**Exhibit 10.8**

 

**PURCHASE AND SALEAGREEMENT**

** **

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 companydoing business as “GoVideo” (“GoVideo”), OPTA CORPORATION, a Delawarecorporation (“Opta”), TCL MULTIMEDIA TECHNOLOGY HOLDINGS LIMITED, a CaymanIslands company (“TCLMM”), TCL INDUSTRIES (H.K.) HOLDINGS LIMITED, a Hong Kongcompany (“TCLI”) and ASIA FOCUS INDUSTRIAL LTD., a Hong Kong company (“AsiaFocus”).

 

**RECITALS**

** **

WHEREAS, GoVideo is the borrower under (i) thatcertain loan agreement (in Chinese) dated January 18, 2005 between Optaand TCLI whereby TCLI agrees to lend Opta, which Opta onlend to GoVideo, theoriginal principal amount of US$4,500,000 for the period from February 9,2005 to August 8, 2005 (“Contract #2005-01”), (ii) that certain loanagreement (in Chinese) dated January 18, 2005 between GoVideo and TCLIwhereby TCLI agrees to lend GoVideo the original principal amount of $1,500,000for 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 GoVideothe 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 “ExistingLoan Agreements”).

 

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

 

WHEREAS, the Opta Guaranty consists of the pledge byOpta 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 topurchase, all of GoVideo’s intellectual property rights and assets (the “GoVideoIP”) by having (i) GoVideo transfer to TCLMM all of GoVideo’s right, titleand interest in and to the GoVideo IP pursuant to an Intellectual PropertyAssignment attached hereto as Exhibit A, (ii) TCLMM assume all of thedebt obligations owed by GoVideo and Opta to TCLI and Asia Focus under theExisting Loan Agreements and (iii) GoVideo issue a promissory note infavor of TCLMM for a principal amount that represents the difference betweenthe value of the GoVideo IP and the total amount of obligations being assumedby TCLMM under the Existing Loan Agreements if the latter is greater than theformer and secure such note with a pledge or lien on all of its remainingassets.

 

----

 

**AGREEMENT**

** **

NOW, THEREFORE, in consideration of the foregoing andthe mutual agreements herein contained and other good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged, theparties hereby agree that all actions described herein will be deemed to haveoccurred simultaneously on the date hereof and are specifically conditionedupon the occurrence of the other transactions as follows:

 

**1.****                                      Assumptionof Debt Obligations and Release of GoVideo**.

 

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

 

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

 

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

 

**2.****                                      Assignmentof Intellectual Property and Issuance of New Note; License.**

 

2.1                                 Inconsideration for TCLMM’s assumption of the obligations of GoVideo and Optaunder the Existing Loan Agreements, GoVideo hereby agrees to (a) assignand transfer to TCLMM the GoVideo IP pursuant to the Intellectual PropertyAssignment to be executed by TCLMM and GoVideo concurrently herewith, (b) issuea 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 toUS$1,000,000 representing the difference between the Existing Loan Amounts andUS$10,000,000, the value of the GoVideo IP as determined by the independentappraiser appointed by GoVideo (the “Estimated IP Valuation”); subject toadjustment provided in Section 2.2 below; and (c) grant to TCLMM asecurity interest in and to all of its existing assets.

 

2.2                                 Within90 days of the date hereof, TCLMM shall appoint its own independent appraiserto confirm the value of the GoVideo IP. If the valuation as determined by such appraiser (the “Final IPValuation”) is less than the Estimated IP Valuation, then GoVideo and TCLMMshall add to the principal amount due on the New Note an amount equal to thedifference between the Estimated IP Valuation and the Final IP Valuation.  Likewise, if the Final

 

2

----

 

IP Valuation ismore than the Estimated IP Valuation, then GoVideo and TCLMM shall subtractfrom the principal amount due on the New Note an amount equal to the differencebetween the Final IP Valuation and the Estimated IP Valuation up to the maximumprincipal amount of US$1,000,000 of the New Note and in such event the New Noteshall be cancelled and no further payments shall be made by TCLMM to GoVideo.

 

2.3                                 Theobligations of GoVideo under the New Note shall be secured by GoVideo’sgranting a security interest in the existing assets of GoVideo to TCLMMpursuant to a security agreement attached hereto as Exhibit C (the “SecurityAgreement”) to be executed by GoVideo and TCLMM concurrently herewith; providedthat 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                                 Effectiveimmediately after the assignment of the GoVideo IP to TCLMM, TCLMM herebygrants to GoVideo a 90-day, non-exclusive, worldwide license to use the GoVideoIP on a royalty-free basis from the date hereof.  Such license shall include GoVideo’s right tosublicense the GoVideo IP.  Within such 90-dayperiod, GoVideo and TCLMM agree to negotiate in good faith the terms of alonger term license agreement to use the GoVideo IP required for GoVideo’scontinuing operations.

 

**3.****                                      Releaseof Opta Guaranty and Security Interest**.

 

3.1                                 Uponthe execution hereof by all parties hereto and GoVideo’s execution and deliveryof the New Note and the Security Agreement, each of Asia Focus and TCLI herebyforever releases in full Opta and its officers, directors, employees and agentsfrom any and all obligations, claims and/or liabilities under the Existing LoanAgreements and/or the Opta Guaranty and each of Asia Focus and TCLI eachexpressly acknowledges that they shall have no further recourse against Optaunder the Existing Loan Agreements and/or the Opta Guaranty whatsoever.  Each of Asia Focus and TCLI knowingly andvoluntarily waives any and all rights or benefits that it may now have, or inthe future may have, against Opta under the Existing Loan Agreeements and/orthe Opta Guaranty under the terms of Section 1542 of the California CivilCode, which provides as follows:

 

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

 

3.2                                 Concurrentlyherewith, each of TCLI and Asia Focus hereby releases their security interests inthe Correlant Shares and any security interest that each of TCLI and Asia Focusmay have in shares of Series D Preferred Stock of Correlant owned by Optaand agrees to promptly deliver to Opta the original stock certificatesevidencing the Correlant Shares.

 

**4.****                                      Miscellaneous**.

 

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

 

3

----

 

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

 

OPTA OR GOVIDEO:c/o Opta Corporation1350 Bayshore Highway, Suite 740Burlingame, CA 94010Attn:  Chief Executive OfficerFacsimile:  (650) 579-3606

 

With Notice To:

Reed Smith1901 Avenue of the Stars, Suite 700Los Angeles, CA 90067Attn:  John Iino, Esq.Facsimile:     (310) 734-5299

 

TCLMM:TCL Multimedia Technology Holdings Limited13/F, TCL Tower8 Tai Chung RoadTsuen Wan, N.T., Hong KongAttn:  Chairman Li Dong ShengFacsimile:  (852) 2405-8411

 

TCLI:TCL Industries Holdings (H.K.) LimitedSuite 1102, Chinachem Tsuen Wan PlazaNo. 457 Castle Peak RoadTsuen Wan, N.T., Hong KongAttn:  Lu Zhong LiFacsimile:  (852) 2402-2602

 

Asia Focus:Asia Focus Industrial LimitedSuite 1307, Chinachem Tsuen Wan PlazaNo. 457 Castle Peak RoadTsuen Wan, N.T., Hong KongAttn:  Yuan BingFacsimile:  (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.

 

4

----

 

4.2                                 PublicDisclosure.  From the date hereof, noparty shall make any press release or other public announcement concerning theterms of this Agreement without first allowing the other to approve thecontents of such press release or other public announcement, except as and tothe extent that any such party shall be so obligated by applicable law, inwhich case such party shall allow any other party reasonable time to comment onsuch release or announcement and the parties shall use their reasonable effortsto cause a mutually agreeable release or announcement to be issued; provided,however, that the foregoing shall not preclude communications or disclosures necessaryby Opta to comply with SEC rules or regulations.

 

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

 

4.4                                 GOVERNINGLAW; JURISDICTION; WAIVER.  THISAGREEMENT IS GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA (EXCLUDING THELAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT ANY SUIT FOR THEENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OFCALIFORNIA OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THENONEXCLUSIVE JURISDICTION OF SUCH COURTS. EACH PARTY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTERHAVE TO THE VENUE OF ANY SUCH SUIT BEING BROUGHT IN THE SUPERIOR COURT FOR THECOUNTY OF SAN MATEO OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERNDISTRICT OF CALIFORNIA.  EACH OF THEPARTIES HERETO WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY INANY PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

 

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

 

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

 

4.7                                 EntireAgreement.  This Agreement, theIntellectual Property Assignment, the New Note and the Security Agreementexpress the entire understanding of the parties with respect to thetransactions contemplated hereby.

 

4.8                                 NoThird Party Beneficiaries.  ThisAgreement does not and shall not be construed to confer any rights or remediesupon any person other than the parties to this Agreement and their respectivesuccessors and permitted assigns.

 

4.9                                 NeutralConstruction.  Each of the partieshereto has been involved in the negotiation, review and execution of thisAgreement; and each has had the opportunity to receive independent legal advicefrom an attorney or attorneys of its choice with respect to the

 

5

----

 

advisability ofmaking and executing this Agreement.  Inthe event of any dispute or controversy regarding this Agreement, the partieshereto shall be considered to be the joint authors of this Agreement and noprovision of this Agreement shall be interpreted against a party hereto becauseof authorship.

 

4.10                           Severability.  The provisions of this Agreement areseverable and if any one clause or provision hereof shall be held invalid orunenforceable in whole or in part in any jurisdiction, then such invalidity orunenforceability shall affect only such clause or provision, or part thereof,in such jurisdiction, and shall not in any manner affect such clause orprovision in any other jurisdiction, or any other clause or provision of thisAgreement in any jurisdiction.

 

4.11                           FurtherAssurances.  Each of the partiesagree to take all reasonable steps and to execute all other reasonabledocuments that may in such party’s reasonable discretion be necessary toconsummate or document the transactions contemplated hereby.

 

[This space intentionally left blank.]

 

6

----

 

IN WITNESS WHEREOF, the parties hereto have executedthis 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 |

 

7

----