Dated as of January 29, 2009
Dated as
of January 29, 2009
This Loan
Agreement (“Agreement”) is made and entered into to be effective upon execution
by and among Guangzhou AWA Wine Co. Ltd., a Chinese corporation with an address
at Suite 510 Tower C 00 Xxxxxxxx Xxxxx Xxxx Xxxxx Xxxxxxxx Xxxxxxxxx Xxxx,
Xxxxxxxxx Xxxxxxxx, Xxxxx (the “Borrower”), Mr. Nei Weifeng, a Chinese national
(ID number 44010319631022061X) with position as the
legal representative of Guangzhou AWA Wine Co. Ltd., (the
“Guarantor”), and Regal Life Concepts, Inc. (the “Lender”), as
follows:
WHEREAS, the Borrower and the
Lender agree to enter into a Capital Increase and Equity Subscription Agreement
and Equity Joint Venture Contract (hereinafter collectively referred as
“Definitive Agreements”), the Lender shall invest Five Hundred Thousand US
Dollars (US$500,000), being first installment payment, in return for a 26%
equity interest of the Borrower on a fully diluted basis. In
consideration of the urgent need of capital by the Borrower, the Lender shall
provide a loan of USD 200,000 to the Borrower within 7 days upon execution of
the Definitive Agreements and this Agreement.
WHEREAS, the Borrower agrees
that upon capital verification be required for the business registration of the
Joint Venture, the Lender shall provide capital verification document for the
said Loan as part of the first installment investment payment pursuant to the appropriately executed Joint Venture Contract and the Capital Increase
and Equity Subscription
Agreement.
WHEREAS, the Lender has agreed
to lend to Borrower the Loan (as defined hereinafter) pursuant to the terms of
this Agreement (as defined hereinafter).
NOW THEREFORE, for good and
valuable consideration, the parties hereto, intending to be legally bound, agree
as follows
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1.
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Loan
Agreement. Borrower hereby agrees to borrow from the
Lender, and the Lender hereby agrees to lend to Borrower, USD200,000,
pursuant to the terms and conditions set forth hereunder, in an aggregate
amount of up to USD200,000 (the
“Loan”).
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a.
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Funding. The
Loan will be funded within 7 days upon the signing and execution of the
Definitive Agreements and this Agreement between the Borrower and the
Lender. The Lender shall wire the Loan amount in
immediately-available funds to an account in Hong Kong designated in
writing by the Borrower.
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b.
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Use
of Proceeds. The funding shall be remitted to a capital
verification account of the JV upon obtaining proper government approval
for establishment of the JV and be used as capital of the JV to (i) open a
second AWA club location in Guangzhou (TianHe); and (ii) open each of the
Nanjing and Shanghai Club
locations.
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x.
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Xxxx. The
Guarantor agrees to pledge all the equity interest he owns in the Company
i.e. 40% of the Borrower, as lien against this
Loan.
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2.
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Terms.
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a.
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Maturity. The
Loan shall be a demand loan and shall be mature on demand or the earlier
of occurrence of the following events (i) Borrower’s failure to obtain the
necessary government approval for the capital increase and
equity subscription and the establishment of the Joint Venture before
August 15, 2009 , (ii) the occurrence of an Event of Default (as defined
in below section 6). The Borrower must repay the entire amount
of the loan within three months after the Lender makes a written demand
upon Borrower for payment.
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b.
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Guarantee. By
signing this Agreement, the Guarantor, who is a principal equity interest
holder of the Borrower, hereby guarantees the prompt payment of the
Loan The Guarantor agrees that it shall not be necessary
for the Lender to proceed in any manner against Borrower for the payment
of the Loan as a condition precedent to enforcing this
guarantee.
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3.
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Representations.
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a.
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The
Borrower represents and warrants to the Lender as
follows:
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(i) Good
Standing. Borrower is a corporation duly organized, validly
existing, and in good standing under the laws of the People’s Republic of China,
duly authorized to conduct business and in good standing under the laws of each
jurisdiction where such qualification is material to the conduct of
business.
(ii) Corporate
Authority. The Borrower has full power and authority to enter
into this Agreement, to borrow the funds and to incur the obligations provided
for herein, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of any public authority is
required as a condition to the validity of this Agreement.
(iii) Binding
Agreement. This Agreement when issued and delivered pursuant
hereto for value received, shall constitute the legal, valid, and binding
obligation of the Borrower in accordance with its terms, subject to bankruptcy
and insolvency laws and any other laws of general application affecting the
rights and remedies of creditors.
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(b)
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The
Guarantor represents and warrants to the Lender as
follows:
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(i)
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Requisite
Authority. The Guarantor has full power and authority to
enter into this Agreement, to guarantee the Loan, and to incur the
obligations provided for herein. No other consent or approval
is required as a condition to the validity of this
Agreement.
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(ii)
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Binding
Agreement. This Agreement, when issued and delivered
pursuant hereto, shall constitute the legal, valid, and binding obligation
of the Guarantor in accordance with its terms, subject to bankruptcy and
insolvency laws and any other laws of general application affecting the
rights and remedies of creditors.
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4.
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Affirmative
Covenants. Until the payment in full of the Loan and
performance of all obligations of the Borrower and Guarantor hereunder,
unless otherwise indicated, each of the Borrower and the Guarantor
shall:
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a.
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Taxes. Pay
and discharge all taxes, assessments, and governmental charges upon it,
its incomes, and its properties prior to the date on which penalties are
attached thereto, unless and to the extent only that such taxes shall be
contested in good faith and by appropriate proceedings by the Borrower or
Guarantor, as applicable.
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b.
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Insurance. Maintain
insurance with insurance companies reasonably acceptable to the Lender on
such properties, in such amounts and against such risks as is customarily
maintained by similar businesses operating within the same
industry.
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c.
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Notice of
Claims. Notify Lender of any claims made or legal
processes instituted against the properties or other assets of Borrower or
Guarantor, as applicable, within fifteen (15) days of Borrower or
Guarantor, as applicable, becoming aware of the existence of such claim or
legal process. Agree to diligently work to resolve, in an
efficient and cost effective manner, such
claims.
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5.
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Negative
Covenants. Until payment in full of the Loan and the
performance of all other obligations of the Borrower and Guarantor
hereunder, neither the Borrower nor the Gurantor shall, from the date
hereof, except with the prior written consent by the
Lender:
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a.
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Make
loans or advances to a person, firm or corporation, except loans or
advances made in the ordinary course of
business.
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b.
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Other
than pursuant to the terms of this Agreement, issue, incur or assume any
indebtedness, nor become liable, whether as an endorser, guarantor,
surety, or otherwise for any debt or obligation of any other person, firm,
or corporation.
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6.
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Events of
Default. The amounts due hereunder shall become
immediately due and payable in full upon the occurrence of any one or more
of the following events of default (the “Events of
Default”).
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a.
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Default
in the payment of the principal of the Loan when due and payable within three months after Lender sends the notice
of repayment, which default is not cured within 10 days of
when such payment was due; or
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b.
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Failure
of a representation or warranty of Borrower or Guarantor to be true, which
failure, if curable, is not cured within 30 days of when such
failure occurred; or
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c.
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Failure
of Borrower or Guarantor to observe or perform any material term,
covenant, or agreement contained in this Agreement that is not cured
within 30 days of when such failure occurred, or the dissolution,
termination of existence, or business failure of the Borrower or
Guarantor; or
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d.
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The
institution by the Borrower or Guarantor of proceedings to be adjudicated
as bankrupt or insolvent, or the consent by it to institution of
bankruptcy or insolvency proceedings against it or the filing by it of a
petition or answer or consent seeking reorganization or release under
applicable Chinese Bankruptcy laws, or any other related applicable law,
or the consent by it to the filing of any such petition or the appointment
of a receiver, liquidator, assignee, trustee or other similar official of
the Borrower or Guarantor, or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
taking of corporate action by the Borrower or Guarantor in furtherance of
any such action; or
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e.
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If,
within sixty (60) days after the commencement of an action against the
Borrower or Guarantor (and service of process in connection therewith on
the Borrower or Guarantor) seeking any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such action shall not have
been resolved in favor of the Borrower or Guarantor, as applicable, or all
orders or proceedings thereunder affecting the operations or the business
of the Borrower or Guarantor, as applicable, stayed, or if the stay of any
such order or proceeding shall thereafter be set aside, or if, within
sixty (60) days after the appointment without the consent or acquiescence
of the Borrower or Guarantor of any trustee, receiver or liquidator of the
Borrower or Guarantor, as applicable, or of all or any substantial part of
the properties of the Borrower or Guarantor, as applicable, such
appointment shall not have been vacated;
or
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f.
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The
cessation of Borrower’s business for more than thirty (30)
days.
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7.
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Assignment. No
portion of the Loan shall be assignable to a third party without the
express written consent of the
Borrower.
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8.
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Miscellaneous
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a.
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This
Agreement constitutes the entire agreement between the Borrower, the
Guarantor and the Lender. No delay or failure on the part of
any Lender in the exercise of any power or right shall operate as a waiver
thereof nor shall any single or partial exercise of the same preclude any
other or further exercise thereof or the exercise of any other power or
right, and the rights and remedies of Lender are cumulative to and not
exclusive of remedies which they would otherwise have. No
waiver, consent or modification, or amendment of this Agreement shall be
effective as against the Lender unless the same is in writing and signed
by the Lender. No such amendment, modification, wavier or
consent shall extend to or affect any obligation or right except to the
extent expressly provided for therein. All computations and
determinations of the assets and liabilities of Borrower for the purpose
of this Agreement shall be made in accordance with generally accepted
accounting principles of China consistently applied, except as may be
otherwise specifically provided herein. Any notice, request or
other communication required or permitted hereunder shall be in writing
and shall be deemed to have been duly given on the date of service if
personally served on the party to whom such notice is to be given, on the
date of transmittal of service via telecopy to the party to whom notice is
to be given (with a confirming copy delivered within 24 hours thereafter),
or on the third day after mailing if mailed to the party to whom notice is
to be given, or via a internationally recognized overnight courier
providing a receipt for delivery and properly addressed to the parties at
the respective addresses of the parties as set forth herein
. Any party hereto may by notice so given change its address
for future notice hereunder.
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b.
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This
Agreement shall be binding upon Borrower and Guarantor and their
respective successors and assigns, and shall inure to the benefit of the
Lender and the benefit of its respective successors and
assigns.
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c.
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Borrower
hereby expressly waives any presentment, demand, protest or other notice
of any kind.
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9.
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Governing
Law. The laws of the State of New York of the United
States of.America shall govern this
Agreement.
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10.
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Survivability. Should
any portion of this Agreement be voided by a court of competent
jurisdiction, all remaining clauses in the Agreement shall remain in full
force and effect.
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[signature
page follows]
Executed
on the day and year below written. This Agreement may be executed in
any number of counterparts, each constituting an original, but altogether one
agreement. A facsimile or other copy of this Agreement shall be
considered as having the same effect and be equivalent to an original signed
document.
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Guangzhou
AWA Wine Co. Ltd.
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By:
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/s/ Nei Weifeng
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Name:
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Title:
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Date:
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January 29, 2009
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GUARANTOR:
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MR.
NEI WEIFENG
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/s/ Nei Weifeng
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Date:
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January 29, 2009
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LENDER:
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By:
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/s/ Xxxx Xxxxxxxx
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| Name: |
Xxxx
Xxxxxxxx
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| Title: |
President
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Date:
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January 29, 2009
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