EXHIBIT 10.4

 

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Security Agreement”) is made and entered into as
of March 4, 2014, by and between China Motion Telecom (HK) Limited, a business
company organized under laws of Hong Kong (“Borrower”), and AQC, LLC, a limited
liability company organized under the laws of Delaware (“Secured Party”).

RECITALS

Borrower owes US$2,863,000 to Secured Party pursuant to a promissory note of
even date herewith from Borrower, payable to the order of Secured Party (the
“Note”). As partial consideration for the Note, Borrower agrees to provide the
Secured Party with a security interest in all of Borrower’s presently existing
and hereafter acquired property, wherever located, in accordance with this
Security Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
conditions contained herein, the receipt and sufficiency of which are hereby
acknowledged, Borrower agrees with Secured Party as follows:

ARTICLE 1

Rules of Construction; Definitions

1.1               Rules of Construction. For purposes of this Security
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:

(a)                Words of masculine, feminine or neuter gender include the
correlative words of other genders. Singular terms include the plural as well as
the singular, and vice versa.

(b)               All references herein to designated Articles, Sections and
other subdivisions or to lettered Exhibits are to the designated Articles,
Sections and subdivisions hereof and the Exhibits annexed hereto unless
expressly otherwise designated in context. All Article, Section, other
subdivision and Exhibit captions herein are used for reference only and do not
limit or describe the scope or intent of, or in any way affect, this Security
Agreement.

(c)                The terms “include,” “including,” and similar terms shall be
construed as if followed by the phrase “without being limited to.”

(d)               The terms “herein,” “hereof” and “hereunder” and other words
of similar import refer to this Security Agreement as a whole and not to any
particular Article, Section, other subdivision or Exhibit. All Recitals set
forth in, and all Exhibits to, this Security Agreement are hereby incorporated
in this Security Agreement by reference.

(e)               No inference in favor of or against any party shall be drawn
from the fact that such party or such party’s counsel has drafted any portion
hereof.

(f)                 All references in this Security Agreement to a separate
instrument are to such separate instrument as the same may be amended, restated,
modified or supplemented from time to time pursuant to the applicable provisions
thereof.

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1.2               Definitions. As used in this Security Agreement, capitalized
terms that are not otherwise defined herein shall have the respective meanings
defined for them in the Note, and the following terms are defined as follows:

(a)                “Collateral” shall mean all rights of Borrower now or
hereafter existing in and to the following items:

(i)                  All of the properties, assets, business and goodwill of
Borrower of every kind and nature whatsoever, tangible or intangible, personal
or mixed, whether now owned or hereafter acquired or arising at any time or from
time to time hereafter, wherever located, whether in the possession of Borrower
or in transit or in the possession of any other person, and all rights, title
and interest of Borrower of every kind and nature whatsoever in and to the
foregoing, and including, without limiting the generality of the foregoing
provisions of this paragraph (i), all of the properties and assets of Borrower
identified and described below in paragraphs (ii) through (viii);

(ii)                All claims, demands, judgments, rights, choses in action,
equities, accounts, accounts receivable, bills and notes receivable, including
without limitation, all contract privileges of Borrower, credits, bank accounts,
cash on hand and in banks, instruments, documents and securities of every
description, investments, all insurance policies in which Borrower is now (or
are hereafter) named as a beneficiary, including the cash surrender value
thereof and all proceeds thereof;

(iii)               All contract rights of every kind and nature whatsoever
(including leases of real property), and all claims, indemnities, rights,
remedies, powers and privileges of Borrower in, to and under all contracts or
agreements among Borrower and any other parties, whether now existing or
hereafter created, made or entered into by Borrower;

(iv)              All rights, permits, approvals, authorizations, and licenses
of every kind and description of Borrower;

(v)                All real estate and real property interests, furniture,
fixtures, goods, equipment, inventory, machinery, supplies, raw materials, goods
in process, work in process, finished and unfinished products, wares and
merchandise, all documents of title, and, in general, all tangible personal
property, goods and chattels of Borrower of every kind and description,
wheresoever situated;

(vi)              All fees, leases, contracts and agreements for the use, sale
or assignment of property, whether tangible or intangible, real or personal,
leaseholds, assignments, options, permits and licenses of every kind and
description, and all documents and instruments of title relating to or in any
way connected with the property of Borrower, whether tangible or intangible;

(vii)             All general intangibles of every kind whatsoever and all
files, books, records and other writings, including without limitation all
records and books of account, and also including without limitation all computer
programs and tapes and all electronic data processing software and all data
recorded, contained or stored in any of the foregoing, and ideas on which such
data is based, all developmental ideas and concepts, all papers, drawing,
blueprints, sketches and documents relating to any of the foregoing and/or
relating to the operation of the businesses of Borrower and/or the Collateral,
all databases, supplier and customer lists, all technology, trademarks, service
marks, trade names, the right of the Borrower to use of the name “CMMobile,” and
all applications for and licenses, rights and interests to or under or in
respect of any technology;

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(viii)           All intellectual property rights of Borrower, including but not
limited to the following:

(A)               Trade secrets, know how, and similar proprietary technical and
business information including algorithms, ideas, processes, procedures and
techniques that have been treated as confidential information;

(B)               Copyrights, works of authorship and similar rights, including
rights in computer program code;

(C)               Mask work rights or similar protection; and

(D)               Copyrights, trademarks, trade names and service marks, and
licenses to use, applications for, and other rights to, patents, copyrights,
trademarks, trade names and service marks.

(ix)              All of the income, products and proceeds of, and all
additions, substitutions and accessions to, all of the properties and assets of
Borrower identified and described in the foregoing paragraphs (i) through (viii)
of this Section 1.2(a);

in each and every case whether now owned or hereafter acquired by Borrower and
howsoever its interest may arise or appear.

(b)               “Default Rate” means a rate of interest equal to 20% per annum
or the maximum rate per annum permitted by law, whichever is less.

(c)                “Event of Default” is defined in Section 4.1. An Event of
Default “exists” if the same has occurred and is continuing.

(d)               “Governmental Authority” means any national, state, county,
municipal or other government, domestic or foreign, and any agency, authority,
department, commission, bureau, board, court or other instrumentality thereof.

(e)               “Loan Documents” means, collectively, the Note and this
Security Agreement.

(f)                 “Person” (whether or not capitalized) includes natural
persons, sole proprietorships, corporations, trusts, unincorporated
organizations, associations, companies, institutions, entities, joint ventures,
partnerships, limited liability companies and Governmental Authorities.

(g)                “Secured Obligations” means, collectively, (i) all
indebtedness evidenced by the Note, (ii) all other obligations, if any,
described or referred to in any other place in this Security Agreement, and
(iii) any and all sums and the interest which accrues on them as provided in
this Security Agreement which Secured Party may advance or which Borrower may
owe Secured Party pursuant to this Security Agreement on account of Borrower’s
failure to keep, observe or perform any of Borrower’s covenants under this
Security Agreement.

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ARTICLE 2

Security Agreement

2.1               Grant of Security Interest. To secure the complete and timely
satisfaction of all of the Secured Obligations, Borrower hereby grants the
Secured Party a security interest in the Collateral and any proceeds thereof.

ARTICLE 3

Representations, Warranties and Covenants

3.1               Warranties and Representations. Borrower represents, warrants
and covenants to Secured Party that:

(a)                Borrower has the right and authority to enter into this
Security Agreement and to grant the rights and securities provided herein and to
perform and comply with all covenants and obligations contained herein;

(b)               Borrower will take reasonable steps to maintain and protect
the Collateral.

(c)                Borrower has disclosed to Secured Party all prior security
interests that encumber any of the Collateral. Borrower shall timely pay all
amounts and shall perform all other obligations necessary to avoid a default
under any security agreement that encumbers any of the Collateral.

(d)               Borrower will not, during the term of this Security Agreement,
incur, create, assume or permit to exist any additional liens, mortgages,
pledges, security interests, licenses, encumbrances, or claims of any nature,
whatsoever, on the Collateral created by or through Borrower, or permit any of
the foregoing to occur or arise, except (A) liens in favor of Secured Party, (B)
liens in favor of third parties providing loans to Borrower, the proceeds of
which are used to retire the Note, and (C) mechanics, materialmen, or other
similar statutory liens securing obligations that are not yet due and payable.

(e)               Borrower will perform all acts and execute any documents that
are reasonably requested by the Secured Party at any time to evidence, perfect
and maintain the rights of the Secured Party in the Collateral under this
Security Agreement, including but not limited to filing a Registration of Charge
in the Hong Kong Companies Registry.

(f)                 No consent, authorization or other action by, and no notice
to or filing with, any other person is required for (i) the execution and
delivery of this Security Agreement by the Borrower, or (ii) the granting to
Secured Party of the liens on the Collateral under this Security Agreement.

(g)                This Security Agreement has been duly executed and delivered
by Borrower and constitutes the legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors’ rights generally.

(h)               Neither the execution and delivery of this Security Agreement
by Borrower, nor the performance by Borrower of its obligations hereunder, will
(i) with or without the giving of notice or the lapse of time or both, conflict
with or result in a breach of any terms or provisions of, or result in the
creation or imposition of any lien, claim, charge or encumbrance upon any of the
Collateral under any material agreements or other instrument, or (ii) violate
any applicable law, rule, regulation, judgment, decree or order of any court or
governmental instrumentality.

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3.2               Dispositions. Borrower shall not sell, transfer or dispose of
any of the Collateral except: (i) as may occur in the ordinary course of
Borrower’s business; (ii) sales of excess inventory at fair market value;
provided that the net proceeds of such sales are used to pay or prepay all or a
portion of the Note, or (iii) to Secured Party pursuant to definitive
transaction documents, appropriately authorized, prepared and executed to effect
such a sale.

3.3               Taxes and Assessments. Borrower shall pay when due all taxes,
assessments and other charges levied or assessed against any of the Collateral,
and all other claims that are or may become liens against the Collateral.

3.4               Further Assurances. At the Borrower’s cost and expense, upon
request of Secured Party, Borrower shall (i) duly execute and deliver, or cause
to be duly executed and delivered, to Secured Party such further instruments and
do and cause to be done such further acts as may be reasonably necessary or
proper in the opinion of Secured Party or its counsel to perfect, preserve and
protect the validity of the liens of Secured Party in the Collateral and to
carry out more effectively the provisions and purposes of this Security
Agreement, and (ii) promptly correct any defect, error or omission which may be
discovered in the contents of this Security Agreement or in any other instrument
executed in connection herewith or in the execution or acknowledgment thereof.

3.5               Performance of Borrower’s Obligations. If Borrower should fail
to comply with any of its agreements, covenants or obligations under this
Security Agreement or any other Loan Document, then Secured Party (in Borrower’s
name or in Secured Party’s own name) may perform them or cause them to be
performed for Borrower’s account and at Borrower’s expense, but shall have no
obligation to perform any of them or cause them to be performed. Any and all
expenses thus incurred or paid by Secured Party shall be Borrower’s obligations
to Secured Party, due and payable on demand, and each shall bear interest from
the date Secured Party pays it until the date Borrower repays it to Secured
Party at the Default Rate.

ARTICLE 4

Events of Default

4.1               Events of Default. The occurrence and continuation of any of
the following events shall constitute an event of default (an “Event of
Default”) under this Security Agreement (whatever the reason for such event and
whether or not it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any governmental requirement):

(a)                any representation or warranty made in this Security
Agreement or any other Loan Document shall prove to be false or misleading in
any material respect as of the time made; or

(b)               Borrower fails to perform, observe or comply with - or
defaults under - any of the terms, covenants, conditions or provisions of this
Security Agreement unless the failure or default is fully cured within 15
calendar days after Secured Party has given Borrower written notice thereof -
provided, however, that in no event shall Secured Party be required to provide
notice with respect to any violation of Sections 3.1 or 3.2 hereof and such
violation shall immediately constitute an Event of Default hereunder; or

(c)                Borrower shall claim - or any court shall find or rule - that
Secured Party does not have a valid lien on the Collateral or any other security
which may have been provided by Borrower; or

(d)               any default, event of default or similar event (however
denominated) shall occur under any of the other Loan Documents and shall
continue beyond any applicable cure periods.

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ARTICLE 5

Remedies

5.1               Remedies. During the existence of an Event of Default:

(a)                Secured Party shall have the option of declaring, without
notice to any person, all Secured Obligations to be immediately due and payable.

(b)               Secured Party is authorized, in any legal manner and without
breach of the peace, to take exercise without interference from Borrower any and
all rights which Borrower has with respect to the management, possession,
operation, protection or preservation of the Collateral, including the right to
sell or rent the same for the account of Borrower and to deduct from such sale
proceeds or such rents all costs, expenses and liabilities of every character
incurred by Secured Party in collecting such sale proceeds or such rents and in
managing, operating, maintaining, protecting or preserving the Collateral and to
apply the remainder of such sales proceeds or such rents on the Secured
Obligations in such manner as Secured Party may elect. Before any sale, Secured
Party may, at its option, complete the processing of any of the Collateral and
any sums expended therefor by Secured Party shall be reimbursed by Borrower. All
costs, expenses, and liabilities incurred by Secured Party in collecting such
sales proceeds or such rents, or in managing, operating, maintaining, protecting
or preserving such properties, or in processing the Collateral if not paid out
of such sales proceeds or such rents as hereinabove provided, shall constitute a
demand obligation owing by Borrower and shall bear interest from the date of
expenditure until paid at the Default Rate, all of which shall constitute a
portion of the Secured Obligations. In connection with any action taken by
Secured Party pursuant to this Section 5.1(b), Secured Party shall not be liable
for any loss sustained by Borrower resulting from any failure to sell the
Collateral, or any part thereof, or from other act or omission of Secured Party
with respect to the Collateral unless such loss is caused by the willful
misconduct and bad faith of Secured Party, nor shall Secured Party be obligated
to perform or discharge any obligation, duty, or liability under any sale or
lease agreement covering the Collateral or any part thereof or under or by
reason of this instrument or the exercise of rights or remedies hereunder.

(c)                Secured Party may, without notice except as hereinafter
provided or as may otherwise be required by applicable law, sell the Collateral
or any part thereof at public or private sale (with or without appraisal or
having the Collateral at the place of sale) for cash, upon credit, or for future
delivery, and at such price or prices as Secured Party may deem best, and
Secured Party may be the purchaser of any and all of the Collateral so sold and
may apply upon the purchase price therefor any of the Secured Obligations and
thereafter hold the same absolutely free from any right or claim of whatsoever
kind. Secured Party is authorized at any such sale, if Secured Party deems it
advisable or is required by applicable law so to do, to disclaim and to refuse
to give any warranty, and to impose such other limitations or conditions in
connection with any such sale as Secured Party reasonably deems necessary or
advisable in order to comply with applicable law. Upon any such sale Secured
Party shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right of whatsoever kind,
including any equity or right of redemption, stay or appraisal which Borrower
has or may have under any rule of law or statute now existing or hereafter
adopted. To the extent notice is required by applicable law, Secured Party shall
give Borrower written notice at the address set forth herein (which shall
satisfy any requirement of notice or reasonable notice in any applicable
statute) of Secured Party’s intention to make any such public or private sale.
Such notice (if any is required by applicable law), in case of public sale,
shall state the time and place fixed for such sale or, in case of private sale
or other disposition other than a public sale, the time after which the private
sale or other such disposition is to be made. Any public sale shall be held at
such time or times, within the ordinary business hours and at such place or
places, as Secured Party may fix in the notice of such sale. At any sale the
Collateral may be sold in one lot as an entirety or in separate parcels as
Secured Party may determine. Secured Party shall not be obligated to make any
sale pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at any time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by Secured Party
until the selling price is paid by the purchaser thereof, but Secured Party
shall incur no liability in case of the failure of such purchaser to take up and
pay for the Collateral so sold, and in case of any such failure, such Collateral
may again be sold upon like notice. Each and every method of disposition
described in this Section 5.1(c) shall constitute disposition in a commercially
reasonable manner. Borrower, to the extent applicable, shall remain liable for
any deficiency.

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(d)               Secured Party shall have all the rights of a secured party
after default under the Hong Kong Companies Ordinance.

5.2               Additional Security, Etc. Without notice to or consent of the
Borrower, and without impairment of the liens and rights created by this
Security Agreement, Secured Party may accept from the Borrower, or any other
Person, additional security for the Secured Obligations. Neither the giving of
this Security Agreement nor the acceptance of any such additional security shall
prevent Secured Party from resorting first to any such additional security, or
first to the liens created by this Security Agreement, without affecting the
liens and rights of Secured Party under this Security Agreement.

5.3               Remedies Cumulative. The rights and remedies of Secured Party
under this Security Agreement are cumulative and not exclusive of any other
rights or remedies now or hereafter existing at law or in equity.

5.4               Lifting of Stay. In the event that Borrower or any other
obligor under the Loan Documents is the subject of any insolvency, bankruptcy,
receivership, dissolution, reorganization or similar proceeding, voluntary or
involuntary, under any present or future law or act, Secured Party is entitled
to the automatic and absolute lifting of any automatic stay as to the
enforcement of its remedies under the Loan Documents against the security for
the Secured Obligations. Borrower hereby consents to the immediate lifting of
any such automatic stay, and will not contest any motion by Secured Party to
lift such stay. Borrower expressly acknowledges that the security for the
Secured Obligations is not now and will never be necessary to any plan of
reorganization of any type.

ARTICLE 6

Miscellaneous

6.1               Notices. All notices, statements, requests and demands given
to or made upon any of the parties under this Security Agreement shall be in
writing and shall be deemed to be given when delivered in person or by private
courier with receipt, when telefaxed and received, or three (3) Business Days
after being deposited in the United States mail, first-class, registered or
certified, return receipt requested, with postage paid and,

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If to Borrower:

Yan Qin

China Motion Telecom (HK) Limited

Suites 1105-1106, 11th Floor, Chinachem Golden Plaza

77 Mody Road, TsimShaTsui East

Hong Kong

Fax No.: + 852 2209 1270

Email: jim.yang@cmmobile.com.hk

 

With a copy to:

 

Kenneth Hobbs

VelaTel Global Communications, Inc.

5950 La Place Court, Suite 160

Carlsbad, CA 92008

Fax No.: + 1 760 359 7040

khobbs@velatel.com

 

If to Secured Party:

David Somrack

AQC, LLC

38448 Lakeshore Boulevard

Willoughby, OH 44095

Email: zelous99@yahoo.com

 

or to such other address as a party shall designate by written notice to the
other party.

6.2               Expenses. Borrower shall pay, promptly on demand, all costs
and expenses, including the fees and disbursements of counsel to Secured Party,
incurred by Secured Party in connection with (a) the enforcement of this
Security Agreement, (b) the preservation of the Collateral, (c) the protection
or perfection of Secured Party’s rights and interests under this Security
Agreement in the Collateral, (d) the exercise by or on behalf of Secured Party
of any of its rights, powers or remedies under this Security Agreement, and (e)
the prosecution or defense of any action or proceeding by or against Secured
Party, Borrower, or any one or more of them, concerning any matter related to
this Security Agreement, any of the Collateral or the Note. All such amounts
shall be included in the obligations secured hereby. The obligations under this
Section 6.2 shall survive the payment in full of the Note and the termination of
this Security Agreement.

6.3               Successors and Assigns. Whenever in this Security Agreement
any party hereto is referred to, such reference shall be deemed to include the
heirs, successors and assigns of such party, except that Borrower may not assign
or transfer this Security Agreement without the prior written consent of Secured
Party and Secured Party only may assign this Security Agreement in connection
with the sale or other transfer of the Note; and all covenants and agreements of
Borrower contained in this Security Agreement shall bind Borrower’s successors
and assigns and shall inure to the benefit of the successors and assigns of
Secured Party.

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6.4               Independent Obligations. Borrower agrees that each of the
obligations of Borrower to Secured Party under this Security Agreement may be
enforced against Borrower without the necessity of joining any other holders of
liens in any Collateral or any other person, as a party.

6.5               Governing Law. This Security Agreement shall be deemed to be a
contract governed by and construed shall be governed by and construed in
accordance with the laws of Hong Kong, without regard to its conflicts of laws
principles.

6.6               Severability. The provisions of this Security Agreement are
intended to be severable. If any provision of this Security Agreement shall for
any reason be held invalid or unenforceable in whole or in part in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to
extent of such invalidity or unenforceability and shall not affect the validity
or enforceability of such provision in any other jurisdiction or any other
provision of this Security Agreement in any jurisdiction.

6.7               Counterparts. This Security Agreement may be executed by
facsimile and in any number of counterparts, each of which so executed shall be
deemed an original, but all such counterparts shall together constitute but one
and the same agreement.

6.8               No Oral Agreements. The terms and conditions of this Security
Agreement constitute the entire agreement of the parties and shall supersede all
previous agreements, either oral or written, with respect to the subject matter
hereof. This Security Agreement may only be modified by a written agreement
signed by a duly authorized representative of each of the parties.

6.9               Waiver and Election. The exercise by Secured Party of any
option given under this Security Agreement shall not constitute a waiver of the
right to exercise any other option. No failure or delay on the part of Secured
Party in exercising any right, power or remedy under this Security Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any further exercise thereof or the
exercise of any other right, power or remedy. No modification, termination or
waiver of any provisions of the Note, nor consent to any departure by the
Borrower therefrom, shall be effective unless in writing and signed by an
authorized officer of Secured Party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.

6.10            No Obligations of Secured Party; Indemnification. Secured Party
does not by virtue of this Security Agreement or any of the transactions
contemplated by the Note assume any duties, liabilities or obligations with
respect to any of the Collateral unless expressly assumed by Secured Party under
a separate agreement in writing, and this Security Agreement shall not be deemed
to confer on Secured Party any duties or obligations that would make Secured
Party directly or derivatively liable for any person’s negligent, reckless or
willful conduct. The Borrower agrees to indemnify and hold Secured Party
harmless against and with respect to any damage, claim, action, loss, cost,
expense, liability, penalty or interest (including attorney fees) and all costs
and expenses of all actions, suits, proceedings, demands, assessments, claims
and judgments directly or indirectly resulting from, occurring in connection
with, or arising out of: (a) any inaccurate representation made by the Borrower
in this Security Agreement; (b) any breach of any of the warranties or
obligations of the Borrower under this Security Agreement; and (c) the
Collateral, or the liens of Secured Party thereon. The provisions of this
Section 6.10 shall survive the payment of the Note in full and the termination,
satisfaction, release (in whole or in part) and foreclosure of this Security
Agreement.

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6.11            Rights, Liens and Obligations Absolute. All rights of Secured
Party hereunder, all Liens granted to Secured Party hereunder, and all
obligations of the Borrower hereunder, shall be absolute and unconditional and
shall not be affected by (a) any lack of validity or enforceability as to any
other person of the Note, (b) any change in the time, manner or place of payment
of, or any other term of the Note, (c) any amendment or waiver of any of the
provisions of the Note as to any other person, and (d) any exchange, release or
non-perfection of any other collateral or any release, termination or waiver of
any guaranty, for the Note.

6.12            Termination. This Security Agreement and Secured Party’s Liens
in the Collateral hereunder shall terminate upon the repayment in full of the
Note.

6.13            Reinstatement. This Security Agreement, the obligations of the
Borrower hereunder, and the Liens, rights, powers and remedies of Secured Party
hereunder, shall continue to be effective, or be automatically reinstated, as
the case may be, if at any time any amount applied to the payment of any of the
obligations under the Note is rescinded or must otherwise be restored or
returned to the Borrower or any other person (or paid to the creditors of any of
them, or to any custodian, receiver, trustee or other officer with similar
powers with respect to any of them, or with respect to any part of their
property) upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any such person, or upon or as a result of the
appointment of a custodian, receiver, trustee or other officer with respect to
any of them, or with respect to any part of their property, or otherwise, all as
though such payment had not been made.

6.14            Submission to Jurisdiction. Borrower hereby irrevocably submits
to the jurisdiction of the courts of Hong Kong and of any country in which it
has assets and hereby irrevocably waives any objection to any proceedings in any
such courts on the basis of forum non conveniens. Borrower agrees that a
judgment in any proceedings brought in any such courts may be enforced in any
other jurisdiction by suit on the judgment or in any other manner permitted by
law. Borrower IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
executed this Security Agreement from the date set forth above.

CHINA MOTION TELECOM (HK) LIMITED

 

 

 

By: /s/ Colin Tay

        Colin Tay, its Director

 

AQC, LLC

 

 

 

By /s/ David Somrack

        David Somrack, its Manager

 

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