Exhibit 10.45
THIS STOCK PURCHASE AGREEMENT, effective as of January 10, 2000, is by and
between TTR TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and
MACROVISION CORPORATION, a Delaware corporation (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK
1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, the Investor agrees to purchase at the
Closing and the Company agrees to sell and issue to the Investor at
the Closing, one million, eight hundred eighty thousand, nine
hundred thirty- seven shares (1,880,937) of the Company's Common
Stock $0.001 par value (the "Shares"). The purchase price for the
Shares (subject to adjustment as provided in section 4.8 hereof)
shall be Two Dollars and Thirteen Cents ($2.1266) per Share, or an
aggregate purchase price of Four Million Dollars ($4,000,000) (the
"Purchase Price"), which purchase price assumes that such Shares
will be registered under the Securities Act within 90 days of the
Closing and will be freely tradable as of that time by Investor,
without regard to exemptions under the Securities Act. The per share
Purchase Price of each Share shall be determined by dividing the
number of shares of Common Stock outstanding immediately prior to
the Closing, on a fully diluted basis, into $31 million. The number
of Shares of Common Stock to be issued to Investor shall be
determined by dividing the per share Purchase Price, determined in
the preceding sentence, into the aggregate $4 million Purchase
Price.
1.2 Closing. The purchase and sale of the Common Stock shall take
place at the offices of Manatt, Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx
Xxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx (or such other location as the
Investor may designate and the Company consents thereto), at 10:00
A.M. on January 12, 2000, or such other time and date as the
Investor determines that all of the conditions to the obligation of
Investor, set forth in Section 5 hereof, have been or will be
satisfied (the "Closing"). At the Closing, the Company shall deliver
to the Investor a certificate representing the Shares against
receipt by the Company from the Investor of a wire transfer in the
amount of the Purchase Price.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Investor, except as set
forth on a Schedule of Exceptions attached as Schedule A hereto (the
"Schedule of Exceptions"), specifically identifying the relevant
subparagraph hereof, which exceptions shall be deemed to be a part of the
representations and warranties as if made hereunder (provided that such
Schedule of Exceptions may, at the discretion of the Company, be amended
from time to time as necessary until Closing, so
long as such amendments do not reflect any material change in the
disclosure), the following:
2.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. The Company is duly
qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a
Material Adverse Effect on its business or properties.
2.2 Capitalization and Voting Rights. Immediately prior to the
Closing, the authorized capital of the Company will consist of:
(i)Capital Stock. 25,000,000 shares of common stock ("Common
Stock"), of which 10,602,866 are issued and outstanding and
5,000,000 shares of preferred stock, none of which are issued
and outstanding. The Company has reserved an aggregate
1,500,000 shares of Common Stock under its 1996 employee stock
option plan for purposes of (i) future grants of stock options
to employees, consultants and directors (hereinafter, the
"ESOP"), and (ii) issuance to holders of previously granted
stock options upon exercise of such options. Additionally, the
company has reserved an additional 25,000 shares of common
stock under its non- executive directors option plan for
issuance to its non-employee directors. There is no other
class or series of stock authorized.
(ii) Warrants and Options. The Company has warrants and
options exercisable and outstanding to purchase up to an
aggregate of 3,224,911 shares of Common Stock, except for
749,400 ESOPS currently exercisable and outstanding.
(iii) Other Agreements. Except as set forth in this Agreement
and in the Schedule of Exceptions, there are no outstanding
options, warrants, convertible securities, rights (including
conversion, right of first refusal or any preemptive rights)
or agreements for the purchase or acquisition from the Company
of any shares of its capital stock or any future issuance of
securities by the Company.
(iv) Voting Agreements. Except as set forth in this Agreement,
the Company has no agreement, obligation or commitment with
respect to the election of any individual or individuals to
the Board, and to the best of the Company's knowledge, there
is no voting agreement or other arrangement among its
shareholders with respect to the election of any individual or
individuals to the Board.
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(v) Common Stock Outstanding. The total number of shares of
the Company's Common Stock outstanding on a fully diluted
basis, immediately prior to the Closing, is 14,577,177 shares.
2.3 Subsidiaries. Except for TTR Technologies, Ltd., the Company's
wholly-owned Israeli subsidiary with offices in Kfar-Saba, Israel,
the Company does not own or control, directly or indirectly, any
other corporation, association, or other business entity.
2.4 Authorization. All corporate action on the part of the Company,
its directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder and the authorization, issuance
and delivery of the Common Stock being sold hereunder has been taken
or will be taken prior to the Closing, and this Agreement, upon due
execution and delivery, constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by
laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
2.5 Valid Issuances of Common Stock. The Shares which are being
purchased by the Investor hereunder, when issued, sold and delivered
in accordance with the terms hereof for the consideration expressed
herein, will be duly and validly issued, fully paid and
nonassessable, and the Investor shall have good and marketable title
to such Shares, free and clear of any liens, pledges, encumbrances,
taxes, charges or restrictions of any kind (other than those created
by or through the Investor).
2.6 Compliance with Law and Charter Documents. The Company is not in
violation of, or default under, any provisions of its Certificate of
Incorporation or Bylaws, both as currently in effect. To its
knowledge, the Company is in compliance in all material respects
with all applicable laws, rules, regulations, judgments, decrees and
governmental orders, except for such non-compliance that would not
have a Material Adverse Effect on the properties, financial
condition, operations, prospects or business of the Company. The
Company has received no notice of any violation of such laws, rules,
regulations, judgments, decrees or orders which has not been
remedied prior to the date hereof or which would have a Material
Adverse Effect on the Company. The execution, delivery and
performance of the Agreement and the consummation of the
transactions contemplated thereby will not result in any such
violation or default, or be in conflict with or constitute, with or
without the passage of time or the giving of notice or both, either
a default under the Company's Certificate of Incorporation or
Bylaws, both as currently in effect, or an event which results in
the creation of any material lien, charge or encumbrance upon
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the capital stock or any asset of the Company, or a default under
any Material Agreement or contract by the Company, or a violation of
any laws, rules, regulations, judgments, decrees or orders. All
material licenses, permits, approvals, registrations,
qualifications, certificates and other authorizations necessary for
the conduct of the Company's business as presently conducted (the
"Licenses") have been duly obtained and are in full force and
effect, and there are no proceedings pending or threatened which may
result in the revocation, cancellation, suspension or any material
adverse modification of any of such Licenses, except for Licenses
that, individually or in the aggregate, the Company need not hold or
possess in order to avoid a Material Adverse Effect on the Company's
assets, properties, financial condition, operating results or
business. The Company believes it can obtain, without undue burden
or expense, any similar authority for the conduct of its business in
the future as presently conducted and proposed to be conducted.
2.7 Compliance with Other Instruments, None Burdensome, Etc. The
execution, delivery and performance of and compliance with this
Agreement and the issuance and sale of the Shares will not result in
nor constitute any breach, default or violation of (i) any
agreement, contract, lease, license, instrument or commitment (oral
or written) to which the Company is a party or is bound and which
involves payment by the Company or any of its subsidiaries in excess
of $250,000 or which is otherwise material to the business,
properties, financial condition or results of operation of the
Company or its subsidiaries (a "Material Agreement") or (ii) any
law, rule, regulation, statute or order applicable to the Company,
any of its subsidiaries or their respective properties, nor result
in the creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company or its
subsidiaries.
2.8 Government Consent, Etc. No consent, approval, order or
authorization of, or designation, registration, declaration or
filing with, any federal, state, local or provincial or other
governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this Agreement
or the consummation of the transactions contemplated herein,
including the offer, sale or issuance of the Shares to the Investor.
2.9 Offering. In reliance on the representations and warranties of
Investor in Section 3, hereof, the offer, sale and issuance of the
Shares will not, to the best knowledge of the Company, result in a
violation of the requirements of Section 5 of the Securities Act or
the qualification or registration requirements of the California or
other applicable blue sky laws or foreign laws as such laws exist on
the date hereof. 2.10 Litigation. There is no action, suit,
proceeding or investigation pending or currently threatened against
the Company which questions the
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validity of this Agreement or the consummation of the transactions
contemplated hereby or which might result, either individually or in
the aggregate, in any Material Adverse Effects on the assets,
financial condition, operations or business of the Company,
financially or otherwise, or any change in the current equity
ownership of the Company. The Company is not a party or subject to
the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. There is no
action, suit, proceeding or investigation by the Company currently
pending or which the Company currently intends to initiate.
2.11 Agreements; Action.
(i) Since November 30, 1999, the Company has not (i) declared or
paid any dividends, or authorized or made any distribution upon or
with respect to any class or series of its capital stock, (ii)
incurred any indebtedness for money borrowed or any other
liabilities in excess of $250,000, (iii) made any loans or advances
to any person, other than ordinary advances for travel expenses, or
(iv) sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its inventory in the ordinary course
of business.
(ii) Except as set forth in the Schedule of Exceptions, the Company
has not engaged since November 24, 1999 in any discussion (i) with
any representative of any corporation or corporations regarding the
consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership,
association or other business entity or any individual regarding the
sale, conveyance or disposition of all or substantially all of the
assets of the Company or a transaction or series of related
transactions in which more than fifty (50%) of the voting ownership
of the Company is disposed of, or (iii) regarding any other form of
acquisition, liquidation, dissolution or winding up of the Company.
2.12 Related Party Transactions.
(i) No employee, officer or director of the Company or member
of his or her immediate family is indebted to the Company, nor
is the Company indebted (or committed to make loans or extend
or guarantee credit) to any of them.
(ii) To the best of the Company's knowledge, no employee or
officer has any direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or
with which the Company has a business relationship, or any
firm or corporation that competes with the Company, except
that employees or officers of the Company and members of their
immediate families may own stock in publicly traded companies
that may compete with the Company. Prior to the Closing, no
officer, director or major
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shareholder or member of the immediate family of any officer,
director or major shareholder of the Company has a direct or
indirect financial interest in any material contract with the
Company.
2.13 Environmental and Safety Laws. To the best of its knowledge,
the Company is not in violation of any applicable statute, law, or
regulation relating to the environment or occupational health and
safety, and to the best of its knowledge, no material expenditures
are or will be required to comply with any such existing statute,
law, or regulation.
2.14 Status of Proprietary Assets.
(i) Ownership. The Company owns, is licensed to use or
otherwise has the right to use all patents, trademarks,
service marks, trade names, copyrights and trade secrets that
are material or necessary for the operation of its business as
now conducted (the "Proprietary Assets"). The Company has not
received within the past 36 months preceding the date first
set out above any communications alleging that the Company has
violated or, by conducting its business, would violate any of
the patents, trademarks, service marks, trade names,
copyrights, trade secrets or other proprietary rights or
processes of any other person or entity. The Company has not
granted any license or option or entered into any agreement of
any kind with respect to the use of the Proprietary Assets
owned by it, other than licenses to and sales of its products
and services made in the ordinary course of its business.
(ii) Licenses; Other Agreements. The Company is not bound by
or a party to any option, license or agreement with respect to
any technology owned by any third party other than shrink-wrap
licenses entered into in the ordinary course of business
except as set forth on the Schedule of Exceptions. The Company
is not obligated to pay any royalties or other payments to
another person or entity with respect to the marketing, sale,
distribution, manufacture, license or use of any Proprietary
Asset or any other property or rights, except as set forth in
the Schedule of Exceptions.
(iii) No Breach by Employees. To the best of the Company's
knowledge, no employee of the Company is subject to any
judgment, decree or order of any court or administrative
agency, or any other restriction that would materially
interfere with the use of his or her best efforts to carry out
his or her duties for the Company or that would conflict with
the Company's business as currently conducted. The Company has
received no written notice from any former employer that any
employee of the Company has
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prior obligations to a former employer that would interfere or
conflict with such employee's ability to perform his or her
intended services for the Company. To the best of the
Company's knowledge and belief, no employee or advisor of the
Company is or is now expected to be in violation of any term
of any employment contract, patent disclosure agreement,
proprietary information and inventions agreement or any other
contract or agreement or any restrictive covenant or any other
common law obligation to a former employer relating to the
right of any such employee to be employed by the Company
because of the nature of the business conducted by the Company
or to the use of trade secrets or proprietary information of
others, and the employment of the Company's employees does not
subject the Company to any liability, except where such
liability would not have a material adverse effect. There is
neither pending nor, to the Company's knowledge and belief,
threatened any actions, suits, proceedings or claims, or to
its knowledge any basis therefor or threat thereof with
respect to any contract, agreement, covenant or obligation
referred to in the preceding sentence.
(iv) No Infringement. Within the 36 months preceding the date
first set out above, no claims with respect to the Proprietary
Assets have been communicated to the Company: (A) to the
effect that the manufacture, sale, license or use of any
Proprietary Asset as now used or offered or proposed for use
or sale by the Company infringes any copyright, patent, trade
secret or other intellectual property right of a third party,
or (B) challenging the ownership or validity of any of the
Company's rights to or interest in such Proprietary Assets.
The Company has received no notice to the effect that any
patents or registered trademarks, service marks or registered
copyright, held by the Company are invalid or not subsisting
except for failures to be valid and subsisting that would not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. To the
best of the Company's knowledge, there has been no material
unauthorized use, infringement or misappropriation of any of
the Proprietary Assets by any third party, including any
employee or former employee of the Company.
2.15 Material Agreements. The Company has not breached in any
material respect any term or condition of (A) any Material Agreement
or (B) any other agreement, contract, lease, license, instrument or
commitment (oral or written) that, individually or in the aggregate,
would have a Material Adverse Effect on the properties, financial
condition, operating results, prospects or business of the Company.
The Company is
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not a party to any agreement that restricts in any material respect
its ability to market, sell or license any of its products or
services (whether by territorial restriction or otherwise).
2.16 Disclosure. The Company has fully provided the Investor with
all information which the Investor has requested for deciding
whether to purchase the Shares and the Company is not aware of any
material information which it has not provided to the Investor and
which the Company believes is reasonably necessary to enable the
Investor to decide whether to enter into the transaction
contemplated by this Agreement. Neither this Agreement nor any other
certificate made or delivered in connection with this Agreement and
the transactions contemplated hereby contains any untrue statement
of a material fact or omits to state a material fact necessary not
to make the statements herein or therein misleading. 2.17
Registration Rights. The Company has not granted or agreed to grant
to any person or entity any rights (including piggyback registration
rights) to have any securities of the Company registered with the US
Securities and Exchange Commission ("SEC") or any other governmental
authority.
2.18 Tax Status. The Company has made or filed all federal, state
and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject and
has paid all taxes and other governmental assessments and charges
that are shown to be due on such returns, reports and declarations
or otherwise due, except those being contested in good faith, and
has set aside on its books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. To the knowledge of the
Company, there are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers
of the Company know of no basis for any such claim. The Company has
not executed a waiver with respect to the statute of limitations
relating to the assessment or collection of any foreign, federal,
state or local tax. None of the Company's tax returns is presently
being audited by any taxing authority.
2.19 Employees.
(i) Employee Benefit Plans. The Company does not have any
Employee Benefit Plan as defined in the Employee Retirement
Income Security Act of 1974.
(ii) Labor Agreements and Actions. The Company is not bound by
or subject to (and none of its assets or properties is bound
by or subject to) any written or oral, express or implied,
contract, commitment or arrangement with any labor union, and
no labor union has requested or to the knowledge of the
Company, has sought to represent any of the employees,
representatives or agents
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of the Company. There is no strike or other labor dispute
involving the Company pending, or to the knowledge of the
Company threatened, which could have a Material Adverse Effect
on the assets, properties, financial condition, operation or
business of the Company, nor is the Company aware of any labor
organization activity involving its employees. The employment
of each officer and employee of the Company is terminable at
the will of the Company upon the giving of notice and the
payment of specified amounts. Company has complied in all
material respects with all applicable state and federal equal
employment opportunity laws and with other laws related to
employment.
(iii) Confidential Information and Invention Assignment
Agreements. Each management and technology employee,
consultant and officer of the Company has executed an
agreement with the Company regarding confidentiality and
proprietary information. The Company is not aware that any of
its employees or consultants is in violation thereof, and the
Company will use its best efforts to prevent any such
violation.
2.20 Insurance. The Company maintains and keeps in force with good
and responsible insurance companies fire, public liability, property
damage and other insurance, of the kinds and in amounts as are usual
and customary in the type of business conducted by the Company.
2.21 Title to Property and Assets. The Company owns and has valid
title to its property and assets free and clear of all mortgages,
liens, loans and encumbrances, except such encumbrances and liens
which arise in the ordinary course of business and do not materially
impair the Company's ownership or use of such property or assets or
which would not, in the aggregate, have a Material Adverse Effect.
With respect to the property and assets it leases, the Company is in
compliance with such leases and, to the best of its knowledge, holds
a valid leasehold interest free of any liens, claims or
encumbrances. The Company does not own any real property.
2.22 Financial Statements. The Company shall deliver to Investor, on
or before January 10, 2000, the Company's annual financial
statements (balance sheet and statement of earnings, statement of
shareholders' equity and statement of cash flows) dated as of
December 31, 1998 and interim financial statements for the eleven
months of operations ended November 30, 1999 (the "Financial
Statements"), in each case, such Financial Statements shall be
prepared in accordance with United States generally accepted
accounting principles ("GAAP"), shall include all footnotes in
accordance with GAAP, and shall be audited by the Israeli office or
affiliate of a "Big 5" public accounting firm (i.e., Deloitte and
Touche, KPMG Peat Marwick, Price Waterhouse Coopers, Xxxxxx Xxxxxxxx
or Ernst and Young). The Financial Statements when delivered, will
fairly
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present the financial condition and operations of the Company as of
the dates, and for the periods, indicated therein, subject to normal
year-end adjustments. The Financial Statements described in
subsection 2.21 hereof and the audited balance sheet as of November
30, 1999, as adjusted by the auditor's subsequent event disclosure
footnote, shall not show liabilities due within 18 months from the
date thereof in an amount in excess of One Million Dollars
($1,000,000) over the amount of cash and cash equivalents shown on
such balance sheet.
2.23 Except as set forth in the Financial Statements, the Company
has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business and (ii)
obligations under contracts and commitments incurred in the ordinary
course of business and not required under GAAP to be reflected in
the Financial Statements, which, in both cases, individually or in
the aggregate, are not material to the financial condition or
operating results of the Company.
2.24 SEC Documents, Financial Statements. Since November 30, 1999,
the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the
SEC pursuant to the reporting requirements of the Exchange Act (all
of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and
documents (other than exhibits) incorporated by reference therein,
being hereinafter referred to herein as the "SEC Documents"). The
Company has delivered to the Investor, or the Investor has had
access to, true and complete copies of the SEC Documents, except for
such exhibits and incorporated documents. As of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act or the Securities Act, as the case
may be, and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. As of their respective dates, the
consolidated financial statements of the Company included in the SEC
Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Except as disclosed in
the SEC Documents, since November 30, 1999, there has been no
material adverse change in the assets, liabilities, business,
properties, operations, financial condition, or operations of the
Company on a consolidated basis.
2.25 No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has
directly or
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indirectly made any offers or sales in any security or solicited any
offers to buy any security under circumstances that would require
registration under the Securities Act of the issuance of the Shares
to the Investor. The issuance of the Shares to the Investor will not
be integrated with any other issuance of the Company's securities
(past, current or future) for purposes of the Securities Act.
2.26 Year 2000. The mission critical computer software operated by
the Company and each of its subsidiaries is currently capable of
providing, or is being adapted to provide uninterrupted millennium
functionality to record, store, process and present calendar dates
falling on or after January 1, 2000 in substantially the same manner
and with the same functionality as such mission critical software
records, stores, processes and processes and presents such calendar
dates falling on or before December 31, 1999. The costs of the
adaptations referred to in this clause will not have a Material
Adverse Effect.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
The Investor hereby represents and warrants that:
3.1 Authorization. The Investor has full power and authority to
enter into this Agreement. This Agreement constitutes a valid and
binding obligation of the Investor enforceable against the Investor
in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the availability
of specific performance, injunctive relief, or other equitable
remedies.
3.2 Purchase Entirely for Own Account. The Investor is acquiring the
Shares for investment for its own account, not as a nominee or
agent, and not with a view to, or for the resale or distribution of
any part thereof. The Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same.
The Investor further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third
person, with respect to any of the Shares. 3.3 Disclosure of
Information. The Investor has received all of the information which
it considers necessary or appropriate for deciding whether to
purchase the Shares. The Investor further represents that it has had
an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Shares.
The foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this Agreement or the
right of the Investor to rely thereon.
3.4 Investment Experience. The Investor (i) fully understands that
an investment in the Company is highly speculative and that it may
lose its
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entire investment in the Shares purchased from the Company; (ii) is
experienced in evaluating and investing in development stage
companies such as the Company, (iii) is capable of evaluating the
merits and risks of its investment in the Shares; (iv) is able to
bear the economic risk of a loss of the entire amount of its
investment in the Shares; and (v) is prepared to hold the Shares for
an indefinite period of time. 3.5 Accredited Investor. The Investor
is an "accredited investor" within the meaning of Securities and
Exchange Commission Rule 501 of Regulation D, as presently in
effect.
3.6 Restricted Securities. The Investor acknowledges that, because
the Shares have not been registered under the Securities Act, the
Shares must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is
available. The Investor is aware of the provisions of Rule 144
promulgated under the Securities Act which permits limited resale of
securities purchased in a private placement subject to the
satisfaction of certain conditions.. 3.7 Legends. The Investor
understands that until (a) the Shares may be sold by the Investor
under Rule 144(k) or (b) such time as the resale of the Shares have
been registered under the Securities Act as contemplated in Section
4.8 hereof, the certificates representing the Shares will bear a
restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the
certificates for such Shares):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES
MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
SECURITIES LAWS, OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENT OF THOSE
LAWS.
The legend set forth above will be removed and the Company will issue a
certificate without the legend to the holder of any certificate upon which
it is stamped, upon registration of the Shares, in accordance with the
terms of Section 4.8 hereof.
4. COVENANTS AND AGREEMENTS
4.1 Ordinary Course of Business and Notice of Adverse Changes. From
and after the date of this Agreement through the Closing, the
Company shall conduct its business in the ordinary course and
consistent
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in all material respects with past practice, except as may be
required or contemplated in this Agreement. The Company shall advise
the Investor promptly of any Material Adverse Effect, any breach of
the Company's representations or warranties, or any breach of a
covenant contained herein of which the Company has knowledge.
4.2 Access to Properties and Records. The Company shall afford to
the Investor and its respective accountants, counsel and
representatives, reasonable access upon notice to the Company and
upon agreed upon times during normal business hours throughout the
period prior to the Closing to all of the Company's properties,
books, contracts, commitments and written records and shall make
reasonably available its respective officers and employees to answer
fully and promptly questions put to them (so long as such questions
are not outside of the scope or purpose of this Section; provided
that such access shall not unreasonably interfere with the normal
business operations of the Company). Any such investigations shall
be specifically related to this Agreement and to the transactions
contemplated hereby.
4.3 Exclusive Negotiations. Except in the furtherance of the
transactions contemplated herein, prior to the Closing, the Company
shall not directly, and shall use its reasonable best efforts to
cause its respective directors, officers, employees, representatives
or agents (including, without limitation, any investment banker,
attorney or accountant retained by it or any of its affiliates) not
to, directly or indirectly, initiate, solicit or encourage any
inquiries or the making or implementation of any proposal or offer,
with respect to any merger, acquisition, consolidation, share
exchange, business combination or other transaction involving, or
which would result in the acquisition of a majority of the
outstanding equity securities or substantially all of the assets of
the Company (any such proposal or offer being hereinafter referred
to as an "Acquisition Proposal"), or engage in any negotiations
concerning, or provide any confidential information or data to, any
person or entity relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition
Proposal. The Company shall immediately cease and cause to be
terminated any existing activities or negotiations with any parties
conducted heretofore with respect to any Acquisition Proposal, and
it shall take the necessary steps to inform any such parties of the
obligations undertaken in this Section. The Company shall notify the
Buyer immediately if any such inquiries or proposals are received
by, any such information is requested from, or any such negotiations
are sought to be initiated or continued with, the Company.
4.4 Right of First Refusal. If, during the period from the Closing
through December 31, 2009 (and so long as the Alliance Agreement is
in effect), the Company (or any subsidiary or affiliate) proposes
either to sell,
13
transfer or assign, directly or indirectly, securities in the
Company or any subsidiary or affiliate thereof equal to, or
convertible into, a majority of the outstanding Common Stock of the
Company (a "Substantial Equity Interest"), the Investor shall have a
first right of refusal to purchase such Substantial Equity Interest
proposed to be sold, transferred or assigned, for a price equivalent
to the bona fide sale or transfer price offered for such Substantial
Equity Interest and otherwise in accordance with the terms and
conditions of such offer. The right of first refusal granted to the
Investor is intended to apply to any sale, transfer or assignment,
directly or indirectly, to any nominee or straw-men, corporation or
other entity, including the sale of stock or an interest in a
partnership, limited-liability corporation, trust or other entity
which holds substantially all of the assets of the Company or any of
its subsidiaries or affiliates, if the intent of any such sale,
transfer or assignment to such person or entity is to avoid the
Investor's right of first refusal contained in this Section. 4.5
Preemptive Right of Investor.
(i) The Company hereby grants to the Investor the preemptive
right to purchase its Pro Rata Share (defined below) of any
New Securities (defined below) that the Company intends to
offer for sale and issuance at the time and on the terms set
forth herein (the "Preemptive Right").
(ii) Definitions:
(1) "New Securities" shall mean (A) any Common Stock of
the Company and (B) those rights, options or warrants to
purchase any such Common Stock (collectively referred to
as "Options"), and those securities that are convertible
into or exchangeable for any such Common Stock
(collectively referred to as "Convertible Securities"),
if the gross proceeds received or receivable by the
Company as consideration for the issue of such Common
Stocks, Options or Convertible Securities, plus the
minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without
regard to any provision contained therein designated to
protect against dilution) payable to the Company upon
the exercise of such Options or the conversion or
exchange of such Convertible Securities, equals or
exceeds One Million Five Hundred Thousand Dollars
($1,500,000); provided however, that "New Securities"
does not include (i) any capital stock or other
securities offered or issued to the public pursuant to a
registration statement filed under the Securities Act;
(ii) any capital stock or other securities offered or
issued in connection with any acquisition of
14
another corporation or entity by the Company by merger
or purchase of all, or substantially all, of the assets
of such corporation or entity, share exchange,
reorganization or the like; (iii) any stock options
granted, subsequent to the Effective Date, to the
Company's existing or future directors, employees or
consultants not in excess of 1,350,000 shares,
representing approximately eight point two percent
(8.2%) of the Company's 16,458,114 aggregate issued and
outstanding shares of common stock post- Closing (on a
fully-diluted basis) by the Company; (iv) any capital
stock or other securities (or related options or
warrants) offered or issued to directors, officers or
employees of, or consultants to, the Company pursuant to
an agreement or an option or purchase plan program, or
any other stock incentive plan or program approved by
the Board of Directors of the Company; or (v) any
capital stock or other securities issued in connection
with any stock split, stock dividend, recapitalization
or the like by the Company.
(2) "Ownership Ratio" shall mean the ratio of shares of
Common Stock of the Company held by the Investor on the
day immediately preceding the date of the notice
described in subsection (c) below to the total number of
shares of Common Stock of the Company then outstanding.
(3) "Pro Rata Share" for purposes of the Preemptive
Right, shall mean all New Securities which the Company
intends to offer for sale multiplied by the Investor's
Ownership Ratio.
(iii) If at any time from the Closing through December 31,
2009, the Company plans or otherwise intends to undertake an
issuance of New Securities, the Company shall, so long as the
Alliance Agreement is in effect, give the Investor written
notice describing the type of New Securities, the price, and
the general terms upon which the Company plans or otherwise
intends to issue the same. The Investor shall have fifteen
(15) days from the date of delivery of any such notice to
agree to purchase all or a portion of its Pro Rata Share of
such New Securities for the price and upon the general terms
specified in the notice by giving written notice to the
Company at or before the end of such fifteen (15) days. If the
Investor either fails to so notify the Company or indicates
that it will not purchase its Pro Rata Share, the Company
shall thereafter be free to offer, sell and issue the New
Securities, including any such Pro Rata Share not purchased by
the Investor, to any third
15
party so long as such sale is at a price and is upon general
terms no more favorable than described in the Company's
notice.
4.6 Certain Employment Matters. Effective as of the date of the
Closing, there are no employment agreements to which the Company is
a party other than those set out in the tabled attached as Schedule
4.6 hereto.
4.7 Board Observer. The Company hereby covenants and agrees with
Investor that, as long as the Alliance Agreement (defined below)
remains in effect, the Investor shall have the right to designate a
person (an "Observer") to be present at all meetings of the Board of
Directors of the Company and all committees thereof. The Company
will give such Observer reasonable prior notice (it being agreed
that the same prior notice given to the Board of Directors shall be
deemed reasonable prior notice) in any manner permitted in the
Company's By-laws for notices to directors of the time and place of
any proposed meeting of the Board of Directors, such notice in all
cases to include true and complete copies of all documents furnished
to any director in connection with such meeting. Such Observer will
be entitled to be present in person as an observer at any such
meeting or, if a meeting is held by telephone conference, to
participate therein for the purpose of listening thereto.
4.8 Registration of Shares. The Company covenants and agrees that it
shall promptly after the Closing prepare and file, at its cost and
expense, a registration statement on Form S-1 (or such other
appropriate form) covering the Shares (the "Registration Statement")
and shall use its best efforts to cause such registration statement
to be declared effective within 90 days following the Closing. The
Company further covenants and agrees to maintain the Registration
Statement Effective for one year following the effective date of the
Registration Statement, provided, that, notwithstanding the
foregoing, if at any time or from time to time after the date of
effectiveness of the Registration Statement, the Company notifies
the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Shares, or engage
in any other transaction involving or relating to the Shares, from
the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the
Company that such Potential Material Event either has been disclosed
to the public or no longer constitutes a Potential Material Event;
provided, however, that the Company may not so suspend such right to
the Investor during the period the Registration Statement is
required to be in effect for more than fifty (50) days, provided,
however, that no one such suspension period shall either (i) be for
more than twenty (20) days or (ii) begin less than ten (10) business
days after the last day of the preceding suspension. As used herein,
"Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for
disclosure in a
16
registration statement, which shall be evidenced by determinations
in good faith by the Board of Directors of the Company that
disclosure of such information in the registration statement would
be detrimental to the business and affairs of the Company; or (ii)
any material engagement or activity by the Company which would, in
the good faith determination of the Board of Directors of the
Company, be adversely affected by disclosure in a registration
statement at such time, which determination shall be accompanied by
a good faith determination by the Board of Directors of the Company
that the registration statement would be materially misleading
absent the inclusion of such information. In the event that the
Registration Statement is not declared effective within 90 days
following Closing, then the Company shall issue to the Investor, in
respect of each full calendar week (beginning on Monday) following
such 90th day and continuing until such time as the Registration
Statement shall have been declared effective, such number of shares
of Common Stock as shall be equal to one and one quarter percent (1
1/4%) of the number of Shares issued hereunder (the "Additional
Shares"), provided, that, notwithstanding anything to the contrary
contained in the foregoing, the Company shall have no obligation to
issue any Additional Shares in excess of such number of Additional
Shares as shall be equal to, in the aggregate, 10% of the number of
Shares issued hereunder. Reporting Status; Eligibility to Use Form
S-1. The Company's Common Stock is registered under Section 12 of
the Exchange Act. The Company will file with the SEC a Current
Report on Form 8-K disclosing this Agreement and the transactions
contemplated hereby within 10 business days after the Closing.
Throughout the one year registration period (referred to in Section
4.8 hereof), the Company shall to file all reports, schedules,
forms, statements and other documents required to be filed by it
timely with the SEC under the reporting requirements of the Exchange
Act, and the Company will not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange
Act or the rules and regulations thereunder would permit such
termination. The Company currently meets, and will take all
reasonably necessary action to continue to meet, the "registrant
eligibility" requirements set forth in the general instructions to
Form S-1.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING.
The obligations of the Investor under subsection 1.1 of this Agreement are
subject to the fulfillment, or written waiver by the Investor, on or
before the Closing of each of the following conditions:
5.1 Execution of Agreement. The Company will have executed and
delivered this Agreement to the Investor.
17
5.2 Shares Certificate. The Company will have delivered to the
Investors duly executed certificates representing the Shares in the
amounts specified in Section 1.1 hereof.
5.3 Representatives, Warranties, Covenants. The representations and
warranties of the Company must be true and correct in all material
respects as of the Closing as though made at that time (except for
representations and warranties that speak as of a specific date,
which representations and warranties must be true and correct as of
such date) and the Company must have performed and complied in all
material respects with the covenants and conditions required by this
Agreement to be performed or complied with by the Company at or
prior to the Closing. The Investor must have received a certificate
or certificates dated as of the Closing and executed by the Chief
Executive Officer or the Chief Financial Officer of the Company
certifying as to the matters contained in this Section 5.3 and as to
such other matters as may be reasonably requested by such Investor,
including, but not limited to, the Company's Certificate of
Incorporation, as amended, By-laws, as amended, Board of Directors'
resolutions relating to the transactions contemplated hereby and the
incumbency and signatures of each of the officers of the Company who
may execute on behalf of the Company any document delivered at the
Closing.
5.4 Litigation. No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction will have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority
of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this
Agreement.
5.5 Stock Listing. Trading and listing of the Company's Common Stock
on OTC Electronic Bulletin Board must not have been suspended. 5.6
Opinion. The Investor will have received an opinion of the Company's
general counsel, dated as of the Closing, in form, scope and
substance substantially in the form attached hereto as Schedule 5.6.
5.7 Alliance Agreement. Prior to or simultaneous with the Closing,
the Company and Investor shall have entered into the Alliance
Agreement, substantially in the form of Schedule 5.7 hereto.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT
CLOSING.
The obligations of the Company to the Investor under this Agreement are
subject to the fulfillment on or before the Closing of each of the
following conditions:
6.1 Execution of Agreement. The Investor will have executed and
delivered this Agreement to the Company.
6.2 Purchase Price. The Investor will have delivered the Purchase
Price for the Shares to the Company in accordance with this
Agreement.
18
6.3 Representations, Warranties, Covenants. The representations and
warranties of the Investor must be true and correct in all material
respects as of the Closing as though made at that time (except for
representations and warranties that speak as of a specific date,
which representations and warranties must be correct as of such
date), and the Investor will have performed and complied in all
material respects with the covenants and conditions required by this
Agreement to be performed or complied with by the Investor at or
prior to the Closing. The Company must have received a certificate
or certificates dated as of the Closing and executed by a duly
authorized officer of the Investor certifying as to the matters
contained in this Section 6.3.
6.4 Legal Impediment. No statute, rule, regulation, executive order,
decree, ruling or injunction will have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority
of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this
Agreement. 6.5 Alliance Agreement. Prior to or simultaneous with the
Closing, the Company and Investor shall have entered into the
Alliance Agreement, substantially in the form of Schedule 5.7
hereto.
7. DEFINITIONS.
7.1 "Alliance Agreement" has the meaning set forth in Section 5.7.
7.2 "Closing" means the closing of the purchase and sale of the
Shares under this Agreement.
7.3 "Common Stock" means the common stock, $0.001 par value per
share, of the Company.
7.4 "Company" means TTR Technologies, Inc.
7.5 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
7.6 "Investor" means Macrovision Corporation
7.7 "Material Adverse Effect" means a material adverse effect on (a)
the business, operations, assets or financial condition of the
Company on a consolidated basis or (b) the ability of the Company to
perform its obligations pursuant to the transactions contemplated by
this Agreement or under the agreements or instruments to be entered
into or filed in connection herewith.
7.8 "Material Agreement" has the meaning set forth in Section 2.7.
7.9 "Regulation D" means Regulation D as promulgated under by the
SEC under the Securities Act.
7.10 "Rule 144" and "Rule 144(k)" mean Rule 144 and Rule 144(k),
respectively, promulgated under the Securities Act, or any successor
rule.
7.11 "SEC" means the United States Securities and Exchange
Commission.
19
7.12 "SEC Documents" has the meaning set forth in Section 2.23.
7.13 "Shares" means the 1,880,937 shares of Common Stock to be sold
to Investor pursuant to this Agreement, as such number may be
adjusted pursuant to the provisions of Section 4.8 hereof.
7.14 "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder, or any similar successor
statute.
8. MISCELLANEOUS.
8.1 Survival of Warranties. The warranties, representations and
covenants of the Company and the Investor contained in or made
pursuant to this Agreement shall survive the execution and delivery
of this Agreement and the Closing and shall in no way be affected by
any investigation of the subject matter thereof made by or on behalf
of the Investor of the Company.
8.2 Successor and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the
parties (including transferees of any Shares). Nothing in this
Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or
by reason of this Agreement, except as expressly provided in this
Agreement.
8.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California as applicable to contracts
to be performed entirely within that state. 8.4 Counterparts. This
Agreement may be executed in two or more counterparts, each of which
shall be deemed an original by the party executing the same, but all
of which together shall constitute one and the same instrument.
8.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience and are not to be considered in
construing or interpreting this Agreement.
8.6 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been
given or made if in writing and (i) delivered personally, (ii)
mailed by registered or certified mail (postage prepaid, return
receipt requested) or (iii) sent by telecopier, with the written
notice sent by mail as set forth in (ii) above, to the parties as
follows:
(i) if to Company to:
TTR Technologies, Inc., c/o TTR Technologies Ltd.
2 Xxxxxxx Xxxxxx
XX Xxx 0000
Xxxx-Xxxx 00000
Xxxxxx
20
Attention: General Counsel
Telecopier No.: 011-972-9-766-2394
with a copy to:
Aboudi & Xxxxxxxxxx
000 Xxxxxxxxxx Xxxx.
Xxx Xxxx 00000
Israel
Telecopier No. 011-972-3-685-1138
(ii) if to Investor to:
Macrovision Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to:
Manatt, Xxxxxx & Xxxxxxxx, LLP
0000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
or at such other addresses as shall be furnished by the parties by like notice,
and such notice or communication shall be deemed to have been given or made as
of the date so delivered, mailed or sent.
8.7 Finder's Fee. Each party represents that it neither is nor will
be obligated for any finders' fee or commission in connection with
this transaction. The Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability)
for which the Investor or any of its officers, partners, employees,
or representatives is responsible. The Company agrees to indemnify
and hold harmless the Investor from any liability for any commission
or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability)
for which the Company or any of its officers, employees or
representatives is responsible.
21
8.8 Expenses. Irrespective of whether the Closing is effected, the
Company and the Investor shall each pay their own costs and expenses
that each incurs with respect to the negotiation, execution,
delivery and performance of this Agreement. If any action at law or
in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
8.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and the Investor.
8.10 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall
be excluded from this Agreement and the balance of the Agreement
shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
8.11 Entire Agreement. This Agreement, together with the Alliance
Agreement, and all schedules and exhibits attached thereto,
constitute the entire agreement among the parties and no party shall
be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set
forth herein or therein. All other prior agreements, understandings
and representations, both oral and written, between the parties with
respect to the subject matter hereof are superseded and of no
effect. This Agreement may be executed in counterparts and by the
exchange of facsimile signed copies.
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement.
TTR TECHNOLOGIES, INC.
BY: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman and CEO
MACROVISION CORPORATION
BY: /s/ Ian Halifax
----------------------------------
Name: Ian Halifax
Title: CFO
22
