NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT is being executed and delivered as of
November 4, 2002 by TTR TECHNOLOGIES, INC., a Delaware corporation (the
"Seller") and TTR TECHNOLOGIES, LTD., an Israeli corporation and a wholly owned
subsidiary of the Seller (together with the Seller, the "Seller Corporations")
in favor of, and for the benefit of: MACROVISION CORPORATION, a Delaware
corporation ("Parent"), MACROVISION EUROPE LTD., a United Kingdom company and
wholly owned subsidiary of Parent (the "Purchaser") and the other "Indemnitees"
(as hereinafter defined). Certain capitalized terms used in this Noncompetition
Agreement are defined in Section 18, and other capitalized terms used and not
otherwise defined herein shall have the meanings assigned to such terms in the
Purchase Agreement (as defined below).
RECITALS
A. Parent, the Purchaser and the Seller Corporations are entering into an
Asset Purchase Agreement of even date herewith (the "Purchase Agreement"),
pursuant to which the Purchaser is agreeing to acquire the Designated Assets (as
defined in the Purchase Agreement) from the Seller Corporations.
B. In connection with the proposed acquisition by the Purchaser of the
Designated Assets from the Seller Corporations pursuant to the Purchase
Agreement (and as a condition to the consummation of such acquisition), and to
enable Parent and the Purchaser to secure more fully the benefits of such
acquisition, Parent and the Purchaser has required that the Seller Corporations
enter into this Noncompetition Agreement; and the Seller Corporations are
entering into this Noncompetition Agreement in order to induce Parent and the
Purchaser to enter into the Purchase Agreement and to consummate the
transactions contemplated by the Purchase Agreement.
C. Parent, the Purchaser and the Seller Corporations have conducted and
are conducting their respective businesses on a worldwide basis.
AGREEMENT
In order to induce Parent and the Purchaser to enter into the Purchase Agreement
and to consummate the transactions contemplated by the Purchase Agreement, and
for other good and valuable consideration, the Seller Corporations agree as
follows:
1. Restriction on Competition. The Seller Corporations agree that, during
the Noncompetition Period, the Seller Corporations shall not, and shall not
permit any of their respective Affiliates to:
(a) engage directly or indirectly in Competition in any Restricted
Territory; or
(b) directly or indirectly be or become a stockholder, owner,
co-owner, Affiliate, partner, promoter, agent, representative, designer,
consultant, advisor, manager, licensor, sublicensor, licensee or
sublicensee of, for or to, or otherwise be or become
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associated with or acquire or hold (of record, beneficially or otherwise)
any direct or indirect interest in, any Person that engages directly or
indirectly in Competition in any Restricted Territory;
provided, however, that the Seller Corporations may, without violating this
Section 1, collectively own, as a passive investment, (i) shares of capital
stock of a publicly-held corporation that engages in Competition if (A) such
shares are actively traded on an established national securities market in the
United States, (B) the number of shares of such corporation's capital stock that
are owned beneficially (directly or indirectly) by the Seller Corporations and
the number of shares of such corporation's capital stock that are owned
beneficially (directly or indirectly) by the Seller Corporations' Affiliates
collectively represent less than one percent of the total number of shares of
such corporation's capital stock outstanding, and (C) neither of the Seller
Corporations nor any Affiliate of either of the Seller Corporations is otherwise
associated directly or indirectly with such corporation or with any Affiliate of
such corporation, and (ii) shares of capital stock of a privately-held
corporation that engages in Competition if (A) the number of shares of such
corporation's capital stock that are owned beneficially (directly or indirectly)
by the Seller Corporations and the number of shares of such corporation's
capital stock that are owned beneficially (directly or indirectly) by the Seller
Corporations' Affiliates collectively represent less than three percent of the
total number of shares of such corporation's capital stock outstanding, and (B)
neither of the Seller Corporations nor any Affiliate of either of the Seller
Corporations is otherwise associated directly or indirectly with such
corporation or with any Affiliate of such corporation.
2. No Hiring or Solicitation of Parent Employees. The Seller Corporations
agree that, during the Noncompetition Period, the Seller Corporations shall not,
and shall not permit any of their respective Affiliates to: (a) hire any
employee of Parent or any of Parent's subsidiaries (a "Parent Employee"), or (b)
directly or indirectly, personally or through others, encourage, induce, attempt
to induce, solicit or attempt to solicit (on the Seller Corporations' behalf or
on behalf of any other Person) any Parent Employee to leave his or her
employment with Parent or any of Parent's subsidiaries.
3. Representations and Warranties. Each Seller Corporation represents and
warrants, to and for the benefit of the Indemnitees, that: (a) it has full power
and capacity to execute and deliver, and to perform all of its obligations
under, this Noncompetition Agreement; and (b) neither the execution and delivery
of this Noncompetition Agreement nor the performance of this Noncompetition
Agreement will result directly or indirectly in a violation or breach of (i) any
agreement or obligation by which the Seller Corporation or any of its Affiliates
is or may be bound, or (ii) any law, rule or regulation. The Seller
Corporations' representations and warranties shall survive the expiration of the
Noncompetition Period.
4. Specific Performance. The Seller Corporations agree that, in the event
of any breach or threatened breach by either of the Seller Corporations of any
covenant or obligation contained in this Noncompetition Agreement, each of
Parent, the Purchaser and the other Indemnitees shall be entitled (in addition
to any other remedy that may be available to it, including monetary damages) to
seek and obtain (a) a decree or order of specific performance to enforce the
observance and performance of such covenant or obligation, and (b) an injunction
restraining such breach or threatened breach. The Seller Corporations further
agree that no
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Indemnitee shall be required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any remedy referred
to in this Section 4, and each of the Seller Corporations irrevocably waives any
right it may have to require any Indemnitee to obtain, furnish or post any such
bond or similarly instrument.
5. Indemnification. Without in any way limiting any of the rights or
remedies otherwise available to any of the Indemnitees, the Seller Corporations
shall indemnify and hold harmless each Indemnitee against and from any loss,
damage, injury, harm, detriment, lost opportunity, liability, exposure, claim,
demand, settlement, judgment, award, fine, penalty, tax, fee (including
reasonable attorneys' fees), charge or expense (whether or not relating to any
third-party claim) that is directly or indirectly suffered or incurred at any
time (whether during or after the Noncompetition Period) by such Indemnitee, or
to which such Indemnitee otherwise becomes subject at any time (whether during
or after the Noncompetition Period), and that arises directly or indirectly out
of or by virtue of, or relates directly or indirectly to, (a) any inaccuracy in
or breach of any representation or warranty contained in this Noncompetition
Agreement, or (b) any failure on the part of either of the Seller Corporations
to observe, perform or abide by, or any other breach of, any restriction,
covenant, obligation or other provision contained in this Noncompetition
Agreement. The total amount of the indemnification payments that the Seller
Corporations shall be required to make under or in connection with this
Agreement shall be limited to an amount equal to the sum of the Purchase Price.
6. Exclusivity of Indemnification Remedies. The indemnification remedies
provided in Section 5 shall be deemed to be the exclusive remedy of Parent or
the Purchaser for Breaches of the representations, warranties and covenants of
the Seller Corporations contained in this Agreement, except with respect to
claims arising out of fraud or the willful breach of covenants by either of the
Seller Corporations; provided, however, that the foregoing shall not prohibit
Parent or the Purchaser party from seeking an injunction or other equitable
relief in respect thereof. Nothing in this Noncompetition Agreement shall limit
any of the Seller Corporations' obligations, or the rights or remedies of Parent
or the Purchaser under the Purchase Agreement; and nothing in the Purchase
Agreement shall limit any of the Seller Corporations' obligations, or any of the
rights or remedies of Parent or the Purchaser or any of the other Indemnitees,
under this Noncompetition Agreement. No breach on the part of Parent or the
Purchaser or any other party of any covenant or obligation contained in the
Purchase Agreement or any other agreement shall limit or otherwise affect any
right or remedy of Parent or the Purchaser or any of the other Indemnitees under
this Noncompetition Agreement.
7. Severability. If any provision of this Noncompetition Agreement or any
part of any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Noncompetition
Agreement. Each provision of this Noncompetition Agreement is separable from
every other provision of this Noncompetition
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Agreement, and each part of each provision of this Noncompetition Agreement is
separable from every other part of such provision.
8. Governing Law. This Noncompetition Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State of
Delaware (without giving effect to principles of conflicts of laws). EACH SELLER
CORPORATION IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY
LEGAL PROCEEDING RELATING TO THIS NONCOMPETITION AGREEMENT OR THE ENFORCEMENT OF
ANY PROVISION OF THIS NONCOMPETITION AGREEMENT.
9. Waiver. No failure on the part of Parent or the Purchaser or any other
Indemnitee to exercise any power, right, privilege or remedy under this
Noncompetition Agreement, and no delay on the part of Parent or the Purchaser or
any other Indemnitee in exercising any power, right, privilege or remedy under
this Noncompetition Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or of
any other power, right, privilege or remedy. No Indemnitee shall be deemed to
have waived any claim of such Indemnitee arising out of this Noncompetition
Agreement, or any power, right, privilege or remedy of such Indemnitee under
this Noncompetition Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written instrument duly executed
and delivered on behalf of such Indemnitee; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given.
10. Successors and Assigns. Each of Parent, the Purchaser and the other
Indemnitees may freely assign any or all of its rights under this Noncompetition
Agreement, at any time, in whole or in part, to any Person without obtaining the
consent or approval of the Seller Corporations or of any other Person. This
Noncompetition Agreement shall be binding upon the Seller Corporations and their
respective representatives, successors and assigns, and shall inure to the
benefit of Parent, the Purchaser and the other Indemnitees.
11. Further Assurances. The Seller Corporations shall execute and/or cause
to be delivered to each Indemnitee such instruments and other documents, and
shall take such other actions, as such Indemnitee may reasonably request at any
time (whether during or after the Noncompetition Period) for the purpose of
carrying out or evidencing any of the provisions of this Noncompetition
Agreement.
12. Attorneys' Fees. If any legal action or other legal proceeding
relating to this Noncompetition Agreement or the enforcement of any provision of
this Noncompetition Agreement is brought against the Seller Corporations, the
prevailing party shall be entitled to recover reasonable attorneys' fees, costs
and disbursements (in addition to any other relief to which the prevailing party
may be entitled).
13. Captions. The captions contained in this Noncompetition Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Noncompetition Agreement and shall not be referred to in connection with the
construction or interpretation of this Noncompetition Agreement.
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14. Construction. Whenever required by the context, the singular number
shall include the plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; and the neuter gender shall include the masculine
and feminine genders. Any rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be applied in the
construction or interpretation of this Noncompetition Agreement. As used in this
Noncompetition Agreement, the words "include" and "including," and variations
thereof, shall not be deemed to be terms of limitation, and shall be deemed to
be followed by the words "without limitation." Except as otherwise indicated in
this Noncompetition Agreement, all references in this Noncompetition Agreement
to "Sections" are intended to refer to Sections of this Noncompetition
Agreement.
15. Survival of Obligations. Except as specifically provided herein, the
obligations of the Seller Corporations under this Noncompetition Agreement
(including their respective obligations under Sections 3, 5 and 11) shall
survive the expiration of the Noncompetition Period. The expiration of the
Noncompetition Period shall not operate to relieve the Seller Corporations of
any obligation or liability arising from any prior breach by either of the
Seller Corporations of any provision of this Noncompetition Agreement.
16. Obligations Absolute. The Seller Corporations' obligations under this
Noncompetition Agreement are absolute and shall not be terminated or otherwise
limited by virtue of any breach (on the part of Parent, the Purchaser, any other
Indemnitee or any other Person) of any provision of the Purchase Agreement or
any other agreement, or by virtue of any failure to perform or other breach of
any obligation of Parent, the Purchaser, any other Indemnitee or any other
Person.
17. Amendment. This Noncompetition Agreement may not be amended, modified,
altered or supplemented other than by means of a written instrument duly
executed and delivered on behalf of each of the Seller Corporations (or any
successor to the Seller Corporations), Parent (or any successor to Parent) and
the Purchaser (or any successor to the Purchaser).
18. Defined Terms. For purposes of this Noncompetition Agreement:
(a) "Affiliate" means, with respect to any specified Person, any
other Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified
Person.
(b) "Competing Product" means any: (i) product, equipment, device or
system that has been designed, developed, manufactured, assembled, promoted,
marketed, sold, supplied, distributed, resold, installed, supported, maintained,
repaired, refurbished, licensed, sublicensed, financed, leased or subleased by
or on behalf of either of the Seller Corporations (or any predecessor of either
of the Seller Corporations) in connection with the Business at any time on or
prior to this date of this Noncompetition Agreement or during the period between
the date of this Noncompetition Agreement and the Closing Date; or (ii) product,
equipment, device or system that is substantially the same as, incorporates, is
a material component or part of, is based upon, is functionally similar to or
competes in any material respect with any product, equipment, device or system
of the type referred to in clause "(i)" of this sentence.
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(c) "Competing Service" means any: (i) service that has been or is
provided, performed or offered by or on behalf of either of the Seller
Corporations (or any predecessor of either of the Seller Corporations) in
connection with the Business at any time on or prior to the date of this
Noncompetition Agreement or during the period between the date of this
Noncompetition Agreement and the Closing Date; (ii) service that facilitates,
supports or otherwise relates to the design, development, manufacture, assembly,
promotion, marketing, sale, supply, distribution, resale, installation, support,
maintenance, repair, refurbishment, licensing, sublicensing, financing, leasing
or subleasing of any Competing Product; or (iii) service that is substantially
the same as, is based upon or competes in any material respect with any service
referred to in clause "(i)", or clause "(ii)" of this sentence.
(d) A Person shall be deemed to be engaged in "Competition" if: (a)
such Person or any of such Person's subsidiaries or other Affiliates is engaged
directly or indirectly in the design, development, manufacture, assembly,
promotion, marketing, sale, supply, distribution, resale, installation, support,
maintenance, repair, refurbishment, licensing, sublicensing, financing, leasing
or subleasing of any Competing Product; or (b) such Person or any of such
Person's subsidiaries or other Affiliates is engaged directly or indirectly in
providing, performing or offering any Competing Service.
(e) "Indemnitees" shall include: (i) the Purchaser; (ii) Parent,
(iii) each Person who is or becomes an Affiliate of the Purchaser or Parent; and
(iv) the successors and assigns of each of the Persons referred to in clauses
"(i)", "(ii)" and "(iii)" of this sentence.
(f) "Noncompetition Period" shall mean the period commencing on the
Closing Date and ending on the third anniversary of the Closing Date.
(g) "Restricted Territory" means each country in the world and the
respective political subdivisions thereof.
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6.
IN WITNESS WHEREOF, the Seller Corporations have duly executed and
delivered this Noncompetition Agreement as of the date first above written.
TTR TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: CEO
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TTR TECHNOLOGIES, LTD.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: Director
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7.
