February 8, 1999
Dr. Alan Phan
The Hartcourt Companies Inc.
2049 Century Park East, Suite 3760
Los Angeles, CA 90067
RE: Restructure of The Hartcourt Companies Inc. ("HRCT")
Dear Alan:
The purpose of this letter is to finalize the negotiations expressed in the
various letters and our meetings regarding the restructuring of HRCT through (a)
the formation of a new subsidiary, Enova Holdings Inc. ("Enova"), into which (b)
the equity investments of HRCT's two (2) active subsidiaries and indebtedness
assumed or guaranteed by HRCT, if any, shall be assigned, (c) the distribution
or Spinoff (as defined below) of the shares of Enova owned by HRCT to the HRCT
shareholders, followed by (d) the "acquisition" by assignment to HRCT by
CyberAmerica Corporation ("CYAA") of the Share Purchase Agreement dated October
21, 1998 and acceptable extension (the "Internet Agreement") between CYAA and
the shareholders of the Chinese corporation which owns 90% of the joint venture
enterprise described in the Internet Agreement as the "Internet Company".
Collectively, steps (a) through (c) are referred to as the "Restructuring", and
step (d) is referred to as the "Initial Business Acquisition."
With this as background, this letter, when countersigned below, will confirm and
memorialize our understanding and agreement ("Agreement") by and among NuVen,
HRCT and yourself to enter into a series of transactions to effect the
Restructuring and the Initial Business Acquisition, all upon and subject to the
following terms and conditions:1. Engagement
HRCT hereby retains NuVen to act as advisor to assist HRCT in
connection with the proposed Restructuring and Initial Business
Acquisition.
To effect the Restructuring, NuVen will prepare transactional
documentation, offering circular(s), explanatory or disclosure
statement(s), and notices or periodic reports pursuant to the
Securities Act of 1933, as amended (the "Securities Act") or the
Securities Exchange Act of 1934 (the "Exchange Act") to be filed with
the Securities and Exchange Commission (the "Commission") pertaining to
the Restructuring, such documents being identified in paragraph 2
herein (collectively referred to as the "Restructuring Documents").
[HARTCORT\FS8:MAR1999]-6
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