EXHIBIT 1
CONSENT TO TRANSFER
AND
FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT
THIS CONSENT TO TRANSFER AND FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT
(this "AMENDMENT"), is made and entered into as of this 21st day of November,
2003, by and among TURBOCHEF TECHNOLOGIES, INC., a Delaware corporation (the
"COMPANY"), OVENWORKS, LLLP, a Georgia limited liability limited partnership
("OVENWORKS"), XXXXXXX X. XXXXXXX, an individual resident of the State of New
York ("BOGATIN"), and XXXXXX X. XXXXX, an individual resident of the State of
New York ("XXXXX").
W I T N E S S E T H:
WHEREAS, the Company, OvenWorks, Bogatin and Xxxxx are parties to that
certain Stockholders' Agreement, dated as of October 28, 2003 (the "AGREEMENT"),
which sets forth, among other things, certain restrictions on Bogatin's ability
to transfer his shares of the Company's common stock;
WHEREAS, Bogatin proposes to sell up to 1,100,000 shares of the Company's
common stock in a private transaction to Xxxxxxx Xxxxxx Xxxxxx Inc., a Texas
corporation ("SMH") (such proposed sale being referred to herein as the
"TRANSFER");
WHEREAS, pursuant to the terms of the Agreement, the Transfer requires the
prior written consent of the Company and OvenWorks;
WHEREAS, the Company and OvenWorks are willing to grant the aforementioned
consent upon the terms and conditions set forth herein;
WHEREAS, in connection with the Transfer, the parties propose certain
amendments to the Agreement in order to revise certain of the restrictions
relating to Bogatin's ability to transfer his shares of the Company's common
stock, and in order to remove certain rights relating to Bogatin's ability to
nominate and elect a member of the Company's Board of Directors; and
WHEREAS, pursuant to Section 7.8 of the Agreement, the Agreement may be
amended by a writing signed by all parties thereto;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
1. DEFINED TERMS. Terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
2. CONSENT TO TRANSFER. Subject to the conditions and covenants set forth
herein, the Company and OvenWorks hereby consent to the Transfer; PROVIDED,
HOWEVER, that the foregoing consent shall not be deemed a consent to any
other sale, pledge or other transfer of any shares of the Company's common
stock owned beneficially or of record by Bogatin, or a waiver of any other
rights that the Company or OvenWorks may have under the Agreement, as
amended hereby.
3. AMENDMENTS TO AGREEMENT.
3.1 AMENDMENTS TO ARTICLE I.
(a) The definition of "GROSS-UP SHARES" is hereby amended and
restated in its entirety to read as follows:
"GROSS-UP SHARES" means, with respect to Xxxxx, a number of
shares equal to forty percent (40%) of the total number of Shares
issued to Xxxxx pursuant to the terms of (a) that certain
Confidentiality and Non-Competition Agreement, dated as of even
date herewith, between the Company and Xxxxx, and (b) that
certain Resignation and Release, dated as of even date herewith,
between the Company and Xxxxx."
(b) The following definition is hereby added to Article I of the
Agreement following the definition of "EXCHANGE ACT":
"EXEMPT SHARES" means, with respect to Bogatin, a number of
shares equal to Nine Hundred Twenty-Five Thousand (925,000)."
3.2 AMENDMENT TO SECTION 2.1. Section 2.1 of the Agreement is hereby
amended and restated in its entirety to read as follows:
"(a) Except as permitted under SECTION 2.3, for a period
beginning on the date hereof and ending on June 30, 2005
(such period of time being referred to as the "BOGATIN
LOCK-UP PERIOD"), without the prior written consent of the
Company and Purchaser, which may be withheld in their
absolute respective discretion, Bogatin may not sell, offer
or agree to sell, grant any option for the sale of, pledge,
make any short sale or maintain any short position,
establish or maintain a "put equivalent position" (within
the meaning of Rule 16-a-1(h) under the Exchange Act), enter
into any swap, derivative transaction or other arrangement
that transfers to another, in whole or in part, any of the
economic consequences of ownership of his respective Shares,
or otherwise dispose of any Shares. Bogatin hereby
authorizes the Company and its transfer agent, if any, to
decline to transfer and/or note stop transfer restrictions
on the transfer books and records of the Company during the
Bogatin Lock-Up Period with respect to the Shares that are
subject to this SECTION 2.1(A) for which Bogatin is the
record holder, and, in the case of any such Shares for which
Bogatin is the beneficial but not the record holder, agrees
to cause the record holder to authorize the Company and its
transfer agent, if any, to decline to transfer and/or note
stop transfer restrictions on such books and records with
respect to such Shares.
(b) Except as permitted under SECTION 2.3, for a period
beginning on the date hereof and ending eighteen (18) months
from the date hereof (such period of time being referred to
as the "XXXXX LOCK-UP PERIOD"), without the prior written
consent of the Company and Purchaser, which may be withheld
in their absolute respective discretion, Xxxxx may not sell,
offer or agree to sell, grant any option for the sale of,
pledge, make any short sale or maintain any short position,
establish or maintain a "put equivalent position" (within
the meaning of Rule 16-a-1(h) under the Exchange Act), enter
into any swap, derivative transaction or other arrangement
that transfers to another, in whole or in part, any of the
economic consequences of ownership of his respective Shares,
or otherwise dispose of any Shares. Xxxxx hereby authorizes
the Company and its transfer agent, if any, to decline to
transfer and/or note stop transfer restrictions on the
transfer books and records of the Company during the Xxxxx
Lock-Up Period with respect to the Shares that are subject
to this SECTION 2.1(B) for which Xxxxx is the record holder,
and, in the case of any such Shares for which Xxxxx is the
beneficial but not the record holder, agrees to cause the
record holder to authorize the Company and its
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transfer agent, if any, to decline to transfer and/or note
stop transfer restrictions on such books and records with
respect to such Shares."
3.3 AMENDMENTS TO SECTION 2.2. Section 2.2(a) of the Agreement is hereby
amended and restated in its entirety to read as follows:
"(a) With respect to each Stockholder, following the expiration
of his respective Lock-Up Period, until such time as the
outstanding shares of Series D Stock and the shares of
Common Stock outstanding as a result of the conversion of
Series D Stock represent, on a fully-diluted, as converted
basis, less than twenty-five percent (25%) of the
outstanding capital stock of the Company, if such
Stockholder proposes to sell, pledge, or otherwise transfer
any of his Shares to any Person, other than pursuant to the
provisions of SECTION 2.3, then he shall first give
simultaneous written notice to the Company and Purchaser
(such written notice being referred to as the "TRANSFER
NOTICE") that (i) sets forth the number of Shares he
proposes to sell (the "OFFERED SHARES"), (ii) sets forth the
name and address of the proposed purchaser (the "PROPOSED
PURCHASER"), (iii) sets forth the price and other terms of
the proposed sale, and (iv) includes a copy of the bona fide
written offer received by such Stockholder from the Proposed
Purchaser."
3.4 AMENDMENTS TO SECTION 2.3.
(a) Section 2.3(a) of the Agreement is hereby amended and restated in
its entirety to read as follows:
"(a) The provisions of SECTION 2.1 and SECTION 2.2 shall not
apply to (i) the Gross-Up Shares, (ii) to any sale of Shares
to the public pursuant to a registration statement filed
with, and declared effective by, the SEC under the
Securities Act, or (iii) to the Exempt Shares, provided that
(A) such Exempt Shares are sold to, or in connection with
"brokers transactions" effected through, Xxxxxxx Xxxxxx
Xxxxxx Inc., a Texas corporation ("SMH"), or if at the time
of sale SMH is no longer conducting a brokerage business,
through Xxxx Xxxxx or any broker-dealer with whom Xx. Xxxxx
is associated at the time of sale (together with SMH, the
"DESIGNATED BROKER"), and (B) Bogatin uses his reasonable
best efforts to minimize the impact, whether positive or
negative, of such sales on the trading market for the
Company's Common Stock."
(b) Section 2.3(b) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(b) Notwithstanding the restrictions set forth in SECTION
2.1 or SECTION 2.2:
(i) either Stockholder shall be permitted to transfer
Shares to a Permitted Transferee in accordance with
ARTICLE V;
(ii) Bogatin shall be permitted to sell, during each
calendar quarter beginning on January 1, 2004, a
numberof Shares not to exceed One Hundred Thousand
(100,000); PROVIDED, HOWEVER, that (A) any such
Shares shall be sold to, or in connection with
"brokers transactions" effected through, the
Designated Broker, and (B) Bogatin uses his
reasonable best efforts to minimize the impact,
whether positive or negative, of such sales on the
trading market for the Company's
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Common Stock. Any transfers of Shares received by
Persons from Bogatin or his Affiliates shall be
aggregated for the purposes of calculating the
transfer limitations pursuant to this
SECTION 2.3(B)(II); and
(iii) Xxxxx shall be permitted to sell, on a monthly
basis, a number of Shares not to exceed ten percent
(10%) of the average daily reported volume of
trading in the Company's Common Stock on all
national securities exchanges and/or reported
through the automated quotation system of a
registered securities association during the prior
month. Any transfers of Shares received by Persons
from Xxxxx or his Affiliates shall be aggregated
for the purposes of calculating the transfer
limitations pursuant to this SECTION 2.3(B)(III)."
3.5 AMENDMENTS TO ARTICLE IV. Article IV of the Agreement is hereby
amended and restated in its entirety to read as follows:
"ARTICLE IV
CORPORATE GOVERNANCE
[INTENTIONALLY OMITTED]"
4. MISCELLANEOUS.
4.1 CONSTRUCTION. This Amendment is an amendment to the Agreement, and
said Agreement and this Amendment shall henceforth be read together.
The Agreement as amended and supplemented by this Amendment is in all
respects confirmed and preserved.
4.2 HEADINGS. The Section headings herein are for convenience only and
shall not affect the construction hereof.
4.3 SEVERABILITY. In case any provision of this Amendment 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.
4.4 COUNTERPARTS. This Amendment 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.
4.5 GOVERNING LAW. This Amendment shall be governed by and construed under
the laws of the State of Delaware as applied to agreements among
residents of Delaware made and to be performed entirely within the
State of Delaware, and without regard to the conflicts of law
principles as may otherwise be applicable.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have executed, or caused this Amendment to
be executed by their duly authorized agents or representatives, as of the day
and year set forth beside their respective signatures below.
TURBOCHEF TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
President and Chief Executive Officer
OVENWORKS, LLLP
By: Oven Management, Inc.,
its General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
