Exhibit
10.2
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 A. Bolton
(“ 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).
(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.
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
(“
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,
directl
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