{"id":41120,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-agreement-utstarcom-inc-and-softbank-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-agreement-utstarcom-inc-and-softbank-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-agreement-utstarcom-inc-and-softbank-corp.html","title":{"rendered":"Loan Agreement &#8211; UTStarcom Inc. and Softbank Corp."},"content":{"rendered":"<pre>     \n\n                                    LOAN AGREEMENT\n\n\n          LOAN AGREEMENT, dated as of June 15, 1998, between UTStarcom, Inc., a\nDelaware corporation (the 'Borrower'), and SOFTBANK Corp., a Japanese\ncorporation (the 'Lender').\n\n\n                                 W I T N E S S E T H:\n\n\n          WHEREAS, the Borrower has requested that the Lender make available to\nit loans in an aggregate amount of up to $55 million; and\n\n          WHEREAS, the Lender is willing to make the loans available to the\nBorrower on the terms and conditions set forth in this Agreement;\n\n          NOW, THEREFORE, the parties hereto agree as follows:\n\n1.   THE LOANS\n\n          (a)  Subject to the terms and conditions hereof, the Lender shall lend\nto the Borrower up to $55 million in two portions (the 'Loans') in amounts of\n(i) $25 million on June 30, 1998 and (ii) at least $10 million plus integral\nmultiples of $5 million (up to $30 million) on a date on or before December 31,\n1998, both as specified by the Borrower by not less than five Business Days\nnotice to the Lender.  Each of the dates on which the Loans are made is herein\ncalled a 'Drawdown Date' and, for purposes of this Agreement, a 'Business Day'\nmeans any day except a Saturday, Sunday or other day on which commercial banks\nin Tokyo or New York City are authorized by law to close.\n\n          (b)  The Borrower's obligation to repay the Loans shall be evidenced\nby promissory notes of the Borrower, substantially in the form of Exhibit A\nattached hereto (the 'Notes'), payable to the order of the Lender on a maturity\ndate (the 'Maturity Date') which shall be the earlier of (i) two Business Days\nafter the closing date of the initial public offering of common stock of the\nBorrower and (ii) two years after the latest Drawdown Date.\n\n          (c)  The Loans shall bear interest until maturity at a rate of 10% per\nannum (based on a 360-day year for the actual number of days elapsed), payable\nsemi-annually in arrears on the last Business Day of March and September, and on\nthe Maturity Date. \n\n          (d)  All payments hereunder and under the Notes shall be made to the\nLender in U.S. dollars at a bank in New \n\n\n\n\nYork City specified by the Lender, net of withholding or other tax on interest.\n\n2.   REPRESENTATIONS AND WARRANTIES  \n\n          The Borrower represents and warrants to the Lender that:\n\n          (a)  ORGANIZATION.  The Borrower is a corporation duly organized,\nvalidly existing and in good standing under the laws of the State of Delaware,\nand has full power and authority to own its property and to carry on its\nbusiness as presently conducted.  The Borrower is duly qualified in good\nstanding to do business in California and New Jersey, and there is no other\njurisdiction in which the failure to so qualify would have a material adverse\neffect on its business or operations. \n\n          (b)  AUTHORITY.  The Borrower has full power and authority to enter\ninto this Agreement, to make the borrowings contemplated hereby, to execute and\ndeliver the Notes and to incur the obligations provided for herein and therein,\nall of which have been duly authorized by all proper and necessary action.  No\nconsent or approval of stockholders is required as a condition to the validity\nor performance of this Agreement and the Notes.\n\n          (c)  AUTHORIZATIONS.  All authorizations, consents, approvals,\nregistrations, exemptions and licenses with or from governmental authorities\nwhich are necessary for the borrowing hereunder, the execution and delivery of\nthis Agreement and the Notes, and the performance by the Borrower of its\nobligations hereunder and thereunder have been effected or obtained and are in\nfull force and effect.\n\n          (d)  BINDING AGREEMENT.  This Agreement constitutes, and each of the\nNotes, when executed and delivered pursuant hereto for value received, will\nconstitute, a valid and legally binding obligation of the Borrower enforceable\nin accordance with its terms.\n\n          (e)  NO CONFLICTS.  There is no statute, regulation, rule, order or\njudgment, no charter, by-law or preference stock provision of the Borrower, and\nno provision of any mortgage, indenture, contract or agreement binding on the\nBorrower or affecting its property, which would prohibit, conflict with or in\nany way prevent the execution, delivery, or carrying out of the terms of this\nAgreement and of the Notes in any material respect.\n\n          (f)  FINANCIAL CONDITION.  The consolidated financial statements of\nthe Borrower and its subsidiaries as \n\n\n                                         -2-\n\n\nof December 31, 1997, and the related statements of earnings, shareholders\nequity and cash flows for the fiscal year then ended, heretofore delivered to\nthe Lender, fairly present the financial condition and results of operations of\nthe Borrower and its subsidiaries as of the date and for such period, and have\nbeen prepared in accordance with generally accepted accounting principles\nconsistently applied.  There are no liabilities, direct or indirect, fixed or\ncontingent, of the Borrower or its subsidiaries as of the date of such financial\nstatements which are not reflected therein or in the notes thereto.  Since\nDecember 31, 1997, there has been no material adverse change in the business,\nproperties, financial condition or operations, present or prospective, of the\nBorrower or its subsidiaries.\n\n          (g)  LITIGATION.  There are no proceedings or investigations pending\nor, to the best of the Borrower's knowledge, threatened before any court or\narbitrator or before or by any governmental authority which, in any one case or\nin the aggregate, if determined adversely to the interests of the Borrower or\nany of its subsidiaries, would have a material adverse effect on the business,\nproperties, financial condition or operations, present or prospective, of the\nBorrower and its subsidiaries, taken as a whole.\n\n3.   COVENANTS\n\n          (a)  Until repayment in full of the Loans, the Borrower will:\n\n          (i)  Furnish to the Lender (A) as soon as available but in no event\n     more than 60 days after the end of each quarterly period of the Borrower's\n     fiscal year consolidated balance sheets of the Borrower and its\n     subsidiaries as of the close of such period and consolidated statements of\n     income and expense; (B) as soon as available but in no event more than 120\n     days after the close of each of the Borrower's fiscal years audited balance\n     sheets of the Borrower and its subsidiaries together with audited\n     consolidated statements of income and expense, retained earnings, paid-in\n     capital and surplus and changes in financial position for such fiscal year,\n     prepared in accordance with generally accepted accounting principles; and\n     (C) such additional information, reports or statements as the Lender may\n     from time to time reasonably request.\n\n         (ii)  Notify the Lender promptly after the discovery by any officer of\n     the Borrower of the occurrence of (A) any Event of Default, or any event\n     which with the giving of notice of lapse of time, or \n\n\n                                         -3-\n\n\n     both, would constitute an Event of Default; (B) any material litigation or\n     proceedings that are instituted against the Borrower or its subsidiaries or\n     any of their respective assets; and (C) any other development in the\n     business or affairs of the Borrower or its subsidiaries which could be\n     reasonably expected to have a material adverse effect on the business,\n     properties, financial condition or operations, present or prospective, of\n     the Borrower and its subsidiaries, taken as a whole -- in each case\n     describing the nature thereof and the action the Borrower proposes to take\n     with respect thereto.\n\n          (b)  Until payment in full of the Loans, without the prior written\nconsent of the Lender, the Borrower will not:\n\n          (i)  Enter into any merger or consolidation or acquire the assets of\n     any person, or sell, lease or otherwise dispose of all or substantially all\n     of its assets, or permit any of its subsidiaries so to do, except that a\n     wholly-owned subsidiary may be merged or consolidated with one or more\n     other wholly-owned subsidiaries or into the Borrower.\n\n         (ii)  Create, incur, assume or suffer to exist any liability for\n     borrowed money, or permit any subsidiary so to do, except (A) indebtedness\n     to the Lender, (B) indebtedness of the Company or any subsidiary secured by\n     mortgages, encumbrances or liens specifically permitted by\n     Section 3(b)(iii) below and (C) intercompany indebtedness.\n\n        (iii)  Create, incur, assume or suffer to exist any mortgage, pledge,\n     lien or other encumbrance of any kind upon, or any security interest in,\n     any of its property or assets, whether now owned or hereafter acquired, or\n     permit any of its subsidiaries so to do, except:\n\n               (A)  liens for taxes not delinquent or being contested in good\n          faith and by appropriate proceedings and for which reserves adequate\n          under generally accepted accounting principles are being maintained,\n\n               (B)  deposits or pledges to secure obligations under workmen's\n          compensation, social security or similar laws, or under unemployment\n          insurance,\n\n               (C)  deposits or pledges to secure bids, tenders, contracts\n          (other than contracts for the \n\n\n                                         -4-\n\n\n          payment of money), leases, statutory obligations, surety and appeal\n          bonds and other obligations of like nature arising in the ordinary\n          course of business,\n\n               (D)  mechanics', workmen's, materialmen's or other like liens\n          arising in the ordinary course of business with respect to obligations\n          which are not due or which are being contested in good faith, and\n\n               (E)  any mortgage, encumbrance or other lien upon, or security\n          interest in, any property hereafter acquired by the Borrower or its\n          subsidiaries, created contemporaneously with such acquisition to\n          secure or provide for the payment or financing of any part of the\n          purchase price thereof, or the assumption of any mortgage, encumbrance\n          or lien upon, or security interest in, any such property hereafter\n          acquired existing at the time of such acquisition, or the acquisition\n          of any such property subject to any mortgage, encumbrance or other\n          lien or security interest without the assumption thereof, provided\n          that such mortgage, encumbrance, lien or security interest attaches\n          only to the property so acquired.\n\n         (iv)  Make loans or advances to any person, firm, joint venture,\n     corporation or other entity, or permit any subsidiary so to do, exceeding\n     in the aggregate for the Company and its subsidiaries $5,000,000 principal\n     amount at any one time outstanding, other than intercompany loans and loans\n     to employees, officers and directors in the ordinary course of business.\n\n          (v)  Assume, guarantee, endorse, contingently agree to purchase or\n     otherwise become liable upon the obligation of any person, firm, joint\n     venture, corporation or other entity (other than in connection with a\n     merger permitted by Section 3(b)(i) above), or permit any subsidiary so to\n     do, except (A) the endorsement of negotiable instruments for deposit or\n     collection or similar transactions in the ordinary course of business,\n     (B) guarantees by the Company of contractual obligations (other than for\n     the payment of borrowed money) of any wholly-owned subsidiary, and\n     (C) guarantees of indebtedness for borrowed money permitted under\n     clause (ii) above.\n\n         (vi)  Declare any cash dividends on any shares of its capital stock, or\n     apply any of its property or assets to the purchase, redemption or other\n     retirement \n\n\n                                         -5-\n\n\n     of, or make any other distribution by reduction of capital or otherwise in\n     respect of, capital stock of the Company.\n\n4.   CONDITIONS\n\n          The obligation of the Lender to make the Loans is subject to the\nfollowing conditions precedent:\n\n          (a)  On the Drawdown Date the Lender shall have received the following\n     documents, each satisfactory in form and substance to the Lender:\n\n               (i)  A Note, dated the Drawdown Date.\n\n              (ii)  Certified copies of all corporate action taken by the\n          Borrower to authorize this Agreement and such Note. \n\n             (iii)  The favorable written opinion of Wilson, Sonsini, Goodrich &amp; Rosati, counsel for the Borrower, dated the Drawdown Date, as to the\n          matters referred to in paragraphs (a)-(e) and (g) of Section 2.\n\n          (b)  On the Drawdown Date (i) the Borrower shall have complied with\n     all the terms, covenants and conditions of this Agreement, (ii) there shall\n     have occurred no Event of Default and no event which, with the giving of\n     notice or the lapse of time, or both, would constitute an Event of Default,\n     (iii) the representations and warranties contained in Section 2 shall be\n     true in all material respects with the same effect as though made on and as\n     of the Drawdown Date, and (iv) the Lender shall have received a certificate\n     dated the Drawdown Date and signed by an executive officer of the Borrower\n     to the foregoing effect.\n\n5.   EVENTS OF DEFAULT  \n\n          (a)  If one of more of the following events (each, an 'Event of\nDefault') shall occur:\n\n          (i)  Default shall be made in the payment of principal of or interest\n     on any of the Loans when due and payable; or\n\n          (ii)  Default shall be made in the due observance or performance of\n     any term, covenant, or agreement contained in Section 3(b); or\n\n\n                                         -6-\n\n\n          (iii)  Default shall be made in the due observance or performance of\n     any other term, covenant or agreement contained in this Agreement, and such\n     default shall have continued unremedied for a period of 30 days after any\n     officer of the Borrower becomes aware of such default; or\n\n          (iv)  Any representation or warranty made by the Borrower herein or\n     any statement or representation made in any certificate, report or opinion\n     delivered in connection herewith shall prove to have been incorrect or\n     misleading in any material respect when made; or\n\n          (v)  Any obligation of the Borrower or any of its subsidiaries for the\n     payment of borrowed money is not paid when due or becomes or is declared\n     due and payable prior to the expressed maturity thereof, or there shall\n     have occurred an event which, with the giving of notice or lapse of time,\n     or both, would cause any such obligation to become or be declared due and\n     payable; or\n\n          (vi)  The Borrower or any of its subsidiaries makes an assignment for\n     the benefit of creditors, files a petition in bankruptcy, is adjudicated\n     insolvent or bankrupt, petitions or applies to any tribunal for any\n     receiver of or any trustee for the Borrower or any subsidiary or any\n     substantial part of its property, commences any proceeding relating to the\n     Borrower or any subsidiary under any reorganization, arrangement,\n     readjustment of debt, dissolution or liquidation law or statute of any\n     jurisdiction, whether now or hereafter in effect, or there is commenced\n     against the Borrower or any subsidiary any such proceeding which remains\n     undismissed for a period of 60 days, or the Borrower or any subsidiary by\n     any act indicates its consent to, approval of or acquiescence in any such\n     proceeding or the appointment of any receiver of or any trustee for the\n     Borrower or any subsidiary or any substantial part of its property, or\n     suffers any such receivership or trusteeship to continue undischarged for a\n     period of 60 days; or\n\n          (vii)  One or more judgments against the Borrower or any of its\n     subsidiaries or attachments against its property, which in the aggregate\n     exceed $10,000,000, or the operation or result of which could be to\n     interfere materially and adversely with the conduct of the business of the\n     Borrower or any subsidiary, remain unpaid, unstayed on appeal,\n     undischarged, unbonded or undismissed for a period of 30 days; \n\n\n                                         -7-\n\n\nthen upon the happening of any of the foregoing Events of Default which shall be\ncontinuing, the Notes shall become and be immediately due and payable upon\ndeclaration to that effect delivered by the Lender to the Borrower; provided,\nthat upon the happening of any event specified in subsection (f) of this Section\n5 the Notes shall be immediately due and payable without declaration or other\nnotice to the Borrower.  The Borrower expressly waives any presentment, demand,\nprotest or other notice of any kind.\n\n          (b)  In the event the Notes are not paid as contemplated by\nSection 5(a), the Lender shall have the option of converting the Notes into such\nnumber of shares of Series C Preferred Stock as is determined by dividing the\nunpaid principal amount by $6.88 or the corresponding adjusted Series B\nConversion Price determined as provided in the Borrower's Certificate of\nIncorporation.\n\n6.   MISCELLANEOUS\n\n          (a)  The Borrower agrees to pay all out-of-pocket expenses incurred by\nthe Lender, including reasonable fees and disbursements of counsel, in\nconnection with the preparation, execution and delivery of, and the enforcement\nof, this Agreement and the Notes.\n\n          (b)  This Agreement shall be binding upon and inure to the benefit of\nthe Borrower and the Lender and their respective successors and assigns, except\nthat neither party may assign any of its rights hereunder without the prior\nwritten consent of the other parties.\n\n          (c)  Any provision of this Agreement or the Notes may be amended or\nwaived only if such amendment or waiver is in writing and is signed by the\nBorrower and the Lender.\n\n          (d)  Each and every right granted to the Lender hereunder or under any\nother document delivered hereunder or in connection herewith, or allowed it by\nlaw or equity, shall be cumulative and may be exercised from time to time.  No\nfailure on the part of the Lender to exercise, and no delay in exercising, any\nright will operate as a waiver thereof, nor will any single or partial exercise\nby the Lender of any right preclude any other or future exercise thereof or the\nexercise of any other right.\n\n          (e)  In case any one or more of the provisions contained in this\nAgreement shall be invalid, illegal or unenforceable in any respect under any\nlaw, the validity, legality and enforceability of the remaining provisions\ncontained herein shall not in any way be affected or impaired thereby.\n\n\n                                         -8-\n\n\n          (f)  Any judicial proceeding against the Borrower with respect to this\nAgreement or the Notes may be brought in any court of competent jurisdiction in\nthe City of New York.  The Borrower hereby accepts the jurisdiction of any such\ncourt and irrevocably agrees to be bound by any judgment rendered thereby, and\nwaives any objection as to the venue of any proceeding brought in such court. \nNothing herein shall limit the right of the Lender to bring proceedings against\nthe Borrower in the courts of any other jurisdiction.\n\n          (g)  Any communication, demand or notice to be given hereunder or with\nrespect to the Notes will be duly given when delivered in writing (including\ncommunication by facsimile) to the following addresses:\n\n          If to the Borrower:\n\n               Address:       UTStarcom, Inc.\n                              333 Hegenberger Road, Suite 328\n                              Oakland, California 94621\n               Attention:     Mr. Hong Liang Lu, President\n               Telephone:     (510) 632-8802\n               Facsimile:     (510) 632-8827\n\n          with a copy to:\n\n               Wilson, Sonsini, Goodrich &amp; Rosati\n               650 Page Mill Road\n               Palo Alto, California 94304\n               Attention:     Steven E. Bochner, Esq.\n                              Carmen Chang, Esq.\n               Telephone:     (415) 493-9300\n               Facsimile:     (415) 493-6811\n     \n          If to the Lender:\n\n               Address:       SOFTBANK Corp.\n                              24-1 Nihonbashi-Hakozakicho\n                              Chuo-ku, Tokyo 103, Japan\n               Attention:     Yoshitaka Kitao, Executive Vice\n                                President and CFO\n                              Hitoshi Hasegawa, Esq.\n                                General Counsel\n               Telephone:     (813) 5642-8020\n               Facsimile:     (813) 5641-3400\n\n          with a copy to:\n\n               Sullivan &amp; Cromwell\n               125 Broad Street\n               New York, New York 10004\n               Attention:     Stephen A. Grant, Esq.\n\n\n                                         -9-\n\n\n               Telephone:     (212) 558-3504\n               Facsimile:     (212) 558-3588\n\nor to such other address as either party may specify by notice in writing to the\nother party.\n\n          (h)  This Agreement shall be governed by and construed in accordance\nwith the laws of the State of New York, United States of America.\n\n          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to\nbe duly executed as of the date first above written.\n\n                              UTSTARCOM, INC.  \n\n\n                                        By: \/s\/ Ed Supplee\n                                           ---------------------------\n                                           Ed Supplee\n                                           Vice President of Finance\n                                           Chief Financial Officer\n\n\n\n                                        SOFTBANK CORP.\n\n\n                                        By: \/s\/ Masayoshi Son\n                                           ---------------------------\n                                           Masayoshi Son\n                                           President and Chief\n                                             Executive Officer\n\n\n                                         -10-\n\n\n                                                             EXHIBIT A\n\n\n\n\n                                   PROMISSORY NOTE\n\n\n\nU.S.$[LOAN AMOUNT]                           [DRAWDOWN DATE]\n\n\n          UTSTARCOM, INC., a Delaware corporation (the 'Borrower'), for value\nreceived, hereby promises to pay to the order of SOFTBANK Corp., a Japanese\ncorporation (the 'Lender'), the principal sum of $________ on the Maturity Date\n(as such term is defined in the Loan Agreement referred to below), and to pay\ninterest on such principal sum at a rate of 10% per annum on the last Business\nDay of March and September, and on the Maturity Date, as provided in such Loan\nAgreement.\n\n          This is one of the Notes referred to in a Loan Agreement, dated as of\nJune 15, 1998, between the Borrower and the Lender and its maturity is subject\nto acceleration on the terms and conditions set forth therein.\n\n          If this Note becomes due and payable on a Saturday, Sunday or other\nday on which commercial banks in Tokyo and New York City are authorized by law\nto close, the maturity shall be extended to the next succeeding business day,\nand interest shall be payable at the rate herein specified during such\nextension.\n\n          This Note shall be governed by and construed in accordance with the\nlaws of the State of New York. \n\n     \n                                        UTSTARCOM, INC.\n     \n\n\n                                        By:\n                                           ----------------------------\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9205],"corporate_contracts_industries":[9516],"corporate_contracts_types":[9560,9567],"class_list":["post-41120","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-utstarcom-inc","corporate_contracts_industries-telecommunications__equipment","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41120"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41120"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41120"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}