STONEPATH HOLDINGS (HONG KONG) LIMITED
February 9, 2004
Xx. Xxxx Xxxx
Room 1201, Xx. 00, Xxxx 00
Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxx'x Xxxxxxxx of China
RE: Amended and Restated Contract for the Sale of Assets
Dear Andy,
This letter will serve as an amendment to that certain Amended and
Restated Contract for the Sale of Assets dated November 10, 2003 by and among
Stonepath Holdings (Hong Kong) Ltd. and yourself (the "Agreement"). Capitalized
terms used but not defined in this letter shall have the same meaning ascribed
to them in the Agreement.
1. Issuance of Stonepath Shares
The Agreement requires that Stonepath deliver the Stonepath Shares to
you on the Closing Date, with the understanding that such shares shall equal
$2,000,000 in value as determined under the Agreement, subject to those
adjustments set forth in Section 2.5(c)(v) therein.
In consideration for your agreement to hold the Stonepath Shares
subject to the restrictions upon resale contained within the Agreement, we have
agreed to issue you certain additional shares of the common stock of Stonepath
Group, Inc. once the restrictions upon resale lapse, in accordance with the
following paragraph.
In the event that on the date the restrictions upon resale of the
Stonepath Shares lapse, the aggregate value of the Stonepath Shares (as
determined by the average closing price of the Stonepath Shares for the ten (10)
Trading Days immediately preceding the date such restrictions lapse) is less
than $2,000,000 (or the Recomputed Stock Value, whichever is lesser), Stonepath
agrees to cause Stonepath Group, Inc. to issue to you such additional shares of
its common stock (the "Additional Shares") at that time as shall be necessary
such that the value of the Additional Shares, plus the then current value of the
original Stonepath Shares delivered to you under the Agreement, equals
$2,000,000 in value (or the Recomputed Stock Value, whichever is lesser);
provided, however, that in no event shall we have a responsibility to cause to
be issued to you shares of the common stock of Stonepath Group at a value of
less than $2.50 per share (as subject to adjustment for any stock splits, stock
dividends, adjustment or other reclassification or reorganization events that
may occur after the Closing Date). By example and not by way of limitation,
assuming no adjustment to the original $2,000,000 in value of the Stonepath
Shares, the number of shares to be issued to you hereunder will be limited to
800,000 shares ($2,000,000 divided by $2.50 per share).
2. Required Amendments to Company Contract and Articles of Association
You also agree to cause Shaanxi Xiangyu Logistics Company Limited () and Huijie
Industry and Trading Company Limited () to, immediately after the Effective Date
in a manner as requested by Stonepath, take all necessary actions and sign all
required documents to amend the document known as the "Company Contract" ()
dated November 3, 2003 and the Articles of Association of Shaanxi Sunshine Cargo
Service Co., Ltd. ()also dated November 3, 2002 to, among others, (i) delete the
reference therein requiring unanimous consent of the board of directors relative
to a transfer of interest in the Company, (ii) require a quorum of two thirds of
the directors for board meetings, and (iii) permit actions by written consent of
the board of the directors.
3. Exclusion of Certain Assets
This letter will confirm that certain assets formerly included as assets on the
financial statements of the branch office operations of Shaanxi International
will be excluded from the Purchased Assets:
(i) Office units located at Huashan Road owned by Andy's wife;
(ii) Two apartments and a house owned by Andy;
(iii) Club membership; and
(iv) Various automobiles that are not titled in the name of the Business.
4. Payment of Fair Market Rental
(a) As promptly after the Closing Date as is possible, Andy shall present
Stonepath with proposals for the fair market rental on the units located on
Huashan Road. All such rentals shall be at arm's length rates determined based
upon fair market comparables.
(b) Stonepath also understands that the Business leases certain business
equipment from employees on a month-to-month basis. Andy shall also present
Stonepath with a proposal for the fair market rental of such equipment. Andy
agrees to discontinue any such rental arrangements at other than fair market
rentals.
2
This letter agreement may be executed by facsimile and in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute the same instrument. Please indicate your agreement to
and acceptance of the terms set forth herein by signing and returning a copy of
this letter agreement to us.
Very truly yours,
STONEPATH HOLDINGS (HONG KONG) LIMITED
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
----------------------------
Title: Director
----------------------------
Acknowledged and accepted:
/s/ Xxxx Xxxx
---------------------
Xxxx Xxxx
3
