Exhibit 10.45
[** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS
DOCUMENT]
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.
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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.
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(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 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).
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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.
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.
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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. 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.
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(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 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.
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(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 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.
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(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, 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.
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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.
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
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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 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 [**] 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
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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 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.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
The Investor hereby represents and warrants that:
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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.
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
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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.
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.
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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 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").
14
(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"), 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 [**];
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 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
15
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
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
16
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.
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
17
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 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.
18
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 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.
19
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 (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.
20
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
with a copy to:
21
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.
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
22
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: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman and CFO
MACROVISION CORPORATION
BY: /s/ Ian Halifax
------------------------------
Name: Ian Halifax
Title: Chief Financial Officer
23
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 a n 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
24
(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)
(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.
25
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.
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.
26
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.
27
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.
28
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.
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, to the
best of our knowledge, 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.
29
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 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,
30
Schedule 5.7
Alliance Agreement
31
