Exhibit 10.3

 
BRIDGE LOAN AGREEMENT

THIS BRIDGE LOAN AGREEMENT (Agreement), dated as of July 1, 2010, by and between
Covenant Group of China, a Nevada corporation ("Borrower"), and JD Holdings 1,
Inc., a Nevada corporation ("JDC") (collectively, the “Parties”).

W I T N E S S E T H:
 
WHEREAS, Borrower requires JDC to make a loan to Borrower in the principal
amount of up to $1,000,000 to finance its operating expenses and honor its
capital commitments; and

WHEREAS, JDC is willing to make such loan to Borrower on the terms and subject
to the conditions hereinafter set forth.

NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants
hereinafter set forth and intending to be legally bound hereby, agree as
follows:
 
ARTICLE I
DEFINITIONS

1.01.           Certain Definitions.  In addition to other words and terms
defined elsewhere in this Agreement, as used herein the following words and
terms shall have the following meanings, respectively:

"Agreement" shall mean this Bridge Loan Agreement as the same may be amended,
modified or supplemented from time to time.

"Closing" shall mean the execution and delivery of the Loan Documents by
Borrower and JDC.

"Closing Date" shall mean the date of the Closing.

                      "Event of Default" shall mean any of the events of default
described in Section 6.01.

"Loan" shall mean the $1,000,000 loan to be made by JDC to Borrower pursuant to
this Agreement.

"Loan Documents" shall mean, collectively, this Agreement, the Promissory Note,
and any and all other documents delivered by or on behalf of Borrower in
connection with the Loan, as the same may be amended, modified or supplemented
from time to time.

"Note" or “Promissory Note” shall mean Borrower's $1,000,000 promissory note to
JDC dated the date hereof and attached hereto as Exhibit A to this Agreement, as
said Note may be extended, renewed, refinanced, refunded, amended, modified or
supplemented from time to time, and any replacement or successor note.

"Official Body" shall mean any government or political subdivision or any
agency, authority, bureau, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.

"Potential Default" shall mean any condition, event, act or omission which, with
the giving of notice or passage of time or both, would constitute an Event of
Default.
 
 
 

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1.02.           Construction of Agreement.  Unless the context of this Agreement
otherwise clearly requires, references to the plural include the
singular.  References in this Agreement to "judgments" of JDC include good faith
estimates by JDC (in the case of quantitative judgments) and good faith beliefs
by JDC (in the case of qualitative judgments).  The words "hereof", "herein",
"hereunder" and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement.  The section and
other headings contained in this Agreement are for reference purposes only and
shall not control or affect the construction of this Agreement or the
interpretation hereof in any respect.  Section and subsection references are to
this Agreement unless otherwise specified.
 
ARTICLE II
THE LOAN

2.01.           Agreement to Lend; Use of Proceeds.  Subject to the terms and
conditions hereof and relying upon the representations and warranties herein set
forth, JDC agrees to make a $1,000,000 Loan to Borrower, such funds to be
disbursed to Borrower upon mutual agreement of the Parties as represented by the
duly authorized signatures next to the dates and amounts set forth at Exhibit B.
The proceeds of the Loan will be used to finance Borrower’s operating expenses
and to honor its capital commitments.

2.02.           Note.  The obligation of Borrower to repay the principal of the
Loan shall be evidenced by the Note.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to JDC that:

3.01.           Authority and Authorization.  Borrower has the power and
authority to execute and deliver this Agreement, to make the borrowing provided
for herein, to execute and deliver the Note in evidence of such borrowing, to
execute and deliver the other Loan Documents to which Borrower is a party and to
perform his or her obligations hereunder and under the Note and the other Loan
Documents, and all such action has been duly and validly authorized.

3.02.           Execution and Binding Effect.  This Agreement, the Note and the
other Loan Documents to which Borrower is a party have been duly and validly
executed and delivered by Borrower and constitute legal, valid and binding
obligations of Borrower, enforceable in accordance with the terms hereof and
thereof, subject to the effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium, or other similar laws relating to or affecting the
rights of creditors generally.

3.03.           Authorizations and Filings.   No authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or
will be necessary or advisable in connection with the execution and delivery of
this Agreement, the Note or the other Loan Documents, consummation of the
transactions herein or therein contemplated or performance of or compliance with
the terms and conditions hereof or thereof.

3.04.           Absence of Conflicts.  Neither the execution and delivery of
this Agreement, the Note or the other Loan Documents nor consummation of the
transactions herein or therein contemplated nor performance of or compliance
with the terms and conditions hereof or thereof will (a) violate any law, (b)
conflict with or result in a breach of or a default under any agreement or
instrument to which Borrower is a party or by which either of them or any of
their properties (now owned or hereafter acquired) may be subject or bound or
(c) result in the creation or
 
 
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 imposition of any lien, charge, security interest or encumbrance upon any
property (now owned or hereafter acquired) of Borrower.

3.05.           Financial Condition.  Neither Borrower has applied for or
consented to the appointment of a receiver, trustee or liquidator of himself or
herself or any of his or her property, admitted in writing his or her inability
to pay his or her debts as they mature, made a general assignment for the
benefit of creditors, been adjudicated a bankrupt or insolvent or filed a
voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute, or an answer admitting the material allegations of a
petition filed against him or her in any proceeding under any such law, and no
action has been taken by Borrower for the purpose of effecting any of the
foregoing.  No order, judgment or decree has been entered by any court of
competent jurisdiction approving a petition seeking reorganization of Borrower
or all or a substantial part of the assets of Borrower, or appointing a
receiver, sequestrator, trustee or liquidator of him or her or any of his or her
property.

3.06.           Defaults.  No Event of Default and no Potential Default has
occurred and is continuing or exists.

3.07.           Litigation.  There is no pending or (to Borrower's knowledge)
threatened proceeding by or before any Official Body against or affecting
Borrower which if adversely decided would have a material adverse effect on the
business, operations or condition, financial or otherwise, of Borrower or on the
ability of Borrower to perform his or her obligations under the Loan Documents.

3.08.           Power to Carry On Business.  Borrower has all requisite power
and authority to own and operate his or her properties and to carry on his or
her business as now conducted and as presently planned to be conducted.
 
ARTICLE IV
CONDITIONS OF LENDING

The obligation of JDC to consummate the Closing and to make the Loan is subject
to the satisfaction of the following conditions:

4.01.           Representations and Warranties.  The representations and
warranties contained in Article III hereof and in the other Loan Documents shall
be true on and as of the Closing Date.  No Event of Default and no Potential
Default shall have occurred and be continuing or shall exist or shall occur and
exist after the consummation of the Closing.

4.02.           Miscellaneous.  Borrower shall have furnished to JDC such other
instruments, documents and opinions as JDC shall reasonably require to evidence
the Loan and to comply with this Agreement, the Promissory Note and the
requirements of regulatory authorities to which JDC is subject.

4.03.           Details, Proceedings and Documents.  All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be satisfactory to JDC and JDC shall have received all such counterpart
originals or certified or other copies of such documents and proceedings in
connection with such transactions, in form and substance satisfactory to JDC, as
JDC may from time to time request.

 
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ARTICLE V
AFFIRMATIVE COVENANTS

Borrower covenants to JDC as follows:

5.01.           Notices.  Promptly upon becoming aware thereof, Borrower shall
give JDC notice of:

(a)           any Event of Default or Potential Default, together with a written
statement setting forth the details thereof, and the action being taken by
Borrower to remedy the same; or

(b)           the commencement, existence or threat of any proceeding by or
before any Official Body against or affecting Borrower which, if adversely
decided, would have a material adverse effect on the business, operations or
condition, financial or otherwise, of Borrower or on his or her ability to
perform his or her obligations under the Loan Documents.

5.02.           Books and Records.  Borrower shall maintain and keep proper
records and books of account in which full, true and correct entries shall be
made of all his dealings and business affairs.

5.03.           Other Obligations.  Borrower shall maintain all obligations of
Borrower in whatsoever manner incurred, including but not limited to obligations
for borrowed money or for services or goods purchased by Borrower, in a current
status.
 
ARTICLE VI
DEFAULTS

6.01.           Events of Default.  An Event of Default shall mean the
occurrence or existence of one or more of the events or conditions (whatever the
reason for such Event of Default and whether voluntary, involuntary or effected
by operation of law) described below which continues and persists for thirty
(30) days beyond the required date of notice of such Event of Default specified
in Section 5.01:

(a)           failure to pay the loan principal of $1,000,000, in accordance
with the terms of the Promissory Note; or

(b)           the commencement, existence or threat of any proceeding by or
before any Official Body against or affecting Borrower which, if adversely
decided, would have a material adverse effect on the business, operations or
condition, financial or otherwise, of Borrower or on his or her ability to
perform his or her obligations under the Loan Documents.
 
6.02.           Consequences of an Event of Default.

(a)           If an Event of Default specified in Section 6.01 shall occur and
continue after the expiration of applicable notice and grace periods, if any,
set forth therein, JDC may, by notice to Borrower, declare the unpaid principal
amount of the Note and all other amounts owing by Borrower hereunder or under
the Note or the other Loan Documents to be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived, and an action therefor shall immediately accrue.
 
 
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ARTICLE VII
MISCELLANEOUS
 
7.01.           Further Assurances.  From time to time upon the request of JDC,
Borrower shall promptly and duly execute, acknowledge and deliver any and all
such further instruments and documents as JDC may deem necessary or desirable to
confirm this Agreement and the Note, to carry out the purpose and intent hereof
and thereof or to enable JDC to enforce any of its rights hereunder or
thereunder.

7.02.           Amendments and Waivers. JDC and Borrower may from time to time
enter into agreements amending, modifying or supplementing this Agreement or the
Note or any other Loan Document or changing the rights of JDC or of Borrower
hereunder or thereunder, and JDC may from time to time grant waivers or consents
to a departure from the due performance of the obligations of Borrower hereunder
or thereunder.  Any such agreement, waiver or consent must be in writing and
shall be effective only to the extent specifically set forth in such
writing.  In the case of any such waiver or consent relating to any provision
hereof any Event of Default or Potential Default so waived or consented to shall
be deemed to be cured and not continuing, but no such waiver or consent shall
extend to any other or subsequent Event of Default or Potential Default or
impair any right consequent thereto.

7.03.           No Implied Waiver; Cumulative Remedies.  No course of dealing
and no delay or failure of JDC in exercising any right, power or privilege under
any of the Loan Documents shall affect any other exercise thereof or exercise of
any other right, power or privilege.  The rights and remedies of JDC under this
Agreement are cumulative and not exclusive of any rights or remedies which JDC
would otherwise have under the other Loan Documents, at law or in equity.

7.04.           Notices.  All notices, requests, demands, directions and other
communications (collectively "notices") under the provisions of this Agreement
shall be in writing or by facsimile unless otherwise expressly permitted
hereunder and shall be sent by first-class or first-class express mail, or by
facsimile with confirmation in writing mailed first-class, in all cases with
postage or charges prepaid, and any such properly given notice shall be
effective when received.  All notices shall be sent to the applicable party
addressed, if to JDC at 2215 B Renaissance Drive, Ste. 5 Las Vegas, NV 89119,
and, if to Borrower, at Two Bala Plaza, Suite 300, Bala Cynwyd, PA 19004,
Attention: Mr. Justin D. Csik, or in accordance with the last unrevoked written
direction from any party to the other party hereto.

7.05.           No Third Party Rights.  Nothing in this Agreement, whether
express or implied, shall be construed to give to any person other than the
parties hereto any legal or equitable right, remedy or claim under or in respect
of this Agreement, which is intended for the sole and exclusive benefit of the
parties hereto.

7.06.           Severability.  The provisions of this Agreement are intended to
be severable.  If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

7.07.           Governing Law.  This Agreement shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the laws of said
State.

7.08.           Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts each
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.

7.09.           Heirs, Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of JDC, Borrower and their respective heirs,
successors and assigns, except that Borrower may not assign or
 
 
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transfer any of its rights hereunder without the prior written consent of
JDC.  Except to the extent otherwise required by the context of this Agreement,
the word " JDC " where used in this Agreement shall mean and include any holder
of the Note originally issued to JDC hereunder, and the holder of such Note
shall be bound by and have the benefits of this Agreement the same as if such
holder had been a signatory hereto.

7.10.           Jurisdiction.  Borrower (a) agrees that JDC may bring suit,
action or other legal proceedings arising out of this Agreement or the Note in
the courts of the Commonwealth of Pennsylvania or the courts of the United
States for the appropriate District in Pennsylvania, (b) consents to the
jurisdiction of each such court in any such suit, action or proceeding, and (c)
waives any objection which Borrower may have to the laying of the venue of any
such suit, action or proceeding in any of such courts.
 
7.11.           Number and Gender.  For purposes of this Agreement, the singular
shall be deemed to include the plural and the neuter shall be deemed to include
the masculine and feminine, as the context may require.
 
[signature page follows]

 
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the date first above written.

   JD HOLDINGS 1, INC.    
 
 
 
By
/s/ James D. Delaney      Name:  James D. Delaney      Title:  President  

 

 
COVENANT GROUP OF CHINA INC.
         
 
By
/s/ Justin D. Csik      Name:  Justin D. Csik      Title:   CFO and General
Counsel  

         

 
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EXHIBIT A
PROMISSORY NOTE
 

 $1,000,000   Philadelphia, Pennsylvania    July 1, 2010

 
FOR VALUE RECEIVED, the undersigned COVENANT GROUP OF CHINA INC., a Nevada
corporation and its principal place of business at Two Bala Plaza, Suite 300,
Bala Cynwyd, PA 19004 ("Maker"), hereby promises to pay to the order of JD
Holdings 1, Inc., a Nevada corporation and its principal place of business at
2215 B Renaissance Drive, Ste. 5 Las Vegas, NV 89119 ("Payee"), in immediately
available funds at Payee’s address above or such other address as Payee may
designate from time to time, that portion of the principal sum of One-Million
Dollars ($1,000,000) due and owing, payable as set forth below. In addition,
Payee will receive upon signing of this Note a warrant to purchase up to 150,000
shares of restricted common stock of Maker at a $3.00 strike price, exercisable
within two years of the date of this Note first set forth above pari passu with
the portion of funds disbursed to Maker by Payee by mutual agreement of Maker
and Payee set forth at Exhibit B of the Bridge Loan Agreement.
 
Each disbursement to Maker by Payee made by mutual agreement of Maker and Payee
set forth at Exhibit B of the Bridge Loan Agreement due and owing will be
payable five (5) full months from the date of each such disbursement.
 
This Note may be prepaid at any time, in whole or in part, without interest,
penalty or premium of any kind.
 
If any payment of principal on this Note shall become due on a day which is a
Saturday, Sunday or holiday, such payment shall be made on the next succeeding
business day.
 
Maker hereby waives presentment for payment, demand, notice of nonpayment or
dishonor, protest and notice of protest.
 
No delay or omission on the part of Payee or any holder hereof in exercising its
rights under this Note, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of Payee or any holder hereof, nor
shall any waiver by Payee or any holder hereof of any such right or rights on
any one occasion be deemed a bar to, or waiver of, the same right or rights on
any future occasion.
 
Maker shall pay Payee on demand any reasonable out-of-pocket expenses (including
reasonable legal fees) arising out of or in connection with any action or
proceeding (including any action or proceeding arising in or related to any
insolvency, bankruptcy or reorganization involving or affecting Maker) taken to
protect, enforce, determine or assert any right or remedy under this Note.
 
This Note shall bind Maker and the heirs and assigns of Maker, and the benefits
hereof shall inure to the benefit of Payee and the heirs and assigns of
Payee.  All references herein to "Maker" shall be deemed to apply to Maker and
its heirs and assigns, and all references herein to "Payee" shall be deemed to
apply to Payee and its heirs and assigns.
 
This Note and the rights and obligations of the parties hereto shall for all
purposes be governed by and construed and enforced in accordance with the
substantive law of the Commonwealth of Pennsylvania without giving effect to
principles of conflict of laws.
 
 
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IN WITNESS WHEREOF, Maker, intending to be legally bound, has executed this Note
as of the date and year first above written with the intention that this Note
shall constitute a sealed instrument.
 

 
COVENANT GROUP OF CHINA INC.
         
 
By
/s/ Justin D. Csik     Name Justin D. Csik     Title:   CFO and General Counsel
 

 
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EXHIBIT B
$1,000,000 BRIDGE LOAN DISBURSEMENT SCHEDULE
 

  Date     Borrower (Maker)       Lender (Payee)   Amount                  
 COVENANT GROUP OF CHINA INC.    JD HOLDINGS 1, INC.                    By:  /s/
Justin D. Csik    By:   /s/ James D. Delaney_  $500,000  July 2, 2010  Name:
   Justin D. Csik         Name:    James D. Delaney      Title:    General
Counsel and CFO    Title:   President  

 
 
 
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