EXHBIIT 10.57

 

This Turnkey Upgrade Agreement (“Agreement”) is made on this 11th day of
November, 2013

BETWEEN

China Motion Telecom (HK) Limited, a company incorporated under the laws of Hong
Kong, Special Administrative Region of the Peoples Republic of China, having its
registered office at Suites 1105-1106, 11th floor, Chinachem Golden Plaza, 77
Mody Road, TsimShaTsui East, Hong Kong (“CMTHK”)

AND

VelaTel Global Communications, Inc., a company incorporated under the laws of
the United States in the State of Nevada, having its registered office at 5950
La Place Court, Suite 160, California 92008 USA (“VelaTel”)

CMTHK and VelaTel are collectively referred to as “Customer.”

AND

New Host International Co., Ltd., a company incorporated under the laws of
Brunei Darussalam having its registered office at Room 804, Sino Centre, 582-591
Nathan Road, Kowloon, Hong Kong (“Contractor”)

CMTHK, VelaTel and Contractor are each referred to as a “Party” and together as
the “Parties”.

WHEREAS:

A.Customer wishes to acquire a turnkey solution for the expansion and upgrade of
its telephony core network in Hong Kong, including hardware, software, billing
and customer support solutions, and accounting reporting functions (“Project”),
and has negotiated contracts for supply, installation and maintenance of the
hardware and software comprising the Project from reputable vendors including
ZTE Corporation (“ZTE”), Niceuc Communication Co., Ltd. (“Niceuc”)and Tectura
Hong Kong Limited (“Tectura” and together with ZTE and Niceuc, collectively
“Subcontractors”).

B.Contractor has expertise in coordinating and managing upgrade services similar
to the Project and has agreed to contract directly with Subcontractors, to pay
to each Subcontractor the amounts required for installation, maintenance and
support of the Project equipment, to provide project management services in
connection with the installation of the Project, and to assign warranty and
other rights from Subcontractors to Customer as appropriate for Customer to have
the full benefit of the Project.

NOW THEREFORE, in consideration of mutual representations, covenants and other
valuable consideration, it is hereby agreed by and between the Parties as
follows.

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ARTICLE 1          PURCHASE PRICE

The total purchase price payable by Customer to Contractor (“Purchase Price”) is
itemized between the Subcontracted Amount, the Management Fee, and Finance
Charges (each defined below).

1.1               Subcontracted Amount. The aggregate amount payable to
Subcontractors is US$2,437,139 (“Subcontracted Amount”), all as itemized on the
quotation attached as Annex 1 to this Agreement (“Quotation”). The Subcontracted
Amount shall be subject to adjustment for any VAT or other taxes due to any
Subcontractor, and any change orders or other change in the scope of the Project
mutually agreed in writing between Contractor and Customer (including approval
of any lender of Customer whose consent is required). Customer may prepay the
Subcontracted Amount, in whole or in part, without penalty, and with
corresponding reduction in the Finance Charges.

1.2               Management Fee. The management fee is US$365,571, which
represents fifteen percent (15%) of the Subcontracted Amount (“Management Fee”).
The Management Fee is subject to increase based on any increase in the
Subcontracted Amount. The Management Fee covers any expense Contractor incurs
associated with financing the Project, including payment of Subcontractor
invoices in amounts and at times different from payments by Customer to
Contractor, letter of credit expenses, and Contractor’s project management
services associated with the Project. The Management Fee shall be fully earned
upon execution of this Agreement, without regard to early repayment of the
Subcontracted Amount or accrued Finance Charges.

1.3               Finance Charges. After the Deferral Period (defined below),
interest at the rate of seven and one-half percent (7.5%) per annum (“Finance
Charges”) shall accrue on any outstanding balance of the Subcontracted Amount
but not on the Management Fee.

ARTICLE 2          TERMS OF PAYMENT

 

2.1               The tenor for payment of the Purchase Price is a term of 72
months (“Term”). The Term shall commence upon the execution of the principal
purchase orders between Contractor and ZTE and Niceuc (“Effective Date”). During
the first twelve (12) months of the Term, no Finance Charges shall accrue, and
no portion of the Purchase Price shall be payable (“Deferral Period”).
Thereafter, the Purchase Price shall be paid in sixty (60) equal monthly
installments commencing on the same calendar date that is thirteen (13) months
after the Effective Date (“Commencement Date”), and on the same calendar day of
each succeeding month during the remaining Term.

2.2               Each installment of the Subcontracted Amount plus Finance
Charges (“P&I Installment”) shall be US$48,835. The amount of each P&I
Installment allocated as Finance Charge is shown on the amortization schedule
included in the Quotation. The amount of each P&I Installment and the
amortization schedule shall be adjusted in the event of any adjustment to the
Subcontracted Amount such that remaining P&I Installments after adjustment are
equal.

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2.3               Each installment of the Management Fee (“Management Fee
Installment”) shall be US$6,092.85. The Management Fee Installment amount shall
be adjusted in the event of any adjustment of the Subcontracted Amount such that
each of the remaining Management Fee Installments after adjustment are equal.
Except in accordance with ARTICLE 4, no Finance Charges shall accrue on the
Management Fee.

2.4               Should Customer elect to prepay any portion of the
Subcontracted Amount, the amount of such prepayment in excess of the sum of the
P&I Installment and the Management Fee Installment next due shall be applied
first against the unpaid balance of the Subcontracted Amount of the following
consecutive installments, until the same is paid in full, and then against the
Management Fee. Any partial prepayment of either the Management Fee or the
Subcontracted Amount shall not decrease subsequent P&I Installments or
Management Fee Installments until one or both have been paid in full.

2.5               Should Customer fail to pay any P&I Installment, Management
Fee Installment, or other amount required under this Agreement, within 10 days
of its due date, Contractor shall thereafter have the right to issue and deliver
to Customer a notice of delinquency, itemizing the amount in arrears and other
circumstances surrounding such delinquency. Should Customer fail to cure such
delinquency within five days of receipt of such notice, Contractor shall be
entitled to declare Customer in default under this Agreement, and to exercise
the remedies described in ARTICLE 4.

2.6               All payments shall be calculated in United States dollars.
Customer shall be responsible for any fluctuation in exchange rates from other
currencies that occur from time to time, and for any wire transfer or other bank
charges associated with any payments. Unless otherwise directed by Contractor,
all payments shall be made to Contractor’s bank account stated as follows:

Account name: [ • ]

Account number USD: [ • ]

Bank name: [ • ]

Swift code: [ • ]

Bank address: [ • ]

ARTICLE 3          TITLE TO EQUIPMENT AND COLLATERAL

 

3.1               Title to all equipment, software, and other property included
in the Project, whether tangible or intangible, shall pass to Customer upon
delivery to Customer’s business premises.

3.2               Until the Purchase Price is paid in full, Contractor shall
have a purchase money security interest in all such equipment, software and
other tangible and intangible property of Customer included in the Project.
Customer shall cooperate with Contractor in signing or filing any papers
necessary to perfect Contractor’s security interest under applicable law.

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ARTICLE 4          WARRANTY

 

Customer is familiar with the scope of warranty and service quality negotiated
with each Subcontractor. Contractor’s warranty to Customer pursuant to this
Agreement shall be co-extensive with the warranty to be contained in each
contract between Contractor and each Subcontractor, each with identical duration
and subject to the same limitations and exclusions as offered by each
Subcontractor. Contractor agrees to assign all such Subcontractor warranties
directly to Customer to the maximum extent allowed by law.

ARTICLE 5          REMEDIES

 

In the event of any delinquency noticed in accordance with Section 2.5 which is
not timely cured, Contractor shall be entitled to exercise any of the following
remedies, which shall be cumulative: (i) to declare the entire unpaid balance of
the Subcontracted Amount, any accrued Finance Charges, and the Management Fee
immediately due and payable, (ii) to foreclose Contractor’s security interest in
any or all of the equipment and other tangible property as described in ARTICLE
3, and/or (iii) to seek specific performance of Customer’s unperformed
obligations under this Agreement. In addition to all other remedies, after
default, interest on the entire unpaid balance of the Purchase Price shall
accrue at the default rate of eighteen percent (18%) per annum from the date of
declaration of default pursuant to Clause 2.5.

ARTICLE 6          FORCE MAJEURE

 

Where the performance of either Party under this Agreement is hindered by or
rendered impossible on account of Force Majeure, including earthquakes, typhoon,
flood , fires, war and other unexpected or unavoidable forces in respect of
their consequence or results, the Party in contingency shall provide notice to
the other Party of such contingency immediately, and within 15 days shall
present valid documents signed by the notarial agency of the locale, stating the
details of the incident and proving the circumstance and the extended time of
performance required. The Party in contingency shall be exempt from liability
for damages caused to the other Party as a result of and during the pendency of
any event constituting Force Majeure.

ARTICLE 7          APPLICABLE LAW AND RESOLUTION OF DISPUTES

 

7.1               This Agreement, including without limitation its conclusion,
validity, construction, performance and settlement of the disputes, shall be
governed by the law of Hong Kong, without giving effect to the principles of
conflict of law. 

7.2               Any dispute arising from, or in connection with the Agreement
shall be first settled through friendly negotiation by both Parties. In case no
settlement to disputes can be reached through amicable negotiation by both
Parties, the disputes shall then be submitted to Hong Kong International
Arbitration Center (“HKIAC”) for arbitration before a single arbitrator to be
conducted in English in accordance with its Arbitration Rules in force at the
time of application for arbitration. The arbitration fees shall be borne by the
losing party except otherwise awarded by the arbitrator.

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ARTICLE 8          GOVERNING LANGUAGE

 

The Agreement is entered in the English language. Should a translation of the
Agreement into any other language be made for any reason, all matters involving
interpretation shall be governed by the English text. The day-to-day language of
communication and document transfer between the parties shall be English.

ARTICLE 9          NO JOINT VENTURE

 

Nothing in this Agreement shall be construed to constitute, create, give effect
or recognize a joint venture partnership or formal business entity of any kind.
Nothing shall be construed as providing for the sharing of profits or losses
arising out of the efforts of either Party except as may be provided in any
separate contract entered into between the parties (if any).

ARTICLE 10          NOTICES

 

Notices under this Agreement must be in writing, to be sent via overnight
courier service, personal delivery, or by confirmed email or facsimile. If sent
by confirmed personal delivery, notice will be effective at the time of
delivery. If sent by overnight courier service, notice will be effective upon
the actual time of delivery. If sent by confirmed email or facsimile, notice
will be effective one business day after being sent. Notices should be sent to
the address/email/facsimile for each Party shown immediately below the signature
block for such Party. Any Party may change the details for delivery of notice to
it by notice to the other Party delivered in accordance with this ARTICLE 9.

ARTICLE 11          NO WAIVER

 

The failure of either party to insist upon strict adherence to any term or
condition of this Agreement on any occasion shall not be considered a waiver of
any right to insist upon strict adherence to that term or condition or any other
term or condition of this Agreement.

 

ARTICLE 12          MISCELLANEOUS

 

12.1            This Agreement and its Annexes constitutes the entire Agreement
and understanding between the Parties with respect to the subject matter hereof,
and there are no additional or other promises, representations, warranties or
contracts or understandings, whether written or oral, except those as contained
herein.

12.2            If any term or provision of this Agreement is held to be illegal
or unenforceable, the validity or enforceability of the remainder of this
Agreement will not be affected.

12.3            This Agreement may not be altered, modified, or waived in whole
or in part, except in writing, signed by the Parties.

12.4            If there are any discrepancies exist between this Agreement and
its Annexes, the provisions of this Agreement shall prevail.

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12.5            This Agreement may be executed in one or more counterparts,
including facsimile copies of signatures, each of which shall be deemed to be an
original and all of which, when taken together, shall be deemed to constitute
one and the same agreement.

12.6            Contractor may assign and transfer its rights under this
Agreement to any nominee who agrees to assume all duties and obligations of
Contractor.

IN WITNESS WHEREOF, this Agreement has been duly signed by the Parties hereto,
in duplicate, on the day written above.

For and on behalf of Customer:

 

CHINA MOTION TELECOM (HK) LIMITED

 

 

 

By: /s/ Yang Qun

Name: Yang Qin

Title: General Manager

For and on behalf of Contractor:

 

NEW HOST INTERNATIONAL CO., LTD.

 

 

 

By: /s/ Derrick Lin

Name: Derrick Lin

Title:

 

 

VELATEL GLOBAL COMMUNICATIONS, INC.

 

 

 

By: /s/ Colin Tay

Name: Colin Tay

Title: President

 

 

Annex 1:   Quotation from Contractor, including Amortization Schedule and
Summary of Quotations from Subcontractors

 

 

 

 

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