EXHIBIT 2
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CONVERSION AGREEMENT
MADE AS OF 29TH DAY OF JULY 1999 (THE "EFFECTIVE DATE")
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BETWEEN: NICOLLET PROCESS ENGINEERING, INC., a corporation duly incorporated
under the laws of the State of Minnesota, of the United States,
having its registered office and principal place of business located
at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000.
(hereinafter referred to as the "CORPORATION")
AND: TECHINSPIRATIONS INC. (CAYMAN), having its registered office and
principal place of business located at CIBC Bank and Trust Company
(Cayman) Limited, P.O. Box 694, CIBC Building, Xxxxxx Street,
Goergetown, Grand Cayman B.W.I
(hereinafter referred to as "Investor")
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CERTAIN DEFINITIONS
In this Conversion Agreement capitalized terms denoting defined terms shall,
if not specifically defined herein, bear the meanings attributable to them in
the Purchase Agreement (as defined below). Subject to the foregoing, for the
purposes hereof, unless there is something in the subject-matter or context
inconsistent therewith, the following terms and expressions shall have the
following meanings:
CHARGE: a hypothec, mortgage, priority, charge, pledge, assignment
in guaranty, security interest, lien, encumbrance, action,
claim, demand, option, offer, right or equity of any nature
whatsoever or howsoever arising on one or more assets or
rights;
CREDIT FACILITY: means the secured revolving operating line of credit
extended by the Investor to the Corporation supported,
originally, by an assignment of the security held, and a
credit facility advanced, by Norwest Business Credit, Inc.
under credit extended to the Corporation
DEBT: means the amount of accrued interest and outstanding
principal owed by the Corporation to the Investor under the
Credit Facility on the date hereof;
PURCHASE means that purchase agreement between the Corporation, as
AGREEMENT: issuer, and the Investor, as purchaser, dated as of the date
hereof whereunder the
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Investor has purchased 20,000,000 shares of Common Stock of
the Corporation, and a Common Stock Warrant covering
4,750,000 shares of Common Stock.
FOR VALUE RECEIVED AND IN CONSIDERATION OF THE MATTERS SET
OUT IN THE PURCHASE AGREEMENT, IT IS AGREED AS FOLLOWS:
1. Pursuant to the provisions of the Purchase Agreement, and
coincidentally with the Closing of the transactions contemplated
under the Purchase Agreement, the Corporation and Investor hereby
confirm their agreement, and the Investor's irrevocable direction,
to convert the following portion of the Debt with the effect as of
the date hereof;
1.1 $3,000,000 of the Debt shall be converted into 20,000,000 shares
of Common Stock of the Corporation at a conversion price of $0.15
per share and in full satisfaction of the subscription price for
20,000,000 shares of Common Stock purchased by the Investor from the
Corporation pursuant to the Purchase Agreement; and
1.2 $100 of the Debt shall be converted into the Common Stock
Warrant covering 4,750,000 shares of Common Stock of the Corporation
in full satisfaction of the subscription price for the Common Stock
Warrant purchased by the Investor from the Corporation pursuant to
the Purchase Agreement.
2. Each of the Corporation and the Investor hereby acknowledges and
confirms that the amount of the Debt outstanding on the date hereof
exceeds $3,000,100. The Corporation hereby acknowledges receipt of
the subscription price referred to in paragraph 1 above and the
Investor hereby confirms that the amount of the Debt outstanding
shall be reduced accordingly.
3. The Corporation and the Investor hereby waive any notice requirement
from one another and any other procedure, condition or other right
precedent to the conversion of the Debt pursuant to this Agreement.
4. Each party hereto represents and warrants that it has the necessary
power, authority and capacity to execute this agreement and to
perform its obligations hereunder.
5. The Investor hereby represents and warrants to the Corporation that
the Debt so converted pursuant to this Agreement is free and clear
of any Charges created by the Investor whatsoever, except for
Charges created under the Credit Facility.
6. Each party hereto shall at the request of the other party execute
and deliver any further documents and do all acts and things as that
party may reasonably require to carry out the true intent and
meaning of this agreement.
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7. Any notice or other communication to be given in connection with
this agreement shall be given in writing and transmitted by any
means providing proof of receipt by the addressee, to the addresses
indicated at the beginning hereof, or to such other address as any
party may designate by notice given to the other party.
8. This agreement shall be governed by the laws in force in the State
of Minnesota and the parties hereto agree irrevocably to attorn to
the jurisdiction of the courts of the State of Minnesota and agree
that any proceedings taken in respect of this agreement shall be
taken in such courts and in no other.
9. This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective personal representatives, heirs,
successors and administrators.
10. This agreement may be executed in separate counterparts, all of
which shall constitute one and the same instrument. This Agreement
may be effectively delivered by the facsimile delivery of a signed
original and such facsimile copy shall be as effective as the signed
original.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
Effective Date.
NICOLLET PROCESS ENGINEERING, INC.
BY:
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ITS:
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TECHINSPIRATIONS INC (CAYMAN)
BY:
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ITS:
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