\n6. CONDITIONS OF THE COMPANY’S OBLIGATIONS AT CLOSING……………………………20<\/p>\n 6.1 Execution of Agreement……………………………………………..21<\/p>\n
6.2 Purchase Price…………………………………………………….21<\/p>\n
6.3 Representations, Warranties, Covenants……………………………….21<\/p>\n
6.4 Legal Impediment…………………………………………………..21<\/p>\n
6.5 Alliance Agreement…………………………………………………21<\/p>\n
7. DEFINITIONS………………………………………………………………21<\/p>\n
8. MISCELLANEOUS…………………………………………………………….22<\/p>\n
8.1 Survival of Warranties……………………………………………..22<\/p>\n
8.2 Successor and Assigns………………………………………………23<\/p>\n
8.3 Governing Law……………………………………………………..23<\/p>\n
8.4 Counterparts………………………………………………………23<\/p>\n
8.5 Titles and Subtitles……………………………………………….23<\/p>\n
8.6 Notices…………………………………………………………..23<\/p>\n
8.7 Finder’s Fee………………………………………………………24<\/p>\n
8.8 Expenses………………………………………………………….24<\/p>\n
8.9 Amendments and Waivers……………………………………………..25<\/p>\n
8.10 Severability………………………………………………………25<\/p>\n
8.11 Entire Agreement…………………………………………………..25<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
iii<\/p>\n
THIS STOCK PURCHASE AGREEMENT, effective as of January 10, 2000, is by
\nand between TTR TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and
\nMACROVISION CORPORATION, a Delaware corporation (the “Investor”).<\/p>\n
THE PARTIES HEREBY AGREE AS FOLLOWS:<\/p>\n
1. PURCHASE AND SALE OF STOCK<\/p>\n
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms
\nand conditions of this Agreement, the Investor agrees to purchase at the Closing
\nand the Company agrees to sell and issue to the Investor at the Closing, one
\nmillion, eight hundred eighty thousand, nine hundred thirty-seven shares
\n(1,880,937) of the Company’s Common Stock $0.001 par value (the “Shares”). The
\npurchase price for the Shares (subject to adjustment as provided in section 4.8
\nhereof) shall be Two Dollars and Thirteen Cents ($2.1266) per Share, or an
\naggregate purchase price of Four Million Dollars ($4,000,000) (the “Purchase
\nPrice”), which purchase price assumes that such Shares will be registered under
\nthe Securities Act within 90 days of the Closing and will be freely tradable as
\nof that time by Investor, without regard to exemptions under the Securities Act.
\nThe per share Purchase Price of each Share shall be determined by dividing the
\nnumber of shares of Common Stock outstanding immediately prior to the Closing,
\non a fully diluted basis, into $31 million. The number of Shares of Common Stock
\nto be issued to Investor shall be determined by dividing the per share Purchase
\nPrice, determined in the preceding sentence, into the aggregate $4 million
\nPurchase Price.<\/p>\n
1.2 CLOSING. The purchase and sale of the Common Stock shall
\ntake place at the offices of Manatt, Phelps & Phillips LLP, 3030 Hansen Way,
\nSuite 100, Palo Alto, California (or such other location as the Investor may
\ndesignate and the Company consents thereto), at 10:00 A.M. on January 12, 2000,
\nor such other time and date as the Investor determines that all of the
\nconditions to the obligation of Investor, set forth in Section 5 hereof, have
\nbeen or will be satisfied (the “Closing”). At the Closing, the Company shall
\ndeliver to the Investor a certificate representing the Shares against receipt by
\nthe Company from the Investor of a wire transfer in the amount of the Purchase
\nPrice.<\/p>\n
1<\/p>\n
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.<\/p>\n
The Company hereby represents and warrants to the Investor, except as
\nset forth on a Schedule of Exceptions attached as SCHEDULE A hereto (the
\n“Schedule of Exceptions”), specifically identifying the relevant subparagraph
\nhereof, which exceptions shall be deemed to be a part of the representations and
\nwarranties as if made hereunder (provided that such Schedule of Exceptions may,
\nat the discretion of the Company, be amended from time to time as necessary
\nuntil Closing, so long as such amendments do not reflect any material change in
\nthe disclosure), the following:<\/p>\n
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
\nCompany is a corporation duly organized, validly existing and in good standing
\nunder the laws of the State of Delaware and has all requisite corporate power
\nand authority to carry on its business as now conducted and as proposed to be
\nconducted. The Company is duly qualified to transact business and is in good
\nstanding in each jurisdiction in which the failure so to qualify would have a
\nMaterial Adverse Effect on its business or properties.<\/p>\n
2.2 CAPITALIZATION AND VOTING RIGHTS. Immediately prior to
\nthe Closing, the authorized capital of the Company will consist of:<\/p>\n
(i) CAPITAL STOCK. 25,000,000 shares of common stock
\n(“Common Stock”), of which 10,602,866 are issued and outstanding and 5,000,000
\nshares of preferred stock, none of which are issued and outstanding. The Company
\nhas reserved an aggregate 1,500,000 shares of Common Stock under its 1996
\nemployee stock option plan for purposes of (i) future grants of stock options to
\nemployees, consultants and directors (hereinafter, the “ESOP”), and (ii)
\nissuance to holders of previously granted stock options upon exercise of such
\noptions. Additionally, the company has reserved an additional 25,000 shares of
\ncommon stock under its non-executive directors option plan for issuance to its
\nnon-employee directors. There is no other class or series of stock authorized.<\/p>\n
(ii) WARRANTS AND OPTIONS. The Company has warrants
\nand options exercisable and outstanding to purchase up to an aggregate of
\n3,224,911 shares of Common Stock, except for 749,400 ESOPS currently exercisable
\nand outstanding.<\/p>\n
2<\/p>\n
(iii) OTHER AGREEMENTS. Except as set forth in this
\nAgreement and in the Schedule of Exceptions, there are no outstanding options,
\nwarrants, convertible securities, rights (including conversion, right of first
\nrefusal or any preemptive rights) or agreements for the purchase or acquisition
\nfrom the Company of any shares of its capital stock or any future issuance of
\nsecurities by the Company.<\/p>\n
(iv) VOTING AGREEMENTS. Except as set forth in this
\nAgreement, the Company has no agreement, obligation or commitment with respect
\nto the election of any individual or individuals to the Board, and to the best
\nof the Company’s knowledge, there is no voting agreement or other arrangement
\namong its shareholders with respect to the election of any individual or
\nindividuals to the Board.<\/p>\n
(v) COMMON STOCK OUTSTANDING. The total number of
\nshares of the Company’s Common Stock outstanding on a fully diluted basis,
\nimmediately prior to the Closing, is 14,577,177 shares.<\/p>\n
2.3 SUBSIDIARIES. Except for TTR Technologies, Ltd., the
\nCompany’s wholly-owned Israeli subsidiary with offices in Kfar-Saba, Israel, the
\nCompany does not own or control, directly or indirectly, any other corporation,
\nassociation, or other business entity.<\/p>\n
2.4 AUTHORIZATION. All corporate action on the part of the
\nCompany, its directors and shareholders necessary for the authorization,
\nexecution and delivery of this Agreement, the performance of all obligations of
\nthe Company hereunder and the authorization, issuance and delivery of the Common
\nStock being sold hereunder has been taken or will be taken prior to the Closing,
\nand this Agreement, upon due execution and delivery, constitutes a valid and
\nbinding obligation of the Company, enforceable in accordance with its terms,
\nexcept (i) as limited by applicable bankruptcy, insolvency, reorganization,
\nmoratorium, and other laws of general application affecting enforcement of
\ncreditors’ rights generally, and (ii) as limited by laws relating to the
\navailability of specific performance, injunctive relief, or other equitable
\nremedies.<\/p>\n
2.5 VALID ISSUANCES OF COMMON STOCK. The Shares which are
\nbeing purchased by the Investor hereunder, when issued, sold and delivered in
\naccordance with the <\/p>\n
3<\/p>\n
terms hereof for the consideration expressed herein, will be duly and validly
\nissued, fully paid and nonassessable, and the Investor shall have good and
\nmarketable title to such Shares, free and clear of any liens, pledges,
\nencumbrances, taxes, charges or restrictions of any kind (other than those
\ncreated by or through the Investor).<\/p>\n
2.6 COMPLIANCE WITH LAW AND CHARTER DOCUMENTS. The Company
\nis not in violation of, or default under, any provisions of its Certificate of
\nIncorporation or Bylaws, both as currently in effect. To its knowledge, the
\nCompany is in compliance in all material respects with all applicable laws,
\nrules, regulations, judgments, decrees and governmental orders, except for such
\nnon-compliance that would not have a Material Adverse Effect on the properties,
\nfinancial condition, operations, prospects or business of the Company. The
\nCompany has received no notice of any violation of such laws, rules,
\nregulations, judgments, decrees or orders which has not been remedied prior to
\nthe date hereof or which would have a Material Adverse Effect on the Company.
\nThe execution, delivery and performance of the Agreement and the consummation of
\nthe transactions contemplated thereby will not result in any such violation or
\ndefault, or be in conflict with or constitute, with or without the passage of
\ntime or the giving of notice or both, either a default under the Company’s
\nCertificate of Incorporation or Bylaws, both as currently in effect, or an event
\nwhich results in the creation of any material lien, charge or encumbrance upon
\nthe capital stock or any asset of the Company, or a default under any Material
\nAgreement or contract by the Company, or a violation of any laws, rules,
\nregulations, judgments, decrees or orders. All material licenses, permits,
\napprovals, registrations, qualifications, certificates and other authorizations
\nnecessary for the conduct of the Company’s business as presently conducted (the
\n“Licenses”) have been duly obtained and are in full force and effect, and there
\nare no proceedings pending or threatened which may result in the revocation,
\ncancellation, suspension or any material adverse modification of any of such
\nLicenses, except for Licenses that, individually or in the aggregate, the
\nCompany need not hold or possess in order to avoid a Material Adverse Effect on
\nthe Company’s assets, properties, financial condition, operating results or
\nbusiness. The Company believes it can obtain, without undue burden or expense,
\nany similar authority for the conduct of its business in the future as presently
\nconducted and proposed to be conducted.<\/p>\n
4<\/p>\n
2.7 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC.
\nThe execution, delivery and performance of and compliance with this Agreement
\nand the issuance and sale of the Shares will not result in nor constitute any
\nbreach, default or violation of (i) any agreement, contract, lease, license,
\ninstrument or commitment (oral or written) to which the Company is a party or is
\nbound and which involves payment by the Company or any of its subsidiaries in
\nexcess of $250,000 or which is otherwise material to the business, properties,
\nfinancial condition or results of operation of the Company or its subsidiaries
\n(a “Material Agreement”) or (ii) any law, rule, regulation, statute or order
\napplicable to the Company, any of its subsidiaries or their respective
\nproperties, nor result in the creation of any mortgage, pledge, lien,
\nencumbrance or charge upon any of the properties or assets of the Company or its
\nsubsidiaries.<\/p>\n
2.8 GOVERNMENT CONSENT, ETC. No consent, approval, order or
\nauthorization of, or designation, registration, declaration or filing with, any
\nfederal, state, local or provincial or other governmental authority on the part
\nof the Company is required in connection with the valid execution and delivery
\nof this Agreement or the consummation of the transactions contemplated herein,
\nincluding the offer, sale or issuance of the Shares to the Investor.<\/p>\n
2.9 OFFERING. In reliance on the representations and
\nwarranties of Investor in Section 3, hereof, the offer, sale and issuance of the
\nShares will not, to the best knowledge of the Company, result in a violation of
\nthe requirements of Section 5 of the Securities Act or the qualification or
\nregistration requirements of the California or other applicable blue sky laws or
\nforeign laws as such laws exist on the date hereof.<\/p>\n
2.10 LITIGATION. There is no action, suit, proceeding or
\ninvestigation pending or currently threatened against the Company which
\nquestions the validity of this Agreement or the consummation of the transactions
\ncontemplated hereby or which might result, either individually or in the
\naggregate, in any Material Adverse Effects on the assets, financial condition,
\noperations or business of the Company, financially or otherwise, or any change
\nin the current equity ownership of the Company. The Company is not a party or
\nsubject to the provisions of any order, writ, injunction, judgment or decree of
\nany court or government agency or instrumentality. <\/p>\n
5<\/p>\n
There is no action, suit, proceeding or investigation by the Company currently
\npending or which the Company currently intends to initiate.<\/p>\n
2.11 AGREEMENTS; ACTION.<\/p>\n
(i) Since November 30, 1999, the Company has not (i)
\ndeclared or paid any dividends, or authorized or made any distribution upon or
\nwith respect to any class or series of its capital stock, (ii) incurred any
\nindebtedness for money borrowed or any other liabilities in excess of $250,000,
\n(iii) made any loans or advances to any person, other than ordinary advances for
\ntravel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
\nassets or rights, other than the sale of its inventory in the ordinary course of
\nbusiness.<\/p>\n
(ii) Except as set forth in the Schedule of
\nExceptions, the Company has not engaged since November 24, 1999 in any
\ndiscussion (i) with any representative of any corporation or corporations
\nregarding the consolidation or merger of the Company with or into any such
\ncorporation or corporations, (ii) with any corporation, partnership, association
\nor other business entity or any individual regarding the sale, conveyance or
\ndisposition of all or substantially all of the assets of the Company or a
\ntransaction or series of related transactions in which more than fifty (50%) of
\nthe voting ownership of the Company is disposed of, or (iii) regarding any other
\nform of acquisition, liquidation, dissolution or winding up of the Company.<\/p>\n
2.12 RELATED PARTY TRANSACTIONS.<\/p>\n
(i) No employee, officer or director of the Company
\nor member of his or her immediate family is indebted to the Company, nor is the
\nCompany indebted (or committed to make loans or extend or guarantee credit) to
\nany of them.<\/p>\n
(ii) To the best of the Company’s knowledge, no
\nemployee or officer has any direct or indirect ownership interest in any firm or
\ncorporation with which the Company is affiliated or with which the Company has a
\nbusiness relationship, or any firm or corporation that competes with the
\nCompany, except that employees or officers of the Company and members of their
\nimmediate families may own stock in publicly traded companies that may compete
\nwith the Company. Prior to the Closing, no officer, director or major
\nshareholder or member of the <\/p>\n
6<\/p>\n
immediate family of any officer, director or major shareholder of the Company
\nhas a direct or indirect financial interest in any material contract with the
\nCompany.<\/p>\n
2.13 ENVIRONMENTAL AND SAFETY LAWS. To the best of its
\nknowledge, the Company is not in violation of any applicable statute, law, or
\nregulation relating to the environment or occupational health and safety, and to
\nthe best of its knowledge, no material expenditures are or will be required to
\ncomply with any such existing statute, law, or regulation.<\/p>\n
2.14 STATUS OF PROPRIETARY ASSETS.<\/p>\n
(i) OWNERSHIP. The Company owns, is licensed to use
\nor otherwise has the right to use all patents, trademarks, service marks, trade
\nnames, copyrights and trade secrets that are material or necessary for the
\noperation of its business as now conducted (the “Proprietary Assets”). The
\nCompany has not received within the past 36 months preceding the date first set
\nout above any communications alleging that the Company has violated or, by
\nconducting its business, would violate any of the patents, trademarks, service
\nmarks, trade names, copyrights, trade secrets or other proprietary rights or
\nprocesses of any other person or entity. The Company has not granted any license
\nor option or entered into any agreement of any kind with respect to the use of
\nthe Proprietary Assets owned by it, other than licenses to and sales of its
\nproducts and services made in the ordinary course of its business.<\/p>\n
(ii) LICENSES; OTHER AGREEMENTS. The Company is not
\nbound by or a party to any option, license or agreement with respect to any
\ntechnology owned by any third party other than shrink-wrap licenses entered into
\nin the ordinary course of business except as set forth on the Schedule of
\nExceptions. The Company is not obligated to pay any royalties or other payments
\nto another person or entity with respect to the marketing, sale, distribution,
\nmanufacture, license or use of any Proprietary Asset or any other property or
\nrights, except as set forth in the Schedule of Exceptions.<\/p>\n
(iii) NO BREACH BY EMPLOYEES. To the best of the
\nCompany’s knowledge, no employee of the Company is subject to any judgment,
\ndecree or order of any court or administrative agency, or any other restriction
\nthat would materially interfere with the use of his or her best efforts to carry
\nout his or her duties for the Company or that would conflict <\/p>\n
7<\/p>\n
with the Company’s business as currently conducted. The Company has received no
\nwritten notice from any former employer that any employee of the Company has
\nprior obligations to a former employer that would interfere or conflict with
\nsuch employee’s ability to perform his or her intended services for the Company.
\nTo the best of the Company’s knowledge and belief, no employee or advisor of the
\nCompany is or is now expected to be in violation of any term of any employment
\ncontract, patent disclosure agreement, proprietary information and inventions
\nagreement or any other contract or agreement or any restrictive covenant or any
\nother common law obligation to a former employer relating to the right of any
\nsuch employee to be employed by the Company because of the nature of the
\nbusiness conducted by the Company or to the use of trade secrets or proprietary
\ninformation of others, and the employment of the Company’s employees does not
\nsubject the Company to any liability, except where such liability would not have
\na material adverse effect. There is neither pending nor, to the Company’s
\nknowledge and belief, threatened any actions, suits, proceedings or claims, or
\nto its knowledge any basis therefor or threat thereof with respect to any
\ncontract, agreement, covenant or obligation referred to in the preceding
\nsentence.<\/p>\n
(iv) NO INFRINGEMENT. Within the 36 months preceding
\nthe date first set out above, no claims with respect to the Proprietary Assets
\nhave been communicated to the Company: (A) to the effect that the manufacture,
\nsale, license or use of any Proprietary Asset as now used or offered or proposed
\nfor use or sale by the Company infringes any copyright, patent, trade secret or
\nother intellectual property right of a third party, or (B) challenging the
\nownership or validity of any of the Company’s rights to or interest in such
\nProprietary Assets. The Company has received no notice to the effect that any
\npatents or registered trademarks, service marks or registered copyright, held by
\nthe Company are invalid or not subsisting except for failures to be valid and
\nsubsisting that would not reasonably be expected to have, individually or in the
\naggregate, a Material Adverse Effect on the Company. To the best of the
\nCompany’s knowledge, there has been no material unauthorized use, infringement
\nor misappropriation of any of the Proprietary Assets by any third party,
\nincluding any employee or former employee of the Company.<\/p>\n
2.15 MATERIAL AGREEMENTS. The Company has not breached in any
\nmaterial respect any term or condition of (A) any Material Agreement or (B) any
\nother agreement, <\/p>\n
8<\/p>\n
contract, lease, license, instrument or commitment (oral or written) that,
\nindividually or in the aggregate, would have a Material Adverse Effect on the
\nproperties, financial condition, operating results, prospects or business of the
\nCompany. The Company is not a party to any agreement that restricts in any
\nmaterial respect its ability to market, sell or license any of its products or
\nservices (whether by territorial restriction or otherwise).<\/p>\n
2.16 DISCLOSURE. The Company has fully provided the Investor
\nwith all information which the Investor has requested for deciding whether to
\npurchase the Shares and the Company is not aware of any material information
\nwhich it has not provided to the Investor and which the Company believes is
\nreasonably necessary to enable the Investor to decide whether to enter into the
\ntransaction contemplated by this Agreement. Neither this Agreement nor any other
\ncertificate made or delivered in connection with this Agreement and the
\ntransactions contemplated hereby contains any untrue statement of a material
\nfact or omits to state a material fact necessary not to make the statements
\nherein or therein misleading.<\/p>\n
2.17 REGISTRATION RIGHTS. The Company has not granted or
\nagreed to grant to any person or entity any rights (including piggyback
\nregistration rights) to have any securities of the Company registered with the
\nUS Securities and Exchange Commission (“SEC”) or any other governmental
\nauthority.<\/p>\n
2.18 TAX STATUS. The Company has made or filed all federal,
\nstate and foreign income and all other tax returns, reports and declarations
\nrequired by any jurisdiction to which it is subject and has paid all taxes and
\nother governmental assessments and charges that are shown to be due on such
\nreturns, reports and declarations or otherwise due, except those being contested
\nin good faith, and has set aside on its books provisions reasonably adequate for
\nthe payment of all taxes for periods subsequent to the periods to which such
\nreturns, reports or declarations apply. To the knowledge of the Company, there
\nare no unpaid taxes in any material amount claimed to be due by the taxing
\nauthority of any jurisdiction, and the officers of the Company know of no basis
\nfor any such claim. The Company has not executed a waiver with respect to the
\nstatute of limitations relating to the assessment or collection of any foreign,
\nfederal, state or local tax. None of the Company’s tax returns is presently
\nbeing audited by any taxing authority.<\/p>\n
9<\/p>\n
2.19 EMPLOYEES.<\/p>\n
(i) EMPLOYEE BENEFIT PLANS. The Company does not
\nhave any Employee Benefit Plan as defined in the Employee Retirement Income
\nSecurity Act of 1974.<\/p>\n
(ii) LABOR AGREEMENTS AND ACTIONS. The Company is not
\nbound by or subject to (and none of its assets or properties is bound by or
\nsubject to) any written or oral, express or implied, contract, commitment or
\narrangement with any labor union, and no labor union has requested or to the
\nknowledge of the Company, has sought to represent any of the employees,
\nrepresentatives or agents of the Company. There is no strike or other labor
\ndispute involving the Company pending, or to the knowledge of the Company
\nthreatened, which could have a Material Adverse Effect on the assets,
\nproperties, financial condition, operation or business of the Company, nor is
\nthe Company aware of any labor organization activity involving its employees.
\nThe employment of each officer and employee of the Company is terminable at the
\nwill of the Company upon the giving of notice and the payment of specified
\namounts. Company has complied in all material respects with all applicable state
\nand federal equal employment opportunity laws and with other laws related to
\nemployment.<\/p>\n
(iii) CONFIDENTIAL INFORMATION AND INVENTION
\nASSIGNMENT AGREEMENTS. Each management and technology employee, consultant and
\nofficer of the Company has executed an agreement with the Company regarding
\nconfidentiality and proprietary information. The Company is not aware that any
\nof its employees or consultants is in violation thereof, and the Company will
\nuse its best efforts to prevent any such violation.<\/p>\n
2.20 INSURANCE. The Company maintains and keeps in force with
\ngood and responsible insurance companies fire, public liability, property damage
\nand other insurance, of the kinds and in amounts as are usual and customary in
\nthe type of business conducted by the Company.<\/p>\n
2.21 TITLE TO PROPERTY AND ASSETS. The Company owns and has
\nvalid title to its property and assets free and clear of all mortgages, liens,
\nloans and encumbrances, except such encumbrances and liens which arise in the
\nordinary course of business and do not materially impair the Company’s ownership
\nor use of such property or assets or which would not, in the aggregate, have a
\nMaterial Adverse Effect. With respect to the property and assets it leases, the
\nCompany is in compliance with such leases and, to the best of its knowledge,
\nholds a valid <\/p>\n
10<\/p>\n
leasehold interest free of any liens, claims or encumbrances. The Company does
\nnot own any real property.<\/p>\n
2.22 FINANCIAL STATEMENTS. The Company shall deliver to
\nInvestor, on or before January 10, 2000, the Company’s annual financial
\nstatements (balance sheet and statement of earnings, statement of shareholders’
\nequity and statement of cash flows) dated as of December 31, 1998 and interim
\nfinancial statements for the eleven months of operations ended November 30, 1999
\n(the “Financial Statements”), in each case, such Financial Statements shall be
\nprepared in accordance with United States generally accepted accounting
\nprinciples (“GAAP”), shall include all footnotes in accordance with GAAP, and
\nshall be audited by the Israeli office or affiliate of a “Big 5” public
\naccounting firm (i.e., Deloitte and Touche, KPMG Peat Marwick, Price Waterhouse
\nCoopers, Arthur Anderson or Ernst and Young). The Financial Statements when
\ndelivered, will fairly present the financial condition and operations of the
\nCompany as of the dates, and for the periods, indicated therein, subject to
\nnormal year-end adjustments. The Financial Statements described in subsection
\n2.21 hereof and the audited balance sheet as of November 30, 1999, as adjusted
\nby the auditor’s subsequent event disclosure footnote, shall not show
\nliabilities due within 18 months from the date thereof in an amount in excess of
\nOne Million Dollars ($1,000,000) over the amount of cash and cash equivalents
\nshown on such balance sheet.<\/p>\n
2.23 Except as set forth in the Financial Statements, the
\nCompany has no liabilities, contingent or otherwise, other than (i) liabilities
\nincurred in the ordinary course of business and (ii) obligations under contracts
\nand commitments incurred in the ordinary course of business and not required
\nunder GAAP to be reflected in the Financial Statements, which, in both cases,
\nindividually or in the aggregate, are not material to the financial condition or
\noperating results of the Company.<\/p>\n
2.24 SEC DOCUMENTS, FINANCIAL STATEMENTS. Since November 30,
\n1999, the Company has timely filed all reports, schedules, forms, statements and
\nother documents required to be filed by it with the SEC pursuant to the
\nreporting requirements of the Exchange Act (all of the foregoing filed prior to
\nthe date hereof and all exhibits included therein and financial statements and
\nschedules thereto and documents (other than exhibits) incorporated by reference<\/p>\n
11<\/p>\n
therein, being hereinafter referred to herein as the “SEC Documents”). The
\nCompany has delivered to the Investor, or the Investor has had access to, true
\nand complete copies of the SEC Documents, except for such exhibits and
\nincorporated documents. As of their respective dates, the SEC Documents complied
\nin all material respects with the requirements of the Exchange Act or the
\nSecurities Act, as the case may be, and the rules and regulations of the SEC
\npromulgated thereunder applicable to the SEC Documents, and none of the SEC
\nDocuments, at the time they were filed with the SEC, contained any untrue
\nstatement of a material fact or omitted to state a material fact required to be
\nstated therein or necessary in order to make the statements therein, in light of
\nthe circumstances under which they were made, not misleading. As of their
\nrespective dates, the consolidated financial statements of the Company included
\nin the SEC Documents complied as to form in all material respects with
\napplicable accounting requirements and the published rules and regulations of
\nthe SEC with respect thereto. Except as disclosed in the SEC Documents, since
\nNovember 30, 1999, there has been no material adverse change in the assets,
\nliabilities, business, properties, operations, financial condition, or
\noperations of the Company on a consolidated basis.<\/p>\n
2.25 NO INTEGRATED OFFERING. Neither the Company, nor any of
\nits affiliates, nor any person acting on its or their behalf, has directly or
\nindirectly made any offers or sales in any security or solicited any offers to
\nbuy any security under circumstances that would require registration under the
\nSecurities Act of the issuance of the Shares to the Investor. The issuance of
\nthe Shares to the Investor will not be integrated with any other issuance of the
\nCompany’s securities (past, current or future) for purposes of the Securities
\nAct.<\/p>\n
2.26 YEAR 2000. The mission critical computer software
\noperated by the Company and each of its subsidiaries is currently capable of
\nproviding, or is being adapted to provide uninterrupted millennium functionality
\nto record, store, process and present calendar dates falling on or after January
\n1, 2000 in substantially the same manner and with the same functionality as such
\nmission critical software records, stores, processes and processes and presents
\nsuch calendar dates falling on or before December 31, 1999. The costs of the
\nadaptations referred to in this clause will not have a Material Adverse Effect.<\/p>\n
12<\/p>\n
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.<\/p>\n
The Investor hereby represents and warrants that:<\/p>\n
3.1 AUTHORIZATION. The Investor has full power and authority to
\nenter into this Agreement. This Agreement constitutes a valid and binding
\nobligation of the Investor enforceable against the Investor in accordance with
\nits terms, except (i) as limited by applicable bankruptcy, insolvency,
\nreorganization, moratorium, and other laws of general application affecting
\nenforcement of creditors’ rights generally and (ii) as limited by laws relating
\nto the availability of specific performance, injunctive relief, or other
\nequitable remedies.<\/p>\n
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Investor is acquiring the
\nShares for investment for its own account, not as a nominee or agent, and not
\nwith a view to, or for the resale or distribution of any part thereof. The
\nInvestor has no present intention of selling, granting any participation in, or
\notherwise distributing the same. The Investor further represents that it does
\nnot have any contract, undertaking, agreement or arrangement with any person to
\nsell, transfer or grant participations to such person or to any third person,
\nwith respect to any of the Shares.<\/p>\n
3.3 DISCLOSURE OF INFORMATION. The Investor has received all of the
\ninformation which it considers necessary or appropriate for deciding whether to
\npurchase the Shares. The Investor further represents that it has had an
\nopportunity to ask questions and receive answers from the Company regarding the
\nterms and conditions of the offering of the Shares. The foregoing, however, does
\nnot limit or modify the representations and warranties of the Company in Section
\n2 of this Agreement or the right of the Investor to rely thereon.<\/p>\n
3.4 INVESTMENT EXPERIENCE. The Investor (i) fully understands that
\nan investment in the Company is highly speculative and that it may lose its
\nentire investment in the Shares purchased from the Company; (ii) is experienced
\nin evaluating and investing in development stage companies such as the Company,
\n(iii) is capable of evaluating the merits and risks of its investment in the
\nShares; (iv) is able to bear the economic risk of a loss of the entire amount of
\nits investment in the Shares; and (v) is prepared to hold the Shares for an
\nindefinite period of time.<\/p>\n
13<\/p>\n
3.5 ACCREDITED INVESTOR. The Investor is an “accredited investor”
\nwithin the meaning of Securities and Exchange Commission Rule 501 of
\nRegulation D, as presently in effect.<\/p>\n
3.6 RESTRICTED SECURITIES. The Investor acknowledges that, because
\nthe Shares have not been registered under the Securities Act, the Shares must be
\nheld indefinitely unless subsequently registered under the Securities Act or an
\nexemption from such registration is available. The Investor is aware of the
\nprovisions of Rule 144 promulgated under the Securities Act which permits
\nlimited resale of securities purchased in a private placement subject to the
\nsatisfaction of certain conditions..<\/p>\n
3.7 LEGENDS. The Investor understands that until (a) the Shares may
\nbe sold by the Investor under Rule 144(k) or (b) such time as the resale of the
\nShares have been registered under the Securities Act as contemplated in Section
\n4.8 hereof, the certificates representing the Shares will bear a restrictive
\nlegend in substantially the following form (and a stop-transfer order may be
\nplaced against transfer of the certificates for such Shares):<\/p>\n
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
\n REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
\n THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
\n SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
\n ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
\n SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS
\n OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
\n EXEMPTION FROM THE REGISTRATION REQUIREMENT OF THOSE LAWS.<\/p>\n
The legend set forth above will be removed and the Company will issue a
\ncertificate without the legend to the holder of any certificate upon which it is
\nstamped, upon registration of the Shares, in accordance with the terms of
\nSection 4.8 hereof.<\/p>\n
14<\/p>\n
4. COVENANTS AND AGREEMENTS<\/p>\n
4.1 ORDINARY COURSE OF BUSINESS AND NOTICE OF ADVERSE CHANGES. From
\nand after the date of this Agreement through the Closing, the Company shall
\nconduct its business in the ordinary course and consistent in all material
\nrespects with past practice, except as may be required or contemplated in this
\nAgreement. The Company shall advise the Investor promptly of any Material
\nAdverse Effect, any breach of the Company’s representations or warranties, or
\nany breach of a covenant contained herein of which the Company has knowledge.<\/p>\n
4.2 ACCESS TO PROPERTIES AND RECORDS. The Company shall afford to
\nthe Investor and its respective accountants, counsel and representatives,
\nreasonable access upon notice to the Company and upon agreed upon times during
\nnormal business hours throughout the period prior to the Closing to all of the
\nCompany’s properties, books, contracts, commitments and written records and
\nshall make reasonably available its respective officers and employees to answer
\nfully and promptly questions put to them (so long as such questions are not
\noutside of the scope or purpose of this Section; provided that such access shall
\nnot unreasonably interfere with the normal business operations of the Company).
\nAny such investigations shall be specifically related to this Agreement and to
\nthe transactions contemplated hereby.<\/p>\n
4.3 EXCLUSIVE NEGOTIATIONS. Except in the furtherance of the
\ntransactions contemplated herein, prior to the Closing, the Company shall not
\ndirectly, and shall use its reasonable best efforts to cause its respective
\ndirectors, officers, employees, representatives or agents (including, without
\nlimitation, any investment banker, attorney or accountant retained by it or any
\nof its affiliates) not to, directly or indirectly, initiate, solicit or
\nencourage any inquiries or the making or implementation of any proposal or
\noffer, with respect to any merger, acquisition, consolidation, share exchange,
\nbusiness combination or other transaction involving, or which would result in
\nthe acquisition of a majority of the outstanding equity securities or
\nsubstantially all of the assets of the Company (any such proposal or offer being
\nhereinafter referred to as an “Acquisition Proposal”), or engage in any
\nnegotiations concerning, or provide any confidential information or data to, any
\nperson or entity relating to an Acquisition Proposal, or otherwise facilitate
\nany effort or attempt to make or implement an Acquisition Proposal. The Company
\nshall immediately cease and cause to be terminated any existing activities or
\nnegotiations with any parties conducted heretofore with respect to any
\nAcquisition Proposal, and <\/p>\n
15<\/p>\n
it shall take the necessary steps to inform any such parties of the obligations
\nundertaken in this Section. The Company shall notify the Buyer immediately if
\nany such inquiries or proposals are received by, any such information is
\nrequested from, or any such negotiations are sought to be initiated or continued
\nwith, the Company.<\/p>\n
4.4 RIGHT OF FIRST REFUSAL. If, during the period from the Closing
\nthrough December 31, 2009 (and so long as the Alliance Agreement is in effect),
\nthe Company (or any subsidiary or affiliate) proposes either to sell, transfer
\nor assign, directly or indirectly, securities in the Company or any subsidiary
\nor affiliate thereof equal to, or convertible into, a majority of the
\noutstanding Common Stock of the Company (a “Substantial Equity Interest”), the
\nInvestor shall have a first right of refusal to purchase such Substantial Equity
\nInterest proposed to be sold, transferred or assigned, for a price equivalent to
\nthe bona fide sale or transfer price offered for such Substantial Equity
\nInterest and otherwise in accordance with the terms and conditions of such
\noffer. The right of first refusal granted to the Investor is intended to apply
\nto any sale, transfer or assignment, directly or indirectly, to any nominee or
\nstraw-men, corporation or other entity, including the sale of stock or an
\ninterest in a partnership, limited-liability corporation, trust or other entity
\nwhich holds substantially all of the assets of the Company or any of its
\nsubsidiaries or affiliates, if the intent of any such sale, transfer or
\nassignment to such person or entity is to avoid the Investor’s right of first
\nrefusal contained in this Section.<\/p>\n
4.5 PREEMPTIVE RIGHT OF INVESTOR.<\/p>\n
(i) The Company hereby grants to the Investor the preemptive
\nright to purchase its Pro Rata Share (defined below) of any New Securities
\n(defined below) that the Company intends to offer for sale and issuance at the
\ntime and on the terms set forth herein (the “Preemptive Right”).<\/p>\n
(ii) DEFINITIONS:<\/p>\n
(1) “New Securities” shall mean (A) any Common Stock
\nof the Company and (B) those rights, options or warrants to purchase any such
\nCommon Stock (collectively referred to as “Options”), and those securities that
\nare convertible into or exchangeable for any such Common Stock (collectively
\nreferred to as “Convertible Securities”), <\/p>\n
16<\/p>\n
if the gross proceeds received or receivable by the Company as consideration for
\nthe issue of such Common Stocks, Options or Convertible Securities, plus the
\nminimum aggregate amount of additional consideration (as set forth in the
\ninstruments relating thereto, without regard to any provision contained therein
\ndesignated to protect against dilution) payable to the Company upon the exercise
\nof such Options or the conversion or exchange of such Convertible Securities,
\nequals or exceeds One Million Five Hundred Thousand Dollars ($1,500,000);
\nprovided however, that “New Securities” does not include (i) any capital stock
\nor other securities offered or issued to the public pursuant to a registration
\nstatement filed under the Securities Act; (ii) any capital stock or other
\nsecurities offered or issued in connection with any acquisition of another
\ncorporation or entity by the Company by merger or purchase of all, or
\nsubstantially all, of the assets of such corporation or entity, share exchange,
\nreorganization or the like; (iii) any stock options granted, subsequent to the
\nEffective Date, to the Company’s existing or future directors, employees or
\nconsultants not in excess of 1,350,000 shares, representing approximately eight
\npoint two percent (8.2%) of the Company’s 16,458,114 aggregate issued and
\noutstanding shares of common stock post-Closing (on a fully-diluted basis) by
\nthe Company; (iv) any capital stock or other securities (or related options or
\nwarrants) offered or issued to directors, officers or employees of, or
\nconsultants to, the Company pursuant to an agreement or an option or purchase
\nplan program, or any other stock incentive plan or program approved by the Board
\nof Directors of the Company; or (v) any capital stock or other securities issued
\nin connection with any stock split, stock dividend, recapitalization or the like
\nby the Company.<\/p>\n
(2) “Ownership Ratio” shall mean the ratio of shares
\nof Common Stock of the Company held by the Investor on the day immediately
\npreceding the date of the notice described in subsection (c) below to the total
\nnumber of shares of Common Stock of the Company then outstanding.<\/p>\n
(3) “Pro Rata Share” for purposes of the Preemptive
\nRight, shall mean all New Securities which the Company intends to offer for sale
\nmultiplied by the Investor’s Ownership Ratio.<\/p>\n
(iii) If at any time from the Closing through December 31,
\n2009, the Company plans or otherwise intends to undertake an issuance of New
\nSecurities, the Company <\/p>\n
17<\/p>\n
shall, so long as the Alliance Agreement is in effect, give the Investor written
\nnotice describing the type of New Securities, the price, and the general terms
\nupon which the Company plans or otherwise intends to issue the same. The
\nInvestor shall have fifteen (15) days from the date of delivery of any such
\nnotice to agree to purchase all or a portion of its Pro Rata Share of such New
\nSecurities for the price and upon the general terms specified in the notice by
\ngiving written notice to the Company at or before the end of such fifteen (15)
\ndays. If the Investor either fails to so notify the Company or indicates that it
\nwill not purchase its Pro Rata Share, the Company shall thereafter be free to
\noffer, sell and issue the New Securities, including any such Pro Rata Share not
\npurchased by the Investor, to any third party so long as such sale is at a price
\nand is upon general terms no more favorable than described in the Company’s
\nnotice.<\/p>\n
4.6 CERTAIN EMPLOYMENT MATTERS. Effective as of the date of
\nthe Closing, there are no employment agreements to which the Company is a party
\nother than those set out in the tabled attached as Schedule 4.6 hereto.<\/p>\n
4.7 BOARD OBSERVER. The Company hereby covenants and agrees
\nwith Investor that, as long as the Alliance Agreement (defined below) remains in
\neffect, the Investor shall have the right to designate a person (an “Observer”)
\nto be present at all meetings of the Board of Directors of the Company and all
\ncommittees thereof. The Company will give such Observer reasonable prior notice
\n(it being agreed that the same prior notice given to the Board of Directors
\nshall be deemed reasonable prior notice) in any manner permitted in the
\nCompany’s By-laws for notices to directors of the time and place of any proposed
\nmeeting of the Board of Directors, such notice in all cases to include true and
\ncomplete copies of all documents furnished to any director in connection with
\nsuch meeting. Such Observer will be entitled to be present in person as an
\nobserver at any such meeting or, if a meeting is held by telephone conference,
\nto participate therein for the purpose of listening thereto.<\/p>\n
4.8 REGISTRATION OF SHARES. The Company covenants and agrees
\nthat it shall promptly after the Closing prepare and file, at its cost and
\nexpense, a registration statement on Form S-1 (or such other appropriate form)
\ncovering the Shares (the “Registration Statement”) and shall use its best
\nefforts to cause such registration statement to be declared effective within 90
\ndays following the Closing. The Company further covenants and agrees to maintain
\nthe <\/p>\n
18<\/p>\n
Registration Statement Effective for one year following the effective date of
\nthe Registration Statement, PROVIDED, THAT, notwithstanding the foregoing, if at
\nany time or from time to time after the date of effectiveness of the
\nRegistration Statement, the Company notifies the Investors in writing of the
\nexistence of a Potential Material Event, the Investors shall not offer or sell
\nany Shares, or engage in any other transaction involving or relating to the
\nShares, from the time of the giving of notice with respect to a Potential
\nMaterial Event until such Investor receives written notice from the Company that
\nsuch Potential Material Event either has been disclosed to the public or no
\nlonger constitutes a Potential Material Event; PROVIDED, HOWEVER, that the
\nCompany may not so suspend such right to the Investor during the period the
\nRegistration Statement is required to be in effect for more than fifty (50)
\ndays, provided, however, that no one such suspension period shall either (i) be
\nfor more than twenty (20) days or (ii) begin less than ten (10) business days
\nafter the last day of the preceding suspension. As used herein, “Potential
\nMaterial Event” means any of the following: (i) the possession by the Company of
\nmaterial information not ripe for disclosure in a registration statement, which
\nshall be evidenced by determinations in good faith by the Board of Directors of
\nthe Company that disclosure of such information in the registration statement
\nwould be detrimental to the business and affairs of the Company; or (ii) any
\nmaterial engagement or activity by the Company which would, in the good faith
\ndetermination of the Board of Directors of the Company, be adversely affected by
\ndisclosure in a registration statement at such time, which determination shall
\nbe accompanied by a good faith determination by the Board of Directors of the
\nCompany that the registration statement would be materially misleading absent
\nthe inclusion of such information.<\/p>\n
In the event that the Registration Statement is not declared effective
\nwithin 90 days following Closing, then the Company shall issue to the Investor,
\nin respect of each full calendar week (beginning on Monday) following such 90th
\nday and continuing until such time as the Registration Statement shall have been
\ndeclared effective, such number of shares of Common Stock as shall be equal to
\none and one quarter percent (1 1\/4%) of the number of Shares issued hereunder
\n(the “Additional Shares”), PROVIDED, THAT, notwithstanding anything to the
\ncontrary contained in the foregoing, the Company shall have no obligation to
\nissue any Additional Shares in excess of such number of Additional Shares as
\nshall be equal to, in the aggregate, 10% of the number of Shares issued
\nhereunder.<\/p>\n
19<\/p>\n
REPORTING STATUS; ELIGIBILITY TO USE FORM S-1. The Company’s Common
\nStock is registered under Section 12 of the Exchange Act. The Company will file
\nwith the SEC a Current Report on Form 8-K disclosing this Agreement and the
\ntransactions contemplated hereby within 10 business days after the Closing.
\nThroughout the one year registration period (referred to in Section 4.8 hereof),
\nthe Company shall to file all reports, schedules, forms, statements and other
\ndocuments required to be filed by it timely with the SEC under the reporting
\nrequirements of the Exchange Act, and the Company will not terminate its status
\nas an issuer required to file reports under the Exchange Act even if the
\nExchange Act or the rules and regulations thereunder would permit such
\ntermination. The Company currently meets, and will take all reasonably necessary
\naction to continue to meet, the “registrant eligibility” requirements set forth
\nin the general instructions to Form S-1.<\/p>\n
5. CONDITIONS OF INVESTOR’S OBLIGATIONS AT CLOSING.<\/p>\n
The obligations of the Investor under subsection 1.1 of this Agreement
\nare subject to the fulfillment, or written waiver by the Investor, on or before
\nthe Closing of each of the following conditions:<\/p>\n
5.1 EXECUTION OF AGREEMENT. The Company will have executed and
\ndelivered this Agreement to the Investor.<\/p>\n
5.2 SHARES CERTIFICATE. The Company will have delivered to the
\nInvestors duly executed certificates representing the Shares in the amounts
\nspecified in Section 1.1 hereof.<\/p>\n
5.3 REPRESENTATIVES, WARRANTIES, COVENANTS. The representations and
\nwarranties of the Company must be true and correct in all material respects as
\nof the Closing as though made at that time (except for representations and
\nwarranties that speak as of a specific date, which representations and
\nwarranties must be true and correct as of such date) and the Company must have
\nperformed and complied in all material respects with the covenants and
\nconditions required by this Agreement to be performed or complied with by the
\nCompany at or prior to the Closing. The Investor must have received a
\ncertificate or certificates dated as of the Closing and executed by the Chief
\nExecutive Officer or the Chief Financial Officer of the Company certifying as to
\nthe matters contained in this Section 5.3 and as to such other matters as may be
\nreasonably requested by such Investor, including, but not limited to, the
\nCompany’s <\/p>\n
20<\/p>\n
Certificate of Incorporation, as amended, By-laws, as amended, Board of
\nDirectors’ resolutions relating to the transactions contemplated hereby and the
\nincumbency and signatures of each of the officers of the Company who may execute
\non behalf of the Company any document delivered at the Closing.<\/p>\n
5.4 LITIGATION. No litigation, statute, rule, regulation, executive
\norder, decree, ruling or injunction will have been enacted, entered, promulgated
\nor endorsed by or in any court or governmental authority of competent
\njurisdiction or any self-regulatory organization having authority over the
\nmatters contemplated hereby which prohibits the consummation of any of the
\ntransactions contemplated by this Agreement.<\/p>\n
5.5 STOCK LISTING. Trading and listing of the Company’s Common Stock
\non OTC Electronic Bulletin Board must not have been suspended.<\/p>\n
5.6 OPINION. The Investor will have received an opinion of the
\nCompany’s general counsel, dated as of the Closing, in form, scope and substance
\nsubstantially in the form attached hereto as SCHEDULE 5.6.<\/p>\n
5.7 ALLIANCE AGREEMENT. Prior to or simultaneous with the Closing,
\nthe Company and Investor shall have entered into the Alliance Agreement,
\nsubstantially in the form of SCHEDULE 5.7 hereto.<\/p>\n
6. CONDITIONS OF THE COMPANY’S OBLIGATIONS AT CLOSING.<\/p>\n
The obligations of the Company to the Investor under this Agreement are
\nsubject to the fulfillment on or before the Closing of each of the following
\nconditions: <\/p>\n
6.1 EXECUTION OF AGREEMENT. The Investor will have executed and
\ndelivered this Agreement to the Company.<\/p>\n
6.2 PURCHASE PRICE. The Investor will have delivered the Purchase
\nPrice for the Shares to the Company in accordance with this Agreement.<\/p>\n
6.3 REPRESENTATIONS, WARRANTIES, COVENANTS. The representations and
\nwarranties of the Investor must be true and correct in all material respects as
\nof the Closing as <\/p>\n
21<\/p>\n
though made at that time (except for representations and warranties that speak
\nas of a specific date, which representations and warranties must be correct as
\nof such date), and the Investor will have performed and complied in all material
\nrespects with the covenants and conditions required by this Agreement to be
\nperformed or complied with by the Investor at or prior to the Closing. The
\nCompany must have received a certificate or certificates dated as of the Closing
\nand executed by a duly authorized officer of the Investor certifying as to the
\nmatters contained in this Section 6.3.<\/p>\n
6.4 LEGAL IMPEDIMENT. No statute, rule, regulation, executive order,
\ndecree, ruling or injunction will have been enacted, entered, promulgated or
\nendorsed by or in any court or governmental authority of competent jurisdiction
\nor any self-regulatory organization having authority over the matters
\ncontemplated hereby which prohibits the consummation of any of the transactions
\ncontemplated by this Agreement.<\/p>\n
6.5 ALLIANCE AGREEMENT. Prior to or simultaneous with the Closing,
\nthe Company and Investor shall have entered into the Alliance Agreement,
\nsubstantially in the form of SCHEDULE 5.7 hereto.<\/p>\n
7. DEFINITIONS.<\/p>\n
7.1 “Alliance Agreement” has the meaning set forth in Section 5.7.<\/p>\n
7.2 “Closing” means the closing of the purchase and sale of the
\nShares under this Agreement.<\/p>\n
7.3 “Common Stock” means the common stock, $0.001 par value per
\nshare, of the Company.<\/p>\n
7.4 “Company” means TTR Technologies, Inc.<\/p>\n
7.5 “Exchange Act” means the Securities Exchange Act of 1934, as
\namended.<\/p>\n
7.6 “Investor” means Macrovision Corporation<\/p>\n
7.7 “Material Adverse Effect” means a material adverse effect on
\n(a) the business, operations, assets or financial condition of the Company on a
\nconsolidated basis or <\/p>\n
22<\/p>\n
(b) the ability of the Company to perform its obligations pursuant to the
\ntransactions contemplated by this Agreement or under the agreements or
\ninstruments to be entered into or filed in connection herewith.<\/p>\n
7.8 “Material Agreement” has the meaning set forth in
\nSection 2.7.<\/p>\n
7.9 “Regulation D” means Regulation D as promulgated under
\nby the SEC under the Securities Act.<\/p>\n
7.10 “Rule 144” and “Rule 144(k)” mean Rule 144 and Rule
\n144(k), respectively, promulgated under the Securities Act, or any successor
\nrule.<\/p>\n
7.11 “SEC” means the United States Securities and Exchange
\nCommission.<\/p>\n
7.12 “SEC Documents” has the meaning set forth in
\nSection 2.23.<\/p>\n
7.13 “Shares” means the 1,880,937 shares of Common Stock to
\nbe sold to Investor pursuant to this Agreement, as such number may be adjusted
\npursuant to the provisions of Section 4.8 hereof.<\/p>\n
7.14 “Securities Act” means the Securities Act of 1933, as
\namended, and the rules and regulations thereunder, or any similar successor
\nstatute.<\/p>\n
8. MISCELLANEOUS.<\/p>\n
8.1 SURVIVAL OF WARRANTIES. The warranties, representations
\nand covenants of the Company and the Investor contained in or made pursuant to
\nthis Agreement shall survive the execution and delivery of this Agreement and
\nthe Closing and shall in no way be affected by any investigation of the subject
\nmatter thereof made by or on behalf of the Investor of the Company.<\/p>\n
8.2 SUCCESSOR AND ASSIGNS. Except as otherwise provided
\nherein, the terms and conditions of this Agreement shall inure to the benefit of
\nand be binding upon the respective successors and assigns of the parties
\n(including transferees of any Shares). Nothing in this Agreement, express or
\nimplied, is intended to confer upon any party other than the parties hereto or
\ntheir respective successors and assigns any rights, remedies, obligations, or
\nliabilities under or by reason of this Agreement, except as expressly provided
\nin this Agreement.<\/p>\n
23<\/p>\n
8.3 GOVERNING LAW. This Agreement shall be governed by and
\nconstrued under the laws of the State of California as applicable to contracts
\nto be performed entirely within that state.<\/p>\n
8.4 COUNTERPARTS. This Agreement may be executed in two or
\nmore counterparts, each of which shall be deemed an original by the party
\nexecuting the same, but all of which together shall constitute one and the same
\ninstrument.<\/p>\n
8.5 TITLES AND SUBTITLES. The titles and subtitles used in
\nthis Agreement are used for convenience and are not to be considered in
\nconstruing or interpreting this Agreement.<\/p>\n
8.6 NOTICES. All notices and other communications given or
\nmade pursuant hereto shall be in writing and shall be deemed to have been given
\nor made if in writing and (i) delivered personally, (ii) mailed by registered or
\ncertified mail (postage prepaid, return receipt requested) or (iii) sent by
\ntelecopier, with the written notice sent by mail as set forth in (ii) above, to
\nthe parties as follows:<\/p>\n
(i) if to Company to:<\/p>\n
TTR Technologies, Inc., c\/o TTR Technologies Ltd.
\n 2 Hanagar Street
\n PO Box 2295
\n Kfar-Saba 44425
\n Israel
\n Attention: General Counsel
\n Telecopier No.: 011-972-9-766-2394<\/p>\n
with a copy to:<\/p>\n
Aboudi & Brounstein
\n 136 Rothschild Blvd.
\n Tel Aviv 65272
\n Israel
\n Telecopier No. 011-972-3-685-1138<\/p>\n
(ii) if to Investor to:<\/p>\n
Macrovision Corporation
\n 1341 Orleans Drive
\n Sunnyvale, CA 94089
\n Attention: Chief Financial Officer
\n Telecopier No.: (408) 743-8610<\/p>\n
24<\/p>\n
with a copy to:<\/p>\n
Manatt, Phelps & Phillips, LLP
\n 3030 Hansen Way
\n Palo Alto, CA 94304
\n Attention: David Herbst, Esq.
\n Telecopier No.: (650) 213-0260<\/p>\n
or at such other addresses as shall be furnished by the parties by like notice,
\nand such notice or communication shall be deemed to have been given or made as
\nof the date so delivered, mailed or sent.<\/p>\n
8.7 FINDER’S FEE. Each party represents that it neither is nor will
\nbe obligated for any finders’ fee or commission in connection with this
\ntransaction. The Investor agrees to indemnify and to hold harmless the Company
\nfrom any liability for any commission or compensation in the nature of a
\nfinders’ fee (and the costs and expenses of defending against such liability or
\nasserted liability) for which the Investor or any of its officers, partners,
\nemployees, or representatives is responsible. The Company agrees to indemnify
\nand hold harmless the Investor from any liability for any commission or
\ncompensation in the nature of a finders’ fee (and the costs and expenses of
\ndefending against such liability or asserted liability) for which the Company or
\nany of its officers, employees or representatives is responsible.<\/p>\n
8.8 EXPENSES. Irrespective of whether the Closing is effected, the
\nCompany and the Investor shall each pay their own costs and expenses that each
\nincurs with respect to the negotiation, execution, delivery and performance of
\nthis Agreement. If any action at law or in equity is necessary to enforce or
\ninterpret the terms of this Agreement, the prevailing party shall be entitled to
\nreasonable attorney’s fees, costs and necessary disbursements in addition to any
\nother relief to which such party may be entitled.<\/p>\n
8.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
\namended and the observance of any term of this Agreement may be waived (either
\ngenerally or in a particular instance and either retroactively or
\nprospectively), only with the written consent of the Company and the Investor.<\/p>\n
25<\/p>\n
8.10 SEVERABILITY. If one or more provisions of this Agreement are
\nheld to be unenforceable under applicable law, such provision shall be excluded
\nfrom this Agreement and the balance of the Agreement shall be interpreted as if
\nsuch provision were so excluded and shall be enforceable in accordance with its
\nterms.<\/p>\n
8.11 ENTIRE AGREEMENT. This Agreement, together with the Alliance
\nAgreement, and all schedules and exhibits attached thereto, constitute the
\nentire agreement among the parties and no party shall be liable or bound to any
\nother party in any manner by any warranties, representations, or covenants
\nexcept as specifically set forth herein or therein. All other prior agreements,
\nunderstandings and representations, both oral and written, between the parties
\nwith respect to the subject matter hereof are superseded and of no effect. This
\nAgreement may be executed in counterparts and by the exchange of facsimile
\nsigned copies.<\/p>\n
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
\nAgreement.<\/p>\n
TTR TECHNOLOGIES, INC.<\/p>\n
BY:
\n —————————————-
\n Name:
\n ———————————
\n Title:
\n ———————————<\/p>\n
MACROVISION CORPORATION<\/p>\n
BY:
\n —————————————-
\n Name:
\n ———————————
\n Title:
\n ———————————<\/p>\n
26<\/p>\n
SCHEDULE A<\/p>\n
SCHEDULE OF EXCEPTIONS<\/p>\n
The following information and disclosures is provided with respect to
\nthe representations and warranties of the Company to the Investor set forth in
\nSection 2 of the Agreement and corresponding to the relevant subsection of the
\nAgreement.<\/p>\n
SECTION 2.2(b).<\/p>\n
The Company has outstanding the following warrants\/options issued to
\nservice providers\/consultants:<\/p>\n
(i) Wall & Broad (1,300,000). Issued in May, 1999 and exercisable
\nthrough April 30, 2002 at an ex. price per share of $0.01<\/p>\n
(ii) K & D Equities Inc. (400,000). Issued in July 1999 and
\nexercisable through Jan. 31, 2001 at an ex. Price per share of $2.75 (2)<\/p>\n
(iii) Machtec Ltd. (1,000,000). Issued in Aug. 1999 and exercisable
\nthrough Oct. 2002 at an ex. Price per share of $0.01.<\/p>\n
(iv) Plans Inc. (25,000). Issued in June 98 and exercisable through
\nJune 2002 at an exercise price of $1.50 per share.<\/p>\n
(v) Josephthal (25,000). Undertook to issue in April 98 and
\nexercisable through June 2002 at an ex. Price per share of $5 5\/8. (3)<\/p>\n
(vi) Shavit (10,069)<\/p>\n
(vii) Mu & Kang (10,000) Issued in Jan 99 and exercisable through
\nJan 2002 at an ex. Price per share of $1.75<\/p>\n
(viii) (196,000) three year penny warrants issued to Employees of the
\nCompany in Feb. 1999.<\/p>\n
(ix) (25,000) three year penny warrants issued to Schneider Ehrlich
\nin Nov. 99.<\/p>\n
The Company has the following warrants\/options outstanding to investors.<\/p>\n
(i) Warrants held by certain private placement investors issued
\nbetween April ’98 through Dec. ’98 to purchase up to an aggregate of 150,842
\nshares of Common Stock<\/p>\n
(ii) Biscount (33,000). Issued in Jan 98 in connection with
\ninvestment in Company and are exercisable through Dec 2001 at an ex. Price per
\nshare of $7.80)<\/p>\n
27<\/p>\n
(iii) (15,000). Issued in Nov. 99 and exercisable through Nov. 2002 at
\nan ex. Price per share of $2.50<\/p>\n
(iv) (35,000) Issued in Nov. 99 and exercisable through Nov. 2002 at
\nan ex. Price per share of $3.50.<\/p>\n
The Company also has outstanding 749,400 ESOPs.<\/p>\n
SECTION 2.2 (c)<\/p>\n
In May 1999 the Company granted to certain investors the right of first
\nrefusal, under certain conditions, with respect to the issuance by the Company
\nof shares of common stock or securities convertible into its common stock, which
\nright is exercisable from October 6, 1999 through approximately July 6, 2000.<\/p>\n
SECTION 2.14(a)<\/p>\n
The Company granted exclusive production and marketing rights for
\nDiscGuard to China Intercontinental Communications Center for the People’s
\nRepublic of China, Taiwan, and Maco.<\/p>\n
Sonopress Gmbh holds a non-exclusive license to manufacture and market
\nDiscGuard and related products in the world, except for the Peoples Republic in
\nChina (PRC).<\/p>\n
Nimbus CD International Inc. holds a non-exclusive worldwide license to
\nmanufacture and market DiscGuard and related products.<\/p>\n
Warlock Records holds a non exclusive worldwide license to use
\nMusicGuard protection for their music CDs.<\/p>\n
SECTION 2.14(b)<\/p>\n
TTR licenses form Elektroson BV a product known as Gear. Wks Toolkit for
\nwhich it pays royalties and which is used in the process of producing DiscGuard
\nprotected discs.<\/p>\n
SECTION 2.17<\/p>\n
TTR has previously granted to Machtec Ltd. registration rights
\nrespecting up to 200,000 shares of the Company’s Common Stock and options to
\nacquire in the aggregate up to 1,000,000 shares of the Company’s Common Stock.<\/p>\n
Additionally, certain consultants\/employees have been granted
\nregistration rights with respect to a total of approximately 500,000 shares of
\nCommon Stock.<\/p>\n
Additionally, the Company currently has outstanding an effective
\nregistration statement in favor of certain of its stockholders and rightsholders
\n[Registration No. 333-85085], which the Company is required to maintain
\neffective through the earlier of Oct. 2001 or the disposition of the subject
\nshares.<\/p>\n
28<\/p>\n
SECTION 2.18<\/p>\n
The Company has not filed its United States Income tax returns for the
\nyear ended December 31, 1998.<\/p>\n
SECTION 2.20<\/p>\n
The Company does not presently have in effect any insurance policies
\nwith respect to fire, public liability, property damage or any other insurance.<\/p>\n
29<\/p>\n
SCHEDULE 4.6<\/p>\n
Emanuel Kronitz, Dr. Baruch Sollish, Marc D. Tokayer, Gershon Tokayer,
\nRobert Friedman, Joseph Cusamaro and Rachel Uzan. The agreements with Messrs.
\nFriedman and Cusamaro are expected to terminate by no later than January 31,
\n2000.<\/p>\n
30<\/p>\n
SCHEDULE 5.6<\/p>\n
OPINION OF COMPANY’S COUNSEL<\/p>\n
January 12, 2000<\/p>\n
Macrovision Corporation (“Investor”)
\n1341 Orleans Drive
\nSunnyvale, California 94089<\/p>\n
Gentlemen:<\/p>\n
As General Counsel of TTR Technologies, Inc., a Delaware corporation
\n(the “Company”), we represented the Company in connection with the issuance of
\n1,880,937 shares (the “Shares”) of the Company’s Common Stock, $0.001 par value
\nper share, pursuant to that certain Stock Purchase Agreement, dated as of
\nJanuary 10, 2000, including the exhibits thereto (the “Agreement”), between the
\nCompany and the Investor. This opinion is being delivered to you pursuant to
\nSection 5.6 of the Agreement. Capitalized terms used herein are as defined in
\nthe Agreement unless otherwise specifically provided herein.<\/p>\n
In rendering the opinions set forth below I have examined such documents
\nand have reviewed such questions of law as I have considered necessary or
\nappropriate for the purpose of this opinion.<\/p>\n
In rendering the opinions set forth below, I have, with your consent,
\nassumed without investigation, that:<\/p>\n
1. All documents submitted to me as originals are complete and
\nauthentic; all copies of documents submitted to me conform in all respects to
\nthe originals thereof, including all modifications or amendments thereto; all
\nsignatures to documents are genuine; all originals or copies submitted to me
\nhave not been amended, modified or terminated since the date they were submitted
\nto me by written or oral agreement of the parties thereto, by the conduct of the
\nparties thereto or otherwise; facsimile signatures have the same legal effect as
\noriginal signatures; and all representations and certificates as to factual
\nmatters dated prior to or on the date hereof upon which I have relied are and
\nremain accurate, adequate and complete on and as of the date hereof; and each
\nnatural person signing a document is a competent adult person of sound mind not
\noperating under any legal disability, duress or fraud.<\/p>\n
2. The Agreement accurately reflects all of the terms, provisions
\nand conditions of the transactions contemplated thereby and the intent of the
\nparties with respect thereto, and that there is no usage of trade or course of
\nconduct among the parties thereto which would modify the terms of the Agreement
\nor the respective rights or obligation of the parties thereunder.<\/p>\n
3. All of the factual representations made by Company and the
\nInvestor in the Agreement are true and correct. As to questions of fact material
\nto this opinion, we have relied upon and assumed the accuracy of, without any
\nindependent investigation on our part, certain representations made by the
\nCompany and such other facts as are actually known to us.<\/p>\n
31<\/p>\n
4. The Agreement will be enforced and performed in good faith and
\nin a commercially reasonable manner.<\/p>\n
5. The conduct of all parties to the Agreement conforms, and in the
\nfuture will conform, with all notice requirements in statutes, law rules,
\nregulations and ordinances, unless such notice requirements have been validly
\nand legally waived.<\/p>\n
6. The Agreement has been duly authorized, executed and delivered
\nby the Investor and Investor has the power and authority (corporate or
\notherwise) to execute and deliver the Agreement.<\/p>\n
Based upon and subject to the foregoing, we are of the opinion
\nthat:<\/p>\n
1. The Company is a corporation duly incorporated, validly existing
\nand in good standing under the laws of the State of Delaware, with the corporate
\npower to own its properties and conduct its business as now conducted. The
\nCompany has the corporate power to execute, deliver and perform the Agreement,
\nincluding without limitation, the issuance and sale of the Shares. The Agreement
\nhas been duly authorized by all requisite corporate action, executed and
\ndelivered by the Company. The Agreement constitutes a valid and binding
\nagreement of the Company enforceable in accordance with its terms, subject to
\nthe following limitations, qualifications and exceptions: (a) the effect of
\nbankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
\nconveyance or similar laws relating to or affecting the rights of creditors,
\nincluding, without limitation, Section 548 of the federal Bankruptcy Code and
\nSection 547 of the federal Bankruptcy Code and comparable provisions of state
\nlaw; and (b) the effect of general principles of equity, including, without
\nlimitation, concepts of materiality, reasonableness, good faith and fair
\ndealing, the possible unavailability of specific performance or injunctive
\nrelief, regardless of whether considered in a proceeding in equity or at law,
\nand the exercise of judicial discretion in appropriate cases.<\/p>\n
2. The Shares, when issued in compliance with the provisions of the
\nAgreement, will be duly authorized and validly issued and fully paid and
\nnon-assessable.<\/p>\n
3. Based on the representations of the Investor in the Agreement,
\nthe offer and sale of the Shares pursuant to the terms of the Agreement are
\nexempt from the registration requirements of Section 5 of the Securities Act of
\n1933, as amended.<\/p>\n
4. The execution, delivery and performance of the Agreement and the
\nissuance and sale of the Shares in accordance with the Agreement will not
\nviolate or conflict with, or result in a breach of or default under, the
\nCertificate of Incorporation, as amended or By-laws, as amended of the Company.<\/p>\n
5. To our knowledge there is no action, suit, proceeding or
\ninvestigation pending against the Company before any court or governmental
\nagency (I) that questions the validity of the Agreement or the right of the
\nCompany to enter into the Agreement or (ii) that, if determined adversely, would
\nbe likely to result in a Material Adverse Effect on the financial condition or
\nbusiness of the Company.<\/p>\n
This opinion is limited to the general corporate laws of the
\nState of Delaware (excluding municipal, county and local ordinances and
\nregulations) without reference to conflict <\/p>\n
32<\/p>\n
of law principles, and the federal laws of the United States of America, and to
\npresent judicial interpretations thereof, and to facts as they presently exist,
\nand we express no opinion with respect to any other law or the law of any other
\njurisdiction. In rendering this opinion, we have no obligation to revise or
\nsupplement it should the current laws of the State of Delaware, or the federal
\nlaws of the United States of America be changed by legislative action, judicial
\ndecision or otherwise.<\/p>\n
Further, the opinions contained in this letter are given as of the date
\nof this letter and are rendered exclusively for your benefit solely in
\nconnection with the consummation of the transactions contemplated by the
\nAgreement and may not be relied upon to state directly or indirectly any general
\nproposition or for any other purpose. We hereby disclaim any obligation to
\nnotify any person or entity after the date hereof if any change in fact or law
\nshould change our opinions with respect to any matter set forth in this letter.<\/p>\n
This opinion may be relied upon by you only in connection with the
\ntransactions contemplated by the Agreement. No other use or distribution of this
\nopinion may be made, and no other person or party may rely on this opinion,
\nwithout our express prior written consent in each instance.<\/p>\n
Very truly yours,<\/p>\n
33<\/p>\n
SCHEDULE 5.7<\/p>\n
ALLIANCE AGREEMENT<\/p>\n
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