{"id":42418,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/letter-agreement-macrovision-corp-and-ttr-technologies-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"letter-agreement-macrovision-corp-and-ttr-technologies-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/letter-agreement-macrovision-corp-and-ttr-technologies-inc.html","title":{"rendered":"Letter Agreement &#8211; Macrovision Corp. and TTR Technologies Inc."},"content":{"rendered":"<pre>\n[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS \nDOCUMENT]\n\n                                LETTER AGREEMENT\n                                  CONFIDENTIAL\n\n\n\n         This Letter Agreement, effective as of November 24, 1999 (the \n'Effective Date') sets forth the essential elements of an agreement between \nMacrovision Corporation, Delaware corporation having its principal place of \nbusiness at 1341 Orleans Drive, Sunnyvale, California 94089, USA, facsimile \nnumber +1 408 743-8610 together with its subsidiary C-Dilla, Ltd., with \noffices at Woodley House, Crockhamwell Road, Woodley, Reading, Berkshire, RG5 \n3JP, United Kingdom, facsimile number +44 118 969 1161, on the one part \n(collectively 'Macrovision'), and, on the other part, TTR Technologies, Inc. \na Delaware corporation having its principal place of business at 1841 \nBroadway, New York, NY 10023 and an operating subsidiary TTR Technologies, \nLtd. with offices at 2 Hanagar Street, Kfar-Saba, 44425, Israel, facsimile \nnumber 011-972-9-766-2394 ('collectively TTR'), related to (i) Macrovision's \nintent to make a US$4 Million equity investment in TTR, (ii) the parties' \nintent for Macrovision to market under exclusive license certain music CD \nCopy Protection Technology to be jointly developed by TTR and Macrovision, \nand (iii) TTR's intent to exclusively license the CD-Technology (as defined \nin Section 11 below) to Macrovision.\n\n1.       MUSIC CD COPY PROTECTION PROJECT DESCRIPTION\n\nTTR and Macrovision agree to jointly develop and market music copy protection \ntechnology for optical media, including but not limited to copy protection \nfor CDs and DVDs (the 'Technology') throughout the term of this Letter \nAgreement. The Technology shall include, but not be limited to, a process \nspecification, LBR encoder modules, manufacturing test modules, and quality \ncontrol modules. The parties intend that the Technology meet the following \nfunctional requirements:\n\n         a.    The quality of the protected disk, when played on [*] of the\n               worldwide installed base of CD players (red book and yellow\n               book, including but not limited to portable players with\n               anti-shock capability), shall match the quality of the\n               original unprotected disk [*].\n\n         b.    The protected disk, when played on [*] of the installed base\n               of CD players (red book and yellow book, including but not\n               limited to portable players with anti-shock capability), [*]\n\n\n                                       1\n\n\n\n[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS \nDOCUMENT]\n\n               and otherwise perform in the same manner as the original \n               unprotected disk.\n\n         c.    Copies of protected disks sourced from at least [*]\n               of the worldwide installed base of CD-Readers as described in\n               subsection (d) below shall be degraded, such that the\n               commercial entertainment value of the music has been\n               eliminated, when played on the worldwide installed base of CD\n               players (red book and yellow book, including but not limited\n               to portable players with anti-shock capability) and mini-disc\n               players.\n\n         d.    The tracks recorded on a protected disc shall not be\n               transferrable (directly or indirectly, except if the\n               commercial value of the music is eliminated during the\n               transfer through the CD Reader - PC Data Interface) from at\n               least [*] of the worldwide installed base of CD-Readers onto\n               the hard-drive of a PC using file formats such as .WAV or\n               .BIN, including but not limited to by using software programs\n               such as Goldenhawk CDRWin, Adaptec Easy CD Creator, and Nero.\n\n2.       PROJECT RESPONSIBILITIES OF TTR\n\nTTR shall develop a complete product specification as well as a completed \nproduct suitable for Commercial Launch (as defined below), including \ncompletely functional LBR encoder modules for the DCA, Eclipse, and \nMediamorphics mastering systems. The parties intend that three LBR encoder \nmodules shall be developed no later than [*], one being for the \nDoug Carson Associates mastering system, one being for the Eclipse \nCorporation mastering system, and one being for the Mediamorphics mastering \nsystem. TTR shall also perform all ongoing technology development, \nenhancement, and 2nd level technical support activities.\n\n3.       PROJECT RESPONSIBILITIES OF MACROVISION\n\nMacrovision shall perform all sales, marketing, installation, and replicator \nliaison, and first level technical support activities. Macrovision shall have \nthe option in its sole discretion, in coordination with TTR, to contribute to \nthe development of LBR encoder modules and to perform ongoing technology \ndevelopment and enhancements.\n\n4.       TECHNOLOGY DEVELOPMENT AND PROJECT MANAGEMENT\n\nTTR agrees to assign a sufficient number of technical personnel for a [*]\nyear period beginning on the Effective Date of this Letter Agreement, to \ndevelop, enhance, and maintain the Technology. During the period beginning on \nthe Effective Date and ending three months following the date on which the \n'Commercial Launch' (as such term is defined in Section 7 below) has \noccurred, TTR agrees to cause [*] to be \nassigned on a full time basis to develop, enhance, and maintain the\n\n\n                                       2\n\n\n\nTechnology and to perform such activities on a three quarter time (i.e., \nthree weeks out of every four) basis at Macrovision's C-Dilla offices located \nin Woodley, UK. TTR shall pay all travel and lodging expenses related to [*] \nwork in the UK during this period. Macrovision agrees to designate at least \none technical liaison to interact with [*] and the other TTR personnel who \nare involved with the Technology. At Macrovision's option, up to three \nproject status meetings may be held at Macrovision's Sunnyvale, California \noffice, and in each such case TTR agrees to cause [*] to attend, and \nMacrovision agrees to reimburse TTR for the reasonable travel (coach class \nairfare) and lodging costs of [*] related to each such meeting. Telephone \nconference calls will also be held weekly at mutually agreed upon times.\n\nTTR also agrees to, upon request from Macrovision, cause [*] to be present at \nTTR's expense (except as described below) at Macrovision's Sunnyvale, CA USA \nlocation, or at any other location in the USA, England (except for Woodley, \nUK where [*] will be working on a three quarter time basis as described \nabove) or Western Europe as requested by Macrovision for up to one week per \nmonth beginning on the Effective Date and ending three months following the \ndate on which the 'Commercial Launch' (as such term is defined in Section 7 \nbelow) has occurred. Macrovision agrees to reimburse TTR for the reasonable \ntravel (coach class airfare) and lodging costs of [*] or other TTR personnel \nif they are requested by Macrovision to travel to the USA.\n\nAll engineers and other staff which may be assigned by TTR or Macrovision to \ndevelop the Technology shall at all times be employees of TTR or Macrovision, \nrespectively. TTR and Macrovision may, at their option, individually employ \nthe services of contractors or consultants to assist in the development of \nthe Technology so long as such contractors or consultants are bound by \nappropriate confidentiality agreements and have agreed to assign all right, \ntitle and interest to their work product to TTR or Macrovision as \nappropriate. TTR or Macrovision, as appropriate, shall be financially \nresponsible for the salaries, benefits, expenses, and equipment required by \ntheir respective engineers, contractors, consultants, and other staff.\n\n5.       OWNERSHIP OF THE TECHNOLOGY\n\nTM and Macrovision shall each individually own all right title and interest \nto those portions of the Technology which can be shown to have been developed \nindependently by them. In addition, Macrovision acknowledges TTR's ownership \nof the intellectual property comprising the CD-Technology, as defined in \nSection 11 below. All other portions of the Technology shall be owned jointly \nby TTR and Macrovision ('Jointly Owned Technology'). Each party agrees to \nfile and prosecute, and shall bear the expense of filing and prosecuting, at \nleast in the United States of America, Canada, Mexico, United Kingdom, \nFrance, Benelux, Scandinavia, Germany, Spain, Italy, Korea\n\n\n                                       3\n\n\n\n[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS \nDOCUMENT]\n\nand Japan, any patents on those portions of the Technology it owns as of the \nEffective Date or which it independently develops subsequent to the Effective \nDate and which are commercially important to protecting the intellectual \nproperty rights underlying the Technology.\n\nExcept as prohibited by law, the parties shall jointly file, with respect to \nJointly Owned Technology, such patent and copyright applications and \namendments thereof as the parties agree are useful to protect their joint \ninterests in the Technology, and shall thereafter use commercially reasonable \ndiligence to prosecute and maintain in force such applications and any \nresultant patents and copyrights. The costs and expenses (including \nattorneys' fees) incurred in the filing, prosecution and maintenance of such \npatents and copyrights shall be shared equally by the parties. As an \nadditional right, either party, at its own expense, may file patent and \ncopyright applications covering the Technology in those countries where the \nparties do not mutually agree to file such applications. All patent and \ncopyright applications for Jointly Owned Technology developed under this \nLetter Agreement shall be filed in the name of both parties.\n\n6.       LICENSE GRANT\n\nSubject to the terms of this Letter Agreement, TTR grants to Macrovision, \nduring the full term of this Letter Agreement, an exclusive, worldwide, \nroyalty-bearing license, within the Field of Use (as defined below), \nincluding the right to sublicense, to use all patent rights, software \nalgorithms, encoder modules, applicable trademarks and tradenames including \nbut not limited to MusicGuard, and other intellectual property owned by or \nlicensed to TTR, or developed by TTR, which is required to develop and \ngenerate commercial benefit from the Technology. 'Field of Use' shall mean \nmusic (including music video) copy protection for optical media, including \nbut not limited to copy protection for CDs and DVDs, and for internet digital \nrights management for music applications.\n\nTTR will ensure, no less frequently than monthly, that Macrovision has a full \ncopy of the latest version of the Technology (including copies of all \npertinent notes, plans, diagrams, schematics, source code, object code and \ntechnical specifications), it being understood that the intent of the parties \nherein is to provide for Macrovision to be able to fully utilize the \nTechnology in the event of a dissolution or corporate reorganization of TTR \nand\/or in the event that [*] ceases to be in the employ of TTR.\n\n7.       LICENSE FEES\n\nExcept as provided below in this Section 7 Macrovision agrees to pay to TTR \nthirty percent (30%) of the Net Revenues received by Macrovision from \ncustomers, distributors, OEM partners, or other sublicensees of the \nTechnology. For purposes of this Letter Agreement, 'Net Revenues' shall mean \ngross revenues reduced by returns,\n\n                                       4\n\n\n\n[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS \nDOCUMENT]\n\ndistributor discounts, and rebates, but not reduced by cost of goods sold. In \nthe event that the 'Commercial Launch' as defined herein has not been \nachieved on or before [*], then, beginning [*] and for the remaining term of \nthis Letter Agreement, the percentage payable by Macrovision to TTR as \ndescribed above shall be reduced to twenty five percent (25%) of Net \nRevenues. For purposes of this Letter Agreement, 'Commercial Launch' shall \nmean the date by which the first of the following two events have occurred: \n(i) [*] of the [*] major music labels [*] have each manufactured at least [*] \nMusic CDs which have been copy protected using the Technology, or (ii) [*] of \nthe [*] major music labels [*] has manufactured at least [*] Music CDs which \nhave been copy protected using the Technology and an aggregate total of [*] \nMusic CDs (including Music CDs manufactured by such major music label) have \nbeen manufactured. Macrovision intends to license the Technology as a \nseparate product or service, however, TTR agrees to negotiate with \nMacrovision in good faith the allocation of revenue to the Technology in the \nevent Macrovision desires to license the Technology as a portion of another \nproduct or service it offers to its customers, distributors, OEM partners, or \nsublicensees. Macrovision agrees that it shall not license the Technology as \na portion of another product or service until the allocation of revenue to \nthe Technology has been mutually agreed by Macrovision and TTR\n\nMacrovision agrees to provide reports to TTR on a quarterly basis (for \nquarters ending March 31, June 30, September 30, and December 31 each year \nduring the term of this Letter Agreement) which indicate the total number of \nMusic CDs manufactured to which Macrovision is aware that the Technology has \nbeen applied, each such report shall be delivered to TTR within 45 days \nfollowing the end of each such calendar quarter. The first such report shall \nbe delivered to TTR within 45 days following the end of the calendar quarter \nin which the Commercial Launch has occurred. Macrovision agrees to pay to TTR \nits share of Net Revenues from the Technology based upon actual cash receipts \nreceived. Such payments shall be made to TTR on the last day of each calendar \nmonth during the Term of this Letter Agreement with respect to cash receipts \nreceived in the immediately preceding month.\n\n8.        MINIMUM FEES\n\nIn consideration for the exclusive license granted to Macrovision by TTR \nhereunder, Macrovision shall pay to TTR, beginning twelve months following \nthe Commercial Launch of the Technology, a minimum annual guaranteed royalty \nadvance, recoupable against royalties actually earned by TTR as its share of \nNet Revenues generated from the Technology, of [*], such annual guaranteed \nroyalty to be [*] in each ensuing year; i.e. [*] in the second year following \ncommercial launch,\n\n                                       5\n\n\n\n\n[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS \nDOCUMENT]\n\n[*] in the third year, and [*] in the fourth year. In the fifth through ninth \nyears following Commercial Launch, such minimum guaranteed royalty would be \n[*]. Failure to make any of these payments when due shall cause Macrovision's \nexclusive license hereunder to revert to nonexclusive status. The initial [*] \nminimum annual guaranteed royalty advance shall be paid by Macrovision to TTR \nin one lump sum when due. Minimum annual guaranteed royalty advances for the \nensuing years shall be paid by Macrovision to TTR in [*] installments, the \nfirst such installment of which shall be paid on the annual anniversary of \nthe Commercial Launch of the Technology.\n\nNotwithstanding the above, if the Commercial Launch of the Technology is \nachieved prior to [*], or if the Commercial Launch of the Technology is not \nachieved by [*], then all minimum fees described in this Section 8 shall be \nwaived. In the event that the minimum fees described in this Section 8 are \nwaived as described in this Section 8 and Macrovision shall not have paid to \nTTR a minimum of [*] in aggregate royalties or royalty advances, including \nroyalties paid under the terms of Section 7 above, by the second annual \nanniversary following the Commercial Launch, then Macrovision's exclusive \nlicense hereunder shall revert to nonexclusive status.\n\n9.       SALES, MARKETING, AND LICENSING OF THE TECHNOLOGY\n\nMacrovision shall in its sole discretion determine the staffing and other \nresources to be allocated by Macrovision to commercializing the Technology, \nincluding but not limited to LBR encoder development or testing, product \nmanagement, sales, marketing and promotion of the Technology. However, \nMacrovision agrees to allocate commercially reasonable staffing and other \nresources to commercializing the Technology consistent with Macrovision's \ngood faith determination of the commercial potential of the Technology. \nMacrovision shall in its sole discretion determine the naming, branding, and \npricing for the Technology, except that Macrovision agrees (i) to include \nmention in the text of all press releases related to the Technology that the \nTechnology has been developed jointly by Macrovision and TTR, (ii) to include \nmention in the small-type copyright\/trademark sections of advertising and \nrelated marketing collaterial materials that the Technology has been \ndeveloped jointly by Macrovision and TTR, and (iii) not to license the \nTechnology free of charge to customers, distributors, OEM partners, or other \nsublicensees other than for promotional purposes. TTR agrees that Macrovision \nshall in its sole discretion determine the degree of prominence afforded to \nthe mention of TTR described in subsections (i) and (ii) of this Section 9.\n\n10.      COOPERATIVE MARKETING AND DEVELOPMENT PAYMENTS\n\nTTR recognizes the unique one-time costs which will be incurred by \nMacrovision to co-develop and launch the Technology into the commercial \nmarket and agrees to reimburse\n\n\n                                      6\n\n\n\n[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS \nDOCUMENT]\n\nMacrovision for its staffing and other costs related to development and \ntesting, product management, sales, product naming\/branding, marketing, and \npromotion expenses incurred by Macrovision with respect to the Technology \nduring the [*]period ending [*], up to an aggregate maximum reimbursement of \nUS$1 Million. Reimbursements shall be paid by TTR to Macrovision on the last \nday of each month with respect to reimbursable expenses (including direct \noverheads related to such expenses) incurred by Macrovision in the prior \nmonth, based upon invoices submitted by Macrovision to TTR for each such \nprior month, until the earlier of the date on which TTR has paid to \nMacrovision [*] in aggregate reimbursements, or [*]. The first such \nreimbursement shall be paid by TTR to Macrovision on or before [*] with \nrespect to reimbursable expenses incurred by Macrovision during the month of \n[*]. Notwithstanding the above, no such reimbursements shall be payable by \nTTR to Macrovision prior to the closing of Macrovision's US$4 Million \ninvestment in, TTR as contemplated herein.\n\n11.      TTR'S EXISTING DISCGUARD CD-ROM SOFTWARE COPY PROTECTION TECHNOLOGY\n\nTTR shall (i) grant to Macrovision, effective upon the closing of \nMacrovision's US$4 Million investment in TTR as contemplated herein, an \nexclusive, worldwide license, including the right to incorporate into other \nMacrovision products and the right to sublicense, to all patents, software \nalgorithms, CD and DVD signatures, encoder modules, other technology, \nDiscGuard and related tradenames, and other intellectual property related to \nTTR's CD-ROM software copy protection technology ('CD Technology'), and (ii) \ndeliver to Macrovision all available documentation related to the \nCD-Technology, including but not limited to the CD and DVD signature portions \nthereof. Such license shall be [*] with respect to the CD and DVD signature \nportions of the CD-Technology and shall be [*] with respect to all other \nportions of the CD-Technology, such royalty to be negotiated separately \nbetween the parties in the event that Macrovision desires to incorporate such \nother portions of the CD-Technology into other Macrovision products, \nincluding but not limited to products related to software, video, and data \npublishing copy protection or internet digital rights management TTR shall, \nwithin 5 business days of the closing of Macrovision's US$4 Million \ninvestment in TTR as contemplated herein, notify all existing CD-Technology \ncustomers and prospects in writing that it has made an agreement with \nMacrovision to transition all TTR CD-Technology customers and prospects to \nMacrovision's SafeDisc technology and that such a transition will be \nimplemented within the next [*] days and, further, that TTR's CD-Technology \nwill [*] for license following such [*] day period. TTR shall, within [*] \nbusiness days of the closing of Macrovision's US$4 Million investment in TTR \nas contemplated herein, TTR will deliver to Macrovision all pertinent notes, \nplans, diagrams, schematics, source code, object code and technical \nspecifications related to the CD and DVD signatures, it being understood\n\n                                       7\n\n\n\n[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS \nDOCUMENT]\n\nthat the intent of the parties herein is for Macrovision to be able to fully \nutilize such signatures under the royalty free license described above.\n\nNotwithstanding the above,\n\n         a.    Macrovision shall pay to TTR, for the [*] period beginning [*] \n               and ending [*], a royalty equal to [*] percent of the Net \n               Revenues Macrovision generates from its SafeDisc technology from\n               customers, distributors, or sublicensees in the People's\n               Republic of China ('PRC'), and\n\n         b.    The rights of the existing TTR CD-Technology licensee in the\n               PRC [*] shall be respected through October 15, 2001, the end of \n               the term of such license. Notwithstanding the above, TTR and \n               Macrovision will work cooperatively to transition [*] to a \n               SafeDisc license so that the CD-Technology can be withdrawn \n               from the PRC market as soon as possible.\n\n12.      MACROVISION `S RIGHT OF FIRST REFUSAL TO OTHER TTR TECHNOLOGIES\n\nTTR shall grant to Macrovision an exclusive right of first refusal, during \nthe term of this Letter Agreement, with respect to (a) the right to purchase \nor (b) the worldwide exclusive marketing rights related to (i) the Technology \noutside of the Field of Use and (ii) any future packaged media copy \nprotection or internet digital rights management technologies developed by \nTTR which are applicable to music, music video, video, software or data \npublishing products or markets. Terms and conditions related to such \nMacrovision right of first refusal shall be equivalent to the terms and \nconditions proposed to TTR by any bona fide third party, unless mutually \nagreed otherwise by Macrovision and TTR.\n\n13.      EQUITY INVESTMENT BY MACROVISION IN TTR\n\nSubject to (i) the satisfactory completion of Macrovision's due diligence \nreview by December 31, 1999, and (ii) the approval of both parties' Boards of \nDirectors, Macrovision and TTR agree as follows:\n\n         a.    TTR shall grant to Macrovision the exclusive right, on or before\n               January 15, 2000, to invest the sum of US$4 Million in the\n               equity of TTR or in such other form as may be mutually\n               agreeable to Macrovision and TTR to allow Macrovision to\n               record the investment as an asset on Macrovision's. balance\n               sheet and to use the 'cost method' of accounting for such\n               investment. The valuation for such investment shall be US$35\n               Million on a post money basis. Between the date of execution\n               of this Letter Agreement and the date of closing for the\n               contemplated US$4 Million investment, TTR agrees not to\n               solicit, initiate discussions with, or engage in further\n\n\n                                       8\n\n\n\n\n               discussions with any other party relating to the purchase of a\n               material equity interest in TTR. TTR will conduct its business\n               in the usual manner and will consult with Macrovision on any\n               proposed material matters which are outside of the ordinary\n               course of its business. TTR shall allow Macrovision all\n               reasonable access to its books and records, as well as to its\n               professional advisors, for the purpose of enabling Macrovision\n               to quickly and conveniently conduct the due diligence reviews\n               contemplated herein.\n\n         b.    Macrovision shall, on or before January 15, 2000\n               invest the sum of US$4 Million in the equity of TTR, or in\n               such other form as may be mutually agreeable to Macrovision\n               and TTR, to allow Macrovision to record the investment as an\n               asset on Macrovision's balance sheet and to use the 'cost\n               method' of accounting for such investment. The valuation for\n               such investment shall be US$35 Million on a post money basis.\n               Notwithstanding the above, TTR agrees that Macrovision's\n               investment in TTR shall be contingent upon receipt by\n               Macrovision no later than January 10, 2000, of TTR financial\n               statements in accordance with United States Generally Accepted\n               Accounting Principles (Balance Sheet as of a date no earlier\n               than October 31, 1999, Statements of Income, Cash Flows, and\n               Stockholders' Equity or Deficit, for the year ending December\n               31, 1998 and the ten months ending October 31, 1999,\n               including, for each period, a full set of US GAAP-compliant\n               footnotes thereon), audited by the Israeli office or affiliate\n               of a 'Big 5' public accounting firm (i.e., Deloitte and\n               Touche, KPMG Peat Marwick, Price WaterhouseCoopers, Arthur\n               Andersen, or Ernst and Young), such audited Balance Sheet\n               showing an excess of liabilities due within 18 months of the\n               date of the Balance Sheet over cash and cash equivalents of no\n               more than US$[*]. TTR agrees to bear all expenses\n               associated with such audit.\n\n         c.    The following additional terms shall apply to Macrovision's\n               US$4 Million investment in TTR as described in this Section\n               13:\n\n              (i)   Macrovision shall have the exclusive right of first \n                    refusal, for the term of this Letter Agreement, with \n                    respect to any third party offer from a party who may \n                    propose to acquire a majority equity interest in TTR, to \n                    acquire such majority equity interest. Terms and \n                    conditions related to such Macrovision right of first \n                    refusal shall be equivalent to the terms and conditions \n                    proposed to TTR by any bona fide third party, unless \n                    mutually agreed otherwise by Macrovision and TTR. \n                    Macrovision shall also have the option, but not the \n                    obligation, to participate pro rata in any future TTR \n                    financing rounds to the extent such future financing \n                    rounds are private financings (i.e., not public offerings \n                    for which offering documents are filed with the \n                    Securities and Exchange Commission) greater than US$[*].\n\n              (ii)  The investment shall be structured in such a way that \n                    Macrovision's outside auditors approve the 'cost method' \n                    of accounting for the investment.                         \n\n                                       9\n\n\n\n              (iii) The investment documents shall include covenants and \n                    other provisions which place the Technology and the \n                    CD-Technology in an escrow status acceptable to \n                    Macrovision such that Macrovision's rights in and to the \n                    Technology survive any and all forms of possible TTR \n                    corporate reorganizations or bankruptcy events, or claims \n                    on such technologies which might otherwise be senior to \n                    the claims of Macrovision and which may impair \n                    Macrovision's exclusive licenses described herein.\n\n              (iv)  Shares in TTR represented directly or indirectly by \n                    Macrovision's $4 million investment in TTR as \n                    contemplated herein shall be registered shares subject to \n                    sale by Macrovision in a private or public market \n                    transaction beginning 60 days after the closing of such \n                    investment transaction.\n\n              (v)   Macrovision shall be granted observer status on TTR's \n                    board of directors, such observer status to include all \n                    rights and privileges of board of directors members \n                    except for voting privileges.\n\n              (vi)  Employment agreements for the twelve months ending \n                    December 31, 2000 reasonably satisfactory to Macrovision \n                    shall be entered into between TTR and up to four key \n                    employees of TTR, including but not limited to [*] and [*].\n\n              (vii) Certain current TTR employees shall be terminated as \n                    mutually agreed by Macrovision and TTR.\n\n14.      CONFIDENTIALITY\n\nThis Letter Agreement is subject to the terms of the nondisclosure agreement \nentered into by the parties on October 20, 1999. Except as provided in \nSection 15 below, the existence of this Letter Agreement and all terms and \nconditions of this Letter Agreement are confidential to TTR and Macrovision.\n\n15.      PUBLIC ANNOUNCEMENT\n\nTTR and Macrovision agree that at a future date it will be desirable to issue \na mutually acceptable press release announcing the signing of this Letter \nAgreement and announcing the development of the Technology. It is anticipated \nthat this public announcement will occur within 10 days following the closing \nof Macrovision's US$4 Million investment in TTR as contemplated herein.\n\nNotwithstanding the above, Macrovision acknowledges thatTTR may be required \nto file form 8-K with the United States Securities and Exchange Commission \nand that if TTR's counsel reasonably determines that TTR is required to file, \nit shall not constitute a breach of this Letter Agreement. TTR agrees, \nhowever, that Macrovision shall have the option to review and comment on such \n8-K filing before it is filed, the intent being to minimize the inclusion of \ndetailed items in this Letter Agreement to that information\n\n\n                                      10\n\n\n\nspecifically required by law or by SEC regulations. Macrovision agrees that, \nno later than five business days following TTR's 8-K filing, Macrovision will \nissue a press release announcing the signing of this Letter Agreement and the \ndevelopment of the Technology, the content of such press release to be \ndetermined by Macrovision in its sole discretion. Following the issuance of \nsuch press release by Macrovision, Macrovision agrees that TTR may issue a \nseparate press release announcing the signing of this Letter Agreement and \nthe development of the Technology, the content of such press release to be \napproved prior to issuance by Macrovision, such approval not to be \nunreasonably withheld.\n\n16.      LONG FORM AGREEMENTS\n\nUpon execution of this Letter Agreement by both parties, Macrovision and TTR \nshall use their respective reasonable efforts to prepare and execute, on or \nbefore January 15, 2000, such long-form agreements and related documentation \nwhich incorporates the terms herein and incorporates such other terms and \nconditions as TTR and Macrovision may deem reasonable or necessary to \naccomplish the agreement set forth herein. Notwithstanding the foregoing, \nthis Letter Agreement when executed by Macrovision and TTR shall represent, \nSubject to Section 20 hereof, a binding agreement between the parties which \nreflects the essential terms related to the development and marketing of the \nTechnology, until such time as a long form agreement which supersedes this \nLetter Agreement has been executed by the parties.\n\nEach party, subject to the confidentiality provisions herein, shall make \navailable to the other party such financial, technological, and other \nbusiness information that such other party may reasonably request as part of \nsuch other party's due diligence activities related to the preparation of \nsuch long form agreement.\n\n17.      DISCLAIMER OF AGENCY\n\nNothing contained in this Letter Agreement is intended or will be construed \nso as to constitute the parties to this Letter Agreement as partners or as \nagents of each other. Neither party will have any express or implied right or \nauthority to assume or create any obligations on behalf of or in the name of \nthe other party or to bind the other party in any contract, agreement or \nundertaking with any third party.\n\n18.      CHOICE OF LAW\n\nThis Letter Agreement will be governed by and interpreted in accordance with \nthe laws of the State of California, as such laws are applied to agreements \nbetween California residents entered into and to be wholly performed within \nCalifornia. In any dispute, litigation, or arbitration between the parties \narising out of or related to this Agreement, the prevailing party therein \nshall be entitled to have its reasonable and actual attorneys' fees, \nreasonable expenses, related litigation costs and costs of suit (if any) paid \nby the non-prevailing party.\n\n\n                                       11\n\n\n\nExcept for claims regarding ownership or infringement of the Technology, any \ndispute between the parties arising out of, or relating to, the validity, \nconstruction, interpretation or performance of this Letter Agreement that \ncannot be resolved amicably shall be submitted to binding arbitration, to be \nheld in San Francisco, California, USA, in accordance with the rules of the \nAmerican Arbitration Association. Any such arbitration proceeding shall be \nconducted before an arbitration panel composed of three (3) arbitrators; each \nparty shall designate one (1) arbitrator, and the two (2) arbitrators so \ndesignated shall designate the third arbitrator. The decision and award of \nthe arbitrators shall (i) be in writing, (ii) state the reasons therefor, \n(iii) be based solely on the terms and conditions of this Agreement, as \ninterpreted under the laws of the State of California, USA, and (iv) shall be \nfinal and binding upon the parties. The decision and award of the arbitrators \nin any such arbitration proceeding may be enforced in any court of competent \njurisdiction. The parties to any such arbitration shall be entitled to \nconduct such discovery as they would have been entitled to conduct had the \naction been filed in the appropriate Federal or State court in San Francisco \nCounty, California, USA.\n\n19.      AUDIT RIGHTS\n\nBoth parties will have the right during the term of this Letter Agreement and \nfor one (1) year thereafter to have an independent 'Big 5' certified public \naccounting firm (i.e., Deloitte and Touche, Arthur Andersen, \nPriceWaterhouseCoopers, KPMG Peat Marwick, or Ernst &amp; Young) review or audit \nthe other party's relevant records for the purpose of certifying compliance \nwith this Letter Agreement. All audits will be at the auditing party's \nexpense and conducted during regular business hours, and begun upon at least \none (1) month's prior written notice. Any discrepancy revealed by such audits \nwill be corrected within ten (10) days of the written notice of the official \nresults of the audit being delivered by the auditor.\n\n20.      TERM AND TERMINATION\n\nThe term of this Letter Agreement shall begin on the Effective Date and end \non December 31, 2009. Notwithstanding the above, this Letter Agreement may be \nterminated earlier:\n\n         a.    by either party upon five days' written notice if the investment\n               by Macrovision in TTR as contemplated herein is not closed\n               (i.e., funded) for any reason whatsoever by January 31, 2000;\n               or\n\n\n                                      12\n\n\n\n         b.    by either party upon thirty days written notice to the other\n               if the other party materially breaches this Letter Agreement\n               and such material breach is not cured within ninety days of\n               notice to cure such breach.\n\nNotwithstanding anything to the contrary in this Letter Agreement, if this \nLetter Agreement is terminated by TTR in accordance with Section 20 (a) \nabove, then each party shall immediately return to the other party all \ntechnology and related materials of such other party and neither party shall \nhave any liability whatsoever to the other party, except with respect to \nclaim related to infringement of intellectual property rights.\n\n21.      EXPENSES\n\nThe parties shall each bear their own legal expenses and the expenses of \ntheir professional advisors, including any brokerage fees, with respect to \nthe transactions contemplated herein.\n\n22.      ACCEPTANCE AND AGREEMENT\n\nThis Letter Agreement is accepted and agreed on behalf of Macrovision and TTR \nby the signatures of their authorized representatives named below. This \nLetter Agreement shall not be binding until executed by both Macrovision and \nTTR. The parties agree that this Letter Agreement may be executed via \nexchange of signed facsimile copies.\n\nMACROVISION CORPORATION                      TTR TECHNOLOGIES, INC.\n\n\n\/s\/ William Krepick                          \/s\/ Mark Tockayer  Nov. 24, 1999\n-----------------------------               ---------------------------------\nSignature\/Date                              Signature\/Date\n\nWilliam Krepick                             Mark Tockayer\n-----------------------------               ---------------------------------\nPrinted Name                                Printed Name\n\nPresident\/CEP                               Chairman\n-----------------------------               ---------------------------------\nTitle                                       Title\n\n\n\n\n                                       13\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8106],"corporate_contracts_industries":[9466],"corporate_contracts_types":[9613,9617],"class_list":["post-42418","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-macrovision-corp","corporate_contracts_industries-media__movies","corporate_contracts_types-operations","corporate_contracts_types-operations__jv"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42418","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42418"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42418"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42418"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}