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EXHIBIT 10.32
 
LINE OF CREDIT LOAN AGREEMENT AND PROMISSORY NOTE
 
$5,000,000.00
Date: July 1, 2011

 
 
This Line of Credit Loan Agreement and Promissory Note (“Loan Agreement”) is
made as of the 1st day of July, 2011 (“Effective Date”) by and between China Tel
Group, Inc. (which includes its pending successor name, VelaTel Global
Communications, Inc.), a Nevada corporation (“Borrower”), and Isaac
Organization, Inc., a Canadian corporation organized under the laws of Ontario
(“Lender”).  Borrower and Lender are each sometimes referred to individually in
this Agreement as a “Party” and together as “Parties.”
 
RECITALS
 
A. The Parties to this Agreement are also the parties to a Stock Purchase
Agreement effective as of May 10, 2011 (“SPA”).  Under the SPA, the installments
Lender pays towards the purchase price entitle Lender to purchase shares of
Borrower’s Series A common stock (“Stock”) at a price per share equal to the
volume weighted average of the closing price of the Stock during the ten trading
days immediately preceding payment of each installment.  Each installment is
payable only following a funding request made by Borrower to Lender.
 
B. In recognition of the price per share at which the Stock has traded since the
effective date of the SPA and is likely to trade in the near term, the current
and projected future short term capital needs of Borrower for its ongoing and
expanding operations, and to avoid unnecessary dilution of the equity of all
shareholders of Borrower, including Lender, the Parties consider it to be in
their mutual best interests to fund some or all of the capital needs of Borrower
over the next six months through debt instead of equity funding.
 
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the Parties to this Agreement agree as follows:
 
AGREEMENT
 
1. FOR VALUE RECEIVED, Borrower promises to pay to the order of Lender the
principal sum of Five Million U.S. Dollars ($5,000,000), or so much thereof as
may be disbursed to, or for the benefit of Borrower by Lender in Lender's sole
and absolute discretion.  It is the intent of Borrower and Lender hereunder to
create a line of credit agreement between Borrower and Lender whereby Borrower
may borrow up to $5,000,000 from Lender in such installments and subject to the
same procedure for making funding requests as apply to the term “Funding
Request” as defined in Section 1.7 of the SPA.  Borrower shall specify in each
funding request whether the particular installment is to be paid pursuant to
this Loan Agreement or pursuant to the SPA.
 
2. LOAN SETUP FEE:  From each funding request, Lender shall retain 5% of the
amount requested (“Holdback”) as a set-up fee and compensation for Lender’s due
diligence.  Each Holdback shall nonetheless be added to the principal balance
and shall accrue interest along with the amount actually disbursed and
outstanding from time to time.
 
3. INTEREST & PRINCIPAL: The unpaid principal of this Loan Agreement shall bear
simple interest at the rate of ten percent (10%) per annum.  Interest shall be
calculated based on the principal balance as may be adjusted from time to time
to reflect additional advances made hereunder.  Interest on the unpaid balance
of this Loan Agreement shall accrue monthly but shall not be due and payable
until such time as when the principal balance of this Note becomes due and
payable.  The principal  balance of this Note shall be due and payable on
December 31, 2011. There shall be no penalty for early repayment of all or any
part of the principal.
 
 
 

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4. NOTICE: All notices given or made pursuant to this Loan Agreement shall be in
writing, shall be sent to the addresses or other contact information contained
on the signature page of this Loan Agreement, and shall comply with the
provisions of Section 6.5 of the SPA.
 
5. DEFAULT: Borrower shall be in default of this Note on the occurrence of any
of the following events: (i) Borrower shall fail to meet its obligation to make
the required principal or interest payments hereunder; (ii) Borrower shall be
dissolved or liquidated; (iii) Borrower shall make an assignment for the benefit
of creditors or shall be unable to, or shall admit in writing their inability to
pay their debts as they become due; (iv) Borrower shall commence any case,
proceeding, or other action under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of debtors, or any
such action shall be commenced against the undersigned; (v) Borrower shall
suffer a receiver to be appointed for it or for any of its property or shall
suffer a garnishment, attachment, levy or execution.
 
6. REMEDIES: Upon default of this Note, Lender may declare the entire amount due
and owing hereunder to be immediately due and payable.  Lender may also use all
remedies in law and in equity to enforce and collect the amount owed under this
Loan Agreement.
 
7. ATTORNEY FEES:  If any action at law or in equity (including arbitration) is
necessary to enforce or interpret the terms of any of this Loan Agreement, the
prevailing Party shall be entitled to reasonable attorneys’ fees, costs and
necessary disbursements in addition to any other relief to which such Party may
be entitled.
 
8. WAIVER: Borrower hereby waives demand, presentment, notice of dishonor,
diligence in collecting, grace and notice of protest.
 

 
BORROWER:
 
LENDER:
     
VelaTel Global Communications Inc.
 
Isaac Organization, Inc.
By: /s/ George Alvarez                   
 
By: /s/ Antonios Isaac              
      Chief Executive Officer
 
      Chief Executive Officer
     
12526 High Bluff Drive, Suite 155
San Diego, California  92130
Facsimile: 760.230.7042
Email:  galvarez@chinatelgroup.com
 
105 Schneider Road
Ottawa, Ontario K2K 1Y3 CANADA
Facsimile:  613.254.8912
Email:  tony@isaac.com