Exhibit 10.16
SECURITIES PURCHASE AGREEMENT
Dated as of March 19, 2001
This Agreement sets forth the agreement of TurboChef Technologies,
Inc. (the "Company") and Grand Cheer Ltd. (the "Purchaser") with respect to the
purchase of the Shares (as hereinafter defined) by the Purchaser.
1. Purchase of Shares.
------------------
The Company hereby agrees to sell and issue to the Purchaser (i) an
aggregate of up to 20,000 shares (the "Shares") of Series B convertible
preferred stock, par value $1.00 per share (the "Preferred Stock"), of the
Company, and (ii) 1,000,000 warrants (the "Warrants"), each Warrant exercisable
to purchase one share of common stock, par value $.01 per share (the "Common
Stock") of the Company, at an exercise price of $1.20 per share, and the
Purchaser hereby agrees to purchase from the Company the Shares and the Warrants
for an aggregate purchase price of $2,000,000 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.
---------------------------------------------------
Payment of the $2,000,000 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 above.
3. Restrictions on Transfer.
------------------------
3.1 The Purchaser understands that the Shares, the Warrants, the shares of
Common Stock issuable upon conversion of the Shares (the "Conversion Shares")
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, the Conversion Shares and the Warrant Shares will 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 upon conversion of the Shares or
exercise of the Warrants, the Company will direct the transfer agent for the
Common Stock to place a stop transfer instruction against the certificates
representing the Conversion Shares or Warrant Shares, as the case may be, 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 Conversion Shares or 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, Conversion Shares or Warrant Shares under the Act or any Other
Securities Laws.
4. Registration Rights.
-------------------
4.1 At any time following the Closing Date, the Purchaser shall have the
right (the "Demand Right"), exercisable by written notice to the Company, to
have the Company prepare and file with the SEC, on one occasion, a 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 Conversion Shares and Warrant Shares by the holders
thereof; provided, however, that the Demand Right will not apply to any
Conversion 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 Demand Right, including the Company's legal and accounting fees, printing
fees, registration and filing fees and blue sky fees and expenses; 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 Demand Right and
any transfer taxes or underwriting or brokerage discounts, commissions or fees
applicable to the Conversion Shares or Warrant Shares.
-2-
5. Purchaser's Representations and Warranties.
------------------------------------------
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-KSB for the year ended
December 31, 1999, as amended, and Form 10-QSB for the quarter ended September
30, 2000, including, in each case, the exhibits thereto and all of the documents
incorporated by reference therein, and the Designation (as hereinafter defined);
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 its representatives are 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's
representatives are 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).
5.7 The Purchaser has all requisite power and authority to enter into this
Agreement and subscribe for the Shares 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.
-3-
5.9 The Purchaser acknowledges that the terms of the Shares are governed
by the Certificate of Designation of Series B Convertible Preferred Stock, a
copy of which is attached as Exhibit B hereto (the "Designation"), and that the
Warrants are governed by the Warrant Certificate, the form of which is attached
as Exhibit A 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.
6. Miscellaneous.
-------------
6.1 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 Grand Cheer Ltd., 13 F Gloucester Tower, The Landmark,
00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx; if to the Company to: TurboChef
Technologies, Inc., 00000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention: Xx. Xxxxxxx Xxxxx, Chief Executive Officer, with a copy to Blank Rome
Xxxxxx Xxxxxxxxxx, LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxxx, Esq.
6.2 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 6.1 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.
6.3 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.
6.4 The Purchaser's rights under this Agreement are not assignable, except
to a wholly-owned subsidiary or parent company of the Purchaser.
-4-
6.5 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.
6.6 The Purchaser understands that the Company intends to issue a press
release regarding the terms of this Agreement as soon as practical after each
closing date and consents to the Company's issuance of a press release relating
to this Agreement and the reference to the Purchaser in the press release.
6.7 This Agreement may be executed in separate counterparts, all of which
shall constitute one agreement.
6.8 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
PURCHASER:
GRAND CHEER LTD.
By:_____________________________________
Name:
Title:
COMPANY:
TURBOCHEF TECHNOLOGIES, INC.
By:_____________________________________
Name: Xxxxxxx Xxxxx
Title: President and Chief Executive
Officer
-5-
