EXHIBIT 10.1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NO INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD BY THE HOLDER HEREOF EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SAID ACT.
TURBOCHEF TECHNOLOGIES, INC.
NON-NEGOTIABLE 8% PROMISSORY NOTE
$1,000,000 April 20, 2001
FOR VALUE RECEIVED, the undersigned, TurboChef Technologies, Inc., a
Delaware corporation (the "Payor"), having its principal executive office at
10500 Metric Drive, Suite 128, Dallas, Texas, 75243, promises to pay to Donald
J. Gogel ("Payee"), whose address is 31 Masterson Road, Bronxvile, New York
10708, the principal sum of One Million Dollars ($1,000,000) on April 20, 2003
(the "Maturity Date"). The principal amount of this Note outstanding from time
to time shall bear interest at the rate of eight percent (8%) per annum and
interest shall accrue from the date hereof through the Maturity Date (or until
any such earlier date of either prepayment if this Note is prepaid as
hereinafter provided or conversion, if this Note is converted into shares of the
Payor's preferred stock as hereinafter provided). Interest accrued on this Note
shall be payable semi-annually, in arrears, on the 20th day of April and October
with the first interest payment commencing on October 20, 2001 (or on such
earlier date of prepayment if this Note is prepaid as hereinafter provided).
This Note is issued and subject to the following additional terms and
conditions:
1. Voluntary Prepayment. The principal amount of this Note outstanding
may be prepaid at any time, in whole, without premium or penalty, but with
accrued interest thereon through the prepayment date.
2. Payments. All payments on this Note shall be made in such currency of
the United States of America as shall be legal tender for payment of public and
private debts at 31 Masterson Road, Bronxville, New York 10708, or such other
place as the holder of this Note may designate by written notice given to the
Payor from time to time. All such payments shall be made in funds immediately
available at the place of payment not later than 5:00 p.m., on the date of
payment. Any payment which shall fall due on a Saturday, Sunday or public
holiday in the State of New York, shall be made on the next succeeding business
day, and in the case of a principal payment, interest shall continue to accrue
on the amount of such payment until the same has been made to Payee.
3. Maximum Interest Rate. In no event shall Payee be entitled to receive
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interest, however characterized and including other consideration received in
connection with this Note, at an effective rate in excess of the maximum rate
allowable under applicable law (the "Maximum Rate"). In the event that a court
of competent jurisdiction determines that such amounts paid or agreed to be paid
by the Payor in connection with this Note causes the effective interest rate on
this Note to exceed the Maximum Rate, such interest or other consideration shall
automatically be reduced to a rate which results in an effective interest rate
under this Note equal to the Maximum Rate over the term hereof, and, in such
event, any amounts received by Payee deemed to constitute excessive interest
shall be applied first to the payment of accrued unpaid interest on this Note
and then to the reduction of the unpaid principal balance of this Note.
4. Automatic Conversion.
4.1 Upon the approval of the stockholders of the Payor ("Stockholder
Approval"), the entire outstanding principal amount of this Note shall, on the
business day immediately following the date of Stockholder Approval, be
automatically converted, without any additional action on the part of the Payee,
into (i) fully paid and non assessable shares of preferred stock, $1.00 par
value (the "Convertible Preferred Stock"), of Payor and (ii) warrants (the
"Warrants") to purchase that number of shares of common stock, $.01 par value of
the Payor (the "Common Stock") equal to fifty (50%) percent of the number of
"Conversion Shares" (as defined below) into which the Convertible Preferred
Stock shall then be convertible. Each share of Convertible Preferred Stock will
(i) have a liquidation preference of $100 per share, (ii) be entitled to a
dividend of $8.00 per share, which dividend will be payable semi-annually, at
the Payor's option, in cash or in shares of Common Stock valued at the then fair
market value, (iii) be convertible into shares of Common Stock ("Conversion
Shares") at a conversion price per Conversion Share equal to the closing sale
price of the Common Stock on the date of this Note, and (iv) contain anti-
dilution provisions identical to those contained in the Certificate of
Designation relating to the Payor's Series B Convertible Preferred Stock. The
Warrants, if issued, shall have a term of ten (10) years, shall be exercisable
in three equal annual installments commencing one (1) year from date of
issuance, and shall be exercisable at an initial exercise price equal to 120% of
the closing sale price of the Common Stock on the date of this Note. Upon
conversion of the principal amount of this Note as provided above, any accrued
but unpaid interest on this Note will be paid, such payment, to be made, at the
Payor's option, in cash, additional shares of Convertible Preferred Stock or
shares of Common Stock valued at the closing sale price of the Common Stock on
the date of this Note.
4.2 Upon receipt of Stockholder Approval, the Payor shall provide
the Payee with written notice of the conversion as provided in 4.1 above, and
the Payor shall surrender this Note to the Payor at the Payor's principal
executive office.
4.3 As promptly as practical after (i) receipt of Stockholder
Approval and (ii) the surrender by Payee of this Note to the Payor, the Payor
shall deliver or cause to be delivered to Payee, certificate(s) representing
fully paid and nonassessable shares of Convertible Preferred Stock and Warrants
issued in the name of Payee and payment of all accrued and unpaid interest as
provided in 4.1 above, and a cash adjustment in respect of any fraction of a
share to which Payee shall otherwise be entitled. No fractional shares of
Convertible Preferred Stock, Warrants or Common Stock shall be issued upon the
surrender of this Note for conversion.
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5. Event of Default. If any of the following conditions, events or acts
shall occur:
5.1 The failure by the Payor to make any payment hereunder as and
when the same shall become due and payable; or
5.2 The dissolution of the Payor or any vote in favor thereof by the
stockholders and the board of directors of the Payor; or
5.3 The Payor's insolvency, assignment for the benefit of creditors,
application for or appointment of a receiver, filing of a voluntary or
involuntary petition under any provision of the Federal Bankruptcy Code or
amendments thereto or any other federal or state statute affording relief to
debtors; or there shall be commenced against the Payor any such proceeding or
filed against the Payor any such application or petition which proceeding,
application or petition is not dismissed or withdrawn within one hundred twenty
(120) days of commencement or filing, as the case may be; or
5.4 The admission in writing of the Payor's inability to pay its
debts as they mature;
Then, in any such event, Payee shall have the right to declare an event of
default hereunder, and the indebtedness evidenced by this Note shall immediately
upon such declaration become due and payable, both as to principal and accrued
interest.
6. Restriction on Transfer. By his acceptance of this Note, Payee
acknowledges that neither this Note, the shares of Convertible Preferred Stock,
Conversion Shares, Warrants or shares of Common Stock underlying the Warrants
(the "Warrant Shares") have been registered or qualified under the securities
laws of the United States of America or any state thereof. By his acceptance of
this Note, Payee acknowledges and represents that this Note has been, and the
shares of Convertible Preferred Stock, Conversion Shares, Warrants and Warrant
Shares and any shares of the Payor's capital stock that may be received by the
Payee in lieu of cash payment of interest or dividends under this Note or the
Convertible Preferred Stock, as the case may be, if acquired, shall be, acquired
for investment and, no interest in this Note, the Convertible Preferred Stock,
Conversion Shares, Warrants, Warrants Shares or shares of capital stock received
by the Payee in lieu of cash payments of interest or dividends, may be offered
for sale, sold, delivered after sale, transferred, pledged, or hypothecated in
the absence of registration and qualification thereof under applicable federal
and state securities laws unless in the opinion of either counsel to the Payor
or counsel of Payee reasonably satisfactory to the Payor such registration and
qualification are not required. Nether this Note nor any interest therein may be
assigned by the Payee without the written consent of the Payor except pursuant
to the laws of descent and distribution.
7. Miscellaneous.
7.1 The headings of the various paragraphs of this Note are for
convenience of reference only and shall in no way modify any of the terms or
provisions of this Note.
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7.2 All notices required or permitted to be given hereunder shall be
in writing and shall be deemed to have been duly given when personally delivered
or sent by registered or certified mail, return receipt requested, postage
prepaid, to the address of the intended recipient set forth in this Note or at
such other address as the intended recipient shall have hereafter given to the
other party hereto pursuant to the provisions hereof.
7.3 If this Note is not paid when due, the Payor shall pay all costs
associated with the enforcement of the terms and payment of this Note, including
reasonable attorney's fees, which shall be added to the amount due and
recoverable under this Note.
Payee shall not be subject to (and the Payor hereby expressly waives as against
Payee) any defenses, set-offs, counterclaims, or other objections to the payment
of this Note.
7.4 The Payor hereby waives presentment for payment, notice of
dishonor, protest, notice of protest and any demand whatsoever.
7.5 This Note may not be changed or terminated orally, but only by
an agreement in writing and signed by the party against whom enforcement or any
waiver, change, modification or discharge is sought.
7.6 This Note and the obligations of the Payor and the rights of
Payee shall be governed by and construed in accordance with the laws of the
State of New York without giving effect to choice of law principles.
7.7 This Note shall bind the Payor and its successors.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by the
undersigned.
TURBOCHEF TECHNOLOGIES, INC.
By: /s/ Richard N. Caron
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Name: Richard N. Caron
Title: President & CEO
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