FINANCIAL STATEMENTS: The Financial Statements \nfor DirecTouch for the years ended 1998 and 1997 attached hereto as EXHIBIT C.\n\n                  DIRECTOUCH SUBSIDIARIES: All Subsidiaries of DirecTouch at \nthe time of the Distribution.\n\n\n                                      -3-\n\n                  DISTRIBUTION DATE: The date determined by the UTS Board as \nthe date on which the Distribution shall be effected, which Distribution Date \nis contemplated by the UTS Board to occur on or about August 5, 1999.\n\n                  DISTRIBUTION RECORD DATE: The date established by the UTS \nBoard as the date for taking a record of the Holders of UTS Common Stock \nentitled to participate in the Distribution, which Distribution Record Date \nhas been established as July 15, 1999.\n\n                  HOLDERS: The holders of record of (i) UTS Capital Stock (as \ndefined below) or (ii) vested options to purchase UTS common stock as of the \nDistribution Record Date.\n\n                  INTER-COMPANY OPTION AGREEMENT: The option agreement \nbetween UTS and DirecTouch, which agreement shall be entered into on or prior \nto the Distribution Date in substantially the form of EXHIBIT D attached \nhereto.\n\n                  LIABILITIES: Any and all debts, liabilities and \nobligations, absolute or contingent, matured or unmatured, liquidated or \nunliquidated, accrued or unaccrued, known or unknown, whenever arising, \nincluding all costs and expenses relating thereto, and including, without \nlimitation, those debts, liabilities and obligations arising under any law, \nrule, regulation, Action, threatened Action, order or consent decree of any \ngovernmental entity or any award of any arbitrator of any kind, and those \narising under any contract, commitment or undertaking.\n\n                  PERSON: Any individual, corporation, partnership, \nassociation, trust, estate or other entity or organization, including any \ngovernmental entity or authority.\n\n                  PRIVILEGES: All privileges that may be asserted under \napplicable law, including, without limitation, privileges arising under or \nrelating to the attorney-client relationship (including but not limited to \nthe attorney-client and work product privileges), the accountant-client \nprivilege, and privileges relating to internal evaluative processes.\n\n                  PRIVILEGED INFORMATION: All Information as to which UTS, \nDirecTouch or any of their Subsidiaries are entitled to assert the protection \nof a Privilege.\n\n                  RELATED AGREEMENTS: All of the agreements, instruments, \nunderstandings, assignments or other arrangements which are entered into in \nconnection with the transactions contemplated hereby and which are set forth \nin a writing, including, without limitation, (i) the Inter-Company Option \nAgreement and (ii) the Stock Transfer Restriction Agreement, attached hereto \nas EXHIBIT E.\n\n                  RETAINED ASSETS: The assets of UTS other than the \nDirecTouch Assets, including without limitation (i) assets relating to the \nRetained Business, determined on a basis consistent with the determination of \nassets included on the UTS Financial Statements, (ii) any other assets of UTS \nand its Affiliates relating to the Retained Business.\n\n\n                                      -4-\n\n\n                  RETAINED BUSINESS: The businesses conducted by UTS pursuant \nto or utilizing the Retained Assets.\n\n                  RETAINED EMPLOYEES: The individuals employed by UTS and not \nDirecTouch on the Distribution Date; PROVIDED HOWEVER, James Miller and \nChauncey Shey shall be employees of both UTS and DirecTouch.\n\n                  RETAINED LIABILITIES: All of the Liabilities arising out of \nor in connection with the Retained Assets or the Retained Business, \ndetermined on a basis consistent with the determination of the Liabilities of \nUTS included on the UTS Financial Statements.\n\n                  SUBSIDIARY: With respect to any Person, (a) any corporation \nof which at least a majority in interest of the outstanding voting stock \n(having by the terms thereof voting power under ordinary circumstances to \nelect a majority of the directors of such corporation, irrespective of \nwhether or not at the time stock of any other class or classes of such \ncorporation shall have or might have voting power by reason of the happening \nof any contingency) is at the time, directly or indirectly, owned or \ncontrolled by such Person, by one or more Subsidiaries of such Person, or by \nsuch Person and one or more of its Subsidiaries, or (b) any non-corporate \nentity in which such Person, one or more Subsidiaries of such Person, or such \nPerson and one or more Subsidiaries of such Person, directly or indirectly, \nat the date of determination thereof, has at least majority ownership \ninterest.\n\n                  UTS BOARD: The Board of Directors of UTS.\n\n                  UTS BOOKS AND RECORDS: The books and records (including \ncomputerized records) of UTS and all books and records owned by DirecTouch \nwhich relate to the Retained Business or are necessary to operate the \nRetained Business, including, without limitation, all such books and records \nrelating to Retained Employees, all files relating to any Action pertaining \nto the Retained Liabilities, original corporate minute books, stock ledgers \nand certificates and corporate seals, and all licenses, leases, agreements \nand filings, relating to UTS or the Retained Business (but not including the \nDirecTouch Books and Records, provided that UTS shall have access to, and \nshall have the right to obtain duplicate copies of, the DirecTouch Books and \nRecords in accordance with the provisions of Article VI).\n\n                  UTS CAPITAL STOCK: The common stock and preferred stock, \npar value $0.0025 per share, of UTS.\n\n                  UTS FINANCIAL STATEMENT: The Financial Statements for UTS \nfor the years ended 1998, 1997 and 1996 attached hereto as EXHIBIT F.\n\n                  UTS GROUP: UTS and the UTS Subsidiaries, collectively.\n\n                  UTS SUBSIDIARIES: All Subsidiaries of UTS at the time of \nthe Distribution.\n\n\n                                      -5-\n\n\n                                   ARTICLE II\n\n                   ASSUMPTION AND SATISFACTION OF LIABILITIES\n\n     Section 2.01 ASSUMPTION AND SATISFACTION OF LIABILITIES. Except as set \nforth in the Inter-company Option Agreement or the other Related Agreements, \neffective as of and after the Distribution Date, (a) DirecTouch shall, and\/or \nshall cause the DirecTouch Subsidiaries to, assume, pay, perform and \ndischarge in due course all of the DirecTouch Liabilities and (b) UTS shall \npay, perform and discharge in due course all of the Retained Liabilities.\n\n                                  ARTICLE III\n\n                           CAPITAL CONTRIBUTION OF UTS\n\n     Section 3.01 Prior to the Distribution Date, UTS hereby agrees to make a \ncapital contribution to DirecTouch in the amount of $338,835.47 and to cancel \npreviously existing indebtedness of $338,835.47, owing by DirecTouch to UTS. \nUTS acknowledges that no additional shares of DirecTouch Common Stock will be \nissued or issuable in connection with or as a result of such capital \ncontribution or forgiveness of debt, except as may otherwise be provided in a \nRelated Agreement. The contribution to capital is intended to qualify under \nSection 351 of the Internal Revenue Code of 1986, as amended, and shall be \nreported on all UTS and DirecTouch tax returns and information statements in \naccordance with such intentions, unless otherwise indicated by UTS. UTS and \nDirecTouch understand and acknowledge that all of the shares of DirecTouch \nCommon Stock held by UTS will be distributed by UTS to the holders of \noutstanding shares of UTS common stock. Prior to the Distribution Date, UTS \nshall return to DirecTouch for cancellation such number of shares of \nDirecTouch Common Stock as UTS deems not to be required for purposes of \neffecting the Distribution. \n\n                                   ARTICLE IV\n\n                                THE DISTRIBUTION\n\n     Section 4.01 COOPERATION PRIOR TO THE DISTRIBUTION.\n\n                  (a) CONSENTS. UTS and DirecTouch shall use all reasonable \nefforts to obtain any third-party consents or approvals necessary or \ndesirable in connection with the transactions contemplated hereby \n('Consents').\n\n                  (b) UTS and DirecTouch will use all reasonable efforts to \ntake, or cause to be taken, all actions, and to do, or cause to be done, all \nthings necessary or desirable under \n\n\n                                      -6-\n\n\napplicable law, to consummate the transactions contemplated under this \nAgreement and the Related Agreements.\n\n     Section 4.02 TRANSFERS NOT EFFECTED PRIOR TO THE DISTRIBUTION; TRANSFERS \nDEEMED EFFECTIVE AS OF THE DISTRIBUTION DATE. To the extent that any \ntransfers or other actions contemplated by this Agreement shall not have been \nconsummated prior to the Distribution Date, the parties shall cooperate to \neffect such transfers or other actions as promptly following the Distribution \nDate as shall be practicable, it nonetheless being agreed and understood by \nthe parties that neither party shall be liable in any manner to any other \nparty for any failure of any of the transfers or assumptions contemplated by \nthis Agreement to be consummated prior to the Distribution Date. Nothing \nherein shall be deemed to require the transfer of any assets or the \nassumption of any Liabilities which by their terms or operation of law cannot \nbe transferred or assumed; PROVIDED, HOWEVER, that UTS and DirecTouch shall \ncooperate to seek to obtain any necessary consents or approvals for the \ntransfer of all assets and assumption of all Liabilities contemplated to be \ntransferred or assumed pursuant to this Agreement. In the event that any such \ntransfer of assets or assumption of Liabilities has not been consummated, \neffective as of and after the Distribution Date, the party retaining such \nasset or Liability shall thereafter hold such asset for the party entitled \nthereto (at the expense of the party entitled hereto) and retain such \nLiability for the account of the party by whom such Liability is to be \nassumed, and to whom such asset is to be transferred, or by whom such \nLiability is to be assumed, as the case may be, in order to place such party, \ninsofar as reasonably possible, in the same position as would have existed \nhad such asset or Liability been transferred or assumed as of the \nDistribution Date. As and when such assets or Liability becomes transferable \nor assumable, such transfer or assumption shall be effected forthwith. The \nparties agree that, as of the Distribution Date, each party hereto shall be \ndeemed to have assumed, in accordance with the terms of this Agreement and \nthe Related Agreements, all of the Liabilities, and all duties, obligations, \nand responsibilities incident thereto, which such party is required to assume \npursuant to the terms hereof and thereof.\n\n     Section 4.03 NO REPRESENTATIONS OR WARRANTIES; CONSENTS. Each of the \nparties hereto understands and agrees that no party hereto is, in this \nAgreement or in any Related Agreement or in any other agreement or document \ncontemplated by this Agreement or otherwise, representing or warranting in \nany way (i) as to the value or freedom from encumbrance of, or any other \nmatter concerning, any assets of such party or (ii) as to the legal \nsufficiency to convey title to any asset pursuant to this Agreement or any \nRelated Agreements, it being agreed and understood that all such assets are \nbeing transferred 'as is, where is' and that the party to which such assets \nare to be transferred hereunder shall bear the economic and legal risk that \nany conveyancing of such assets shall prove to be insufficient or that such \nparty's title to any such assets shall be other than good and marketable and \nfree from encumbrances. Similarly, each party hereto understands and agrees \nthat no party hereto is, in this Agreement or in any other agreement or \ndocument contemplated by this Agreement or otherwise, representing or \nwarranting in any way that the obtaining of any consents or approvals, the \nexecution and delivery of any agreements or the making of any filings or \napplications contemplated by this Agreement will satisfy the provisions of \nany or all applicable agreements or the requirements of any and all \napplicable laws or judgments, it being agreed and understood that the party \nto which any assets are transferred shall bear the economic and legal risk \nthat any necessary consents or approvals are not obtained or that any \nrequirements of laws or judgments are not\n\n\n                                      -7-\n\n\ncompiled with. Notwithstanding the foregoing, the parties shall use\nreasonable efforts to obtain all consents and approvals, to enter into all\nagreements and to make all filings and applications which may be required for\nthe consummation of the transactions contemplated by this Agreement,\nincluding, without limitation, all applicable regulatory filings or consents\nunder federal or state laws and all necessary consents, approvals,\nagreements, filings and applications.\n\n     Section 4.04 CONVEYANCING AND ASSUMPTION INSTRUMENTS. In connection with \nthe transfers of assets (other than capital stock) and the assumptions of \nLiabilities contemplated by this Agreement and the Information Statement, the \nparties shall execute or cause to be executed by the appropriate entities the \nConveyancing and Assumption Instruments in such form as the parties shall \nagree. The transfer of capital stock shall be effected by means of delivery \nof stock certificates and executed stock powers and notation on the stock \nrecord books of the corporation or other legal entities involved.\n\n     Section 4.05 UTS BOARD ACTION; CONDITIONS PRECEDENT TO THE DISTRIBUTION. \nThe UTS Board shall, in its discretion, establish any appropriate procedures \nin connection with the Distribution. In no event shall the Distribution occur \nunless the following conditions shall have been satisfied:\n\n                  (a) the DirecTouch Board, comprised as contemplated by \nSection 6.01, shall have been elected, and the DirecTouch Certificate and \nDirecTouch Bylaws shall have been adopted and shall be in effect;\n\n                  (b) UTS and DirecTouch shall have obtained all Consents, \nthe failure of which to obtain would, in the determination of the UTS Board, \nhave a material adverse effect on UTS or DirecTouch;\n\n                  (c) UTS and DirecTouch shall have entered into the Related \nAgreements; PROVIDED, HOWEVER, that (i) any such condition may be waived by \nthe UTS Board in its sole discretion, and (ii) the satisfaction of such \nconditions shall not create any obligation on the part of UTS or any other \nparty hereto to effect the Distribution or in any way limit UTS's power of \ntermination set forth in Section 8.07 or alter the consequences of any such \ntermination from those specified in such Section.\n\n                  (d) UTS shall have granted vested options pursuant to the \n1999 Special Stock Option Plan to every holder of vested options to purchase \nUTS common stock in the ratio of one vested option to purchase a share of \nDirecTouch common stock for every vested option to purchase a share of UTS \ncommon stock held by the UTS option holder as of the Distribution Record Date \n(the 'Spin-off Options').\n\n                  (e) UTS shall have effected the UTS Option Price Adjustment \nwith respect to every UTS Option so that the aggregate exercise price of each \nUTS Option and DirecTouch Option will equal the aggregate exercise price of \neach UTS Option immediately prior to the Distribution.\n\n\n                             -8-\n\n\n                  (f) UTS shall have amended the vested options to purchase \nUTS common stock held by all the DirecTouch Employees as of the Distribution \nRecord Date excluding Jim Miller and Chauncey Shey (the 'DirecTouch \nAmendment Optionees') so that these vested options (the 'Amended Options') \nwill remain exercisable as if such DirecTouch Amendment Optionees remained \nemployed by UTS; PROVIDED, HOWEVER, that upon the termination of these \nDirecTouch Amendment Optionees from DirecTouch, their Amended Options will \nterminate according to the terms of the UTS' 1997 Stock Plan as if these \nDirecTouch Amendment Optionees had terminated from UTS on a date even with \ntheir termination from DirecTouch. All nonvested options to purchase UTS \ncommon stock held by DirecTouch Amendment Optionees terminate as of the \nDistribution Date.\n\n     Section 4.06 THE DISTRIBUTION. On the Distribution Date, subject to the \nconditions and rights of termination set forth in this Agreement, UTS shall \ndistribute, on or as soon as practicable following the Distribution Date, to \neach Holder one share of DirecTouch common stock for every share of UTS \ncapital stock held by such Holder. DirecTouch agrees to provide all share \ncertificates that UTS shall require in order to effect the Distribution.\n\n                               ARTICLE V\n\n                            INDEMNIFICATION\n\n     Section 5.01 INDEMNIFICATION BY UTS. Except as otherwise expressly set \nforth in a Related Agreement, UTS shall indemnify, defend and hold harmless \nDirecTouch and each of the DirecTouch Subsidiaries, and each of their \nrespective directors, officers, employees, agents and Affiliates and each of \nthe heirs, executors, successors and assigns of any of the foregoing (the \n'DirecTouch Indemnitees') from and against the Retained Liabilities and any \nand all losses, Liabilities, damages, including, without limitation, the \ncosts and expenses of any and all Actions, threatened Actions, demands, \nassessments, judgments, settlements and compromises relating to the Retained \nLiabilities and attorneys' fees and any and all expenses whatsoever \nreasonably incurred in investigating, preparing or defending against any such \nActions or threatened Actions (collectively, 'DirecTouch Indemnifiable \nLosses' and, individually, a 'DirecTouch Indemnifiable Loss') of the \nDirecTouch Indemnitees arising out of or due to the failure or alleged \nfailure of UTS or any of its Affiliates prior to or after the Distribution \nDate to pay, perform or otherwise discharge in due course any of the Retained \nLiabilities.\n\n     Section 5.02 INDEMNIFICATION BY DIRECTOUCH. Except as otherwise \nexpressly set forth in a Related Agreement, DirecTouch shall indemnify, \ndefend and hold harmless UTS and each of its directors, officers, employees, \nagents and Affiliates and each of the heirs, executors, successors and \nassigns of any of the foregoing (the 'UTS Indemnitees') from and against \nthe DirecTouch Liabilities and any and all losses, Liabilities, damages, \nincluding, without limitation, the costs and expenses of any and all Actions, \nthreatened Actions, demands, assessments, judgments, settlements and \ncompromises relating to the DirecTouch Liabilities and attorneys' fees and \nany and all expenses \n\n\n                             -9-\n\n\nwhatsoever reasonably incurred in investigating, preparing or defending \nagainst any such Actions or threatened Actions (collectively, 'UTS \nIndemnifiable Losses' and, individually, a 'UTS Indemnifiable Loss') of \nthe UTS Indemnitees arising out of or due to the failure or alleged failure \nof DirecTouch or any of its Affiliates prior to or after the Distribution \nDate to pay, perform or otherwise discharge in due course any of the \nDirecTouch Liabilities. The 'DirecTouch Indemnifiable Losses' and the 'UTS \nIndemnifiable Losses' are collectively referred to as the 'Indemnifiable \nLosses.'\n\n     Section 5.03 INSURANCE PROCEEDS. The amount which any party (an \n'Indemnifying Party') is or may be required to pay to any other Person (an \n'Indemnitee') pursuant to Section 5.01 or Section 5.02 shall be reduced \n(including, without limitation, retroactively) by any Insurance Proceeds or \nother amounts actually recovered by or on behalf of such Indemnitee in \nreduction of the related Indemnifiable Loss. If an Indemnitee shall have \nreceived the payment required by this Agreement from an Indemnifying Party in \nrespect of an Indemnifiable Loss and shall subsequently actually receive \nInsurance Proceeds, or other amounts in respect of such Indemnifiable Loss as \nspecified above, then such Indemnitee shall pay to such Indemnifying Party a \nsum equal to the greater of (i) the amount of such Insurance Proceeds or \nother amounts actually received and (ii) the amount of the payment previously \nmade by the Indemnifying Party in respect of the Indemnifiable Loss.\n\n     Section 5.04 PROCEDURE FOR INDEMNIFICATION.\n\n                  (a) Except as may be set forth in a Related Agreement, if \nan Indemnitee shall receive notice or otherwise learn of the assertion by a \nPerson (including, without limitation, any governmental entity) who is not a \nparty to this Agreement or to any of the Related Agreements of any claim or \nof the commencement by any such Person of any Action (a 'Third-Party \nClaim') with respect to which an Indemnifying Party may be obligated to \nprovide indemnification pursuant to this Agreement, such Indemnitee shall \ngive such Indemnifying Party written notice thereof promptly after becoming \naware of such Third-Party Claim; PROVIDED that the failure of any Indemnitee \nto give notice as required by this Section 5.04 shall not relieve the \nIndemnifying Party of its obligations under this Article IV, except to the \nextent that such Indemnifying Party is prejudiced by such failure to give \nnotice. Such notice shall describe the Third-Party Claim in reasonable \ndetail, and shall indicate the amount (estimated if necessary) of the \nIndemnifiable Loss that has been or may be sustained by such Indemnitee.\n\n                  (b) An Indemnifying Party may elect to defend or to seek to \nsettle or compromise, at such Indemnifying Party's own expense and by such \nIndemnifying Party's own counsel, any Third-Party Claim, provided that the \nIndemnifying Party must confirm in writing that it agrees that the Indemnitee \nis entitled to indemnification hereunder in respect of such Third-Party \nClaim. Within 30 days of the receipt of notice from an Indemnitee in \naccordance with Section 5.04(a) (or sooner, if the nature of such Third-Party \nClaim so requires), the Indemnifying Party \n\n\n                             -10-\n\n\nshall notify the Indemnitee of its election whether to assume responsibility \nfor such Third-Party Claim (provided that if the Indemnifying Party does not \nso notify the Indemnitee of its election within 30 days after receipt of such \nnotice from the Indemnitee, the Indemnifying Party shall be deemed to have \nelected not to assume responsibility for such Third-Party Claim), and such \nIndemnitee shall cooperate in the defense or settlement or compromise of such \nThird-Party Claim. After notice from an Indemnifying Party to an Indemnitee \nof its election to assume responsibility for a Third-Party Claim, such \nIndemnifying Party shall not be liable to such Indemnitee under this Article \nIV for any legal or other expenses (except expenses approved in advance by \nthe Indemnifying Party) subsequently incurred by such Indemnitee in \nconnection with the defense thereof; PROVIDED THAT if the defendants in any \nsuch claim include both the Indemnifying Party and one or more Indemnitees \nand in such Indemnitees' reasonable judgment a conflict of interest between \nsuch Indemnitees and such Indemnifying Party exists in respect of such claim, \nsuch Indemnitees shall have the right to employ separate counsel and in that \nevent the reasonable fees and expenses of such separate counsel (but not more \nthan one separate counsel reasonably satisfactory to the Indemnifying Party) \nshall be paid by such Indemnifying Party. If an Indemnifying Party elects not \nto assume responsibility for a Third-Party Claim (which election may be made \nonly in the event of a good faith dispute that a claim was inappropriately \ntendered under Section 5.01 or 5.02, as the case may be), the Indemnitee may \ndefend or (subject to the following sentence) seek to compromise or settle \nsuch Third-Party Claim. Notwithstanding the foregoing, an Indemnitee may not \nsettle or compromise any claim without prior written notice to the \nIndemnifying Party, which shall have the option within ten days following the \nreceipt of such notice (i) to disapprove the settlement and assume all past \nand future responsibility for the claim, including reimbursing the Indemnitee \nfor prior expenditures in connection with the claim, or (ii) disapprove the \nsettlement and continue to refrain from participation in the defense of the \nclaim, in which event the Indemnifying Party shall have no further right to \ncontest the amount or reasonableness of the settlement if the Indemnitee \nelects to proceed therewith, or (iii) to approve the amount of the \nsettlement, reserving the Indemnifying Party's right to contest the \nIndemnitee's right to indemnity, or (iv) to approve and agree to pay the \nsettlement. In the event the Indemnifying Party makes no response to such \nwritten notice from the Indemnitee, the Indemnifying Party shall be deemed to \nhave elected option (ii).\n\n                  (c) If an Indemnifying Party chooses to defend or to seek \nto compromise any Third-Party Claim, the Indemnitee shall make available to \nsuch Indemnifying Party any personnel and any books, records or other \ndocuments within its control or which it otherwise has the ability to make \navailable that are necessary or appropriate for such defense.\n\n                  (d) Notwithstanding anything else in this Section 5.04 to \nthe contrary, an Indemnifying Party shall not settle or compromise any \nThird-Party Claim unless such settlement or compromise contemplates as an \nunconditional term thereof the giving by such claimant or plaintiff to the \nIndemnitee of a written release from all liability in respect of such \nThird-Party Claim (and provided further that such settlement may not provide \nfor any non-monetary relief by Indemnitee without the written consent of \nIndemnitee). In the event the Indemnitee shall notify the Indemnifying Party \nin writing that such Indemnitee declines to accept any such settlement or \ncompromise, such Indemnitee may continue to contest such Third-Party Claim, \nfree of any participation by such Indemnifying Party, at such Indemnitee's \nsole expense. In such event, the obligation of such Indemnifying Party to \nsuch Indemnitee with respect to such Third-Party Claim shall be equal to (i) \nthe costs and expenses of such Indemnitee prior to the date such Indemnifying \nParty notifies such Indemnitee of the offer to settle or compromise (to the \nextent such costs and \n\n\n                             -11-\n\n\nexpenses are otherwise indemnifiable hereunder) PLUS (ii) the lesser of (A) \nthe amount of any offer of settlement or compromise which such Indemnitee \ndeclined to accept and (B) the actual out-of-pocket amount such Indemnitee is \nobligated to pay subsequent to such date as a result of such Indemnitee's \ncontinuing to pursue such Third-Party Claim.\n\n                  (e) Any claim on account of an Indemnifiable Loss which \ndoes not result from a Third-Party Claim shall be asserted by written notice \ngiven by the Indemnitee to the applicable Indemnifying Party. Such \nIndemnifying Party shall have a period of 15 days after the receipt of such \nnotice within which to respond thereto. If such Indemnifying Party does not \nrespond within such 15-day period, such Indemnifying Party shall be deemed to \nhave refused to accept responsibility to make payment. If such Indemnifying \nParty does not respond within such 15-day period or rejects such claim in \nwhole or in part, such Indemnitee shall be free to pursue such remedies as \nmay be available to such party under applicable law or under this Agreement.\n\n                  (f) In addition to any adjustments required pursuant to \nSection 5.03, if the amount of any Indemnifiable Loss shall, at any time \nsubsequent to the payment required by this Agreement, be reduced by recovery, \nsettlement or otherwise, the amount of such reduction, less any expenses \nincurred in connection therewith, shall promptly be repaid by the Indemnitee \nto the Indemnifying Party.\n\n                  (g) In the event of payment by an Indemnifying Party to any \nIndemnitee in connection with any Third-Party Claim, such Indemnifying Party \nshall be subrogated to and shall stand in the place of such Indemnitee as to \nany events or circumstances in respect of which such Indemnitee may have any \nright or claim relating to such Third-Party Claim against any claimant or \nplaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate \nwith such Indemnifying Party in a reasonable manner, and at the cost and \nexpense of such Indemnifying Party, in prosecuting any subrogated right or \nclaim.\n\n     Section 5.05 REMEDIES CUMULATIVE. The remedies provided in this Article \nIV shall be cumulative and shall not preclude assertion by any Indemnitee of \nany other rights or the seeking of any and all other remedies against any \nIndemnifying Party.\n\n     Section 5.06 SURVIVAL OF INDEMNITIES. The obligations of each of \nDirecTouch and UTS under this Article IV shall survive the sale or other \ntransfer by it of any assets or businesses or the assignment by it of any \nLiabilities with respect to any Indemnifiable Loss of the other related to \nsuch assets, businesses or Liabilities.\n\n\n                             -12-\n\n\n                            ARTICLE VI\n\n                   CERTAIN ADDITIONAL MATTERS\n\n     Section 6.01 DIRECTOUCH BOARD. DirecTouch and UTS shall take all actions \nwhich may be required to constitute, effective as of the Distribution Date, \nthe board of directors of DirecTouch with the following persons: Hong Lu, \nChauncey Shey, Li Kin Shing, Jim Miller and Charlie Shi.\n\n     Section 6.02 EMPLOYEE MATTERS.\n\n                  (a) On the Distribution Date, except to the extent retained \nor assumed by UTS under this Agreement or any other agreement relating to the \nDistribution, DirecTouch shall retain or assume, as the case may be, \nresponsibility as employer for the DirecTouch Employees. On the Distribution \nDate, except to the extent retained or assumed by DirecTouch under this \nAgreement or any other agreement relating to the Distribution, UTS shall \nretain or assume, as the case may be, responsibility as employer for the \nRetained Employees.\n\n                  (b) DirecTouch shall cause all of the DirecTouch Employees \nto resign, effective as of the Distribution Date, from all positions as \nofficers or employees of UTS in which they serve. UTS shall cause all of the \nRetained Employees to resign, effective as of the Distribution Date, from all \npositions as officers or employees of DirecTouch or any of its Subsidiaries \nin which they serve.\n\n                              ARTICLE VII\n \n                  ACCESS TO INFORMATION AND SERVICES\n \n     Section 7.01 PROVISION OF CORPORATE RECORDS.\n\n                  (a) Except as may otherwise be provided in a Related \nAgreement, UTS shall arrange as soon as practicable following the \nDistribution Date for the transportation (at DirecTouch's cost) to DirecTouch \nof the DirecTouch Books and Records in its possession, except to the extent \nsuch items are already in the possession of DirecTouch or a DirecTouch \nSubsidiary. The DirecTouch Books and Records shall be the property of \nDirecTouch, but shall be available to UTS for review and duplication until \nUTS shall notify DirecTouch in writing that such records are no longer of use \nto UTS.\n\n                  (b) Except as otherwise provided in a Related Agreement, \nDirecTouch shall arrange as soon as practicable following the Distribution \nDate for the transportation (at UTS's cost) to UTS of the UTS Books and \nRecords in its possession, except to the extent such items are already in the \npossession of UTS. The UTS Books and Records shall be the property of UTS, \nbut \n\n\n                             -13-\n\n\nshall be available to DirecTouch for review and duplication until \nDirecTouch shall notify UTS in writing that such records are no longer of use \nto DirecTouch.\n\n     Section 7.02 ACCESS TO INFORMATION. Except as otherwise provided in a \nRelated Agreement, from and after the Distribution Date, UTS shall afford to \nDirecTouch and its authorized accountants, counsel and other designated \nrepresentatives reasonable access (including using reasonable efforts to give \naccess to persons or firms possessing information) and duplicating rights \nduring normal business hours to all records, books, contracts, instruments, \ncomputer data and other data and information relating to pre-Distribution \noperations (collectively, 'Information') within UTS's possession insofar as \nsuch access is reasonably required by DirecTouch for the conduct of its \nbusiness, subject to appropriate restrictions for classified or Privileged \nInformation. Similarly, except as otherwise provided in a Related Agreement, \nDirecTouch shall afford to UTS and its authorized accountants, counsel and \nother designated representatives reasonable access (including using \nreasonable efforts to give access to persons or firms possessing information) \nand duplicating rights during normal business hours to Information within \nDirecTouch's possession, insofar as such access is reasonably required by UTS \nfor the conduct of its business, subject to appropriate restrictions for \nclassified or Privileged Information. Information may be requested under this \nArticle VI for the legitimate business purposes of either party, including, \nwithout limitation, audit, accounting, claims (including claims for \nindemnification hereunder), litigation and tax purposes, as well as for \npurposes of fulfilling disclosure and reporting obligations and for \nperforming this Agreement and the transactions contemplated hereby.\n\n     Section 7.03 PRODUCTION OF WITNESSES. At all times from and after the \nDistribution Date, each of DirecTouch and UTS shall use reasonable efforts to \nmake available to the other, upon written request, its and its Subsidiaries' \nofficers, directors, employees and agents as witnesses to the extent that \nsuch persons may reasonably be required in connection with any Action.\n\n     Section 7.04 REIMBURSEMENT. Except to the extent otherwise contemplated \nin any Related Agreement, a party providing Information or witness services \nto the other party under this Article VI shall be entitled to receive from \nthe recipient, upon the presentation of invoices therefor, payments of such \namounts, relating to supplies, disbursements and other out-of-pocket expenses \n(at cost) and direct and indirect expenses of employees who are witnesses or \notherwise furnish assistance (at cost), as may be reasonably incurred in \nproviding such Information or witness services.\n\n     Section 7.05 RETENTION OF RECORDS. Except as otherwise required by law \nor agreed to in a Related Agreement or otherwise in writing, each of UTS and \nDirecTouch may destroy or otherwise dispose of any of the Information, which \nis material Information and is not contained in other Information retained by \nUTS or DirecTouch, as the case may be, at any time after the seventh \nanniversary of this Agreement, provided that, prior to such destruction or \ndisposal, (a) it shall provide no less than 90 or more than 120 days prior \nwritten notice to the other, specifying in reasonable detail the Information \nproposed to be destroyed or disposed of and (b) if a recipient of such notice \nshall request in writing prior to the scheduled date for such destruction or \ndisposal that any of the Information proposed to be destroyed or disposed of \nbe delivered to such requesting party, \n\n\n                             -14-\n\n\nthe party proposing the destruction or disposal shall promptly arrange for \nthe delivery of such of the Information as was requested at the expense of \nthe party requesting such Information.\n\n     Section 7.06 CONFIDENTIALITY. Each of UTS and its Subsidiaries on the \none hand, and DirecTouch and its Subsidiaries on the other hand, shall hold, \nand shall cause its consultants and advisors to hold, in strict confidence, \nall Information concerning the other in its possession or furnished by the \nother or the other's representatives pursuant to this Agreement (except to \nthe extent that such Information has been (i) in the public domain through no \nfault of such party or (ii) later lawfully acquired from other sources by \nsuch party), and each party shall not release or disclose such Information to \nany other person, except its auditors, attorneys, financial advisors, rating \nagencies, bankers and other consultants and advisors, unless compelled to \ndisclose by judicial or administrative process or, as reasonably advised by \nits counsel or by other requirements of law, or unless such Information is \nreasonably required to be disclosed in connection with (x) any litigation \nwith any third-parties or litigation between UTS and the DirecTouch Group, \n(y) any contractual agreement to which UTS or the DirecTouch Group are \ncurrently parties, or (z) in exercise of either party's rights hereunder.\n\n     Section 7.07 PRIVILEGED MATTERS. UTS and DirecTouch recognize that legal \nand other professional services that have been and will be provided prior to \nthe Distribution Date have been and will be rendered for the benefit of both \nthe UTS Group and the DirecTouch Group and that both the UTS Group and the \nDirecTouch Group should be deemed to be the client for the purposes of \nasserting all Privileges. To allocate the interests of each party in the \nPrivileged Information, the parties agree as follows:\n\n                  (a) UTS shall be entitled, in perpetuity, to control the \nassertion or waiver of all Privileges in connection with Privileged \nInformation which relates solely to the Retained Business, whether or not the \nPrivileged Information is in the possession of or under the control of UTS or \nDirecTouch. UTS shall also be entitled, in perpetuity, to control the \nassertion or waiver of all Privileges in connection with Privileged \nInformation that relates solely to the subject matter of any claims \nconstituting Retained Liabilities, now pending or which may be asserted in \nthe future, in any lawsuits or other proceedings initiated against or by UTS, \nwhether or not the Privileged Information is in the possession of or under \nthe control of UTS or DirecTouch.\n\n                  (b) DirecTouch shall be entitled, in perpetuity, to control \nthe assertion or waiver of all Privileges in connection with Privileged \nInformation which relates solely to the DirecTouch Business, whether or not \nthe Privileged Information is in the possession of or under the control of \nUTS or DirecTouch. DirecTouch shall also be entitled, in perpetuity, to \ncontrol the assertion or waiver of all Privileges in connection with \nPrivileged Information which relates solely to the subject matter of any \nclaims constituting DirecTouch Liabilities, now pending or which may be \nasserted in the future, in any lawsuits or other proceedings initiated \nagainst or by DirecTouch, whether or not the Privileged Information is in the \npossession of DirecTouch or under the control of UTS or DirecTouch.\n\n\n                             -15-\n\n\n                  (c) UTS and DirecTouch agree that they shall have a shared \nPrivilege, with equal right to assert or waive, subject to the restrictions \nin this Section 7.07, with respect to all Privileges not allocated pursuant \nto the terms of Sections 7.07(a) and (b). All Privileges relating to any \nclaims, proceedings, litigation, disputes or other matters which involve both \nUTS and DirecTouch in respect of which UTS and DirecTouch retain any \nresponsibility or liability under this Agreement shall be subject to a shared \nPrivilege.\n\n                  (d) No party may waive any Privilege which could be \nasserted under any applicable law, and in which the other party has a shared \nPrivilege, without the consent of the other party, except to the extent \nreasonably required in connection with any litigation with third-parties or \nas provided in subsection (e) below. Consent shall be in writing, or shall be \ndeemed to be granted unless written objection is made within 20 days after \nnotice upon the other party requesting such consent.\n\n                  (e) In the event of any litigation or dispute between a \nmember of the UTS Group and a member of the DirecTouch Group, either party \nmay waive a Privilege in which the other party has a shared Privilege, \nwithout obtaining the consent of the other party, provided that such waiver \nof a shared Privilege shall be effective only as to the use of Information \nwith respect to the litigation or dispute between the UTS Group and the \nDirecTouch Group, and shall not operate as a waiver of the shared Privilege \nwith respect to third-parties.\n\n                  (f) If a dispute arises between the parties regarding \nwhether a Privilege should be waived to protect or advance the interest of \neither party, each party agrees that it shall negotiate in good faith, shall \nendeavor to minimize any prejudice to the rights of the other party, and \nshall not unreasonably withhold consent to any request for waiver by the \nother party. Each party specifically agrees that it will not withhold consent \nto waiver for any purpose except to protect its own legitimate interests.\n\n                  (g) Upon receipt by any party of any subpoena, discovery or \nother request which arguably calls for the production or disclosure of \nInformation subject to a shared Privilege or as to which the other party has \nthe sole right hereunder to assert a Privilege, or if any party obtains \nknowledge that any of its current or former directors, officers, agents or \nemployees have received any subpoena, discovery or other requests which \narguably calls for the production or disclosure of such Privileged \nInformation, such party shall promptly notify the other party of the \nexistence of the request and shall provide the other party a reasonable \nopportunity to review the Information and to assert any rights it may have \nunder this Section 7.07 or otherwise to prevent the production or disclosure \nof such Privileged Information.\n\n                  (h) The transfer of the DirecTouch Books and Records and \nthe UTS Books and Records and other Information between the UTS Group and the \nDirecTouch Group is made in reliance on the agreement of UTS and DirecTouch, \nas set forth in Sections 7.06 and 7.07, to maintain the confidentiality of \nPrivileged Information and to assert and maintain all applicable Privileges. \nThe access to information being granted pursuant to Sections 7.01 and 7.02, \nthe agreement to provide witnesses and individuals pursuant to Section 7.03 \nand the transfer of \n\n\n                             -16-\n\n\nPrivileged Information between the UTS Group and the DirecTouch Group \npursuant to this Agreement shall not be deemed a waiver of any Privilege that \nhas been or may be asserted under this Agreement or otherwise.\n\n                        ARTICLE VIII\n\n                       MISCELLANEOUS\n\n     Section 8.01 COMPLETE AGREEMENT; CONSTRUCTION. This Agreement, including \nthe Exhibits and the Related Agreements and other agreements and documents \nreferred to herein, shall constitute the entire agreement between the parties \nwith respect to the subject matter hereof and thereof and shall supersede all \nprevious negotiations, commitments and writings with respect to such subject \nmatter. Notwithstanding any other provisions in this Agreement to the \ncontrary, in the event and to the extent that there shall be a conflict \nbetween the provisions of this Agreement and the provisions of the Related \nAgreements, the Related Agreements shall control.\n\n     Section 8.02 EXPENSES. Except as otherwise set forth in this Agreement \nor any Related Agreement, all costs and expenses in connection with the \npreparation, execution, delivery and implementation of this Agreement, the \nDistribution and with the consummation of the transactions contemplated by \nthis Agreement shall be charged to the party for whose benefit the expenses \nare incurred, with any expenses which cannot be allocated on such basis to be \nsplit equally between the parties.\n\n     Section 8.03 GOVERNING LAW. This Agreement shall be governed by and \nconstrued in accordance with the laws of the State of California, without \nregard to the principles of conflicts of laws thereof.\n\n     Section 8.04 NOTICES. All notices and other communications hereunder \nshall be in writing and shall be delivered by hand, mailed by registered or \ncertified mail (return receipt requested) to the parties at the addresses \nbelow (or at such other addresses for a party as shall be specified by like \nnotice) or sent by facsimile to the numbers listed below with confirmation of \ntransmission, and shall be deemed given on the date on which such notice is \nreceived:\n\n                    To DirecTouch:\n\n                     DirecTouch, Inc.\n                     Room 3813-15\n                     Hong Kong Plaza\n                     188 Connaught Road West\n                     (011) 852-2859-9333\n                     (011) 852-2859-9393 (Fax)\n                     Attention:  Jim Miller\n\n\n                             -17-\n\n\n\n                        To UTS:\n\n                           UTS, Inc.\n                           1275 Harbor Bay Parkway, Suite 100\n                           Alameda, California 94502\n                           (510) 864-8800\n                           (510) 864-8802 (Fax)\n                           Attention:  Hong Lu\n\n     Section 8.05 AMENDMENTS. This Agreement may not be modified or amended \nexcept by an agreement in writing signed by the parties.\n\n     Section 8.06 SUCCESSORS AND ASSIGNS. This Agreement and all of the \nprovisions hereof shall be binding upon and inure to the benefit of the \nparties and their respective successors and permitted assigns. The parties \nacknowledge and agree that any party into which UTS or DirecTouch merges or \nwhich acquires all or substantially all of UTS's or DirecTouch's assets in a \nsale transaction would constitute a permitted assign for purposes of this \nSection 8.06.\n\n     Section 8.07 TERMINATION. This Agreement may be terminated and the \nDistribution abandoned at any time prior to the Distribution Date by and in \nthe sole discretion of the UTS Board without the approval of DirecTouch or of \nUTS's stockholders. In the event of such termination, no party shall have any \nliability to any other party pursuant to this Agreement. \n\n     Section 8.08 SUBSIDIARIES. Each of the parties hereto shall cause to be \nperformed, and hereby guarantees the performance of, all actions, agreements \nand obligations set forth herein to be performed by any Subsidiary of such \nparty which is contemplated to be a Subsidiary of such party on and after the \nDistribution Date.\n\n     Section 8.09 NO THIRD-PARTY BENEFICIARIES. Except for the provisions of \nArticle IV relating to Indemnitees, this Agreement is solely for the benefit \nof the parties hereto and their respective Subsidiaries and Affiliates and \nshould not be deemed to confer upon third-parties any remedy, claim, \nLiability, reimbursement, claim of action or other right in excess of those \nexisting without reference to this Agreement.\n\n     Section 8.10 TITLES AND HEADINGS. Titles and headings to sections herein \nare inserted for the convenience of reference only and are not intended to be \na part of or to affect the meaning or interpretation of this Agreement.\n\n     Section 8.11 EXHIBITS AND SCHEDULES. The Exhibits and Schedules shall be \nconstrued with and as an integral part of this Agreement to the same extent \nas if the same had been set forth verbatim herein.\n\n\n                                      -18-\n\n\n     Section 8.12 LEGAL ENFORCEABILITY. Any provision of this Agreement which \nis prohibited or unenforceable in any jurisdiction shall, as to such \njurisdiction, be ineffective to the extent of such prohibition or \nunenforceability without invalidating the remaining provisions hereof. Any \nsuch prohibition or unenforceability in any jurisdiction shall not invalidate \nor render unenforceable such provision in any other jurisdiction. Without \nprejudice to any rights or remedies otherwise available to any party hereto, \neach party hereto acknowledges that damages would be an inadequate remedy for \nany breach of the provisions of this Agreement and agrees that the \nobligations of the parties hereunder shall be specifically enforceable.\n\n     Section 8.13 ARBITRATION OF DISPUTES.\n\n                  (a) Any controversy or claim arising out of this Agreement, \nor any breach of this Agreement, including any controversy relating to a \ndetermination of whether specific assets constitute DirecTouch Assets or \nRetained Assets or whether specific Liabilities constitute DirecTouch \nLiabilities or Retained Liabilities, shall be settled by arbitration in \naccordance with the Rules of the American Arbitration Association then in \neffect, as modified by this Section 8.13 or by the further agreement of the \nparties.\n\n                  (b) Such arbitration shall be conducted in Santa Clara \nCounty, California.\n\n                  (c) Any judgment upon the award rendered by the arbitrators \nmay be entered in any court having jurisdiction thereof. The arbitrators \nshall have the authority to award to the prevailing party its attorneys' fees \nand costs incurred in such arbitration. The arbitrators shall not, under any \ncircumstances, have any authority to award punitive, exemplary or similar \ndamages, and may not, in any event, make any ruling, finding or award that \ndoes not conform to the terms and conditions of this Agreement.\n\n                  (d) Nothing contained in this Section 8.13 shall limit or \nrestrict in any way the right or power of a party at any time to seek \ninjunctive relief in any court and to litigate the issues relevant to such \nrequest for injunctive relief before such court (i) to restrain the other \nparty from breaching this Agreement or (ii) for specific enforcement of this \nSection 8.13. The parties agree that any legal remedy available to a party \nwith respect to a breach of this Section 8.13 will not be adequate and that, \nin addition to all other legal remedies, each party is entitled to an order \nspecifically enforcing this Section 8.13.\n\n                  (e) The parties hereby consent to the jurisdiction of the \nfederal courts located in Santa Clara County, California for all purposes \nunder this Agreement.\n\n                  (f) Neither party nor the arbitrators may disclose the \nexistence or results of any arbitration under this Agreement or any evidence \npresented during the course of the arbitration without the prior written \nconsent of both parties, except as required to fulfill applicable disclosure \nand reporting obligations, or as otherwise required by law.\n\n\n                                      -19-\n\n\n                  (g) Except as provided in Section 8.13(c), each party shall \nbear its own costs incurred in the arbitration. If either party refuses to \nsubmit to arbitration any dispute required to be submitted to arbitration \npursuant to this Section 8.13, and instead commences any other proceeding, \nincluding, without limitation, litigation, then the party who seeks \nenforcement of the obligation to arbitrate shall be entitled to its \nattorneys' fees and costs incurred in any such proceeding.\n\n                           (Signature page follows.)\n\n\n                                      -20-\n\n\nIN WITNESS WHEREOF, the parties have caused this Agreement to be duly\nexecuted as of the day and year first above written.\n\n                                          UTStarcom, Inc.\n\n                                          By:  \/s\/ Hong Liang Lu\n                                               -------------------------------\n                                          Name:    Hong Liang Lu\n                                                ------------------------------\n                                          Title:   President\/CEO\n                                                 -----------------------------\n\n                                          DIRECTOUCH COMMUNICATIONS \n                                          LIMITED\n\n                                          By:  \/s\/ Li Kin Shing\n                                               -------------------------------\n                                          Name:    Li Kin Shing\n                                                ------------------------------\n                                          Title:   Director\n                                                 -----------------------------\n\n\n                                      -21-\n\n\n                                    EXHIBIT A\n\n                                DIRECTOUCH BYLAWS\n\n                                    [Omitted]\n\n\n\n\n                                    EXHIBIT B\n\n                              DIRECTOUCH CERTIFICATE\n\n                                    [Omitted]\n\n\n\n\n                                    EXHIBIT C\n\n                         DIRECTOUCH FINANCIAL STATEMENTS\n\n                                   [Omitted]\n\n\n\n\n                                    EXHIBIT D\n\n                          INTER-COMPANY OPTION AGREEMENT\n\n                                   [Omitted]\n\n\n\n\n                                    EXHIBIT E\n\n                         STOCK TRANSFER RESTRICTION AGREEMENT\n\n                                    [Omitted]\n\n\n\n\n                                    EXHIBIT F\n\n                             UTS FINANCIAL STATEMENTS\n\n                                    [Omitted]\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9205],"corporate_contracts_industries":[9516],"corporate_contracts_types":[9622,9628],"class_list":["post-43383","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-utstarcom-inc","corporate_contracts_industries-telecommunications__equipment","corporate_contracts_types-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43383"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43383"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43383"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}