Exhibit 10.106


 


COMMITTED RECEIVABLES PURCHASE AGREEMENT


 


COMMITTED
RECEIVABLES PURCHASE AGREEMENT (as it may be amended, modified or supplemented
from time to time, the “Agreement”) is made as of August 1, 2005,
between UTSTARCOM PERSONAL COMMUNICATIONS LLC, a Delaware limited liability
company (“Seller”) and CITIBANK, N.A., a national banking association (“Buyer”).


 


RECITALS


 


Seller
desires to sell certain of its Receivables from time to time, and Buyer is
willing to purchase from Seller such Receivables on the terms set forth
herein.  Terms not otherwise defined
herein shall have the meanings set forth on Exhibit A.


 


Accordingly,
the parties hereto agree as follows:


 


1.                                       Sale
and Purchase.


 


(a)                                  Sale.  Seller from time to time during the period
commencing on the date hereof and terminating on the Purchase Termination Date
may submit to Buyer a request (a “Request”) that Buyer purchase from
Seller the Proposed Receivables described in such  Request. 
Subject to satisfaction of the conditions precedent set forth in subsection 1(b),
Buyer shall purchase, and Seller shall sell, all of Seller’s right, title and
interest (but none of Seller’s obligations) with respect to such Proposed
Receivables as of the Purchase Date (all such Proposed Receivables, once
purchased and sold hereunder, collectively the “Purchased Receivables”).  Under no circumstances shall Buyer purchase
Proposed Receivables to the extent that such purchase would result in the
Outstanding Purchase Price exceeding the Purchase Commitment.


 


(b)                                 Conditions
Precedent.  Buyer shall not be
obligated to purchase Eligible Receivables described in such Request unless on
the Purchase Date therefor:


 


i.                                          Buyer has
received a Request in substantially the form of Schedule I attached hereto
with respect to the Proposed Receivables, together with such additional
supporting documentation that Buyer may have reasonably requested;


 


ii.                                       Seller’s
representations, warranties and covenants herein are true and accurate in all
material respects on such Purchase Date, including with respect to the Proposed
Receivables;


 


iii.                                    No Event of
Repurchase exists on such Purchase Date, unless Seller has repurchased and paid
the full purchase price for the affected Purchased Receivables pursuant to the
terms of Section 5 or such repurchase is being


 





















 


effectuated on such Proposed Date by payment in cash or by setoff by
Buyer against the Purchase Price for the Proposed Receivables; and


 


iv.                                   There shall
not have been any Material Adverse Change in Seller, Parent or, solely with
respect to the purchase of its related Eligible Receivables (and unless waived
in writing by Buyer), any Account Debtor, since the date of the last purchase
hereunder.


 


(c)                                  Purchase
Price.  Buyer shall pay the
Purchase Price for Purchased Receivables purchased on any Purchase Date,
denominated in U.S. dollars, to Seller’s Account in immediately available funds
on such Purchase Date.


 


(d)                                 Security
Interest.  Effective as of the
date hereof, Seller has granted (and Seller hereby does grant) (in addition to
and not in substitution of the grant under Section 5(e) below) to
Buyer a first priority security interest in and to any and all present and
future Purchased Receivables and the proceeds thereof to secure the repayment
of all amounts paid to Seller hereunder with accrued interest thereon, and this
Agreement is deemed to be a security agreement. 
With respect to such grant of a security interest, Buyer may at its
option exercise from time to time any and all rights and remedies available to
it hereunder, under the UCC or otherwise. 
Seller agrees that five Business Days shall be reasonable prior notice
to Seller of the date of any public or private sale or other disposition of all
or any of the Receivables.


 


(e)                                  Commitment
Fee.  Seller agrees to
pay to Buyer quarterly in arrears on or before the 10th day following the end
of each of Seller’s fiscal quarter a commitment fee of [CONFIDENTIAL PORTION
OMITTED AND FILED SEPARATELY WITH THE SEC] (the “Commitment Fee”) on the
average daily difference between the Outstanding Purchase Price and the
Purchase Commitment.


 


(f)                                    True Sale;
No Recourse. 
On and at all times following the Trigger Date, except as otherwise
provided in Section 5, each purchase of the Purchased Receivables is made
without recourse to Seller and Seller shall have no liability to Buyer for any
Account Debtor’s failure to pay any Purchased Receivable when it is due and
payable under the terms applicable thereto. 
Buyer agrees that it shall be responsible for the non-payment of any
Purchased Receivable to the extent it is the result, with respect to
Receivables purchased hereunder on and following the Trigger Date, of an
Insolvency Event of an Account Debtor, such assumption of credit risk (with
respect to the Outstanding Purchase Price relating thereto only) being
effective as of the Purchase Date for such Purchased Receivables.  Buyer and Seller have structured the
transactions contemplated by this Agreement as a sale after the occurrence of
the Trigger Date, and Buyer and Seller each agree to treat each such transaction
as a sale for all purposes, including, without limitation, in their respective
books, records, computer files, tax returns (federal, state and local),
regulatory and governmental filings (and shall reflect such sale in their
respective financial statements).  Seller
will advise all persons inquiring about the ownership of the Receivables that
all such Purchased Receivables have been sold to Buyer.  In the event that, contrary to the mutual
intent of the parties, any purchase of such Purchased Receivables following the
Trigger Date is


 


2





















 


not characterized as a sale, Seller shall, effective as of the Trigger
Date, be deemed to have granted to Buyer the security interest granted in Section 1(d) above.


 


2.                                       Seller
Representations and Warranties. 
Seller represents and warrants to Buyer on each Purchase Date that the
representations and warranties set forth on Exhibit C are true and
correct.


 


3.                                       Seller
Covenants.  Seller agrees to perform
the covenants set forth on Exhibit D.


 


4.                                       Collection
Activities.


 


(a)                                  Buyer
appoints Seller as its servicer and agent for the administration and servicing
of all Purchased Receivables sold to Buyer hereunder, and Seller hereby accepts
such appointment and agrees to perform all necessary and appropriate commercial
collection activities with the same care and policies as are applied to its own
Receivables in arranging the timely payment of amounts due and owing by any
Account Debtor all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, including, without limitation,
diligently and faithfully performing all servicing and collection actions
(including, if necessary, acting as party of record in foreign jurisdictions); provided, however, that such appointment
shall not release Seller from any of its duties, responsibilities, liabilities
and obligations resulting from or arising hereunder.  Buyer may replace Seller as its servicer
pursuant to clause (f) below.  In
connection with its servicing obligations, Seller will perform its obligations
and exercise its rights under contracts related to the Purchased Receivables
with the same care and applying the same policies as it would exercise and
apply if it owned the Purchased Receivables and shall act in the best interest
of Buyer to maximize Collections and provided,
further that following an Insolvency Event of an Account Debtor of
Receivables purchased hereunder on or after the Trigger Date (or any other
event that Buyer may assume the risk thereof in writing from time to time after
the date hereof), Buyer shall be fully responsible for all costs and expenses
incurred by Seller in connection herewith, which costs and expenses shall not
be adjusted or setoff against Collections in any manner.


 


(b)                                 Seller will,
on or prior to the initial Purchase Date, establish in its own name, the
Collection Account.  Seller covenants and
agrees (i) to send a notice to each Account Debtor substantially in the
form attached hereto as Exhibit E instructing each Account Debtor to pay
all amounts owing under the Receivables to the Collection Account, (ii) not
to change such payment instructions while any Purchased Receivables remain
outstanding, and (iii) to take any and all other reasonable actions,
including actions requested by Buyer, to ensure that all amounts owing under
the Receivables will be deposited exclusively to the Collection Account.


 


(c)                                  If Seller
receives a misdirected payment of a Receivable from any Account Debtor, Seller
will immediately notify Buyer and immediately (and in any event within two
Business Days of receipt thereof) remit the funds to the Collection Account.


 


3





















 


Until remitted, Seller will hold such funds in trust as Buyer’s
exclusive property and safeguard such funds for the benefit of Buyer.


 


(d)                                 Seller, as
servicer, shall be responsible for identifying, matching and reconciling any
payments received in the Collection Account with the Receivable associated with
such payment. If any payment is received in the Collection Account other than
payments on the Receivables, such funds will immediately be forwarded to
Seller, subject to receipt of evidence of payments details documenting that the
payment is for transactions other than the Receivables and that no event under Section 5
exists. If any payment is received from an Account Debtor, and such payment is
not identified or misidentified by such Account Debtor as relating to a
particular Receivable and cannot otherwise be reasonably identified (e.g. by
invoice amount) as relating to a particular Receivable or if Buyer determines
that the reconciliation is otherwise defective within five Business Days of
receipt thereof or Seller defaults in its obligations as servicer as set forth
under this Section 4, such payment shall be applied first to the unpaid
Purchased Receivables of such Account Debtor in chronological order (beginning
with the oldest unpaid Purchased Receivable), and then to Receivables which
have not been purchased hereunder, also in chronological order.


 


(e)                                  Based on the
reconciliation information  provided to
Buyer by Seller as servicer prior to 11am Pacific time under clause (d) above
and other information available to Buyer, (1) Buyer will remit to Seller’s
Account the same day, if the reconciliation is in order, (i) Collections
on account of Receivables not purchased hereunder and (ii) all other
collections received in the Collection Account and not relating to the
Receivables, and (2) Buyer will retain for its own account from Collections
on account of Purchased Receivables an amount up to the Discount of such
Purchased Receivables and any amounts then owing to Buyer.


 


(f)                                    If Seller
defaults in its obligations as servicer as set forth under this Section 4,
Buyer may at any time thereafter (and shall, without requirement of notice to
Seller or any other Person, upon a Material Adverse Change or an Insolvency
Event of Seller or Parent) replace Seller as servicer (which replacement may be
effectuated through the outplacement to a Person of all back office duties,
including billing, collection and processing responsibilities, and access to
all personnel, hardware and software utilized in connection with such
responsibilities).


 


5.                                       Repurchase
Events; Indemnities and Set-Off.


 


(a)                                  If any of
the following events (“Events of Repurchase”) occurs and is continuing:


 


i.                                          any
representation or warranty by Seller hereunder with respect to any of the
Purchased Receivables is incorrect when made or deemed made and shall have an
adverse effect on the ability to collect the Net Invoice Amount of such
Purchased Receivables; or


 


ii.                                       If,


 


4





















 


(1)                                  Seller fails
to perform or observe any other term, covenant or agreement with respect to any
of the Purchased Receivables and such failure shall have an adverse effect on
the collectibility of the Net Invoice Amount of any Purchased Receivable;


 


(2)                                  Seller
instructs an Account Debtor to pay to an account other than the Collection
Account or if an Account Debtor makes repeated misdirected payments to Seller;


 


(3)                                  An Account
Debtor asserts a Dispute with respect to any Purchased Receivable, or


 


(4)                                  Buyer does
not receive all amounts owing with respect to a Purchased Receivable within 45
days of the Due Date thereof for any other reason, unless such non-payment with
respect to Receivables purchased hereunder following the Trigger Date is the
result of an Insolvency Event of an Account Debtor,


 


then,
Seller shall, at the time, in the manner and otherwise as hereinafter set
forth, repurchase and pay for the affected part (or, if such misrepresentation,
Dispute or failure to perform relates to more than 20% of such affected
Purchased Receivables then outstanding, then, at Buyer’s discretion, all) of
such Purchased Receivables then outstanding affected by such Event of
Repurchase at Buyer’s option and demand. 
The repurchase price for a Purchased Receivable shall be the amount
equal to the Outstanding Purchase Amount relating thereto and shall be paid to
the Collection Account in immediately available funds.  Any repurchase of a Purchased Receivable
hereunder shall be without recourse to or warranty by Buyer.  Seller agrees that Buyer may set off against
any unpaid obligation of Seller under this Section, as provided in subsection (d) below.  Amounts due hereunder shall accrue interest
at the Refundable Discount Margin.


 


(b)                                 Seller
hereby agrees to indemnify Buyer (together with its officers, directors,
agents, representatives, shareholders, counsel, employees and lenders, each, an
“Indemnified Party”) from and against any and all claims, losses and
liabilities (including, without limitation, reasonable attorneys’ fees) (all of
the foregoing being collectively referred to as “Indemnified Amounts”)
arising out of or resulting from any of the following: (i) the sale to
Buyer of any Receivable which purports to be a Purchased Receivable as to which
the representations and warranties made herein are not true and correct on the
Purchase Date therefor; (ii) any other representation or warranty made or
deemed made by Seller (or any of its officers) under or in connection with this
Agreement which shall have been incorrect in any material respect when made; (iii) the
failure by Seller or any Purchased Receivable to comply with any applicable
law, rule or regulation; (iv) the failure to vest in Buyer a
perfected security interest in each Purchased Receivable and the proceeds and
Collections in respect thereof, free and clear of any liens or encumbrances of
any kind or nature whatsoever; (v) any Dispute or any other claim
resulting from the services or merchandise related to such Purchased Receivable
or the furnishing or failure to furnish such services or merchandise or


 


5





















 


relating to collection activities with respect to such Purchased
Receivable; provided, however, this clause (v) shall not be deemed to
include any failure to pay arising out of any Insolvency Event of an Account
Debtor, or (vi) the commingling by Seller of Collections at any time with
other funds of Seller or any other Person; provided,
however, with respect to Receivables purchased hereunder on and
following the Trigger Date that in all events there shall be excluded from the
foregoing indemnification any claims, losses or liabilities resulting solely
from the gross negligence or willful misconduct of an Indemnified Party or as
the result of an Insolvency Event of an Account Debtor.  Amounts due hereunder shall accrue interest
at the Refundable Discount Margin.


 


(c)                                  Tax Indemnification.  Seller shall pay, and indemnify and hold
Buyer harmless from and against, any taxes that may at any time be asserted in
respect of the purchase transactions hereunder (including any sales,
occupational, excise, personal property, privilege or license taxes, or any
withholdings, but not including taxes imposed upon Buyer with respect to its
overall net income) and costs, expenses and reasonable counsel fees in
defending against the same, whether arising by reason of the acts to be
performed by Seller hereunder or otherwise.


 


(d)                                 Set-Off.  Seller further agrees that, if Seller fails
to pay any amounts due under this Section 5 within three (3) Business
Days after receipt of notice from Buyer of the occurrence of an Event of
Repurchase, Seller hereby irrevocably instructs Buyer to set-off such amount
against the Purchase Price of any Proposed Receivables to be purchased on or
after such date or against any Collections. 
Buyer may also set-off for unpaid amounts under this Section 5
against any other funds of Seller held by Buyer.  No act or consent of any nature whatsoever is
required prior to the right of Buyer to exercise such right of set-off.


 


(e)                                  Collateral
Security.  As collateral
security for Seller’s existing and future obligations to repurchase and pay for
Purchased Receivables as set forth in clause (a) above and indemnification
obligations set forth in clauses (b) and (c) above, Seller hereby
grants to Buyer a first priority lien on and security interest in, and the
right of set-off against (1) the Collection Account and (2) all
proceeds of the foregoing.


 


(f)                                    UCC.  The rights granted to Buyer hereunder are in
addition to all other rights and remedies afforded to Buyer as a secured party
under the UCC.


 


6.                                       Notices.  Unless otherwise provided herein, all
communications by Seller or Buyer or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements
and other informational documents which may be sent by first-class mail,
postage prepaid, or by email) shall be personally delivered or sent by a
recognized overnight delivery service, certified mail, postage prepaid, return
receipt requested, or by telecopier (with confirmed receipt) to Seller or
Buyer, as the case may be, at its address set forth below:


 


	
  If
  to Seller:

  	
   

  	
  UTStarcom, Inc.

  
	
   

  	
   

  	
  1275
  Harbor Bay Parkway

  



 


6





















 


	
   

  	
   

  	
  Alameda,
  CA 94502

  
	
   

  	
   

  	
  Fax:
  (510) 864-8802

  
	
   

  	
   

  	
  email:
  ksanfelipe@utstar.com

  
	
   

  	
   

  	
  cc
  email: candace.hsu@utstar.com

  
	
   

  	
   

  	
  Attention:
  Keith San Felipe, Treasurer

  
	
   

  	
   

  	
   

  
	
  If
  to Buyer:

  	
   

  	
  Citibank,
  N.A.

  
	
   

  	
   

  	
  388
  Greenwich Street, 25th Floor

  
	
   

  	
   

  	
  New
  York, NY 10013

  
	
   

  	
   

  	
  Fax:
  (212) 816-6290

  
	
   

  	
   

  	
  email:
  Erik.Wanberg@citigroup.com

  
	
   

  	
   

  	
  Attention:
  Erik Wanberg

  



 


Any
Request, and any supporting documentation in connection herewith or therewith,
such as copies of invoices, may be sent by Seller by fax or as a PDF file
attachment to an email, and Buyer and Seller may otherwise communicate by email
or fax.  Seller agrees that Buyer may presume
the authenticity, genuineness, accuracy, completeness and due execution of any
email or fax communication bearing a facsimile or scanned signature resembling
a signature of an authorized Person of Seller without further verification or
inquiry by Buyer.  Notwithstanding the
foregoing, Buyer in its sole discretion may elect not to act or rely upon such
a communication and shall be entitled (but not obligated) to make inquiries or
require further Seller action to authenticate any such communication.


 


A
Person may change the address at which it is to receive notices hereunder by
written notice in the foregoing manner given to the other.


 


7.                                       Survival.  All covenants, representations and warranties
made herein shall continue in full force and effect so long as any Purchased
Receivables remain outstanding.  Seller’s
obligations to indemnify Buyer with respect to the expenses, damages, losses,
costs and liabilities shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Buyer have run.


 


8.                                       Expenses.  Seller shall reimburse Buyer for all
reasonable costs (including reasonable attorneys’ fees and expenses) Buyer
incurs in connection with the preparation and negotiation of this Agreement in
excess of $10,000 and for the enforcement of its rights or indemnities
hereunder.


 


9.                                       General
Provisions.


 


This
Agreement shall be governed by the laws of the State of New York, without
giving effect to conflicts of law principles. 
Each of the parties hereto irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States sitting in the Borough of
Manhattan, New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement


 


7





















 


of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court.  A final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law.  Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any New York State or federal court located in the Borough of Manhattan.  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of inconvenient
forum to the maintenance of such action or proceeding in any such court.


 


This
Agreement represents the final agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous understandings
and agreements with respect to such subject matter.  No provision of this Agreement may be amended
or waived except by a writing signed by the parties hereto.  This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that Seller may not assign any of its
rights hereunder without Buyer’s prior written consent, given in its sole
discretion.


 


Buyer
shall have the right to sell, transfer, assign, negotiate, or grant participations
in all or any part of, or any interest in, Buyer’s rights, obligations and
benefits hereunder; provided, that, at all times prior to an Event of
Termination, Buyer shall provide Seller at least 30 days’ notice prior to any
sale, transfer or assignment of Buyer’s obligations under this Agreement,
such  sale, transfer or assignment shall
be only to an Eligible Assignee and shall be subject to the prior consent of
Seller, such consent to be provided in a timely fashion and not unreasonably
withheld; and provided, further, that an assignment by Buyer to an
Affiliate of Buyer shall not be subject to such prior notice and consent
provisions.  Subject to the notice and
consent provisions set forth above, from and after the effective date of any
sale, transfer or assignment , the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned thereunder, shall have
the rights, duties and obligations of a Buyer under this Agreement, the
Performance Undertaking and related documents, and the assigning Buyer
thereunder, to the extent of the interest so assigned, shall be released from
its obligations under this Agreement and the other documents relating hereto.


 


Each
provision of this Agreement shall be severable from every other provision
hereof for the purpose of determining the legal enforceability of any specific
provision.  This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one
and the same agreement.


 


BUYER
AND SELLER IRREVOCABLY WAIVE ANY RIGHT THAT EITHER MAY HAVE TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR


 


8





















 


ARISING
OUT OF ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS.


 


9





















 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.


 


	
   

  	
  UTSTARCOM
  PERSONAL COMMUNICATIONS

  LLC, Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Keith San Felipe

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIBANK, N.A.,
  Buyer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Keith R.
  Karako

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice President

  	
   

  
								



 


10





















 


SCHEDULE I


 


Form of Request


 


[date]


 


Citibank,
N.A.

388 Greenwich Street, 25th Floor

New York, NY 10013


 


Reference
is hereby made to that certain Purchase Agreement, dated as of August 1,
2005, between UTSTARCOM PERSONAL COMMUNICATIONS LLC (“Seller”) and
CITIBANK, N.A. (“Buyer”) (as it may be amended, modified or supplemented
from time to time, the “Agreement”; terms not otherwise defined herein
shall have the meanings set forth in the Agreement).


 


Pursuant
to the terms of the Agreement, Seller hereby requests that Buyer purchase from
Seller the Proposed Receivables listed on the Exhibit attached hereto with
an aggregate Purchase Price of $                .


 


Seller
represents and warrants that as of the date hereof, assuming the purchase of
the Proposed Receivables pursuant to terms of the Agreement:


 


1.                                       Following
the purchase of the Proposed Receivables set forth in this Request, the
Outstanding Purchase Price does not exceed $100,000,000;


 


2.                                       Seller’s
representations, warranties and covenants set forth in the Agreement are true
and accurate in all material respects;


 


3.                                       No Event of
Repurchase exists on such Purchase Date except for repurchases being
effectuated on the date hereof by setoff by Buyer against the Purchase Price
for the Proposed Receivables; and


 


4.                                       There has
not been any Material Adverse Change in Seller or Account Debtor since the date
of the last purchase under the Agreement.


 


5.                                       There has
not been any Dispute with any Account Debtor of any Proposed Receivable or
Purchased Receivable since the date of the last purchase under the Agreement
that has not been disclosed to Buyer (and for which Buyer may establish a
reserve, at its discretion, in an amount not exceeding the amount asserted in
connection with such Dispute).


 


Upon
acceptance by Buyer of this Request and payment of the Purchase Price, Buyer
hereby purchases, and Seller hereby sells, all of Seller’s right, title and
interest (but none of Seller’s obligations) with respect to the Proposed
Receivables on the attached Exhibit as of the date hereof, and the
Proposed Receivables shall become Purchased Receivables in the manner set forth
in the Agreement.


 


I-1





















 


	
   

  	
  UTSTARCOM
  PERSONAL COMMUNICATIONS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  
	
  REQUEST
  ACCEPTED:

  
	
  CITIBANK,
  N.A.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
										



 


I-2





















 


EXHIBIT TO REQUEST


 


List of Accounts Receivable

Proposed for Sale as of                ,
200  


 


	
  Customer

  	
   

  	
  Invoice/Purchase

  Order Number

  	
   

  	
  Invoice Amount

  	
   

  	
  Shipment Date

  	
   

  	
  Customer P.O. #

  	
   

  	
  Due Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


CALCULATION OF PURCHASE PRICE FOR THE PROPOSED RECEIVABLES


 


	
  Net Invoice Amount:

  	
   

  	
  $

  	
   

  
	
  multiplied by Adjustment Percentage

  	
   

  	
  95

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Adjusted Invoice Amount

  	
   

  	
  $

  	
   

  
	
  Less: Discount

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Purchase Price

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CALCULATION OF MAXIMUM AMOUNT

  	
   

  	
   

  	
   

  
	
  Outstanding Purchase Price (without Proposed Receivables):

  	
   

  	
  $

  	
   

  
	
  Purchase Price for Proposed Receivables:

  	
   

  	
  $

  	
   

  
	
  Total Outstanding Purchase Price (not
  to exceed $100,000,000):

  	
   

  	
  $

  	
   

  



 


I-3





















 


Schedule II


Account Debtors


 


II-1





















 


Exhibit A


Certain Defined Terms


 


As
used herein, the following terms shall have the following meanings:


 


“Account
Debtor”:  The account debtors listed
on Schedule II hereto, as such Schedule may be modified or
supplemented from time to time, as approved by Buyer in writing in its sole and
absolute discretion in good faith, exercised in a commercially reasonable
manner and based solely on the creditworthiness of the subject Account Debtor;
in furtherance of the foregoing, Buyer shall exclude from Schedule II with
respect to future purchases an account debtor who is subject to an Insolvency
Event, and may elect to exclude any account debtor from Schedule II with
respect to future purchases, the Purchased Receivables of whom (i) have
been subject to material repurchases under Section 5 of this Agreement, (ii) have
been subject to material and ongoing Disputes, or (iii) are 45 days or
more past due.  Buyer may also from time
to time specify maximum Outstanding Purchase Price limits for certain Account
Debtors in good faith, exercised in a commercially reasonable manner and based
solely on the creditworthiness of the subject Account Debtor.


 


“Adjusted
Invoice Amount”:  For Purchased
Receivables on any Purchase Date, the aggregate Net Invoice Amount of such
Purchased Receivables multiplied by the Adjustment Percentage as of such date.


 


“Adjustment
Percentage”:  The Adjustment
Percentage with respect to the amount paid by Buyer for the Purchased
Receivables on a Purchase Date shall be the percentage mutually agreed upon by
Buyer and Seller with respect to such Purchase Date, which as of the date
hereof shall be 95%.


 


“Affiliate”:  As to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person.  For the purposes of this definition, “control”,
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.


 


“Agreement”:  This Purchase Agreement, as it may be
amended, modified or supplemented from time to time in accordance with the
terms hereof.


 


“Business
Day”:  Any day that is not a
Saturday, Sunday or other day on which banks in New York City are required or
permitted to close.


 


“Buyer”:  The meaning set forth in the preamble.


 


“Change
of Control”:  With respect to any
Person, means any of the following: 
following:  (a) the sale, lease
or transfer of all or substantially all of the assets of such Person or group
(as such term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended); (b) the liquidation or dissolution of
(or the adoption of a plan of liquidation by) such Person; or (c) the
acquisition by any Person or group (as such


 


A-1





















 


term
is defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) of more than 20% of the voting stock of such Person by way of
merger or consolidation or otherwise.


 


“Collection
Account”:  Account #[                     ]
at Citibank, N.A., New York, New York, ABA #[                     ].


 


“Collection
Date”:  With respect to any Purchased
Receivables, the date of receipt into the Collection Account of Collections
relating to such Purchased Receivables. 
In the event that Collections relating to any Purchased Receivable are
deposited into the Collection Account on more than one day, “Collection Date”
shall be the date as of which all outstanding amounts relating to such
Purchased Receivables have been deposited in or transferred to the Collection
Account.


 


“Collections”:  With respect to any Receivable, all cash
collections, checks (or availability of good funds), wire transfers, electronic
funds transfers and other cash proceeds of such Receivable, deposited in or
transferred, or to be deposited or transferred, to the Collection Account,
including, without limitation, all cash proceeds thereof.


 


“Commitment
Fee”:  The meaning set forth in Section 1(e).


 


“Control
Agreement”:  The Deposit Account
Control Agreement, dated the date hereof, among Buyer, Seller, and Citibank,
N.A. in its capacity as depository institution, as such agreement may be
amended, modified or supplemented from time to time by agreement of such
parties.


 


“Discount”:  For any Purchase Receivable, an amount equal
to:


 


DM  x                (AIA x
Tenor/360)


 


in
which


 


DM                           =                                         Discount
Margin


AIA                        =                                         Adjusted
Invoice Amount of such Purchased Receivable


Tenor                =                                         number of
days from the Purchase Date of such Purchased Receivable to 45 days past the
Due Date of such Purchased Receivable


 


“Discount
Margin”:  The discount cost applied
by Buyer to Purchased Receivables purchased on a Purchase Date, equal to (a) for
any approved Account Debtor set forth in Schedule II herein as of the date
hereof, (i) [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SEC] if the payment cycle is less than 75 days or (ii) [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE SEC] if the payment cycle is 75
days or more, calculated on the basis of 
the Adjusted Invoice Amount of such Purchased Receivables for the number
of days between the date of discounting and 45 days past the Due Date and (b) for
any other Account Debtor, as mutually agreed by Buyer and Seller.


 


A-2





















 


“Dispute”:  Any dispute, discount, deduction, claim,
offset, defense or counterclaim of any kind relating to the Purchased
Receivables (other than a discount or adjustment granted with Buyer’s written
approval), regardless of whether the same (i) is in an amount greater
than, equal to or less than the Purchased Receivables concerned, (ii) is
bona fide or not, or (iii) arises by reason of an act of God, civil strife,
war, currency restrictions, foreign political restrictions or regulations or
any other circumstance beyond the control of Seller or related Account
Debtor.  In the absence of an Insolvency
Event of an Account Debtor of Receivables purchased hereunder on and following
the Trigger Date, any Purchased Receivables 45 days past due or more are deemed
to have a Dispute and be subject to Section 5 herein; provided that the failure to make payment
of a Purchased Receivable as a result of an Insolvency Event of an Account
Debtor of Receivables purchased hereunder on and following the Trigger Date
shall not be deemed a “Dispute” hereunder.


 


“Due
Date”:  With respect to any Purchased
Receivable, the last day that is set forth for timely payment in the invoice
provided to the related Account Debtor.


 


“Eligible
Assignee”:  A nationally recognized
bank or financial institution that is experienced in receivables purchase
transactions and possesses the financial ability to perform as a Buyer under
this Agreement;


 


“Eligible
Receivables”:  Receivables generated
by Seller in the ordinary course of its business from the sale of
telecommunication equipment to an Account Debtor.


 


“Employee
Benefit Plan”:  any employee benefit
plan within the meaning of §3(3) of ERISA maintained by Seller or any
ERISA Affiliate, or with respect to which any of them have any liability.


 


“ERISA”:  the Employee Retirement Income Security Act
of 194, as amended.


 


“ERISA
Affiliate”:  any entity which is
under common control with Seller within the meaning of ERISA or which is
treated as a single employer with Seller under the Internal Revenue Code of
1986, as amended.


 


“Events
of Repurchase”:  The meaning set
forth in Section 5(a).


 


“Events
of Termination”:  The meaning set
forth in Exhibit F.


 


“GAAP”:
 generally accepted accounting principles
in the United States of America, applied on a consistent basis as set forth in
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and/or in statements of the Financial Accounting
Standards Board and/or the rules and regulations of the SEC and/or their
respective successors and which are applied in the circumstances as of the date
in question.


 


“Indemnified
Amounts”:  The meaning set forth in Section 5(b).


 


“Indemnified
Party”:  The meaning set forth in Section 5(b).


 


A-3





















 


“Insolvency
Event”:  With respect to any Person,
such Person shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts generally, or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against such Person seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
such Person shall take any action to authorize any of the actions set forth
above in this definition; provided, that
in the case of the inability of any Person to pay its debts as such debts
become due arising by reason of currency restrictions or foreign political
restrictions or regulations beyond the control of Seller or such Person, such
event shall not be deemed an “Insolvency Event” hereunder.


 


“LIBOR”:  For any period, the LIBOR base rate quoted by
Citibank N.A. and then in effect for such period; provided that for any period between 1 and 30 days LIBOR
shall be based on a one-month period, for any period between 31 and 60 days
LIBOR shall be based on a two-month period and for any period between 61 and 90
days LIBOR shall be based on a three-month period.


 


“Material
Adverse Change”:  (x) As to Seller or
Parent, an event that results or could likely result in (a) a material
adverse change in (i) the business, condition (financial or otherwise),
operations, relationships with any Account Debtor, performance, properties or
prospects of Seller or Parent, (ii) the ability of Seller, as servicer or
otherwise, to fulfill its obligations hereunder, or of Parent to fulfill its
obligations under the Performance Undertaking, (b) the impairment of the
validity or enforceability of, or the rights, remedies or benefits available
to, Buyer under this Agreement or the Performance Undertaking, and (y) as to
any Account Debtor, (i) a Change of Control of such Account Debtor, or (ii) a
significant downgrade (meaning, (x) a full level downgrade of an “investment
grade” account debtor from the level existing on the initial purchase of
Receivables relating to such Account Debtor, (y) a downgrade of an “investment
grade” account debtor below investment grade or (z) any downgrade of a non-”investment
grade” account debtor) of the senior unsecured indebtedness of such Account
Debtor by a nationally recognized rating agency.


 


“Net
Invoice Amount”:  The amount of the
applicable Purchased Receivable shown on the invoice for such Purchased
Receivable as the total amount payable by the related Account Debtor (net of
any discounts, credits or other allowances shown on such invoice).


 


A-4





















 


“Outstanding
Purchase Amount”:  (x) The aggregate
amount of all Purchase Prices paid by Buyer with respect to the Purchased
Receivables, plus the Discount Margin, minus (y) the aggregate amount of all
collections with respect to the Purchased Receivables deposited into the Collection
Account.


 


“Outstanding
Purchase Price”:  (x) The aggregate
amount of all Purchase Prices paid by Buyer with respect to the Purchased
Receivables, minus (y) the
aggregate amount of all collections with respect to the Purchased Receivables
deposited into the Collection Account.


 


“Parent”:  UTStarcom, Inc., a Delaware corporation.


 


“PBGC”:  the Pension Benefit Guaranty Corporation or
any entity succeeding to all or any of its functions under ERISA.


 


“Performance
Undertaking”:  The undertaking being executed
and delivered by Parent to Buyer as of the date of this Agreement.


 


“Person”:  An individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.


 


“Proposed
Receivables”:  With respect to any
Purchase Date, the Eligible Receivables proposed by Seller to Buyer and
described in a Request to be purchased on such Purchase Date.


 


“Purchase
Commitment”:  $100,000,000.


 


“Purchase
Date”:  Each date on which Buyer
purchases Eligible Receivables.


 


“Purchase
Price”:  With respect to any
Purchased Receivables, equals (i) Adjusted Invoice Amount minus (ii) the Discount.


 


“Purchase
Termination Date”:  The earlier of
(x) a date 364 days from the date of this Agreement, which shall be July 27,
2006; provided, that such date shall be automatically
extended for annual successive terms unless Seller or Buyer provides written
notice to the other Person not less than 30 days prior to the expiration of
such annual term, that such Person does not intend to extend the term of this
Agreement, and (y) the occurrence of an Event of Termination; provided, further, that Seller may
terminate this facility early upon written notice thereof to Buyer.


 


“Purchased
Receivables”:  The meaning set forth
in Section 1(a).


 


“Receivables”:  All accounts, instruments, documents,
contract rights, general intangibles and chattel paper (as such terms are
understood under the UCC), all tax refunds and proceeds of insurance, and all
other forms of obligations owing to Seller by an Account Debtor, whether now
existing or hereafter created that represent bona fide obligations of an
Account Debtor arising out of Seller’s sale and delivery of goods and


 


A-5





















 


services,
together with the Related Security with respect thereto, and with respect to
each of the foregoing, all proceeds thereof.


 


“Reconciliation
Report”:  With respect to any
Purchased Receivables, a report detailing the reconciliation of the payments
collected for such Purchased Receivables.


 


“Refundable
Discount Margin”:  With respect to
any Purchased Receivables, the portion of the Discount Margin applied by Buyer
from the Collection Date to 45 days past the Due Date.


 


“Related
Security:  With respect to any
Receivable:


 


(i)                                     all of
Seller’s interest in any merchandise (including returned merchandise) relating
to any sale giving rise to such Receivable;


 


(ii)                                  all security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant to a contract related to
such Receivable or otherwise, together with all financing statements signed by
the related Account Debtor describing any collateral securing such Receivable;


 


(iii)                               all
guaranties, insurance and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable
whether pursuant to the contract related to such Receivable or otherwise; and


 


(iv)                              all books,
records and other information (including, without limitation. computer
programs. tapes, discs, punch cards and data processing software) relating to
such Receivable and the related Account Debtor.


 


“Request”:  The meaning set forth in Section 1(a).


 


“SEC”:  The Securities and Exchange Commission.


 


“Seller”:  The meaning set forth in the preamble.


 


“Seller’s
Account”:  Seller’s account at
[bank/address], ABA# [                     ],
Account # [                   ],
or such other bank account identified in writing by Seller to Buyer from time
to time.


 


“Trigger
Date”:  The date on which the
conditions precedent set forth in Exhibit B (3) are satisfied.


 


“UCC”:  The Uniform Commercial Code in effect in the
State of Delaware from time to time.


 


A-6





















 


Exhibit B


Conditions Precedent


 


1.                                       Conditions
Precedent for Facility Closing


 


The
purchase of Proposed Receivables under this Agreement is subject to the conditions
precedent that Buyer shall have received on or before such date the following,
each (unless otherwise indicated) dated such date, in form and substance
satisfactory to Buyer:


 


(a)                                  A duly
executed Agreement.


 


(b)                                 A duly
executed Performance Undertaking.


 


(c)                                  Proof of
payment of the setup fee to Buyer.


 


2.                                       Conditions
Precedent for Initial Purchase Date


 


The
purchase of Proposed Receivables under the Agreement on the initial Purchase
Date is subject to the conditions precedent that Buyer shall have received on
or before such date the following, each (unless otherwise indicated) dated such
date, in form and substance satisfactory to Buyer:


 


(a)                                  A
certificate issued by the Secretary of State of the State of Delaware as to the
legal existence and good standing of Seller and Parent.


 


(b)                                 Certified
copies of Seller’s and Parent’s articles of organization and limited liability
company agreement and certified copies of all documents evidencing necessary
company action and governmental approvals, if any, with respect to the
Agreement.


 


(c)                                  A
certificate of the Secretary or Assistant Secretary of Seller and Parent
certifying the names and true signatures of the incumbent officers of such
entity authorized to sign the Agreement, each Request, the Performance
Undertaking and any other documents to be delivered by it hereunder.


 


(d)                                 Acknowledgment
or time-stamped receipt copies of proper financing statements (showing Seller
as debtor and Buyer as secured party with respect to the grant by Seller of a
first priority security interest to Buyer as contemplated by Section 5(e) of
the Agreement) duly filed on or before the initial Purchase Date under the UCC.


 


(e)                                  Completed
requests for information (UCC search results) dated within 20 days of the
initial Purchase Date, and a schedule thereof listing all effective
financing statements filed in the State of Delaware that name Seller as debtor,
together with copies of all other financing statements filed against Seller and
releases of, and acknowledgment copies of proper termination statements (Form UCC-3)
necessary to


 


B-1





















 


evidence the release of all security interests,
ownership and other rights of any Person previously granted by Seller in the
Receivables.


 


(f)                                    (i) Favorable
opinion of counsel to Seller in form and substance satisfactory to Buyer and (ii) favorable
opinion of in-house counsel of Seller in form and substance satisfactory to
Buyer.


 


(g)                                 Proof of
payment of all reasonable attorneys’ fees and disbursements incurred by Buyer
in excess of $10,000.


 


(h)                                 Evidence of
establishment of the Collection Account.


 


(i)                                     A duly
executed Control Agreement.


 


(j)                                     A copy of
the duly executed notice from Seller substantially in the form attached hereto
as Exhibit E instructing each Account Debtor to deposit all payments with
respect to the Receivables solely into the Collection Account.


 


3.                                       Conditions
Precedent for Trigger Date


 


The
occurrence of the Trigger Date is subject to the following conditions
precedent:


 


(a)                                  The Purchase
Termination Date shall not have occurred.


 


(b)                                 Buyer shall
have received a favorable opinion of counsel to Seller relating to the true
sale nature of this Agreement, in form and substance satisfactory to Buyer.


 


(c)                                  Buyer shall
have received acknowledgment or time-stamped receipt copies of proper financing
statements (showing Seller as debtor/seller and Buyer as secured
party/purchaser, and stating that the financing statements are being filed
because UCC Section 9-109 does not distinguish between a sale and a secured
loan for filing purposes) duly filed on or before the Trigger Date under the
UCC.


 


B-2





















 


Exhibit C


Representations and Warranties


 


(a)                                  The
receivable information contained on the exhibit to each Request is a true and
correct list of the purchase order numbers, the invoice numbers, and the unpaid
amounts due in respect thereof which comprise the Purchased Receivables on such
Purchase Date.  Buyer has received true
and correct copies of all the documentation relating to each of the Purchased
Receivables.  None of the Purchased
Receivables are currently evidenced by chattel paper or instruments.  Each of the Purchased Receivables is in full
force and effect and is the valid and binding obligation of the related Account
Debtor, enforceable in accordance with its terms, and constitutes such Account
Debtor’s legal, valid and binding obligation to pay to Seller the amount of the
Purchased Receivables, subject, as to enforcement of such Account Debtor’s
payment obligation, to bankruptcy, insolvency, reorganization, arrangement,
moratorium and other laws of general applicability relating to or affecting
creditors’ rights.  Neither Seller nor
the related Account Debtor is in default in the performance of any of the provisions
of the documentation applicable to its transactions included within the
Purchased Receivables.  Seller has
delivered to the related Account Debtor all property or performed all services
required to be so delivered or performed by the terms of the documentation
giving rise to the Purchased Receivables. 
The payments due with respect to each Purchased Receivable are not
contingent upon Seller’s fulfillment of any further obligation.


 


(b)                                 Each
Receivable included in a Request as a Proposed Receivable, as of the date of
sale hereunder, is (i) an Eligible Receivable, and (ii) without the
prior consent of Buyer, (x) the sale terms thereof does not exceed 90 days, and
(iii) the Net Invoice Amount thereof is not less than $25,000.


 


(c)                                  Seller is
the legal and beneficial owner of each Eligible Receivable free and clear of
any lien, encumbrance or security interest; upon each purchase of a Purchased
Receivable, Buyer shall acquire valid ownership of each Purchased Receivable
and the collections with respect thereto prior to all other Persons.


 


(d)                                 Seller is a
limited liability company duly formed, validly existing and in good standing
under the laws of the State of Delaware, and is duly qualified to do business,
and is in good standing, in every jurisdiction where the nature of its business
requires it to be so qualified.


 


(e)                                  The
execution, delivery and performance by Seller of the Agreement and the other
documents to be delivered by Seller hereunder, (i) are within Seller’s
limited liability company powers, (ii) have been duly authorized by all
necessary limited liability company action, and (iii) do not contravene (1) Seller’s
certificate of formation or limited liability company agreement, (2) any
law, rule or regulation applicable to Seller, (3) any contractual
restriction binding on or affecting Seller or its property, or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting
Seller or its property.  The Agreement
has been duly executed and delivered by Seller. 
Seller has furnished (or will furnish prior to the initial Purchase
Date) to Buyer


 


C-1





















 


a true, correct and complete copy of its
certificate of formation and limited liability company agreement, including all
amendments thereto.


 


(f)                                    No
authorization or approval or other action by, and no notice to or filing with,
any governmental entity is required for the due execution, delivery and
performance by Seller of the Agreement or any other document to be delivered
thereunder except for the filings or notices as may be necessary to perfect the
security interest granted to Buyer pursuant to the Agreement.


 


(g)                                 The
Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as limited by
bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws
relating to the enforcement of creditors’ rights generally and general
principles of equity (regardless of whether enforcement is sought at equity or
law).


 


(h)                                 As of the
initial Purchase Date, all conditions precedent set forth in Exhibit B
have been fulfilled or waived in writing by Buyer, and as of each Purchase
Date, the respective conditions precedent set forth therein have been fulfilled
or waived in writing by Buyer.


 


(i)                                     There is no
pending or, to its knowledge, threatened action, proceeding, investigation or
injunction, writ or restraining order affecting Seller, Parent or any of their
affiliates before any court, governmental entity or arbitrator which could
reasonably be expected to result in a Material Adverse Change, and Seller is
not currently the subject of, and has no present intention of commencing, an
insolvency proceeding or petition in bankruptcy.


 


(j)                                     Seller is in
compliance in all material respects with the agreements and sale terms relating
to the Purchased Receivables, and the Purchased Receivables, and the agreements
and sale terms related thereto are not subject to any defense or Dispute or any
offset, counterclaim or other defense, whether arising out of the transactions
contemplated by the Agreement or independently thereof.  No effective financing statement or other
instrument similar in effect covering any Receivable is on file in any recording
office, except those filed in favor of Buyer relating to the Agreement, and no
competing notice or notice inconsistent with the transactions contemplated in
the Agreement remains in effect with respect to any Account Debtor.


 


(k)                                  The
Purchased Receivables are denominated and payable only in United States dollars
in the United States.


 


(l)                                     Seller has
not changed its principal place of business or chief executive office in the
last five years.


 


(m)                               There exists
no event of Material Adverse Change.


 


(n)                                 Seller’s
assets are free and clear of any liens in favor of any taxing authority, any
Employee Benefit Plan or the PBGC other than inchoate tax liens.


 


C-2





















 


Exhibit D


Covenants


 


Until
the later of the termination of the Agreement and the date that the Outstanding
Purchase Amount equals zero:


 


(a)                                  Company
Existence.  Seller will comply
in all material respects with all material applicable laws, rules, regulations
and orders and preserve and maintain its company existence, rights, franchises,
qualifications, and privileges.  Seller
will keep its state of formation as the State of  Delaware and principal place of business and
chief executive office and the office where it keeps its records concerning the
Receivables at the address set forth in Section 6 of the Agreement or,
upon 30 days’ prior written notice to Buyer, at any other locations in
jurisdictions where all actions reasonably requested by Seller or otherwise
necessary to protect, perfect and maintain Buyer’s security interest in the
Receivables have been taken and completed.


 


(b)                                 Books and
Records.  Seller shall keep
its books and accounts in accordance with GAAP and, at all times following the
Trigger Date, shall make a notation on its books and records, including any
computer files, to indicate which Receivables have been sold to Buyer.  Seller shall maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Receivables and related contracts in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for collecting all Receivables (including, without limitation,
records adequate to permit the daily identification of each Receivable and all
collections of and adjustments to each existing Purchased Receivable).


 


(c)                                  True Sale.  On and after the Trigger Date, Seller shall
treat each sale of Purchased Receivables hereunder as a sale for federal and
state income tax, reporting and accounting purposes.


 


(d)                                 Sales, Liens
and Debt.  Seller will not
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any lien, encumbrance or security interest upon or
with respect to, the Receivables or upon or with respect to any account to
which any collections of any Receivable are sent, or assign any right to
receive income in respect thereof except the security interests in favor of
Buyer.


 


(e)                                  Extension or
Amendment of Receivables. 
Seller shall not amend or extend the payment terms under any Purchased
Receivables, unless approved in advance by Buyer, and shall not otherwise waive
or permit or agree to any deviation from the terms or conditions of any
Purchased Receivable except in accordance with prior and prudent business
practices.


 


(f)                                    Audits and
Visits.  Seller will, at any
time and from time to time during regular business hours as requested by Buyer,
permit Buyer, or its agents or


 


D-1





















 


representatives, upon reasonable notice, (i) on
a confidential basis, to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes and
disks) in its possession or under its control relating to Receivables
including, without limitation, the related contracts, and (ii) to visit
its offices and properties for the purpose of examining and auditing such
materials described in clause (i) above, and to discuss matters relating
to Receivables or its performance hereunder or under the related contracts with
any of its officers or employees having knowledge of such matters.


 


(g)                                 Reporting
Requirements. 
Seller will provide to Buyer (in multiple copies, if requested by Buyer)
the following:


 


i.                                          as soon as
available and in any event within 45 days after the end of each of the first
three quarters of each fiscal year of Seller and Parent, consolidated balance
sheets of Parent and its subsidiaries as of the end of such quarter and
consolidated statements of income, cash flows and retained earnings of Parent
and its subsidiaries for the period commencing at the beginning of the current
fiscal year and ending with the end of such quarter, certified by the chief
financial officer of Parent;


 


ii.                                       as soon as
available and in any event within 90 days after the end of each fiscal year of
Seller and Parent, a copy of the audited consolidated financial statements
(together with explanatory notes thereon) and the auditor’s report letter for
such year for Parent and its subsidiaries, containing financial statements for
such year audited by independent public accountants of recognized standing;


 


iii.                                    promptly
after the sending or filing thereof, if any, copies of all reports and
registration statements that Parent or Seller thereof files with the SEC or any
national securities exchange and official statements that Parent or Seller
thereof files with respect to the issuance of tax-exempt indebtedness;


 


iv.                                   at least ten
Business Days prior to any change in the Borrower’s name, a notice setting
forth the new name and the proposed effective date thereof;


 


v.                                      on the first
Business Day of each week (or on such other day of the week as may be mutually
agreed upon by Buyer and Seller from time to time), invoices, Reconciliation
Reports and aging and past due reports relating to the Purchased Receivables,
together with such other data, reports and information relating to the
Receivables requested by Buyer from time to time;


 


vi.                                   immediately
(and in no event later than one Business Day following actual knowledge or
receipt thereof), written notice in reasonable detail, of any lien, encumbrance
or security interest asserted or claim made against a Receivable; and


 


vii.                                as soon as
possible and in any event within five days after becoming aware of the
occurrence thereof, written notice of any Material Adverse Change.


 


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(h)                                 Further
Instruments. 
Seller shall, at its expense, promptly execute and deliver all further
instruments and documents, and take all further action that Buyer may
reasonably request, from time to time, in order to perfect, protect or more
fully evidence the full and complete ownership and security interest in the
Receivables, or to enable Buyer to exercise or enforce the rights of Buyer
hereunder or under the Receivables.


 


(i)                                     Taxes.  Seller shall pay any and all taxes (including
any sales, occupational, excise, personal property, privilege or license taxes,
or any withholdings, but not including taxes imposed upon Buyer with respect to
its overall net income) relating to the transactions contemplated under the
Agreement, including but not limited to the sale, transfer and assignment of
each Purchased Receivable; except for those taxes that Seller is contesting in
good faith and for which adequate reserves have been taken.


 


(j)                                     Perform
Terms.  Seller shall duly
perform and comply with all terms under each contract relating to the Purchased
Receivables and immediately inform Buyer of any breach or default by Seller or
any Account Debtor of any of the terms thereof including, without limitation,
the basis of any non-payment with respect to a Purchased Receivable.


 


(k)                                  Not
Adversely Affect Buyer’s Rights. 
Seller shall refrain from any act or omission which might in any way
which might be reasonably expected to prejudice or limit Buyer’s rights under
any of the Purchased Receivables or this Agreement.


 


(l)                                     Disclosures.  Seller will promptly disclose to the public
such information as required pursuant to GAAP and in accordance with rules and
regulations promulgated by the SEC under the Securities Exchange Act of 1934,
as amended, including, without limitation, (i) the net effect of this
Receivables sale transaction on its financial condition, (ii) the nature,
amount and term of the material financial obligations incurred hereunder, and (iii) a
description of events that may cause such an obligation to arise, increase or
become accelerated.


 


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Exhibit E


Form of Notice to Account Debtor


 


[Letterhead of Seller]


 


[Date]


 


[Name
and Address

of Account Debtor]


 


Re:                              Change of
Account and Address


 


To
Whom it May Concern:


 


Please
be advised that we are selling to Citibank, N.A. all of our existing and future
receivables payable by you to us. 
Accordingly, you are hereby directed to make all wire transfers and send
all checks and other forms of payment directly to the following account:


 


 


 


 


Account #

ABA #

Confirm Phone Number: 

Attention:  


 


The
foregoing directions shall apply to all existing receivables payable to us and
(until further written notice) to all receivables arising in the future and may
not be revoked except by a writing executed by Citibank, N.A.


 


Please
acknowledge your receipt of this notice by signing the enclosed copy of this
letter and returning it in the enclosed envelope.


 


Thank
you for your cooperation in this matter.


 


	
   

  	
  UTSTARCOM
  PERSONAL COMMUNICATIONS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Authorized Officer]

  	
   

  



 


Receipt Acknowledged:

[Name of Account Debtor]


 


 


	
  By:

  	
   

  	
   

  
	
  Title:

  



 


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Exhibit F


Events of Termination


 


Each
of the following shall be an “Event of
Termination”:


 


(a)                                  Any
representation or warranty (other than those representations and
warranties  with respect to eligibility
criteria of the Receivables, to the extent subject to the repurchase and
indemnification provisions of Section 5 of the Agreement) made or deemed
made by Seller under or in connection with the Agreement or any information or
report delivered by Seller pursuant to the Agreement (other than  with respect to eligibility criteria of the
Receivables, to the extent subject to the repurchase and indemnification
provisions of Section 5 of the Agreement) shall prove to have been
incorrect or untrue in any material respect when made or deemed made or
delivered, and shall remain incorrect or untrue for 10 days after written
notice thereof shall have been given to Seller or Parent by Buyer.


 


(b)                                 Seller or
Parent fails to perform or observe any term, covenant or agreement contained in
the Agreement or the Performance Undertaking on its part to be performed or
observed and any such failure shall remain unremedied for ten days (and with
respect to payment obligations, two Business Days) after written notice thereof
shall have been given to Seller or Parent by Buyer.


 


(c)                                  Seller or
Parent shall fail to pay any principal of or premium or interest on any of its
indebtedness for borrowed money in a principal amount in excess of $10,000,000
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such indebtedness; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
indebtedness and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such indebtedness; or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment or a voluntary prepayment), in each case prior to the
stated maturity thereof.


 


(d)                                 Any purchase
of Receivables pursuant to the Agreement shall for any reason fail or cease to
create or fail or cease to be a valid and perfected security interest (or,
following the Trigger Date, ownership interest) in such Purchased Receivables
and the Collections with respect thereto free and clear of all Liens (other
than permitted Liens) unless such Purchased Receivables (or portion thereof)
are repurchased in the manner set forth in Section 5(a), or the
indemnification payment is made to Buyer in the manner set forth in Section 5(b) within
five Business Days following demand therefor, or any material provision of this
Agreement or the Performance Undertaking shall for any reason cease to be valid
and binding on Seller or Parent, or Seller or Parent shall so state in writing


 


F-1





















 


(e)                                  Seller or
Parent shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against Seller or Parent seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 60 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or
the appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its Property) shall occur; or Seller or
Parent shall take any action to authorize any of the actions set forth above in
this paragraph (e).


 


(f)                                    Seller or
Parent shall have consummated, or shall have entered into any transaction or
agreement which shall result or be intended to result in any Change of Control;
or a Change of Control occurs.


 


If
an Event of Termination shall occur and be continuing, Buyer may, by notice to
Seller, declare the Purchase Termination Date to have occurred, except with
respect to an Event of Termination arising as a result of clause (e) of
this Exhibit F, in which case the Purchase Termination Date shall be
deemed to have occurred automatically and without notice.  Upon any such declaration, Buyer shall have,
in addition to the rights and remedies which it may have under this Agreement,
all other rights and remedies provided after default under the UCC and under
other applicable law, which rights and remedies shall be cumulative.


 


F-2