BLONDER TONGUE LABORATORIES, INC. 1 JAKE BROWN ROAD OLD BRIDGE, NJ 08857 February 27, 2006 Yosi Lahad, Chairman Octalica Inc. (f/k/a TMT Coaxial Networks, Inc.) 14 Shabazi Street Yahud 56231 Israel Yosi Lahad, Chairman T.M.T. - Third Millennium Technologies Ltd. 14 Shabazi Street Yahud 56231 Israel 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") - -------------------------------------------------------------------------------- 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/ James A. Luksch James A. Luksch, 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
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10-Q Filing
Blonder Tongue Laboratories (BDRL) 10-Q2006 Q1 Quarterly report
Filed: 12 May 06, 12:00am