Exhibit 10.16
SECURITIES PURCHASE AGREEMENT
December 20, 2001
This Agreement sets forth the agreement of TurboChef Technologies,
Inc. (the "Company") and Zeke, LP, (the "Purchaser") with respect to the
purchase of the Shares (as hereinafter defined) by the Purchaser.
1. Purchase of Shares.
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The Company hereby agrees to sell and issue to the Purchaser (i) an
aggregate of 422,535 shares (the "Shares") of the common stock, par value $.01
per share of the Company (the "Common Stock"), and (ii) 92,958 five-year
warrants (the "Warrants"), each Warrant exercisable to purchase one share of
Common Stock, at an exercise price of $ 5.34 per share, and the Purchaser hereby
agrees to purchase from the Company the Shares and the Warrants for an aggregate
purchase price of $1,500,000 on the date hereof (the "Closing Date"). The form
of the Warrant is attached as Exhibit A hereto.
2. Payment for and Delivery of the Shares and Warrants.
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Payment of the purchase price for the Shares and Warrants by the
Purchaser will be made by wire transfer by the Purchaser to the Company on the
Closing Date. Within ten (10) business days following receipt of payment for the
full purchase price of the Shares and Warrants, the Company will issue and
deliver the Shares and Warrants to the Purchaser at the address written in
Section 7.1 of this Agreement.
3. Restrictions on Transfer.
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3.1 The Purchaser understands that the Shares, the Warrants and the
shares of Common Stock issuable upon exercise of the Warrants (the "Warrant
Shares") are "restricted securities" with the meaning of Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Act").
3.2 The Purchaser understands that the certificates representing the
Shares, the Warrants and the Warrant Shares may bear a restrictive legend
thereon substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS, AND ARE
RESTRICTED SECURITIES AS THAT TERM IS DEFINED UNDER RULE 144
PROMULGATED UNDER THE ACT. THESE SECURITIES MAY NOT BE SOLD,
PLEDGED, TRANSFERRED, DISTRIBUTED OR OTHERWISE DISPOSED OF IN
ANY MANNER UNLESS THEY ARE REGISTERED UNDER THE ACT AND ANY
APPLICABLE
SECURITIES LAWS, OR UNLESS THE REQUEST FOR TRANSFER IS
ACCOMPANIED BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND ANY OTHER SECURITIES LAWS."
3.3 The Purchaser understands that the Company will direct the
transfer agent for the Common Stock to place a stop transfer instruction against
the certificates representing the Shares, and upon exercise of the Warrants, the
Warrant Shares, and will instruct the transfer agent to refuse to effect any
transfer thereof in the absence of a registration statement declared effective
by the Securities and Exchange Commission ("SEC") with respect to the Shares or
the Warrant Shares, as the case may be, or a favorable opinion of counsel,
satisfactory to the Company, that such transfer is exempt from registration
under the Act and any other applicable state securities laws ("Other Securities
Laws").
3.4 The Purchaser understands that, except as otherwise provided
herein, the Purchaser will have no rights whatsoever to request, and that the
Company is under no obligation whatsoever to furnish, a registration of the
Shares, Warrants or Warrant Shares under the Act or any Other Securities Laws.
4. Registration Rights.
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4.1 As promptly as reasonably practicable following the Closing Date ,
and in any event, not later than March 31, 2002, the Company will prepare and
file with the SEC a registration statement ("Registration Statement") and such
other documents, including a prospectus, as may be necessary, in order to comply
with the provisions of the Act, so as to permit a public offering and sale of
the Shares and the Warrant Shares by the holders thereof; provided, however,
that the obligation of the Company to file the Registration Statement will not
apply to any Shares or Warrant Shares which in the opinion of counsel to the
Company may be freely traded (without limitation or restriction as to quantity
or timing and without registration under the Act) under Rule 144(k) promulgated
under the Act or otherwise.
4.2 The Company shall pay all costs, fees and expenses in connection
with the filing of the Registration Statement, including the Company's legal and
accounting fees, printing fees, registration and filing fees; provided however,
that the Purchaser shall be solely responsible for the fees of any counsel or
other advisor retained by it in connection with the Registration Statement and
any transfer taxes or underwriting or brokerage discounts, commissions or fees
applicable to the Shares or Warrant Shares.
4.3 The Company's obligation to file the Registration Statement is
conditioned upon the holder of the Shares, Warrants and Warrant Shares to
provide the Company with such information as the Company may reasonable request
for inclusion in the Registration Statement in order to comply with the
provisions of the Act.
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5. Purchaser's Representations and Warranties.
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In order to induce the Company to execute this Agreement and to
consummate the transactions set forth herein, the Purchaser hereby represents
and warrants with and covenants to the Company as follows:
5.1 The Purchaser acknowledges that representatives of the Purchaser
have received and reviewed copies of the Company's Form 10-K for the year ended
December 31, 2000 and Form 10-Q for the quarters ended March 31, 2001, June 30,
2001 and September 30, 2001, respectively, including, in each case, the exhibits
thereto and all of the documents incorporated by reference therein, the
Purchaser's representatives have had the opportunity to ask questions of and
receive answers from qualified representatives of the Company concerning the
business and financial condition of the Company and the terms and conditions of
this Agreement; and all of such questions have been answered to the satisfaction
of the Purchaser's representatives.
5.2 The Purchaser represents that it is a sophisticated investor
familiar with the type of risks inherent in the acquisition of securities such
as the Shares and Warrants and that, by reason of the Purchaser's
representatives' knowledge and experience in financial and business matters in
general, and investments of this type in particular, the Purchaser, through its
representatives, is capable of evaluating the merits and risks of an investment
in the Shares and Warrants.
5.3 The Purchaser is able to bear the economic risk of an investment
in the Shares and Warrants, including, without limiting the generality of the
foregoing, the risk of losing part or all of the Purchaser's investment in the
Shares and Warrants and the Purchaser's possible inability to sell or transfer
the Shares and Warrants for an indefinite period of time.
5.4 The Purchaser is acquiring the Shares and Warrants for its own
account and for the purpose of investment and not with a view to, or for resale
in connection with, any distribution within the meaning of the Act or any Other
Securities Laws, in violation of the Act.
5.5 The Purchaser acknowledges that the Shares and Warrants have not
been registered under the Act or any of the Other Securities Laws, and may not
be sold, transferred or otherwise disposed of, except if an effective
registration statement is then in effect or pursuant to an exemption from
registration under said Act and such Other Securities Laws.
5.6 The Purchaser is an "accredited investor" as that term is defined
in Rule 501(a) of Regulation D promulgated under the Act (a copy of which
definition is attached hereto as Exhibit A).
5.7 The Purchaser has all requisite power and authority to enter into
this Agreement and subscribe for the Shares and Warrants pursuant hereto.
5.8 This Agreement has been duly authorized, executed and delivered by
or on behalf of the Purchaser and constitutes the valid and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with its
terms.
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5.9 The Purchaser acknowledges that the terms of the Warrants are
governed by the Warrant Certificate, the form of which is attached as Exhibit B
hereto.
5.10 The Purchaser acknowledges that the Company has relied on the
representations contained herein and that the statutory basis for exemption from
the requirements of Section 5 of the Act may not be present if, notwithstanding
such representations, the Purchaser were acquiring the Shares and Warrants for
resale or distribution upon the occurrence or non-occurrence of some
predetermined event.
5.11 The Purchaser's principal executive offices are located at the
address set forth in Section 7.1 of this Agreement.
5.12 The Purchaser hereby indemnifies the Company against any losses
it may incur as a result of any breaches by the Purchaser of any of the
representations of the Purchaser contained in this Section 5.
6. Company Representations and Warranties
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In order to induce the Purchaser to execute this Agreement and to
consummate the transactions set forth herein, the Company hereby represents and
warrants with and covenants to the Purchaser as follows:
(i) The Company is a duly incorporated and validly existing
corporation in good standing under the laws of its jurisdiction of
incorporation.
(ii) The Company has the corporate power and authority to
enter into this Agreement and to consummate the transactions provided
for herein. This Agreement has been duly authorized, executed and
delivered by the Company and, assuming it is a binding agreement of the
Purchaser, constitutes a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of creditors'
rights and the application of equitable principles relating to the
availability of remedies and except as rights to indemnity or
contribution may be limited by federal or state securities laws and the
public policy underlying such laws).
(iii) The Shares, the Warrants and the Warrant Shares have
been duly authorized; on the Closing Date, after payment therefor in
accordance with the terms of this Agreement, (A) the Shares will be
validly issued, fully paid and nonassessable, and (B) the Warrants will
be duly authorized, executed and delivered by the Company and will be a
valid and binding agreement on the part of the Company
(iv) The Warrant Shares to be issued by the Company pursuant
to the terms of the Warrants have been duly authorized and, upon
issuance and delivery against payment therefor in accordance with the
terms of the Warrants, will be duly and validly issued and fully paid
and nonassessable.
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7. Miscellaneous.
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7.1 All communications hereunder will be in writing and, except as
otherwise provided, will be delivered at, or mailed by certified mail, return
receipt requested, or telegraphed to, the following addresses: if to the
Purchaser, addressed to 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx , XX 00000; if
to the Company to: TurboChef Technologies, Inc., 000 Xxxxx Xxxxxx, Xxxxx 000,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxxxx Xxxxxxx, Interim Executive
Officer, with a copy to Blank Rome Xxxxxx Xxxxxxxxxx, LLP, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq.
7.2 This Agreement shall be deemed to have been made and delivered in
New York City and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws of the State
of New York. The Purchaser and the Company (1) agrees that any legal suit,
action or proceeding arising out of or relating to this Agreement, shall be
instituted exclusively in New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York,
unless such court shall have refused such jurisdiction, (2) waives any objection
which the Purchaser or the Company may have now or hereafter to the venue of any
such suit, action or proceeding, and (3) irrevocably consents to the
jurisdiction of the New York State Supreme Court, County of New York, and the
United States District Court for the Southern District of New York in any such
suit, action or proceeding. The Purchaser and the Company further agrees to
accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in the New York State Supreme Court, County of
New York, or in the United States District Court for the Southern District of
New York and agrees that service of process upon the Purchaser or the Company,
as the case may be, mailed by certified mail to the Purchaser's address or the
Company's address, as the case may be, set forth in Section 7.1 of this
Agreement shall be deemed in every respect effective service of process upon the
Purchaser or the Company, as the case may be, in any such suit, action or
proceeding.
7.3 Each party hereto agrees to use its reasonable best efforts to take
any action which may be necessary or appropriate or reasonably requested by the
other party hereto in order to effectuate or implement the provisions of this
Agreement.
7.4 The Purchaser's rights under this Agreement are not assignable,
except to a wholly-owned subsidiary or parent company of the Purchaser.
7.5 The rights and obligations of the parties under this Agreement
shall bind and inure to the benefit of the parties and their respective
successors and assigns.
7.6 This Agreement may be executed in separate counterparts, all of
which shall constitute one agreement.
7.7 All notices required or permitted to be given hereunder shall be
personally delivered, sent by courier service or mailed by certified or
registered mail, postage prepaid, to the respective parties at the addresses set
forth herein and shall be deemed given upon receipt.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PURCHASER:
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: GP
COMPANY:
TURBOCHEF TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and CEO
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EXHIBIT A
Accredited Investors
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The term "accredited investor" refers to any person or entity
who comes within any of the following categories, or whom the Company reasonably
believes comes within any of the following categories, at the time of the sale
of the Preferred Shares to such person or entity:
1. Any bank as defined in Section 3(a)(2) of the Securities
Act, or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or
fiduciary capacity; any broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934; any insurance company as defined in Section
2(13) of the Securities Act; any investment company registered under the
Investment Company Act of 1940, or any business development company as defined
in Section 2(a)(48) of that act; any Small Business Investment Company licensed
by the U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958; any plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of a state
or its political subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000; any employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
such act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, investment
decisions are made solely by persons that are accredited investors;
2. Any private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
3. Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;
4. Any director or executive officer of the Company;
5. Any natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his or her purchase exceeds
$1,000,000;
6. Any natural person who had individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years, and has a reasonable
expectation of reaching the same income level in the current year;
7. Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule 506 of
Regulation D; and
8. Any entity in which all of the equity owners are accredited
investors.
