EXHIBIT 10.26
STRATEGIC ALLIANCE AGREEMENT
STRATEGIC ALLIANCE AGREEMENT
This STRATEGIC ALLIANCE AGREEMENT (this "Agreement"), dated as of
September 26, 1997, by and between TurboChef, Inc., a Delaware corporation
("TurboChef"), and Maytag Corporation, a Delaware corporation ("Maytag"),
WHEREAS, TurboChef has expertise in the development of innovative
cooking and other related technologies (the "TurboChef Technologies") and
desires to participate with Maytag in the commercialization of residential and
commercial appliances and vending equipment utilizing the TurboChef
Technologies, and
WHEREAS, Maytag has expertise in manufacturing, market development and
sales of residential and commercial appliances and vending equipment for which
the TurboChef Technologies may offer significant advancement and market place
opportunities,
NOW, THEREFORE, in consideration of the foregoing and the agreements
herein contained, TurboChef and Maytag agree as follows:
ARTICLE I
FORMATION OF STRATEGIC ALLIANCE
Section 1.1. The Alliance; Projects. The parties, by this Agreement,
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form a Strategic Alliance (the "Alliance") to cooperate in the development and
commercialization of highly
innovative products based on leading edge technologies in the areas of heat
transfer, thermodynamics and controls pursuant to the terms and conditions set
out below. The Alliance will by mutual agreement develop and implement specific
projects, the first of which is the XXXXXX, an agreement between TurboChef and
Maytag being appended to this Agreement as Schedule No. 1 and made a part
hereof. The terms of this Agreement shall apply to the XXXXX and to all other
Project agreements which are appended to this Agreement pursuant to Section 1.2,
unless otherwise provided in the related Schedules hereto.
It is contemplated that, during the term of this Agreement, Maytag and
TurboChef, or their respective subsidiaries and affiliates, may discover or
develop new product concepts or applications (in addition to the XXXX) which
could utilize the TurboChef Technologies in conjunction with the Maytag
expertise. If either Maytag or TurboChef, or their respective subsidiaries or
affiliates, propose a significant concept or application of this type ("New
Development"), and if it intends to utilize engineering, marketing research,
distribution or product development services in relation thereto from third
party sources, it shall first give written notice thereof to the other party by
presenting a specific written project proposal relating thereto to the other
party setting forth in reasonable detail the scope of the proposed project.
Neither party is required to
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enter into a specific project agreement with the other party with respect to any
New Development.
The party receiving such notice shall have a reasonable time to
evaluate and respond thereto, provided that if the receiving party shall elect
not to proceed or does not respond in a reasonable time, the presenting party,
upon written notice to the receiving party, shall have the right to develop the
same unilaterally and the receiving party shall have no interest therein.
It is agreed and understood that, except as specifically provided
herein, nothing herein shall
(i) require Maytag or TurboChef to give notice to the other of any
business to be acquired by it by means of a merger, consolidation, purchase
of securities or assets or otherwise; or require Maytag or TurboChef to
permit the other to have access to any proprietary information used in any
such business; or
(ii) require either party to give access to the ongoing research and
development and planning conducted by such party or its subsidiaries and
affiliates.
Section 1.2. Additional Projects. The duties and responsibilities of
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each party with regard to each project
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hereunder (a "Project") shall be specified in the Schedule relating thereto. The
parties acknowledge that it will be necessary to negotiate and enter into
definitive agreements with regard to each Project in areas such as treatment of
intellectual property, marketing, allocation of costs, task responsibility and
other matters. The parties agree to negotiate in good faith to reach mutually
satisfactory agreements as necessary to facilitate each Project.
Section 1.3. Mutual Responsibilities. Each of Maytag and TurboChef
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agree that it will:
(a) facilitate and participate in the exploration and prioritization
of New Developments involving Maytag's residential and commercial appliances and
vending equipment, provided that such activities shall not impede the efforts
required by each party to complete the XXXX and any other then existing
Projects;
(b) provide adequate staffing to explore and prioritize New
Developments in Maytag's residential and commercial appliances and vending
equipment, provided that such staffing shall not impede the efforts required to
complete the XXXX and any other then existing Projects; and
(c) provide access to the research, intellectual property, facilities
and personnel necessary to evaluate New Developments.
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Section 1.4. Commercialization Agreements. Maytag and TurboChef
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agree that should any Project result in the development of any product for which
a significant commercial market exists, they shall each, in good faith,
negotiate and enter into agreements (each a "Commercialization Agreement")
providing for the design, manufacture and distribution of such products for the
exclusive benefits of the parties hereto, specifying the method and source of
such manufacture, the channels of distribution to be employed, the reimbursement
of costs, pricing, the allocation and distribution of profits and losses and
other relevant considerations, including royalties.
Section 1.5. Termination. (a) this Agreement shall not be
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terminable prior to 180 days from the date of this agreement except
(i) at the election of Maytag, upon the material breach of this
Agreement by TurboChef and the failure of TurboChef to cure such breach
within 30 days after receipt of written notice from Maytag requesting such
breach be cured; or
(ii) at the election of TurboChef, upon the material breach of this
Agreement by Maytag, and the failure of Maytag to cure such breach within
30 days after receipt of written notice from TurboChef requesting such
breach be cured.
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(b) after 180 days from the date of this Agreement, this Agreement
shall be terminable by either party for any reason (including a material breach
of this Agreement by the other party) on 30 days advance written notice by
either party.
(c) for the purpose of this Agreement, the term "material breach"
shall mean (i) for the period from the date of this Agreement until the 180th
day thereafter, (w) any failure to perform the requirements of Sections 1.3,
2.1, 2.2, 2.3, 2.5(a), 2.6 and 2.7 or (x) the fact, if true, that the TurboChef
registration statement referred to in Section 2.3 is not declared effective by
the Securities and Exchange Commission on or before such 180th day; and (ii)
after such 180th day shall mean (y) any failure to perform the requirements of
Section 2.5 applicable after such 180th day or of Section 2.6 or (z) the terms
and conditions of the registration rights agreement referred to in Section 2.3.
No such termination shall have any effect on any Commercialization
Agreement in effect on the date of such termination. Termination pursuant to
subsection (a) above, or termination pursuant to subsection (b) above on account
of a material breach, shall (a) have the effects specified in Sections 2.4 and
3.8; and (b) any Project then underway shall be completed in accordance with the
related Project agreement unless the parties otherwise agree in writing.
Termination hereunder shall be without prejudice to any rights or remedies
either party may
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have with respect to the other party's breach of any provision of this
Agreement.
ARTICLE II
STOCK ACQUISITIONS
Section 2.1. Issuance of TurboChef Common Stock. Within 15 days of
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the date of this Agreement:
(a) TurboChef is issuing and selling to Maytag, and Maytag is
purchasing from TurboChef, that number of whole shares of Common Stock, par
value $.01 per share, of TurboChef (the "TurboChef Common Stock"), determined in
accordance with subsection (d) of this Section 2.1 (such shares of TurboChef
Common Stock, together with any TurboChef Common Stock issued with respect
thereto as a stock dividend or stock split, being referred to herein as the
"Acquired TurboChef Common Stock") for the purchase price of $10,000,000 (the
"Purchase Price");
(b) TurboChef is instructing its transfer agent to deliver to Maytag a
certificate, registered in the name of Maytag, representing the Acquired
TurboChef Common Stock, such certificate to bear the following legend:
"The securities represented by this certificate were issued in a
transaction exempt from registration under the Securities Act of 1933.
No transfer of such securities may be made on the books of the Company
unless accompanied by an opinion of counsel, satisfactory to the
Company, that such transfer may be effected without registration under
the Securities Act
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of 1933 or that such securities have been so registered under a
registration statement which is in effect at the date of such
transfer.
The sale, assignment, pledge, encumbrance or other transfer of the
securities represented by this certificate is subject to the
provisions of an agreement, dated as of September 26, 1997, between
the Company and Maytag Corporation, a copy of which is on file at the
principal executive office of the Company."; and
(c) Maytag is delivering $10,000,000, by wire transfer to an account
designated by TurboChef, in payment of the Purchase Price.
(d) The number of shares of TurboChef Common Stock which shall
constitute the Acquired TurboChef Common Stock on the date hereof shall be
determined by multiplying the number of shares of Acquired Maytag Common Stock
(as such term is defined in Section 2.2) by a ratio, the numerator of which is
the Maytag VWAP and the denominator of which is the TurboChef VWAP. The "Maytag
VWAP" is the volume weighted average price per share of the Maytag Common Stock
as reported on the New York Stock Exchange over the two trading days immediately
prior to the date of this Agreement. The "TurboChef VWAP" is the volume
weighted average price per share of the TurboChef Common Stock reported by
NASDAQ over the two trading days immediately prior to the date of this
Agreement.
Section 2.2. Purchase of Maytag Common Stock. Concurrently with the
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execution and delivery of this Agreement:
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(a) TurboChef is placing an order with ▇▇▇▇▇▇ Brothers (the "Broker")
for the purchase on the New York Stock Exchange of that number of whole shares
of Common Stock, par value $1.25 per share (the "Maytag Common Stock"), of
Maytag purchaseable in the ordinary course for an aggregate of $10,000,000 (such
shares of Maytag Common Stock, together with any Maytag Common Stock issued with
respect thereto as a stock dividend or stock split, being referred to herein as
the "Acquired Maytag Common Stock").
(b) TurboChef is instructing the Broker to instruct the transfer agent
for Maytag Common Stock, and Maytag is instructing the transfer agent for Maytag
Common Stock, to include the following legend on the certificates representing
the Acquired Maytag Common Stock:
"The sale, assignment, pledge, encumbrance or other transfer of the
securities represented by this certificate is subject to the
provisions of an agreement, dated as of September 26, 1997, between
the Company and TurboChef, Inc., a copy of which is on file at the
principal executive office of the Company."
Section 2.3. Registration of TurboChef Common Stock. TurboChef agrees
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to take all steps reasonably necessary to cause the Acquired TurboChef Common
Stock to be registered in accordance with Section 5 of the Securities Act of
1933, as amended (the "Act"), in order that any sale of the Acquired TurboChef
Common Stock by Maytag shall be in accordance with the Act. TurboChef agrees to
file a registration statement covering
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the Acquired TurboChef Common Stock under the Act on or before November 26, 1997
and to use its best efforts to cause the Securities and Exchange Commission to
declare such registration statement effective under the Act no later than the
180th day after the date of this Agreement. TurboChef shall, no later than 30
days after the date of this Agreement, have executed and delivered to Maytag a
registration rights agreement, in form and substance reasonably satisfactory to
Maytag and TurboChef, containing customary terms with regard to such
registration, including, without limitation, mutual indemnification.
Section 2.4. Effect of Termination under Section 1.5 for Material
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Breach. (a) In the event that this Agreement is terminated by Maytag pursuant
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to Section 1.5 on account of a material breach by TurboChef, Maytag shall have
the right (i) to retain the Acquired TurboChef Common Stock with the right to
dispose of the same subject only to Section 2.5(e) of this Agreement; or (ii)
upon 20 days advance written notice to TurboChef given within three days after
the date of such termination, to require TurboChef to transfer and assign to
Maytag all of the Acquired Maytag Common Stock then owned by TurboChef (but not
pledged) and transfer and assign a proportionate number of shares of the
Acquired TurboChef Common Stock to TurboChef, such proportion to be based upon
the ratio of the Acquired Maytag Common Stock then owned by TurboChef (but not
pledged) to the total number of shares of Acquired Maytag Common Stock acquired
by TurboChef hereunder.
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(b) In the event that this Agreement is terminated by TurboChef
pursuant to Section 1.5 on account of a material breach by Maytag, TurboChef
shall have the right (i) to retain the Acquired Maytag Common Stock with the
rights to dispose of the same subject only to Section 2.5(e) of this Agreement;
or (ii) upon 20 days advance written notice to Maytag given within three days
after the date of such termination, to require Maytag to transfer and assign to
TurboChef all of the Acquired TurboChef Common Stock then owned by Maytag and
transfer and assign a proportionate number of shares of the Acquired Maytag
Common Stock to Maytag, such proportion to be based upon the ratio of the
Acquired TurboChef Common Stock then owned by Maytag to the total number of
shares of Acquired TurboChef Common Stock acquired by Maytag hereunder.
Section 2.5. Restrictions on Transfer. (a) Except as provided in
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Section 2.4, Maytag shall not sell, pledge, transfer or assign any Acquired
TurboChef Common Stock, and TurboChef shall not sell, pledge, transfer or assign
any Acquired Maytag Common Stock, for a period of 180 days after the date of
this Agreement.
(b) Subject to subsections (c), (e) and (f) below, (i) TurboChef may
sell, pledge, transfer or assign up to 50% of the total number of shares of
Acquired Maytag Common Stock at any time after the 180th day after the date of
this Agreement and (ii) on and after the second anniversary of the date of this
-▇▇-
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ may sell, pledge, transfer or assign any shares of the
Acquired Maytag Common Stock then owned by TurboChef.
(c) It shall be a condition to TurboChef's right to sell, pledge,
transfer or assign Acquired Maytag Common Stock during the period from and after
the 180th day after the date of this Agreement to the second anniversary of the
date of this Agreement that the following occur:
(i) TurboChef shall give written notice to Maytag should it desire to
obtain additional financing for its business; such notice shall specify the
amount and type of financing desired and the proposed uses of the proceeds
thereof;
(ii) within seven days of the receipt by Maytag of such notice,
Maytag shall notify TurboChef in writing as to whether or not it desires to
participate in such financing; if Maytag does not desire to so participate,
TurboChef shall be entitled to sell, pledge, transfer or assign all or any
portion of the Acquired Maytag Common Stock subject to subsections (e) and
(f) below;
(iii) If Maytag elects to participate in such financing, Maytag shall
submit in writing to TurboChef its plan for such financing within seven
days of such notice,
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including, the type of financing proposed by Maytag and the sources
thereof;
(iv) TurboChef shall advise Maytag in writing within seven days of
its receipt of such plan as to whether or not such plan is acceptable to
TurboChef; if TurboChef accepts such plan, Maytag and TurboChef shall each
use their best efforts to consummate such financing, and TurboChef shall
sell, pledge, transfer or assign no shares of the Acquired Maytag Common
Stock unless such sale was part of such financing plan; and
(v) If TurboChef rejects such plan and desires to sell, pledge,
transfer or assign the Acquired Maytag Common Stock as the method of
providing such financing, it shall notify Maytag in writing of such
rejection and intention within seven days of its receipt of such plan and,
subject to subsection (e) below and to Maytag's right of first refusal
contained in subsection (f), it shall have the right to sell, pledge,
transfer or assign the Acquired Maytag Common Stock.
(d) Subject to subsections (e) and (f) below, Maytag shall have the
right to sell that number of shares of the Acquired TurboChef Common Stock
determined by multiplying the total number of shares of Acquired TurboChef
Common Stock by a fraction, the numerator of which is the total number of shares
of
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Acquired Maytag Common Stock sold by TurboChef pursuant to this Section 2.6 and
the denominator of which is the total number of shares of Acquired Maytag Common
Stock; provided that Maytag shall limit such sales to not more than 50,000
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shares of Acquired TurboChef Common Stock per month.
(e) In no event shall any Acquired Maytag Common Stock or TurboChef
Common Stock be sold, assigned or transferred by any party to this Agreement in
violation of the Act or any applicable state securities or "Blue Sky" laws.
Each party shall notify the other of any proposed sale, assignment or transfer
and use its best efforts to arrange such sales so as not to disrupt the market
for the securities being sold.
(f) Neither TurboChef nor Maytag shall sell Acquired Maytag Common
Stock or Acquired TurboChef Common Stock, as the case may be, unless it shall
have first offered the same to the other party in writing for cash at the Volume
Weighted Average Price per share thereof (on the New York Stock Exchange, in the
case of Maytag, or on the NASDAQ National Market, in the case of TurboChef) for
the two trading days prior to the date of such offer. The offeree shall have
three business days to accept such offer in writing and such acceptance, if any,
must be for the entire number of shares so offered. If such offer is so
accepted, the offeror shall sell and transfer such shares to the offeree, and
the offeree shall accept and pay for such shares, no later than the close of
business on the second business day
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following the date of such written acceptance. If such offer is not so accepted,
the offeror shall have the right to sell such shares in accordance with Section
2.5(b), (d) and (e) for a period of 30 days after which such shares shall again
be subject to this subsection (f).
Section 2.6. Standstill. (a) During the period that this Agreement
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is in effect and for a period of five (5) years after the termination thereof,
neither party (the "Initiating Party") nor any of its Affiliates (as such term
is defined in Rule 12h-2 of the Securities Exchange Act of 1934, as amended, the
"Exchange Act") or any other person or entity with whom such party is acting in
concert or shall have formed a "group" within the meaning of Section 13(d)(3) of
the Exchange Act shall, directly or indirectly, (a)(x) solicit, seek or offer to
effect, or effect, or (xx) make any statement or proposal, whether written or
oral, either alone or in concert with others, to the Board of Directors of the
other party, any director or officer of the other party or any stockholder of
the other party, or (xxx) make any public announcement or proposal or offer
whatsoever (including, but not limited to, any "solicitation" of "proxies" as
such terms are defined, or used in Regulation 14A of the Exchange Act) with
respect to, (i) any form of business combination or transaction involving the
other party, including, without limitation, a merger, tender or exchange offer
or liquidation of the other party's assets, (ii) any form of restructuring,
recapitalization or similar transaction with
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respect to the other party, (iii) any purchase of any securities or assets, or
rights or options to acquire any securities or assets (through purchase,
exchange, conversion or otherwise), of the other party if the aggregate amount
of the securities held by the Initiating Party, its Affiliates and/or the
members of any "group" would exceed fifteen percent (15%) of the other party's
issued and outstanding voting securities, (iv) any proposal to seek
representation on the Board of Directors of the other party or otherwise to seek
to control or influence the management, Board of Directors or policies of the
other party, or (b) instigate, encourage, join, act in concert with or assist
(including, but not limited to, providing or assisting in any way in the
obtaining of financing for or acting as a joint bidder or co-bidder for the
other party with) any third party to do any of the foregoing, unless and until
the Initiating Party has received the prior written invitation or approval of a
majority of the Board of Directors of such other party to do any of the
foregoing.
(b) Prior to the execution of any transaction, as described below,
TurboChef shall give prompt written notice to Maytag of any decision by the
Board of Directors of TurboChef (i) to sell all or substantially all of the
assets of TurboChef or any of its subsidiaries, (ii) to merge or consolidate
TurboChef or any of its subsidiaries with or into any third party, (iii) to
approve any offer for more than 15% of its outstanding Common Stock or (iv) for
any other transaction which will result in a
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change in control of TurboChef or its business and assets. Upon receipt of such
notice at its option, Maytag shall have the right to propose such a transaction
to TurboChef involving Maytag, notwithstanding the provisions of subsection (a)
of this Section 2.6.
Section 2.7. Restriction on Trading. The number of shares comprising
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the Acquired TurboChef Common Stock is being derived in part by a formula which
utilizes the Maytag VWAP and the TurboChef VWAP over a designated period of two
trading days. Neither Maytag or TurboChef, nor any of their affiliates, agents
or representatives on their behalf, shall purchase any Maytag Common Stock or
any TurboChef Common Stock during such two day period.
ARTICLE III
INTELLECTUAL PROPERTY RIGHTS
Section 3.1. Intellectual Property. As used herein, the term
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"Intellectual Property" shall include, without limitation, any and all United
States and foreign patents, patent applications, any continuations,
continuations-in-part, and divisionals (the "Patents"); any copyrights, whether
registered or unregistered, mask works, and other copyrightable works (the
"Copyrights"); any computer software applications, software systems, tools,
interfaces, in any form, including object code and source code, in any media,
and related documentation (the
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"Software"); and any proprietary inventions, discoveries, improvements,
know-how, show-how, works-in-progress, processes, designs, concepts,
technologies, ideas, customer information, customer lists, marketing strategies,
market research, industrial designs and any other trade secrets (collectively
the "Trade Secrets").
Section 3.2. Pre-Existing Intellectual Property.
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(a) Retention of Ownership and Rights in Pre-Existing Intellectual
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Property: Each party will retain exclusive ownership of and rights to any
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Intellectual Property (including any derivative works based therefrom or
improvements thereon) which the respective party owned or created prior to the
execution of this Agreement ("Pre-Existing Intellectual Property"). This
Agreement shall not affect the exclusive ownership or rights of each party to
its respective Pre-Existing Intellectual Property (whether before, during or
after the term of this Agreement). Maytag shall own any market research
conducted solely by Maytag or industrial design documents and prototypes done or
produced solely by Maytag as part of a Project.
(b) Limited License to Use the Other Party's Pre-Existing Intellectual
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Property: During the term of this Agreement, each party will be granted, for a
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reasonable royalty, rights to use certain Pre-Existing Intellectual Property of
the other as provided in the specific Project agreements solely for
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the purpose of and to the extent necessary for the work contemplated by such
Project, for commercial products identified or developed in the course of a
Project, and subject to the terms and conditions of Article IV of this
Agreement. The specific terms and conditions of each license for such Pre-
Existing Intellectual Property will be as set forth in the description of the
Project to which the Pre-Existing Intellectual Property is applicable or as set
forth in a separate license agreement relating to a Project and applicable for
the particular type of Pre-Existing Intellectual Property (whether a Patent,
Trade Secret, Copyright or Software, or combination thereof, as the case may
be). However, Maytag's payment to TurboChef of $1,500,000 pursuant to the
agreement for the XXXXX shall entitle Maytag access to (but not necessarily the
use of) all of TurboChef's Pre-Existing Intellectual Property as Maytag shall
reasonably require (including the TurboChef Technologies referred to in Section
4.1) as of the date of this Agreement; provided, however, that such access does
not interfere with any agreed upon completion schedule in any Project agreement.
Section 3.3. Ownership of Improvements, Derivative Works, and other
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Enhancements to Pre-Existing Intellectual Property and Limited License Grant.
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(a) Ownership of Enhancements. Any improvement, modification,
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discovery, process, know-how, derivative work, or other enhancement
("Enhancement") based upon, or related to, a
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Pre-Existing Intellectual Property that is created, invented or discovered in
connection with the performance of a Project shall be owned exclusively by the
owner of the Pre-Existing Intellectual Property.
(b) Limited License to Use. If the other party has contributed to
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the development, creation or discovery of the Enhancement, and if the other
party so requests, then the party that owns the Enhancement shall grant the
contributing party a limited, non-exclusive, non-assignable, revocable license
at a reasonable royalty rate to use such Enhancement in accordance with the
terms and conditions of a license agreement to be mutually agreed upon by the
parties.
Section 3.4. Ownership of Jointly Developed Intellectual Property.
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Any Intellectual Property which are not Enhancements and which are created,
developed, discovered, or invented jointly by the parties during the term of
this Agreement or in connection with a particular Project shall be jointly
owned; provided, however, it shall be the responsibility of Maytag to identify
those creations, developments, discoveries, or inventions which it considers
jointly created, developed, discovered or invented by the parties hereto,
otherwise sole ownership thereof shall accrue to TurboChef.
Section 3.5. Prosecution of Patent Applications Or Other Protection
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For Jointly-Owned Intellectual Property. If the
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parties mutually agree to file and prosecute a patent application, or to seek
other forms of protection as applicable, in the U.S. or elsewhere for a jointly
owned Intellectual Property, the parties will share equally in the expense
incurred in connection with the filing and prosecution of such patent
applications or other protection. The parties will reasonably cooperate and
execute all documents reasonably required to file and prosecute such patent
applications or to obtain such other protection.
If one party elects not to file and prosecute a patent application or
obtain such other applicable protection ("the Non-Electing Party") for a
potential jointly owned Intellectual Property, the other party ("the Electing
Party") may do so at its expense. The Non-Electing Party will reasonably
cooperate with the Electing Party and will execute all documents reasonably
required to file and prosecute such patent applications or obtain such other
protection. In such event, the Intellectual Property shall become the property
of the Electing Party.
Section 3.6. Prosecution of Patent Applications or Other Protection
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for Exclusively-Owned Enhancements. Each party will reasonably cooperate and
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execute all documents reasonably required to assist the party who owns an
Enhancement to file and prosecute a patent application or obtain other
protection for such Enhancement.
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Section 3.7. Employee Matters. Each party will take reasonable
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efforts to secure and protect its ownership in and rights to all work product,
including any inventions, Software, Copyrights, Patents, patent rights, and
Trade Secrets which its employees or agents who are assigned to a Project have
developed or created, or have participated in the development or creation,
including by entering into appropriate written work made-for-hire, and
confidentiality agreements, and assignments of rights in inventions and work
product, with each employee assigned to a Project.
Section 3.8 Termination of Agreement. In the event that this
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Agreement is terminated, all rights, including the licenses to Pre-Existing
Intellectual Property and the Enhancements, under this Article III shall cease,
unless otherwise provided in a separate agreement relating to a Project.
ARTICLE IV
CONFIDENTIALITY
Section 4.1. Confidential Information. Information communicated by
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one party (the "Disclosing Party") to the other (the "Receiving Party") pursuant
to this Agreement or in connection with a Project which the Disclosing Party
considers confidential shall, when communicated in documentary form or on
computer tape or disc or transmitted electronically, be marked, or designated,
as "Confidential." In the event information is
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communicated orally or by transfer of non-documentary materials, the
confidential nature of such information shall be confirmed to the Receiving
Party in writing within twenty days after such disclosure. "Confidential
Information" shall mean any and all information in any form with respect to the
Disclosing Party's technical or business matters which are designated by the
Disclosing Party as "Confidential" in the manner set forth above.
Notwithstanding the provisions of this paragraph, as to those subjects within
TurboChef Technology, it is agreed that all disclosure of information with
respect to said subjects shall be considered "Confidential Information,"
regardless of the form in which it is communicated and whether marked
"confidential" or not, unless otherwise indicated in writing by the Disclosing
Party.
Section 4.2. Maintenance of Confidentiality. During the term of this
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Agreement and for a period of five years thereafter the Receiving Party shall
maintain all Confidential Information of the Disclosing Party in strict
confidence, shall not publish, disseminate, disclose or otherwise make such
Confidential Information available to any third party, and shall not use such
Confidential Information for any purpose other than for the benefit of the
Disclosing Party in a manner approved by the Disclosing Party; provided that, as
to documentation containing Confidential Information which is designated by a
party as "Super Confidential," the obligations of this Section
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4.2 shall remain in force beyond the period specified in this Section 4.2 for so
long as such information remains confidential. The Receiving Party agrees to
limit the dissemination of, and access to, the Confidential Information to
employees of the Receiving Party (together with its legal advisors) who have a
"need to know" such information, provided that such employees shall have entered
into appropriate confidentiality relationships with the Receiving Party so as to
ensure that the Receiving Party has the legal right to implement the terms and
conditions of this Confidentiality Agreement.
Section 4.3. Exceptions. Notwithstanding Section 4.2, the
----------
obligations of confidentiality and non-use on the part of the Receiving Party
shall not apply to information which:
(a) the Receiving Party can establish was publicly known or was
known to the Receiving Party at the time of disclosure;
(b) become publicly known subsequent to the time of disclosure,
provided that such public knowledge is not the result of disclosure of
Confidential Information by the Receiving Party;
(c) is approved for release by prior written authorization of
the Disclosing Party; or
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(d) is required to be disclosed by applicable law, regulation or
legal process (whether by subpoena, civil investigative demand, or
other similar process), provided that if the Receiving Party is so
required to disclose any of the Confidential Information the Receiving
Party will provide the Disclosing Party with prompt notice of any such
request of which the Receiving Party has knowledge so that the
Disclosing Party may seek a protective order or other appropriate
remedy or waive the Receiving Party's compliance with the provisions
of this Confidentiality Agreement, as appropriate. Regardless of
whether the Disclosing Party waives compliance with the terms hereof,
or whether a protective order or other appropriate remedy is obtained,
the Receiving Party will furnish only that portion of the Confidential
Information which is required to be disclosed by such applicable law,
regulation or legal process.
Section 4.4. Remedies. The parties acknowledge and agree that a
--------
breach of this Article IV by either of them would cause irreparable damage to
the non-breaching party, that such damage would be difficult to measure, and
that such damage may not be adequately compensated by monetary damages.
Consequently, the parties agree that each shall be entitled to equitable relief,
including injunction and specific performance, in the event of any breach of the
provisions of this Article IV, in
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addition to all remedies available to the parties at law or in equity.
Section 4.5. Other Agreements. The parties recognize that other
----------------
agreements between them on various subjects related to a Project may contain
confidentiality provisions. Nothing herein shall affect each party's obligation
to fully perform any such provisions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations by Maytag. Maytag represents and
-------------------------
warrants, as of the date of execution of this Agreement and of each Project
agreement (except with respect to Section 5.1(f) and except as may be otherwise
provided in such Project agreement), that:
(a) Maytag has full corporate right, power and authority to
enter into this Agreement and perform its obligations hereunder;
(b) The execution, delivery and performance by Maytag of this
Agreement do not (i) contravene or constitute a default under any
contractual restriction binding on or affecting Maytag or any of its
properties or certificate of incorporation or by-laws or (ii) to
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the best of Maytag's knowledge, require any consent, permit or
approval of any U.S. governmental agency or authority;
(c) This Agreement has been duly executed and delivered by
Maytag and is a legal, valid and binding obligation of Maytag
enforceable against it in accordance with its terms;
(d) To the best of Maytag's knowledge, there are no claims,
judgments or settlements binding on Maytag or any of its affiliates,
or pending or threatened claims or litigation against Maytag or any of
its affiliates, which would prevent or impede its performance under
this Agreement;
(e) To the best of Maytag's knowledge, the execution, delivery
and performance by Maytag of this Agreement do not violate any
intellectual property rights of any other parties; and
(f) Maytag is acquiring the Acquired TurboChef Common Stock for
its own account, for investment and not with a view to the distribution
thereof within the meaning of the Act.
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Section 5.2. Representations by TurboChef. TurboChef represents and
----------------------------
warrants, as of the date of execution of this Agreement and of each Project
Agreement (except as otherwise provided therein), that:
(a) TurboChef has full corporate right, power and authority to
enter into this Agreement and perform its obligations hereunder;
(b) The execution, delivery and performance by TurboChef of this
Agreement do not (i) contravene or constitute a default under any
contractual restriction binding on or affecting TurboChef or any of
its properties or under TurboChef's certificate of incorporation or
by-laws or (ii) to the best of TurboChef's knowledge, require any
consent, permit or approval of any U.S. governmental agency or
authority;
(c) This Agreement has been duly executed and delivered by
TurboChef and is a legal, valid and binding obligation of TurboChef
enforceable against it in accordance with its terms;
(d) To the best of TurboChef's knowledge, there are no claims,
judgments or settlements binding on TurboChef or any of its
affiliates, or pending or threatened claims or litigation against
TurboChef or
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any of its affiliates, which would prevent or impede its performance
under this Agreement;
(e) To the best of the TurboChef's knowledge, the execution,
delivery and performance by TurboChef of this Agreement do not violate
any intellectual property rights of any other parties; and
(f) The shares of Acquired TurboChef Common Stock issued pursuant
to Section 2.1 have been duly authorized and are validly issued, fully
paid and nonassessable.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Entire Agreement; Assignment. This Agreement (a)
----------------------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof and (b) shall not be assigned by operation of law or otherwise;
provided, however, that either party may assign its rights and obligations to
-------- -------
any wholly owned subsidiary, but no such assignment shall relieve the party of
its obligations hereunder.
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Section 6.2 Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, telecopies (which is confirmed by the
recipient) or sent to registered or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses:
If to TurboChef, to:
TurboChef, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Maytag, to:
Maytag Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
Section 6.3. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the substantive laws of the State of Iowa,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
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Section 6.4. Publicity. Except as otherwise required by law or in
---------
accordance with good faith advice by legal counsel, for so long as this
Agreement is in effect, neither TurboChef or Maytag shall issue or cause the
publication of any press release or other public announcement with respect to
the transactions contemplated by this Agreement without the express prior
written approval of the other parties. Without the prior written consent of
Maytag, or TurboChef, as the case may be, the other party shall not use the name
"Maytag" or "TurboChef" or any confusingly similar variations thereof, in any
marketing materials, product descriptions, point-of-purchase materials, or
annual or periodic reports, or otherwise. Such approval and consent, if
granted, will be on a timely basis and will not be unreasonably withheld.
Section 6.5. Dispute Resolution. Except as otherwise provided
------------------
herein, any and all claims or controversies relating to this Agreement shall be
finally resolved by arbitration. Any of the parties to such claim or
controversy shall have the right to submit the same to arbitration by delivery
of a written dated notice (the "Arbitration Notice") for arbitration delivered
to the other party to such claim or controversy. Upon receipt of such
Arbitration Notice, the parties shall have ten days to agree on a single
arbitrator. If no such agreement is reached during such ten day period, each
party shall have 10 additional days to appoint one neutral and impartial
individual to serve on the arbitration panel. Within ten days after such two
arbitrators are selected, a third arbitrator who shall preside shall be
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appointed by the two so selected. Any vacancy which is not filled within ten
days by the parties shall be filled with a neutral and impartial individual by
the American Arbitration Association.
Following designation and appointment of the three arbitrators to
serve on the arbitration panel, the parties to such claim or controversy shall
undertake in good faith informal efforts to mediate and negotiate to resolve
such claim or controversy. If a negotiated solution cannot be achieved within
fifteen days after the date such arbitration panel is constituted, then unless
the parties to such claim or controversy agree otherwise to a reasonable
extension of time in order to negotiate to resolve such claim or controversy,
the arbitration proceeding shall commence.
The Arbitration proceedings shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA")
subject to the following modifications:
(a) discovery shall be permitted under the same standards provided
for in the Federal Rules of Civil Procedure;
(b) the members of the arbitration panel shall interpret and apply
the provisions of this Agreement;
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(c) the arbitration panel shall determine and award costs between the
parties to the arbitration proceedings;
(d) the proceedings will be held in Dallas, Texas, unless the parties
otherwise agree in writing;
(e) to the extent permissible under applicable law, the decisions and
award of the arbitrators shall be final and conclusive, and may be enforced in
any court having prior jurisdiction; and
(f) it is not intended by the parties that the arbitrators shall be
required to be members of the AAA's Panel of Commercial Arbitrators or that the
arbitration be subject to the auspices of the AAA or subject to AAA
administration.
Section 6.6. Independent Contractor. Each party hereto is, and at
----------------------
all times will remain, an independent contractor and will not represent itself
to be the agent, joint venturer, or partner of the other party hereto or to be
related to such other party. No representations will be made or acts done by
either party which would establish any apparent relationship of agency, joint
venture, or partnership.
Section 6.7. Descriptive Headings. The descriptive headings herein
--------------------
are inserted for convenience of reference only
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and are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
Section 6.8. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TURBOCHEF, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President, CEO
MAYTAG CORPORATION
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: VP Strategic Planning
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