EXHIBIT 1
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
BETWEEN
TTR TECHNOLOGIES, INC.
AND
MACROVISION CORPORATION
DATED AS OF JANUARY 10, 2000
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
1. PURCHASE AND SALE OF
STOCK...............................................................................1
1.1 Sale and Issuance of Common Stock...........................................1
1.2 Closing.....................................................................1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................1
2.1 Organization, Good Standing and Qualification...............................2
2.2 Capitalization and Voting Rights............................................2
2.3 Subsidiaries................................................................3
2.4 Authorization...............................................................3
2.5 Valid Issuances of Common Stock.............................................3
2.6 Compliance with Law and Charter Documents...................................3
2.7 Compliance with Other Instruments, None Burdensome, Etc.....................4
2.8 Government Consent, Etc.....................................................5
2.9 Offering....................................................................5
2.10 Litigation..................................................................5
2.11 Agreements; Action..........................................................5
2.12 Related Party Transactions..................................................6
2.13 Environmental and Safety Laws...............................................6
2.14 Status of Proprietary Assets................................................7
2.15 Material Agreements.........................................................8
2.16 Disclosure..................................................................8
2.17 Registration Rights.........................................................9
2.18 Tax Status..................................................................9
2.19 Employees ..................................................................9
2.20 Insurance..................................................................10
2.21 Title to Property and Assets...............................................10
2.22 Financial Statements.......................................................10
2.23 SEC Documents, Financial Statements........................................11
2.24 No Integrated Offering.....................................................11
2.25 Year 2000..................................................................12
i
TABLE OF CONTENTS
(CONTINUED)
PAGE
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.....................................12
3.1 Authorization..............................................................12
3.2 Purchase Entirely for Own Account..........................................12
3.3 Disclosure of Information..................................................12
3.4 Investment Experience......................................................13
3.5 Accredited Investor........................................................13
3.6 Restricted Securities......................................................13
3.7 Legends....................................................................13
4. COVENANTS AND AGREEMENTS...........................................................14
4.1 Ordinary Course of Business and Notice of Adverse Changes..................14
4.2 Access to Properties and Records...........................................14
4.3 Exclusive Negotiations.....................................................14
4.4 Right of First Refusal.....................................................15
4.5 Preemptive Right of Investor...............................................16
4.6 Certain Employment Matters.................................................17
4.7 Board Observer.............................................................17
4.8 Registration of Shares.....................................................18
4.9 Form D; Blue Sky Laws......................................................18
4.10 Reporting Status; Eligibility to Use Form S-1..............................18
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING....................................19
5.1 Execution of Agreement.....................................................19
5.2 Shares Certificate.........................................................19
5.3 Representatives, Warranties, Covenants.....................................19
5.4 Litigation.................................................................20
5.5 Stock Listing..............................................................20
5.6 Opinion....................................................................20
5.7 Alliance Agreement.........................................................20
5.8 Financial Statements.......................................................20
5.9 Accounting for Investment..................................................20
ii
TABLE OF CONTENTS
(CONTINUED)
PAGE
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.................................20
6.1 Execution of Agreement.....................................................21
6.2 Purchase Price.............................................................21
6.3 Representations, Warranties, Covenants.....................................21
6.4 Legal Impediment...........................................................21
6.5 Alliance Agreement.........................................................21
7. DEFINITIONS........................................................................21
8. MISCELLANEOUS......................................................................22
8.1 Survival of Warranties.....................................................22
8.2 Successor and Assigns......................................................23
8.3 Governing Law..............................................................23
8.4 Counterparts...............................................................23
8.5 Titles and Subtitles.......................................................23
8.6 Notices....................................................................23
8.7 Finder's Fee...............................................................24
8.8 Expenses...................................................................24
8.9 Amendments and Waivers.....................................................25
8.10 Severability...............................................................25
8.11 Entire Agreement...........................................................25
iii
THIS STOCK PURCHASE AGREEMENT, effective as of January 10, 2000, is by
and between TTR TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and
MACROVISION CORPORATION, a Delaware corporation (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms
and conditions of this Agreement, the Investor agrees to purchase at the Closing
and the Company agrees to sell and issue to the Investor at the Closing, one
million, eight hundred eighty thousand, nine hundred thirty-seven shares
(1,880,937) of the Company's Common Stock $0.001 par value (the "Shares"). The
purchase price for the Shares (subject to adjustment as provided in section 4.8
hereof) shall be Two Dollars and Thirteen Cents ($2.1266) per Share, or an
aggregate purchase price of Four Million Dollars ($4,000,000) (the "Purchase
Price"), which purchase price assumes that such Shares will be registered under
the Securities Act within 90 days of the Closing and will be freely tradable as
of that time by Investor, without regard to exemptions under the Securities Act.
The per share Purchase Price of each Share shall be determined by dividing the
number of shares of Common Stock outstanding immediately prior to the Closing,
on a fully diluted basis, into $31 million. The number of Shares of Common Stock
to be issued to Investor shall be determined by dividing the per share Purchase
Price, determined in the preceding sentence, into the aggregate $4 million
Purchase Price.
1.2 CLOSING. The purchase and sale of the Common Stock shall
take place at the offices of Manatt, Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx Xxx,
Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx (or such other location as the Investor may
designate and the Company consents thereto), at 10:00 A.M. on January 12, 2000,
or such other time and date as the Investor determines that all of the
conditions to the obligation of Investor, set forth in Section 5 hereof, have
been or will be satisfied (the "Closing"). At the Closing, the Company shall
deliver to the Investor a certificate representing the Shares against receipt by
the Company from the Investor of a wire transfer in the amount of the Purchase
Price.
1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Investor, except as
set forth on a Schedule of Exceptions attached as SCHEDULE A hereto (the
"Schedule of Exceptions"), specifically identifying the relevant subparagraph
hereof, which exceptions shall be deemed to be a part of the representations and
warranties as if made hereunder (provided that such Schedule of Exceptions may,
at the discretion of the Company, be amended from time to time as necessary
until Closing, so long as such amendments do not reflect any material change in
the disclosure), the following:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
Material Adverse Effect on its business or properties.
2.2 CAPITALIZATION AND VOTING RIGHTS. Immediately prior to
the Closing, the authorized capital of the Company will consist of:
(i) CAPITAL STOCK. 25,000,000 shares of common stock
("Common Stock"), of which 10,602,866 are issued and outstanding and 5,000,000
shares of preferred stock, none of which are issued and outstanding. The Company
has reserved an aggregate 1,500,000 shares of Common Stock under its 1996
employee stock option plan for purposes of (i) future grants of stock options to
employees, consultants and directors (hereinafter, the "ESOP"), and (ii)
issuance to holders of previously granted stock options upon exercise of such
options. Additionally, the company has reserved an additional 25,000 shares of
common stock under its non-executive directors option plan for issuance to its
non-employee directors. There is no other class or series of stock authorized.
(ii) WARRANTS AND OPTIONS. The Company has warrants
and options exercisable and outstanding to purchase up to an aggregate of
3,224,911 shares of Common Stock, except for 749,400 ESOPS currently exercisable
and outstanding.
2
(iii) OTHER AGREEMENTS. Except as set forth in this
Agreement and in the Schedule of Exceptions, there are no outstanding options,
warrants, convertible securities, rights (including conversion, right of first
refusal or any preemptive rights) or agreements for the purchase or acquisition
from the Company of any shares of its capital stock or any future issuance of
securities by the Company.
(iv) VOTING AGREEMENTS. Except as set forth in this
Agreement, the Company has no agreement, obligation or commitment with respect
to the election of any individual or individuals to the Board, and to the best
of the Company's knowledge, there is no voting agreement or other arrangement
among its shareholders with respect to the election of any individual or
individuals to the Board.
(v) COMMON STOCK OUTSTANDING. The total number of
shares of the Company's Common Stock outstanding on a fully diluted basis,
immediately prior to the Closing, is 14,577,177 shares.
2.3 SUBSIDIARIES. Except for TTR Technologies, Ltd., the
Company's wholly-owned Israeli subsidiary with offices in Kfar-Saba, Israel, the
Company does not own or control, directly or indirectly, any other corporation,
association, or other business entity.
2.4 AUTHORIZATION. All corporate action on the part of the
Company, its directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
the Company hereunder and the authorization, issuance and delivery of the Common
Stock being sold hereunder has been taken or will be taken prior to the Closing,
and this Agreement, upon due execution and delivery, constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
2.5 VALID ISSUANCES OF COMMON STOCK. The Shares which are
being purchased by the Investor hereunder, when issued, sold and delivered in
accordance with the
3
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable, and the Investor shall have good and
marketable title to such Shares, free and clear of any liens, pledges,
encumbrances, taxes, charges or restrictions of any kind (other than those
created by or through the Investor).
2.6 COMPLIANCE WITH LAW AND CHARTER DOCUMENTS. The Company
is not in violation of, or default under, any provisions of its Certificate of
Incorporation or Bylaws, both as currently in effect. To its knowledge, the
Company is in compliance in all material respects with all applicable laws,
rules, regulations, judgments, decrees and governmental orders, except for such
non-compliance that would not have a Material Adverse Effect on the properties,
financial condition, operations, prospects or business of the Company. The
Company has received no notice of any violation of such laws, rules,
regulations, judgments, decrees or orders which has not been remedied prior to
the date hereof or which would have a Material Adverse Effect on the Company.
The execution, delivery and performance of the Agreement and the consummation of
the transactions contemplated thereby will not result in any such violation or
default, or be in conflict with or constitute, with or without the passage of
time or the giving of notice or both, either a default under the Company's
Certificate of Incorporation or Bylaws, both as currently in effect, or an event
which results in the creation of any material lien, charge or encumbrance upon
the capital stock or any asset of the Company, or a default under any Material
Agreement or contract by the Company, or a violation of any laws, rules,
regulations, judgments, decrees or orders. All material licenses, permits,
approvals, registrations, qualifications, certificates and other authorizations
necessary for the conduct of the Company's business as presently conducted (the
"Licenses") have been duly obtained and are in full force and effect, and there
are no proceedings pending or threatened which may result in the revocation,
cancellation, suspension or any material adverse modification of any of such
Licenses, except for Licenses that, individually or in the aggregate, the
Company need not hold or possess in order to avoid a Material Adverse Effect on
the Company's assets, properties, financial condition, operating results or
business. The Company believes it can obtain, without undue burden or expense,
any similar authority for the conduct of its business in the future as presently
conducted and proposed to be conducted.
4
2.7 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC.
The execution, delivery and performance of and compliance with this Agreement
and the issuance and sale of the Shares will not result in nor constitute any
breach, default or violation of (i) any agreement, contract, lease, license,
instrument or commitment (oral or written) to which the Company is a party or is
bound and which involves payment by the Company or any of its subsidiaries in
excess of $250,000 or which is otherwise material to the business, properties,
financial condition or results of operation of the Company or its subsidiaries
(a "Material Agreement") or (ii) any law, rule, regulation, statute or order
applicable to the Company, any of its subsidiaries or their respective
properties, nor result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or its
subsidiaries.
2.8 GOVERNMENT CONSENT, ETC. No consent, approval, order or
authorization of, or designation, registration, declaration or filing with, any
federal, state, local or provincial or other governmental authority on the part
of the Company is required in connection with the valid execution and delivery
of this Agreement or the consummation of the transactions contemplated herein,
including the offer, sale or issuance of the Shares to the Investor.
2.9 OFFERING. In reliance on the representations and
warranties of Investor in Section 3, hereof, the offer, sale and issuance of the
Shares will not, to the best knowledge of the Company, result in a violation of
the requirements of Section 5 of the Securities Act or the qualification or
registration requirements of the California or other applicable blue sky laws or
foreign laws as such laws exist on the date hereof.
2.10 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company which
questions the validity of this Agreement or the consummation of the transactions
contemplated hereby or which might result, either individually or in the
aggregate, in any Material Adverse Effects on the assets, financial condition,
operations or business of the Company, financially or otherwise, or any change
in the current equity ownership of the Company. The Company is not a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality.
5
There is no action, suit, proceeding or investigation by the Company currently
pending or which the Company currently intends to initiate.
2.11 AGREEMENTS; ACTION.
(i) Since November 30, 1999, the Company has not (i)
declared or paid any dividends, or authorized or made any distribution upon or
with respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed or any other liabilities in excess of $250,000,
(iii) made any loans or advances to any person, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.
(ii) Except as set forth in the Schedule of
Exceptions, the Company has not engaged since November 24, 1999 in any
discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company or a
transaction or series of related transactions in which more than fifty (50%) of
the voting ownership of the Company is disposed of, or (iii) regarding any other
form of acquisition, liquidation, dissolution or winding up of the Company.
2.12 RELATED PARTY TRANSACTIONS.
(i) No employee, officer or director of the Company
or member of his or her immediate family is indebted to the Company, nor is the
Company indebted (or committed to make loans or extend or guarantee credit) to
any of them.
(ii) To the best of the Company's knowledge, no
employee or officer has any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation that competes with the
Company, except that employees or officers of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. Prior to the Closing, no officer, director or major
shareholder or member of the
6
immediate family of any officer, director or major shareholder of the Company
has a direct or indirect financial interest in any material contract with the
Company.
2.13 ENVIRONMENTAL AND SAFETY LAWS. To the best of its
knowledge, the Company is not in violation of any applicable statute, law, or
regulation relating to the environment or occupational health and safety, and to
the best of its knowledge, no material expenditures are or will be required to
comply with any such existing statute, law, or regulation.
2.14 STATUS OF PROPRIETARY ASSETS.
(i) OWNERSHIP. The Company owns, is licensed to use
or otherwise has the right to use all patents, trademarks, service marks, trade
names, copyrights and trade secrets that are material or necessary for the
operation of its business as now conducted (the "Proprietary Assets"). The
Company has not received within the past 36 months preceding the date first set
out above any communications alleging that the Company has violated or, by
conducting its business, would violate any of the patents, trademarks, service
marks, trade names, copyrights, trade secrets or other proprietary rights or
processes of any other person or entity. The Company has not granted any license
or option or entered into any agreement of any kind with respect to the use of
the Proprietary Assets owned by it, other than licenses to and sales of its
products and services made in the ordinary course of its business.
(ii) LICENSES; OTHER AGREEMENTS. The Company is not
bound by or a party to any option, license or agreement with respect to any
technology owned by any third party other than shrink-wrap licenses entered into
in the ordinary course of business except as set forth on the Schedule of
Exceptions. The Company is not obligated to pay any royalties or other payments
to another person or entity with respect to the marketing, sale, distribution,
manufacture, license or use of any Proprietary Asset or any other property or
rights, except as set forth in the Schedule of Exceptions.
(iii) NO BREACH BY EMPLOYEES. To the best of the
Company's knowledge, no employee of the Company is subject to any judgment,
decree or order of any court or administrative agency, or any other restriction
that would materially interfere with the use of his or her best efforts to carry
out his or her duties for the Company or that would conflict
7
with the Company's business as currently conducted. The Company has received no
written notice from any former employer that any employee of the Company has
prior obligations to a former employer that would interfere or conflict with
such employee's ability to perform his or her intended services for the Company.
To the best of the Company's knowledge and belief, no employee or advisor of the
Company is or is now expected to be in violation of any term of any employment
contract, patent disclosure agreement, proprietary information and inventions
agreement or any other contract or agreement or any restrictive covenant or any
other common law obligation to a former employer relating to the right of any
such employee to be employed by the Company because of the nature of the
business conducted by the Company or to the use of trade secrets or proprietary
information of others, and the employment of the Company's employees does not
subject the Company to any liability, except where such liability would not have
a material adverse effect. There is neither pending nor, to the Company's
knowledge and belief, threatened any actions, suits, proceedings or claims, or
to its knowledge any basis therefor or threat thereof with respect to any
contract, agreement, covenant or obligation referred to in the preceding
sentence.
(iv) NO INFRINGEMENT. Within the 36 months preceding
the date first set out above, no claims with respect to the Proprietary Assets
have been communicated to the Company: (A) to the effect that the manufacture,
sale, license or use of any Proprietary Asset as now used or offered or proposed
for use or sale by the Company infringes any copyright, patent, trade secret or
other intellectual property right of a third party, or (B) challenging the
ownership or validity of any of the Company's rights to or interest in such
Proprietary Assets. The Company has received no notice to the effect that any
patents or registered trademarks, service marks or registered copyright, held by
the Company are invalid or not subsisting except for failures to be valid and
subsisting that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. To the best of the
Company's knowledge, there has been no material unauthorized use, infringement
or misappropriation of any of the Proprietary Assets by any third party,
including any employee or former employee of the Company.
2.15 MATERIAL AGREEMENTS. The Company has not breached in any
material respect any term or condition of (A) any Material Agreement or (B) any
other agreement,
8
contract, lease, license, instrument or commitment (oral or written) that,
individually or in the aggregate, would have a Material Adverse Effect on the
properties, financial condition, operating results, prospects or business of the
Company. The Company is not a party to any agreement that restricts in any
material respect its ability to market, sell or license any of its products or
services (whether by territorial restriction or otherwise).
2.16 DISCLOSURE. The Company has fully provided the Investor
with all information which the Investor has requested for deciding whether to
purchase the Shares and the Company is not aware of any material information
which it has not provided to the Investor and which the Company believes is
reasonably necessary to enable the Investor to decide whether to enter into the
transaction contemplated by this Agreement. Neither this Agreement nor any other
certificate made or delivered in connection with this Agreement and the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary not to make the statements
herein or therein misleading.
2.17 REGISTRATION RIGHTS. The Company has not granted or
agreed to grant to any person or entity any rights (including piggyback
registration rights) to have any securities of the Company registered with the
US Securities and Exchange Commission ("SEC") or any other governmental
authority.
2.18 TAX STATUS. The Company has made or filed all federal,
state and foreign income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject and has paid all taxes and
other governmental assessments and charges that are shown to be due on such
returns, reports and declarations or otherwise due, except those being contested
in good faith, and has set aside on its books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. To the knowledge of the Company, there
are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim. The Company has not executed a waiver with respect to the
statute of limitations relating to the assessment or collection of any foreign,
federal, state or local tax. None of the Company's tax returns is presently
being audited by any taxing authority.
9
2.19 EMPLOYEES.
(i) EMPLOYEE BENEFIT PLANS. The Company does not
have any Employee Benefit Plan as defined in the Employee Retirement Income
Security Act of 1974.
(ii) LABOR AGREEMENTS AND ACTIONS. The Company is not
bound by or subject to (and none of its assets or properties is bound by or
subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or to the
knowledge of the Company, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the knowledge of the Company
threatened, which could have a Material Adverse Effect on the assets,
properties, financial condition, operation or business of the Company, nor is
the Company aware of any labor organization activity involving its employees.
The employment of each officer and employee of the Company is terminable at the
will of the Company upon the giving of notice and the payment of specified
amounts. Company has complied in all material respects with all applicable state
and federal equal employment opportunity laws and with other laws related to
employment.
(iii) CONFIDENTIAL INFORMATION AND INVENTION
ASSIGNMENT AGREEMENTS. Each management and technology employee, consultant and
officer of the Company has executed an agreement with the Company regarding
confidentiality and proprietary information. The Company is not aware that any
of its employees or consultants is in violation thereof, and the Company will
use its best efforts to prevent any such violation.
2.20 INSURANCE. The Company maintains and keeps in force with
good and responsible insurance companies fire, public liability, property damage
and other insurance, of the kinds and in amounts as are usual and customary in
the type of business conducted by the Company.
2.21 TITLE TO PROPERTY AND ASSETS. The Company owns and has
valid title to its property and assets free and clear of all mortgages, liens,
loans and encumbrances, except such encumbrances and liens which arise in the
ordinary course of business and do not materially impair the Company's ownership
or use of such property or assets or which would not, in the aggregate, have a
Material Adverse Effect. With respect to the property and assets it leases, the
Company is in compliance with such leases and, to the best of its knowledge,
holds a valid
10
leasehold interest free of any liens, claims or encumbrances. The Company does
not own any real property.
2.22 FINANCIAL STATEMENTS. The Company shall deliver to
Investor, on or before January 10, 2000, the Company's annual financial
statements (balance sheet and statement of earnings, statement of shareholders'
equity and statement of cash flows) dated as of December 31, 1998 and interim
financial statements for the eleven months of operations ended November 30, 1999
(the "Financial Statements"), in each case, such Financial Statements shall be
prepared in accordance with United States generally accepted accounting
principles ("GAAP"), shall include all footnotes in accordance with GAAP, and
shall be audited by the Israeli office or affiliate of a "Big 5" public
accounting firm (i.e., Deloitte and Touche, KPMG Peat Marwick, Price Waterhouse
Coopers, Xxxxxx Xxxxxxxx or Xxxxx and Xxxxx). The Financial Statements when
delivered, will fairly present the financial condition and operations of the
Company as of the dates, and for the periods, indicated therein, subject to
normal year-end adjustments. The Financial Statements described in subsection
2.21 hereof and the audited balance sheet as of November 30, 1999, as adjusted
by the auditor's subsequent event disclosure footnote, shall not show
liabilities due within 18 months from the date thereof in an amount in excess of
One Million Dollars ($1,000,000) over the amount of cash and cash equivalents
shown on such balance sheet.
2.23 Except as set forth in the Financial Statements, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business and (ii) obligations under contracts
and commitments incurred in the ordinary course of business and not required
under GAAP to be reflected in the Financial Statements, which, in both cases,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company.
2.24 SEC DOCUMENTS, FINANCIAL STATEMENTS. Since November 30,
1999, the Company has timely filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits) incorporated by reference
11
therein, being hereinafter referred to herein as the "SEC Documents"). The
Company has delivered to the Investor, or the Investor has had access to, true
and complete copies of the SEC Documents, except for such exhibits and
incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the consolidated financial statements of the Company included
in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Except as disclosed in the SEC Documents, since
November 30, 1999, there has been no material adverse change in the assets,
liabilities, business, properties, operations, financial condition, or
operations of the Company on a consolidated basis.
2.25 NO INTEGRATED OFFERING. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act of the issuance of the Shares to the Investor. The issuance of
the Shares to the Investor will not be integrated with any other issuance of the
Company's securities (past, current or future) for purposes of the Securities
Act.
2.26 YEAR 2000. The mission critical computer software
operated by the Company and each of its subsidiaries is currently capable of
providing, or is being adapted to provide uninterrupted millennium functionality
to record, store, process and present calendar dates falling on or after January
1, 2000 in substantially the same manner and with the same functionality as such
mission critical software records, stores, processes and processes and presents
such calendar dates falling on or before December 31, 1999. The costs of the
adaptations referred to in this clause will not have a Material Adverse Effect.
12
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
The Investor hereby represents and warrants that:
3.1 AUTHORIZATION. The Investor has full power and authority to
enter into this Agreement. This Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Investor is acquiring the
Shares for investment for its own account, not as a nominee or agent, and not
with a view to, or for the resale or distribution of any part thereof. The
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. The Investor further represents that it does
not have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Shares.
3.3 DISCLOSURE OF INFORMATION. The Investor has received all of the
information which it considers necessary or appropriate for deciding whether to
purchase the Shares. The Investor further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Shares. The foregoing, however, does
not limit or modify the representations and warranties of the Company in Section
2 of this Agreement or the right of the Investor to rely thereon.
3.4 INVESTMENT EXPERIENCE. The Investor (i) fully understands that
an investment in the Company is highly speculative and that it may lose its
entire investment in the Shares purchased from the Company; (ii) is experienced
in evaluating and investing in development stage companies such as the Company,
(iii) is capable of evaluating the merits and risks of its investment in the
Shares; (iv) is able to bear the economic risk of a loss of the entire amount of
its investment in the Shares; and (v) is prepared to hold the Shares for an
indefinite period of time.
13
3.5 ACCREDITED INVESTOR. The Investor is an "accredited investor"
within the meaning of Securities and Exchange Commission Rule 501 of
Regulation D, as presently in effect.
3.6 RESTRICTED SECURITIES. The Investor acknowledges that, because
the Shares have not been registered under the Securities Act, the Shares must be
held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Investor is aware of the
provisions of Rule 144 promulgated under the Securities Act which permits
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions..
3.7 LEGENDS. The Investor understands that until (a) the Shares may
be sold by the Investor under Rule 144(k) or (b) such time as the resale of the
Shares have been registered under the Securities Act as contemplated in Section
4.8 hereof, the certificates representing the Shares will bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Shares):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENT OF THOSE LAWS.
The legend set forth above will be removed and the Company will issue a
certificate without the legend to the holder of any certificate upon which it is
stamped, upon registration of the Shares, in accordance with the terms of
Section 4.8 hereof.
14
4. COVENANTS AND AGREEMENTS
4.1 ORDINARY COURSE OF BUSINESS AND NOTICE OF ADVERSE CHANGES. From
and after the date of this Agreement through the Closing, the Company shall
conduct its business in the ordinary course and consistent in all material
respects with past practice, except as may be required or contemplated in this
Agreement. The Company shall advise the Investor promptly of any Material
Adverse Effect, any breach of the Company's representations or warranties, or
any breach of a covenant contained herein of which the Company has knowledge.
4.2 ACCESS TO PROPERTIES AND RECORDS. The Company shall afford to
the Investor and its respective accountants, counsel and representatives,
reasonable access upon notice to the Company and upon agreed upon times during
normal business hours throughout the period prior to the Closing to all of the
Company's properties, books, contracts, commitments and written records and
shall make reasonably available its respective officers and employees to answer
fully and promptly questions put to them (so long as such questions are not
outside of the scope or purpose of this Section; provided that such access shall
not unreasonably interfere with the normal business operations of the Company).
Any such investigations shall be specifically related to this Agreement and to
the transactions contemplated hereby.
4.3 EXCLUSIVE NEGOTIATIONS. Except in the furtherance of the
transactions contemplated herein, prior to the Closing, the Company shall not
directly, and shall use its reasonable best efforts to cause its respective
directors, officers, employees, representatives or agents (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its affiliates) not to, directly or indirectly, initiate, solicit or
encourage any inquiries or the making or implementation of any proposal or
offer, with respect to any merger, acquisition, consolidation, share exchange,
business combination or other transaction involving, or which would result in
the acquisition of a majority of the outstanding equity securities or
substantially all of the assets of the Company (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal"), or engage in any
negotiations concerning, or provide any confidential information or data to, any
person or entity relating to an Acquisition Proposal, or otherwise facilitate
any effort or attempt to make or implement an Acquisition Proposal. The Company
shall immediately cease and cause to be terminated any existing activities or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal, and
15
it shall take the necessary steps to inform any such parties of the obligations
undertaken in this Section. The Company shall notify the Buyer immediately if
any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations are sought to be initiated or continued
with, the Company.
4.4 RIGHT OF FIRST REFUSAL. If, during the period from the Closing
through December 31, 2009 (and so long as the Alliance Agreement is in effect),
the Company (or any subsidiary or affiliate) proposes either to sell, transfer
or assign, directly or indirectly, securities in the Company or any subsidiary
or affiliate thereof equal to, or convertible into, a majority of the
outstanding Common Stock of the Company (a "Substantial Equity Interest"), the
Investor shall have a first right of refusal to purchase such Substantial Equity
Interest proposed to be sold, transferred or assigned, for a price equivalent to
the bona fide sale or transfer price offered for such Substantial Equity
Interest and otherwise in accordance with the terms and conditions of such
offer. The right of first refusal granted to the Investor is intended to apply
to any sale, transfer or assignment, directly or indirectly, to any nominee or
straw-men, corporation or other entity, including the sale of stock or an
interest in a partnership, limited-liability corporation, trust or other entity
which holds substantially all of the assets of the Company or any of its
subsidiaries or affiliates, if the intent of any such sale, transfer or
assignment to such person or entity is to avoid the Investor's right of first
refusal contained in this Section.
4.5 PREEMPTIVE RIGHT OF INVESTOR.
(i) The Company hereby grants to the Investor the preemptive
right to purchase its Pro Rata Share (defined below) of any New Securities
(defined below) that the Company intends to offer for sale and issuance at the
time and on the terms set forth herein (the "Preemptive Right").
(ii) DEFINITIONS:
(1) "New Securities" shall mean (A) any Common Stock
of the Company and (B) those rights, options or warrants to purchase any such
Common Stock (collectively referred to as "Options"), and those securities that
are convertible into or exchangeable for any such Common Stock (collectively
referred to as "Convertible Securities"),
16
if the gross proceeds received or receivable by the Company as consideration for
the issue of such Common Stocks, Options or Convertible Securities, plus the
minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein
designated to protect against dilution) payable to the Company upon the exercise
of such Options or the conversion or exchange of such Convertible Securities,
equals or exceeds One Million Five Hundred Thousand Dollars ($1,500,000);
provided however, that "New Securities" does not include (i) any capital stock
or other securities offered or issued to the public pursuant to a registration
statement filed under the Securities Act; (ii) any capital stock or other
securities offered or issued in connection with any acquisition of another
corporation or entity by the Company by merger or purchase of all, or
substantially all, of the assets of such corporation or entity, share exchange,
reorganization or the like; (iii) any stock options granted, subsequent to the
Effective Date, to the Company's existing or future directors, employees or
consultants not in excess of 1,350,000 shares, representing approximately eight
point two percent (8.2%) of the Company's 16,458,114 aggregate issued and
outstanding shares of common stock post-Closing (on a fully-diluted basis) by
the Company; (iv) any capital stock or other securities (or related options or
warrants) offered or issued to directors, officers or employees of, or
consultants to, the Company pursuant to an agreement or an option or purchase
plan program, or any other stock incentive plan or program approved by the Board
of Directors of the Company; or (v) any capital stock or other securities issued
in connection with any stock split, stock dividend, recapitalization or the like
by the Company.
(2) "Ownership Ratio" shall mean the ratio of shares
of Common Stock of the Company held by the Investor on the day immediately
preceding the date of the notice described in subsection (c) below to the total
number of shares of Common Stock of the Company then outstanding.
(3) "Pro Rata Share" for purposes of the Preemptive
Right, shall mean all New Securities which the Company intends to offer for sale
multiplied by the Investor's Ownership Ratio.
(iii) If at any time from the Closing through December 31,
2009, the Company plans or otherwise intends to undertake an issuance of New
Securities, the Company
17
shall, so long as the Alliance Agreement is in effect, give the Investor written
notice describing the type of New Securities, the price, and the general terms
upon which the Company plans or otherwise intends to issue the same. The
Investor shall have fifteen (15) days from the date of delivery of any such
notice to agree to purchase all or a portion of its Pro Rata Share of such New
Securities for the price and upon the general terms specified in the notice by
giving written notice to the Company at or before the end of such fifteen (15)
days. If the Investor either fails to so notify the Company or indicates that it
will not purchase its Pro Rata Share, the Company shall thereafter be free to
offer, sell and issue the New Securities, including any such Pro Rata Share not
purchased by the Investor, to any third party so long as such sale is at a price
and is upon general terms no more favorable than described in the Company's
notice.
4.6 CERTAIN EMPLOYMENT MATTERS. Effective as of the date of
the Closing, there are no employment agreements to which the Company is a party
other than those set out in the tabled attached as Schedule 4.6 hereto.
4.7 BOARD OBSERVER. The Company hereby covenants and agrees
with Investor that, as long as the Alliance Agreement (defined below) remains in
effect, the Investor shall have the right to designate a person (an "Observer")
to be present at all meetings of the Board of Directors of the Company and all
committees thereof. The Company will give such Observer reasonable prior notice
(it being agreed that the same prior notice given to the Board of Directors
shall be deemed reasonable prior notice) in any manner permitted in the
Company's By-laws for notices to directors of the time and place of any proposed
meeting of the Board of Directors, such notice in all cases to include true and
complete copies of all documents furnished to any director in connection with
such meeting. Such Observer will be entitled to be present in person as an
observer at any such meeting or, if a meeting is held by telephone conference,
to participate therein for the purpose of listening thereto.
4.8 REGISTRATION OF SHARES. The Company covenants and agrees
that it shall promptly after the Closing prepare and file, at its cost and
expense, a registration statement on Form S-1 (or such other appropriate form)
covering the Shares (the "Registration Statement") and shall use its best
efforts to cause such registration statement to be declared effective within 90
days following the Closing. The Company further covenants and agrees to maintain
the
18
Registration Statement Effective for one year following the effective date of
the Registration Statement, PROVIDED, THAT, notwithstanding the foregoing, if at
any time or from time to time after the date of effectiveness of the
Registration Statement, the Company notifies the Investors in writing of the
existence of a Potential Material Event, the Investors shall not offer or sell
any Shares, or engage in any other transaction involving or relating to the
Shares, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; PROVIDED, HOWEVER, that the
Company may not so suspend such right to the Investor during the period the
Registration Statement is required to be in effect for more than fifty (50)
days, provided, however, that no one such suspension period shall either (i) be
for more than twenty (20) days or (ii) begin less than ten (10) business days
after the last day of the preceding suspension. As used herein, "Potential
Material Event" means any of the following: (i) the possession by the Company of
material information not ripe for disclosure in a registration statement, which
shall be evidenced by determinations in good faith by the Board of Directors of
the Company that disclosure of such information in the registration statement
would be detrimental to the business and affairs of the Company; or (ii) any
material engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading absent
the inclusion of such information.
In the event that the Registration Statement is not declared effective
within 90 days following Closing, then the Company shall issue to the Investor,
in respect of each full calendar week (beginning on Monday) following such 90th
day and continuing until such time as the Registration Statement shall have been
declared effective, such number of shares of Common Stock as shall be equal to
one and one quarter percent (1 1/4%) of the number of Shares issued hereunder
(the "Additional Shares"), PROVIDED, THAT, notwithstanding anything to the
contrary contained in the foregoing, the Company shall have no obligation to
issue any Additional Shares in excess of such number of Additional Shares as
shall be equal to, in the aggregate, 10% of the number of Shares issued
hereunder.
19
REPORTING STATUS; ELIGIBILITY TO USE FORM S-1. The Company's Common
Stock is registered under Section 12 of the Exchange Act. The Company will file
with the SEC a Current Report on Form 8-K disclosing this Agreement and the
transactions contemplated hereby within 10 business days after the Closing.
Throughout the one year registration period (referred to in Section 4.8 hereof),
the Company shall to file all reports, schedules, forms, statements and other
documents required to be filed by it timely with the SEC under the reporting
requirements of the Exchange Act, and the Company will not terminate its status
as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination. The Company currently meets, and will take all reasonably necessary
action to continue to meet, the "registrant eligibility" requirements set forth
in the general instructions to Form S-1.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING.
The obligations of the Investor under subsection 1.1 of this Agreement
are subject to the fulfillment, or written waiver by the Investor, on or before
the Closing of each of the following conditions:
5.1 EXECUTION OF AGREEMENT. The Company will have executed and
delivered this Agreement to the Investor.
5.2 SHARES CERTIFICATE. The Company will have delivered to the
Investors duly executed certificates representing the Shares in the amounts
specified in Section 1.1 hereof.
5.3 REPRESENTATIVES, WARRANTIES, COVENANTS. The representations and
warranties of the Company must be true and correct in all material respects as
of the Closing as though made at that time (except for representations and
warranties that speak as of a specific date, which representations and
warranties must be true and correct as of such date) and the Company must have
performed and complied in all material respects with the covenants and
conditions required by this Agreement to be performed or complied with by the
Company at or prior to the Closing. The Investor must have received a
certificate or certificates dated as of the Closing and executed by the Chief
Executive Officer or the Chief Financial Officer of the Company certifying as to
the matters contained in this Section 5.3 and as to such other matters as may be
reasonably requested by such Investor, including, but not limited to, the
Company's
20
Certificate of Incorporation, as amended, By-laws, as amended, Board of
Directors' resolutions relating to the transactions contemplated hereby and the
incumbency and signatures of each of the officers of the Company who may execute
on behalf of the Company any document delivered at the Closing.
5.4 LITIGATION. No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction will have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
5.5 STOCK LISTING. Trading and listing of the Company's Common Stock
on OTC Electronic Bulletin Board must not have been suspended.
5.6 OPINION. The Investor will have received an opinion of the
Company's general counsel, dated as of the Closing, in form, scope and substance
substantially in the form attached hereto as SCHEDULE 5.6.
5.7 ALLIANCE AGREEMENT. Prior to or simultaneous with the Closing,
the Company and Investor shall have entered into the Alliance Agreement,
substantially in the form of SCHEDULE 5.7 hereto.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company to the Investor under this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
6.1 EXECUTION OF AGREEMENT. The Investor will have executed and
delivered this Agreement to the Company.
6.2 PURCHASE PRICE. The Investor will have delivered the Purchase
Price for the Shares to the Company in accordance with this Agreement.
6.3 REPRESENTATIONS, WARRANTIES, COVENANTS. The representations and
warranties of the Investor must be true and correct in all material respects as
of the Closing as
21
though made at that time (except for representations and warranties that speak
as of a specific date, which representations and warranties must be correct as
of such date), and the Investor will have performed and complied in all material
respects with the covenants and conditions required by this Agreement to be
performed or complied with by the Investor at or prior to the Closing. The
Company must have received a certificate or certificates dated as of the Closing
and executed by a duly authorized officer of the Investor certifying as to the
matters contained in this Section 6.3.
6.4 LEGAL IMPEDIMENT. No statute, rule, regulation, executive order,
decree, ruling or injunction will have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
6.5 ALLIANCE AGREEMENT. Prior to or simultaneous with the Closing,
the Company and Investor shall have entered into the Alliance Agreement,
substantially in the form of SCHEDULE 5.7 hereto.
7. DEFINITIONS.
7.1 "Alliance Agreement" has the meaning set forth in Section 5.7.
7.2 "Closing" means the closing of the purchase and sale of the
Shares under this Agreement.
7.3 "Common Stock" means the common stock, $0.001 par value per
share, of the Company.
7.4 "Company" means TTR Technologies, Inc.
7.5 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
7.6 "Investor" means Macrovision Corporation
7.7 "Material Adverse Effect" means a material adverse effect on
(a) the business, operations, assets or financial condition of the Company on a
consolidated basis or
22
(b) the ability of the Company to perform its obligations pursuant to the
transactions contemplated by this Agreement or under the agreements or
instruments to be entered into or filed in connection herewith.
7.8 "Material Agreement" has the meaning set forth in
Section 2.7.
7.9 "Regulation D" means Regulation D as promulgated under
by the SEC under the Securities Act.
7.10 "Rule 144" and "Rule 144(k)" mean Rule 144 and Rule
144(k), respectively, promulgated under the Securities Act, or any successor
rule.
7.11 "SEC" means the United States Securities and Exchange
Commission.
7.12 "SEC Documents" has the meaning set forth in
Section 2.23.
7.13 "Shares" means the 1,880,937 shares of Common Stock to
be sold to Investor pursuant to this Agreement, as such number may be adjusted
pursuant to the provisions of Section 4.8 hereof.
7.14 "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute.
8. MISCELLANEOUS.
8.1 SURVIVAL OF WARRANTIES. The warranties, representations
and covenants of the Company and the Investor contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investor of the Company.
8.2 SUCCESSOR AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any Shares). Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
23
8.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applicable to contracts
to be performed entirely within that state.
8.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original by the party
executing the same, but all of which together shall constitute one and the same
instrument.
8.5 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience and are not to be considered in
construing or interpreting this Agreement.
8.6 NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been given
or made if in writing and (i) delivered personally, (ii) mailed by registered or
certified mail (postage prepaid, return receipt requested) or (iii) sent by
telecopier, with the written notice sent by mail as set forth in (ii) above, to
the parties as follows:
(i) if to Company to:
TTR Technologies, Inc., c/o TTR Technologies Ltd.
2 Xxxxxxx Xxxxxx
XX Xxx 0000
Xxxx-Xxxx 00000
Xxxxxx
Attention: General Counsel
Telecopier No.: 011-972-9-766-2394
with a copy to:
Aboudi & Xxxxxxxxxx
000 Xxxxxxxxxx Xxxx.
Xxx Xxxx 00000
Israel
Telecopier No. 011-972-3-685-1138
(ii) if to Investor to:
Macrovision Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
24
with a copy to:
Manatt, Xxxxxx & Xxxxxxxx, LLP
0000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
or at such other addresses as shall be furnished by the parties by like notice,
and such notice or communication shall be deemed to have been given or made as
of the date so delivered, mailed or sent.
8.7 FINDER'S FEE. Each party represents that it neither is nor will
be obligated for any finders' fee or commission in connection with this
transaction. The Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Investor or any of its officers, partners,
employees, or representatives is responsible. The Company agrees to indemnify
and hold harmless the Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
8.8 EXPENSES. Irrespective of whether the Closing is effected, the
Company and the Investor shall each pay their own costs and expenses that each
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
8.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
25
8.10 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
8.11 ENTIRE AGREEMENT. This Agreement, together with the Alliance
Agreement, and all schedules and exhibits attached thereto, constitute the
entire agreement among the parties and no party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein. All other prior agreements,
understandings and representations, both oral and written, between the parties
with respect to the subject matter hereof are superseded and of no effect. This
Agreement may be executed in counterparts and by the exchange of facsimile
signed copies.
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement.
TTR TECHNOLOGIES, INC.
BY:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
MACROVISION CORPORATION
BY:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
26
SCHEDULE A
SCHEDULE OF EXCEPTIONS
The following information and disclosures is provided with respect to
the representations and warranties of the Company to the Investor set forth in
Section 2 of the Agreement and corresponding to the relevant subsection of the
Agreement.
SECTION 2.2(b).
The Company has outstanding the following warrants/options issued to
service providers/consultants:
(i) Wall & Broad (1,300,000). Issued in May, 1999 and exercisable
through April 30, 2002 at an ex. price per share of $0.01
(ii) K & D Equities Inc. (400,000). Issued in July 1999 and
exercisable through Jan. 31, 2001 at an ex. Price per share of $2.75 (2)
(iii) Machtec Ltd. (1,000,000). Issued in Aug. 1999 and exercisable
through Oct. 2002 at an ex. Price per share of $0.01.
(iv) Plans Inc. (25,000). Issued in June 98 and exercisable through
June 2002 at an exercise price of $1.50 per share.
(v) Josephthal (25,000). Undertook to issue in April 98 and
exercisable through June 2002 at an ex. Price per share of $5 5/8. (3)
(vi) Shavit (10,069)
(vii) Mu & Kang (10,000) Issued in Jan 99 and exercisable through
Jan 2002 at an ex. Price per share of $1.75
(viii) (196,000) three year xxxxx warrants issued to Employees of the
Company in Feb. 1999.
(ix) (25,000) three year xxxxx warrants issued to Xxxxxxxxx Xxxxxxx
in Nov. 99.
The Company has the following warrants/options outstanding to investors.
(i) Warrants held by certain private placement investors issued
between April '98 through Dec. '98 to purchase up to an aggregate of 150,842
shares of Common Stock
(ii) Biscount (33,000). Issued in Jan 98 in connection with
investment in Company and are exercisable through Dec 2001 at an ex. Price per
share of $7.80)
27
(iii) (15,000). Issued in Nov. 99 and exercisable through Nov. 2002 at
an ex. Price per share of $2.50
(iv) (35,000) Issued in Nov. 99 and exercisable through Nov. 2002 at
an ex. Price per share of $3.50.
The Company also has outstanding 749,400 ESOPs.
SECTION 2.2 (c)
In May 1999 the Company granted to certain investors the right of first
refusal, under certain conditions, with respect to the issuance by the Company
of shares of common stock or securities convertible into its common stock, which
right is exercisable from October 6, 1999 through approximately July 6, 2000.
SECTION 2.14(a)
The Company granted exclusive production and marketing rights for
DiscGuard to China Intercontinental Communications Center for the People's
Republic of China, Taiwan, and Maco.
Sonopress Gmbh holds a non-exclusive license to manufacture and market
DiscGuard and related products in the world, except for the Peoples Republic in
China (PRC).
Nimbus CD International Inc. holds a non-exclusive worldwide license to
manufacture and market DiscGuard and related products.
Warlock Records holds a non exclusive worldwide license to use
MusicGuard protection for their music CDs.
SECTION 2.14(b)
TTR licenses form Elektroson BV a product known as Gear. Wks Toolkit for
which it pays royalties and which is used in the process of producing DiscGuard
protected discs.
SECTION 2.17
TTR has previously granted to Machtec Ltd. registration rights
respecting up to 200,000 shares of the Company's Common Stock and options to
acquire in the aggregate up to 1,000,000 shares of the Company's Common Stock.
Additionally, certain consultants/employees have been granted
registration rights with respect to a total of approximately 500,000 shares of
Common Stock.
Additionally, the Company currently has outstanding an effective
registration statement in favor of certain of its stockholders and rightsholders
[Registration No. 333-85085], which the Company is required to maintain
effective through the earlier of Oct. 2001 or the disposition of the subject
shares.
28
SECTION 2.18
The Company has not filed its United States Income tax returns for the
year ended December 31, 1998.
SECTION 2.20
The Company does not presently have in effect any insurance policies
with respect to fire, public liability, property damage or any other insurance.
29
SCHEDULE 4.6
Xxxxxxx Xxxxxxx, Xx. Xxxxxx Xxxxxxx, Xxxx X. Xxxxxxx, Xxxxxxx Xxxxxxx,
Xxxxxx Xxxxxxxx, Xxxxxx Cusamaro and Xxxxxx Xxxx. The agreements with Messrs.
Xxxxxxxx and Cusamaro are expected to terminate by no later than January 31,
2000.
30
SCHEDULE 5.6
OPINION OF COMPANY'S COUNSEL
January 12, 2000
Macrovision Corporation ("Investor")
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
As General Counsel of TTR Technologies, Inc., a Delaware corporation
(the "Company"), we represented the Company in connection with the issuance of
1,880,937 shares (the "Shares") of the Company's Common Stock, $0.001 par value
per share, pursuant to that certain Stock Purchase Agreement, dated as of
January 10, 2000, including the exhibits thereto (the "Agreement"), between the
Company and the Investor. This opinion is being delivered to you pursuant to
Section 5.6 of the Agreement. Capitalized terms used herein are as defined in
the Agreement unless otherwise specifically provided herein.
In rendering the opinions set forth below I have examined such documents
and have reviewed such questions of law as I have considered necessary or
appropriate for the purpose of this opinion.
In rendering the opinions set forth below, I have, with your consent,
assumed without investigation, that:
1. All documents submitted to me as originals are complete and
authentic; all copies of documents submitted to me conform in all respects to
the originals thereof, including all modifications or amendments thereto; all
signatures to documents are genuine; all originals or copies submitted to me
have not been amended, modified or terminated since the date they were submitted
to me by written or oral agreement of the parties thereto, by the conduct of the
parties thereto or otherwise; facsimile signatures have the same legal effect as
original signatures; and all representations and certificates as to factual
matters dated prior to or on the date hereof upon which I have relied are and
remain accurate, adequate and complete on and as of the date hereof; and each
natural person signing a document is a competent adult person of sound mind not
operating under any legal disability, duress or fraud.
2. The Agreement accurately reflects all of the terms, provisions
and conditions of the transactions contemplated thereby and the intent of the
parties with respect thereto, and that there is no usage of trade or course of
conduct among the parties thereto which would modify the terms of the Agreement
or the respective rights or obligation of the parties thereunder.
3. All of the factual representations made by Company and the
Investor in the Agreement are true and correct. As to questions of fact material
to this opinion, we have relied upon and assumed the accuracy of, without any
independent investigation on our part, certain representations made by the
Company and such other facts as are actually known to us.
31
4. The Agreement will be enforced and performed in good faith and
in a commercially reasonable manner.
5. The conduct of all parties to the Agreement conforms, and in the
future will conform, with all notice requirements in statutes, law rules,
regulations and ordinances, unless such notice requirements have been validly
and legally waived.
6. The Agreement has been duly authorized, executed and delivered
by the Investor and Investor has the power and authority (corporate or
otherwise) to execute and deliver the Agreement.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with the corporate
power to own its properties and conduct its business as now conducted. The
Company has the corporate power to execute, deliver and perform the Agreement,
including without limitation, the issuance and sale of the Shares. The Agreement
has been duly authorized by all requisite corporate action, executed and
delivered by the Company. The Agreement constitutes a valid and binding
agreement of the Company enforceable in accordance with its terms, subject to
the following limitations, qualifications and exceptions: (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance or similar laws relating to or affecting the rights of creditors,
including, without limitation, Section 548 of the federal Bankruptcy Code and
Section 547 of the federal Bankruptcy Code and comparable provisions of state
law; and (b) the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law,
and the exercise of judicial discretion in appropriate cases.
2. The Shares, when issued in compliance with the provisions of the
Agreement, will be duly authorized and validly issued and fully paid and
non-assessable.
3. Based on the representations of the Investor in the Agreement,
the offer and sale of the Shares pursuant to the terms of the Agreement are
exempt from the registration requirements of Section 5 of the Securities Act of
1933, as amended.
4. The execution, delivery and performance of the Agreement and the
issuance and sale of the Shares in accordance with the Agreement will not
violate or conflict with, or result in a breach of or default under, the
Certificate of Incorporation, as amended or By-laws, as amended of the Company.
5. To our knowledge there is no action, suit, proceeding or
investigation pending against the Company before any court or governmental
agency (I) that questions the validity of the Agreement or the right of the
Company to enter into the Agreement or (ii) that, if determined adversely, would
be likely to result in a Material Adverse Effect on the financial condition or
business of the Company.
This opinion is limited to the general corporate laws of the
State of Delaware (excluding municipal, county and local ordinances and
regulations) without reference to conflict
32
of law principles, and the federal laws of the United States of America, and to
present judicial interpretations thereof, and to facts as they presently exist,
and we express no opinion with respect to any other law or the law of any other
jurisdiction. In rendering this opinion, we have no obligation to revise or
supplement it should the current laws of the State of Delaware, or the federal
laws of the United States of America be changed by legislative action, judicial
decision or otherwise.
Further, the opinions contained in this letter are given as of the date
of this letter and are rendered exclusively for your benefit solely in
connection with the consummation of the transactions contemplated by the
Agreement and may not be relied upon to state directly or indirectly any general
proposition or for any other purpose. We hereby disclaim any obligation to
notify any person or entity after the date hereof if any change in fact or law
should change our opinions with respect to any matter set forth in this letter.
This opinion may be relied upon by you only in connection with the
transactions contemplated by the Agreement. No other use or distribution of this
opinion may be made, and no other person or party may rely on this opinion,
without our express prior written consent in each instance.
Very truly yours,
33
SCHEDULE 5.7
ALLIANCE AGREEMENT
34
