Document:

Exhibit 10.2

 

WAIVER AND MODIFICATION NO. 1 TO

LOAN AND SECURITY AGREEMENT

 

This Waiver and Modification
No. 1 to Loan and Security Agreement (this “Modification”) is entered into as of December 17, 2018 (the “Modification
Effective Date”), by and between Partners for Growth V, L.P., a Delaware limited partnership with its principal place
of business at 1660 Tiburon Blvd., Suite D, Tiburon, California 94920 (“PFG”) Borqs Hong Kong Limited, a Hong
Kong company with its principal place of business at Office B, 21/F, Legend Tower, 7 Shing Yip Street, Kwun Tong, Kowloon, Hong
Kong (“Borrower”), and BORQS International Holding Corp, a Cayman Islands company (“Holdings”)
and a guarantor of the obligations of Borrower under that certain Deed of Guarantee and Indemnity dated as of April 30, 2018. This
Modification amends that certain Loan and Security Agreement between PFG and Borrower dated as of April 30, 2018 (the “Loan
Agreement”). Capitalized terms used but not defined herein have their meanings as set forth in the Loan Agreement. The
Loan Agreement is modified herein inter alia for the purposes of providing an additional loan to Borrower upon the same terms and
with the benefit of the same security, the terms of which are set forth in a new Schedule 2 to the Loan Agreement, as exhibited
hereto. Group Parent is acceding as a party to this Modification as it derives direct and indirect benefit from the Loans made
by PFG to Borrower and, in addition, the Schedule 2 Loan (as defined herein) is convertible at the option of PFG into ordinary
shares in Group Parent. Borrower, Holdings and Group Parent may be referred to herein as “Obligor”.

 

RECITALS

 

WHEREAS, PFG and Obligor
desire to modify the Loan Agreement to contemplate a new convertible Loan to Borrower and to waive the Specified Default as detailed
in Section 4 hereof;

 

WHEREAS, Group Parent
desires to facilitate the Schedule 2 Loan for the direct and indirect benefit of Group Parent and the Group by allowing for the
convertibility of the Schedule 2 Loan into ordinary shares in Group Parent;

 

NOW THEREFORE, the
parties hereby agree as follows:

 

1. DESCRIPTION
OF EXISTING INDEBTEDNESS: As of the Modification Effective Date, Borrower is directly indebted to PFG for the Obligations pursuant
to the Existing Loan Documents (as defined below) in the aggregate principal amount of $3,000,000 (such amount, for the avoidance
of doubt, exclusive of the sum of US$2,083,333.37 owed by Borrower to Partners for Growth IV, L.P.).

 

2. DESCRIPTION
OF COLLATERAL. Repayment of the Obligations is secured by the Collateral, as described in the Loan Agreement, in that certain
Intellectual Property Security Agreement and related Collateral Agreements and Notices of even date with the Loan Agreement, Deed
of Guaranty, Debentures, Hong Kong Security Documents, BVI Security Documents, Cayman Security Documents and such documents, agreements
and instruments as were entered into in contemplation of the Loan Agreement. The above-described security documents, together with
all other documents securing and/or perfecting security interests in the repayment of the Obligations, shall be referred to herein
as the “Security Documents”. Hereinafter, the Security Documents, together with all other documents evidencing
or securing the Obligations are referred to as the “Existing Loan Documents”.

 

     

     

    

 

3. DESCRIPTION
OF CHANGES IN TERMS. As from the Modification Effective Date:

 

3.1 New
Schedule 2. The Loan Agreement is amended to incorporate a new “Schedule 2” incorporating the terms of the new
Loan (the “Schedule 2 Loan”) to be made under this Modification, such Schedule 2 in the form set forth in Exhibit
A to this Modification.

 

3.2 References
to “Schedule”. References to the term “Schedule” in the Loan Agreement shall be construed to mean each
or both of the Schedules as the context permits and references to the “Schedule 1 Loan” shall mean the Loan made on
the original Loan Agreement Effective Date and to the “Schedule 2 Loan” shall mean the additional Loan made pursuant
to this Modification.

 

3.3 Restated
Compliance Certificate. The Compliance Certificate is amended and restated in the form appended as Exhibit B hereto.

 

3.4 Negative
Covenant. Until PFG shall have otherwise expressly approved in writing (which shall be deemed to include any amendment and
restatement of the Loan Agreement after the Modification Effective Date), notwithstanding anything to the contrary in Section 4.6
of the Loan Agreement, no Obligor shall transfer any Collateral or other assets, make any Permitted Investments in or incur any
Permitted Indebtedness to Borrower’s New Subsidiary, Borqs Technologies (HK) Limited, or otherwise cause or permit it to
hold other than nominal assets sufficient to maintain its corporate existence.

 

4. ACKNOWLEDGMENT
OF SPECIFIED DEFAULT; WAIVER. Borrower acknowledges that it is currently in default under the Loan Agreement due to it having
failed to meet the minimum Revenues and minimum EBITDA financial covenant set forth in Section 5 of Schedule 1 (formerly the Schedule)
for the reporting periods ending September 30, 2018 (the “Current Defaults”) and for the anticipated failure
to meet the minimum EBITDA financial covenant for the reporting period ending October 31, 2018 (the “Anticipated Default”
and, together with the Current Defaults, the “Specified Defaults”). If no Default or Event of Default has occurred
and is continuing under the Loan Agreement, other than the Specified Defaults and the conditions set forth in Section 7 are timely
satisfied, PFG shall be deemed to have forever waived the Specified Defaults. Borrower hereby acknowledges and agrees that except
as specifically provided herein, nothing in this Section or anywhere in this Modification shall be deemed or otherwise construed
as a waiver by PFG of any of its rights and remedies pursuant to the Existing Loan Documents, applicable law or otherwise. The
waiver of Specified Defaults set forth in this Modification shall be limited precisely as written and shall not be deemed (a) to
be a forbearance, waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement
referred to therein or to prejudice any right or remedy which PFG may now have or may have in the future under or in connection
with the Loan Agreement, the Existing Loan Documents or any instrument or agreement referred to therein; (b) to be a consent to
any future amendment or modification, forbearance or waiver to any instrument or agreement the execution and delivery of which
is consented to hereby, or to any waiver of any of the provisions thereof; or (c) to limit or impair PFG’s right to demand
strict performance of all terms and covenants as of any date, subject to this Modification. The Loan Agreement, as amended, shall
continue in full force and effect.

 

    2

     

    

 

5. Representations
And Warranties OF OBLIGOR. Each Obligor hereby represents and warrants that:

 

(a) immediately
upon giving effect to this Modification (i) the representations and warranties contained in the Existing Loan Documents are
true, accurate and complete in all material respects as of the date hereof (except to the extent qualified in the updated Representations
deliverable to PFG on or before the Modification Effective Date), and (ii) no Event of Default has occurred and is continuing,
other than the Specified Defaults;

 

(b) it
has the corporate power and authority to execute and deliver this Modification and to perform its respective obligations under
the Existing Loan Documents, as amended by this Modification, and in the case of Group Parent, its obligations in relation to the
conversion of the Schedule 2 Loan;

 

(c) its
Constitutional Documents of Borrower as last delivered to PFG remain true, accurate and complete and have not been amended, supplemented
or restated and are and continue to be in full force and effect;

 

(d) it
has duly executed and delivered this Modification and the performance by it of its obligations under the Existing Loan Documents,
as amended by this Modification, and any required consents, including of shareholders, have been duly obtained;

 

(e) this
Modification constitutes (i) its binding obligations, enforceable against it in accordance with the terms of this Modification,
except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting creditors’ rights, and (ii) a reaffirmation
of its respective obligations under the Existing Loan Documents, including under the Hong Kong Security Documents, the Cayman Security
Documents and the BVI Security Documents;

 

(f) as
of the date hereof, it has no defenses against its obligation to repay the Obligations, it has no claims of any kind against PFG
and it acknowledges that PFG has acted in good faith and in a commercially reasonable manner in connection with this Modification
and the Existing Loan Documents;

 

(g) the
Security Documents relating to Intellectual Property either disclose an accurate, complete and current listing of all Collateral
that consists of Intellectual Property; and

 

(h) it
hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in the Representations previously
delivered to PFG by Borrower, and acknowledges, confirms and agrees that, subject to the update to the Representations to be provided
under Section 7 hereof, the disclosures and information provided to PFG therein remain true, correct, accurate and complete in
all material respects as of the Modification Effective Date.

 

    3

     

    

 

Each Obligor understands
and acknowledges that PFG is entering into this Modification in reliance upon, and in partial consideration for, the above representations
and warranties, and agrees that such reliance is reasonable and appropriate.

 

6. CONTINUING
VALIDITY. Each of Borrower and Group Parent understands and agrees that in modifying the existing Obligations, PFG is relying
upon Borrower's representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified
pursuant to this Modification, the terms of the Existing Loan Documents remain unchanged and in full force and effect. PFG's agreement
to modifications to the existing Obligations in no way shall obligate PFG to make any future consents, waivers or modifications
to the Obligations. Nothing in this Modification shall constitute a satisfaction of the Obligations or a waiver of any default
under the Existing Loan Documents except as expressly stated otherwise. It is the intention of PFG and Borrower to retain as liable
parties all makers and endorsers, if any, of the Existing Loan Documents, unless the party is expressly released by PFG in writing.
Unless expressly released herein, no maker, endorser, or guarantor will be released by virtue of this Modification. The terms of
this paragraph apply not only to this Modification, but also to all subsequent loan modifications.

 

7.  CONDITIONS.
The effectiveness of this Modification is conditioned upon each of:

 

7.1Execution
and Delivery. Each Obligor shall have duly executed and delivered a counterpart of this Modification to PFG.

 

7.2 Lender
Expenses. Promptly upon PFG invoice, Borrower shall have promptly paid all Lender Expenses noticed by PFG in connection with
this Modification.

 

7.3 Waiver
and Modification Fee. Promptly upon PFG invoice, Borrower shall have promptly paid PFG a fee in consideration of this Modification
in the amount of $15,000, as detailed in Section 3 of Schedule 2.

 

7.4 Updated
Representations. Borrower shall have provided an update to the Representations.

 

7.5 Convertible
Note. Borrower shall have executed and delivered and Group Parent shall have acknowledged by its execution and delivery the
Note, in the form appended hereto as Exhibit C.

 

7.6 Joinder
as Guarantor. The parties acknowledge that they have agreed the principal terms of a new loan to be consummated within approximately
sixty days after the Schedule 2 Loan is disbursed, which new loan will refinance and replace the existing facilities of the Senior
Lender. If such new loan is not contemplated as envisioned, as a condition subsequent to this Modification, Group Parent shall
upon PFG request promptly join and accede to the Existing Loan Documents as a named guarantor of Borrower’s Obligations.

 

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The failure of any of
the conditions set forth in this Section 7 shall constitute an immediate Event of Default.

 

8. CONSISTENT
CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

9. RATIFICATION
OF EXISTING LOAN DOCUMENTS; FURTHER ASSURANCES. (a) Borrower acknowledges and agrees that (i) each of the Existing Loan Documents
remains in full force and effect in accordance with the original terms, except as expressly modified hereby, (ii) the Liens granted
by the Borrower to PFG under the Existing Loan Documents shall remain in place, unimpaired by the transactions contemplated by
this Agreement, and PFG’s priority with respect thereto shall not be affected hereby or thereby, and (iii) the Loan Agreement
and the other Existing Loan Documents shall continue to secure all Obligations as stated therein except as expressly amended and
modified by this Modification; (b) Borrower ratifies, reaffirms, restates and incorporates by reference all of its representations,
warranties, covenants, and agreements made under the Existing Loan Documents; (c) Borrower hereby ratifies, confirms, and reaffirms
that the Obligations include, without limitation, the Loans, and any future modifications, amendments, substitutions or renewals
thereof; (d) Borrower has no defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims,
actions or causes of action of any kind or nature whatsoever against PFG or any past, present or future agent, attorney, legal
representative, predecessor-in-interest, affiliate, successor, assign, employee, director or officer of PFG, directly or indirectly,
arising out of, based upon, or in any manner connected with, any transaction, event, circumstance, action, failure to act, or occurrence
of any sort or type, whether known or unknown, which occurred, existed, was taken, permitted, or began prior to the execution of
this Agreement and accrued, existed, was taken, permitted or begun in accordance with, pursuant to, or by virtue of the terms or
conditions of the Existing Loan Documents, or which directly or indirectly relate to or arise out of or in any manner are connected
with any of the Existing Loan Documents; (e) Borrower and PFG confirm that neither party has heretofore waived or modified, and
has not agreed to waive or modify, any term of the Existing Loan Documents, and any actions that Borrower takes or fails to take
(including the expenditure of any funds) is voluntary, informed and taken at its own risk; and (g) Borrower shall, from and after
the execution of this Agreement, execute and deliver to PFG whatever additional documents, instruments, and agreements that PFG
may reasonably require in order to perfect the Collateral granted in the Loan Agreement more securely in PFG and to otherwise give
effect to the terms and conditions of this Modification. Nothing in this Modification shall constitute a satisfaction of the Obligations
or a waiver of any default under the Existing Loan Documents, except of the Specified Defaults to the extent waived herein. It
is the intention of PFG and Borrower to retain as liable parties all makers and endorsers, if any, of the Existing Loan Documents,
unless the party is expressly released by PFG in writing. Unless expressly released herein, no maker, endorser, or guarantor will
be released by virtue of this Modification. The terms of this paragraph apply not only to this Modification, but also to all subsequent
loan modification agreements.

 

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10. INTEGRATION;
CONSTRUCTION. This Modification, the Loan Agreement and the Existing Loan Documents (as modified) and any documents executed
in connection herewith or pursuant hereto contain the entire agreement between the parties with respect to the subject matter hereof
and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic
evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Modification; provided,
however, that any financing statements or other agreements or instruments filed by PFG with respect to Borrower shall remain in
full force and effect. The Existing Loan Documents are hereby amended wherever necessary to reflect the modifications set forth
in this Modification. The quotation marks around modified clauses set forth herein and any differing font styles in which such
clauses are presented herein are for ease of reading only and shall be ignored for purposes of construing and interpreting this
Modification. This Modification is subject to the General Provisions of Section 8 of the Loan Agreement, each of which are incorporated
herein as if set forth in this Modification.

 

11. ADVICE
OF COUNSEL. PFG and Borrower have prepared this Modification and all documents, instruments, and agreements incidental hereto
with the aid and assistance of their respective counsel. Accordingly, all of them shall be deemed to have been drafted by PFG and
Borrower and shall not be construed against the PFG or Borrower.

 

12. ILLEGALITY
OR UNENFORCEABILITY. Any determination that any provision or application of this Modification or the Loan Agreement is invalid,
illegal, or unenforceable in any respect, or in any instance, shall not affect the validity, legality, or enforceability of any
such provision in any other instance, or the validity, legality, or enforceability of any other provision of this Agreement.

 

13. Governing
Law; Venue. THIS MODIFICATION SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA. Borrower and PFG submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County,
California, in connection with any proceeding or dispute arising in connection herewith.

 

[Signature Page Follows]

 

    6

     

    

 

This Modification is
executed as of the date first written above.

 

	Executed
    and Delivered as a Deed by	)	PARTNERS
FOR GROWTH V, L.P. (COMPANY SEAL)

	BORQS
    Hong Kong Limited	)	 	 
	 	 	 	 
	Acting
    by:	 	By	 
	 	 	 	 
	 	/s/ Pat Sek Yuen Chan
	 	 	 
	 Name:	Pat
Sek Yuen Chan	 	Name:
    	 
	 Title:	Sole
    Director	 	Title:	Manager, Partners
    for Growth V, LLC,
			 		its
    General Partner
	in
    the presence of :	 	 	 
	 	 	 		

	/s/ Anthony Chan

	 	 	 
	Witness
    name: Anthony Chan	 	 	 
	Witness
    occupation: CFO	 	 	 
	 	 	 	 	 
	Executed
    and Delivered as a Deed by	)	 	 
	BORQS
    International Holding Corp	)	 	 
	 	 	 	 
	Acting
    by:	 	 	 
	 	 	 	 
	 
	/s/ Pat Sek Yuen Chan
	 	 	 
	Name:	Pat
Sek Yuen Chan	 	 	 
	Title:	Director	 	 	 
	in
    the presence of:	 	 	 
	 	 	 	 	 
	/s/ Anthony Chan

	 	 	 
	Witness
    name: Anthony Chan	 	 	 
	Witness
    occupation: CFO	 	 	 
	 	 	 	 	 
	Executed
    and delivered as a deed by	)	 	 
	Borqs
    Technologies, Inc.	)	 	 
	Acting
    by its duly authorised director	)	 	/s/ Pat Sek Yuen Chan
	 	 	 	Name:	 Pat Sek Yuen Chan

 

Signature Page - PFG V -Borqs Hong Kong
Limited

Modification No. 1 to Loan and Security
Agreement

 

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Exhibit A – Schedule 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Partners For Growth

Schedule 2 to 

Loan and Security Agreement

 

		Borrower:	BORQS Hong Kong Limited, a private company limited by shares under Hong Kong law, registered
with the Companies Registry under number 1151010

 

		Address:	Office B, 21/F, Legend Tower, 7 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong

 

	Effective Date:	April 30, 2018
	 	 
	Modification Effective Date:	December 17, 2018

 

This Schedule 2 forms an integral part
of the Loan and Security Agreement between PARTNERS FOR GROWTH V, L.P. and the above-referenced Borrower dated the date specified
above as the “Modification Effective Date”).

 

 

 

		1.	LOAN (Section 1.1):

 

	a)	The
    Schedule 2 Loan:	The Loan shall consist of a convertible term loan in the principal amount of $1,000,000 as set forth herein and as detailed in convertible promissory note appended hereto (the “Note”), to be advanced to Borrower upon the later to occur of (x) one (1) Business Day following the Modification Effective Date and (y) two (2) Business Days following the Business Day during which the conditions set forth in Section 9 of this Schedule 2 have been satisfied, waived by PFG or deferred as conditions subsequent by PFG, each in its sole discretion.
	 	 	 
	(b)	Repayment:	Subject to PFG’s right to convert the Note into the ordinary shares of Group Parent at any time the Note is outstanding and unpaid, Borrower shall pay interest only on Schedule 2 Loan principal until the Schedule 2 Loan Maturity Date set forth in Section 4 of this Schedule 2, on which date the entire unpaid principal balance of the Schedule 2 Loan plus any and all accrued and unpaid interest and other monetary Obligations then owing shall be paid. Prepaid Schedule 2 principal may not be reborrowed.
	 	 
	(c)	Conversion:	At any time while the Schedule 2 Loan is outstanding, upon notice only, PFG may elect to convert the Schedule 2
	 	 	 
	 	 	Loan (in whole only, unless Borrower has prepaid the Schedule 2 Loan in part and, in such case, the remaining balance) into the ordinary shares of Group Parent, as set forth in the Note.
	 	 	 
	(d)	Prepayment:	Borrower may prepay the Loan in whole or in part at any time without prepayment fee or penalty of any kind; provided, however, prepayment of the Note shall be subject to the concurrent issuance of a warrant to purchase Group Parent’s ordinary shares reflecting the conversion value (in ordinary shares) that equates to the principal prepaid. For example only, if the Note were convertible into 1,000 Group Parent ordinary shares and $500,000 in Schedule 2 Loan principal is prepaid, then such prepayment would be subject to the concurrent issuance of a warrant to acquire 500 Group Parent ordinary shares.

 

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	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

	2.	Interest.

 

	 	Interest Rate (Section 1.2):
	 	 	 
	 	 	The Loan shall bear interest at a per annum rate equal to 12.00%, fixed. 
	 	 	 
	 	 	Interest shall be calculated on the basis of a 360-day year and a year of twelve months of 30 days each but paid for the actual number of days elapsed during each month or other accrual period. Accrued interest for each month shall be payable monthly, on the first day of each month for interest accrued during the prior month.

 

 

 

	3.	Fees (Section 1.3):

 

	 	Commitment Fee:	$15,000, payable promptly upon PFG invoice following the Modification Effective Date. 

 

 

 

	4.	SCHEDULE 2 LOAN Maturity Date

	 	(Section 5.1):	December 17, 2023.

 

 

 

	5.	Financial Covenants

	 	(Section 4.1):	The Group shall meet or exceed (i) Revenues of $32,500,000 on a calendar quarterly basis and (ii) three (3) month trailing EBITDA, tested monthly, of $2,000,000, with compliance determined as of the last day each calendar quarter (Revenues) and each calendar month (EBITDA). 

 

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	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

	 	Definitions:	For purposes of the foregoing financial covenants, the following term shall have the following meaning:
	 	 	 
	 	 	“EBITDA” means (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax expense.
	 	 	 
	 	 	“Revenue(s)” means revenues required to be classified as such under U.S. GAAP.
	 	 	 
	 	Future Periods:

	For future
periods not covered by the above requirements, the thresholds shall be set by PFG in consultation with Borrower based on its then-current
Plan, but in no event (for each measurement period) less than the immediately prior measurement period. For instance, the minimum
EBITDA threshold for January 2019 would be as set, but in no event less than $32,500,000, and for March 2019 (for Revenues) would
be as set but in no event less than $2,000,000.

 

 

 

	6.	Reporting.
	 	(Section 4.4):

 

	 	Borrower shall provide PFG
with the following:
	 	 	 
		(a)	Monthly accounts payable, accounts receivable and deferred Revenue schedules,
aged by invoice date, and outstanding or held check registers, if any, within 20 days after the end of each month.

 

		(b)	Monthly unaudited consolidated and consolidating Financial Statements, as
soon as available, and in any event within 20 days after the end of each month.

 

		(c)	Monthly Compliance Certificates within 20 days after the end of each month
and at each Loan request, signed by the Chief Financial Officer of Borrower, certifying that as of the end of such month or as
at such date of Loan request Borrower was in full compliance with all of the terms and conditions of this Agreement and setting
forth calculations showing compliance with the financial covenants set forth in this Schedule 2 and such other information as PFG
shall reasonably request.

 

		(d)	Updates to the Representations, as and when required to render the information
therein true, correct, accurate and complete as of the date of such date: (i) in all respects as to matters addressed in Part A
of the Representations (except for the Collateral values set forth in Part A, Section 3(g), which must be true and correct in all
material respects) and Part B, Section 11, and (ii) in all material respects with respect to all other sections of the Representations.

 

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	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

		(e)	Annual Borrower Board-approved Budgets and Forecasts, as soon as available
and in any event within thirty (30) days of approval by Borrower’s Board.

 

		(f)	Annual consolidated and consolidating Financial Statements, as soon as available,
and in any event within 120 days following the end of Borrower's fiscal year, certified by, and with an opinion containing no material
qualifications of, independent certified public accountants acceptable to PFG. If Borrower is required to file and is current in
its filings with a securities regulatory agency and the same information is generally available to the public within said period
through such agency (such as, through EDGAR with respect to US public companies), this requirement will be deemed satisfied.

 

		(g)	Notification of any changes in the executive management (including directors)
of any Group Members, promptly upon such change(s).

 

 

 

	7.	Borrower Information:

 

			Borrower
represents and warrants that the information set forth in the Representations and Warranties of Borrower dated December 10, 2018,
previously submitted to PFG (the “Representations”) is true and correct as of the Effective Date.

 

 

 

	8.	ADDITIONAL PROVISIONS

 

		(a)	Senior Lender.

 

		(1)	Senior Lender. As used herein, “Senior Lender” means SPD
Silicon Valley Bank Co., Ltd. and its successors, and “Senior Loan Documents” means all present and future documents,
instruments and agreements entered into between Borrower and Senior Lender or by third parties relating to Borrower and Senior
Lender.

 

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	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

		(2)	Senior Debt Limit. In the absence of PFG’s consent, which shall
be a matter of its sole business discretion, Borrower shall not permit the total Indebtedness of Borrower (whether by way of direct
liability or obligations of another Group Member guaranteed by Borrower to Senior Lender), other than Non-Overdue Senior Monetary
Obligations, to exceed the aggregate of (i) $6,000,000, whether under that certain Facility Agreement in effect on the Effective
Date or otherwise (regardless of the amendment thereof or any other agreement for Indebtedness), plus (ii) an amount not to exceed
RMB25 million under a credit facility made available by the Senior Lender to a PRC Subsidiary (collectively, the “Senior
Debt Limit”), including, but not limited to, monies borrowed by Borrower, interest on loans due from Borrower (other than
Non-Overdue Senior Monetary Obligations as aforesaid), Lender Expenses for which Borrower is obligated, sums due from Borrower
in connection with issuance of commercial letters of credit, issuance of forward contracts for foreign exchange reserve, and any
other direct or indirect financial accommodation Senior Lender may provide to Borrower.

 

		(3)	Senior Loan Documents. Borrower represents and warrants that it has
provided PFG with true and complete copies of all existing Senior Loan Documents, and Borrower covenants that it will, in the future,
provide PFG with true and complete copies of any future Senior Loan Documents, including without limitation any amendments to any
existing Senior Loan Documents.

 

		(b)	Collateral Accounts. To the fullest extent available in the jurisdictions
in which Borrower holds its Collateral Accounts, concurrently, Borrower shall cause the banks and other institutions where its
Collateral Accounts are maintained to enter into Control Agreements with PFG, in form and substance legally sufficient and otherwise
satisfactory to PFG in its good faith business judgment and sufficient to perfect PFG’s security interest in said Collateral
Accounts, subject to the security interest of the Senior Lender, provided that no Control Agreement shall be required in respect
of any Collateral Account that does not at any time have a value in excess of $25,000. Any Control Agreements required to be in
effect under this Agreement shall, subject to applicable law, permit PFG upon a Default to exercise exclusive control over said
Collateral Accounts and proceeds thereof (subject to the rights of the Senior Lender). As a continuing obligation, all primary
operating accounts and excess Cash of Borrower shall be maintained with the Senior Lender and its affiliates.

 

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	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

		(c)	Subordination of Inside Debt. All present and future indebtedness
of Borrower to its officers, directors and shareholders (“Inside Debt”) shall, at all times, be subordinated to the
Lien of PFG in respect of and prior payment of Obligations. Borrower represents and warrants that there is no Inside Debt presently
outstanding, except as set forth in Exhibit A. Prior to incurring any Inside Debt in the future, Borrower shall cause the
person to whom such Inside Debt will be owed to execute and deliver to PFG a subordination agreement on PFG’s standard form.

 

		(d)	Adjustment for Extraordinary Events. In the event that Borrower engages
in a corporate transaction or other restructure that would bear in any non-trivial way on any of the financial covenant thresholds
set forth in Section 5 of this Schedule 2, such as an acquisition that accretes to EBITDA or Revenue or a change in fiscal year
or other periods, then PFG shall be entitled to reset the financial covenant thresholds to reasonably adjust for the effect of
such corporate or other restructure transactions.

 

		(e)	Use of Proceeds. The proceeds of the Schedule 2 Loan shall be used
for general working capital purposes.

 

 

 

	9.	CONDITIONS 

 

In
addition to any other conditions to the Schedule 2 Loan set out in this Agreement (the conditions to the Schedule 1 Loan being
acknowledged by PFG to have been satisfied or waived on or after the Effective Date), PFG will not make the Schedule 2 Loan until
PFG shall have received from Borrower, in form and substance reasonably satisfactory to PFG, such documents, and completion of
such other matters, as PFG may reasonably deem necessary or appropriate, including that there shall be no discovery of any facts
or circumstances which would, as determined by PFG in its good faith business judgment, materially negatively affect or be reasonably
expected to materially negatively affect the collectability of the Obligations, PFG’s security interest in Borrower’s
Collateral or the value thereof. Notwithstanding the foregoing, Borrower agrees to deliver to PFG each item required to be delivered
to PFG under this Agreement as a condition precedent to the Schedule 2 Loan. Borrower expressly agrees that the making of the Schedule
2 Loan made prior to the receipt by PFG of any such item shall not constitute a waiver by PFG of Borrower’s obligation to
deliver such item unless so waived in a separate writing, and the making of the Schedule 2 Loan in the absence of a required item
shall be in PFG’s sole discretion. Without limiting the foregoing, as conditions precedent to the Loan, Borrower shall provide:

 

(i)
duly executed original signatures of each Obligor to this Schedule 2;

 

    14

     

    

 

	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

(ii)
a Certificate for each Obligor signed by a Responsible Officer (in the case of Borrower) or a Person authorized to lawfully
act on behalf of Guarantor (in the case of each other Obligor) appending the written resolutions or minutes of a meeting of its
board of directors and, as required, of its shareholder(s), authorizing the execution, delivery and performance of this Schedule
2 and, in the case of Group Parent, the issuance of its ordinary shares upon conversion of the Note or any Warrant issued in connection
with a prepayment of the Note;

 

(iii)
Any Control Agreements as required by Section 8(b) of this Schedule 2, duly executed by Borrower and each relevant depositary
institution in favor of PFG;

 

(iv)
to the extent reasonably practicable, certified copies, dated as of a recent date, of Security Instrument searches, as PFG
shall request, accompanied by written evidence that the Liens indicated in any such Security Instruments either constitute Permitted
Liens or have been or, in connection with the Schedule 2 Loan, will be terminated or released;

 

(v)
the Representations as updated to the Modification Effective Date, duly executed by Borrower on behalf of Borrower and Guarantor;

 

(vi)
the insurance policies and/or endorsements required pursuant to Section 4.3;

 

(vii)
payment of the payable Fees specified in Section 3 of this Schedule 2 and Lender Expenses incurred in connection with the
Schedule 2 Loan;

 

(viii)
any third party consents required in order for Borrower to enter into and perform the Loan Agreement, as amended by the
Modification;

 

(ix)
any ratification of Subordination Agreement required by the Senior Lender;

 

(x)
subordination agreements in favor of PFG from holders of Indebtedness;

 

    15

     

    

 

	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

(xi)
execution and delivery of any BVI Security Documents in connection with the Modification;

 

(xii)
execution and delivery of the Cayman Security Documents in connection with the Modification;

 

(xiii)
execution and delivery of the Hong Kong Security Documents in connection with the Modification;

 

(xiv)
execution, delivery of all other Security Instruments contemplated under the BVI Security Documents, Cayman Security Documents
or Hong Kong Security Documents; and

 

(xv)
to the extent that the conditions to this Agreement have not been completed as of the Modification Effective Date, a post-closing
obligations letter in PFG’s customary form by which PFG waives or defers performance of such conditions as PFG is willing
to defer in its sole business discretion.

 

[Signature Page Follows]

 

    16

     

    

 

	Partners for Growth	Schedule 2 to Loan and Security Agreement

 

	Executed
    and Delivered as a Deed by	)	PARTNERS
    FOR GROWTH V, L.P.
	BORQS
    Hong Kong Limited	)	 	 
	 	 	 	 
	Acting
    by:	 	By	 
	 	 	 	 	 
	 	 	 	Name:
    	 
	Name:	 		Title:	Manager, Partners
    for Growth V, LLC,
	Title:	Sole
    Director	 		its
    General Partner
	 	 	 	 	 
	in
    the presence of :	 	 	 
	 	 	 		

	 	 	 	 	 
	Witness
    name:	 	 	 
	Witness
    occupation:	 	 	 
	 	 	 	 	 
	Executed
    and Delivered as a Deed by	)	 	 
	BORQS
    International Holding Corp	)	 	 
	 	 	 	 
	Acting
    by:	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Name:	 	 	 	 
	Title:	Director	 	 	 
	in
    the presence of :	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Witness
    name:	 	 	 
	Witness
    occupation:	 	 	 
	 	 	 	 	 
	Executed
    and delivered as a deed by	)	 	 
	Borqs
    Technologies, Inc.	)	 	 
	Acting
    by its duly authorised director	)	 	 

  

    17

     

    

 

Exhibit B – Compliance Certificate 

 

	
        Borrower: BORQS Hong Kong Limited

        Office B, 21/F, Legend Tower, 7 Shing Yip Street, Kwun Tong, Kowloon,
        Hong Kong

         
	   Lender:	 Partners for Growth V,
L.P. (“PFG”)
        1660 Tiburon Blvd., Suite D

        Tiburon,
CA 94920

         

 

The undersigned authorized officer of Borrower
hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and PFG dated
as of April 30, 2018, as amended by that certain Waiver and Modification No. 1 dated December 17, 2018 (as may be amended and restated,
the “Agreement”), (i) Borrower (on a consolidated basis) is in complete compliance for the period ending __________________
with all required covenants except as detailed below, (ii) all representations and warranties of Borrower stated in the Agreement,
including the Representation Letter, as defined in the Agreement, are true, complete, correct and accurate on this date except
those representations and warranties expressly referring to a specific date shall be true, complete, correct and accurate as of
such date, and except as noted below or on any disclosure letter attached to this Certificate as Exhibit A, (iii) each Borrower
and each of its Subsidiaries has timely filed all required tax returns and reports, and each Borrower has timely paid all foreign,
federal state and local taxes, assessments, deposits and contributions owed by Borrower(s) except as otherwise permitted pursuant
to the Loan Agreement, (iv) no Liens have been levied or claims made against any Borrower or any of its Subsidiaries relating to
unpaid employee payroll or benefits of which such Borrower has not previously provided written notification to PFG, and (v) there
are no Defaults or Events of Default. Attached herewith are the required documents supporting the above certification. The undersigned
further certifies that the financial statements, information and schedules referred to below have been prepared in accordance with
Generally Accepted Accounting Principles (GAAP) and are consistent from one period to the next except as explained in an accompanying
letter or footnotes.

 

Please indicate compliance status by circling
Yes/No under "Complies" column.

  

	Reporting
Covenants	 	Required 	 	Complies
	 	 	 	 	 
	Compliance Certificates	 	Monthly within 20 Days	 	Yes	No
	Unaudited Financial Statements	 	Monthly within 20 Days	 	Yes	No
	AR and AP Agings 	 	Monthly within 20 Days	 	Yes	No
	Annual Budgets/Projections	 	As soon as available / 30 days of Board Approval	 	Yes	No
	Audited Financial Statements	 	Annually, when available or 120 days from FYE	 	Yes	No
	Other Reports	 	When Requested by PFG	 	Yes	No
	Representations Letter Update	 	When Required1 or each Q-End	 	Yes	No
	Advance Notice of Board Meeting	 	LSA Section 4.5 – ongoing obligation	 	Yes	No
	Senior Lender documents	 	Upon Request	 	Yes	No
	Exec management changes	 	Promptly upon occurrence	 	Yes	No

 

	Financial Covenants2	Required	 Actual	Complies
	Quarterly Revenue	 	 	 	 
	Trailing 3 month EBITDA	 	 	 	 

 

 

	Sincerely,	 	 
	 	 	 
	SIGNATURE	 	 
	 	 	 
	NAME / TITLE	 	DATE

 

 

 

 

1 To be updated as and when necessary to keep the information
current, accurate and complete.

2 See Exhibit B, page 3

  

    18

     

    

  

Compliance Certificate – Exhibit A Disclosure
Schedule

 

    	 	19	 

     

    

 

Compliance Certificate – Exhibit B Current
Financial Covenants

 

Financial
Covenants (Section 5 of Schedule to Loan and Security Agreement)

 

 

5.
Financial Covenants 

	(Section
4.1):	 	The
Group shall meet or exceed (i) Revenues of $32,500,000 on a calendar quarterly basis and (ii) three (3) month trailing EBITDA,
tested monthly, of $2,000,000, with compliance determined as of the last day each calendar quarter (Revenues) and each calendar
month (EBITDA).
	 	 	 
	Definitions:	 	For purposes of the foregoing financial
covenants, the following term shall have the following meaning:

	 	 	 
	 	 	“EBITDA”
means (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation
expense and amortization expense, plus (d) income tax expense.
	 	 	 
	 	 	“Revenue(s)”
means revenues required to be classified as such under U.S. GAAP.
	 	 	 
	Future Periods:	 	For
future periods not covered by the above requirements, the thresholds shall be set by PFG in consultation with Borrower based on
its then-current Plan, but in no event (for each measurement period) less than the immediately prior measurement period. For instance,
the minimum EBITDA threshold for January 2019 would be as set, but in no event less than $32,500,000, and for March 2019 (for
Revenues) would be as set but in no event less than $2,000,000.

  

 

    20

     

    

 

Exhibit C – Convertible Note

 

 

 

 

 

    21Exhibit 10.3

 

	DECEMBER 17, 2018	US$1,000,000

 

THIS SENIOR SECURED CONVERTIBLE
PROMISSORY NOTE (“NOTE”) AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, THE LAWS OF HONG KONG, S.A.R, THE LAWS OF THE BRITISH VIRGIN ISLANDS OR ANY OTHER JURISDICTION’S
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, OR ASSIGNED EXCEPT (i) PURSUANT TO REGISTRATIONS OR EXEMPTIONS UNDER
SUCH LAWS, OR (ii) IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT SUCH REGISTRATIONS. THIS NOTE IS BEING ISSUED PURSUANT
TO THAT CERTAIN WAIVER AND MODIFICATION NO. 1 TO LOAN AND SECURITY AGREEMENT AMONG (INTER ALIA) MAKER, GROUP PARENT AND HOLDER
OF EVEN DATE WITH THIS NOTE (THE “LOAN AGREEMENT”), THE RIGHT OF HOLDER THEREIN TO EXCHANGE UP TO $1,000,000
OF ITS “SCHEDULE 2 LOAN” FOR ORDINARY SHARES OF GROUP PARENT (AN OBLIGOR OF MAKER’S OBLIGATIONS UNDER THE LOAN
AGREEMENT).

 

SENIOR
SECURED CONVERTIBLE PROMISSORY NOTE

 

BORQS HONG KONG LIMITED,
a company incorporated under the laws of Hong Kong with registration number 1151010 and its registered address its principal place
of business at Office B, 21/F, Legend Tower, 7 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong (“Maker”), for
value received, promises to pay to Partners for Growth V, L.P., a Delaware limited partnership (“Holder”) the
principal sum of One Million Dollars (the “Principal Amount”) on December 17, 2023 or immediately upon Holder
demand after the occurrence of an Event of Default under the Loan Agreement that is continuing or upon the Schedule 2 Loan Maturity
Date. Capitalized terms used but not defined herein are used with the meanings given to them in the Loan Agreement, as amended.
The terms of the Loan Agreement shall govern this Note and are incorporated by reference herein and Holder shall have the benefit
of its terms whether or not the Loan Agreement is then in effect. All Maker Obligations under the Loan Agreement, including those
under this Note, are unconditionally guaranteed by Borqs International Holding Corp, a Cayman Islands company with Cayman entity
no. 192127, the direct parent company of Maker. Group Parent is joined to this Note as set forth in Section 14.

 

1. Payments.

 

(a) The
interest rate payable hereunder shall be 12.00%, per annum, payable monthly on the basis set forth in Section 1 of the Schedule
to the Loan Agreement. Any accrued and unpaid interest on this Note will be due and payable on the day that all principal is due
and payable, whether on the Schedule 2 Loan Maturity Date, by acceleration or upon conversion as set forth in Section 3 hereof.

 

(b) Payment
shall be made in lawful tender of the United States in immediately available funds, and shall be credited first to accrued interest
then due and payable with the remainder applied to principal. This Note may be prepaid to the extent permitted under the Loan Agreement,
subject to the contemporaneous issuance of the “Prepayment Warrant” to Holder as specified herein.

 

2. Ranking.
This Note and all principal, interest and other amounts, if any, payable hereunder shall rank senior in right of payment to all
other Maker, Borrower and Group Parent Indebtedness, save for Indebtedness to the Senior Lender named in the Loan Agreement, for
so long as Indebtedness to the Senior Lender remains outstanding and unpaid.

 

     

     

    

 

3. Conversion.

 

(a) This
Note may be converted at any time upon election by Holder into Group Parent’s ordinary shares (the “Conversion Shares”).

 

(b) The
basis on which this Note may convert into Conversion Shares is dollar-for-dollar at a conversion price equal to $4.79 per share
(the “Conversion Price”) such that if this Note were converted in whole it would convert into 208,768 Conversion
Shares.

 

(c) Upon
its receipt of Holder’s notice of conversion, Group Parent shall cause (and Maker shall procure) at Group Parent’s
or Maker’s expense, to be issued in the name of and delivered to Holder, a certificate, certificates or other evidence of
the Conversion Shares to which Holder is entitled upon such conversion.

 

(d) Group
Parent shall reserve and keep available out of its authorized but unissued capital such number of Conversion Shares as shall from
time to time be sufficient to effect conversion of this Note into Conversion Shares. Group Parent will not, by amendment of its
Memorandum and Articles of Association, shareholders or other agreements between Group Parent and its investors or through any
reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, dividend
or other distribution of cash or property, or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by Maker and Group Parent, but will at all times in good faith assist
in the carrying out of all the provisions hereof, and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of Holder as set forth herein against impairment.

 

4.
Prepayment. This Note may be prepaid on the basis set forth in Schedule 2 to the Loan Agreement, but expressly
subject to the contemporaneous issuance by Group Parent of one or more Warrants in Holder’s favor to acquire that
number of Conversion Shares as would be acquirable at the Conversion Price by the dollar amount of the Note prepaid (such
warrant, the “Conversion Warrant”). The Conversion Warrant shall be in form and substance substantially
identical to the form of Conversion Warrant appended to this Note as “Attachment I”.

 

5. Conversion
Adjustments.

 

(a) Adjustments.
The basis on which this Note may convert shall be subject to adjustment from time to time in accordance with this Section 5.

 

(b) Subdivisions,
Combinations and Stock Dividends. If Group Parent shall at any time subdivide by split-up or otherwise, its securities of the
same type as the Conversion Shares into a greater number of Conversion Shares, or issue additional Group Parent securities as a
dividend, bonus issue or otherwise with respect to any Conversion Shares, the Conversion Price (and/or number of Conversion Shares)
in effect immediately prior to such subdivision or share dividend or bonus issue shall be proportionately reduced. Conversely,
in case the Conversion Shares of Group Parent shall be combined into a smaller number of Group Parent securities, the Conversion
Price (and/or number of Conversion Shares) in effect immediately prior to such combination shall be proportionately increased.

 

    2

     

    

 

(c) Reclassification,
Exchange, Substitutions, Etc. Upon any reclassification, exchange, substitution, or other event that results in a change of
the number and/or class of Conversion Shares, Holder shall be entitled to receive, upon conversion of this Note, the number and
kind of securities and property that Holder would have received in exchange for the securities that would have been issued on conversion
if this Note had been converted immediately before such reclassification, exchange, substitution, or other event. Group Parent
or its successor shall promptly issue to Holder a certificate setting forth the number and kind of such new securities or other
property issuable upon exchange or exercise of this Note as a result of such reclassification, exchange, substitution or other
event that results in a change of the number and/or class and series of securities issuable upon exchange or exercise of this Note.
The certificate shall provide for adjustments (as determined in good faith by Group Parent’s Board, as “Board”
is defined in the Loan Agreement) which shall be as nearly equivalent as may be practicable to the adjustments provided for in
this Section 5 including, without limitation, adjustments to the Conversion Price and number of Conversion Shares. The provisions
of this Section 5(c) shall similarly apply to successive reclassifications, exchanges, substitutions, or other similar events.

 

(d) Notices of Record
Date, Etc. In the event that Group Parent shall:

 

(1) declare or propose
to declare any dividend upon any equity, whether payable in cash, property, stock or other securities and whether or not a regular
cash dividend, or

 

(2) offer for sale
any additional securities of Group Parent, or

 

(3) effect or approve
any reclassification, exchange, substitution or recapitalization of the capital of Group Parent, including any subdivision or combination
of its outstanding units, or a consolidation or merger of Group Parent with, or sale of all or substantially all of its assets
to, another corporation, or to liquidate, dissolve or wind up (including an assignment for the benefit of creditors), or

 

(4) offer holders of
registration rights the opportunity to participate in any public offering or registrations of Group Parent’s securities,
then, in connection with such event, Group Parent shall give to Holder:

 

(i) at least ten (10)
days prior written notice of the date on which the books of Group Parent shall close or a record shall be taken for such a dividend
or offer in respect of the matters referred to in (1) or (2) above, or for determining rights to vote in respect of the matters
referred to in (3) above; and

 

(ii) in the case of
the matters referred to in (3) above, at least ten (10) days prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (1) shall also specify, in the case of any such dividend, the date on which Holders
of units shall be entitled thereto and the terms of such dividend, and such notice in accordance with clause (2) shall also specify
the date on which Holders of units shall be entitled to exchange their units for securities or other property deliverable upon
such reorganization, reclassification, exchange, substitution, consolidation, merger or sale, as the case may be, and the terms
of such exchange. Each such written notice shall be given by first class mail, postage prepaid, addressed to Holder of this Note
at the address of Holder; and

 

    3

     

    

 

(iii) in the case of
the matter referred to in (4) above, the same notice as is given or required to be given to Holders of such registration rights.

 

(e) Adjustment by
Board. If any event occurs that does not fall within the generic terms used in this Section 5 (such as merger, amalgamation
or reorganization) but is within the rationale of adjustment provisions generally in warrants as maintaining the economic value
of this Note and Conversion Shares relative to other holders of securities of the same class and series as the Conversion Shares,
then the Board shall make an adjustment in the application of such provisions so that the effect of such event on the rights and
economics of Holder are not disadvantaged relative to the rights and economics of other holders of securities of the same class
and series as the Conversion Shares, generally.

 

(f) Officers’
Statement as to Adjustments. Whenever the Conversion Price is required to be adjusted as provided in this Section 5, Group
Parent shall forthwith file at the office of its registered agent in the British Virgin Islands, with a copy to Holder notice parties
set forth in Section 11 hereof, a statement, signed by the Chief Executive Officer or Chief Financial Officer of Maker or Group
Parent, as the case may be, showing in reasonable detail the facts requiring such adjustment and the Conversion Price that will
be effective after such adjustment.

 

(g) Issue of Securities
other than Conversion Equity. In the event that at any time, as a result of any adjustment made pursuant to Section 5, Holder
thereafter shall become entitled to receive any securities of Group Parent, other than Conversion Shares, thereafter the number
of such other securities so receivable upon exchange of this Note shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with respect to the Conversion Shares contained in Section 5.

 

5. Events
of Default. An Event of Default shall be deemed to have occurred under this Note if an Event of Default has occurred under
the Loan Agreement (whether or not any particular Loan is outstanding at the time of such Event of Default) or any other Loan Document
(each, an “Event of Default”).

 

6. No
Offset Rights. Group Parent may not offset any amounts due or claimed to be due from Holder to Group Parent against amounts
due to Holder under this Note.

 

7. Costs
and Expenses. Group Parent promises to pay all reasonable costs and expenses incurred, including reasonable attorneys’ fees,
incurred by Holder in connection with the enforcement of Holder’s rights hereunder and collection of any amounts due under,
this Note. Group Parent hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or
dishonor and all other notices or demands relative to this instrument, except for notices to which Group Parent is expressly entitled
under this Note.

 

8. Successors
and Assigns. This Note shall be binding upon, and shall inure to the benefit of, Maker, Group Parent and Holder and their respective
successors and assigns; provided, however, that neither this Note nor any of the rights, interests or obligations
hereunder may be assigned, by operation of law or otherwise, in whole or in part, by Maker or Group Parent without the prior written
consent of Holder. Holder may, upon notice only, assign its right to convert this Note in whole or in part to an Affiliate, subject
only the assignee executing such documents and agreements as Holder would be required to execute and deliver if it had converted
this Note in whole or in part.

 

    4

     

    

 

9. Modifications
and Amendments; Reissuance of Note. This Note may only be modified, amended, or terminated (other than by payment in full)
by an agreement in writing signed by Maker, Group Parent and Holder. No waiver of any term, covenant or provision of this Note
shall be effective unless given in writing by Holder. Upon receipt of evidence reasonably satisfactory to Maker of the loss, theft,
destruction, or mutilation of this Note and of an unsecured agreement of indemnity reasonably satisfactory to Maker, and upon surrender
or cancellation of this Note, if mutilated, Maker and Group Parent will make and deliver a new Note of like tenor in lieu of such
lost, stolen, destroyed, or mutilated Note.

 

10. Remedies
Cumulative. Each and every right, power and remedy herein given to Holder, or otherwise existing, shall be cumulative and not
exclusive and be in addition to all other rights, powers and remedies now or hereafter granted (including, without limitation,
other rights of set-off under applicable law) or otherwise existing. Each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient
by Holder.

 

11. Notices.
All notices or other communications required or permitted hereunder shall be in writing and shall be deemed effectively given in
the manner set forth in the Loan Agreement, addressed as follows:

 

if to Holder, at

 

Partners for Growth V, L.P.

1660 Tiburon Blvd., Suite
D

Tiburon, CA 94920

Attention: Andrew Kahn

Email: notices@pfgrowth.com

 

with a copy (not constituting
notice) to

 

Greenspan Law Office

Attn: Benjamin Greenspan,
Esq.

620 Laguna Road

Mill Valley, CA 94941

Fax: (415) 738-5371

Email: ben@greenspan-law.com

 

or

 

if to Maker, Guarantor
or Group Parent, at

 

c/o Borqs Hong Kong Limited

Attn: Anthony K. Chan, Chief Financial
Officer

Office B, 21/F, Legend Tower

7 Shing Yip Street, Kwun Tong

Kowloon, Hong Kong S.A.R.

Email: akchan@borqs.com

 

    5

     

    

 

or at such other address and facsimile
number as Holder shall have furnished to Maker in accordance with this Section 11.

 

12. Waiver.
Holder shall not by any act (except by a written instrument in accordance with Section 10 hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or Event of Default or
in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of Holder,
any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
A waiver by Holder of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy
which Holder would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights or remedies provided by law.

 

13. Miscellaneous;
Interpretation. The terms of the Loan Agreement are incorporated by reference herein and shall provide the basis for Holder’s
rights and remedies so long as this Note (or any part hereof if prepaid in part) is outstanding. This Note is intended to supplement
the Loan Agreement terms in relation to the terms of this Note. In the event of any direct conflict between the terms of this Note
and the terms of the Loan Agreement, except as to the issue date of this Note and where expressly set forth herein to the contrary,
the terms of the Loan Agreement and such other Loan Document shall control (whether or not the Loan Agreement or such other Loan
Document is then in effect). Without limiting the foregoing, the terms governing this Note in relation to late payment and fees
payable in connection therewith are as set forth in the Loan Agreement (whether or not the Loan Agreement is then in effect). “Dollars”
and “$” mean the lawful currency of the United States.

 

14. Execution
by Group Parent. Notwithstanding anything to the contrary set forth in the Loan Agreement and this Note, Group Parent is joined
to this Note (i) in its capacity as an Obligor under the Loan Agreement, and (ii) to document Group Parent’s obligation to
issue its ordinary shares upon conversion of this Note.

 

[Signature Page Follows]

 

    6

     

    

 

IN WITNESS WHEREOF, Maker,
Guarantor and Group Parent have caused this Note to be executed and delivered, signed on the date first set forth above.

 

	Executed
    and Delivered as a Deed by	)	PARTNERS
FOR GROWTH V, L.P. (COMPANY SEAL)

	BORQS
    Hong Kong Limited	)	 	 
	 	 	 	 
	Acting
    by:	 	By	 
	 	 	 	 
	 	/s/ Pat Sek Yuen Chan	 	 	 
	Name:	Pat Sek Yuen Chan	 	Name:
    	 
	Title:	Sole
    Director 	 	Title:	Manager,
    Partners for Growth V, LLC,
			 		its General Partner
	 	 	 	 	 
	in
    the presence of :	 	 	 
	 	 	 		

	/s/ Anthony Chan

	 	 	 
	Witness
    name: Anthony Chan	 	 	 
	Witness
    occupation: CFO	 	 	 
	 	 	 	 	 
	Executed
    and Delivered as a Deed by	)	 	 
	BORQS
    International Holding Corp	)	 	 
	 	 	 	 
	Acting
    by:	 	 	 
	 	 	 	 
	 
	/s/ Pat Sek Yuen Chan
	 	 	 
	Name:	Pat Sek Yuen Chan	 	 	 
	Title:	Director	 	 	 
	in
    the presence of:	 	 	 
	 	 	 	 	 
	/s/ Anthony Chan

	 	 	 
	Witness
    name: Anthony Chan	 	 	 
	Witness
    occupation: CFO	 	 	 
	 	 	 	 	 
	Executed
    and delivered as a deed by	)	 	 
	Borqs
    Technologies, Inc.	)	 	 
	Acting
    by its duly authorised director	)	 
	/s/ Pat Sek Yuen Chan

	 	 	 	Name:
    Pat Sek Yuen Chan

 

    7

     

    

 

Attachment I – Conversion Warrant

 

 

 

 

 

 

 

    8

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