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Form SC 13D/A UTSTARCOM HOLDINGS CORP. Filed by: SHAH CAPITAL MANAGEMENT

August 7, 2015 9:33 AM EDT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 14)*

 

 

UTSTARCOM HOLDINGS CORP.

 

(Name of Issuer)

Ordinary Shares, par value US$0.00375 per share

 

(Title of Class of Securities)

918076100

 

(CUSIP Number)

Shah Capital Management, Inc.

8601 Six Forks Road, Suite 630

Raleigh, NC 27615

Telephone: +1 (919) 719-6360

 

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

August 6, 2015

 

(Date of Event Which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ¨

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 


SCHEDULE 13D

 

CUSIP No. 918076100  

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Shah Capital Management, Inc.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

North Carolina

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7    

SOLE VOTING POWER

 

0

     8   

SHARED VOTING POWER

 

10,649,369

     9   

SOLE DISPOSITIVE POWER

 

0

   10   

SHARED DISPOSITIVE POWER

 

10,649,369

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

10,649,3691

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

28.6%2

14  

TYPE OF REPORTING PERSON (See Instructions)

 

IA

 

1  Includes (i) 1,730,000 Ordinary Shares managed by Shah Management in separately managed accounts, and (ii) 8,919,369 Ordinary Shares owned by Shah Opportunity. Shah Management is the investment manager of Shah Opportunity. Mr. Shah is the president and chief investment officer of Shah Management.
2  Percentage calculated based on 37,201,620 Ordinary Shares outstanding.

 

2


SCHEDULE 13D

 

CUSIP No. 918076100  

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Shah Capital Opportunity Fund LP

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7    

SOLE VOTING POWER

 

0

     8   

SHARED VOTING POWER

 

8,919,369

     9   

SOLE DISPOSITIVE POWER

 

0

   10   

SHARED DISPOSITIVE POWER

 

8,919,369

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

8,919,3693

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

23.9%4

14  

TYPE OF REPORTING PERSON (See Instructions)

 

PN

 

3  Includes 8,919,369 Ordinary Shares. Shah Capital LLC is the general partner of Shah Opportunity. Mr. Shah is the managing member of Shah Capital LLC.
4  Percentage calculated based on 37,201,620 Ordinary Shares outstanding.

 

3


SCHEDULE 13D

 

CUSIP No. 918076100  

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Himanshu H. Shah

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

United States

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7    

SOLE VOTING POWER

 

433,691

     8   

SHARED VOTING POWER

 

10,649,369

     9   

SOLE DISPOSITIVE POWER

 

433,691

   10   

SHARED DISPOSITIVE POWER

 

10,649,369

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

10,649,3695

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

28.6%6

14  

TYPE OF REPORTING PERSON (See Instructions)

 

IN

 

5  Includes (i) 1,730,000 Ordinary Shares in separately managed accounts managed by Shah Management, which includes 433,691 Ordinary Shares in the name of Mr. Shah and (ii) 8,919,369 Ordinary Shares owned by Shah Opportunity. Mr. Shah is the president and chief investment officer of Shah Management. Shah Capital LLC is the general partner of Shah Opportunity. Mr. Shah is the managing member of Shah Capital LLC.
6  Percentage calculated based on 37,201,620 Ordinary Shares outstanding.

 

4


SCHEDULE 13D

 

CUSIP No. 918076100  

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Hong Liang Lu

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

United States

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7    

SOLE VOTING POWER

 

1,090,563

     8   

SHARED VOTING POWER

 

0

     9   

SOLE DISPOSITIVE POWER

 

1,090,563

   10   

SHARED DISPOSITIVE POWER

 

0

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

1,090,5637

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

2.9%8

14  

TYPE OF REPORTING PERSON (See Instructions)

 

IN

 

7  Includes (i) 957,552 Ordinary Shares, (ii) 26,925 Ordinary Shares registered in the name of Lu Charitable Remainder Trust, of which Mr. Lu is the trustee, (iii) 16,408 Ordinary Shares registered in the name of the Lu Family Trust, of which Mr. Lu is a trustee and of which Mr. Lu and his spouse are beneficiaries, (iv) 76,333 Ordinary Shares registered in the name of The Lu Family Limited Partnership, of which Mr. Lu is a general partner, and (v) 13,345 Ordinary Shares issuable upon exercise of options held by Mr. Lu that are exercisable currently or within 60 days of the date hereof.
8  Percentage calculated based on 37,201,620 Ordinary Shares outstanding.

 

5


SCHEDULE 13D

 

CUSIP No. 918076100  

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Lu Charitable Remainder Trust

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

California

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7    

SOLE VOTING POWER

 

26,925

     8   

SHARED VOTING POWER

 

0

     9   

SOLE DISPOSITIVE POWER

 

26,925

   10   

SHARED DISPOSITIVE POWER

 

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

26,9259

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

0.1%10

14  

TYPE OF REPORTING PERSON (See Instructions)

 

OO

 

9  Includes 26,925 Ordinary Shares. Mr. Lu is the trustee of Lu Charitable Trust.
10  Percentage calculated based on 37,201,620 Ordinary Shares outstanding.

 

6


SCHEDULE 13D

 

CUSIP No. 918076100  

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Lu Family Trust

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

California

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7    

SOLE VOTING POWER

 

16,408

     8   

SHARED VOTING POWER

 

0

     9   

SOLE DISPOSITIVE POWER

 

16,408

   10   

SHARED DISPOSITIVE POWER

 

0

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

16,40811

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

0.0%12

14  

TYPE OF REPORTING PERSON (See Instructions)

 

OO

 

11 Includes 16,408 Ordinary Shares. Mr. Lu is a trustee of Lu Family Trust, of which Mr. Lu and his spouse are beneficiaries.
12 Percentage calculated based on 37,201,620 Ordinary Shares outstanding.

 

7


SCHEDULE 13D

 

CUSIP No. 918076100  

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

The Lu Family Limited Partnership

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7    

SOLE VOTING POWER

 

76,333

     8   

SHARED VOTING POWER

 

0

     9   

SOLE DISPOSITIVE POWER

 

76,333

   10   

SHARED DISPOSITIVE POWER

 

0

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

76,33313

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

0.2%14

14  

TYPE OF REPORTING PERSON (See Instructions)

 

PN

 

13 Includes 76,333 Ordinary Shares. Mr. Lu is a general partner of Lu Family Partnership.
14 Percentage calculated based on 37,201,620 Ordinary Shares outstanding.

 

8


This Amendment No. 14 is being filed jointly by Shah Capital Management, Inc. (“Shah Management”), Shah Capital Opportunity Fund LP (“Shah Opportunity”), Himanshu H. Shah (“Mr. Shah”), Hong Liang Lu (“Mr. Lu”), Lu Charitable Remainder Trust (“Lu Charitable Trust”), Lu Family Trust (“Lu Family Trust”) and The Lu Family Limited Partnership (“Lu Family Partnership”, together with Shah Opportunity, Mr. Shah, Mr. Lu, Lu Charitable Trust and Lu Family Trust, the “Reporting Persons”). The Reporting Persons have entered into a joint filing agreement, dated as of March 27, 2013, a copy of which is attached hereto as Exhibit 99.1.

Item 1. Security and Issuer.

This Schedule 13D relates to the ordinary shares, par value US$0.00375 per share (the “Ordinary Shares”), of UTStarcom Holdings Corp. (the “Company” or “Issuer”). The Company’s principal executive office is located at Level 6, Hennessy Road, Admiralty, Hong Kong.

Item 2. Identity and Background.

Shah Management is a registered investment adviser incorporated in North Carolina. The address of its principal office is 8601 Six Forks Road, Suite 630, Raleigh, NC 27615. Mr. Shah is the President and Chief Investment Officer of Shah Management.

Shah Opportunity is a Delaware Limited Partnership with its principal office at 8601 Six Forks Road, Suite 630, Raleigh, NC 27615. The general partner of Shah Opportunity is Shah Capital LLC, a Delaware limited liability company, whose principal office is at 8601 Six Forks Road, Suite 630, Raleigh, NC 27615. Mr. Shah is the Managing Member of Shah Capital LLC.

Mr. Shah is a citizen of the United States and his principal occupation is the president and chief investment officer of Shah Management. Mr. Shah’s principal business address is 8601 Six Forks Road, Suite 630, Raleigh, NC 27615.

Mr. Lu is a citizen of the United States and his principal occupation is a director of the Company. Mr. Lu’s principal business address is 10 Cassia Road, #1B, Yau Yut Chuen, Kowloon Tong, Hong Kong.

Lu Charitable Trust is organized under the laws of the State of California and its principal business is managing investments for the Lu family. Lu Charitable Trust’s principal business address is 1 Lakeside Drive, #1802 Oakland, CA 94612. Mr. Lu is the trustee of Lu Charitable Trust.

Lu Family Trust is organized under the laws of the State of California and its principal business is managing investments for the Lu family. Lu Family Trust’s principal business address is 1 Lakeside Drive, #1802 Oakland, CA 94612. Mr. Lu is a trustee of Lu Family Trust, of which Mr. Lu and his spouse are beneficiaries.

Lu Family Partnership is a Delaware limited partnership and its principal business is managing investments for the Lu family. Lu Family Partnership’s principal business address is 1 Lakeside Drive, #1802 Oakland, CA 94612. Mr. Lu is the general partner of Lu Family Partnership.

None of the Reporting Persons has, during the past five years, been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors), nor been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

N/A

 

9


Item 4. Purpose of Transaction.

The information set forth in Item 6 is incorporated herein by reference.

Item 5. Interest in Securities of the Issuer.

(a)-(b) The following table sets forth the beneficial ownership of Ordinary Shares of the Company for each of the Reporting Persons as of August 6, 2015.

 

Name    Shares
Beneficially
Owned
    

Percentage

of Total

   

Sole

Voting
Power

     Shared
Voting
Power
     Sole
Dispositive
Power
     Shared
Dispositive
Power
 

Shah Management(1)

     10,649,369         28.6     —           10,649,369         —           10,649,369   

Shah Opportunity(2)

     8,919,369         23.9     —           8,919,369         —           8,919,369   

Mr. Shah(3)

     10,649,369         28.6     433,691         10,649,369         433,691         10,649,369   

Mr. Lu(4)

     1,090,563         2.9     1,090,563         —           1,090,563         —     

Lu Charitable Trust(5)

     26,925         0.1     26,925         —           26,925         —     

Lu Family Trust(6)

     16,408         0.0     16,408         —           16,408         —     

Lu Family Partnership(7)

     76,333         0.2     76,333         —           76,333         —     

 

 

(1) Includes (i) 1,730,000 Ordinary Shares managed by Shah Management in separately managed accounts, and (ii) 8,919,369 Ordinary Shares owned by Shah Opportunity. Shah Management is the investment manager of Shah Opportunity. Mr. Shah is the president and chief investment officer of Shah Management.
(2) Includes 8,919,369 Ordinary Shares. Shah Capital LLC is the general partner of Shah Opportunity. Mr. Shah is the managing member of Shah Capital LLC.
(3) Includes (i) 1,730,000 Ordinary Shares in separately managed accounts managed by Shah Management, which includes 433,691 Ordinary Shares in the name of Mr. Shah, and (ii) 8,919,369 Ordinary Shares owned by Shah Opportunity. Mr. Shah is the president and chief investment officer of Shah Management. Shah Capital LLC is the general partner of Shah Opportunity. Mr. Shah is the managing member of Shah Capital LLC.
(4) Includes (i) 957,552 Ordinary Shares, (ii) 26,925 Ordinary Shares registered in the name of Lu Charitable Trust, of which Mr. Lu is the trustee, (iii) 16,408 Ordinary Shares registered in the name of the Lu Family Trust, of which Mr. Lu is a trustee and of which Mr. Lu and his spouse are beneficiaries, (iv) 76,333 Ordinary Shares registered in the name of The Lu Family Limited Partnership, of which Mr. Lu is a general partner, and (v) 13,345 Ordinary Shares issuable upon exercise of options held by Mr. Lu that are exercisable currently or within 60 days of the date hereof. Under the Term Sheet described in Item 6, the purchaser named therein is required to purchase such 13,345 shares only if Mr. Lu has exercised these options prior to the closing date for the transaction.
(5) Includes 26,925 Ordinary Shares. Mr. Lu is the trustee of Lu Charitable Trust.
(6) Includes 16,408 Ordinary Shares. Mr. Lu is the trustee of Lu Family Trust, of which Mr. Lu and his spouse are beneficiaries.
(7) Includes 76,333 Ordinary Shares. Mr. Lu is a general partner of Lu Family Partnership.

 

10


Shah Management, Shah Opportunity and Mr. Shah are collectively referred to as the “Shah Parties”. Mr. Lu, Lu Charitable Trust, Lu Family Trust and Lu Family Partnership are collectively referred to as the “Lu Parties”. Due to the nature of the term sheet and potential transaction described in Item 6 of this statement, the Shah Parties and the Lu Parties may be deemed to be part of a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with each other. As a result, the Shah Parties and the Lu Parties may both be deemed to beneficially own an aggregate of 11,723,524 Ordinary Shares, or 31.6% of the total outstanding Ordinary Shares. Each of the Shah Parties hereby expressly disclaims beneficial ownership of any Ordinary Shares beneficially owned by any of the Lu Parties or any other person, and does not affirm membership in a “group” (within the meaning of Rule 13(d)-5 of the Exchange Act) with any of the Lu Parties or any other person, and this Schedule 13D shall not be construed as acknowledging that any of the Shah Parties, for any or all purposes, beneficially owns any Ordinary Shares beneficially owned by any of the Lu Parties or any other person or is a member of a group with any of the Lu Parties or any other person. Each of the Lu Parties hereby expressly disclaims beneficial ownership of any Ordinary Shares beneficially owned by any of the Shah Parties or any other person, and does not affirm membership in a “group” (within the meaning of Rule 13(d)-5 of the Exchange Act) with any of the Shah Parties or any other person, and this Schedule 13D shall not be construed as acknowledging that any of the Lu Parties, for any or all purposes, beneficially owns any Ordinary Shares beneficially owned by any of the Shah Parties or any other person or is a member of a group with the Shah Parties or any other person.

 

(c) Except as disclosed in Item 6 below, to the best knowledge of each of the Reporting Persons, none of the Reporting Persons has effected any transactions relating to the Ordinary Shares during the past sixty (60) days.

 

(d) Not applicable.

 

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

On August 6, 2015, the Shah Parties and the Lu Parties entered into a Binding Term Sheet (“Term Sheet”) with The Smart Soho International Limited (“Smart Soho”) setting out certain terms of a proposed transaction for the sale of 11,739,932 Ordinary Shares held by the Shah Parties and the Lu Parties to Smart Soho and additional purchasers to be designated by Smart Soho at a price of US$6.081 (the “Transaction”). The detailed terms and conditions regarding the Transaction shall be promptly negotiated in good faith by the parties to the Term Sheet and set forth in a mutually satisfactory definitive share purchase agreement for the sale and purchase of the Sale Shares. Smart Soho has agreed to deposit US$1 million into escrow as provided under the Term Sheet which amount shall be credited against the purchase price should the Transaction be consummated. Among other items, the Term Sheet sets out certain non-exclusive conditions that must be fulfilled as a condition to Smart Soho’s obligation to sign a share purchase agreement and complete the Transaction. Further, under the Term Sheet the parties have agreed to an exclusivity period during which to negotiate the share purchase agreement and complete the Transaction. The Term Sheet also provides that none of the parties is obligated to enter into the share purchase agreement, or to close the Transaction unless a mutually satisfactory share purchase agreement has been reached and the closing conditions thereunder have been satisfied.

The foregoing description of the Term Sheet does not purport to be complete and is qualified in its entirety by reference to the Term Sheet, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

To the best knowledge of the Reporting Persons, except as provided herein, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons and between any of the Reporting Persons and any other person with respect to any securities of the Company.

 

11


Item 7. Materials to be Filed as Exhibits.

 

Exhibit No.

  

Description

99.1    Joint Filing Agreement dated, March 27, 2013, by and among the Reporting Persons (Incorporated by reference to Exhibit 99.1 to Schedule 13D (Amendment No. 8) filed by the Reporting Persons on March 27, 2013).
99.2    Binding Term Sheet dated, August 6, 2015, by and among Shah Management, Shah Opportunity, Mr. Shah, Mr. Lu., Lu Charitable Trust, Lu Family Partnership, Lu Family Trust and The Smart Soho International Limited.

 

12


SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Dated:

August 7, 2015

 

Shah Capital Management, Inc.
By:  

/s/ Himanshu H. Shah

  Name: Himanshu H. Shah
  Title: President and CIO
Shah Capital Opportunity Fund LP
By:   Shah Capital LLC, the General Partner
By:  

/s/ Himanshu H. Shah

  Name: Himanshu H. Shah
  Title: Managing Member
Himanshu H. Shah
By:  

/s/ Himanshu H. Shah

  Name: Himanshu H. Shah
Hong Liang Lu
By:  

/s/ Hong Liang Lu

  Name: Hong Liang Lu
Lu Charitable Remainder Trust
By:  

/s/ Hong Liang Lu

 

Name: Hong Liang Lu

Title: Trustee

Lu Family Trust
By:  

/s/ Hong Liang Lu

 

Name: Hong Liang Lu

Title: Trustee

The Lu Family Limited Partnership
By:   Hong Liang Lu, the General Partner
By:  

/s/ Hong Liang Lu

  Name: Hong Liang Lu

 

13


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Joint Filing Agreement dated, March 27, 2013, by and among the Reporting Persons (Incorporated by reference to Exhibit 99.1 to Schedule 13D (Amendment No. 8) filed by the Reporting Persons on March 27, 2013).
99.2    Binding Term Sheet dated, August 6, 2015, by and among Shah Management, Shah Opportunity, Mr. Shah, Mr. Lu., Lu Charitable Trust, Lu Family Partnership, Lu Family Trust and The Smart Soho International Limited.

 

14

Exhibit 99.2

BINDING TERM SHEET

 

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This binding term sheet (this “Term Sheet”) summarizes the relevant terms of the proposed transaction whereby The Smart Soho International Limited and additional purchasers to be designated by The Smart Soho International Limited (collectively, the “Investor”) will acquire a certain number of ordinary shares of UTStarcom Holdings Corp. (the “Target”) currently held by the persons identified on Schedules A and B as the “Shah Sellers” and the “Lu Sellers” respectively (individually, a “Shah Seller” or a “Lu Seller”, as the case may be and, collectively, the “Sellers”) (the “Transaction”). The Investor, on the one hand, and the Sellers, on the other hand, shall be referred to individually herein as a “Party” and collectively as the “Parties”.

 

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The Parties intend that the provisions of this Term Sheet (the “Binding Terms”) will be binding and enforceable against them, subject to the entering into of the Share Purchase Agreement (as defined below).

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Overview of the Transaction:

 

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Currently, the Sellers hold a total of 11,739,932 ordinary shares of the Target, par value US$0.00375 per share (the “Ordinary Shares”), comprising approximately 31.6% of Target’s issued and outstanding share capital as further identified on Schedules A and B. For avoidance of doubt, the number of Sale Shares (as defined below) provided in the preceding sentence includes options to purchase 13,345 Ordinary Shares held by the Lu Sellers, and Investor shall not be obligated to purchase such 13,345 Ordinary Shares unless the Lu Sellers shall have exercised the options and acquired the corresponding number of the Ordinary Shares prior to the closing of the Transaction. The Sellers intend to dispose of their 11,739,932 Ordinary Shares (the “Sale Shares”).

 

Subject to the terms and conditions of the Share Purchase Agreement (as defined below), the Investor proposes to make an offer to acquire the Sale Shares from the Sellers at a price of US$6.081 cash per Ordinary Share.

 

The detailed terms and conditions regarding the Transaction contemplated in this Term Sheet shall be promptly negotiated in good faith by the Parties as soon as practicable and within the time frame provided herein and set forth in a mutually satisfactory definitive share purchase agreement for the sale and purchase of the Sale Shares (the “Share Purchase Agreement”), which will contain customary and appropriate closing conditions, representations, warranties, indemnities and covenants including, without limitation, conditions precedent to Investor’s obligation to purchase the Ordinary Shares contemplated by the provisions of this Term Sheet under the headings “Share Capital,” “Board Composition and Management,” “No Material Adverse Change” and other terms to be negotiated in the Share Purchase Agreement. For the avoidance of doubt, the Share Purchase Agreement and other definitive documents contemplated in this Term Sheet shall not include any condition under which the Investor’s obligation to close the Transaction shall be subject to its success in raising or borrowing funds to acquire the Sale Shares. The Parties will endeavor to effect the closing of the Transaction by October 15, 2015 and not later than October 31, 2015. Notwithstanding any other provisions in this Term Sheet, neither Party is obligated to enter into the Share Purchase Agreement, or to close the Transaction unless the Parties have reached a mutually satisfactory Share Purchase Agreement and all the closing conditions thereunder have been satisfied.

 

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Termination

Fee:

  The definitive Share Purchase Agreement shall provide that:
LOGO   (A)    if the closing under the agreement shall not have occurred by October 31, 2015 for any reason other than a failure by either the Sellers or Investor to perform the covenants and agreements set forth therein to be performed by them or to satisfy the conditions set forth therein to be satisfied by them, either Party may terminate the agreement and neither Party shall have any liability or obligation to the other;
  (B)    if the Shah Sellers shall have performed the covenants and agreements and satisfied the conditions set forth therein to be performed or satisfied by the Shah Sellers and the closing under the agreement shall not have occurred by October 31, 2015 solely due to a failure by Investor to perform the covenants and agreements or to satisfy the conditions set forth therein to be performed or satisfied by the Investor, the Shah Sellers may terminate the agreement and, upon such termination, Investor shall pay the Shah Sellers a Termination Fee of US$1,000,000; and
  (C)    if Investor shall have performed the covenants and agreements and satisfied the conditions set forth therein to be performed or satisfied by Investor and the closing under the agreement shall not have occurred by October 31, 2015 solely due to a failure by the Shah Sellers to perform the covenants and agreements or to satisfy the conditions set forth therein to be performed or satisfied by the Shah Sellers, Investor may terminate the agreement and, upon such termination, the Shah Sellers shall pay Investor a Termination Fee of US$1,000,000.
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  (A)    LOGO
  (B)    LOGO
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Escrow Amount:

 

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The Investor will deposit US$1,000,000 in cash (the “Escrow Amount”) in an escrow account under the name of the Investor (or any of its designated affiliates on its behalf) with Li, Wong, Lam & W.I. Cheung (the “Escrow Agent”) for the purchase of the Sale Shares (or in the event that a termination fee is payable by the Investor to the Shah Sellers, for the payment of the termination fee to the Shah Sellers), pursuant to a mutually satisfactory escrow agreement to be entered into by Investor and the Shah Sellers with the Escrow Agent. The Escrow Amount will be deposited within five (5) business days of the later of the execution of this Term Sheet and execution of the escrow agreement. The Escrow Agreement shall provide that the Escrow Amount shall be (i) released to the Shah Sellers upon the closing of the Transaction, together with any interest earned thereon, and the Escrow Amount and any such interest shall be credited against the purchase price for the Sale Shares to be purchased from the Shah Sellers, or (ii) refunded to the Investor together with any interest earned thereon in the event that the closing of the Transaction has not occurred by October 31, 2015, unless the Investor is obligated to pay a termination fee to the Shah Sellers under the conditions set forth in clause (B) under “Termination Fee,” above, in which case the Escrow Amount shall be paid to the Shah Sellers in full satisfaction of Investor’s obligation to pay such Termination Fee, and any interest on the Escrow Amount shall be paid to Investor.

 

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Transaction

Fees and Expenses:

 

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The fees, costs and expenses incurred by each Party in connection with the negotiation of the Term Sheet, the Share Purchase Agreement, and other transaction documents contemplated hereunder or thereunder shall be borne by such Party.

 

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Share Capital:

 

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It shall be condition to Investor’s obligation to enter into and perform its obligations under the Share Purchase Agreement that there shall have occurred no changes to the share capital structure of the Target prior to the closing of the Transaction. The Sale Shares to be acquired by the Investor under this Term Sheet shall represent not less than 31.6% of the total number of Ordinary Shares outstanding on the closing of the Transaction.

 

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Board Composition and Management:

 

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The board of directors of the Target currently consists of six (6) directors. It shall be condition to Investor’s obligation to enter into and perform its obligations under the Share Purchase Agreement that there shall have occurred no changes to the board of directors (the “Board”) or executive officers of the Target and its subsidiaries prior to the closing of the Transaction. Any Seller or affiliate thereof that is a director of the Target shall resign upon the closing of the Transaction. The Sellers, or their respective affiliates who are directors of the Target, shall recommend for appointment to the board of directors to fill the vacancies caused by such resignations with persons designated by the Investor. In the event Investor wishes to designate additional members to the Board and/or specified executive officers of the Target, the Sellers shall consult with the Board and recommend to the Board the appointment of such designees as additional directors or as executive officers of Target, as the case may be.

 

Upon the signing of the Term Sheet and the Investor’s payment of the Escrow Amount, subject to applicable laws, the Sellers shall cause the Target to provide the Investor with such periodic reports of the Target’s financial condition and results of operations as may reasonably be requested by the Investor during the period between execution of this Term Sheet and the closing of the Transaction.

 

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No Material Adverse Change:

 

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   From the date of this Term Sheet until the closing of the Transaction, there shall not have occurred and be continuing any event, change, circumstance, effect or other matter that has, or would reasonably be expected to have a material adverse effect on Investor’s ability to timely consummate the transactions contemplated by the Share Purchase Agreement or result, either individually or in the aggregate with all other events, changes, circumstances, effects or other matters, in a material adverse change in the business, financial condition, compliance position and results of operations of the Target and its subsidiaries taken as a whole including, without limitation, any spin-off, sale, transfer or otherwise disposition of any properties, assets, business and other interests of the Target or its subsidiaries, or incurrence of any liability or debt other than, in each case, in the ordinary course of the Target’s business, consistent with past practices of the Target and its subsidiaries (the “Material Adverse Change”), provided, that in no event shall any of the following, either alone or in combination, constitute or be taken into account in determining whether there has been a Material Adverse Change: (A) changes affecting the economic conditions or financial markets generally in any country or region in which the Target or any of its subsidiaries conduct business; (B) changes in GAAP or any interpretation thereof after the date hereof, or to applicable laws or the interpretation or enforcement thereof; (C) changes that are the result of factors generally affecting the industries in which the Target and its subsidiaries operate; (D) changes affecting the financial, credit or securities market in which the Target or any of its subsidiaries operate, including changes in interest rates or foreign exchange rates; (E) changes resulting from the public announcement of the Transaction; (F) natural disasters, declarations of war, acts of sabotage or terrorism or armed hostilities, or (G) actions taken (or omitted to be taken) at the request of the Investor (except, with respect to clauses (A) through (D) and (F), to the extent that any such event, change, circumstance, effect or other matter, alone or in combination, disproportionately has a greater adverse impact on the Target and its subsidiaries, taken as a whole, as compared to other companies operating in the same industries and markets in which the Target or any of its subsidiaries operates).
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Exclusivity:

 

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The Parties will work on the Transaction contemplated under this Term Sheet (or a transaction similar to this Transaction) exclusively from the date hereof until October 31, 2015 (the “Exclusivity Period”). During the Exclusivity Period, unless otherwise mutually agreed by both Parties, neither Party will, directly or indirectly, through any affiliate, officer, director, agent or otherwise, (i) make, solicit, initiate or encourage submission of any proposal or offer from any third party relating to an investment in/purchase or sale of, or other significant transaction relating to, the Target or its subsidiaries or the Sale Shares by such third party, (ii) participate in an investment in/purchase or sale of, or other significant transaction relating to, the Target, its subsidiaries, its equity interests or assets by any third party, or (iii) dispose of any equity interests in the Target held by such Party (any of (i), (ii) or (iii), a “Prohibited Act”). Each Party agrees (a) to terminate or procure the termination of all ongoing contacts or negotiations, if any, with any third party with respect to any Prohibited Act with immediate effect, and (b) to promptly notify the other Parties if any proposal or offer from any third party relating to a Prohibited Act, or any inquiry or contact with any third party with respect thereto, is made, and shall provide the other Parties with such information regarding such proposal, offer, inquiry or contact as the other Parties may request. The Parties further agree that the Exclusivity Period under this Term Sheet may be reasonably extended based on the progress of the Transaction upon mutual agreement by the Parties.

 

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Confidentiality:

 

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Each of the Parties hereto agrees that this Term Sheet is being transmitted to the other Party with the express understanding that the other Party will keep its contents and the fact that it has been transmitted to such Party strictly confidential, and each Party shall not, without the other Party’s express prior written consent, disclose such confidential information to any third party or issue a press release or make any public announcement; provided that (i) each Party may disclose such confidential information to its officers, directors, partners, employees, affiliates and advisors on a need-to-know basis in connection with the Transaction and such officers, directors, employees, partners, affiliates and advisors shall keep such information strictly confidential; and (ii) each Party may disclose such confidential information to the extent that it is required to be disclosed by law or regulation, pursuant to a legal action, legal proceeding or arbitration, by order of a court of competent jurisdiction or by a governmental or regulatory authority, provided further that the disclosing Party shall provide copies of any filings, announcements and disclosures permitted by the preceding sentence to the other Parties for review with a reasonable opportunity to comment prior to filing or disclosing the same. In addition, each Party shall not use the name of the other Parties or any of the other Parties’ affiliates in any manner, context or format (including reference on or links to websites or press releases) without obtaining in each instance the prior written consent from the other Parties, except as may be required by applicable law, regulation, stock exchange rules or requirements or legal process. The Sellers agree to use their best commercial efforts to cause the Target to observe the foregoing limits on publicity.

 

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Governing Law/Dispute Resolution:

 

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This Term Sheet shall be governed by the laws of Hong Kong, without regard to the conflicts of law principles thereof.

 

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Any dispute, controversy, claims or differences of any kind whatsoever arising out or in connection with this Term Sheet shall be resolved exclusively through arbitration administered by the Hong Kong International Arbitration Centre in Hong Kong which shall be conducted in accordance with the then effective Hong Kong International Arbitration Centre Administered Arbitration Rules.

 

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Language:    This Term Sheet is written in both English and Chinese, and both versions shall have equal effect.
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For and on behalf of LOGO     

SHAH CAPITAL MANAGEMENT, INC.

 

    

August 6, 2015

 

     Himanshu H. Shah
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/s/ Himanshu H. Shah

    
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For and on behalf of LOGO      
SHAH CAPITAL OPPORTUNITY FUND LLP      
  

August 6, 2015

     

Himanshu H. Shah

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/s/ Himanshu H. Shah

     
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HIMANSHU H. SHAH      
August 6, 2015      

 

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/s/ Himanshu H. Shah

     
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HONG LIANG LU        

August 6, 2015

       
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/s/ Hong Liang Lu

       
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For and on behalf of LOGO        
LU CHARITABLE REMAINDER TRUST        

August 6, 2015

       

Hong Liang Lu

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/s/ Hong Liang Lu

       
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For and on behalf of LOGO        
THE LU FAMILY LIMITED PARTNERSHIP        

August 6, 2015

       

Hong Liang Lu

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/s/ Hong Liang Lu

       
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For and on behalf of LOGO        
LU FAMILY TRUST        

August 6, 2015

       

Hong Liang Lu

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/s/ Hong Liang Lu

       
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For and on behalf of LOGO   
THE SMART SOHO INTERNATIONAL LIMITED   

August 6, 2015

  

Guoping Gu

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/s/ Guoping Gu

  
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SCHEDULE A

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SHAH SELLERS

Shah LOGO

 

Shah Sellers

  

Number of Ordinary Shares

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Shah Capital Management, Inc.    1,730,000
Shah Capital Opportunity Fund LP    8,919,369
Total LOGO    10,649,369


SCHEDULE B

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LU SELLERS

Lu LOGO

 

Lu Seller

  

Number of Ordinary Shares

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Hong Liang Lu    970,897
Lu Charitable Remainder Trust    26,925
The Lu Family Limited Partnership    76,333
Lu Family Trust    16,408
Total LOGO    1,090,563


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