Amended Loan Agreement with AQT, LLC
On December 13, 2013, VelaTel entered into an Amended Loan Agreement with AQT, LLC. In addition to $600,000 AQT had loaned VelaTel in August 2013 to pay an installment then due on its acquisition of China Motion Telecom (HK) (“CMMobile”), AQT loaned VelaTel $1,262,000 on December 13, which VelaTel paid towards the CMMobile acquisition. AQT has the option to loan VelaTel the final installment of $2,418,100 due on February 28, 2014, which will complete the CMMobile acquisition. When the collateral pledge of CMMobile stock in favor of a prior lender is released upon payment of the last installment, AQT will receive a pledge of the same collateral (“AQT Security”). AQT also has the right to receive payment of amounts due under the AQT Loan Agreement in the form of CMMobile stock (“AQT Option”). The AQT Security and the AQT Option are subject to the option in favor of leading Singapore Tier 1 mobile operator StarHub Mobile to acquire up to 25% of the CMMobile stock. AQT agrees to release sufficient shares from the AQT Security to allow StarHub to exercise its option, and/or to transfer to StarHub sufficient shares AQT has previously received under the AQT Option, such that VelaTel will at all times hold at least 51% of the CMMobile stock, giving VelaTel the right to consolidate CMMobile’s revenues on VelaTel’s financial statements.
VelaTel disclosed additional details about the transaction, including a complete copy of the AQT Amended Loan Agreement, in an 8-K Report filed on December 17, 2013.