Imagine that. Wainwright & Co financial financial advisor to TTRE reiterates buy recommendation. Did they disclose this information in their reiteration? Oops, Letter marked CONFIDENTIAL
EX-10.4614LETTER AGREEMENT tenkwizard.com
Exhibit 10.46
February 8, 2000C
CONFIDENTIAL
TTRnTechnologies, Inc.
2 Hanagar St.
Kfar-Saba, 44425, IsraelAttention: Marc D. Tokayer
Chairman & PresidentGentlemen:
This letter agreement (this "Agreement") confirms the engagement of H.C.
This letter agreement (this "Agreement") confirms the engagement of H.C.
Wainwright & Co., Inc. ("HCW") by TTR Technologies, Inc. ("TTR") on behalf of
TTR and its affiliates (collectively, the "Company") as financial advisor and
exclusive placement agent to arrange a private placement (the "Private
Placement") of equity securities and/or convertible debt of the Company (the
"Securities"). The Private Placement shall be made pursuant to one or more
exemptions from registration under the Securities Act of 1933, as amended (the
"Securities Act"), and applicable securities laws of states and other
jurisdictions ("Blue Sky Laws"). The Private Placement will have estimated
aggregate gross proceeds of $10,000,000 to $15,000,000 and will close only upon
receipt by the Company of a waiver of certain rights from (i) certain purchasers
of debentures under SPA dated May 1999 and (ii) Macrovision Corporation.
1. Retention. Subject to the terms and conditions of this Agreement, TTR
hereby engages HCW to act on behalf of the Company as financial advisor and
placement agent during the Authorization Period (as defined below) to arrange
the sale of Securities in an amount and on terms and conditions satisfactory to
the Company and HCW hereby accepts such engagement.
The Company understands that, in soliciting purchasers of Securities and
in assuming its other obligations hereunder, HCW is acting solely as agent for
the Company, and not as principal, and that HCW's responsibility is limited to
acting on a reasonable efforts basis in arranging the sale of Securities, with
no understanding, expressed or implied, of a commitment on HCW's part to
underwrite, purchase or place the Securities.
It is understood that HCW is being engaged solely to provide the services
described in this Agreement to the Company and that HCW is not acting as an
agent or fiduciary of, and shall have no duties or liabilities to, the equity
holders of the Company or any third party in connection with its engagement.
During the Authorization Period, TTR shall not, and shall not permit its
affiliates or its or their officers, directors, employees or representatives to,
directly or indirectly, (i) offer any Securities for sale to, or solicit any
offer to purchase any Securities from, or otherwise contact, discuss or
negotiate with respect to any offer or sale of any Securities with, any person,
(ii) authorize anyone other than HCW to act on behalf of the Company to place
any Securities or (iii) have any discussions or negotiations with
any person other than HCW with respect to engaging such person as a finder,
broker, dealer, agent or financial advisor in connection with any sale of
Securities. TTR shall, and shall cause its affiliates and its and their
officers, directors, employees and representatives to, promptly refer to HCW all
offers, inquiries and proposals relating to any Securities received at any time
during the Authorization Period.
2. Authorization Period. HCW's engagement shall become effective on the
date hereof and, unless extended in writing by TTR and HCW, shall expire on the
earlier of (i) the final closing date of the Private Placement or (ii) 120 days
from the data hereof, (in either case, the "Termination Date"). The period from
the date hereof through the Termination Date is called the "Authorization
Period."
3. Offering Documents. TTR, with the assistance of HCW, shall prepare a
Confidential Offering Memorandum, and such amendments or supplements thereto as
HCW may reasonably deem to be necessary, to effectuate sales of Securities. The
Confidential Offering Memorandum, and any such amendments or supplements, are
collectively called the "Offering Materials." TTR authorizes HCW to transmit the
Offering Materials to potential purchasers of Securities, and shall furnish to
HCW copies of the Offering Materials in such quantities as HCW may from time to
time reasonably request. TTR shall prepare forms of necessary and appropriate
purchase, subscription and other agreements and documents, containing terms and
conditions customary for private placements, to be entered into by the Company
and purchasers of Securities (collectively called "definitive documents"), which
forms shall be provided to prospective purchasers only upon the review and
approval of both the Company and HCW.
4. Compensation. TTR shall pay HCW the compensation set forth below:
a. Fees. TTR shall pay HCW a retainer fee of $25,000 and 10,000
shares of TTR restricted common stock (valued at $5 per share for purpose of
this agreement), which is payable promptly upon execution of this Agreement, and
a placement fee equal to 5.0% of the Aggregate Consideration (as defined below)
received or receivable directly or indirectly by the Company in connection with
the Private Placement, which is payable in cash on the closing date on which
such Aggregate Consideration is paid or becomes payable. The retainer fee shall
be credited against the placement fee.
"Aggregate Consideration" shall include the total value of
Securities sold, including all amounts paid in escrow or payable in the future
(in each case, whether or not subject to any contingency in connection
therewith) and all amounts paid or payable upon exercise, conversion or exchange
of Securities.
If Aggregate Consideration is paid in whole or in part in the form
of securities or other noncash consideration, such consideration shall be valued
at the fair market value thereof on the day prior to the relevant closing date;
provided, however, that to the extent that such consideration consists of
securities with an existing public trading market, such consideration shall be
valued at the average of the last sales price for such securities on the five
trading days prior to the relevant closing date.
b. Warrants. On each closing date on which Aggregate Consideration
is paid or becomes payable, TTR shall or shall cause the issuer of Securities
(if other than TTR) to issue to HCW
or its assigns warrants (the "Warrants") to purchase 10% of the amount of
Securities issued to purchasers, or, upon mutual agreement of HCW and TTR, the
equity equivalent thereof. The exercise price of the Warrants shall equal the
average price (to any purchaser) at which any common equity of the Company is or
may be sold in the Private Placement or upon the conversion, exercise or
exchange of Securities. The Warrants shall be exercisable immediately after the
date of issuance and shall expire five years after the date of issuance, unless
otherwise extended by the Company. The Warrants shall include customary
anti-dilution protection, including protection against issuances of securities
at prices (or with exercise prices, in the case of warrants, options or rights)
below the lower of the exercise price of the Warrants or the then fair market
value of the underlying common equity, a cashless exercise provision and provide
for automatic exercise upon expiration. At the request of the Company, assuming
there is an effective registration statement for the common shares underlying
the warrants, HCW or its assigns will execute the warrants for cash The Warrants
shall also include one demand registration right exercisable following the first
anniversary of the closing subject to a 60 day notice requirement, and unlimited
piggyback registration rights, in each case customary in transactions of this
type. The Warrants shall be transferable within HCW at HCW's discretion.
c. Tail Period. TTR shall and shall cause its affiliates to, pay to
HCW all compensation described in this Section 4 with respect to all Securities
sold to a purchaser or purchasers at any time prior to the expiration of one
year after the Termination Date (the "Tail Period") if (i) such purchaser or
purchasers were identified to the Company by HCW during the Authorization
Period, (ii) HCW advised the Company with respect to such purchaser or
purchasers during the Authorization Period or (iii) the Company or HCW had
discussions with such purchaser or purchasers during the Authorization Period.
d. Other Terms. If the Company fails through no fault of the Company
to complete a sale of Securities to one or more purchasers whose offer or offers
in respect thereof the Company shall have accepted, TTR(i) shall hold HCW
harmless against any loss, liability, expense, claim or damage arising from such
failure and (ii) shall pay to HCW all compensation to which HCW would be
entitled hereunder in connection therewith if such sale had been consummated.
HCW shall be entitled to its full compensation under this Section 4
regardless of the structure of the Private Placement or sale of Securities.
Accordingly, Section 4 shall apply to any sale of debt or equity securities by,
or any other investment in, any affiliate of TTR and regardless of the terms and
conditions thereof. Likewise, for purposes of this Agreement, the word
"affiliate", when used with respect to TTR or the Company, shall include
subsidiaries, parents, stockholders and sister companies, the word "purchaser"
shall include investors, partners, co-venturers and members. Additionally, any
parties introduced to the Company during the Tail Period, by a party contacted
by HCW during the Authorization period will be deemed to have been contacted
during the Authoriztion period. If such structure does not consist solely of a
sale of common stock of TTR, appropriate adjustments shall be made to the terms
and conditions of the Warrants so that HCW receives the full benefit intended to
be afforded by Section 4(b).
5. Expenses. Regardless of whether the Private Placement or sale of
Securities is consummated, TTR will pay or cause to be paid the Company's
expenses in connection herewith and
therewith, including: (i) the fees and disbursements of the Company's counsel,
accountants and other representatives and advisers; (ii) the expenses in
connection with the preparation, printing and distribution of the Offering
Materials, definitive agreements and other documents in connection herewith and
therewith; (iii) the expenses in connection with the qualification of Securities
for offering and sale under Blue Sky Laws, including filing fees and fees and
disbursements of counsel for HCW in connection with reviewing applicable Blue
Sky Laws and preparing filings thereunder not to exceed $20,000; (iv) the costs
of preparing certificates representing Securities; (v) the charges of any escrow
agent, transfer agent or registrar; and (vi) all other costs and expenses
incident to the performance of the Company's obligations hereunder and under
definitive agreements (including, without limitation, any taxes payable in
connection with the issuance, sale and delivery of the Securities).
6. Reimbursements. Regardless of whether the Private Placement or sale of
Securities is consummated, the Company shall reimburse HCW, upon request made
from time to time, for all of its reasonable out-of-pocket expenses, not to
exceed $10,000, without the written consent of TTR, incurred in connection with
its engagement and the expenses of any travel that may be necessary.
7. Escrow Account. All proceeds from sales of Securities shall be
deposited in a non-interest bearing escrow account pending the sale of $2
million minimum of Securities. Upon the sale of such minimum amount, there shall
be a first closing of the Private Placement (the "First Closing"). From the date
of the First Closing, all proceeds from further sales of Securities will
continue to be deposited in the escrow account and there shall be a subsequent
closing on the earlier of the sale of the maximum amount of Securities
(cumulative with the amount of Securities sold through the First Closing) or the
Termination Date. HCW will appoint a bank chartered in the State of New York as
the escrow agent. Such appointment will be subject to approval by TTR, which
approval shall not be unreasonably withheld. All fees and expense reimbursements
due to HCW shall be paid out of the proceeds held in the escrow account at each
such closing. The escrow agreement with such bank shall contain provisions
giving effect to this Section 7.
8. Representations, Warranties and Covenants of TTR. TTR represents and
warrants to, and covenants with, HCW as follows:
a. During the Authorization Period, TTR shall not, and shall not
permit its affiliates to, use, disseminate, publish, distribute or refer to any
materials in connection with any offering of Securities, including any Offering
Materials, without HCW's prior consent, except for internal use among the
Company's personnel and representatives.
b. Neither the Company nor any person acting on its behalf has
taken, and TTR shall not and shall not permit its affiliates to take, directly
or indirectly, any action so as to cause any of the transactions contemplated by
this Agreement to fail to be entitled to exemption from registration or
qualification under all applicable securities laws or which constitutes general
advertising or general solicitation (as those terms are used in Regulation D
under the Securities Act) with respect to the Securities.
c. TTR shall, and shall cause its affiliates to, from time to time,
take such action as HCW may reasonably request to qualify Securities for
offering and sale as a private placement under the
securities laws of such states or other jurisdictions as HCW may reasonably
request and to comply with such laws so as to permit such offers and sales.
d. TTR shall, and shall cause its affiliates to, make available to
HCW, or have professionally prepared at the Company's expense, all financial
statements, projections, appraisals, surveys and other information which in
HCW's reasonable judgment shall be necessary or appropriate for the proper
marketing of Securities. TTR shall, and shall cause its affiliates to, upon
reasonable request, cause the Company's directors, officers, personnel, counsel,
accountants and other representatives to meet with HCW or its representatives to
discuss all information relevant for disclosure in any Offering Materials and to
cooperate in any reasonable investigation requested by HCW or its
representatives (including the production of information at the Company's
offices or copies of such information at the offices of HCW and its counsel) for
the purpose of confirming the accuracy and completeness of statements contained
in the Offering Materials.
e. The Offering Materials as of the date thereof and as of the
closing date of each sale of Securities will be complete and correct in all
material respects and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading. TTR shall advise HCW immediately of the
occurrence of any event or circumstance which results in the Offering Materials
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading, and shall furnish to HCW copies of amended or supplemented Offering
Materials that correct such statement or omission in such quantities as HCW may
from time to time reasonably request. All financial or other projections
included in the Offering Materials will be prepared in good faith on the basis
of reasonable assumptions. TTR acknowledges that HCW (i) will be using and
relying primarily on the information in the Offering Materials and information
available from generally recognized public sources in performing the services
contemplated hereunder without having independently verified the same, (ii) does
not assume responsibility for the accuracy or completeness of such information
or of the Offering Materials and (iii) will not make any appraisal of any assets
of the Company.
f. TTR has full corporate power and authority to execute and deliver
this Agreement on behalf of itself and its affiliates and to perform its
obligations hereunder, and all consents, authorizations, approvals and orders
required in connection with the execution, delivery and performance hereof have
been obtained. This Agreement is a valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that the
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors generally and general principles
of equity. The execution, delivery and performance of this Agreement will not
conflict with, result in a breach of any of the terms or provisions of or
constitute a violation or a default under any material agreement or instrument
to which the Company is a party or by which the Company is bound.
g. TTR shall take and shall cause its affiliates to take such
actions as may be required to cause compliance with Section 8(h) and 11. HCW
acknowledges that TTR may cause its affiliates to perform any of its obligations
hereunder; provided, however, that TTR's intention to do so
(or any action by TTR or HCW in respect thereof) shall not relieve TTR from its
obligation to perform such obligations when due.
h. TTR shall cause counsel to the Company to deliver, at each
closing of the Private Placement, an opinion, addressed to HCW and to
purchasers, covering such matters as are typically covered in opinions delivered
in connection with private placements (including, an opinion to the effect that
the Private Placement is exempt from registration under the Securities Act), in
form and substance reasonably acceptable to HCW and its counsel. TTR shall also
cause to be furnished to HCW, at each closing of the Private Placement, (i)
copies of all other legal opinions, "comfort" letters, certificates, agreements
and other documents furnished to purchasers on such closing date and (ii) copies
of all filings made by the Company with the Securities and Exchange Commission
or Blue Sky Law administrators, in each case, in form and substance reasonably
satisfactory to HCW.
9. Representations, Warranties and Covenants of HCW. HCW represents and
warrants to, and covenants with, TTR as follows:
a. None of HCW, its affiliates or any person acting on behalf of HCW
or any of such affiliates has engaged or will engage in any general solicitation
or general advertising (as those terms are used in Regulation D under the
Securities Act) with respect to the Securities.
b. HCW will use its best efforts to conduct the offering and sale of
Securities so that Securities are sold in a transaction or series of
transactions exempt from registration under the Securities Act.
c. HCW will send the Offering Materials only to persons that the HCW
reasonably believes are "accredited investors" (as defined under Rule 501(a) of
the Securities Act).
d. HCW will not make any representation or warranty as to the
Securities or the Company, except those set forth in the Offering Materials.
10. Indemnification. The Company agrees to the indemnification and other
agreements set forth in the attached Indemnification Agreement, the provisions
of which are incorporated herein by reference.
11. Right of First Refusal. HCW shall have a right of first refusal (a)
from the date of the closing until eighteen months after the first closing date
of the Private Placement, to act as (i) the lead managing underwriter in
connection with any public sale of any equity securities (including any public
sale of any securities convertible into or exchangeable or exercisable for
equity securities) of the Company, with the Company having the right to name a
co-manager subject to the approval of HCW, which approval shall not be
unreasonably withheld, (ii) the placement agent in connection with any private
sale of any equity securities (including any private sale of any securities
convertible into or exchangeable or exercisable for equity securities) of the
Company, (iii) the lead placement agent in connection with any private sale of
any debt securities of the Company and (iv) a co-managing underwriter in
connection with any public sale of any debt securities of the Company (and,
unless otherwise agreed by HCW in its sole discretion, HCW shall receive a
minimum of 20% of the gross
underwriting fees, including its pro-rata share of any non-accountable expense
allowances, associated with any sale of debt securities described in this clause
(iv) and HCW's name shall appear as a co-managing underwriter on the cover of
any prospectus used in connection with any sale of debt securities described in
this clause (iv)) The Company shall compensate HCW for services in connection
with any sale described in clause (a) (i), (a) (ii) or (a) (iii) above an amount
that reflects HCW's normal and customary compensation for such services, as
agreed between TTR and HCW in good faith. The rights herein shall not apply in
event of a business combination as defined below.
12. Merger or Acquisition Transactions. If a business combination
involving the Company (other than with Macrovision), including a merger or
consolidation, a sale, purchase or transfer of assets or formation of a joint
venture, or an exchange or tender offer involving outstanding securities (a
"Business Combination"), is consummated, or the Company enters into an agreement
providing for a Business Combination, (a) during the Authorization Period with
any person or (b) during the Tail Period (i) with any person identified to the
Company by HCW during the Authorization Period, (ii) with any person as to which
HCW advised the Company during the Authorization Period or (iii) with any person
with whom the Company or HCW had discussions during the Authorization Period,
then TTR shall pay HCW an amount equal to 2.5% of the Transaction Value (as
defined below), which is payable in cash on the closing date of such Business
Combination; provided, however, that no such payment shall be due if the Company
enters into such an agreement but no Business Combination of any kind is at any
time consummated.
"Transaction Value" shall include the total proceeds and other
consideration paid or received or to be paid or received in connection with a
Business Combination (including amounts paid in escrow), including: (i) cash;
(ii) notes, securities and other property; (iii) liabilities, including debt,
pension , severance and retirement liabilities and guarantees, assumed or
extinguished; (iv) payments to be made in installments; (v) contingent payments
(whether or not related to future earnings or operations); and (vi) dividends
and distributions to stockholders and other equity holders in anticipation of a
Business Combination and cash and other current assets (net of current
liabilities) retained in connection with a Business Combination. If Transaction
Value is paid in whole or in part in the form of securities or other non-cash
consideration, such consideration shall be valued at the fair market value
thereof on the day prior to the closing date of the Business Combination;
provided that, to the extent such consideration consists of securities with an
existing public trading market, such consideration shall be valued at the
average of the closing sales price for such securities on the five trading days
prior to the closing date of the Transaction.
13. Break-up Fee. If HCW's engagement is terminated by the Company during
the Authorization Period without just Cause (as defined below), TTR shall pay
HCW a break-up fee of $75,000, plus all compensation and expense reimbursements
(up to $25,000) due or which may become due hereunder. The break-up fee shall be
credited against fees or amounts which become payable under Section 4(b), 4(c)
or 12. The retainer fee will not be credited against the break-up fee. For
purposes hereof, "Cause" shall mean gross negligence or willful malfeasance by
HCW in the discharge of its material obligations hereunder, illegal acts or
omissions by HCW in the discharge of its obligations hereunder which adversely
affect the Company or consummation of the Private Placement (other than in a de
minimis way), or repeated failure (after notice) by HCW to discharge its
obligations hereunder.
14. Survival of Certain Provisions. The expense, indemnification,
reimbursement and contribution obligations of TTR provided herein and in the
attached Indemnification Agreement HCW's rights to compensation (which term
includes all fees, amounts and Warrants due or which may become due under
Sections 4, 12 and 13) provided herein and HCW's rights under Section s 8(h)
shall remain operative and in full force and effect regardless of (i) any
withdrawal, termination other than for cause by Company or consummation of or
failure to initiate or consummate any transaction described herein, (ii) any
investigation made by or on behalf of HCW and (iii) any termination or the
completion or expiration of this Agreement or HCW's engagement hereunder.
Section 11 shall survive any termination, other than for cause by Company,
provided there has been a closing.
15. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be given in writing and shall be sent by certified mail, return
receipt request or recognized overnight courier or personally delivered (a) if
to the Company, to TTR's office at 2 Hanagar St., Kfar-Saba, 44425, Israel,
attention: Marc D. Tokayer, Chairman & President and (b) if to HCW, to its
office at 245 Park Avenue, 44th floor, New York, NY 10167. attention: Scott
Weisman, Managing Director.
16. Future Advertisements. TTR agrees that HCW has the right to place
advertisements describing its services to the Company under this Agreement in
financial and other newspapers and journals at its own expense following the
first closing date of the Private Placement.
17. Confidentiality. No financial advice rendered by HCW pursuant to this
Agreement may be disclosed publicly in any manner without HCW's prior written
approval, except as may be required by law, regulation or court order but
subject to the limitation below. If the Company is required or reasonably
expects to be so required to disclose any advice, TTR shall provide HCW with
prompt notice thereof so that HCW may seek a protective order or other
appropriate remedy and take reasonable efforts to assure that all of such advice
disclosed will be covered by such order or other remedy. Whether or not such a
protective order or other remedy is obtained, TTR will and will cause its
affiliates to disclose only that portion of such advice which the Company is so
required to disclose.
18. Miscellaneous. This Agreement (including the attached Indemnification
Agreement) sets forth the entire agreement between the parties, supersedes and
merges all prior written or oral agreements with respect to the subject matter
hereof, may only be amended in writing and shall be governed by the laws of the
State of New York applicable to agreements made and to be performed entirely
within such State. The parties shall make reasonable efforts to resolve any
dispute concerning this Agreement, its construction or its alleged breach by
face-to-face negotiations. If such negotiations fail to resolve the dispute, the
dispute shall be finally decided by arbitration in accordance with the rules
then in effect of the American Arbitration Association. Any arbitration will be
conducted in the New York City metropolitan area. TTR (for the Company, for
anyone claiming through or in the name of the Company and on behalf of the
equity holders of the Company) and HCW each hereby irrevocably waives any right
it may have to trial by jury in respect of any claim arising out of this
Agreement or the transactions contemplated hereby.
This Agreement may not be assigned by either party without the prior
written consent of the other party.
If any provision of this Agreement is determined to be invalid or
unenforceable in any respect, such determination will not effect such provision
in any other respect or any other provision of this Agreement.
Please confirm that the foregoing correctly sets forth our agreement
by signing and returning to HCW the enclosed duplicate copy of this Agreement.
Very truly yours,
H.C. Wainwright & Co., Inc.
By: /s/ Scott Weisman
---------------------------
Name: Scott Weisman
Title: Managing Director
Accepted and agreed to as ofthe date first written aboveTTR Technologies, Inc.
By: /s/ Marc D. TokayerName: Marc D. TokayerTitle: Chairman & President |
