Document:

Exhibit 10.1

 

FIRST
AMENDMENT TO CREDIT AGREEMENT

This
FIRST AMENDMENT TO CREDIT AGREEMENT (“Amendment”), dated as of October 17,
2007, among THE RYLAND GROUP, INC., a Maryland corporation (the “Borrower”),
the Lenders that are identified on the signature pages hereto and JPMORGAN
CHASE BANK, N.A., as Agent (the “Agent”).

RECITALS

WHEREAS,
the Borrower, the Lenders identified on the signature pages hereto, certain
other Lenders and Agent are parties to that certain Credit Agreement dated as
of January 12, 2006 (as it may be amended, renewed and restated from time to
time, the “Credit Agreement”) (all capitalized terms not defined herein shall
have the meanings given such terms in the Credit Agreement);

WHEREAS,
the Borrower and the Lenders desire to amend the Credit Agreement for the
purposes hereinafter set forth;

NOW,
THEREFORE, for good and valuable consideration, the parties hereto hereby agree
as follows:

1.             Amendment
of Article 1.

(a)         The
following defined terms in Article 1 of the Credit Agreement are hereby amended
and restated as follows:

“Consolidated
Interest Incurred” means for any period, for the Borrower and the Guarantors
(specifically excluding any Subsidiaries that are not Guarantors) on a
consolidated basis, interest expense plus interest capitalized into inventory
in such period.  To the extent that under
GAAP premiums on prepayment of Indebtedness would be included in interest
expense, such premiums shall not be included in Consolidated Interest Incurred.

“EBITDA” means,
for any period, (i) the sum of the following amounts:  (a) Consolidated Net Income for such period;
(b) cash distributions received by Borrower from the Financial Services Segment
not otherwise included in the determination of such Consolidated Net Income;
(c) income and franchise taxes deducted from revenues in determining such
Consolidated Net Income; (d) depreciation and amortization deducted from
revenues in determining such Consolidated Net Income; (e) interest expense
deducted from revenues in determining such Consolidated Net Income (including,
without duplication, previously capitalized interest expense which would be
included in “Cost of Goods Sold” and deducted from revenues in determining such
Consolidated Net Income on a combined income statement of the Borrower and the
Guarantors); (f) other non-cash charges and expenses (including but not limited
to asset impairment charges for

land inventory, investments in Joint Ventures, goodwill and option
forfeiture costs) deducted in the determination of such Consolidated Net
Income; and (g) any losses arising outside of the ordinary course of business
which have been included in the determination of such Consolidated Net Income;
less (ii) the sum of (x) any non-cash credits included in the determination of
such Consolidated Net Income, (y) any gains arising outside of the ordinary
course of business included in the determination of such Consolidated Net
Income and (z) any interest income included in the determination of such
Consolidated Net Income.

“Financial
Services Segment” means the business segment of the Borrower and its
Subsidiaries engaged in mortgage banking (including the title and escrow
business), insurance, mortgage servicing, securities issuance, bond
administration and management services and related activities, which segment
currently consists principally of the activities of Ryland Mortgage Company and
its Subsidiaries and of the Insurance Segment but excludes the Limited-Purpose
Subsidiaries.

“Leverage Ratio”
means, at any date, the ratio of (a) Consolidated Indebtedness at such date,
less unrestricted cash of the Borrower and Guarantors in excess of $25,000,000
but not to exceed $300,000,000 to (b) the sum of Consolidated Indebtedness and
Consolidated Tangible Net Worth at such date.

(b)        The
following defined terms are hereby added to Article 1 of the Credit Agreement:

“Coverage Test Failure
Quarter” is defined in Section 6.25(b).

“Insurance Segment” means
the business segment of the Borrower and its Subsidiaries engaged in the
insurance business.

“Interest Coverage Ratio”
means, as of the end of each fiscal quarter of the Borrower for the
twelve-month period ending on such date, the ratio of (a) EBITDA for the
applicable period to (b) Consolidated Interest Incurred for the applicable
period, less interest income included in revenues in determining
Consolidated Net Income for such period.

“Interest Coverage Test”
is defined in Section 6.25(b).

“Permitted Leverage Ratio”
means, at the date hereof, 57.5%, as such amount may hereafter be adjusted from
time to time as provided in Section 6.25.

2.             Reduction
of Aggregate Commitment.  Pursuant to
Section 2.5.2 of the Credit Agreement, the Aggregate Commitment is hereby
reduced from $1,133,500,000 to $750,000,000, allocated to each Lender’s
Commitment ratably.  The amounts of the
reduced Commitments of the Lenders are set forth in Schedule I hereto.

3.             Pricing.  The Pricing Schedule attached to the Credit
Agreement is hereby deleted and replaced by the Pricing Schedule attached
hereto.

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4.             Limitation
on Guarantee Obligations.  Section
6.13(a) of the Credit Agreement is hereby amended and restated in its entirety
as follows:

(a)           the Borrower and any
Guarantor may incur Guarantee Obligations, not to exceed (i) $65,000,000 in the
aggregate at any time in respect of obligations of entities in the Insurance
Segment and (ii) $35,000,000 in the aggregate at any time in respect of
obligations of entities in the Financial Services Segment (other than the
Insurance Segment).

5.             Consolidated
Tangible Net Worth.  Section 6.24 of
the Credit Agreement is hereby amended and restated in its entirety as follows:

6.24         Consolidated
Tangible Net Worth.  The Borrower
shall not permit Consolidated Tangible Net Worth at any time to be less than
the sum of (a) $1,000,000,000 plus (b) 50% of the
Consolidated Net Income (without deduction for losses sustained during any
fiscal quarter) for each fiscal quarter subsequent to the fiscal quarter ended
June 30, 2007, plus
(c) 50% of the net proceeds from any equity offerings of the Borrower from and
after June 30, 2007.  Notwithstanding the
foregoing, in the event that the Borrower shall at any time engage in an
Acquisition with a purchase price (determined under GAAP) equaling or exceeding
$100,000,000, the minimum Consolidated Tangible Net Worth requirement shall be
adjusted to the sum of (i) 80% of Consolidated Tangible Net Worth at the end of
the fiscal quarter in which the closing of such Acquisition occurs, plus (ii) an amount equal to 50% of the Consolidated Net
Income (without deduction for losses sustained in any fiscal quarter) for each
fiscal quarter subsequent to the closing of such Acquisition, plus (iii) 50% of the net proceeds
received by the Borrower for any capital stock issued after the closing of such
Acquisition.

6.             Leverage
Ratio.  Section 6.25 of the Credit
Agreement is hereby amended and restated in its entirety as follows:

6.25         Leverage Ratio.

(a)           Leverage Covenant.  As of the last day of each fiscal quarter of
the Borrower (beginning with the fiscal quarter ending September 30, 2007), the
Leverage Ratio shall be less than or equal to the then applicable Permitted
Leverage Ratio (the “Leverage Covenant”).

(b)           Interest Coverage Test.  If at any time Borrower shall fail to
maintain, for two (2) consecutive fiscal quarters, an Interest Coverage Ratio,
determined as of the last day of each fiscal quarter for the four-quarter
period ending on such day, of at least 2.0 to 1.0 (the “Interest Coverage Test”),
then the Permitted Leverage Ratio for the fiscal quarter next succeeding the
second such consecutive fiscal quarter with respect to which Borrower shall
have so failed the Interest Coverage Test (such second consecutive fiscal
quarter being herein referred to as the “Coverage Test Failure Quarter”) shall
be decreased as follows:  (i) if the Permitted
Leverage Ratio for the Coverage Test Failure Quarter was 57.5%, the Permitted
Leverage Ratio for the next succeeding fiscal quarter

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shall be decreased by 5% to 52.5%; and (ii) if the Permitted Leverage
Ratio for the Coverage Test Failure Quarter was less than 57.5%, the Permitted
Leverage Ratio for the next succeeding fiscal quarter shall be decreased by
2.5%.   (By way of example, if the
Permitted Leverage Ratio for the Coverage Test Failure Quarter was 52.5%, the
Permitted Leverage Ratio for the next succeeding fiscal quarter shall be
50.0%.)  The decreased Permitted Leverage
Ratio shall remain in effect unless and until further decreased pursuant to
this Section 6.25(b) or increased pursuant to Section 6.25(c).

(c)           Adjustment of Permitted Leverage Ratio.  If at any time at which the Permitted
Leverage Ratio is less than 57.5%, Borrower shall have satisfied the Interest
Coverage Test (which for purposes of this Section 6.25(c) shall be deemed
satisfied only if, on the same day on which Borrower satisfies the Interest
Coverage Test, Borrower is also in compliance with the Leverage Covenant), then
the Permitted Leverage Ratio, effective as of the fiscal quarter immediately
following the fiscal quarter with respect to which Borrower shall have so satisfied
the Interest Coverage Test, shall be increased as follows:  (i) upon satisfaction of the Interest
Coverage Test on a date on which the Permitted Leverage Ratio is 52.5%, the
Permitted Leverage Ratio for the next fiscal quarter shall be increased to 57.5%;
and (ii) upon satisfaction of the Interest Coverage Test on a date on which the
Permitted Leverage Ratio is less than 52.5%, the Permitted Leverage Ratio for
the next fiscal quarter shall be increased by 2.5%.   (By way of example, if the Permitted Leverage
Ratio was 47.5% prior to the satisfaction of the Interest Coverage Test, the
Permitted Leverage Ratio for the next fiscal quarter shall be 50.0%.)  The increased Permitted Leverage Ratio shall
remain in effect unless and until further increased pursuant to this Section
6.25(c) or decreased pursuant to Section 6.25(b). In no event shall the
Permitted Leverage Ratio exceed 57.5%.

(d)           Measure of Compliance.  Borrower’s satisfaction of the Interest
Coverage Test shall be measured on a quarterly basis, based on the financial
statements delivered to Agent pursuant to Section 6.1(a) or (b).  A failure to satisfy the Interest Coverage
Test alone shall not constitute a Default or Unmatured Default.

7.             Section
6.26.  Section 6.26 is hereby deleted
from the Credit Agreement.

8.             Conditions
Precedent.  This Amendment shall be
effective as of the date (“Amendment Effective Date”) upon which the following
conditions are satisfied:

(a)         The
Agent shall have received from the Borrower and the Required Lenders a counterpart
of this Amendment signed on behalf of each such party.

(b)        The
Agent shall have received from the Guarantors the Consent and Agreement
substantially in the form attached hereto as Appendix A.

(c)         The
Agent shall have received such documents and certificates as the Agent or its
counsel may reasonably request relating to the organization or formation,
existence and good standing of the Borrower, the authorization of this
Amendment and any other legal matters relating to the Borrower, the Agreement
or this Amendment, all in form and substance satisfactory to the Agent and its
counsel.

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(d)        The Agent shall have received all fees
and other amounts due and payable on or prior to the Amendment Effective Date,
including reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.

The
Agent shall notify the Borrower and the Lenders of the Amendment Effective
Date, and such notice shall be conclusive and binding.

9.             Representations
and Warranties.  The Borrower hereby
represents and warrants that as of the date hereof:

(a)           The representations and warranties of
the Borrower in the Credit Agreement are true and correct in all material
respects.

(b)           There exists no Default or Unmatured
Default.

10.           Ratification.  The Credit Agreement, as amended hereby, is
hereby ratified and remains in full force and effect.

11.           Counterparts.  This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one agreement and
any of the parties hereto may execute this Amendment by signing any such
counterpart.

12.           Choice
of Law.  This Agreement shall be
construed in accordance with the internal laws (but without regard to the
conflict of laws provisions) of the State of New York, but giving effect to
federal laws applicable to national banks.

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IN
WITNESS WHEREOF, the Borrower and the undersigned Lenders have caused this
Amendment to be duly executed as of the date first above written.

	
   

  	
  Borrower:

  
	
   

  	
   

  
	
   

  	
  THE
  RYLAND GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 6
 

 

	
  

  	
  Lenders:

  
	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,

  As Lender and Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
					

 

[Other Lender Signatures]

 

 7

PRICING
SCHEDULE

	
  

  	
  Level I

  	
  Level II

  	
  Level III

  	
  Level IV

  	
  Level V

  
	
  Rating

  	
  BBB+/Baa1

  	
  BBB/Baa2

  	
  BBB-/Baa3

  	
  BB+/Bal

  	
  BB/Ba2 or

  below or no

  Rating

  
	
  Leverage Ratio

  	
  < 30%

  	
  >
  30% < 40%

  	
  >
  40% < 50%

  	
  >
  50% < 55%

  	
  >
  55%

  
	
  Applicable Margin

  	
  0.625%

  	
  0.75%

  	
  0.875%

  	
  1.125%

  	
  1.50%

  
	
  Applicable Fee Rate

  	
  0.15%

  	
  0.175%

  	
  0.20%

  	
  0.225%

  	
  0.25%

  

 

“Rating” means the higher
of the publicly announced ratings of the Borrower’s senior unsecured public
debt by Moody’s and S&P.  If only one
of Moody’s or S&P announces a rating of the Borrower’s senior unsecured
public debt, no Rating shall be deemed to exist.

If the Level as
determined by the Rating is not the same as the Level as determined by the
Leverage Ratio, but no more than one Level apart, then the Applicable Margin
and the Applicable Fee Rate shall correspond to the Level which causes pricing
to be lower.  If the Level as determined
by the Rating is more than one Level different from the Level as determined by
the Leverage Ratio, then the Applicable Margin and the Applicable Fee Rate
shall be one Level lower (i.e., lower pricing) than the higher of such two
Levels.

Notwithstanding
the foregoing, at any time at which the Interest Coverage Ratio is less than
2.00 to 1.00, the Applicable Margin and Applicable Fee Rate determined as
provided above shall be increased based upon the Interest Coverage Ratio as
follows:

	
  Interest Coverage Ratio

  	
  Less than 2.0 to 1.0
  but

  greater than or equal to

  1.5 to 1.0

  	
  Less than 1.5 to 1.0
  but 

  greater than or equal to

  1.0 to 1.0

  	
  Less than 1.0 to
  1.0

  
	
  Increase in
  Applicable

  Margin and Applicable Fee

  Rate

  	
  0.125%

  	
  0.25%

  	
  0.375%

  

 

The Applicable Margin and
Applicable Fee Rate shall be determined in accordance with the foregoing table
based on the Borrower’s status as reflected in the then most recent Ratings and
the then most recent annual or quarterly financial statements of the Borrower
delivered pursuant to Section 6.1(a) or (b) (the “Financials”).  Adjustments, if any, to the Applicable Margin
or Applicable Fee Rate resulting from changes in the Leverage Ratio or Interest
Coverage Ratio shall be effective five Business Days after the Agent has
received the applicable Financials.  If
the Borrower fails to deliver the Financials to the Agent at the time required
pursuant to Section 6.1, then the Applicable Margin and Applicable Fee Rate
shall be the highest Applicable Margin and Applicable Fee Rate set forth in the
foregoing table until five days after such Financials are so delivered.  The Rating in effect on any date for the purposes
of this Schedule is that in effect at the close of business on such date.

In
the event that any of the Financials or any certificate delivered by Borrower
under Section 6.2(b) is shown to be inaccurate (regardless of whether this
Agreement is in effect or any Loans or Commitments are outstanding when such
inaccuracy is discovered), and such inaccuracy, if corrected, would have led to
the application of a higher Applicable Margin and Applicable Fee Rate for any
period (an “Applicable Period”) than the Applicable Margin and Applicable Fee
Rate actually applied for such Applicable Period, then (i) the Borrower shall
immediately deliver to the Agent a correct certificate under Section 6.2(b) for
such Applicable Period, (ii) the Applicable Margin and Applicable Fee Rate
shall be determined at such higher Applicable Margin and Applicable Fee Rate
for such Applicable Period, and (iii) the Borrower shall immediately pay to the
Agent (for the benefit of the Lenders) the accrued additional interest and
additional fees owing as a result of such higher Applicable Margin and
Applicable Fee Rate for such Applicable Period.

In
the event that any of the Financials or any certificate delivered by Borrower
under Section 6.2(b) is shown to be inaccurate and such inaccuracy, if
corrected, would have led to the application of a lower Applicable Margin and
Applicable Fee Rate for any Applicable Period than the Applicable Margin and
Applicable Fee Rate actually applied for such Applicable Period, and provided
such inaccuracy was not as a result of any fraudulent act, then (i) the
Borrower may, within 60 days of its discovery of such inaccuracy (but in no
event later than one (1) year after delivery of the inaccurate Financials or
certificate), deliver to the Agent a correct certificate under Section 6.2(b)
for such Applicable Period and (ii) provided this Agreement is then in effect,
Borrower may, from time to time after timely delivery of such correct
certificate, offset, against payments of interest and fees thereafter payable
under this Agreement to any Lender that received payments of interest and fees
for the Applicable Period (“Overpayments”) in excess of the fees and interest
that would have been payable to such Lender if such payment had been made based
upon the corrected Financials and certificate, amounts not to exceed in the
aggregate the Overpayments received by such Lender. No Lender shall have any
liability or obligation with respect to any Overpayment received by any other
Lender nor shall any Lender have any liability or obligation with respect to
any Overpayment received by it other than Borrower’s right of offset hereunder.

 2

SCHEDULE I

COMMITMENTS

Lender                                                                                                                    Commitment

 

 

Total                                                                                                            $750,000,000.00

 1

Appendix
A

CONSENT AND AGREEMENT OF
GUARANTORS

THIS
CONSENT AND AGREEMENT OF GUARANTORS (“Consent”) is executed and delivered as of
October 17, 2007, by the undersigned (the “Guarantors”), in favor of the “Lenders”
under that certain Credit Agreement dated January 12, 2006, among The Ryland
Group, Inc., the Lenders from time to time parties thereto and JPMorgan Chase
Bank, N.A., in its capacity as Agent. 
Such Credit Agreement, as it has been and may be amended, modified or
supplemented from time to time, is hereinafter referred to as the “Credit
Agreement.”  Unless otherwise defined
herein, capitalized terms used herein shall have the meanings ascribed to them
in the Credit Agreement.

W I T N E S S E T H:

WHEREAS,
the Guarantors have executed and delivered a Guaranty dated January 12, 2006 in
favor of the Lenders under the Credit Agreement or a Supplemental Guaranty
thereto (collectively, the “Guaranty”); and

WHEREAS,
the Borrower, the Agent and certain Lenders have entered into that certain
First Amendment to Credit Agreement of even date herewith amending the Credit
Agreement (the “Amendment”); and

WHEREAS,
it is a condition to the Amendment that the Guarantors shall have executed this
Consent;

NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Guarantors hereby consent to the Amendment
and agree that the Guaranty continues in full force and effect.

IN WITNESS WHEREOF, this Consent has been duly
executed by the Guarantors as of the day and year first set forth above.

[Guarantors]Exhibit 10.1

[***]. 
Confidential Treatment Requested — Certain information in this exhibit has been
omitted and filed separately with the Commission.  Confidential treatment
has been requested with respect to the omitted portions.

AMENDED AND RESTATED RECEIVABLES
PURCHASE AGREEMENT

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
(as it may be amended, restated, modified or supplemented from time to time,
the “Agreement”) is made as of March 30, 2007, between UTSTARCOM
PERSONAL COMMUNICATIONS LLC, a Delaware limited liability company (“Seller”)
and CITIBANK, N.A., a national banking association (“Buyer”), as an
amendment and restatement of the Committed Receivables Purchase Agreement dated
as of August 1, 2005 (as amended by Amendment of Committed Receivables Purchase
Agreement dated June 29, 2006, the “Original Agreement”).

RECITALS

The Buyer and Seller are parties to the Original
Agreement pursuant to which, subject to the terms and conditions set forth
therein, the Seller agreed to sell certain Receivables to the Buyer.

The Buyer and Seller wish to amend and restate the
Original Agreement in its entirety to reflect, among other things, that each
purchase of Receivables hereunder by the Buyer shall be at the Buyer’s sole
discretion.  Terms not otherwise defined
herein shall have the meanings set forth on Exhibit A.

Accordingly, the parties hereto agree that the
Original Agreement is hereby amended and restated in its entirety to read 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.  Buyer, in its sole discretion, may elect to
accept or reject a Request.  If Buyer
accepts a Request, then 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.  Assuming that it is willing to accept a
Request, Buyer shall not be obligated to purchase Eligible Receivables
described in such Request unless (x) 

on the initial Purchase
Date, the conditions precedent listed in Sections 1 and 2 of Exhibit B have
been fulfilled, and (y) on each Purchase Date (including the initial Purchase
Date), the following conditions precedent have been fulfilled, in each case, in
form and substance satisfactory to Buyer:

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; and

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.

(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 Subject 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)           Omitted.

(f)            True Sale; No Recourse.  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 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 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

 2
 

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 is not characterized as a sale, Seller shall, effective as of the
date hereof, 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 (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 

 3
 

Business Days of receipt
thereof) remit the funds to the Collection Account.  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 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 relating to collection activities with respect
to such 

 5
 

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, 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
notification, 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 payment obligations and 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, (2) all of the Receivables now or
hereafter owned or held by Seller that were purported to have constituted
Purchased Receivables but have been deemed for any reason to not constitute
Purchased Receivables by a court of competent jurisdiction, and (3) 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:

 6
 

 

	
  If to Seller:

  	
  UTStarcom, Inc.

  	
   

  
	
   

  	
  1275 Harbor Bay Parkway

  	
   

  
	
   

  	
  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 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 of any judgment, and each of
the parties hereto 

 7
 

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 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
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.

 8
 

10.           Acknowledgement.  The Buyer and Seller acknowledge and agree
that the amendment and restatement of the Original Agreement on the terms and
conditions set forth herein shall not in any way affect any undertakings or
security interest grants effected pursuant to the Original Agreement or any
representations, warranties or covenants made by the Seller with respect to
such undertakings  or security interest
grants or any rights or remedies of the Buyer 
with respect thereto.  The Seller
hereby confirms all undertakings and security interest grants effected pursuant
to the Original Agreement.

 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: 

  	
  Keith San Felipe

  
	
   

  	
  Title: 

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIBANK, N.A., Buyer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Katharine C. Baragona

  
	
   

  	
  Title: 

  	
  Director, Global Trade North America

  
				

 

 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 Amended and
Restated Receivables Purchase Agreement, dated as of March 30, 2007, between
UTSTARCOM PERSONAL COMMUNICATIONS LLC (“Seller”) and CITIBANK, N.A. (“Buyer”)
(as it may be amended, restated, modified or supplemented from time to time,
the “Agreement”; terms not otherwise defined herein shall have the
meanings set forth in the Agreement), which amended and restated the Committed
Receivables Purchase Agreement dated as of August 1, 2005 (as amended by
Amendment of Committed Receivables Purchase Agreement dated June 29, 2006).

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.             The conditions precedent for
purchases listed in [Sections 1 and 2 of Exhibit B to the Agreement and ][prior
text is for use with respect to the initial Purchase Date][Section 1(b)(y) of
the Agreement have been fulfilled in full].

4.             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

5.             There has not been any Material
Adverse Change in Seller or Account Debtor since the immediately preceding
Purchase Date under the Agreement.

6.             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).

 1
 

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.

	
  

  	
   

  	
  

  	
  UTSTARCOM PERSONAL COMMUNICATIONS LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REQUEST ACCEPTED:

  CITIBANK, N.A.

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
							

 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):                          $

  	
   

  	
   

  

 

 3

Schedule II

Account Debtors

 

	
  Account Debtor

  	
   

  	
  Facility Sub-Limits

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

 

Note:  No Account Debtors may be added to this
Schedule II until the UCC-1 Financing Statement naming Buyer as debtor and
Seller as secured party has been amended to refer to such new Account Debtor.

 

 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 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.

 1
 

“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.

“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) [***] per annum if the payment cycle is less than 75 days or (ii) [***] 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.

“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, 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 

 2
 

payment of a Purchased Receivable as a result of an Insolvency Event of
an Account Debtor of Receivables purchased hereunder 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).

“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).

“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 

 3
 

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 to a level 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).

“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 executed and delivered by
Parent to Buyer as of August 1, 2005, as such may be amended, restated, or
otherwise modified from time to time.

“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.

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“Proposed Receivables”:  With respect to any Purchase Date, the
Eligible Receivables proposed by Seller to Buyer for purchase hereunder 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 March 28, 2008; provided, that such date may be extended
for successive 364 day terms if the Buyer and Seller agree to each such
extension in writing, and (y) a date 90 days after the date on which the Buyer
sends written notice of the termination of this Agreement to the Seller; provided, that
the Seller may terminate this Agreement at any time upon written notice thereof
to the 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 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

 5
 

(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.

“Subject Receivables”:  Receivables payable by an Account Debtor, or
any Account Debtor’s successors or assigns (whole and partial), subsidiaries,
parents or affiliates (including any other entity directly, or indirectly
through one or more intermediaries, controlling, controlled or under common
control of such entity), which have been purchased, sold or transferred, or
purported to have been purchased, sold, or transferred by Seller to Buyer under
this Agreement.

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

 

 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, simultaneously with, 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 Confirmation of
Performance Undertaking.

(c)           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.

(d)           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 and the
Confirmation of Performance Undertaking.

(e)           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 Confirmation of Performance Undertaking and any
other documents to be delivered by it hereunder.

(f)            Proof of payment of all reasonable
attorneys’ fees and disbursements incurred by 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, simultaneously with, or before such date the
following, each (unless otherwise indicated) dated such date, in form and
substance satisfactory to Buyer:

(a)           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) to be duly
filed on the initial Purchase Date under the UCC.

(b)           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 this Agreement) to be duly filed on the initial Purchase
Date under the UCC.

 1
 

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

(d)           (i) 
Favorable opinion of counsel to Seller (including, with respect to the
true sale nature of the Agreement) and Parent in form and substance
satisfactory to Buyer and (ii) favorable opinion of in-house counsel of Seller
and Parent in form and substance satisfactory to Buyer.

(e)           Proof of payment of all reasonable
attorneys’ fees and disbursements incurred by Buyer.

(f)            Evidence of establishment of the
Collection Account.

(g)           A duly executed Control Agreement.

(h)           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.

 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, and the related Account Debtor has accepted all such
property and services.  The payments due
with respect to each Purchased Receivable are not contingent upon Seller’s
fulfillment of any further obligation.

(b)           Each
Receivable listed on a Request, 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 a true, correct and complete copy of its
certificate of formation and limited liability company agreement, including all
amendments thereto.

 1
 

(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 Sections 1
and 2 of Exhibit B to the Agreement have been fulfilled or waived in
writing by Buyer, and as of each Purchase Date (including the initial Purchase
Date), the conditions precedent set forth in Section 1(b)(y) of the Agreement
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.

 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 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.  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 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

 1
 

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.

(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.

 2
 

(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.

 3

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:

  	
   

  	
   

  
							

 

 1

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