Exhibit 10.8

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is entered into as of
July 26, 2005, by and among OPTA SYSTEMS, LLC, a Delaware limited liability
company doing business as “GoVideo” (“GoVideo”), OPTA CORPORATION, a Delaware
corporation (“Opta”), TCL MULTIMEDIA TECHNOLOGY HOLDINGS LIMITED, a Cayman
Islands company (“TCLMM”), TCL INDUSTRIES (H.K.) HOLDINGS LIMITED, a Hong Kong
company (“TCLI”) and ASIA FOCUS INDUSTRIAL LTD., a Hong Kong company (“Asia
Focus”).

 

RECITALS

 

WHEREAS, GoVideo is the borrower under (i) that certain loan agreement (in
Chinese) dated January 18, 2005 between Opta and TCLI whereby TCLI agrees to
lend Opta, which Opta onlend to GoVideo, the original principal amount of
US$4,500,000 for the period from February 9, 2005 to August 8, 2005 (“Contract
#2005-01”), (ii) that certain loan agreement (in Chinese) dated January 18, 2005
between GoVideo and TCLI whereby TCLI agrees to lend GoVideo the original
principal amount of $1,500,000 for the period from January 25, 2005 to July 24,
2005 (“Contract #2005-02”), and (iii) that certain loan agreement (in Chinese)
dated January 18, 2005 between GoVideo and Asia Focus whereby Asia Focus agrees
to lend GoVideo the original principal amount of $4,700,000 for the period from
February 12, 2005 to August 11, 2005 (“Contract #2005-03”) Contract #2005-01,
Contract #2005-02 and Contract #2005-03 are collectively referred to as the
“Existing Loan Agreements”).

 

WHEREAS, the Existing Loan Agreements are secured by Opta pursuant to (i) a
Security Agreement (in Chinese) dated January 18, 2005 between Opta and TCLI in
respect of Contract #2005-01, (ii) a Security Agreement (in Chinese) dated
January 18, 2005 between Opta and TCLI in respect of Contract #2005-02, and
(iii) a Security Agreement (in Chinese) dated January 18, 2005 between Opta and
Asia Focus in respect of Contract #2005-03 (the three security agreements
described in (i), (ii) and (iii) of this Recital shall be referred to
collectively hereafter as the “Opta Guaranty”).

 

WHEREAS, the Opta Guaranty consists of the pledge by Opta of 13,959,430 shares
of common stock (collectively, the “Correlant Shares”) of Correlant
Communications, Inc., a Delaware corporation (“Correlant”), owned by Opta.

 

WHEREAS, GoVideo desires to sell, and TCLMM desires to purchase, all of
GoVideo’s intellectual property rights and assets (the “GoVideo IP”) by having
(i) GoVideo transfer to TCLMM all of GoVideo’s right, title and interest in and
to the GoVideo IP pursuant to an Intellectual Property Assignment attached
hereto as Exhibit A, (ii) TCLMM assume all of the debt obligations owed by
GoVideo and Opta to TCLI and Asia Focus under the Existing Loan Agreements and
(iii) GoVideo issue a promissory note in favor of TCLMM for a principal amount
that represents the difference between the value of the GoVideo IP and the total
amount of obligations being assumed by TCLMM under the Existing Loan Agreements
if the latter is greater than the former and secure such note with a pledge or
lien on all of its remaining assets.

 

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AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree that all
actions described herein will be deemed to have occurred simultaneously on the
date hereof and are specifically conditioned upon the occurrence of the other
transactions as follows:

 

1.                                      Assumption of Debt Obligations and
Release of GoVideo.

 

1.1                                 GoVideo hereby transfers to TCLMM, and TCLMM
hereby assumes in full as debtor, all of the obligations owed by GoVideo and
Opta to TCLI and Asia Focus under the Existing Loan Agreements, which total
amount, including accrued and unpaid interest and other amounts due and payable
as of the date hereof is US$11,000,000 (the “Existing Loan Amounts”).

 

1.2                                 Each of Asia Focus and TCLI hereby consents
to the foregoing transfer and assumption and forever release GoVideo and Opta
and their respective officers, directors, managers, members, employees and
agents from any and all obligations, claims and/or liabilities under the
Existing Loan Agreements.  Each of Asia Focus and TCLI expressly acknowledge
that they shall have no further recourse against GoVideo and Opta under the
Existing Loan Agreements whatsoever.  Each of Asia Focus and TCLI voluntarily
waives any and all rights or benefits that it may now have, or in the future may
have, against GoVideo and Opta under the Existing Loan Agreements under the
terms of Section 1542 of the California Civil Code, which provides as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

2.                                      Assignment of Intellectual Property and
Issuance of New Note; License.

 

2.1                                 In consideration for TCLMM’s assumption of
the obligations of GoVideo and Opta under the Existing Loan Agreements, GoVideo
hereby agrees to (a) assign and transfer to TCLMM the GoVideo IP pursuant to the
Intellectual Property Assignment to be executed by TCLMM and GoVideo
concurrently herewith, (b) issue a new promissory note in favor of TCLMM in the
form attached hereto as Exhibit B (the “New Note”) concurrently herewith in the
principal amount equal to US$1,000,000 representing the difference between the
Existing Loan Amounts and US$10,000,000, the value of the GoVideo IP as
determined by the independent appraiser appointed by GoVideo (the “Estimated IP
Valuation”); subject to adjustment provided in Section 2.2 below; and (c) grant
to TCLMM a security interest in and to all of its existing assets.

 

2.2                                 Within 90 days of the date hereof, TCLMM
shall appoint its own independent appraiser to confirm the value of the GoVideo
IP.  If the valuation as determined by such appraiser (the “Final IP Valuation”)
is less than the Estimated IP Valuation, then GoVideo and TCLMM shall add to the
principal amount due on the New Note an amount equal to the difference between
the Estimated IP Valuation and the Final IP Valuation.  Likewise, if the Final

 

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IP Valuation is more than the Estimated IP Valuation, then GoVideo and TCLMM
shall subtract from the principal amount due on the New Note an amount equal to
the difference between the Final IP Valuation and the Estimated IP Valuation up
to the maximum principal amount of US$1,000,000 of the New Note and in such
event the New Note shall be cancelled and no further payments shall be made by
TCLMM to GoVideo.

 

2.3                                 The obligations of GoVideo under the New
Note shall be secured by GoVideo’s granting a security interest in the existing
assets of GoVideo to TCLMM pursuant to a security agreement attached hereto as
Exhibit C (the “Security Agreement”) to be executed by GoVideo and TCLMM
concurrently herewith; provided that such lien shall be junior to the lien held
by Wells Fargo Business Credit, Inc. (“Wells”) under the Credit and Security
Agreement dated as of July 21, 2003, as amended to date between GoVideo and
Wells.

 

2.4                                 Effective immediately after the assignment
of the GoVideo IP to TCLMM, TCLMM hereby grants to GoVideo a 90-day,
non-exclusive, worldwide license to use the GoVideo IP on a royalty-free basis
from the date hereof.  Such license shall include GoVideo’s right to sublicense
the GoVideo IP.  Within such 90-day period, GoVideo and TCLMM agree to negotiate
in good faith the terms of a longer term license agreement to use the GoVideo IP
required for GoVideo’s continuing operations.

 

3.                                      Release of Opta Guaranty and Security
Interest.

 

3.1                                 Upon the execution hereof by all parties
hereto and GoVideo’s execution and delivery of the New Note and the Security
Agreement, each of Asia Focus and TCLI hereby forever releases in full Opta and
its officers, directors, employees and agents from any and all obligations,
claims and/or liabilities under the Existing Loan Agreements and/or the Opta
Guaranty and each of Asia Focus and TCLI each expressly acknowledges that they
shall have no further recourse against Opta under the Existing Loan Agreements
and/or the Opta Guaranty whatsoever.  Each of Asia Focus and TCLI knowingly and
voluntarily waives any and all rights or benefits that it may now have, or in
the future may have, against Opta under the Existing Loan Agreeements and/or the
Opta Guaranty under the terms of Section 1542 of the California Civil Code,
which provides as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

3.2                                 Concurrently herewith, each of TCLI and Asia
Focus hereby releases their security interests in the Correlant Shares and any
security interest that each of TCLI and Asia Focus may have in shares of
Series D Preferred Stock of Correlant owned by Opta and agrees to promptly
deliver to Opta the original stock certificates evidencing the Correlant Shares.

 

4.                                      Miscellaneous.

 

4.1                                 Notices.  All notices, demands, or requests
from one party to another shall, unless otherwise specified herein, be delivered
personally, sent by mail, certified or registered, return receipt requested,
sent by overnight courier or sent by facsimile, to the persons and addresses

 

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identified below.  Any such notice, demand or request shall be deemed to have
been received when personally delivered, five (5) days after mailing, the day
after deposit with an overnight courier, or upon delivery by facsimile in the
manner set forth below:

 

OPTA OR GOVIDEO:

c/o Opta Corporation
1350 Bayshore Highway, Suite 740
Burlingame, CA 94010
Attn:  Chief Executive Officer
Facsimile:  (650) 579-3606

 

With Notice To:

Reed Smith
1901 Avenue of the Stars, Suite 700
Los Angeles, CA 90067
Attn:  John Iino, Esq.
Facsimile:     (310) 734-5299

 

TCLMM:
TCL Multimedia Technology Holdings Limited
13/F, TCL Tower
8 Tai Chung Road
Tsuen Wan, N.T., Hong Kong
Attn:  Chairman Li Dong Sheng
Facsimile:  (852) 2405-8411

 

TCLI:
TCL Industries Holdings (H.K.) Limited
Suite 1102, Chinachem Tsuen Wan Plaza
No. 457 Castle Peak Road
Tsuen Wan, N.T., Hong Kong
Attn:  Lu Zhong Li
Facsimile:  (852) 2402-2602

 

Asia Focus:
Asia Focus Industrial Limited
Suite 1307, Chinachem Tsuen Wan Plaza
No. 457 Castle Peak Road
Tsuen Wan, N.T., Hong Kong
Attn:  Yuan Bing
Facsimile:  (852) 2402-2137

 

or at such other address as such party may designate by ten (10) days’ advance
written notice to the other parties pursuant to this paragraph.

 

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4.2                                 Public Disclosure.  From the date hereof, no
party shall make any press release or other public announcement concerning the
terms of this Agreement without first allowing the other to approve the contents
of such press release or other public announcement, except as and to the extent
that any such party shall be so obligated by applicable law, in which case such
party shall allow any other party reasonable time to comment on such release or
announcement and the parties shall use their reasonable efforts to cause a
mutually agreeable release or announcement to be issued; provided, however, that
the foregoing shall not preclude communications or disclosures necessary by Opta
to comply with SEC rules or regulations.

 

4.3                                 Amendments; Waivers.  This Agreement may not
be modified or amended except in writing signed by the parties and the terms of
this Agreement may not be waived except in writing signed by the parties.

 

4.4                                 GOVERNING LAW; JURISDICTION; WAIVER.  THIS
AGREEMENT IS GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  THE PARTIES HERETO ACKNOWLEDGE AND
AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF CALIFORNIA OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS.  EACH PARTY HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT BEING BROUGHT IN THE SUPERIOR COURT FOR THE COUNTY OF SAN MATEO OR THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA.  EACH OF
THE PARTIES HERETO WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

 

4.5                                 Headings.  Section or other headings
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.

 

4.6                                 Successors and Assigns.  This Agreement
shall inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns and shall be binding upon and
enforceable against the parties hereto and their respective successors and
assigns.

 

4.7                                 Entire Agreement.  This Agreement, the
Intellectual Property Assignment, the New Note and the Security Agreement
express the entire understanding of the parties with respect to the transactions
contemplated hereby.

 

4.8                                 No Third Party Beneficiaries.  This
Agreement does not and shall not be construed to confer any rights or remedies
upon any person other than the parties to this Agreement and their respective
successors and permitted assigns.

 

4.9                                 Neutral Construction.  Each of the parties
hereto has been involved in the negotiation, review and execution of this
Agreement; and each has had the opportunity to receive independent legal advice
from an attorney or attorneys of its choice with respect to the

 

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advisability of making and executing this Agreement.  In the event of any
dispute or controversy regarding this Agreement, the parties hereto shall be
considered to be the joint authors of this Agreement and no provision of this
Agreement shall be interpreted against a party hereto because of authorship.

 

4.10                           Severability.  The provisions of this Agreement
are severable and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.

 

4.11                           Further Assurances.  Each of the parties agree to
take all reasonable steps and to execute all other reasonable documents that may
in such party’s reasonable discretion be necessary to consummate or document the
transactions contemplated hereby.

 

[This space intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

OPTA SYSTEMS, LLC

 

 

 

 

By:

 

 

 

 

Name:

/s/ David Xiong

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

OPTA CORPORATION

 

 

 

 

By:

 

 

 

 

Name:

 /s/ Sean Wang

 

 

 

Title: Chief Operating Officer

 

 

 

 

 

 

 

TCL MULTIMEDIA TECHNOLOGY HOLDINGS LIMITED

 

 

 

 

By:

 

 

 

 

Name:

 /s/ Li Dong Sheng

 

 

 

Title: Chairman

 

 

 

 

 

 

 

TCL INDUSTRIES (H.K.) HOLDINGS LIMITED

 

 

 

 

By:

 

 

 

 

Name:

/s/ Lu Zhong Li

 

 

 

Title: Director

 

 

 

 

 

 

 

ASIA FOCUS INDUSTRIAL LTD.

 

 

 

 

By:

 

 

 

 

Name:

 /s/ Yuan Bing

 

 

 

Title: Director

 

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