Form SC 13D/A UTSTARCOM HOLDINGS CORP. Filed by: Shanghai Phicomm Communication Co., Ltd.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

(Amendment No. 2)

 

Under the Securities Exchange Act of 1934

 

UTStarcom Holdings Corp.

(Name of Issuer)

 

Ordinary Shares, Par Value US$0.00375 per share

(Title of Class of Securities)

 

918076100

(CUSIP Number)

 

GU Guoping
Shanghai Phicomm Communication Co. Ltd.
3666 Sixian Road
Songjiang District
Shanghai, People’s Republic of China
011-86-21- 31183118

 

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

January 8, 2016

(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 o.

 

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).

CUSIP No. 918076100
1.	Names of Reporting Persons.
	GU GUOPING
2.	Check the Appropriate Box if a Member of a Group (See Instructions)			(a)	o
				(b)	x
3.	SEC Use Only
4.	Source of Funds (See Instructions)
	AF
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)				o
6.	Citizenship or Place of Organization
	People’s Republic of China
Number of Shares Beneficially Owned by Each Reporting Person With		7.	Sole Voting Power
			-0-
		8.	Shared Voting Power
			11,739,932
		9.	Sole Dispositive Power
			-0-
		10.	Shared Dispositive Power
			11,739,932
11.	Aggregate Amount Beneficially Owned by Each Reporting Person
	11,739,932
12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares				o
13.	Percent of Class Represented by Amount in Row (11)
	31.7%
14.	Type of Reporting Person
	IN

CUSIP No. 918076100
1.	Names of Reporting Persons.
	Shanghai Phicomm Communication Co., Ltd.,
2.	Check the Appropriate Box if a Member of a Group (See Instructions)			(a)	o
				(b)	x
3.	SEC Use Only
4.	Source of Funds (See Instructions)
	WC
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)				o
6.	Citizenship or Place of Organization
	People’s Republic of China
Number of Shares Beneficially Owned by Each Reporting Person With		7.	Sole Voting Power
			-0-
		8.	Shared Voting Power
			11,739,932
		9.	Sole Dispositive Power
			-0-
		10.	Shared Dispositive Power
			11,739,932
11.	Aggregate Amount Beneficially Owned by Each Reporting Person
	11,739,932
12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares				o
13.	Percent of Class Represented by Amount in Row (11)
	31.7%
14.	Type of Reporting Person
	CO

CUSIP No. 918076100
1.	Names of Reporting Persons.
	Phicomm Technology (Hong Kong) Co., Limited
2.	Check the Appropriate Box if a Member of a Group (See Instructions)			(a)	o
				(b)	x
3.	SEC Use Only
4.	Source of Funds (See Instructions)
	AF
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)				o
6.	Citizenship or Place of Organization
	Hong Kong
Number of Shares Beneficially Owned by Each Reporting Person With		7.	Sole Voting Power
			-0-
		8.	Shared Voting Power
			11,739,932
		9.	Sole Dispositive Power
			-0-
		10.	Shared Dispositive Power
			11,739,932
11.	Aggregate Amount Beneficially Owned by Each Reporting Person
	11,739,932
12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares				o
13.	Percent of Class Represented by Amount in Row (11)
	31.7%
14.	Type of Reporting Person
	CO

CUSIP No. 918076100
1.	Names of Reporting Persons.
	The Smart Soho International Limited
2.	Check the Appropriate Box if a Member of a Group (See Instructions)			(a)	o
				(b)	x
3.	SEC Use Only
4.	Source of Funds (See Instructions)
	AF
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)				o
6.	Citizenship or Place of Organization
	Cayman Islands
Number of Shares Beneficially Owned by Each Reporting Person With		7.	Sole Voting Power
			-0-
		8.	Shared Voting Power
			11,739,932
		9.	Sole Dispositive Power
			-0-
		10.	Shared Dispositive Power
			11,739,932
11.	Aggregate Amount Beneficially Owned by Each Reporting Person
	11,739,932
12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares				o
13.	Percent of Class Represented by Amount in Row (11)
	31.7%
14.	Type of Reporting Person
	CO

The Statement on Schedule 13D filed December 14, 2015 (the “Statement”) filed by Mr. GU Guoping, Shanghai Phicomm Communication Co., Ltd. (“Phicomm”), Phicomm Technology (Hong Kong) Co., Limited (“Phicomm HK”), The Smart Soho International Limited (“Smart Soho” and, together with GU Guoping, Phicomm and Phicomm HK, the “Phicomm Group”) and Chongqing Liangjian New Area Strategic Emerging Industries Equity Investment Fund Partnership (Limited Liability Partnership) (the “Fund” and, together with the Phicomm Group, the “Filing Persons”) relating to the Ordinary Shares, par value US$0.00375 per share (the “Ordinary Shares”) of UTStarcom Holdings Corp., a Cayman Islands corporation (the “Issuer”), as amended by Amendment No. 1 thereto filed December 22, 2015, is hereby further amended with respect to the items set forth below in this Amendment No. 2. Capitalized terms used herein without definition have the same meanings as those ascribed to them in the Statement.

Item 2.

Identity and Background

 

Item 2 of the Schedule is hereby amended by deleting the Fund from the group that may be deemed to have been formed by the Phicomm Group and the Fund. This Amendment No. 2 is filed solely by the Phicomm Group.

Item 4.

Purpose of Transaction

 

Item 4 of the Schedule is hereby amended by the addition of the following information:

In connection with the execution of the Third Amendment to the Purchase Agreement (see Item 6), Mr. William Wong resigned as a director and Chief Executive Officer of the Issuer. Effective January 11, 2016, the Issuer’s board elected Mr. GU Guoping, the Chairman of Phicomm, as a director to fill the vacancy on the board resulting from Mr. Wong’s resignation, and appointed Mr. Tenling Ti as the Issuer’s Chief Executive Officer. The effectiveness of the resignations of certain other directors of the Issuer, the enlargement of the Issuer’s board to eight directors and the election of additional designees of the Acquirer to fill the resulting vacancies all remain subject to Sellers’ receipt of aggregate payments of US$64,569,626 out of the total purchase price of US$70,439,592 for the Ordinary Shares. For additional information regarding such matters, see Item 4 of the Schedule as originally filed. Under the Third Amendment, if the closing under the Purchase Agreement does not occur by June 30, 2016, the Acquirer is obligated to procure Mr. GU’s resignation as a director of the Issuer.

Item 6.

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

Item 6 of the Schedule is hereby amended by the addition of the following information:

On January 8, 2016, Acquirer, Phicomm HK and the Sellers entered into a third amendment to the Purchase Agreement (the “Third Amendment”). Pursuant to the Third Amendment, the parties agreed that the closing under the Purchase Agreement will take place as soon as practicable as shall be agreed among the parties to the Purchase Agreement, but in no event later than June 30, 2016. In consideration of certain waivers by the Sellers set forth in the Third Amendment, Acquirer has made an additional payment of US$2,500,000 to the Shah Sellers and has agreed to deposit US$2,000,000 into an escrow account. Upon closing, the escrowed funds will be applied against the purchase price for the Ordinary Shares. Under the Third Amendment, additional sums may become payable to the Shah Sellers, depending on when and whether the closing occurs. In the event the closing does not occur by June 30, 2016, a termination fee or a reverse termination fee may be payable, as provided in the Third Amendment. The Acquirer has also agreed not to directly or indirectly transfer or otherwise dispose of any Ordinary Shares or enter into any swap agreement or other arrangement that transfers to another person, in whole or in part, any of the economic consequences of ownership of the Ordinary Shares. Phicomm HK’s pledge of its shares of the Acquirer to the Fund pursuant to the Subscription Agreement (see Item 6 of the Schedule as originally filed) is excluded from the operation of such restrictions.

The foregoing description of certain terms of the Third Amendment to the Purchase Agreement in this Item 6 is not complete and is qualified in its entirety by reference to the full text of such agreement, which is an exhibit to this Schedule 13D and is hereby incorporated by reference into this Item 6. See Item 7.

Item 7.

Materials to be Filed as Exhibits

 

The following document is filed as an exhibit to this Schedule 13D (Amendment No. 3):

 

Exhibit No.	Document
99.7	Third Amendment dated January 8, 2016 to Purchase and Sale Agreement dated as of November 4, 2015 between The Smart Soho International Limited, Phicomm Technology (Hong Kong) Co., Limited, Himanshu Shah, Shah Capital Management, Inc., Shah Capital Opportunity Fund LP, Hong Liang Lu, Lu Charitable Remainder Trust, The Lu Family Limited Partnership and Lu Family Trust (filed herewith).

Signatures

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

Dated: January 19, 2016

 

	SHANGHAI PHICOMM COMMUNICATION CO., LTD.
	By:	/s/	GU Guoping
	Name:		GU Guoping
	Title:		Chairman
	PHICOMM TECHNOLOGY (HONG KONG) CO., LIMITED.
	By:	/s/	GU Guoping
	Name:		GU Guoping
	Title:		Sole Director
	THE SMART SOHO INTERNATIONAL LIMITED
	By:	/s/	GU Guoping
	Name:		GU Guoping
	Title:		Sole Director
	GU GUOPING, individually
	/s/		GU Guoping
	Name:		GU Guoping

EXHIBIT 99.7

 

THE SMART SOHO INTERNATIONAL LIMITED

P.O. Box 309

Ugland House

Grand Cayman, KY1-1104

Cayman Islands

 

January 8, 2016

 

To the Sellers to the

Purchase and Sale Agreement

dated November 4, 2015

 

Ladies and Gentlemen:

We refer to the Purchase and Sale Agreement among us dated as of November 4, 2015, as amended by the letter agreement dated December 4, 2015 (the “First Amendment”) and by the letter agreement dated December 16, 2015 (the “Second Amendment” and, as so amended, the “Agreement”). This letter agreement (this “Third Amendment”) sets forth our agreement with respect the further amendment of certain provisions of the Agreement and the waiver of the satisfaction of certain conditions to the respective obligations of the parties. Capitalized terms used in this Third Amendment without definitions have the respective meanings assigned to them in the Agreement.

We hereby agree that, notwithstanding any inconsistent provision of the Agreement (including, without limitation, any inconsistent provisions of Section 1.03(b), Section 1.03(c), or Section 1.04 through Section 1.06), the remaining portion of the Purchase Price for the Ordinary Shares and the additional amounts referred to below shall be paid, and the remaining 6,739,932 Ordinary Shares subject to the Agreement shall be delivered, as follows:

1.            Extension Payments. In consideration of the waivers set forth in this Third Amendment, Acquirer shall make the following payments to Shah Capital Opportunity Fund LP (“Shah Capital”):

(a)            Acquirer shall pay Shah Capital the sum of US$2,500,000 contemporaneously with the execution and delivery of this Third Amendment; and

(b)            Acquirer shall pay Shah Capital the sum of US$600,000 for each month of extension (starting on the eighth day (inclusive) of each month) from January 8, 2016 till the New Termination Date. By way of example, if the Closing occurs on or before February 8, 2016, Acquirer will pay Shah Capital US$600,000, and US$1,200,000 thereafter if the Closing occurs on or before March 8, 2016. Any amount payable by Acquirer for extension under this clause, if any, shall be made contemporaneously with the payment of Purchase Price upon the Closing. For the avoidance of doubt, any amount payable by Acquirer for extension under this clause shall not be applied or accumulated into termination fee payable to the Shah Sellers set forth in this Third Amendment, and Acquirer shall not be obligated to pay the amount under this sub-paragraph 1(b) in the event that the termination fee is payable to the Shah Sellers in accordance with paragraph 5 of this Third Amendment.

2.            Payment into Escrow. Acquirer will deposit US$2,000,000 in cash (the “New Escrow Amount”) in the Escrow Account previously established with Li, Wong, Lam & W.I. Cheung (the “Escrow Agent”) pursuant to the Term Sheet or an escrow account under the name of Acquirer (or any of its designated affiliates on its behalf) to be established with the Escrow Agent pursuant to a mutually satisfactory escrow agreement (the “Escrow Agreement”) to be entered into by Acquirer and the Shah Sellers with the Escrow Agent. The New Escrow Amount will be deposited within five (5) business days of the later of the execution of this Third Amendment and execution of the Escrow Agreement. The Escrow Agreement shall provide that the New Escrow Amount shall be (i) released to the Shah Sellers upon the Closing, together with any interest earned thereon, and the New Escrow Amount and any such interest shall be credited against the Purchase Price for the Ordinary Shares to be purchased from the Shah Sellers, or (ii) refunded to the Acquirer together with any interest earned thereon in the event that the Closing has not occurred by June 30, 2016 (the “New Termination Date”), unless the Acquirer is obligated to pay a termination fee to the Shah Sellers under the conditions set forth in this Third Amendment, or (iii) released to one or more accounts to be designated by the Shah Sellers if the Acquirer is obligated to pay a termination fee to the Shah Sellers under the conditions set forth in this Third Amendment.

3.            Payment of Purchase Price Balance. On the “Final Closing Date” (as defined below), and subject to paragraph 4 below, Acquirer shall pay an aggregate of US$40,439,592 to the Sellers via wire transfer of immediately available funds in U.S. dollars to one or more accounts to be designated by the Sellers by notice to the Acquirer (which notice shall be delivered not later than five (5) days prior to the Final Closing Date) against delivery by the Sellers of the remaining 6,739,932 Ordinary Shares of the Sellers required to be delivered to Acquirer pursuant to the Agreement. Such payments shall be made to the following Sellers and in the following amounts:

(a)            to Shah Capital, in the amount of US$33,896,214; and

(c)            to the Lu Sellers, payments in the aggregate amount of US$6,543,378, of which Acquirer shall pay to each Lu Seller an amount equal to the sum of the First Tranche Payment and the Second Tranche Payment set forth for such Lu Seller in Schedule B to the Agreement.

4.            Closing. The closing of the purchase and sale of the remaining 6,739,932 Ordinary Shares (the “Closing”), and the delivery of the Ordinary Shares by Sellers and of the payments required by paragraph 3 by Acquirer shall take on place as soon as practicable as agreed among the Parties, but in no event later than the New Termination Date. The date on which the Closing occurs is referred to herein as the “Final Closing Date.” For the avoidance of doubt:

(a)            the obligations of the Acquirer to make the payments required by paragraph 3 of this Third Amendment at the Closing are not subject to the performance of any obligation or fulfillment of any closing condition by any Seller or any other condition, other than the following:

(i)            Sellers shall deliver the remaining 6,739,932 Ordinary Shares to be delivered to the Acquirer;

(ii)            Mr. William Wong shall have resigned in writing as a director and chief executive officer of the Company, and the Company’s Board shall have duly adopted resolutions accepting Mr. Wong’s resignation and appointing Mr. GU Guoping as a member of the Board to fill the vacancy created by such resignation and Mr. Tim Ti as the Company’s Chief Executive Officer immediately following Mr. William Wong’s resignation, all effective on January 11, 2016. On or prior to January 11, 2016, Sellers shall deliver or cause the Company to deliver to the Acquirer copies of Mr. Wong’s resignation letter and the board resolutions required by this paragraph, in the form adopted or to be adopted by the board of directors of the Company. Acquirer shall be ensured to be able to nominate only one designee, initially Mr. Gu Guoping, into the Company’s board until the Closing and have him duly appointed. Notwithstanding the foregoing, in the event that the Agreement is terminated due to failure of Acquirer’s delivery of the payments required by paragraphs 1, 2 or 3 of this Third Amendment, Acquirer shall procure that Mr. GU shall resign from the board, effective immediately upon termination of the Agreement.

(b)          the obligations of the Sellers to deliver such 6,739,932 Ordinary Shares at the Closing are not subject to the performance of any obligation or fulfillment of any closing condition by Acquirer other than Acquirer’s delivery of the payments required by paragraphs 1, 2 and 3 of this Third Amendment, in each case in the manner and on the terms set forth in the Agreement, as amended hereby. Upon the Closing or termination of the Agreement in accordance with Section 1.06 of the Agreement as further amended in paragraph 5 below, Phicomm Technology (Hong Kong) Co., Limited (“Phicomm HK”) shall be released from any liability or obligation under the letter of guarantee issued to Sellers.

5.            Termination in Lieu of Closing.

(a)            With respect to the termination of the Agreement as set forth in Section 1.06 of the Agreement, for the avoidance of doubt, references in Section 1.06 of the Agreement to (i) the “Closing” shall mean the Closing as defined hereunder, (ii) the “Closing Date” shall mean the Final Closing Date and (iii) the “Termination Date” shall mean the New Termination Date.

(b)            If the Closing has not occurred by the New Termination Date solely due to a failure by the Acquirer to make the payments required by paragraphs 1, 2 or 3 of this Third Amendment, the Acquirer shall (i) pay the Shah Sellers a termination fee of US$1,000,000 to one or more accounts to be designated by the Shah Sellers, and (ii) cause the Escrow Amount to be released to one or more accounts to be designated by the Shah Sellers.

 

(c)            If the Closing has not occurred by the New Termination Date solely due to a failure by any Seller to perform the covenants under paragraph 4(a)(ii) or decline to deliver such 6,739,932 Ordinary Shares, the Shah Sellers shall (i) pay the Acquirer a termination fee of US$3,000,000 to one or more accounts to be designated by the Acquirer, and (ii) cause the Escrow Amount to be released to the account to be designated by the Acquirer.

 

(d)            Furthermore, upon the payment of the termination fee, none of the parties shall have any further liability or obligation to any other Party under the Agreement.

6.            Standstill. Each of Acquirer and Phicomm HK agrees that until the earlier to occur of the Closing and Termination of this Agreement it will not, and it will use its best efforts to cause its Affiliates not to, in each case without the prior written consent of the Shah Sellers: (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or any securities convertible into or exercisable or exchangeable for Ordinary Shares, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in the preceding clauses (i) or (ii) above is to be settled by delivery of Ordinary Shares or other securities, in cash, or otherwise. The foregoing provisions shall not apply to (x) a direct or indirect transfer of Ordinary Shares to an Affiliate of Acquirer that assume Acquirer’s obligations under the Agreement, or (y) Phicomm HK’s pledge of the Acquirer’s shares to Chongqing Liangjian New Area Strategic Emerging Industries Equity Investment Fund Partnership (Limited Liability Partnership) (the “Fund”) pursuant to the Capital Increase and Share Subscription Agreement dated December 2, 2015, among the Fund, Shanghai Phicomm Communication Co., Ltd., Phicomm HK and Acquirer.

7.             Waiver. The Acquirer hereby waives satisfaction of the conditions set forth in clauses e)(i) and e)(ii) of the Conditions to the Obligations of the Acquirer set forth in Schedule C of the Agreement in respect of the 6,739,932 Ordinary Shares to be delivered by the Sellers on the “Final Closing Date” (as defined in the Second Amendment), subject to the payments required to be made by the Acquirer on the Final Closing Date established hereunder, provided, however, that the Sellers shall be obligated to deliver the 6,739,932 Ordinary Shares in the manner set forth in clauses e)(i) and e)(ii) of the Conditions to the Obligations of the Acquirer set forth in Schedule C of the Agreement on the Final Closing Date established by this Third Amendment upon the receipt by the Sellers of all the payments required to be made under paragraphs 1, 2 and 3 of this Third Amendment.

8.             Miscellaneous. Except as otherwise expressly provided by this Third Amendment, all of the terms, conditions and provisions of the Agreement shall remain unchanged and in full force and effect. The Agreement, as amended hereby, shall continue in full force and effect, and this Second Amendment and the Agreement shall be read and construed as one instrument. This Third Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, but all of which together shall constitute one instrument. The delivery of this Third Amendment by facsimile transmission or email of an executed original hereof or signature page hereto and/or the retransmission of any executed facsimile transmission hereof or signature page hereto shall be deemed to be the same as delivery of an executed original. In proving this Third Amendment, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. This Third Amendment shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of law principles thereof.

If the foregoing is acceptable to you, please confirm your agreement, effective the date first set forth above, by countersigning this letter below and returning it to the undersigned.

 

For and on behalf of		For and on behalf of
THE SMART SOHO INTERNATIONAL LIMITED		PHICOMM TECHNOLOGY (HONG KONG) CO., LIMITED
/s/ Gu Guoping		/s/ Gu Guoping
Gu Guoping		Gu Guoping

 

The foregoing is accepted and agreed as of the date first above written.

 

For and on behalf of		HONG LIANG LU
SHAH CAPITAL MANAGEMENT, INC.
/s/ Himanshu H. Shah		/s/ Hong Liang Lu
Himanshu H. Shah		Hong Liang Lu
For and on behalf of		For and on behalf of
SHAH CAPITAL OPPORTUNITY FUND LP		LU CHARITABLE REMAINDER TRUST
/s/ Himanshu H. Shah		/s/ Hong Liang Lu
Himanshu H. Shah		Hong Liang Lu
HIMANSHU H. SHAH		For and on behalf of
		THE LU FAMILY LIMITED PARTNERSHIP
/s/ Himanshu H. Shah
Himanshu H. Shah
		/s/ Hong Liang Lu
		Hong Liang Lu
		For and on behalf of
		LU FAMILY TRUST
		/s/ Hong Liang Lu
		Hong Liang Lu

 

[Signature Page to Third Amendment to Purchase and Sale Agreement]

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