Exhibit10.3 UNOFFICIAL ENGLISH TRANSLATION Dated January 29,2009 CooperativeJoint Venture Contract of GuangzhouAWA Wine Co. Ltd.

2.1

The Parties

3.1

3.2

3.3

4.1

4.2

4.3

5.1

5.2

5.3

5.4

7.1

 

7.1.1

 

7.1.2

Regal Life may transfer Acquired Equity Interests to any affiliates it controls and Regal Life shall unconditionally warrant that Regal Life’s obligations under this Contract will be performed by the transferee.

 

7.1.3

Regal Life may transfer Acquired Equity Interests to any third party that has acquired all or substantially all of the business from Regal Life with respect to the import of wine and export of Chinese drink and low-alcoholic liquor products in the territory of China.

7.2

 

7.2.1

Other than the transfer stipulated in Section 7.1.2 and Section 7.1.3, if any Chinese Shareholder or Regal Life (the “Transferring Party”) proposes to transfer any portion or all of its equity interests in the Company (the “Transferred Equity Interests”) to any individual or entity, the Chinese Equity Interest Holders (in the case of a transfer by Regal Life) or Regal Life (in the case of a transfer by any Chinese Shareholder) (in each case, the “Non-transferring Party”) shall have the right of first refusal (the “Right of First Refusal”) to purchase part or all of the equity interests proposed to be transferred under the same terms and conditions. The Transferring Party shall send a written notice (the “Transfer Notice”) to the Company and other parties, informing the number of equity interests proposed to be transferred, the proposed transfer price, the proposed payment conditions and the name and address of the proposed transferee and disclosing the true transaction terms. And if the proposed transferee is a corporation, the Transfer Notice shall also disclose, among others, the shareholder(s) (or investor(s) or owner(s)) and the ultimate shareholder (controller) of such corporation. Any proposed transfer of equity interests under the Right of First Refusal must be settled in the form of cash instead of any other forms.  To avoid misunderstanding, only Regal Life (other than any other Chinese Equity Interest Holders) shall have the Right of First Refusal in the case of a share transfer by a Chinese Shareholder.

 

7.2.2

A Non-transferring Party shall notify the Transferring Party and the Company in writing to elect to execute its Right of First Refusal (the “Election Notice”) for purchasing any or all of the Transferred Equity Interests stated in the Transfer Notice at the same price and by the same payment term as indicated thereof (the “Election Notice”), within thirty (30) days after its receipt of the Transfer Notice (the “Refusal Period”).  If the Non-transferring Party fails to give any Election Notice to the Transferring Party within the Refusal Period, such Non-transferring Party shall be deemed to have waived its Right of First Refusal. In the event that Regal Life proposes a transfer of its equity interests, the Chinese Equity Interest Holders shall decide on how to allocate the equity interests proposed to be transferred among themselves within the Refusal Period, and Regal Life shall not be obligated to transfer any equity interests until all the Chinese Equity Interest Holders proposing to exercise their Rights of First Refusal deliver a joint notice to Regal Life regarding their decision (“Joint Election Notice”). In the event that no Joint Election Notice is delivered by the Non-transferring Party to Regal Life within the Refusal Period, relevant Non-transferring Party shall be deemed to have waived its Right of First Refusal.

 

7.2.3

Upon delivery of an Election Notice or, when applicable, a Joint Election Notice, the parties shall prepare and compile appropriate share transfer documents and submit all required applications and notices to competent government authorities.  The Transferring Party shall make relevant representations and warranties to purchaser(s) as follows: (a) the Transferring Party has a clean title to the Transferred Equity Interest, free from all security interest, and (b) the Transferring Party has valid authority to engage in such transaction in relation to the Transferred Equity Interests.  The purchase and transfer pursuant to a Right of First Refusal shall take place within ten (10) business days after receipt of all necessary governmental approvals for such transfer.

 

7.2.4

In the event that all Non-transferring Parties give their consent for the proposed transfer or no Party executes its Right of First Refusal upon expiry of Refusal Period, the Transferring Party shall within ninety (90) days thereafter sign an unconditional and binding agreement on the proposed transfer of the Transferred Equity Interests at a price not lower and under the terms and conditions not less favourable than those specified in the Transfer Notice (subject to availability of necessary governmental approval).  In the event that the Transferring Party has not entered into any unconditional and binding agreement on the proposed transfer of the Transferred Equity Interests within such ninety (90) days, the Transferring Party shall not thereafter transfer any equity interests proposed to be transferred without re-performing the obligations to be performed by the Transferring Party under Section 7.2 hereof.

7.3

 

7.3.1

In the event that the Company wishes to sell its newly increased equity interests to any person or entity for any reasons, the Company shall first offer the Chinese Equity Interest Holders and Regal Life the opportunity to purchase such newly increased equity interests.  The Company shall notify the Chinese Equity Interest Holders and Regal Life in writing of the Company’s plan to increase its registered capital, including the percentage of the newly increased equity interests and the proposed sale price per share.  The Chinese Equity Interest Holders and Regal Life shall notify the Company whether or not they choose to purchase such newly increased equity interests within twenty (20) business days after being notified.

 

7.3.2

If the Chinese Equity Interest Holders and Regal Life choose to purchase the newly increased equity interests, the Company shall prepare share purchase agreement(s) based on the percentage of the newly increased equity interests as agreed between the Chinese Equity Interest Holders and Regal Life and shall submit all required applications and notices to competent government authorities.  The sale and purchase of the newly increased equity interests shall take place within ten (10) business days after the receipt of all necessary governmental approvals for such transaction.

 

7.3.3

In the event that any of the Chinese Equity Interest Holders and Regal Life decides neither to purchase the newly increased equity interests nor to give a written reply of its decision to purchase within twenty (20) business days, the party deciding to purchase the newly increased equity interests shall have the pre-emptive right to purchase the non-subscribed portion of the newly increased equity interests by notifying the Company thereof within twenty (20) business days thereafter, and such party’s percentage of shareholding in the Company shall be adjusted based on the then valuation of Company determined by the Chinese Equity Interest Holders and Regal Life.

 

7.3.4

Within forty (40) business days after the Company delivers the notice as specified in Section 7.4.1, if the number of the newly increased equity interests that the Chinese Equity Interest Holders and Regal Life desire to subscribe to is fewer than that the Company desires to sell, the Company may issue and sell the non-subscribed newly increased equity interests at the price and upon terms and conditions not less favourable than offered to the Chinese Equity Interest Holders and Regal Life, provided that the Company shall enter into an unconditional and binding agreement within ninety (90) days for the transfer of the newly increased equity interests at the price and upon terms and conditions not less favourable than those indicated in the notice under the above Section 7.4.1 (subject to availability of necessary governmental approvals).  In the event that the Company has not entered into such unconditional and binding agreement within such ninety (90)-day period, the Company shall not thereafter sell the non-subscribed newly increased equity interests without re-performing the obligations to be performed by the Company under Section 7.4 hereof.

 

7.3.5

When the Company issues any new equity interests, the Chinese Equity Interest Holders and Regal Life shall provide necessary and prompt assistance and cooperation as requested by the Company’s board of directors, including without limitation provision of relevant legal documents and execution of board resolutions.

7.4

 

7.4.1

In the event that the Company or any Chinese Shareholder commits a material breach of this Contract, the Subscription  Agreement or the Loan Agreement among Regal Life, the Company and the Chinese Equity Interest Holders, Regal Life shall have the right to require the Company to repurchase the Acquired Equity Interests from Regal Life.  Such repurchase shall occur within thirty (30) days after Regal Life notifies the Company in writing of such material breach.

 

7.4.2

Any repurchase under this Section 7.4 shall be made at a price equal to the original purchase price (namely USD 500,000) for the Acquired Equity Interests, plus a premium of five percent (5%) of the original purchase price per annum since the date of acquisition by Regal Life of the Acquired Equity Interests (prorated for any partial year on the basis of a 365-day year). The Company and the Chinese Equity Interest Holders shall take all necessary actions to obtain all then required governmental approvals.

9.1

9.2

9.3

 

9.3.1

The board of directors shall be the highest authority of the Company. The board of directors shall decide on all significant matters of the Company and determine all the policies and business guidelines of the Company.

 

9.3.2

Resolutions on the following matters shall be unanimously approved by all the directors attending the board meetings:

 

(a)

amendments of the articles of association of the Company;

 

(b)

termination and dissolution of the Company;

 

(c)

increase and reduction of the Company’s registered capital;

 

(d)

merger and division of the Company.

 

9.3.3

Resolutions on other matters than those in Section 9.3.2 shall be adopted by more than half of the affirmative votes of the directors attending the board meetings.

 

9.3.4

Notwithstanding the provisions of Section 9.3.3, resolutions on the following matters of the Company and its subsidiaries cannot be adopted unless approved by the director(s) appointed by Regal Life:

 

(a)

issuance or distribution of any dividend to the Company’s Equity Interest Holders, whether in the form of cash or other assets, in excess of fifty percent (50%) of the net profits of the Company during the current year;

 

(b)

incurring any borrowing or debt which makes the debt-to-asset ratio of the Company exceeding 80%;

 

(c)

creation of any security interest over the assets of the Company (except for the security interest for the borrowing in compliance with Section 9.3.4(b));

 

(d)

any change in the Company’s registered capital;

 

(e)

issuance of any new stock option or creation of any stock option plan; and

 

(f)

any increase in the total compensation of any responsible person or senior manager (including general manager, deputy general managers, directors and other officers having similar powers and their higher-ups) of the Company or any of its subsidiaries by 50% more than that of the previous fiscal year in any single year.

9.4

 

9.4.1

The board of directors shall convene at least a meeting each quarter.  The first board meeting shall be convened within one month after the issuance of the Company’s business license as foreign-invested enterprise. The board meetings shall be called and presided over by the chairman. As requested by more than one thirds (1/3) of the directors, the chairman shall call an interim meeting. A notice shall be given to all the directors ten (10) days prior to the convening of any board meeting. Upon unanimous approval of all the directors, the convening of any board meeting may not be subject to the time restriction mentioned above.

 

9.4.2

Any board meeting shall be convened at the office of the Company or other places unanimously approved by all the directors or via phone. The Company will make appropriate arrangement so that the directors can attend all the teleconferences.

 

9.4.3

Quorum shall be present at any board meeting. More than two thirds (2/3) of all the directors constitutes the quorum of the board meeting. If any director is unable to attend the board meeting in person or via phone for some reason, he/she may issue an authorization letter to entrust other director to attend the meeting and exercise the powers of the directors as his/her proxy. If any director fails to attend the board meeting in person, via phone or by proxy, without reasonable excuse, he/she will be deemed to have waived his/her rights to attend and vote at such meeting without further indication of such waiver in any document or declaration, and such director shall not be counted into the quorum of the meeting.

10.1

10.2

10.2.1

To implement each resolution adopted at the meetings of the board of directors and all the rules and regulations of the Company, and organize the business activities of the Company in compliance with the articles of association of the Company;

10.2.2

To organize the preparation of development plans, annual business plans, business objectives and profit objectives of the Company and submit them to the board of directors for approval, and be responsible for implementation and fulfillment of them if approved by the board of directors;

10.2.3

To lead the establishment of operational and management rules and regulations, financial system, labor and salary system, employee attendance checking system and employee award and punishment system of the Company and submit them to the board of directors for approval, and implement as such  if approved by the board of directors;

10.2.4

To propose and submit plans for funds raising, annual budget, final account and infrastructure construction of the Company and submit as such to the board of directors for approval, and oversee and control financial balance of the Company;

10.2.5

To organize the preparation and implementation of the annual, quarterly and monthly production, development and operation schedules according to the business objectives and annual business plans approved by the board of directors, and be responsible for reaching each economic indicator raised by the board of directors;

10.2.6

To propose and submit corporate organizational and governance structure of the Company to the board of directors for approval, formulate responsibilities and rules of each department under the Company, recruit managers of each departments and file as such at the board of directors, and decide on salary, benefits, awards, punishment and promotion of such managers according to relevant rules approved by the board of directors;

10.2.7

To be responsible for submitting annual work report and other reports to the board of directors and accept inquiry from the board of directors;

10.2.8

To submit statistic forms requested by each competent governmental authority; and

10.2.9

To be responsible for other operation and management assignments, have the full right to deal with relevant ordinary business within the scope of the board of directors’ authorization, sign and issue various documents in the Company’s name, and handle other matters entrusted by the board of directors.

10.3

10.3.1

In addition to the general manager, the Company’s other senior management officers include deputy general managers and chief financial officer as well as other officers having equivalent powers.

10.3.2

The chief financial officer shall be nominated by the Chinese Equity Interest Holders and appointed by the board of directors.  The other senior management personnel shall be nominated by the general manager and appointed by the board of directors.  The general manager shall have the right to request the board of directors to appoint or remove senior management personnel other than the chief financial officer.

10.3.3

Each senior management officer of the Company shall serve a term of office of three (3) years and can serve consecutive terms if reappointed. If any senior management officer is engaged in embezzlement and malpractice or severely fails in his/her duty or carries out any activities harmful to the Company’s interest, he/she may be dismissed at any time upon the board’s resolution and pursued legal liability.

10.3.4

Subject to the approval or designation of the board of directors, the chairman and other directors may concurrently act as the general manager or other senior management officer of the Company.

11.1

11.2

11.3

11.4

11.5

12.1

Each party represents and warrants to the other party as at the execution date of this Contract that:

12.1.1

it is a corporation duly organized, and validly existing and in good standing under the laws of its jurisdiction of incorporation with full legal right, power and authority (or, in the case of natural persons, he or she has reached the legal age and has full capacity and competence) to execute and deliver this Contract and to observe and perform the obligations hereunder and, in the case of legal entities, is not exceeding its corporate powers or business scope (as the case may be) in executing and performing any of the transaction documents to which it is a party;

12.1.2

in the case of legal entities, it has taken all appropriate and necessary corporate actions to authorize the execution and delivery of this Contract and all the agreements and documents referred to herein to which it is a party and to authorize the performance and observance of the terms and conditions hereof and of such agreements and documents;

12.1.3

each transaction document to which he or she as natural person or it as legal person (as the case may be) is a party, when executed or when approved by any applicable governmental authorities, will constitute lawful, valid and binding obligations on him, her or it in accordance with its terms;

12.1.4

his, her or its execution and performance of each transaction document to which he, she or it (as the case may be) is a party will not result in any breach of its articles of association or other existing documents (in the case of legal person entities) or any of his or her legal or contractual obligations to any natural person (in the case of natural persons), or result in any claim by a third party against the other parties to such transaction document;

12.1.5

in the case of legal person entities, no steps have been taken or legal proceedings commenced or threatened against it for its winding up or for it to be declared bankrupt or insolvent or for a liquidation committee to be appointed; in the case of natural persons, he or she is not personally bankrupt or insolvent, and has all appropriate experience to fully evaluate and understand the contents of the transaction documents or the transactions contemplated thereby.

12.2

The Chinese Equity Interest Holders represent and warrant that:

12.2.1

they are either citizens of the People’s Republic of China or limited liability companies validly existing under the laws of the People’s Republic of China, in each case with full capacity and competence for civil conducts;

12.2.2

they duly hold 100% of the original equity interests of the Company and each has full capacity and competence and has obtained all necessary authorizations to enter into this Contract and to perform the obligations hereunder;

12.2.3

each of their signing representatives has been duly authorized by full power of attorney, board resolution or other necessary documents to sign this Contract;

12.2.4

with respect to any of the Chinese Equity Interest Holders, neither the execution of this Contract nor the performance of the obligations hereunder will result in any breach of relevant laws and regulations or conflict with any other contract or undertaking to which it is a party;

12.2.5

with respect to any of the Chinese Equity Interest Holders, there is no lawsuit, arbitration or governmental investigation that affects or may affect its execution or performance of this Contract;

12.2.6

all documents, statements and information in the possession of them relating to the transactions contemplated hereby have been disclosed to Regal Life, and none of these documents contains any untrue statement of a material fact or anything misleading;

12.2.7

no material adverse change would occur to the business operation, assets, financial status or prospects of the Company before the Closing Date (as defined in the Subscription  Agreement) (hereinafter as the “Closing Date”);

12.2.8

they would procure all requisite approvals required by regulatory and administrative authorities in respect of the subscription of newly issued equity interests under the Subscription  Agreement.

12.3

Regal Life represents and warrants that:

12.3.1

it is a foreign-invested investment company duly incorporated and validly existing under the laws of the State of Nevada;

12.3.2

it has full capacity and competence and has obtained all necessary authorizations to enter into this Contract and to perform the obligations hereunder;

12.3.3

its signing representatives has been duly authorized by full power of attorney, board resolution or other necessary documents to sign this Contract;

12.3.4

its execution of this Contract or its performance of the obligations hereunder will not result in any breach of its articles of association or relevant laws and regulations, or conflict with any other contract or undertaking to which it is a party;

12.3.5

there is no lawsuit, arbitration or governmental investigation that affects or may affect its execution or performance of this Contract;

12.3.6

all documents, statements and information in the possession of it relating to the transactions contemplated hereby have been disclosed to the Chinese Equity Interest Holders, and none of these documents contains any untrue statement of a material fact or anything misleading;

12.3.7

the Contribution Amount paid by it under Section 5 hereof is from lawful sources and it has full capacity to pay the Contribution Amount to the Company pursuant to the terms and conditions hereof.

14.1

14.2

14.2.1

The Company shall establish its financial and accounting system in accordance with the accounting principles of PRC.

14.2.2

The Company shall, in accordance with applicable PRC laws and regulations, engage and retain reputable accounting firms in China to audit the financial status of the Company and to issue annual financial statements and audit reports in conformity with the PRC accounting principles.

14.2.3

The Company shall use RMB as the base currency in its bookkeeping.  Cash, bank deposits, foreign currency loans and credits, debts, receipts and expenditures, if made in currencies other than RMB, shall be recorded in currencies actually used in receipts or payments.  The conversion of other currencies to RMB shall be based on the median price published by the People’s Bank of China as at the date of the transaction or such other rate permitted by laws and approved by board resolutions.  Gains and losses arising from exchange differences shall be recorded and entered in accordance with the accounting standards for foreign exchange transactions published by the Ministry of Finance and other competent authorities of PRC.

14.3

14.3.1

The Company shall set up a sound financial department to be directed and led by the chief financial officer and shall formulate well-improved financial management rules.

14.3.2

Within the first three months of each fiscal year, the chief financial officer of the Company shall prepare the audited balance sheet, income statement and statement of cash flows for the previous year and submit the same to all the members of the board of directors for inspection.  The chief financial officer shall also, throughout each fiscal year, prepare and submit unaudited monthly financial statements in comparison with the business plans, operating plans and budgets of the Company, such other financial statements as required by the board of directors and the annual profit distribution proposal to the board of directors for inspection and approval.

14.3.3

The Company shall, within 15 days after the end of each quarter, provide its unaudited quarterly financial statements to Regal Life.  Within 30 days after the end of each year, the Company shall provide its unaudited annual financial statements to Regal Life.

16.1

16.2

17.1

17.2

 

(a)

the term of operation of the Company or any extension thereof expires;

 

(b)

if any of the conditions or events set forth below shall occur and be continuing, all parties hereto shall, upon any party’s proposal, cause their respective representatives on the board of directors to affirmatively vote for the resolution of dissolving the Company:

 

(i)

the Company has suffered from significant losses and is unable to continue its operations;

 

(ii)

the Company is unable to continue its operations due to any event of force majeure (as defined in Section 23 hereof);

 

(iii)

all the parties hereto agree to dissolve the Company.

 

(c)

this Contract is ordered to be terminated by a court judgment or arbitration award.

19.1

19.2

 

(a)

to liquidate the Company’s properties, prepare a balance sheet and inventory of assets of the Company and formulate a liquidation plan;

 

(b)

to notify the unknown creditors by public announcement and the known creditors by written notice;

 

(c)

to dispose of unfinished businesses of the Company to the extent that such businesses are related to the liquidation;

 

(d)

to propose a basis for the valuation and calculation of the properties of the Company;

 

(e)

to pay off the outstanding taxes;

 

(f)

to clear creditor’s rights and indebtednesses;

 

(g)

to dispose of the balance of the liquidation proceeds  of the Company  after all the debts of the Company have been fully discharged;

 

(h)

to represent the Company in civil litigations.

19.3

 

(a)

which is publicly known other than as a result of violation of the restriction set forth in this Section 20.1;

 

(b)

which, as certified by the written records kept during the normal course of business, is already known to the receiving party at the time of disclosure;

 

(c)

which is known or obtained from a third party not under any obligation of confidentiality, or is developed by the receiving party independently;

 

(d)

which a party, with the written consent of other parties, may disclose to a recipient only if such recipient agrees to keep such information confidential.

21.1

21.2

22.1

22.2

 

(a)

environmental pollution, compensation or loss arising before the Closing Date from the Company’s business operations;

 

(b)

product liabilities arising before the Closing Date from the production or sale of products;

 

(c)

liabilities arising before the Closing Date from income tax or other taxes;

 

(d)

litigations not concluded before the Closing Date, including litigations which are filed after the Closing Date against the business operations conducted by the Company before the Closing Date;

 

(e)

liabilities arising before the Closing Date from the Company’s breach of the then effective PRC laws and regulations or infringement upon the intellectual property rights of any third party when producing or selling products or carrying out advertising and marketing or other business operations at any time; and

 

(f)

liabilities arising before the Closing Date in relation to remuneration and social insurance contribution (including but not limited to contribution to pension  insurance, medical insurance, unemployment insurance and the payment of housing funds) to the Company’s employees.

22.3

22.3.1

If the performance of all or any part of this Contract is rendered impossible by the fault of a party, such defaulting party shall be liable for all direct losses and damages caused therefrom.  If more than one party are at fault, the defaulting parties shall bear their respective liabilities and losses in accordance with the actual situation.

22.3.2

If any party breaches any of its representations, warranties or undertakings set forth in Section 12 hereof, it shall compensate for any and all losses, injuries, costs, expenses, liabilities and possible claims that the other parties may suffer as a result of such breach.

22.3.3

Any violation of any clauses set forth in this Contract, the Subscription  Agreement and the Loan Agreement shall be deemed as breach of this Contract, the Subscription  Agreement and the Loan Agreement. The party in breach shall accordingly assume all relevant liabilities and compensate for any and all losses, injuries, costs, expenses, liabilities and possible claims that the other parties may suffer as a result of such breach.

22.4

24.1

24.2

24.2.1

In the event of any dispute, controversy or claim arising out of or relating to this Contract, or the performance, breach, termination, or invalidity hereof (each a “Dispute”), such Dispute shall be referred to and finally settled by the Hong Kong International Arbitration Centre for arbitration in Hong Kong, which shall be conducted in accordance with the International Chamber of Commerce International Arbitration Rules in effect at the time of applying for arbitration. The arbitral tribunal shall consist of three arbitrators. The language of arbitration shall be Chinese.

24.2.2

Any award made by the arbitral tribunal shall be final and binding on the parties, who hereby exclude any right to commence proceedings in or any right of appeal to any court that might otherwise have jurisdiction in respect of the matter and in respect of the Company’s or Regal Life’s directors, employees or agents, and such award shall be enforceable in any court having jurisdiction, or application may be made to such court for assistance in enforcing the award, as the case may be.  If it becomes necessary for a party to enforce an arbitral award by legal action of any kind, the defaulting party shall pay for all reasonable costs and expenses and attorney’s fees, including, but not limited to, any cost of additional litigation or arbitration that shall be incurred by the party seeking to enforce the award.

24.2.3

No arbitration of any Dispute shall commence unless the parties have genuinely attempted to settle the Dispute amicably for a period of ninety (90) days after the date of giving a written notice of arbitration by one party to the other, which notice shall describe generally the nature of the dispute.

24.2.4

The costs of arbitration shall be borne by the losing party or according to the arbitration award made by the arbitral tribunal.

24.2.5

When any Dispute occurs and when any Dispute is under arbitration, except for the matters under dispute, the parties shall continue to fulfil their respective obligations (and shall be entitled to exercise their rights) under this Contract.

25.1

25.2

25.3

25.4

25.5

25.6

25.7