**Exhibit10.8**

 

LLC INTERESTPURCHASE AGREEMENT

 

THIS LLC INTEREST PURCHASE AGREEMENT (this “Agreement”), entered intoas of the 17`*h* day of April, 2003 by and between LOTUS PACIFIC,INC., a Delaware corporation, having offices at 18200 Von Karman Avenue Suite730, Irvine, CA 92612 (the “Purchaser”), and CARMCO INVESTMENTS, LLC, aConnecticut limited liability company, having offices at 47 Cherry Gate Lane,Trumbull, CT 06611 (the “Seller”).

 

WITNESSETH:

 

WHEREAS,Purchaser and Opta Systems, LLC, a Delaware limited liability company (the“Company”) are parties to that certain Loan and Security Agreement dated ofeven date herewith (the “Loan Agreement”), pursuant to which Purchaser loanedthe Company the sum of $5,986,019.48 for the purchase (the “Business Purchase”)from SONICbIue Incorporated (“SONICbIue”), a Delaware corporation and SensoryScience Corporation, a Delaware corporation and wholly-owned subsidiary ofSONICbIue (collectively, “Prior Owners”) of the Prior Owners’ design,production, marketing and servicing of video electronics products business,which Prior Owners conducted generally, but not exclusively, as a business unitunder the name “Sensory Science” (the “Business”), pursuant to the AssetPurchase Agreement dated as of March 20, 2003 by and among the Company andthe Prior Owners (“Asset Purchase Agreement”);

 

WHEREAS,Seller is the record and beneficial owner of all of the issued and outstandingmembership interests of Opta Systems, LLC, a Delaware limited liability company(the “Company”), which Company was formed for the sole purpose of acquiring theBusiness;

 

WHEREAS,Seller desires to sell to Purchaser all, and not less than all, of theoutstanding membership interests of the Company and the Business as a goingconcern, and to consummate the other transactions contemplated by thisAgreement, all upon the terms and subject to the conditions set forth in thisAgreement;

 

WHEREAS,Purchaser desires to purchase from Seller all, and not less than all, of theoutstanding membership interests of the Company, and to consummate the.other transactions contemplated by this Agreement, all upon the terms andsubject to the conditions set forth in this Agreement;

 

WHEREAS,it is a condition to the Loan Agreement that Seller agree to sell to Purchaserall of the issued and outstanding membership interests of the Company.

 

NOW,THEREFORE, in consideration of the premises and of the mutual covenants andagreements herein set forth, the parties hereby covenant and agree as follows:

 

1.                                       SALE AND PURCHASE OF THE MEMBERSHIP INTEREST.

 

Sellerhereby sells, assigns, transfers, and conveys to-Purchaser all right, title andinterest in all outstanding membership interests in the Company, all of itsright, title and interest in any other equity or ownership interest in orobligation of the Company of any kind

 

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whatsoever (collectivelythe “Membership Interest”). Upon execution of this Agreement, Seller shall makeand deliver to the Purchaser an assignment of the Membership Interest to thePurchaser in the form attached hereto as Exhibit A (the “Assignment”).

 

2.                                                 CONSIDERATION FOR THE MEMBERSHIP INTEREST:

 

2.1                                 Purchase and Sale.  Inconsideration for Seller’s sale of the Membership Interest and upon delivery ofthe Assignment, Purchaser shall pay and deliver to Seller by wire transfer ofimmediately available funds to the accounts designated by the Seller therefor,the sum of $420,000 (the “Purchase Price”). The Purchase Price hereunder shallbe allocated and used to satisfy the following claims and costs as follows:

 

(a)                                  the sum of $250,000 as return to the Sellerof Seller’s investment in the Company for the Company’s deposit held in escrowto secure the Company’s purchase of the Business pursuant to the Asset PurchaseAgreement; and

 

(b)                                 the sum of $170,000 to reimburse CarmineAdimando, the Chairman of the Company, and Roger Hacket, the Vice-Chairman ofthe Company for their costs and expenses in connection with the Company’sacquisition of the Business.

 

Purchaserfurther agrees that it shall be solely responsible for the reasonable fees andexpenses of Greenberg Traurig, LLP, legal counsel to the Seller and theCompany, as incurred on behalf of the Seller and the Company in connection withthe acquisition of the Business, to a maximum aggregate amount of $200,000.Purchaser agrees to reimburse the Seller for any legal fees and expenses ofGreenberg Traurig if the Purchaser or the Company does not fully pay such feesand expenses (to a maximum of $200,000) and Seller is required to pay such feesand expenses.

 

2.2                                 Vendor Retention Payment.Purchaser and the Company agree,jointly and severally to pay to Seller the sum of $100,000 (the “RetentionPayment”) in immediately available U.S. funds on October 17, 2003 (the“Payment Date”), so long as a Non-Payment Event shall not have occurred on orprior to the Payment Date. For purposes hereof, a “NonPayment Event” shall meanthe occurrence of the termination by either Samsung Electronics Co. Ltd. or LGElectronics, Inc. (each, a “Vendor”) of its relationship with the Company tosupply product to the Company, consistent with past practices by such Vendor,provided, such termination shall be continuing on the Payment Date and theCompany is operating in the ordinary course. Notwithstanding the foregoing,Purchaser and the Company jointly and severally shall be required to pay theSeller the Retention Payment if such Vendor terminates its relationship withthe Company for any reason other than as a result of a commercially reasonablebusiness decision made solely by such Vendor, which decision shall not becaused by the bad faith or willful misconduct of the Company or the Purchaser.If a Non-Payment Event shall have occurred, the Purchaser and the Companyagrees that it shall deliver to the Seller a certificate from an authorizedofficer of a Vendor which has terminated its relationship with the Companydetailing the reasons for such termination, prior to the Payment Date.

 

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3.                                       REPRESENTATIONS AND WARRANTIES OF THE SELLER.

 

TheSeller hereby represents and warrants to and for the benefit of Purchaser asfollows:

 

3.1                                 Authority Relative to this Agreement.(a)                      Seller is a limited liability company, duly formed, validly existingand in good standing under the laws of the jurisdiction of formation and hasthe requisite power and authority to own, lease and operate its respectiveproperties and carry on its business as now being conducted. Seller has alllimited liability company power and authority necessary to execute and deliverthis Agreement and to consummate the transactions contemplated hereby. TheCompany is duly qualified and is authorized to do business and is in goodstanding as a foreign corporation in all jurisdictions in which the nature ofits activities and of its properties (both owned and leased) makes such qualificationnecessary, except for those jurisdictions in which failure to do so would nothave a material adverse effect on the Company or its business.

 

(b)                                 The execution and delivery of this Agreementand the consummation of the transactions contemplated hereby have been duly andvalidly authorized by the managing member of the Seller and no other companyproceedings on the part of the Seller are necessary to authorize this Agreementor to consummate the transactions contemplated hereby. This Agreement has beenduly and validly executed and delivered by Seller, and, assuming that thisAgreement constitutes a valid and binding agreement of Purchaser, constitutes avalid and binding agreement of Seller, enforceable against Seller in accordancewith its terms, except as such enforceability may be limited by applicablebankruptcy, insolvency, moratorium or other similar laws affecting or relatingto enforcement of creditors’ rights generally or general principles of equity.

 

3.2                                 Title to Membership Interest. (a) Since the date of formation of theCompany, as evidenced by the initial filing of the Certificate of Formation ofthe Company with the Delaware Secretary of State, the Seller is and has beenthe sole owner and holder of the Membership Interest: Upon payment of thePurchase Price therefor pursuant to this Agreement, the Purchaser will receivegood and marketable title to the Membership Interest, constituting 100% of theoutstanding membership interests and economic interests of the Company, freeand clear of all liens, options, encumbrances and restrictions of any kind ornature whatsoever other than restrictions imposed by federal and statesecurities laws with respect to the transfer of the Membership Interest.

 

:                                                      (b)                                  There are no outstanding options, warrants,rights (including conversion or preemptive rights and rights of first refusal),proxy or agreements among members or potential members, or agreements of anykind for the purchase or acquisition from the Company of any of its equityinterests or securities.

 

(c)                                  Other than under the Asset Purchase Agreementand the transactions contemplated therein, the Company does not own or controlany equity security or other interest of any other corporation, limitedpartnership or other business entity.        TheCompany is not a participant in any joint venture, partnership or similararrangement.

 

(d)                             The Membership Interest (i) has been dulyauthorized and validly issued and are fully paid and nonassessable, (ii) wasissued in compliance with all applicable state and federal laws concerning theissuance of securities (assuming due filing of all post-sale notices underapplicable securities laws).

 

3.3                                 Legal Proceedings and Judgments.There are no claims, actions,proceedings or investigations pending or, to Seller’s actual knowledge,threatened against or

 

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relating to Seller beforeany court or other governmental authority acting in an adjudicative capacitythat could have an adverse effect on Seller’s ability to consummate thetransactions contemplated hereby.

 

3.4                                 Brokers.No person is entitled to any brokerage, financial advisory,finder’s or similar fees or commissions payable by Seller or any of itsaffiliates in connection with the transactions contemplated by this Agreementor associated with the Business Purchase based upon arrangements made by or onbehalf of Seller.

 

3.5                                 Business Purchase Documentation.Attached hereto as Schedule 3.5is a true and complete copy of the Asset Purchase Agreement, together withall exhibits and schedules associated therewith. Seller has provided toPurchaser copies of all documents required under the Asset Purchase Agreementto consummate the transactions contemplated thereby.

 

3.6                                 Interim Operations of the Company.The Company was formed solely forthe purpose of acquiring the Business and has engaged in no business other thanin connection with the Business Purchase and the transactions contemplated inthe Asset Purchase Agreement.

 

3.7                                 No Conflict.Seller has delivered to the Purchaser true and complete copiesof the Certificate of Formation and Operating Agreement of the Company, asamended to date and the Certificate of Formation and Operating Agreement of theSeller, as amended to date. The execution, delivery, and performance of andcompliance with this Agreement and the sale of the Membership Interest pursuanthereto will not, with or without the passage of time or giving of notice,result in any such violation, or be in conflict with or constitute a defaultunder the Certificate of Formation and Operating Agreement of the Company orthe Asset Purchase Agreement, or result in the creation of any mortgage,pledge, lien, encumbrance or charge upon any of the properties or assets of theCompany or the suspension, revocation, impairment, forfeiture or nonrenewal ofany permit, license, authorization or approval applicable to the Company, itsbusiness or operations or any of its assets or properties.

 

3.8                                 No Other Assets or Liabilities. (a) Other than  the Asset PurchaseAgreement and as otherwise set forth in Section 2.2, there are noagreements, understandings, instruments, contracts, commitments, proposedtransactions, judgments, orders, writs or decrees to which the Company is aparty or, to its knowledge, by which it is bound.

 

(b)                                 Other than reimbursement of Carmine Adimandoand Roger Hacket for their costs and expenses and the fees and expenses ofGreenberg Traurig, LLP, each as described in Section 2.1 hereof and asotherwise set forth in Section 2.2, the Company has no liabilities and, tothe knowledge of Seller and the Company, there are no contingent liabilities ofthe Company other than pursuant to or as contemplated by the Asset PurchaseAgreement.

 

3.9                                 Asset Purchase Agreement; Compliance. The Company has satisfied, and the Sellerhas caused the Company to satisfy, all of the conditions to closing that havenot otherwise been waived set forth in Article VI, Section 4.3 of theAsset Purchase Agreement and all of the representations and warranties of theCompany set forth in the Asset Purchase Agreement are true, complete and correctin all material respects as of the date hereof.

 

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3.10                        Notice; Third-Party Consents:To Seller’s knowledge, the PriorOwners have delivered timely and proper notice to, and received the writtenconsent of, all third-parties required to consummate the transactionscontemplated under the Asset Purchase Agreement and this Agreement.

 

4.                                                 REPRESENTATIONS AND WARRANTIES OF PURCHASER.

 

Purchaserhereby represents and warrants to the Seller as follows:

 

4.1                                 Authority Relative to this Agreement. The Purchaser is a corporation, dulyorganized, validly existing and in good standing under the laws of thejurisdiction of formation and has the requisite power and authority to own,lease and operate its respective properties and carry on its business as now beingconducted. Purchaser has all corporate power and authority necessary to executeand deliver this Agreement and to consummate the transactions contemplatedhereby. The execution and delivery of this Agreement and the consummation ofthe transactions contemplated hereby have been duly and validly authorized bythe board of directors of the Purchaser and no other corporate proceedings onthe part of the Purchaser are necessary to authorize this Agreement or toconsummate the transactions contemplated hereby. This Agreement has been dulyand validly executed and delivered by Purchaser, and, assuming that thisAgreement constitutes a valid and binding agreement of Seller, constitutes avalid and binding agreement of Purchaser, enforceable against Purchaser in accordancewith its terms, except as such enforceability may be limited by applicablebankruptcy, insolvency, moratorium or other similar laws affecting or relatingto enforcement of creditors’ rights generally or general principles of equity.

 

.                                                               4:2                                  Legal Proceedings and Judgments.There are no material claims,actions, proceedings or investigations pending or, to Purchaser’s actualknowledge, threatened against or relating to Purchaser before any court orother governmental authority acting in an adjudicative capacity that could havea material adverse effect on Purchaser’s ability to consummate the transactionscontemplated hereby.

 

4.3                                 Purchase of Membership Interest forInvestment.ThePurchaser has been informed that the Membership Interest has not beenregistered under the Securities Act of 1933, as amended or under any applicablestate securities laws. Purchaser will be acquiring ownership of the MembershipInterest for its own account, for investment purposes only, and not with a viewto the resale or distribution thereof in violation of any applicable securitieslaws.

 

5.                                                 COVENANTS OF THE PARTIES.

 

5.1                                 Further Assurances. (a) Subject to the terms and conditions ofthis Agreement; each of the parties hereto agrees to execute and deliver,before and after the Closing, such other documents, instruments, certificatesand agreements and to take such other action as may be reasonably necessary ordesirable for the implementation of this Agreement and the consummation of thetransactions contemplated hereby.

 

(b)Seller agrees to execute and deliver such other documents, instruments,certificates and agreements and to take such other action as Purchaser and itscounsel may deem reasonably necessary or desirable in order to consummate theClosing (as defined in the Asset Purchase Agreement) of the transactionscontemplated by the Asset Purchase Agreement.

 

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6.                                       INDEMNITY BY THE PURCHASER AND THE SELLER.

 

6:1                                 Indemnification of the Seller by thePurchaser:ThePurchaser shall indemnify and hold harmless the Seller from, against and inrespect of the full amount of any and all liabilities, damages, claims,deficiencies, assessments, losses, penalties, interest, costs and expenses;including, without limitation, reasonable fees and disbursements of trial andappellate counsel, arising from, in connection with, or incident to any breachor violation of any of the representations, warranties, covenants or agreementsof the Purchaser set forth in this Agreement.

 

6.2                                 Indemnification of the Purchaser by theSeller.The Sellershall indemnify and hold harmless the Purchaser from, against and in respect ofthe full amount of any and all liabilities, damages, claims, deficiencies,assessments, losses, penalties, interest, costs and expenses, including,without limitation; reasonable fees and disbursements of trial and appellatecounsel arising from, in connection with, or incident to any breach orviolation of any of the representations, warranties, covenants or agreements ofthe Seller set forth in this Agreement. In no event shall Seller indemnify andhold harmless the Purchaser from, against and in respect of the full amount ofany and all liabilities, damages, claims, deficiencies, assessments, losses,penalties, interest, costs and expenses, including, without limitation,reasonable fees and disbursements of trial and appellate counsel arising from,in connection with, or incident to any breach or violation by the Prior Owners`of any of the representations, warranties, covenants or agreements of the PriorOwners set forth in the Asset Purchase Agreement.

 

6.3                                 Claims for Indemnification.A claim for indemnity pursuant toSection 6.1 or 6.2 of this Agreement may be made by any indemnified partyat any time by the giving of written notice thereof to the indemnifying party. Thenotice shall set forth in reasonable detail the basis upon which the claim forindemnity is made.

 

6.4                                 Defense of Claims:If any person or entity not a partyto this Agreement shall make any demand or claim, or file or threaten to fileany lawsuit, which demand, claim or lawsuit may result in any liability, damageor loss to any party that is indemnified under Section 6.1 or 6:2 of thisAgreement or that may cause liability to any indemnified party as the resultof, arising from, in connection with or incident to any breach or violation ofany representations, warranties, covenants, or agreements contained in thisAgreement, then, in that event, after notice by the indemnified party to theindemnifying party of the demand, claim or lawsuit, the indemnifying partyshall have the option, at the indemnifying party’s cost and expense, to retaincounsel reasonably satisfactory to the indemnified party, to defend any demand,claim or lawsuit. Thereafter, the indemnified party shall be permitted toparticipate in any defense at the indemnified party’s own expense, providedhowever, that the indemnifying party shall not be entitled to settle any claimon behalf of, or consent to any judgment against the indemnified party withoutthe prior written consent of the indemnified party; unless such settlement isonly for the payment of money by the indemnifying party and the indemnifiedparty is fully released from and against any liability. If the indemnifyingparty shall fail to respond within ten (10) days after receipt of the notice ofany demand, claim or lawsuit; the indemnified party shall retain counsel andconduct the defense of the demand, claim or lawsuit as the indemnified partymay deem proper in the discretion of the indemnified party, at the cost andexpense of the indemnifying

 

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party. The indemnitiesfrom the indemnifying party to the indemnified party shall include anyliability, damage or losses that the indemnified party may suffer as the resultof the demand, claim or lawsuit.

 

7:                                       CLOSING.

 

7.1                                 Timing and Location.The closing hereunder (the“Closing”) shall take place simultaneously upon the execution of this Agreementat the offices of Reed Smith LLP, 1901 Avenue of the Stars, Suite 700, LosAngeles, CA 90067 or such other location to be mutually agreed upon by theSeller and the Purchaser.

 

7.2                                 Closing Deliveries.At the Closing; subject to all theterms, conditions and provisions of this Agreement, the following shall takeplace as a single integrated transaction:

 

(a)                                  The Seller shall make and deliver to thePurchaser the Assignment, as required by Section 1 hereof.

 

(b)                                 The Seller shall deliver to the Purchasercertified copies of the resolutions duly adopted by the managing member of theSeller authorizing the execution, delivery and performance of this Agreementand each of the other transactions contemplated hereby.

 

(c)                                  The Seller shall deliver to the Purchaseroriginal or certified copies of the minute book, correspondence, files and allother limited liability company records of the Company.

 

(d)                                 The Seller shall cause Carmine Adimando andRoger Hacket to deliver, releases in favor of the Company, in form satisfactoryto Purchaser, releasing the Company from any further claims or rights,including without limitation, any claims for reimbursement of expenses advancedon behalf of the Company.

 

(e)                                  The Purchaser shall deliver to the Seller thePurchase Price, as required by Section 2.1 hereof.                                  :

 

(f)                                    The Purchaser shall deliver to the Sellercertified- copies of the resolutions duly adopted by its board of directorsauthorizing the execution, delivery and performance of this Agreement and eachof the other transactions contemplated hereby.

 

(g)                                 The parties hereto shall deliver any and allother instruments or documents required to be delivered pursuant to, ornecessary or proper in order to give effect to, all of the terms and provisionsof this Agreement.

 

7:3                                 Conditions to the Seller’s Obligation toClose.The Seller’sobligation to close the transaction contemplated by this Agreement shall be conditionedupon fulfillment of all of the following conditions:

 

(a)                                  All of the representations and warranties ofthe Purchaser set forth in Section 4 hereof shall be true, complete andaccurate in all respects.

 

(b)                                 The prior or simultaneous closing of thetransactions contemplated by the Asset Purchase Agreement.

 

(c)                                  The Purchaser shall have delivered to theSeller all of the items that the Purchaser is required to deliver pursuant toSection 7.2 of this Agreement.

 

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7.4                                 Conditions to Purchaser’s Obligation to Close.The Purchaser’s obligation to closethe transaction contemplated by this Agreement shall be conditioned uponfulfillment of all of the following conditions:

 

(a)                                  All of the representations and warranties ofthe Seller set forth in Section 3 hereof shall be true, complete andaccurate in all respects.

 

(b)                                 The prior or simultaneous closing of thetransactions contemplated by the Asset Purchase Agreement.

 

(c)                                  The Seller shall have delivered to thePurchaser all of the items that the Seller is required to deliver pursuant toSection 7.2 of this Agreement.

 

7.5                                 Failure to Close.          Inthe event that the transaction contemplated by this Agreement shall fail to beconsummated as the result of the Seller’s inability or refusal to satisfy, asof the scheduled Closing date, all of the conditions set forth inSection 7:4 hereof, then the Purchaser shall have the right to obtain anyand all remedies to which the Purchaser is entitled under the laws of the Stateof Delaware for any and all losses or damages arising from such failure. In theevent that the transaction contemplated by this Agreement shall fail to beconsummated as the result of the Purchaser’s inability or refusal to satisfy,as of the scheduled Closing date, all of the conditions set forth inSection 7.3 hereof, then the Seller shall have the right to obtain any andall remedies to which the Seller is entitled under the laws of the State ofDelaware for any and all losses or damages arising from such failure.

 

7:6                                 Specific Performance.The parties hereto agree thatirreparable damage would occur in the event that any of the provisions of thisAgreement were not performed in accordance with their specific terms or wereotherwise breached. It is agreed that the parties shall be entitled to an injunctionor injunctions to prevent breaches of this Agreement and to enforcespecifically the terms and provisions hereof in any court of the United Statesor any state having jurisdiction, this being in addition to any other remedy towhich they are entitled at law or in equity.

 

MISCELLANEOUS.

 

8.1                                 Governing Law.This Agreement shall be governed byand construed in accordance with the internal substantive and procedural lawsof the State of Delaware without regard to that state’s rules regarding choiceof law.

 

8.2                                 Notices. Any notices, requests, demands and other communications required orpermitted to be given hereunder shall be given in writing and shall be deemedto have been duly given when delivered by hand, five days following the date ofdeposit in the United States mail, by registered or certified mail, postageprepaid; return receipt requested, or on the delivery date shown on a writtenverification of delivery provided by a reputable private delivery service, ifaddressed to the last address provided to the sender by the addressee.

 

8.3                                 Entire Agreement. This Agreement constitutes the entireagreement among the parties hereto with respect to the subject matter hereofand supersedes all prior and contemporaneous agreements, understandings,negotiations and discussions, both written and oral, among such parties withrespect to such subject matter. This Agreement may not be

 

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amended or modified inany way; except by a written instrument executed by all of the parties hereto:

 

8.4                                 No Assignment; Binding Effect. Neither this Agreement nor any right,interest or obligation hereunder may be assigned (by operation of law orotherwise) by any party without the prior written consent of all parties andany attempt to do so will be void. Subject to the preceding sentence, thisAgreement is binding upon, inures to the benefit of and is enforceable by theparties hereto and their respective successors and assigns.

 

8.5                                 No Waiver.No waiver of any of the provisions of this Agreement shall bedeemed or shall constitute a waiver of any other provisions hereof (whether ornot similar), nor shall any such waiver constitute a continuing waiver unlessotherwise expressly so provided.

 

8.6                                 No Third Party Beneficiary.Nothing expressed or implied in thisAgreement is intended or shall be construed to confer upon or give any person,firm, corporation, partnership, association or other entity, other than theparties hereto and their respective heirs, personal representatives, legalrepresentatives and assigns, any rights or remedies under or by reason of thisAgreement.

 

8.7                                 Severability. The invalidity of any one or more of thewords, phrases, sentences, clauses, sections or subsections contained in thisAgreement shall not affect the enforceability of the remaining portions of thisAgreement or any part hereof, all of which are inserted conditionally on theirbeing valid in law, and, in the event that any one or more of the words,phrases, sentences, clauses, sections or subsections contained in thisAgreement shall be declared invalid, this Agreement shall be construed as ifsuch invalid word or words, phrase or phrases; sentence or sentences, clause orclauses, section or sections, or subsection or subsections had notbeen inserted.

 

8:8                                 Section Headings. The section and other headingscontained in this Agreement are for reference purposes only and shall notaffect the meaning or interpretation of any provisions of this Agreement.

 

8.9                                 Pronouns and Plurals.Whenever the context may require,any pronoun used in this Agreement shall include the corresponding masculine,feminine or neuter forms, and the singular forms of nouns, pronouns and verbsshall include the plural and vice versa.

 

8.10                           Counterparts.This Agreement may be executed inmultiple counterparts and all such counterparts shall collectively constitutean original Agreement, which may be evidenced by any one counterpart.

 

8.11                           Public Disclosure.Except as otherwise required byapplicable law (including federal and state securities laws as applicable toPurchaser) or, as to Purchaser, by the rules and regulations of the any stockexchange, the NASD and/or Nasdaq, no press release, announcement or otherdisclosure (whether or not in response to any inquiry) of the existence of anysubject matter of, or the terms and conditions of, this Agreement shall be madeby any party hereto unless approved by both of the parties hereto prior torelease; provided, however, that such approval shall not be unreasonablywithheld or delayed:

 

Closing:

 

8.12                           Termination.This Agreement may be terminated at any time prior to the

 

(a)                                  by agreement of all the parties hereto;

 

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(b)                                 by the Purchaser, in its sole discretion, ifthe Loan Agreement is terminated or is no longer in effect; or

 

(c)                                  by the Purchaser, in its sole discretion, ifthe Asset Purchase Agreement is terminated in accordance with its terms.

 

Inthe event of a valid termination of this Agreement as provided in thisSection 8.12, this Agreement shall forthwith become void and there shallbe no liability or obligation on the part of Purchaser, Seller or the Company,or their respective officers, directors or shareholders or members; provided,however, that each party shall remain liable for any breaches of this Agreementprior to its termination; and provided further that, the provisions of Sections6.1, 6.2, 6:3, 6.4, 8.11 and 8.13 shall remain in full force and effect andsurvive any termination of this Agreement.

 

8:13.                        Waiver of Jury Trial.THE PARTIES EACH HEREBY WAIVE TRIALBY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE SELLER OR THE PURCHASER MAY BEPARTIES, ARISING OUT OF, OR IN ANY WAY PERTAINING TO, THIS AGREEMENT. IT ISAGREED THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMSAGAINST ALL PARTIES TO SUCH - ACTIONS OR PROCEEDINGS. THIS WAIVER IS KNOWINGLY,WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES, AND EACH PARTY HEREBY REPRESENTSTHAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TOINDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITSEFFECT. EACH OF THE PARTIES FURTHER REPRESENTS THAT EACH HAS BEEN REPRESENTEDIN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BYINDEPENDENT LEGAL COUNSEL, SELECTED OF EACH PARTY’S OWN FREE WILL, AND THATEACH PARTY HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

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LOTUS PACIFIC, INC.

18200 Von KarmanAvenue, Suite 730, Irvine, CA 92612 Tel. (949) 475-1880 • Fax (949) 475-1808

 

 

April 17,2003

 

CarmcoInvestments, LLC 47 Cherry Gate Lane Trumbull, CT 06611

Attn:Mr. Carmine Adimando

 

 

Re:                               LLC Interest Purchase Agreement datedApril 17. 2003 (the “Purchase Agreement”)

 

DearCarmine:

 

Referenceis made to the above referenced agreement and the other agreements by and amongCarmco Investments, LLC and Lotus Pacific, Inc. of even date herewith.Capitalized terms not otherwise defined herein shall have the meanings setforth in the Purchase Agreement.

 

Asof this date, we understand Seller may be not in good standing under the lawsof the state of Connecticut, which could constitute a breach of Seller’srepresentation and warranty set forth in Section 3.1(a) of the PurchaseAgreement. As such, pursuant to Section 7.4(a) of the Purchase Agreement,Purchaser is not required to consummate the transactions contemplated by thePurchase Agreement.

 

Asa material inducement to Purchaser to waive such condition to close, Seller andPurchaser hereby agree to amend the Purchase Agreement as follows:

 

1.                                       Seller agrees (and the members of Selleragree to cause Seller) to promptly become in good standing (or confirm itscurrent good standing) in the records of the State of Connecticut and upondoing so all members of the Seller undertake to deliver to Purchaser documentsexpressly reaffirming and ratifying the Purchase Agreement and the agreementsand other documents to which Seller is a party in connection with the PurchaseAgreement.

 

2.                                       Purchaser shall deposit the Purchase Priceinto the client trust account of Greenberg Traurig LLP, counsel to Seller.Greenberg Traurig shall not be entitled to deliver the Purchase Price to Selleruntil Seller and its members fully comply with the covenants set forth inParagraph 1 above.

 

3.                                       The parties agree that maximum aggregateamount of legal fees and expenses of Greenberg Traurig to be paid by Purchaserand the Company shall be reduced to $194,435.85.

 

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4.                                       The legal opinion of Greenberg Traurigpreviously delivered in connection with the Closing shall be specificallyamended to include an opinion as to the enforceability of the PurchaseAgreement.

 

Exceptas set forth herein, the Purchase Agreement shall remain unaffected and in fullforce and effect. This letter agreement may be executed in one or morecounterparts, all of which together shall constitute one original document.

 

Kindlyacknowledge your agreement to the foregoing by signing where indicated below.

 

Verytruly yours, LOTUS PACIFIC, INC.

 
| By:                       |
|---------------------------|
|                      |
| /s/  Yimin Foo            |   |
| Yimin  Foo, CFO           |
|                      |
|                      |
| Acknowledged  and Agreed: |
| CARMCO  INVESTMENTS, LLC  |
| :                         |
|                      |
| Name:                     | /s/  Carm Adimando | Title:  Member of Seller |
| Name:                     | /s/  Josephine Adimando | Title:  Member of Seller |
|                           |  |  |  |  |

 

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