Exhibit 10.1
THE EXCHANGE RIGHTS GRANTED HEREUNDER, AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THOSE EXCHANGE RIGHTS, HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN GRANTED TO THE
HOLDER THEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY
EXEMPTIONS UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES
LAWS. THESE EXCHANGE RIGHTS AND THE SECURITIES ISSUED UPON EXERCISE THEREOF MAY
NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED, NOR MAY THESE EXCHANGE RIGHTS BE
EXERCISED, EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS OF THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF
TURBOCHEF HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO TURBOCHEF THAT SUCH
TRANSACTION DOES NOT REQUIRE REGISTRATION OF ANY SUCH SECURITIES.
PREFERRED UNIT EXCHANGE AGREEMENT
THIS PREFERRED UNIT EXCHANGE AGREEMENT (this "AGREEMENT") is entered
into as of the 21st day of May, 2004, by and among TURBOCHEF TECHNOLOGIES, INC.,
a Delaware corporation ("TURBOCHEF"), and those other persons and entities whose
names are set forth on the signature pages hereto (each, a "HOLDER", and
collectively, the "HOLDERS").
W I T N E S S E T H:
WHEREAS, on May 21, 2004, TurboChef, the Holders and Enersyst
Development Center, L.L.C., a Texas limited liability company (the "COMPANY"),
entered into that certain Contribution Agreement (the "CONTRIBUTION AGREEMENT"),
which provided for, among other things, the conversion of the Company from a
Texas limited liability company to a Delaware limited liability company, the
exchange by the Holders of all of the units of membership interest of the
Company owned by each of them for Preferred Units of the Company, and the
acquisition by TurboChef, in exchange for an initial capital contribution, of
Common Units of the Company, all in accordance with the provisions thereof
(collectively, the "CONTRIBUTION"); and
WHEREAS, as a condition to the consummation of the Contribution,
TurboChef and the Holders agreed to enter into this Agreement, pursuant to
which, among other things, each Holder will be granted the right, subject to
certain conditions, to exchange such Holder's Preferred Units for shares of
common stock, par value $.01 per share, of TurboChef;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms have the meanings assigned to them below in this SECTION 1.01.
"AFFILIATE" means, 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.
"AGGREGATE PAYOFF AMOUNT" shall have the meaning ascribed to such term
in the Contribution Agreement.
"AGGREGATE PREFERRED UNIT VALUE" means Thirteen Million Six Hundred
Thousand Dollars ($13,600,000) less the Aggregate Payoff Amount.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the common stock, par value $.01 per share, of
TurboChef.
"COMMON UNITS" shall have meaning given to such term in the Operating
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE PRICE" means average closing price of the Common Stock on the
over-the-counter bulletin board market for the thirty (30) trading days
immediately preceding the date hereof, subject to adjustment as provided in
ARTICLE IV hereof.
"EXCHANGE SHARES" means, as of any given date, the total number of
shares of Common Stock issuable upon the exercise of all Exchange Rights that
remain outstanding as of such date, subject to adjustment as provided in ARTICLE
IV hereof.
"INDIVIDUAL PREFERRED UNIT VALUE" means, with respect to any Holder,
the product obtained by multiplying the Aggregate Preferred Unit Value by such
Holder's Preferred Percentage Interest.
"LAWS" means all laws, codes, statutes, ordinances, orders, judgments,
decrees, administrative or judicial promulgations, injunctions, determinations,
approvals, rules, regulations, permits, certificates, licenses and
authorizations, and all successors, amendments or supplements thereto, of all
governmental authorities with jurisdiction.
"LIEN" means any mortgage, deed of trust, title defect or restriction,
lien or objection, pledge, security interest, hypothecation, restriction,
covenant, transfer restriction, right of first refusal, adverse claim,
conditional sales contract, easement, right-of-way, encumbrance, claims or
charge of any kind or nature whatsoever.
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"OPERATING AGREEMENT" means that certain Amended and Restated Operating
Agreement of the Company, dated of even date herewith, by and among TurboChef
and the Holders.
"PERSON" means an individual, sole proprietorship, partnership,
corporation, association, institution, joint stock company, limited liability
company, trust, joint venture, unincorporated organization, governmental
authority or agency or any other legal entity.
"PREFERRED PERCENTAGE INTEREST" means, with respect to any Holder, the
quotient obtained by dividing the number of Preferred Units held by such Holder
by the total number of Preferred Units issued and outstanding on the date
hereof.
"PREFERRED UNITS" shall have meaning given to such term in the
Operating Agreement.
"REGISTRABLE SHARES" means, as of any given date, the shares of Common
Stock deliverable upon the exercise of Exchange Rights outstanding as of such
date, all shares of Common Stock then-outstanding as a result of the exercise of
Exchange Rights prior to such date, and any additional shares of Common Stock
issued by virtue of such shares pursuant to any stock split, stock dividend,
recapitalization or similar event.
"REGISTRATION EXPENSES" means all expenses incurred by TurboChef in
complying with SECTION 6.01 hereof, including, without limitation, all
registration and filing fees; printing expenses; fees and disbursements of
counsel for TurboChef; state "blue sky" fees and expenses; and accountants'
expenses, including without limitation any special audits incident to or
required by any such registration; but excluding any expenses of counsel for the
Holders.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLING EXPENSES" means all underwriting discounts, selling
commissions and transfer taxes applicable to the sale of Registrable Shares by
the Holders, and all fees of any attorneys engaged by one or more of the Holders
in connection with any such sale.
1.02 CAPTIONS. Captions to Articles, Sections, and subsections of, and
Schedules and Exhibits to, this Agreement are included for convenience of
reference only, and such captions shall not constitute a part of this Agreement
for any other purpose or in any way affect the meaning or construction of any
provision of this Agreement.
ARTICLE II
EXCHANGE RIGHTS
2.01 GRANT OF EXCHANGE RIGHTS. TurboChef hereby agrees that each Holder
is entitled to exchange such Holder's Preferred Units, in the manner set forth
in ARTICLE III, and subject to the other conditions set forth in this Agreement,
for that number of fully paid and non-assessable shares of Common Stock equal to
the quotient obtained by dividing such Holder's Individual Preferred Unit Value
by the Exchange Price (as determined at the close of business on the date
TurboChef receives such Holder's Notice of Exercise pursuant to
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SECTION 3.01(A) hereof) (the foregoing right of exchange being referred to
herein as the "EXCHANGE RIGHT").
2.02 WITHHOLDING OF PREFERRED UNITS; CLAIMS FOR INDEMNIFICATION.
(a) Each Holder acknowledges that a portion of its Preferred Units
are being deposited with TurboChef on the date hereof pursuant to the provisions
of Section 8.08 of the Contribution Agreement, and that such Preferred Units,
the shares of Common Stock into which such Preferred Units are exchanged under
this Agreement, and the proceeds of the sale of any such shares of Common Stock,
shall be subject to and governed by the provisions of Section 8.08 of the
Contribution Agreement.
(b) In the event that any of the Preferred Units deposited with
Purchaser as referenced in SECTION 2.02(A) above are cancelled to satisfy a
claim for indemnification in accordance with Section 8.08 of the Contribution
Agreement, such Holder's Exchange Right with respect to the number of Preferred
Units so cancelled shall terminate, effective as of the date that such Preferred
Units are cancelled, and thereafter such Exchange Right shall no longer be
exercisable with respect to such Preferred Units.
2.03 DURATION. The Exchange Rights shall be exercisable to the extent
and in the manner provided herein for a period of twenty (20) years from the
date hereof, unless sooner terminated as provided herein.
ARTICLE III
METHOD OF EXCHANGE
3.01 MANNER OF EXERCISE. Subject to compliance with the terms and
conditions of this Agreement and applicable securities laws, a Holder may
exercise such Holder's Exchange Right, in whole but not in part, at any time or
from time to time, following the date hereof by:
(a) delivering the form of Notice of Exercise attached hereto as
EXHIBIT A (the "NOTICE OF EXERCISE"), duly executed by such Holder, at the
principal office of TurboChef; and
(b) surrendering any and all certificates representing the
Preferred Units being exchanged, duly endorsed in blank, or accompanied by stock
powers duly executed in blank, by such Holder at the principal office of
TurboChef.
3.02 STOCK CERTIFICATES; FRACTIONAL SHARES. As soon as practicable on
or after its receipt of a Notice of Exercise, TurboChef shall issue and deliver,
or cause its transfer agent to issue and deliver, to the Holder entitled to
receive the same a certificate or certificates for the number of whole shares of
Common Stock issuable upon such exercise (but shall retain such certificates as
represent the shares of Common Stock that are required to be withheld pursuant
to Section 8.08 of the Contribution Agreement), together with cash in lieu of
any fraction of a share equal to such fraction multiplied by the Exchange Price.
No fractional shares or scrip representing fractional shares shall be issued
upon an exercise of an Exchange Right.
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ARTICLE IV
ADJUSTMENTS
4.01 ADJUSTMENTS. The number of Exchange Shares is subject to
adjustment in accordance with the following provisions of this ARTICLE IV,
except to the extent appropriate adjustments are otherwise made pursuant to
TurboChef's Articles of Incorporation, any amendment or restatement thereof, or
by TurboChef's Board of Directors in connection with any event described below:
(a) If TurboChef, at any time or from time to time after the date
hereof, subdivides (by any stock split, stock dividend, recapitalization or
otherwise) the Exchange Shares into a greater number of shares, the Exchange
Price in effect immediately before that subdivision shall be proportionately
decreased. If TurboChef, at any time or from time to time after the date hereof,
combines (by reverse stock split or otherwise) the Exchange Shares into a lesser
number of shares, the Exchange Price in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
SECTION 4.01(A) shall become effective at the close of business on the date the
subdivision or combination becomes effective. Except as otherwise provided in
this Agreement, when any adjustment is required to be made in the Exchange Price
pursuant to this SECTION 4.01(A), the number of Exchange Shares shall be changed
to the number determined by dividing (i) an amount equal to the number of shares
of Common Stock issuable upon the exercise of all Exchange Rights outstanding
immediately prior to such adjustment, multiplied by the Exchange Price in effect
immediately prior to such adjustment, by (ii) the Exchange Price in effect
immediately after such adjustment.
(b) If, at any time or from time to time after the date hereof,
TurboChef shall make or issue, or fix a record date for the determination of
holders of Exchange Shares who are entitled to receive a dividend or other
distribution payable in securities of TurboChef, then and in each such event,
unless such dividend or distribution results in an adjustment of the Exchange
Price pursuant to another provision of this ARTICLE IV, provision shall be made
so that each Holder shall receive upon exercise hereof in addition to the
securities receivable hereupon, the amount of securities of TurboChef that such
Holder would have received had such Holder's Exchange Rights been exercised on
the date of such event and had such Holder thereafter, during the period from
the date of such event to and including the exercise date, retained such
securities receivable by such Holder as aforesaid during such period, giving
application during such period to all adjustments called for herein.
(c) If, at any time or from time to time after the date hereof,
the class of securities issuable upon exercise of the then-outstanding Exchange
Rights shall be changed into the same or a different number of shares of any
class or classes of stock, whether by capital reorganization, reclassification,
or otherwise (other than a subdivision or combination of shares or stock
dividend provided for in SECTION 4.01(A) and SECTION 4.01(B) above, or a merger,
consolidation or sale of assets provided for in SECTION 4.01(D), below), then
and in each such event provision shall be made so that each Holder of such
Exchange Rights shall have the right thereafter to receive on exercise of their
respective Exchange Rights the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification or
other change by holders of the number of shares of the class of securities into
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which such Exchange Rights might have been exercisable for immediately prior to
such reorganization, reclassification or change, all subject to further
adjustment as provided herein.
(d) If, at any time or from time to time after the date hereof,
TurboChef shall merge or consolidate with or into another entity or sell all or
substantially all of its assets, then as part of such merger, consolidation or
sale, TurboChef may, in its sole discretion, take such action as is necessary to
cause:
(i) each Exchange Right outstanding on the date such merger,
consolidation or sale is consummated to be cancelled in exchange for receipt by
each Holder of such Exchange Rights of the kind and amount of shares of stock or
other securities or property which such Holder would have been entitled to
receive upon such merger, consolidation or sale, assuming that such Holder's
Exchange Rights were exercised immediately prior thereto; or
(ii) each Holder of then-outstanding Exchange Rights to
thereafter receive upon exercise of such Holder's Exchange Rights the kind and
amount of shares of stock or other securities or property to which a holder of
the number of shares of Common Stock deliverable upon exercise of such Exchange
Rights was entitled to receive upon such merger, consolidation or sale, and in
such case, appropriate adjustment (as determined in good faith by TurboChef's
Board of Directors) shall be made in the application of the provisions set forth
in this SECTION 4.01(D) with respect to the rights and interests thereafter of
such Holder, to the end that the provisions set forth in this ARTICLE IV
(including provisions with respect to changes in and other adjustments of the
Exchange Price) shall thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock or other property thereafter deliverable upon
exercise of such Exchange Rights.
4.02 CERTIFICATE OF ADJUSTMENT. In each case of any adjustment or
readjustment pursuant to this ARTICLE IV in the Exchange Price, or number or
type of shares issuable upon exercise of outstanding Exchange Rights, TurboChef
at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of the adjusted
Exchange Price. TurboChef shall promptly send (by either first class mail,
postage prepaid or overnight delivery) a copy of each such certificate to each
Holder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TURBOCHEF
5.01 ORGANIZATION. TurboChef is a corporation, duly organized and in
good standing under the laws of the State of Delaware, and has all requisite
power and authority to carry on its business as now conducted by it and to own
and operate its assets as now owned and operated by it.
5.02 AUTHORITY. TurboChef has the full power, legal capacity, and
authority to execute and deliver this Agreement, to perform its respective
obligations hereunder, and to consummate the transactions contemplated hereby.
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5.03 BINDING AGREEMENT; NO VIOLATION. This Agreement constitutes the
legal, valid, and binding obligations of TurboChef, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, reorganization and
other similar laws affecting creditors' rights generally, general equitable
principles and the discretion of courts in granting equitable remedies. Except
as set forth on SCHEDULE 5.03 hereof, the execution and delivery of this
Agreement by TurboChef, the consummation of the transactions contemplated hereby
by TurboChef, and the performance of the covenants and agreements of TurboChef
set forth herein do not, and will not, with or without the giving of notice or
the lapse of time, or both: (a) require the consent, waiver, approval, license
or other authorization of any Person; (b) violate or conflict with any Laws; (c)
breach or constitute a default under any contract to which TurboChef is a party
or by which TurboChef or any of its assets are bound; (d) result in the creation
or imposition of, or afford any Person the right to obtain, any Lien upon any of
the assets of TurboChef; or (e) violate the Articles of Incorporation or Bylaws
of TurboChef.
5.04 CAPITAL STOCK. The shares of Common Stock to be issued hereunder
upon the exercise of Exchange Rights will, at the time of issuance, be duly
authorized, validly issued, fully paid and nonassessable.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS
Each of the Holders hereby represents and warrants to TurboChef as
follows:
6.01 AUTHORITY. Such Holder has the full power, legal capacity, and
authority to execute and deliver this Agreement, to perform its respective
obligations hereunder, and to consummate the transactions contemplated hereby.
6.02 BINDING AGREEMENT; NO VIOLATION. This Agreement constitutes the
legal, valid, and binding obligations of such Holder, enforceable against such
Holder in accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other similar laws affecting creditors' rights generally,
general equitable principles and the discretion of courts in granting equitable
remedies. The execution and delivery of this Agreement by such Holder, the
consummation of the transactions contemplated hereby by such Holder, and the
performance of the covenants and agreements of such Holder set forth herein do
not, and will not, with or without the giving of notice or the lapse of time, or
both: (a) require the consent, waiver, approval, license or other authorization
of any Person (including any spousal consent); (b) violate or conflict with any
Laws; (c) breach or constitute a default under any contract to which such Holder
is a party or by which such Holder or any of its assets, including its Preferred
Units, are bound; (d) result in the creation or imposition of, or afford any
Person the right to obtain, any Lien upon any of the assets of such Holder; or
(e) if such Holder is a corporation, limited liability company or other entity,
violate the articles of incorporation, bylaws, articles of organization,
operating agreement or other related organizational and governing documents of
such Holder.
6.03 TITLE TO PREFERRED UNITS. Such Holder owns, beneficially and of
record, such number of Preferred Units as are set forth beside such Holder's
name on Exhibit A to the
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Operating Agreement, free and clear of any Liens, other than such Liens as are
created by virtue of the provisions of the Operating Agreement.
6.04 INVESTMENT REPRESENTATIONS. Such Holder acknowledges and agrees
that:
(a) The Exchange Right is, and the Common Stock subject to such
Holder's Exchange Right will be, issued to such Holder in reliance upon the
exemption from registration contained in Section 4(2) of the Securities Act, and
in reliance upon the exemptions from registration contained in comparable
exemptions contained in the securities laws of other jurisdictions to the extent
applicable, and any transfer of such Exchange Right or Common Stock may be
restricted or limited as a condition to the availability of such exemptions.
(b) TurboChef's reliance upon such exemptions is based in part
upon such Holder's representations, warranties, covenants, and agreements
contained in this Agreement.
(c) The Exchange Right is, and the Common Stock acquired on
exercise of the Exchange Right will be, acquired for investment for the account
of such Holder and without the intent of participating directly or indirectly in
a distribution of such Exchange Right or Common Stock, and the Exchange Right
and Common Stock will not be transferred except in a transaction that is in
compliance with any and all applicable securities laws.
(d) Such Holder has been supplied with, or has had access to, all
appropriate disclosure information, including risk disclosures, financial
statements and other financial information, of TurboChef, to which a reasonable
investor would attach significance in making investment decisions, and has had
the opportunity to ask questions of, and receive answers from, knowledgeable
individuals concerning TurboChef and its Common Stock.
(e) Such Holder is an "accredited investor" as such term is
defined in Regulation D promulgated under the Securities Act, or has, itself or
together with such Holder's purchaser representative, such knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risks of an investment in TurboChef and the Common Stock.
(f) Such Holder is financially able to bear the economic risk of
its investment in TurboChef, can afford to hold the Common Stock for an
indefinite period and can afford a complete loss of its investment in TurboChef.
ARTICLE VII
PIGGY-BACK REGISTRATION RIGHTS
7.01 REGISTRATION RIGHTS. If, after the date hereof, TurboChef
determines to register any of its securities for its own account or for the
account of other security holders of TurboChef on any registration form (other
than Form S-4 or S-8) which permits the inclusion of any Registrable Shares (a
"PIGGYBACK REGISTRATION"), TurboChef will give the Holders written notice
thereof promptly and, subject to SECTION 7.03, shall include in such
registration all the Registrable Shares specified in a written request, or
requests, made by the Holders within twenty (20) days after receipt of such
written notice from TurboChef, subject to the underwriter
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limitations, if any, described in SECTION 7.03 hereof; PROVIDED, HOWEVER, that
the number of Registrable Shares that any Holder may include in any such
registration shall not exceed the product of (a) the total number of Registrable
Shares then held by such Holder, multiplied by (b) a fraction, the numerator of
which is the total number of Registrable Shares then held by the Holder and the
denominator of which is the total number of Registrable Shares then held by all
Holders. TurboChef shall have the right to withdraw or cease to prepare or file
any registration statement for any offering referred to in this SECTION 7.01
without any obligation or liability to the Holders.
7.02 PARTICIPATION IN UNDERWRITING. If the Piggyback Registration
relates to an underwritten public offering, TurboChef shall so advise each
Holder as a part of the written notice given pursuant to SECTION 7.01. In such
event, the right of a Holder to participate in such registration shall be
conditioned upon such Holder's participation in such underwriting in accordance
with the terms and conditions thereof. Should a Holder propose to distribute its
Registrable Shares through such underwriting, it shall (together with TurboChef)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by TurboChef.
7.03 PRIORITY. If such proposed Piggyback Registration is an
underwritten offering and the managing underwriter for such offering advises
TurboChef in writing that the securities requested to be included therein
exceeds the amount of securities that can be sold in such offering, the number
of Registrable Shares that may be included in the registration shall be
allocated among the Holders exercising rights pursuant to SECTION 7.01, as
nearly as practicable, to the respective amounts of Registrable Shares that each
such Holder had requested to be included, and which were otherwise includable,
in such Piggyback Registration (taking into account any securities to be sold by
other holders with similar registration rights who have requested that such
securities be included in the registration). TurboChef shall advise the Holders
as to the number of Registrable Shares that may be included in the registration
and underwriting as allocated in the foregoing manner. No such reduction shall
be made with respect to securities offered by the Company for its own account.
7.04 WITHDRAWAL. If the Piggyback Registration relates to an
underwritten public offering and any Holder disapproves of the terms of such
underwriting, such Holder may elect to withdraw therefrom by written notice to
TurboChef and the underwriter. Any Registrable Shares so excluded or withdrawn
from such underwriting shall also be withdrawn from such registration.
7.05 DURATION. Subject to the underwriter limitations described in
SECTION 7.03, the Holders shall be entitled to have their Registrable Shares
included in an unlimited number of Piggyback Registrations pursuant to SECTION
7.01.
7.06 ADDITIONAL REGISTRATION MATTERS.
(a) All Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to SECTION 7.01 of this
Agreement shall be borne by TurboChef; and each participating Holder shall
bear such Holder's respective Selling Expenses; PROVIDED, HOWEVER, that if any
jurisdiction in which such securities shall be qualified shall
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require that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by the Holders, then each participating
Holder shall bear such Holder's respective portion of such expenses.
(b) Each Holder, with respect to any registration in which
Registrable Shares held by such Holder are included, shall furnish in writing to
TurboChef such information regarding such Holder and the distribution proposed
by such Holder as TurboChef may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement, and TurboChef shall not be required to
include such Holder's respective securities in any such registration unless such
information shall have been provided.
7.07 INDEMNIFICATION.
(a) Each participating Holder shall, if securities held by such
Holder are included among the securities as to which a registration,
qualification or compliance is being effected, severally and not jointly,
indemnify TurboChef, each of its directors and officers, each underwriter, if
any, of TurboChef's securities covered by such a registration statement, each
Person who "controls" (as defined under the Securities Act) TurboChef or such
underwriter, and each of such controlling person's officers, directors and
partners, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which such statements were made, and shall reimburse
TurboChef, its directors, officers, partners, underwriters and control persons
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to TurboChef
by any such Holder specifically for use therein.
(b) With respect to Holders whose securities are included among
the securities as to which a registration, qualification or compliance is being
effected hereunder, TurboChef shall indemnify such Holders against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which such statements
were made, and shall reimburse such Holders for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action; PROVIDED, HOWEVER, that TurboChef
shall not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based upon written information
furnished to TurboChef by a Holder, the underwriter or any other party seeking
to be indemnified, where such information was provided specifically for use in
such prospectus, offering circular or related document.
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(c) Each party entitled to indemnification under this SECTION 7.07
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be withheld unreasonably), and the Indemnified Party may participate in such
defense at such Indemnified Party's expense. The failure of any Indemnified
Party to give notice as provided herein shall relieve the Indemnifying Party of
its obligations under this SECTION 7.07 only if such failure is prejudicial to
the ability of the Indemnifying Party to defend such action, and only then to
the extent so prejudiced, and such failure shall in no event relieve the
Indemnifying Party of any liability that he or it may have to any Indemnified
Party otherwise than under this SECTION 7.07. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
with respect to such claim or litigation.
(d) If the indemnification provided in SECTION 7.07(A) or SECTION
7.07(B) is unavailable for any reason, the Indemnifying Party agrees to
contribute to the claims, losses, damages and liabilities of the Indemnified
Party in the proportion appropriate to reflect (i) the relative benefits
received by the Indemnified Party, on the one hand, and the Indemnifying Party,
on the other hand, in connection with the transaction(s) from which such claims,
losses, damages or liabilities arose, (ii) the relative fault of the
Indemnifying Party, on the one hand, and the Indemnified Party, on the other, in
connection with such claims, losses, damages or liabilities, and (iii) any other
relevant equitable considerations. The relative fault of the Indemnifying Party,
on the one hand, and of the Indemnified Party, on the other hand, shall be
determined by reference to, among other things, the parties' relative intent,
knowledge, access to information, opportunity to correct or prevent the
circumstances resulting in such claims, losses, damages or liabilities, and
whether any alleged untrue statement or omission or any other alleged conduct
relates to information provided by the Indemnifying Party or other conduct by
the Indemnifying Party (or its employees or other agents), on the one hand, or
by the Indemnified Party, on the other hand.
7.08 TERMINATION OF REGISTRATION RIGHTS. Notwithstanding any provision
to the contrary contained in this Agreement, a Holder's registration rights
under this ARTICLE VII shall automatically terminate on the date when all of the
Common Stock owned by such Holder as a result of the exercise of its Exchange
Rights hereunder is eligible for sale under Rule 144(k) under the Securities
Act.
ARTICLE VIII
OTHER COVENANTS AND AGREEMENTS
8.01 FURTHER ASSURANCES. From and after the date hereof, TurboChef and
the Holders agree to execute, acknowledge, deliver and file, or cause to be
executed, acknowledged, delivered and filed, all further instruments, agreement
or documents as may be necessary to
11
consummate the transactions provided for in this Agreement, and to do all
further things necessary to carry out the purpose and intent of this Agreement.
8.02 LEGENDS. Unless (a) the Registrable Shares have been registered
under the 1933 Act, or (b) in the opinion of counsel for TurboChef such legend
is no longer required in order to ensure compliance with the Securities Act and
all applicable state securities laws, upon the issuance of any of the shares of
Common Stock, all certificates representing such shares shall bear on the face
thereof substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES")
HAVE BEEN ISSUED AND SOLD IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
AND APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN (A) PURSUANT TO AN
EFFECTIVE REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, AND (B) UPON RECEIPT BY THE
ISSUER OF EVIDENCE SATISFACTORY TO IT OF COMPLIANCE WITH THE
SECURITIES ACT AND THE APPLICABLE SECURITIES LAWS OF ANY OTHER
JURISDICTION. THE ISSUER SHALL BE ENTITLED TO REQUIRE AN OPINION OF
COUNSEL SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE WITH THE ABOVE
LAWS. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR
OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND
THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE. INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT
IN THESE SECURITIES FOR AN INDEFINITE PERIOD OF TIME.
8.03 NO STOCKHOLDER RIGHTS.
(a) No Holder shall be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of Common Stock subject to
such Holder's Exchange Right until (i) such Exchange Right shall have been
exercised pursuant to the terms of this Agreement, (ii) TurboChef shall have
issued and delivered the shares of Common Stock to such Holder, and (iii) such
Holder's name shall have been entered as a stockholder of record on the books of
TurboChef, whereupon such Holder shall have full voting and other ownership
rights with respect to such shares of Common Stock issued to such Holder.
(b) The existence of this Agreement shall not affect in any way
the right or power of TurboChef to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business
structure, any merger or consolidation of TurboChef, any issue of debt or equity
securities having preferences or priorities as to the Exchange Stock or the
12
rights thereof, the dissolution or liquidation of TurboChef, any sale or
transfer of all or any part of its business or assets or any other corporate act
or proceeding.
8.04 TRANSFER OR ASSIGNMENT OF RIGHTS.
(a) Neither this Agreement nor any rights hereunder may be
transferred by any Holder without the prior written consent of TurboChef, except
that a Holder may, subject to the terms and conditions of this Agreement, and
compliance with all applicable securities laws, transfer its rights under this
Agreement to a transferee who is acquiring such Holder's Preferred Units in
connection with a transfer of such Preferred Units which is effected in
connection with the transfer provisions of Section 8.1 or Section 8.2 of the
Operating Agreement.
(b) In connection with and as a condition to any assignment or
transfer hereunder, (i) the assigning or transferring Holder must provide to
TurboChef evidence satisfactory to TurboChef that the proposed transfer will be
effected in compliance with all applicable laws, including without limitation
federal and state securities laws, and (ii) the transferee must have executed
and delivered a written agreement, in form and substance reasonably satisfactory
to TurboChef, to assume all of the duties and obligations of the assigning or
transferring Holder under this Agreement, and to be bound by and subject to all
of the terms and conditions of this Agreement.
(c) Except as set forth in this SECTION 8.04, neither this
Agreement nor any rights hereunder may be assigned, transferred, pledged or
hypothecated in any way (whether by operation of law or otherwise), and any
attempted assignment, transfer, pledge, hypothecation or other disposition of
this Agreement or any rights hereunder contrary to the provisions of this
Agreement shall be null and void and without legal effect.
ARTICLE IX
MISCELLANEOUS
9.01 NOTICES. All notices, objections, requests, claims, demands, and
other communications required or permitted hereunder shall be in writing, and
shall be deemed to be delivered and received (a) if personally delivered or, if
delivered by telegram, facsimile, or courier service, when actually received by
the party to whom notice is sent (or upon confirmation of receipt received by
the sender), or (b) if delivered by mail (whether actually received or not), at
the close of business on the third (3rd) business day next following the day
when placed in the mail, postage prepaid, certified or registered, return
receipt requested addressed to the appropriate party or parties, at the address
of such party set forth on the signature pages hereto (or at such other address
as such party may designate by written notice to all other parties in accordance
herewith):
9.02 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein constitute the entire agreement between the parties with respect to the
subject matter hereof, and no party shall be liable or bound to any other party
in any manner by any warranties, representations or covenants with respect to
such subject matter, except as specifically set forth herein or therein.
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9.03 BINDING EFFECT. Subject to the provisions of SECTION 8.04 hereof,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
9.04 THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express or
implied, is intended to confer upon any third party any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
9.05 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York as applied to agreements among residents
of New York made and to be performed entirely within the State of New York, and
without regard to the conflicts of law principles as may otherwise be
applicable.
9.06 JURISDICTION AND VENUE; WAIVER OF JURY TRIAL. Each party to this
Agreement hereby irrevocably agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereunder may be brought in the courts of Fulton County in the State of Georgia
or of the United States of America for the Northern District of Georgia, and
hereby expressly submits to the personal jurisdiction and venue of such courts
for the purposes thereof and expressly waives any claim of improper venue and
any claim that such courts are an inconvenient forum. Each party hereby
irrevocably consents to the service of process of any of the aforementioned
courts in any such suit, action or proceeding, by the mailing of copies thereof
by registered or certified mail, postage prepaid, to its address set forth in
this Agreement, such service to become effective ten (10) days after such
mailing. IF LITIGATION IS BROUGHT TO ENFORCE THIS AGREEMENT, EACH PARTY
KNOWINGLY AND INTENTIONALLY WAIVES THE RIGHT IT HAS TO A TRIAL BY JURY. THE
PARTIES AGREE THIS PROVISION IS A MATERIAL INDUCEMENT TO THE PARTIES' ENTERING
INTO THIS AGREEMENT.
9.07 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall to the extent practicable be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
9.08 AMENDMENTS; WAIVERS; DELAYS OR OMISSIONS. No waiver, amendment,
modification or change of any provision of this Agreement shall be effective
unless and until made in writing and signed by TurboChef and each Holder. No
delay or omission to exercise any right, power or remedy accruing to any party
upon any breach, default or noncompliance of another party under this Agreement
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach, default or
noncompliance under this Agreement or any waiver on any party's part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing and that all
remedies, either under this Agreement or otherwise afforded to a party shall be
cumulative and not alternative.
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9.09 COUNTERPARTS AND SIGNATURE BY FACSIMILE. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. The
facsimile signature of any party to this Agreement for purposes of execution or
otherwise, is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding effect as an original
signature on an original document. At the request of any party, any facsimile or
telecopy document is to be re-executed in original form by the parties who
executed the facsimile or telecopy document. No party may raise the use of a
facsimile machine or telecopier or the fact that any signature was transmitted
through the use of a facsimile or telecopier machine as a defense to the
enforcement of this Agreement or any notice required thereof.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
TURBOCHEF:
TURBOCHEF TECHNOLOGIES, INC.
By: /s/ James K. Price
-----------------------------------------------
Name: James K. Price
----------------------------------------
Title: President and Chief Executive Officer
---------------------------------------
Six Concourse Parkway
Suite 1900
Atlanta, Georgia 30328
Attn: General Counsel
Facsimile: (_____) _____-_______
[signatures continued on following pages]
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CAIRNWOOD FOOD GROUP, LLC
By: /s/ Thayer B. Pendleton
-------------------------------------
Name: Thayer B. Pendleton
------------------------------
Title: President
-----------------------------
24 Woodstock Road, Suite 200
Roswell, Georgia 30075
Attn: Tim Lundberg
Facsimile: (770) 645-0987
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/s/ Sarah Palisi Chapin
-----------------------------------
Sarah Palisi Chapin
[ADDRESS OMITTED]
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/s/ Maxwell T. Abbott
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Maxwell T. Abbott
[ADDRESS OMITTED]
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/s/ John Robert Norris
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John Robert Norris
[ADDRESS OMITTED]
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/s/ Michael J. Dobie
------------------------------------
Michael Dobie
[ADDRESS OMITTED]
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/s/ Neal Cooper
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Neal Cooper
[ADDRESS OMITTED]
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/s/ Carl Jay Dougherty
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Carl Jay Dougherty
[ADDRESS OMITTED]
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/s/ Gwen S. Irwin
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Gwen Irwin
[ADDRESS OMITTED]
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/S/ William Richards
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William Richards
[ADDRESS OMITTED]
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/s/ Alison Brushaber
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Alison Brushaber
[ADDRESS OMITTED]
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/s/ Robert Foreman
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Robert Foreman
[ADDRESS OMITTED]
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/s/ Rusty Rose
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Rusty Rose
[ADDRESS OMITTED]
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/s/ Carol Hunt Kralicek
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Carol Kralicek
[ADDRESS OMITTED]
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the right of
exchange granted pursuant to the attached Preferred Unit Exchange Agreement (the
"AGREEMENT") to exchange __________ Preferred Units of ENERSYST DEVELOPMENT
CENTER, L.L.C., a Delaware limited liability company, for shares of common
stock, par value $.01 per share, of TURBOCHEF TECHNOLOGIES, INC., a Delaware
corporation ("TURBOCHEF"), as provided for therein.
The undersigned has enclosed any and all certificates representing the
Preferred Units to be exchanged hereby, which have been duly endorsed in blank,
or are accompanied by stock powers duly executed in blank.
The undersigned hereby certifies to TurboChef that, as of the date
hereof, the representations and warranties contained in SECTION 6.04 of the
Agreement are true and correct in all material respects on and as of the date
hereof.
Please issue a certificate or certificates for such securities, and pay
any cash for any fractional share, to the undersigned, at the address set forth
below.
Dated: _______________ _____, 20_____.
--------------------------------------
(signature)
--------------------------------------
(print name)
--------------------------------------
--------------------------------------
(address)
NOTE: The above name and signature should correspond exactly with
the name and signature set forth on the signature pages to the
Agreement.