NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
REPRESENTATIONS AND AGREEMENTS MADE TO THE RECORD HOLDER HEREOF SET FORTH IN
THIS WARRANT.
COMMON STOCK PURCHASE WARRANT
in favor of
MANTLE INTERNATIONAL INVESTMENT LTD.
DATE: February 15, 2000
WARRANT NO. __ 200,000 Shares of Common
Stock of TTR Technologies, Inc.
FOR VALUE RECEIVED, TTR TECHNOLOGIES INC., a Delaware company (the
"Company"), hereby grants to MANTLE INTERNATIONAL INVESTMENT LTD. (the
"Holder"), the right to purchase, subject to the terms and conditions hereof,
200,000 fully paid and non-assessable shares of Common Stock of the Company, par
value $0.001, (the "Shares"). The purchase price for each Share purchased
pursuant to this Warrant shall be equal to $2.75, subject to the terms hereof.
Hereinafter, (i) such Shares, together with any other equity security which may
be issued by the Company in substitution therefor, are referred to as the
"Shares"; (ii) the shares purchasable hereunder are referred to as the "Warrant
Shares"; (iii) and the price payable hereunder for each of the Warrant Shares,
as adjusted in the manner set froth hereinafter, is referred to as the "Per
Share Warrant Price"; and (iv) this warrant and all warrants hereafter issued in
exchange or substitution for this Warrant are referred to as the "Warrants". The
Per Share Warrant Price and the number of Warrant Shares are subject to
adjustment as hereinafter provided.
1. Warrant Period; Exercise of Warrant
1.1 This Warrant may be exercised in whole or in part at any time commencing
9:00 a.m., New York City time, on the date set forth above through January 31,
2001 (the "Warrant Period") by the surrender of this Warrant (with a duly
executed exercise form in the form attached at the end hereof as Exhibit A) at
the principal office of the Company, together with the proper payment of the Per
Share Warrant Price times the number of Warrant Shares, subject to the closing
of the Investment. As used herein, the term "Investment" shall mean the closing
of a private investment in the Company with gross proceeds equal to or exceeding
$7,500,000.
1.2 Upon surrender of this warrant and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered to Warrant holder,
a certificate or certificates for the number of Warrant Shares being purchased,
and such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of the such Shares as
of the close of business on the date of the surrender of the Warrant and payment
of the Per Share Warrant Price. If this warrant should be exercised in part
only, the Company shall, upon surrender of the Warrant for cancellation, execute
and deliver a new Warrant evidencing the rights of the Holder hereof to purchase
the balance of the Shares purchasable hereunder.
1.3 Any stamp tax attributable to the issuance of the Shares shall be borne
solely by Holder.
2. Representations and Warranties
2.1 The Holder (i) represents, warrants, covenants and agrees that the Warrant
and the underlying Warrant Shares are being acquired by the Holder for the
Holder's own account, for investment purposes only, and not with a view to or
for sale in connection with any distribution thereof or with any present
intention of selling or distributing all or any part of the Warrant or the
underlying Warrant Shares thereof; (ii) understands (x) that if it should
thereafter decide to dispose of such Warrant or Warrant Shares (which it does
not contemplate at such time) it may do so only in compliance with the
Securities Act, (y) this Warrant and the Warrant Shares are not registered under
the Securities Act nor does the Company have any obligation to register this
Warrant and the Warrant Shares (except as provided in paragraph 3 below) and (z)
that it is unlikely that Rule 144 adopted by the Securities and Exchange
Commission will be applicable to permit sales of this Warrant and the Warrant
Shares in reliance thereon; and (iii) acknowledges that, as of the date hereof,
it has been given a full opportunity to ask questions of and to receive answers
from the Company concerning this Warrant and the Warrant Shares and the business
of the Company and to obtain such information as it desired in order to evaluate
the acquisition of this Warrant and the Warrant Shares, and all questions have
been answered to its full satisfaction.
3. Reservation of Shares.
The Company has reserved, and shall at all times so long as any Warrant remains
outstanding, keep reserved, out of its authorized and unissued capital stock,
such number of shares of Common Stock, par value $0.001, as shall be subject to
purchase under the Warrant.
4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
6. Stock Dividends, Reclassifications, Reorganization, Anti-Dilution Provisions,
Etc.
6.1 In case prior to the expiration of this Warrant by exercise or by its terms
the Company shall issue any shares of its Common Stock as a stock dividend or
subdivide the number of outstanding shares of Common Stock into a greater number
of shares, then, in either of such cases, the Exercise Price per share of the
Warrant Shares purchasable pursuant to this Warrant in effect at the time of
such action shall be proportionately reduced and the number of Warrant Shares
purchasable at that time shall be proportionately increased; and, conversely, in
the event the Company shall contract the number of outstanding shares of Common
Stock by combining such shares into a smaller number of shares, then, in such
case, the Exercise Price per share of the Warrant Shares purchasable pursuant to
this Warrant shall be proportionately decreased. Any dividend paid or
distributed upon the Common Stock in stock of any other class of securities
convertible into shares of Common Stock shall be treated as a dividend paid in
Common Stock to the extent that shares of Common Stock are issuable upon
conversion thereof.
6.2 In case of any consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
surviving or the continuing corporation) or in the case of any sale or
conveyance to another corporation or other entity of the property, assets or
business of the Company as an entirety or substantially as an entirety, in any
such case, the Company or such successor or purchasing corporation or entity, as
the case may be, shall (i) execute with the Holder an agreement that the Holder
shall have the right thereafter to receive upon the exercise of the Warrant the
kind and amount of shares and/or other securities or other property which he
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had the Warrant been exercised
immediately prior to such action, (ii) make effective provision in its
certificate of its incorporation or otherwise, if necessary, in order to effect
such agreement, and (iii) set aside or reserve for the benefit of the Holder,
the stock, securities, property and cash to which the Holder would be entitled
to upon exercise of this Warrant.
6.3 In case of any reclassification or change of the Warrant Shares issuable
upon exercise of this Warrant (other than a change in par value or from no par
value to a specific par value, or as a result of a subdivision or combination,
including any change in the shares into two or more classes or series of
shares), or in the case of any consolidation or merger of another corporation
into the Company in which the Company is the continuing corporation and in which
there is a reclassification or change (including a change in the right to
receive cash or other property) of the Shares (other than a change in the par
value, or from no par value to a specific par value or, as a result of a
subdivision or combination, including any change in the shares into two or more
classes or series of shares), Holder shall have the right thereafter to receive
upon exercise of this Warrant solely the kind and amount of shares of stock and
other securities, property, cash or combination thereof receivable upon such
reclassification, change, consolidation or merger by a holder of the number of
Shares for which this Warrant might have been exercised immediately prior to
such reclassification, change, consolidation or merger.
6.4 Upon the occurrence of each event requiring an adjustment of the Exercise
Price and the number of Warrant Shares purchasable at such adjusted Exercise
Price by reason of such event in accordance with the provision of this Section
6, the Company shall compute the adjusted Exercise Price and the adjusted number
of Warrant Shares purchasable at such adjusted Exercise Price by reason of such
event in accordance with the provisions of this Section 6 and shall prepare a
certificate setting forth such adjusted Exercise Price and the adjusted number
of Warrant Shares and showing in reasonable detail the facts upon which such
determination is made. The Company shall mail to the holder of this Warrant a
copy of such Certificate, and thereafter said certificate shall be conclusive
and shall be binding upon such holder unless contested by such holder in a
written notice furnished to the Company within 15 days of the receipt thereof
setting forth in reasonable detail the basis of such contention.
6.5 In case:
(a) the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or any other distribution in
respect of the Common Stock (including cash), pursuant to without limitation,
any spin-off, split-off or distribution of the Company's assets; or
(b) the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to subscribe for or purchase any shares of stock of
any class or to receive any other rights; or
(c) of any classification, reclassification or other reorganization of the
capital stock of the Company, consolidation or merger of the Company with or
into another corporation, or conveyance of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up of
the Company;
then, and in any such case, the Company shall mail to the Holder, at least
twenty (20) days prior thereto, a notice stating the date or expected date on
which a record is to be taken for the purpose of such dividend or distribution
of rights, or the date on which such classification, reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation, or
winding up is to take place, as the case may be. Such notice shall also specify
the date or expected date, if any is to be fixed, as of which holders of Common
Stock of record shall be entitled to participate in said dividend on
distribution of rights, or shall be entitled to exchange their shares of Common
stock for securities or other property deliverable upon such classification,
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation, or winding up, as the case may be. The failure to give
such notice shall not affect the validity of any such proceeding or transaction
and shall not affect the right of the holder of this Warrant to participate in
said dividend, distribution of rights, or any such exchange and acquire the kind
and amount of cash, securities or other property as the Holder would have been
entitled to acquire if it was the record holder of the Warrant Shares which
could be obtained upon the exercise of the Warrants immediately before such
proceeding or transaction; provided that the Holder
exercises the Warrants within 30 days after discovery that such action or
proceeding has taken place.
6.6 In case the Company at any time while this Warrant shall remain unexpired
and unexercised, shall dissolve, liquidate, or wind up its affairs, the holder
of this Warrant may thereafter receive upon exercise hereof in lieu of each
share of Common Stock of the Company which it would have been entitled to
receive, the same kind and amount of any securities or assets as may be
issuable, distributable or payable upon any such dissolution, liquidation or
winding up with respect to each share of Common Stock of the Company.
7. Limited Transfer
7.1 The Company may treat the registered holder of record as the holder for all
purposes.
7.2 In no event shall the Company be obligated to effect any transfer of
Warrants or Warrant Shares unless a registration statement is in effect with
respect thereto under applicable state and Federal securities laws or unless the
Company shall have received an opinion in substance reasonably satisfactory to
it from counsel that such registration is not required. Unless registered, the
Warrant Shares issued upon exercise of the Warrant shall be subject to a stop
transfer order and the certificate or certificates evidencing such Warrant
Shares shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, ASAMENDED, PURSUANT TO A REGISTRATION
STATEMENT. ACCORDINGLY, SUCH SHARES MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO A REGISTRATION STATEMENT UNDER SUCH ACT, OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT."
8. Registration Rights
The Holder understands that the Company is in the process of filing with
the Securities and Exchange Commission a registration statement under the
Securities Act relating to certain Company securities held by certain Company
shareholders or the holders of certain rights in Company securities, (the
"Registration Statement"). That Registration Statement is being filed pursuant
to the terms of a investment agreement between the Company and certain parties.
The Company agrees to include the Warrant Shares in the Registration Statement
subject to the Holder executing any lock up which all other selling shareholders
shall be required to execute.
9. Representations and Warranties of the Company.
The Company represents and warrants to the holder as follows:
9.1 The Company is duly organized and, as of the date of the original issuance
hereof, validly existing and in good standing under the laws of the State of
Delaware.
9.2 The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuing Warrant
Shares upon the exercise of this Warrant, such shares as may be issuable upon
the exercise hereof.
9.3 The Warrant Shares, when issued and paid for in accordance with the terms of
this Warrant, will be fully paid and not assessable.
9.4 This Warrant has been duly authorized and approved by all required corporate
action by the Company and does not violate the certificate of incorporation or
the bylaws of the Company.
10. Notices
Any notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when
delivered personally or, if mailed, three days after the date of deposit, to
each party at its address designated in writing by it to the other party.
11. Governing Law
This Agreement shall be construed in accordance with and governed by the laws of
the State of New York, without giving effect to the conflict of laws provisions.
IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase
Warrant to be executed as of the date first written above.
TTR TECHNOLOGIES INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
ELECTION TO PURCHASE
TTR Technologies, Inc.
[address]
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant for and to purchase thereunder the
full amount of shares represented thereby, and requests that certificates
representing such shares be issued in the name of :
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please print name, address and other pertinent information)
Sincerely,
