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RESTRICTIVE COVENANT AGREEMENT

NonDisclosure Agreement NDA

RESTRICTIVE COVENANT AGREEMENT | Document Parties: TurboChef Technologies, Inc., You are currently viewing:
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TurboChef Technologies, Inc.,

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Title: RESTRICTIVE COVENANT AGREEMENT
Governing Law: Massachusetts     Date: 9/13/2005
Industry: Appliance and Tool    

RESTRICTIVE COVENANT AGREEMENT, Parties: turbochef technologies  inc.
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Exhibit 10.1

 

RESTRICTIVE COVENANT AGREEMENT

 

THIS RESTRICTIVE COVENANT AGREEMENT (the “ Restrictive Agreement ”) is made and entered into as of September 12, 2005 (“ Effective Date ”), by and between TurboChef Technologies, Inc., a Delaware corporation (“ Buyer ”), and David H. McFadden (“ Executive ”).

 

W I T N E S S E T H :

 

WHEREAS, Buyer, Global Appliance Technologies, Inc., a Delaware corporation (“ Seller ”), and all of the stockholders of Seller, have entered into an Asset Purchase Agreement, dated the Effective Date (the “ Definitive Agreement ”), providing for the acquisition by Buyer of substantially all of the assets and the assumption of certain liabilities of Seller (the “ Transaction ”);

 

WHEREAS, Executive is a major stockholder, director and key executive of Seller and has been one of the primary individuals involved in developing certain proprietary technology associated with Seller’s business (the “ Purchased Technology ”), which, along with the goodwill associated with Seller’s business, is one of the most valuable assets being acquired by Buyer in the Transaction;

 

WHEREAS, in light of the foregoing, Executive has extensive and detailed knowledge of the Purchased Technology, and of Seller’s other intellectual property and confidential and proprietary information;

 

WHEREAS, Seller’s business of researching, designing, developing and licensing various heat transfer technologies and cooking methods and services for use by manufacturers of commercial and residential foodservice equipment is highly competitive; and

 

WHEREAS, as a condition of, and in order to induce Buyer to consummate, the Transaction, Executive has agreed to enter into this Restrictive Agreement.

 

NOW, THEREFORE, for and in consideration of the rights and benefits that they will each derive from this Restrictive Agreement and the Definitive Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged conclusively, Buyer and Executive (the “ Parties ”), intending to be legally bound, agree as follows:

 

ARTICLE 1

 

DEFINED TERMS; ACKNOWLEDGMENTS;

REPRESENTATIONS AND WARRANTIES

 

1.1          Defined Terms . For purposes of this Restrictive Agreement, the following capitalized terms shall have the following meanings:

 

(a)          “ Affiliate ” shall mean, as to any specified Person, any other Person that, directly or indirectly through one or more intermediaries or otherwise, controls, is controlled by, or is under common control with the specified Person. As used in this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities of that Person, by contract, or otherwise).

 

 

 

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(b)          “ Business ” shall mean the business of inventing, researching, designing, developing, licensing, marketing and selling various heat transfer technologies and cooking methods, products and services for use by manufacturers of commercial and residential foodservice equipment.

 

(c)          “ Buyer Indemnified Party ” shall mean Buyer and its Affiliates, and each of Buyer’s officers, directors, employees, representatives and agents.

 

(d)          “ Competitive Position ” shall mean (i) Executive’s direct or indirect equity ownership or control of any Competitor, or (ii) an employment, consulting, partnership, advisory, directorship, agency, promotional or independent contractor relationship between Executive and a Competitor, where Executive is to provide employment, consulting, contractual, advisory or other services similar in nature to some or all of the services that Executive provided to Seller. Notwithstanding the foregoing: (x) Executive’s direct or indirect ownership, solely as a passive investment, of equity securities of any entity that is required to file periodic reports with the U.S. Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the securities of which corporation are listed on any securities exchange, quoted on the National Association of Securities Dealers Automated Quotation System or traded in the over-the-counter market shall not constitute a “Competitive Position” if Executive is not a controlling person of, or a member of a group that controls, the entity and Executive does not, directly or indirectly, own one percent (1%) or more of any class of securities of the entity; and (y) a relationship between Executive and a subsidiary, division or Affiliate of a Competitor with annual revenues in excess of $1 billion, which subsidiary, division or Affiliate is not engaged, in whole or in part, in the Business, shall not constitute a “Competitive Position” if such relationship does not involve the provision of employment, consulting, contractual, advisory or other services within the Business.

 

(e)          “ Competitor ” when referring to the Seller, shall mean any Person that is engaged, wholly or in material part, in the Business, or that develops, manufactures, sells, resells or distributes commercial or residential foodservice equipment that are within the Business.

 

(f)          “ Confidential Information ” shall mean all Non-Public (as defined below) information or data of or about Seller, its business, clients and customers, including, but not limited to, information or data about its products, manufacturing processes, intellectual property, know-how, Trade Secrets (as defined below), designs, formulas, developmental or experimental work, computer programs (whether in object or source code), databases, other original works of authorship, customer lists, marketing methods, business plans, and financial information; provided , however , that Confidential Information shall not include information (i) that is or becomes generally available to the public other than as a result of a disclosure by Executive that was not previously authorized by Buyer, or (ii) that becomes available to Executive on a non-confidential basis from a third-party source unaffiliated with Buyer or Seller, provided that such source is not actually known by Executive to be bound by a confidentiality agreement with or other obligation of secrecy to Buyer or Seller. For purposes of the foregoing definition, “ Non-Public ” information is information that is not legally available to or legally accessible by the public.

 

(g)          “ Person ” shall mean any individual, corporation, partnership, limited liability company, association, trust, governmental authority or other entity or organization.

 

(h)          “ Restricted Period ” shall mean the period from and after the consummation of the Transaction on the Effective Date until the tenth (10 th ) anniversary of the Effective Date.

 

(i)          “ Trade Secrets ” shall mean information that constitutes a trade secret under applicable law.

 

 

 

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1.2          Acknowledgements by Executive . Executive acknowledges that by virtue of his ownership of and senior position with Seller, and his critical role in developing the Purchased Technology he has developed substantial expertise in the business operations of Seller and has had extensive access to Trade Secrets and other Confidential Information of Seller. Executive also acknowledges that while Seller’s principal place of business is currently located in Tarrant County, Texas, Seller has conducted business activities throughout the United States and the world, that the relevant market for the Business of Seller is national, international and worldwide in scope, and that there exists intense national, international and worldwide competition for the Purchased Technology and the other products and services of the Business of Seller. Executive also acknowledges that, as an owner of Seller and as one of Seller’s senior most executive officers, his duties for the Seller effectively extended throughout all areas where the Seller conducted business. Executive acknowledges that he will receive significant value and benefit in conjunction with the Transaction as a result of being a major stockholder of Seller, and that he is receiving and will receive substantial financial benefits hereunder. Executive recognizes that Buyer would be irreparably damaged, and its substantial investment in the assets of Seller materially impaired, if Executive were to enter into an activity competing with the Business of Seller in violation of the terms of this Restrictive Agreement or if Executive were to disclose or make unauthorized use of any Confidential Information. Executive expressly acknowledges that he is voluntarily entering into this Restrictive Agreement.

 

1.3          Representations and Warranties . Executive represents and warrants, to and for the benefit of the Buyer Indemnified Parties, that: (a) he has full power and capacity to execute and deliver, and to perform all of Executive’s obligations under, this Restrictive Agreement; (b) neither the execution and delivery of this Restrictive Agreement nor the performance of this Restrictive Agreement will result directly or indirectly in a violation or breach of (i) any agreement or obligation by which he is or may be bound, or (ii) any law, rule or regulation of which Executive has knowledge; (c) Executive has carefully read this Restrictive Agreement; (d) Executive executes this Restrictive Agreement with full knowledge of the contents of this Restrictive Agreement, the legal consequences thereof, and any and all rights which each Party may have with respect to one another; (e) Executive has had the opportunity to receive, and has received, independent legal advice with respect to the matters set forth in this Restrictive Agreement and with respect to the rights and asserted rights arising out of such matters; and (f) Executive is entering into this Restrictive Agreement of Executive’s own free will. Executive’s representations and warranties shall survive until the expiration of the Restricted Period.

 

ARTICLE 2

 

LIMITATION ON COMPETITION

 

Executive agrees that during the Restricted Period, Executive shall not, anywhere in the restricted territory described on Exhibit A to this Restrictive Agreement (the “ Restricted Territory ”), directly or indirectly, alone or in conjunction with any other person or entity, without the express prior written consent of Buyer, seek, accept, or take active steps to prepare for a Competitive Position (it being understood that any continuing education or attending any industry conference or trade show shall not be deemed to be taking “active steps” to prepare for a Competitive Position).

 

ARTICLE 3

 

NON-SOLICITATION AND NON-INTERFERENCE COVENANTS

 

3.1          Clients, Customers, Suppliers and Agents . Executive shall not, directly or indirectly, during the Restricted Period: (a) solicit, or assist with the solicitation of, any Person to whom Seller actually provided services or products (or any Person to whom Seller had actively and directly sought to provide services or products) at any time after November 15, 2002 until the Effective Date

 

 

 

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(“ Customers ”), for purposes of providing products or services that are in competition with those offered by Seller in conduct of the Business, except on behalf of Buyer or its controlled Affiliates; or (b) induce Customers, suppliers, agents or other Persons under contract or otherwise associated or doing business with Seller at any time after November 15, 2002 until the Effective Date, to reduce, alter or sever any such association or business with Buyer and/or its controlled Affiliates.

 

3.2          Personnel . Executive agrees that during the Restricted Period, at any time or for any reason, Executive shall not, directly or


 
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