Exhibit 10.27
AGREEMENT
AGREEMENT made as of this 27th day of July, 1999, between Xxxxxx X. Xxxxx,
residing at 000 Xxxxxxx Xxx, Xxxxxx Xxxxxxx, XX 00000-0000 ("Xxxxx"), on the one
hand, and TTR Technologies, Inc., a Delaware company with offices at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx ("TTR Inc." or the "Company") and TTR Technologies
Ltd., an Israeli company with offices at 0 XxXxxxx Xxxxxx, Xxxx Xxxx, Xxxxxx
("TTR Ltd." together with "TTR Inc.", the "Companies"), on the other hand.
W I T N E S S E T H
WHEREAS, Xxxxx was employed by TTR Inc. as its Chief Executive Officer
from July 6, 1998 through February 12, 1999, when he resigned from the Companies
pursuant to an employment agreement entered into by Xxxxx and TTR Inc. as of
July 6, 1998 (hereinafter the "Employment Agreement");
WHEREAS, in connection with his employment, Xxxxx was granted stock
options under TTR Inc. Employee Stock Option Plan (1996) ("ESOP") to purchase up
to 250,000 common shares of TTR Inc. at an exercise price per share of $2 15/16,
the per share market price of TTR Inc.'s stock at the time of the grant, which
stock options were to vest over a 5 year period;
WHEREAS, on or about October 28, 1998, in connection with the readjustment
in the salary payable to Xxxxx under the Employment Agreement, Xxxxx returned to
ESOP the stock grant and was awarded, in lieu of such grant, stock options to
purchase up to 250,000 shares at an exercise price of $15/16, the then per share
market price of TTR Inc.'s stock;
WHEREAS, Xxxxx resigned from the employ of TTR Inc. effective as of
February 12, 1999; and
WHEREAS, Xxxxx and the companies desire to settle certain differences
outstanding amongst them relating to the amount of stock options exercisable by
Xxxxx following his resignation and the satisfaction of certain obligations
owing from TTR Inc. to Xxxxx, all on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the terms and conditions hereafter set forth
and the consideration received that adequacy of which is hereby acknowledged,
the parties agree hereafter as follows:
1. Exercise of Stock Options. In consideration of Xxxxx'x waiver of any monies
due to him under the Employment Agreement and in satisfaction of all stock
options issued to him and, in consideration of the releases contained herein,
without any acknowledgement or admittance of liability, TTR Inc. agrees that
Xxxxx shall be deemed to have rightfully exercised his stock options for an
aggregate of 150,000 common shares of TTR Inc. (hereinafter the, "Xxxxx
Shares"). Within 15 days following the execution of this agreement by all of the
parties hereto, TTR Inc. shall issue to Xxxxx share certificate(s) reflecting
the Xxxxx Shares, which certificate(s) may
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be issued as instructed by Xxxxx. Xxxxx may designate a portion of such shares
as being issued in lieu of the expense reimbursement due to him from the
Companies.
2. Inclusion in the Registration Statement, Lock-Up.
(a) Xxxxx and the Companies acknowledge that TTR Inc. is preparing a
registration statement under the Securities Act of 1933, as amended (the "Act"),
relating to certain Company securities held by certain Company shareholders or
the holders of certain rights in Company securities, (the "Registration
Statement"), which Registration Statement is being filed pursuant to the terms
of a Registration Rights Agreement, dated as May 13, 1999, between the Company
and the Initial Investors named therein. It is anticipated that the Registration
Statement will be filed within thirty (30) days of the date hereof, though no
assurance may be given that such Registration Statement will in fact be filed.
In consideration of the releases contained herein, TTR Inc. undertakes to
include the Xxxxx Shares in the Registration Statement.
(b) Lock Up. In consideration of the inclusion of the Xxxxx Shares in the
Registration Statement (the "Registered Shares"), Xxxxx hereby agrees as
follows:
(i) Xxxxx and any of the transferees of the Registered Shares
(except for a Permitted Transferee, as defined below) will not,
directly or indirectly, sell or otherwise transfer, individually or
on a combined basis with such transferees, more than ten percent
(10%) of the Registered Shares as of the date hereof during any
consecutive thirty (30) day period (the shares permitted to be
transferred in each such period are referred to as "Permitted
Shares"); and
(ii) the Company may provide "stop transfer" instructions to
the Company's stock transfer agent to assure compliance with this
agreement, but if the stock transfer agent is not willing to accept
such instructions, the Company may institute other reasonable
procedures to assure compliance with this agreement.
(c) Additional Issuance of Xxxxx Shares if Registration Statement is not
Filed or Does Not Go Effective. If a Registration Statement including the Xxxxx
Shares does not go effective on or before January 31, 2000, then Xxxxx shall be
deemed to have rightfully exercised the balance of his stock options for an
aggregate of 250,000 common shares of TTR Inc. In such case, on or before
February 15, 2000, TTR Inc. shall issue to Xxxxx a certificate reflecting the
issuance of an additional 100,000 common shares of TTR Inc. The exercise price
for these 100,000 additional common shares shall be $100.00.
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The term "Permitted Transferee" means a party acquiring all or a portion
of the Permitted Shares in a transaction made pursuant to, or as contemplated
by, the Registration Statement.
Xxxxx understands and agrees that this agreement is being provided to the
Company for the benefit of, and may be enforceable against the undersigned by,
each of the Company and the Initial Investors. A photocopy of this agreement
shall suffice as evidence of its terms and its enforceability against Xxxxx.
Notwithstanding the foregoing restrictions, Xxxxx may, without obtaining
the consent of any of the Companies, effect a private transfer of all or part of
the Registered Shares, provided the transferee agrees in a writing furnished to
the Company to be bound by all of the terms hereof as if such transferee were an
original signatory hereto (and the provisions of this paragraph 2(b) shall apply
to the undersigned, such transferee and any other of the undersigned's
transferees jointly).
3. Release. In consideration of TTR Inc.'s covenants under Sections 1 and 2
hereunder, Xxxxx (and each of his attorneys, agents, heirs, successors,
executors, personal representatives and assigns) does hereby absolutely and
unconditionally waive, release and forever discharge each of the Companies,
their respective affiliates, officers, directors, shareholders, employees,
agents, attorneys, insurers, successors and assigns, from any claims, demands,
obligations, liabilities, rights, causes of action and damages, whether
liquidated or unliquidated, absolute or contingent, known or unknown, arising
prior to or concurrent with the date hereof including specifically, but without
limiting the generality of the foregoing, claims relating to or arising as a
result of his employment with the Company and the termination of such
employment.
4. Reliance and Complete Agreement. The parties acknowledge and agree that in
the execution of this Agreement, neither has relied upon any representation by
any party or attorney, except as expressly stated herein. Moreover, this
Agreement shall represent the complete and entire agreement between the parties,
to the exclusion of any and all other prior or concurrent terms, written or
oral. No supplement, modification or waiver or termination of this Agreement or
any provision hereof shall be binding unless executed in writing by the parties
to be bound thereby.
5. Headings. Section and subsection headings are not to be considered part of
this Agreement and are included solely for convenience and are not intended to
be full or accurate descriptions of the content thereof.
6. Successors and Assigns. Except as otherwise provided in this Agreement, all
the terms and provisions of this Agreement shall be upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, personal
representatives, successors and assigns.
7. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
8. Arbitration. In the event of any controversy, dispute or claim arising out of
or related to this Agreement or the Executive's employment by the Company, the
parties shall negotiate in good faith in an attempt to reach a mutually
acceptable settlement of such dispute. If negotiations in good faith do not
result in a settlement of any such controversy, dispute or claim, it shall be
finally settled by expedited arbitration in
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accordance with the National Rules of the American Arbitration Association
governing employment disputes, except to the extent deemed modified by the
following:
(i) The Arbitrator shall be determined from a list of names of
five impartial arbitrators each of whom shall be an attorney
experienced in arbitration matters concerning executive
employment disputes, supplied by the American Arbitration
Association (the "Association") chosen by Executive and the
Company each in turn striking a name from the list until one
name remains.
(ii) The expenses of the arbitration shall be borne equally by each
party; and each party shall bear its own legal fees and
expenses, except that the Arbitrator shall have authority to
award to the prevailing party his or its reasonable attorney's
fees and expenses if an award is rendered by the Arbitrator in
such party's favor.
(iii) The Arbitrator shall determine whether and to what extent any
party shall be entitled to damages under this Agreement. No
party shall be entitled to punitive damages, and each party
waives all such rights if any.
(iv) Each party shall prepare a submission and proposed finding
with such affidavits, memoranda of law, exhibits and other
documents as are appropriate to support the position taken by
such party. The Arbitrator shall take such evidence in the
hearing or request further submissions that the Arbitrator
believes would be necessary to evaluate the submission or the
credibility of the evidence, provided that the Arbitrator will
use every effort to avoid a general hearing. The Arbitrator
shall render a decision in writing, providing the reasons and
support therefor. Such determination by the Arbitrator is
intended to constitute an award and will be an award entitled
to full recognition under Article 75 of the New York Civil
Practice Law and Rules.
(v) Subject to subparagraph (d) above, the Arbitrator shall have
the authority to award any remedy or relief provided for in
this Agreement, in addition to any other remedy or relief
(including provisional remedies and relief) that a court of
competent jurisdiction could order or grant. In addition, the
Arbitrator shall have the authority to decide issues relating
to the interpretation, meaning or performance of this
Agreement even if such decision would constitute an advisory
opinion in a court proceeding or if the issues would otherwise
not be ripe for resolution in a court proceeding, and any such
decision shall bind the parties in their continuing
performance of this Agreement. The Arbitrator's written
decision shall be rendered within sixty days of the submission
by both parties, or if the Arbitrator determines to hold a
hearing, then within sixty days of the hearing. The decision
reached by the Arbitrator shall be final and binding upon the
parties as to the matter in dispute. To the extent that
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the relief or remedy granted by the Arbitrator is relief or
remedy on which a court could enter judgment, a judgment upon
the award rendered by the Arbitrator shall be entered in any
court having jurisdiction thereof (unless in the case of an
award of damages, the full amount of the award is paid within
15 days of its determination by the Arbitrator). Otherwise,
the award shall be binding on the parties in connection with
their continuing performance of this Agreement and in any
subsequent arbitration or judicial proceedings between the
parties.
(vi) The arbitration shall take place in New York City or in the
locale of the Company's office in the United States where
Executive is based, as elected by the party commencing
arbitration.
(vii) The arbitration proceeding and all filing, testimony,
documents and information relating to or presented during the
arbitration proceeding shall be disclosed exclusively for the
purpose of facilitating the arbitration process and for no
other purpose and shall be deemed to be information subject to
the confidentiality provisions of this Agreement.
(viii) The parties shall continue performing their respective
obligations under this Agreement notwithstanding the existence
of a dispute while the dispute is being resolved unless and
until such obligations are terminated or expire in accordance
with the provisions hereof.
(ix) The parties may obtain an exchange of information including
depositions, interrogatories, production of documents,
exchange of summaries of testimony or exchange of statements
of position, and the Arbitrator shall limit such disclosure to
avoid unnecessary burden to the parties and shall schedule
promptly all discovery and other procedural steps and
otherwise assume case management initiative and control to
effect an efficient and expeditious resolution of the Dispute.
At any oral hearing of evidence in connection with an
arbitration proceeding, each party and its counsel shall have
the right to examine its witness and to cross-examine the
witnesses of the other party who testify at the hearing.
(x) Notwithstanding the dispute resolution procedures contained in
this Section 8, either party may apply to any court having
jurisdiction (i) to enforce this Agreement to arbitrate, (ii)
to seek provisional injunctive relief so as to maintain the
status quo until the arbitration award is rendered or the
Dispute is otherwise resolved, or (iii) to challenge or vacate
any final judgment, award or decision of the Arbitrator that
does not comport with the express provisions of this Section.
9. Representation. Each Party acknowledges that they have had the opportunity to
consult with legal counsel respecting this Agreement.
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10. Non-Disparagement. Neither Xxxxx (and his respective heirs, personal
representatives, successors) nor any of the Companies (and their respective
officers, directors, employees, agents, attorneys, insurers, successors and
assigns) shall disparage the other parties hereto or their business.
11. Governing Law. This Agreement and the performance hereof shall be construed
and governed in accordance with the internal laws of the State of New York
without reference to principles of conflict of laws.
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IN WITNESS WHEREOF, each of the parties has set forth its/ his signature
as of the date first written above.
TTR Technologies, Inc.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Tokaer
Title: President
/s/ XXXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
TTR Technologies Ltd.
By: /s/ XXXX X. XXXXXXX
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Xxxx Xxxxxxx
Title:
