June 29, 2007
Exhibit
10.1
June
29,
2007
Beijing
Xxxxx Xxxx Real Estate Development Co. Ltd.
00
Xxxx
Xxxx, Xxxxxxxx Industrial Development Zone,
Yanqing
County, Beijing City, People’s Republic of China
Attention:
Xx. Xxxxx-xx Xx
Gentlemen:
Re:
Fulfillment
of Xxxxx Xxxx Investment Obligation
Reference
is made to that certain Contract, dated January 29, 2004, between Beijing
Xxxxx
Xxxx Real Estate Development Co. Ltd. (“Xxxxx
Xxxx”)
and
Minghua Group International Holdings Ltd. (the “Company”),
as
amended and supplemented from time to time (the “Contract”).
Capitalized terms used, but not otherwise defined, have the meanings ascribed
to
such terms in the Contract.
Pursuant
to the Contract, Xxxxx Xxxx is obligated to purchase 140,000,000 shares of
Minghua's common stock, par value $0.01 (the “Shares”)
at an
aggregate purchase price of US$29,400,000, or $0.21 per Share (the “Purchase
Price”).
In
accordance with the Contract, Xxxxx Xxxx has paid US$653,795 of the Purchase
Price to the Company as a performance bond at the signing of the Contract
and
US$632,911 of the Purchase Price in exchange for 3,013,862 Shares, and is
obligated to pay the US$28,113,294 balance of the Purchase Price (the
“Final
Installment”)
in
full by June 30, 2007 (the “Performance
Date”).
In
exchange, the Company is obligated to issue the Shares to Xxxxx Xxxx. However,
as you are aware, the Company does not have a sufficient number of authorized
shares available to issue all the Shares to Xxxxx Xxxx by the Performance
Date.
Rather, the Company will have to obtain the consent of its stockholders to
amend
the Certificate of Incorporation of the Company to, among other things, effect
a
one-for-twenty reverse split of the Company’s issued and outstanding Common
Stock, such that the Company would be able to issue the Shares to Xxxxx Xxxx
(the “Amendment”).
Therefore, to allow for the issuance of the Shares after the Performance
Date,
Xxxxx Xxxx has agreed to permit the Company to issue the Shares to Xxxxx
Xxxx as
hereinafter set forth:
1. Xxxxx
Xxxx will deliver the Purchase Price to Beijing China Cardinal Real Estate
Consulting Co., Ltd., the Company’s wholly-owned PRC subsidiary, to be held for
the benefit of the Company in accordance with the Company’s procedures.
2. Within
fifteen (15) business days after receiving the Final Installment, the Company
shall issue 50,000,000 of the Shares to Xxxxx Xxxx.
3. Within
fifteen (15) business days following the effective date of the
Amendment,
the
Company will issue to Xxxxx Xxxx the remaining 86,986,138
Shares,
which is equal to 4,349,307
Shares
post-reverse split.
4. Each
of
the Company and Xxxxx Xxxx acknowledges and agrees that, except as specifically
set forth in this letter agreement, all of the terms and conditions of the
Contract, including, but not limited to, all the obligations of the Company
and
Xxxxx Xxxx, shall remain unchanged, with the same force and effect as if
such
matters were set forth herein. The terms and conditions set forth in this
letter
agreement may not be changed except in a writing signed by the Company and
Xxxxx
Xxxx.
5. The
representations and warranties of Xxxxx Xxxx set forth in the Contract,
including those regarding compliance with local laws, being a non-US person
and
the U.S. Patriot Act, are true and correct on and as of the date hereof,
with
the same effect as though such representations and warranties had been made
on
and as of the date hereof, except for any such representation or warranty
that
expressly applies to a specified earlier date, in which case such representation
or warranty shall have been true in all material respects on and as of such
earlier date.
6. This
letter agreement shall be governed by and construed in accordance with the
laws
of the State of New York (without giving effect to conflict of law principles)
as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
7. This
letter agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and which together shall constitute one and
the
same instrument.
[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]
If
the
foregoing provisions correctly state our understanding with respect to the
above
matters, please indicate your agreement by signing two copies of this letter
in
the space provided below and returning one of the copies to us.
| Very truly yours, | ||
| MINGHUA GROUP INTERNATIONAL HOLDINGS LTD. | ||
| |
|
|
| By: | /s/ Xxx Xxxx | |
|
Xxx Xxxx |
||
| Chief Executive Officer | ||
Acknowledged
this 29th
day of June, 2006:
BEIJING
XXXXX XXXX REAL ESTATE DEVELOPMENT CO. LTD
By
/s/
Changde Li
Changde
Li
President
