[Exhibit 10.1 Letter Agreement With Xxxxx Xxxx]
[Letterhead of Minghua Group International Holdings Limited]
April 13, 2004
Xx. Xxxxx-Xx Xx
Beijing Xxxxx Xxxx Real
Estate Development Co., Ltd.
No. 95 Kangxi Road
Xx Xx Xxx Industrial Development Zone
Yanqing County, Beijing
People's Republic of China
Re: Amendment to Contracts Dated September 29, 2003 and January 29, 2004
Dear Xx. Xx:
Reference is made to (i) that certain Regulation S Subscription Agreement,
dated September 29, 2003 (the "September 29 Contract"), between Minghua Group
International Holdings Limited ("Minghua") and Beijing Xxxxx Xxxx Real Estate
Development Co., Ltd. ("Xxxxx Xxxx"), and (ii) that certain contract, dated
January 29, 2004 (the "January 29 Contract" and together with the September 29
Contract, the "Contracts"), between Minghua and Xxxxx Xxxx.
Pursuant to the September 29 Contract Xxxxx Xxxx is obligated to purchase
15,000,000 shares of Minghua's Common Stock for US$6,000,000, in the aggregate.
Upon signing the September 29 Contract Xxxxx Xxxx funded US$602,410 of the
subscription price and Minghua issued to Xxxxx Xxxx 1,511,488 shares of its
common stock for such funds. Xxxxx Xxxx then funded an additional US$1,204,820
on January 9, 2004 and received 3,023,998 additional shares of Minghua common
stock for such funds. The September 29 Contract also required that Xxxxx Xxxx
fund US$4,192,770 on February 29, 2004. To date, Xxxxx Xxxx has not made this
final payment (the "February Payment").
Pursuant to the January 29 Contract, Xxxxx Xxxx agreed to purchase
140,000,000 shares of Minghua's Common Stock at an aggregate purchase price of
US$29,400,000. The January 29 Contract requires that the acquisition of these
shares take place in two installments. On April 15, 2004, Xxxxx Xxxx is required
to pay (the "April Payment") US$12,600,000 for 60,000,000 shares of Minghua's
Common Stock. Thereafter, the Company was to hold an annual stockholders meeting
at which the stockholders would vote upon an amendment to Minghua's Certificate
of Incorporation that would increase the number of authorized shares to a higher
number such that Minghua would have enough authorized shares to satisfy its
obligations under the January 29 Contract. Xxxxx Xxxx would then pay (the "Final
Payment") the second installment of US$16,800,000 within 15 days of the
effective date of such amendment and receive the remaining 80,000,000 shares of
Minghua Common Stock at that time.
Without waiving any potential claims that either party may have against
the other for breach of the Contracts, the parties now desire to amend the
Contracts to provide for an extension of the time within which Xxxxx Xxxx is
required to make each of the February Payment, the April Payment and the Final
Payment. Accordingly, Minghua and Xxxxx Xxxx, intending to be bound, hereby
agree as follows:
1. Amendment to Payment Dates.
(a) Extension of February Payment Date. The September 29 Contract is
hereby amended to extend the due date for the February Payment from February 29,
2004 to May 31, 2004.
(b) Extension of April Payment Date. The January 29 Contract is
hereby amended to extend the due date for the April Payment from April 15, 2004
to October 15, 2004.
(c) Extension of Final Payment Date. The January 29, 2004 Contract
is hereby amended to extend the due date for the Final Payment to November 30,
2004.
2. Resignations of Certain Directors. Xxx Xxxx Li, Xxxxxx Xxxx and Xxxx
Xxxxx Xxxx each agree to resign from their positions as directors of Minghua and
from any and all offices that they hold with Minghua effective upon the tenth
day following the mailing of an information statement on Schedule 14f-1 to the
stockholders of Minghua. Minghua will use commercially reasonable efforts to
prepare and file a Schedule 14f-1 information statement with the Securities and
Exchange Commission as soon as practicable and, subject to responding to and
complying with any comments or requests of the Staff of the Securities and
Exchange Commission, mail such information statement to its stockholders.
3. Third Party Beneficiary. Xxx Xxxx Li is hereby designated by Xxxxx Xxxx
as an intended third party beneficiaries of this letter agreement and of the
Contracts. Xxxxx Xxxx hereby agrees that Xxx Xxxx Li may enforce the rights of
Minghua under the Contracts and this letter agreement on behalf of Minghua and
the stockholders of Minghua . Without limiting the generality of the foregoing,
Xxx Xxxx Li may bring an action as intended third party beneficiary against
Xxxxx Xxxx for breach of this letter agreement and the Contracts in the event
that Xxxxx Xxxx does not satisfy its obligations hereunder and thereunder.
3. Contracts Remains in Full Force and Effect. Except as modified by this
letter agreement, the Contracts remain valid and binding upon the parties,
unchanged and in full force and effect. This letter agreement shall be treated
by the parties as a supplement and an amendment to the Contracts and shall be
governed by the provisions thereof, including any provisions regarding governing
law and arbitration.
4. Miscellaneous. The parties hereto, without the need for any additional
consideration, agree to execute such other and further instruments, documents
and agreements and to perform such other acts as may be reasonably required to
effectuate the purposes of this letter agreement. This letter agreement along
with the Contracts constitute the entire understanding among the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
arrangements and understandings relating to the subject matter hereof, including
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without limitation, any Chinese language versions of this agreement or the
Contracts that may have been entered into by the parties prior to the date
hereof. Notwithstanding any provision of the Contracts to the contrary, neither
this letter agreement nor the Contracts may be amended, modified or supplemented
except by a written instrument signed by all of the parties hereto, including
the party named herein as an intended third party beneficiary hereunder. This
letter agreement may be executed in any number of counterparts, each of which
shall be deemed an original and enforceable against the parties actually
executing such counterpart, and all of which, when taken together, shall
constitute one instrument. Facsimile execution and delivery of this letter
agreement is legal, valid and binding execution and delivery for all purposes.
[signature page follows]
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Please indicate your assent to the foregoing by executing this letter in
the space provided below.
Sincerely,
MINGHUA GROUP INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Chief Executive Officer
ACCEPTED AND AGREED
TO AS OF THE DATE OF THIS
LETTER:
BEIJING XXXXX XXXX REAL ESTATE DEVELOPMENT CO., LTD.
/s/ Xxxxx-Xx Xx
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Xxxxx-Xx Xx
THE FOLLOWING PARTIES AGREE TO SECTION
2 HEREOF:
/s/ Xxx Xxxx Li
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XXX XXXX LI, individually
/s/ Xxxxxx Xxxx.
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XXXXXX XXXX, individually
/s/ Xxxx Xxxxx Chan
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XXXX XXXXX XXXX, individually
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