Exhibit 10.69
Equity Transfer Agreement
[Translation]
Transferor: Guangdong Nanfang Communications Group Co. Ltd (hereinafter Party A)
Domicile: No.138 North Guangzhou Avenue Guangzhou City
Legal Representative: Chen Guohan
Title: Chairman of Board of Directors
Nationality: China
Transferee: UTStarcom Inc. (hereinafter Party B)
Domicile: 1275 Harbor Bay Parkway, suite 100 Alameda, CA95402, U.S.A.
Legal Representative: Hong Liang Lu
Title: Chairman of Board of Directors
Nationality: U.S.A.
Party A and Party B incorporated a Chinese-Foreign equity joint venture,
Guangdong UTStarcom Communications Co. Ltd. (hereinafter referred to as Company)
in 1995. Party A and Party B, in accordance with the Law of the P.R.China on
Chinese-Foreign equity Joint Ventures and the Several Provisions on the Share
Right Variation of Investors of Foreign-Invested Enterprises, under the
principles of Equality and Free Will, Consultation and Consensus, Honesty and
Good Faith and Compensation of Equal Value, conclude this equity transfer
agreement:
[_] The Amount of Equity to be transferred:
1. Prior to the transfer, Party A contributes US$ 1,960,000.00
amounting to 49% of the Company's registered capital; Party B
contributes US$ 2,040,000.00 amounting to 51% of the Company's
registered capital.
2. In light of the operation situation of the Company, Party A agrees
to transfer to Party B all the equity of the Company held by Party
A in accordance with this Agreement; Party B agrees to buy the said
equity. Party B shall own 100% of the equity of the Company after
the realization of the transfer.
3. Neither the total investment amount nor the registered capital
shall be changed.
[_] Price of the Transferred Equity and the Payment Thereof
1. Upon friendly consultation between Party A and Party B, Party A
agrees to transfer 49% of the equity of the Company held by Party A
at the price of 30,111,200.00 Yuan.
2. Party B agrees to pay Party A the price of transferred equity in
two times after the this Agreement goes into effect:
Before December 31/st/, 2001, 50% of the Price of transferred
equity shall be paid, i.e. 15,000,000.00 Yuan.
Before January 31, 2002, the balance of 50% of the Price of
transferred equity shall be paid, i.e., 15,111,200.00 Yuan.
[_]. The Rights and Obligations of Both Parties After the Transfer:
1. The Company shall be run solely by Party B. Party B enjoys the
shareholder's rights and bears the shareholder's obligations,
while Party A will no longer participate in the running of the
Company, nor enjoy the shareholder's rights.
2. The Company's all property, creditor's rights and debts shall
be undertaken by Party B, thus they have nothing to do with
Party A.
3. All the contracts entered into in the name of the Company shall
continue to be effective; Party B shall make no rescission of
these contracts for any reasons unless Party B may rescind the
contracts upon the agreement thereon of both parties concerned.
4. Party A shall cooperate with Party B to complete all the
transfer procedures; where special circumstances make it
impossible to transfer, Party A shall promptly refund all the
price of transfer to Party B.
[_] Default
Both Party A and Party B shall perform this agreement after it goes into effect;
where either party breaches the agreement, the defaulting party shall bear the
corresponding liabilities for breach of contract.
[_]. Guarantee
1. Party A guarantees that the equity transferred to Party B in
accordance with the stipulations hereof are held legally by
Party A in the Company and that Party A has completely effective
right to dispose of the said equity and that no third party
shall make claims thereof to Party B.
2. Party A guarantees that the approval has been obtained from the
competent authority and valid authorization has been acquired
according to the relevant provisions of laws and regulations.
3. Party B guarantees that the necessary authorization has been
obtained for the conclusion hereof.
4. Party B guarantees to pay Party A the price of the transferred
equity according hereto.
[_]. Dispute Settlement
Party A and Party B shall by friendly consultation resolve the disputes
concerning the validity, performance, default, rescission, indemnity and so on
hereof. Where the disputes fail to be resolved within ninety days after the
disputes occur, both Parties agree to submit the disputes to the arbitration of
Guangzhou City Arbitration Committee and the arbitration shall be conducted in
Guangzhou in accordance with the arbitration procedures of the said Committee.
The arbitral awards shall be final and binding upon both Parties. During the
arbitration, the other clauses hereof shall continue to be performed except the
disputed parts hereof.
[_]. Application of Law
This equity transfer agreement shall be governed by the laws and regulations of
the P.R.China.
[_]. This Agreement shall be executed only after it is signed and sealed by the
representatives authorized by both Parties; it shall be valid after it is
ratified by the original ratifying authority. This Agreement has six copies of
originals; Party A and Party B shall hold one copy respectively and the other
copies shall be presented to the departments concerned for approval or records.
All these copies shall be equally effective at law.
Transferor: Transferee:
Guangdong South Communications Group Co. Utstarcom.Inc.
Representative: Representative:
Date: December 18, 2001 Date: December 18, 2001
Place of Signature: Guangzhou City, China.
Translation Certification
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I hereby certify that the foregoing represents a fair and accurate English
translation of the original Chinese document.
Dated: February 5, 2002
By: /s/ Michael J. Sophie
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Michael J. Sophie
Chief Financial Officer