BLONDER TONGUE LABORATORIES, INC.
0 XXXX XXXXX XXXX
XXX XXXXXX, XX 00000
February 27, 0000
Xxxx Lahad, Chairman
Octalica Inc. (f/k/a TMT Coaxial Networks, Inc.)
00 Xxxxxxx Xxxxxx
Xxxxx 00000 Xxxxxx
Yosi Lahad, Chairman
T.M.T. - Third Millennium Technologies Ltd.
00 Xxxxxxx Xxxxxx
Xxxxx 00000 Xxxxxx
Re: Stock Purchase Agreement (the "Stock Purchase Agreement") by and among
Octalica Inc. (f/k/a T.M.T. Coaxial Networks, Inc.), a Delaware corporation
("Seller"), T.M.T. - Third Millennium Technologies Ltd., a company organized
under the State of Israel (the "Company"), and Shenzhen Junao Technology Company
Ltd., a corporation organized under the laws of the People's Republic of China
("Purchaser")
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Dear Mr. Lahad:
Blonder Tongue Laboratories, Inc., a Delaware corporation ("Blonder
Tongue"), the Company and Seller have agreed to enter into this letter agreement
in connection with and contemporaneously with the closing of the transactions
contemplated by, the Stock Purchase Agreement. This letter agreement, upon
execution and delivery by Blonder Tongue, the Company and Seller, shall replace,
supersede and cause the immediate and automatic termination of that certain
Letter of Intent dated December 30, 2005 by and among Blonder Tongue, Seller and
the Company. Capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed to such terms in the Stock Purchase Agreement.
Blonder Tongue, the Company and Seller hereby agree as follows:
1. Blonder Tongue hereby guarantees the payment of the Purchase Price
payable by Purchaser to Seller pursuant to the terms of the Stock Purchase
Agreement, subject to any and all rights of offset and defenses available to
Purchaser under the Stock Purchase Agreement. In the event that Purchaser shall
assign the Stock Purchase Agreement, Blonder Tongue shall automatically
guarantee the payment of the Purchase Price payable by the assignee to Seller
pursuant to the terms of the Stock Purchase Agreement provided Purchaser obtains
the prior written consent of Blonder Tongue with respect to such assignment if
the assignee is not an affiliate or subsidiary of Blonder Tongue, as required
under the Stock Purchase Agreement, subject to any and all rights of offset and
defenses available to the assignee under the Stock Purchase Agreement.
2. Blonder Tongue agrees that any and all information (with the exception
of information that (i) is or becomes publicly known through no wrongful act or
omission of Blonder Tongue or any affiliate, (ii) was known to Blonder Tongue
prior to its due diligence examination of the Company, or (iii) was rightfully
received from third parties not bound with confidentiality restrictions and
without breach of this letter agreement) obtained in connection with its due
diligence examination of the Company shall not be used, now or in the future, in
any legal proceedings conducted by Blonder Tongue against Seller, except
proceedings conducted in connection with the Stock Purchase Agreement.
3. Each of Blonder Tongue and the Company does hereby irrevocably remise,
release and forever discharge Seller, its shareholders, directors, officers and
employees, and their respective successors and assigns, of and from all, and all
manner of, actions and causes of action, suits, debts, dues, accounts, bonds,
covenants, contacts, agreements, judgments, claims and demands whatsoever in law
or equity, each of them ever had, now has, or which it or its successors or
assigns hereafter can, shall or may have, for, or by reason of any cause, matter
or thing whatsoever, from the beginning of the world to the date hereof, other
than those arising under, in connection with or related to, the Stock Purchase
Agreement or this letter agreement.
4. Seller does hereby irrevocably remise, release and forever discharge
each of Blonder Tongue and the Company, and their respective shareholders,
directors, officers and employees, and their respective successors and assigns,
of and from all, and all manner of, actions and causes of action, suits, debts,
dues, accounts, bonds, covenants, contacts, agreements, judgments, claims and
demands whatsoever in law or equity, it ever had, now has, or which it or its
successors or assigns hereafter can, shall or may have, for, or by reason of any
cause, matter or thing whatsoever, from the beginning of the world to the date
hereof, other than those arising under, in connection with or related to the
Stock Purchase Agreement or this letter agreement.
5. Blonder Tongue shall permit Seller and its representatives, and shall
cause its affiliates and subsidiaries to permit Seller and its representatives,
to have reasonable access (upon Seller's execution and delivery of its
accountant's standard confidentiality letter, if required) to the data and
information with respect to any sales of Products by Blonder Tongue and its
affiliates and subsidiaries for purposes of (i) verifying the information
contained in the Quarterly Sales and Manufacturing Reports delivered to Seller
from time to time and the calculation of the Inventory Price Component and (ii)
verifying the information contained in the Earn-Out Statements delivered to
Seller from time to time and the calculation of the Earn-Out Amount (but only to
the extent necessary to verify such information and calculations).
6. Blonder Tongue agrees that at all times hereafter, except as required by
court order and with the exception of information that (i) is or becomes in the
public domain (through no default by Blonder Tongue or any affiliate or
subsidiary of Blonder Tongue), (ii) was known to Blonder Tongue prior to its due
diligence examination of the Company or (iii) was received from third parties
that Blonder Tongue neither knew nor should have known are subject to a
confidentiality undertaking with respect to such information, it shall keep
confidential and shall not, except with the express prior written consent of
Seller, directly or indirectly, voluntarily or involuntarily, communicate,
disclose or divulge to any Person or use for the benefit of any third party, any
knowledge or information disclosed under or pursuant to the due diligence review
of the Company conducted by it, other than and excluding information related to
(w) the Retained Assets purchased by Purchaser under the Stock Purchase
Agreement, (x) the Retained Liabilities, (y) other liabilities or obligations of
the Company other than the Retained Liabilities which are not paid, satisfied
and discharged prior to the Closing as required under the Stock Purchase
Agreement or (z) the business of the Company as it exists at the Closing,
including, but not limited to, trade secrets, technology, know-how, methods,
contracts, costs, policies, sales methods, financial condition, operations,
statistics, and suppliers.
7. From and after the Closing Date and for a period of three (3) years
thereafter, neither Seller nor Blonder Tongue, nor any of their respective
subsidiaries or affiliates, will employ or solicit for employment any of the
other party's employees or the employees of such other party's respective
subsidiaries and affiliates (including all employees who were employed by the
respective parties or their subsidiaries or affiliates on February 6, 2006),
provided, however, that upon the prior written consent of Seller which consent
shall not be unreasonably withheld, Blonder Tongue and Blonder Tongue's
subsidiaries and affiliates may solicit for employment or hire employees of
Seller and of Seller's subsidiaries and affiliates.
8. Any breach by Seller or Blonder Tongue, as applicable, of the covenants
and agreements contained in Sections 2, 6 or 7 above will result in irreparable
injury to Blonder Tongue or Seller, as applicable, for which money damages could
not adequately compensate Blonder Tongue or Seller, as applicable, and in the
event of any such breach, Blonder Tongue or Seller, as applicable, shall be
entitled (in addition to any other rights and remedies which it may have at law
or in equity) to have an injunction issued by any competent court of equity
enjoining and restraining Blonder Tongue or Seller, as applicable, and/or any
other Person involved therein from continuing such breach. The existence of any
claim or cause of action which Seller or Blonder Tongue may have against Blonder
Tongue or Seller (as appropriate) or any other Person shall not constitute a
defense or bar to the enforcement of such covenants. If Blonder Tongue or
Seller, as applicable, is obliged to resort to the courts for the enforcement of
any of the covenants or agreements contained herein, or if such covenants or
agreements are otherwise the subject of litigation between the parties, then the
term of such covenants and agreements shall be extended for a period of time
equal to the period of such breach, which extension shall commence on the later
of (a) the date on which the original (unextended) term of such covenants and
agreements is scheduled to terminate or (b) the date of the final court order
(without further right of appeal) enforcing such covenant or agreement. The
covenants contained in this Section 8 are independent of all other covenants
between Seller and Blonder Tongue.
9. The Company and Blonder Tongue agree that the Amended and Restated
Distribution Agreement dated as of September 12, 2002 between the Company and
Blonder Tongue, as amended (the "Distribution Agreement"), is in full force and
effect, including, without limitation, the appointment of Blonder Tongue as the
exclusive distributor of TMT Products (as defined in the Distribution Agreement)
in the Territory (as defined in the Distribution Agreement). The Company agrees
that, notwithstanding anything to the contrary contained in the Distribution
Agreement or in any notice, if any, heretofore given by the Company to Blonder
Tongue, Blonder Tongue shall remain the exclusive distributor of TMT Products in
the Territory for the remainder of the Term (as defined in the Distribution
Agreement) and shall be released from any and all Sales Quotas (as defined in
the Distribution Agreement) and other requirements imposed on Blonder Tongue in
the Distribution Agreement for purposes of maintaining its exclusive rights
thereunder.
9. This letter agreement will be governed by and construed and enforced in
accordance with the laws of the State of New Jersey, USA, without regard to
conflict of laws principles. This letter agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
Please acknowledge your acceptance of the foregoing by executing this
letter agreement in the space below.
Very truly yours,
BLONDER TONGUE LABORATORIES, INC.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, Chief Executive Officer
ACCEPTED AND AGREED TO:
on this 27th day of February, 2006
Octalica Inc.
By: /s/ Moti Kintzlinger
Name: Moti Kintzlinger
Title: President
T.M.T. - Third Millennium Technologies Ltd.
By: /s/ Moti Kintzlinger
Name: Moti Kintzlinger
Title: CEO
