Letter Agreement Extending Closing and Payment Terms under Stock Purchase Agreement between Fine Day Holdings Limited and Cellstar International Corporation/Asia
Fine Day Holdings Limited and Cellstar International Corporation/Asia have agreed to extend the closing date of their Amended and Restated Stock Purchase Agreement to September 9, 2005. Fine Day Holdings will pay a total of $12 million to Cellstar according to a set schedule, including cash payments and delivery of a promissory note. Cellstar agrees to delay legal action against certain employees for 60 days after closing, with conditions for mutual releases. This letter overrides any conflicting terms in the original agreement.
Exhibit 10.38
FINE DAY HOLDINGS LIMITED
a British Virgin Islands company
c/o Stephan, Oringher, Richman & Theodora
2029 Century Park East, Sixth Floor
Los Angeles, California 90067 (“Newco”)
September 1, 2005 (Hong Kong Time)
Cellstar International Corporation/Asia
1730 Briercroft Court, Carrollton,
Texas, U.S.A. 75006
(“CICA”)
Re: Amended and Restated Stock Purchase Agreement between CICA and Newco dated August 24, 2005 (“SPA”)
Dear Sirs:
Capitalised terms used in this side letter shall have the same meaning given to them in the SPA, unless the context requires otherwise.
We hereby request your agreement to extend the deadline for the Closing to 9 September, 2005 on the condition that:
(a) we shall pay or procure to be paid to you the total consideration of Twelve Million Dollars (US$12,000,000) according to the following schedule:
| (i) | on 2 September 2005, payment of One Million Dollars (US$1,000,000) by way of release of the Escrow Deposit by signing an attached copy of the joint statement; |
| (ii) | on 2 September 2005, payment of Four Million Dollars (US$4,000,000) in cash via wire transfer to an account designated by CICA, details of which are attached; |
| (iii) | on or before 9 September 2005, payment of One Million Dollars (US$1,000,000) in cash via wire transfer to an account designated by CICA; and |
| (iv) | on or before 9 September 2005, delivery of the Note in the principal amount of Six Million Dollars (US$6,000,000) in the attached form; |
and Closing shall occur on the first date on which all of (i), (ii), (iii) and (iv) above have been satisfied.
(b) CICA shall delay taking any legal action against all current and former employees of the Company and Shanghai CellStar for a period of sixty (60) days following Closing and shall execute any mutual release executed by a current or former employee of the Company or Shanghai CellStar in the form attached to the SPA as Exhibit F within this 60 day period PROVIDED THAT CICA shall not be obliged to execute those mutual releases executed by those current or former employees of the Company
or Shanghai CellStar in respect of whom CICA has evidence showing that any representation made by him or her in Clause 3 of the mutual release may be false.
This side letter supersedes any contrary provisions in the SPA; in particular, paragraph (b) above supersedes Clause 8 of the SPA in its entirety.
Please sign below to indicate your agreement to the above.
| Fine Day Holdings Limited | ||
| By: | /s/ An-Hsien Horng | |
| As its authorized representative | ||
Agreed to and accepted by:
CellStar International Corporation/Asia
By: /s/ Elaine Flud Rodriguez
Elaine Flud Rodriguez
Sr. Vice President
