FIRST AMENDMENT TO LOAN AGREEMENT
FIRST
AMENDMENT TO
This
FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment"),
effective as of June 30, 2008, is made by and between
Well Chance Investments Limited, a company incorporated in the British Virgin
Islands (the "Company"),
and
RMK
Emerging Growth Opportunity Fund LP, a Delaware limited partnership (the
"Lender").
WHEREAS,
on January 31, 2008, the Company entered into a Loan Agreement (the
"Loan
Agreement")
with
the Lender pursuant to which the Lender were to extend a loan to the Company
in
the aggregate amount of up to $444,733.15, consisting of an Initial Loan of
$244,733.15, and an Additional Loan of up to $200,000; and
WHEREAS,
subsequent to executing the Loan Agreement, the parties determined that the
aggregate amount for the RMK Loan should be 375,733.15, consisting of an Initial
Loan of $175,733.15, and an Additional Loan of up to $200,000, which is
consistent with the outstanding balance as of March 31, 2008.
NOW,
THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined
Terms.
Capitalized terms used but not defined herein have the meanings assigned to
them
in the Loan Agreement.
2. Amendments
to Sections 2.1 and 2.2.
Sections 2.1 and 2.2 of the Loan Agreement are hereby deleted in their entirety
and replaced by the following:
"2.1
Loan.
According to the terms and subject to the conditions of this Agreement, RMK
shall make a single-installment loan to the Company on the Initial Closing
Date
in the amount of at least $175,733.15 (the "Initial
Loan").
RMK
shall advance an additional Loan, in accordance with the terms set forth in
Section 2.2, in the amount of up to $200,000 (the "Additional
Loan")
(the
Initial Loan and the Additional Loan, if any, shall be referred to collectively
as the "Loan").
The
Initial Loan and the Additional Loan shall be $375,733.15. The Initial Loan
shall be used solely for payment of the Company's Transaction Fees and shall
be
evidenced by promissory note(s) in the form attached hereto as Exhibit
A
("Note"),
duly
executed on behalf of the Company and dated as of the Initial Loan Closing
Date.
The Initial Loan Closing Date shall be no later than the closing of the share
exchange transaction between Noble Quests, a Nevada corporation and the
shareholders of the Company ("Merger
Closing Date")."
"2.2
Additional
Loan.
Provided there is no Event of Default under this Agreement, RMK shall make
an
Additional Loan to the Company of up to $200,000. RMK shall be obligated to
make
the Additional Loan so long as there is no Event of Default within 20 calendar
days of the Initial Loan Closing Date. The Additional Loan shall be evidenced
by
a Note, duly executed on behalf of the Company and dated as of the Additional
Loan Closing Date."
3. Amendment
to Section 2.3(b).
Section
2.3(b), including footnote 1, of the Loan Agreement is hereby deleted in its
entirety and replaced by the following:
"(b)
Initial
Payment Period Repayments.
The
total amount due and payable to RMK (regardless of whether or not there is
a
closing of an Equity Financing) if such repayment is delivered to RMK on or
before the 365th calendar day after the Initial Loan Closing Date shall be
the
sum of the Loan(s) (the "Loan
Principal")
plus a
loan fee of 68.64045% of the amount of the Loan Principal (the "Initial
Loan Premium").
For
example, if the Loan Principal were $375,733.15, then the Loan Principal and
Initial Loan Premium would be a total of $633,638. Any funds received by RMK
as
a partial repayment of the Loan ("Partial Repayment") on or before the 365th
calendar day after the Initial Loan Closing Date shall be applied toward
repayment as follows:
(i) 59.3%
of
the Partial Repayment shall be applied toward payment of the remaining
outstanding Loan Principal owed by the Company as of the date of such Partial
Repayment; and
(ii) 40.7%
of
the Partial Repayment shall be applied toward payment of the remaining
outstanding Initial Loan Premium as of the date of such Partial
Repayment.1"
"1
For
example, if the Company's first repayment is a Partial Repayment of $100,000
during the Initial Payment Period, $59,300 of such Partial Repayment will be
applied toward payment of the outstanding Loan Principal (thus reducing the
amount outstanding owed for Loan Principal from $375,733.15 to $316,433.15),
and
$40,700 of such Partial Repayment will be applied toward payment of the
outstanding Initial Loan Premium (thus reducing the amount of outstanding
Initial Loan Premium from $257,904.93 to $217,204.93)."
4. Amendment
to Footnote 3.
Footnote 3 of the Loan Agreement is hereby deleted in its entirety and replaced
by the following:
"3
For
example and continuing with the hypothetical described in footnote 1 above,
assume the Company makes another $100,000 Partial Repayment to RMK during the
Initial 45-day Period. The portion of the $100,000 Partial Repayment to be
allocated toward payment of the remaining outstanding Loan Principal would
equal
$58,602.40 (thus further reducing the remaining outstanding Loan Principal
from
$316,433.15 to $257,830.75). The portion of the $100,000 Partial Repayment
to be
allocated toward payment of the remaining outstanding Initial Loan Premium
would
equal $40,225.55 (thus further reducing the remaining outstanding Initial Loan
Premium from $257,904.93 to $217,679.38). The portion of the $100,000 Partial
Repayment that would be applied toward payment of the total outstanding
Additional Loan Fee due would equal $1172.05."
5. Amendment
to Section 7.1.
Section
7.1 of the Loan Agreement is hereby deleted in its entirety and replaced by
the
following:
"7.1
Issuance
of Warrant.
In the
event that there is a closing of the Merger, on the Merger Closing Date, the
Company shall cause Noble Quests, by including a condition to the closing of
the
Merger in the merger agreement, to issue to RMK a Common Stock Purchase Warrant
(the "Warrant")
substantially in the form attached hereto as Exhibit
D.
The
Warrant shall be immediately exercisable upon issuance and shall be exercisable
until the third anniversary of the issuance date of the Warrant. The Warrant
exercise price shall equal $2.50 per share, subject to adjustments as set forth
in Section 2 of the Warrant (the "Initial
Exercise Price").
The
total number of shares underlying the Warrant that RMK will receive shall equal
150,294 shares of Noble Quests' common stock."
6. Effect
of Amendment.
Except
as expressly amended hereby, the Security Agreement shall continue in full
force
and effect and its terms are incorporated herein by this reference and shall
constitute a part of this Amendment. Any references to the "Security Agreement"
or to the words hereof, hereunder or words of similar effect in the Security
Agreement shall mean the Security Agreement as amended hereby. In the event
of
any conflict between the Security Agreement and this Amendment, the terms and
conditions of this Amendment shall control.
7.
Counterparts;
Facsimile Signatures.
This
Amendment may be executed in separate counterparts each of which will be an
original and all of which taken together will constitute one and the same
agreement. This Amendment may be executed using facsimiles of signatures, and
a
facsimile of a signature shall be deemed to be the same, and equally
enforceable, as an original of such signature.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
executed and delivered by its duly authorized officer as of August 23,
2008.
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THE
COMPANY:
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| WELL CHANCE INVESTMENTS LIMITED | ||
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| By: | /s/ Xxxxxxx Dash | |
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Xxxxxxx Dash, |
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| Chief Executive Officer | ||
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THE
LENDER:
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| RMK EMERGING GROWTH OPPORTUNITY FUND LP | ||
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| By: | /s/ Xxxx X. Xxxxxxx | |
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Xxxx
X. Xxxxxxx, as authorized
signatory
for and on behalf of
ARC
EMERGING GROWTH PARTNERS, LLC, General Partner of RMK Emerging Growth
Opportunity Fund LP
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