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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
__________________
Date of Report (Date of earliest event reported): November 7, 1997
___________________
NICOLLET PROCESS ENGINEERING, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-27928 41-1528120
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(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
420 North Fifth Street, Ford Centre, Suite 1040, Minneapolis, Minnesota 55401
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (612) 339-7958
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ITEM 5. OTHER EVENTS.
On November 7, 1997, pursuant to certain Subscription Agreements
(collectively the "Subscription Agreements") dated as of November 7, 1997 by and
between Nicollet Process Engineering, Inc. (the "Company") and each of Oscar
Capital Management, LLC ("Oscar Capital"), Anthony Scaramucci ("Scaramucci"),
David R. Chamberlin ("Chamberlin") and Andrew K. Boszhardt, Jr. ("Boszhardt")
(Oscar Capital, Scaramucci, Chamberlin and Boszhardt are collectively referred
to herein as the "Investors"), the Investors purchased an aggregate of 1,166,667
shares (the "Investor Shares") of common stock, no par value (the "Common
Stock") of the Company at a price of $0.60 per share, for an aggregate purchase
price of $700,000 (the "Transaction"). As a condition to the closing of the
Transaction, the directors of the Company were required to purchase an aggregate
of 100,000 shares of Common Stock of the Company at a price of $0.60 per share
(the "Directors Shares"). The 1,166,667 shares issued to the Investors in
connection with the Transaction represented approximately 25.2% of the
outstanding shares of Common Stock of the Company after the closing,
approximately 34.6% of such outstanding Common Stock of the Company prior to the
closing and approximately 19.5% of such outstanding Common Stock of the Company
on a fully-diluted basis (assuming the exercise of all stock options and
warrants outstanding as of November 7, 1997). All of the Investors Shares and
the Director Shares are "restricted stock," as defined in the rules promulgated
under the Securities Act of 1933, as amended. The Investors Shares also have
certain demand and "piggyback" registration rights. Pursuant to the terms of
the Subscription Agreements, the Company agreed to elect Boszhardt to the
Company's Board of Directors. Mr. Pierce A. McNally and Mr. Robert A. Pitner,
the Chairman of the Board and President and Chief Executive Officer of the
Company, respectively, have agreed to vote their respective shares of Common
Stock of the Company in favor of electing Mr. Boszhardt to the Board of
Directors of the Company.
Additional information concerning the Transaction is contained in the
Subscription Agreements and the Registration Rights Agreement, the forms of
which are exhibits hereto and are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION. Not applicable.
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(c) EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description Method
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<S> <C> <C>
10.1 Form of Subscription Agreement dated Incorporated by reference
November 7, 1997 by and between the into Amendment No. 1 to
Company and each of Oscar, Scaramucci, Schedule 13D filed on
Chamberlin and Boszhardt. November 13, 1997 by
Pierce A. McNally and
Robert A. Pitner.
10.2 Registration Rights Agreement dated Filed herewith.
November 7, 1997 by and between the
Company and each of Oscar, Scaramucci,
Chamberlin and Boszhardt.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NICOLLET PROCESS ENGINEERING, INC.
(Registrant)
By: /s/ John Sandberg
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John Sandberg
Its: Controller
Dated: November 14, 1997
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Method
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<S> <C> <C>
10.1 Form of Subscription Agreement dated Incorporated by reference
November 7, 1997 by and between the into Amendment No. 1 to
Company and each of Oscar, Scaramucci, Schedule 13D filed on
Chamberlin and Boszhardt. November 13, 1997 by
Pierce A. McNally and
Robert A. Pitner.
10.2 Registration Rights Agreement dated Filed herewith.
November 7, 1997 by and between the
Company and each of Oscar, Scaramucci,
Chamberlin and Boszhardt.
</TABLE>
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EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of November
7, 1997, by and among Nicollet Process Engineering, Inc., a Minnesota
corporation (together with its successors, the "Company") and those persons or
entities designated as Investors on the signature pages hereto (the
"Investors").
The Company desires to grant to each of the Investors certain registration
rights with respect to the 1,166,667 shares (the "Shares") of the Company's
common stock, no par value (the "Common Stock"), sold to such Investors on
November 7, 1997 (the "Effective Date") pursuant to those certain Subscription
Agreements dated as of November 7, 1997 between the Company and each Investor,
respectively. Each Investor owns that number of Shares specified in SCHEDULE A
hereto.
Accordingly, the parties hereto hereby agrees as follows:
Section 1. DEFINITIONS. As used in this Agreement the following
terms shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission.
"COMMON STOCK" shall have the meaning given to such term in the
recitals hereto.
"EFFECTIVE DATE" shall have the meaning given to such term in the
recitals hereto.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any federal statute or code which is a successor thereto.
"FORM S-1," "FORM S-2", "FORM S-3", "FORM SB-1" and "FORM SB-2" shall
mean the forms so designated, promulgated by the Commission for registration of
securities under the Securities Act, and any forms succeeding to the functions
of such forms, whether or not bearing the same designation.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
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"REGISTER," "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering by the
Commission of effectiveness of such registration statement.
"REGISTRABLE SECURITIES" shall mean, collectively, as at any
particular time, (i) the Shares and (ii) any securities issued or issuable with
respect to the Shares by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization; provided, however, that Registrable Securities shall not
include, at any particular time, any such Shares or securities which are
beneficially owned by an Investor who is not an "affiliate" (as such term is
defined under Rule 144) of the Company at such time and which Shares or
securities may be sold without restriction by such non-affiliate in reliance
upon paragraph (k) of Rule 144, as evidenced by an opinion of counsel to the
Company, addressed to the transfer agent of the Company, that such Shares or
securities, as the case may be, may be sold without restriction by such
non-affiliate pursuant to paragraph (k) of Rule 144.
"RULE 144" shall mean Rule 144 issued by the Commission under the
Securities Act, or any subsequent rule pertaining to the disposition of
securities without registration.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any federal statute or code which is a successor thereto.
"SHARES" shall have the meaning given to such term in the recitals
hereto.
"TRANSFER" shall mean any transfer, sale, assignment, pledge,
hypothecation or other disposition of any interest. "TRANSFEROR" and
"TRANSFEREE" shall have correlative meanings.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall refer to
any registration in which securities of the Company are sold or to be sold
pursuant to a firm commitment underwriting.
Section 2. DEMAND REGISTRATIONS.
(a) REQUESTS FOR DEMAND REGISTRATIONS.
(i) Subject to the limitations contained in the following
paragraphs of this Section 2, an Investor or any group of Investors
may, at any time commencing one year after the Effective Date, give to
the Company, pursuant to this clause (i), a written request for the
registration by the Company under the Securities Act of all or any
part of the Registrable Securities of such Investors (each such
registration being herein called a "Demand Registration"). Within ten
(10) days after the receipt by the Company of any such written
request, the Company will give written notice of such registration
request to all holders of Registrable Securities.
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(ii) Subject to the limitations contained in the following
paragraphs of this Section 2, after the receipt of each such written
request for a Demand Registration, (a) the Company will be obligated
and required to include in such Demand Registration all Registrable
Securities with respect to which the Company shall receive from
Investors holding Registrable Securities, within thirty (30) days
after the date on which the Company shall have given to all such
Investors a written notice of registration request pursuant to Section
2(a)(i) hereof, the written requests of such Investors for inclusion
in such Demand Registration, and (b) the Company will use its best
efforts in good faith to effect within sixty (60) days after the
expiration of such thirty (30) day period the registration of all such
Registrable Securities. All written requests made by Investors
holding Registrable Securities pursuant to this clause (ii) will
specify the number of shares of Registrable Securities to be
registered and will also specify the intended method of disposition
thereof. Such method of disposition shall, in any case, be an
underwritten offering if an underwritten offering is requested by the
holders of a majority in interest of the Registrable Securities to be
included in such Demand Registration.
(b) LIMITATIONS ON DEMAND REGISTRATIONS.
(i) The Investors holding Registrable Securities, as a group,
will be entitled to require the Company to effect, pursuant to Section
2(a) hereof, (A) an unlimited number of Demand Registrations on Form
S-3 and (B) one (1) Demand Registration on any of Form S-1, Form S-2,
Form SB-1 or Form SB-2 as may at the time of such request be available
to the Company; provided, however, that no registration under
Section 2(a) hereof may be demanded within six (6) months after the
completion of any other registration under Section 2(a) or Section
3(a) hereof. The Company will be obligated to pay all Registration
Expenses (as that term is defined in Section 7 hereof) of each such
registration which constitutes a Demand Registration for purposes of
this Section 2.
(ii) The Company shall not be obligated or required to effect
any Demand Registration of any Registrable Securities (A) pursuant to
Section 2(b)(i)(A) hereof unless and until the Investors shall have
requested, pursuant to Section 2(a)(ii) hereof, the inclusion in such
Demand Registration of not less than 1/5 of the Registrable Securities
or (B) pursuant to Section 2(b)(i)(B) hereof unless and until the
Investors shall have requested, pursuant to Section 2(a)(ii) hereof,
the inclusion in such Demand Registration of not less than 500,000
shares of Registrable Securities.
(iii) Any registration initiated by Investors as a Demand
Registration pursuant to Section 2(a) hereof shall not, for purposes
of this Section 2, count as a
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Demand Registration unless and until such registration shall have
become and remained effective for at least eighteen months.
(iv) The Company may refuse to effect any Demand Registration of
any Registrable Securities pursuant to Section 2(a) hereof for any
ninety (90) day period following receipt of any written request for
registration if, in the good faith judgment of the Board of Directors
of the Company, the filing of any registration statement during such
ninety (90) day period would adversely affect a material proposed or
pending acquisition, merger or other similar corporate event to which
the Company is or expects to be a party; provided, however, that the
Company may only elect such refusal or cause a suspension pursuant to
Section 5(a) hereof once within any consecutive twelve month period.
(c) EFFECTIVE REGISTRATION - EXPENSES. In any registration initiated
by Investors as a Demand Registration pursuant to Section 2(a) hereof, the
Company will pay all Registration Expenses (as defined in Section 7 hereof) of
each such registration regardless of whether such registration constitutes a
Demand Registration for purposes of this Section 2.
(d) RIGHTS TO PIGGYBACK ON DEMAND REGISTRATIONS.
(i) Subject to the provisions of Section 2(e) hereof, the
Company may include any of the Company's securities in any
registration initiated by Investors as a Demand Registration pursuant
to Section 2(a) hereof, provided, that (A) such securities are of the
same class as the Registrable Securities to be included in such Demand
Registration, and (B) if such Demand Registration is an underwritten
offering, the Company shall have duly and properly agreed in writing
to sell its securities on the same terms and conditions as shall apply
to the Registrable Securities to be included in such Demand
Registration.
(ii) The Company shall not grant or agree to grant to any
persons any registration rights which will conflict or be inconsistent
in any respect with any of the provisions of clause (i) of this
Section 2(d). In the event of any such conflict or inconsistency, the
provisions of such clause (i) shall in any case prevail and be
controlling.
(e) PRIORITY ON DEMAND REGISTRATIONS. If any Demand Registration or
any registration effected pursuant to Section 2 hereof is an underwritten
offering, and the managing underwriters shall give written advice to the Company
and the Investors requesting such Demand Registration that, in the reasonable
opinion of such managing underwriters, marketing factors require a limitation on
the total number of securities to be underwritten (in this paragraph (e) called
the "Underwriters' Maximum Number"), then: (i) the Company will be obligated
and required to include in such registration that number of Registrable
Securities requested by the holders thereof to be included in such registration
which does not exceed the Underwriters' Maximum Number, and such number of
Registrable Securities shall be allocated PRO RATA among
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such holders requesting such Demand Registration on the basis of the number of
Registrable Securities requested to be included therein by each such holder;
(ii) if the Underwriters' Maximum Number exceeds the number of Registrable
Securities requested by the holders thereof to be included in such registration,
then, subject to Section 2(d)(i) hereof, the Company will be entitled to include
in such registration that number of securities which other securityholders shall
have requested be included in such registration which shall not be greater than
such excess, and such number of securities shall be allocated among such
securityholders in such proportion as the Company and such securityholders may
agree; and (iii) if the Underwriters' Maximum Number exceeds the sum of the
number of Registrable Securities which the Company shall be required to include
in such Demand Registration and the number of securities which other
securityholders have requested to include in such Demand Registration, then,
subject to Section 2(d)(i) hereof, the Company may include in such registration
that number of other securities which shall have been requested by the Company
to be included in such registration for the account of the Company and which
shall not be greater than such excess.
(f) SELECTION OF UNDERWRITERS. If any Demand Registration effected
pursuant to Section 2(b)(i)(B) hereof is an underwritten offering, or a best
efforts underwritten offering, the investment bankers and managing underwriters
in such registration shall be selected by a majority in interest of the
Investors requesting such Demand Registration, subject to the approval of the
Company (which approval will not be unreasonably withheld or delayed).
Section 3. PIGGYBACK REGISTRATIONS.
(a) RIGHTS TO PIGGYBACK.
(i) If (and on each occasion that) the Company proposes to
register any of its securities under the Securities Act, either for
the Company's own account or for the account of any of its
securityholders (including at the request of Investors pursuant to
Section 2 hereof), and provided that (A) Registrable Securities are of
the same class as the securities to be included in such registration
and, (B) if such registration is an underwritten offering, the
Investors shall have duly and properly agreed in writing to sell their
securities on the same terms and conditions as shall apply to the
securities to be included in such registration (each such registration
being herein called a "Piggyback Registration"), the Company will give
written notice to all Investors holding Registrable Securities of the
Company's intention to effect such Piggyback Registration not later
than the earlier to occur of (x) the tenth day following the receipt
by the Company of notice of exercise of any registration rights by any
persons, and (y) thirty (30) days prior to the anticipated filing date
of such Piggyback Registration.
(ii) Subject to the provisions contained in paragraph (c) of
this Section 3 and in the last sentence of this clause (ii) and
subject to the terms of certain registration rights granted by the
Company prior to the date hereof, which
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terms are set forth on SCHEDULE 3(a)(ii) hereto, (A) the Company will
be obligated and required to include in each Piggyback Registration
all Registrable Securities with respect to which the Company shall
receive from Investors, within thirty (30) days after the date on
which the Company shall have given written notice of such Piggyback
Registration to all such Investors pursuant to Section 3(a) (i)
hereof, the written requests of such Investors for inclusion in such
Piggyback Registration, and (B) the Company will use its best efforts
in good faith to effect promptly the registration of all such
Registrable Securities; provided, however, that the Company will have
the right to postpone or withdraw any Piggyback Registration effected
pursuant to this Section 3(a) without obligation to any of the
Investors. Any Investor holding Registrable Securities shall be
permitted to withdraw all or any part of the Registrable Securities of
such person from any Piggyback Registration at any time prior to the
effective date of such Piggyback Registration. Any registration of
Registrable Securities pursuant to this Section 3 shall not be counted
as a Demand Registration pursuant to Section 2 hereof. The Company
will not be obligated or required to include any Registrable
Securities in any registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 promulgated
under the Securities Act is applicable.
(iii) If any Piggyback Registration is an underwritten primary
registration initiated by the Company, all persons whose securities
are included in such Piggyback Registration shall be obligated to sell
their securities on the same terms and conditions as shall apply to
the securities being issued and sold by the Company. If any Piggyback
Registration is an underwritten secondary registration initiated by
holders of the Company's securities, all persons whose securities are
included in such Piggyback Registration shall be obligated to sell
their securities on the same terms and conditions as shall apply to
the securities being sold by the holders who initiated the
underwritten secondary registration.
(b) PIGGYBACK REGISTRATION EXPENSES. The Company will pay all
Registration Expenses (as defined in Section 7 hereof) of each Piggyback
Registration attributable to Registrable Securities or otherwise incurred or
sustained in connection with or arising out of the inclusion in each such
Piggyback Registration of Registrable Securities.
(c) PRIORITY ON PIGGYBACK REGISTRATION. If a Piggyback Registration
is an underwritten registration and the managing underwriters shall give written
advice to the Company that, in the reasonable opinion of such managing
underwriters, marketing factors require a limitation on the total number of
securities to be underwritten (in this clause (c) called the "Underwriters'
Maximum Number"), then, subject to the terms of certain registration rights
granted by the Company prior to the date hereof, which terms are set forth on
SCHEDULE 3(a)(ii) hereto: (i) the Company shall be entitled to include in such
registration, to the extent of the Underwriters' Maximum Number, that number of
securities which the Company proposes to offer and sell for its own account in
such registration or which securityholders initiating such
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registration shall have requested to be included in such registration, as the
case may be, such securities to be allocated among the Company and such
securityholders in such proportion as the Company and such securityholders may
agree; (ii) if the Underwriters' Maximum Number exceeds the number of securities
to be included in such registration by the Company and by securityholders
initiating such registration, as the case may be, then the Company will be
obligated and required to include in such registration that number of
Registrable Securities which shall have been requested by Investors to be
included in such registration which does not exceed the Underwriters' Maximum
Number, and such number of Registrable Securities shall be allocated PRO RATA
among such Investors on the basis of the number of Registrable Securities
requested to be included therein by each such Investor; and (iii) if the
Underwriters' Maximum Number exceeds the sum of the number of securities which
the Company proposes to offer and sell for its own account or for the account of
the securityholders initiating such registration, as the case may be, and the
number of Registrable Securities which the Investors shall have requested to
include in such registration, then the Company may include in such registration
that number of other securities which its other securityholders having rights to
include such securities in a Piggyback Registration shall have requested be
included in such registration, which shall not be greater than such excess, and
the number of securities which such persons shall have requested to include in
such registration shall be allocated among such persons making such requests as
the Company and such persons may agree.
(d) SELECTION OF UNDERWRITERS. In any Piggyback Registration, the
Company shall (unless the Company shall otherwise agree) have the right to
select the investment bankers and managing underwriters in such registration.
Section 4. LOCKUP AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY INVESTORS. Each Investor, if the
Company or the managing underwriters so request in connection with a
registration pursuant to which Registrable Securities are registered, will not,
without the prior written consent of the Company or such underwriters, effect
any public sale or other distribution of any equity securities of the Company,
including any sale pursuant to Rule 144, during the thirty (30) days prior to,
and during the period commencing on, the effective date of such underwritten
registration and ending on the earlier of (i) 180 days after such effective date
and (ii) the earliest date on which such underwriters permit other stockholders
of the Company to so sell or distribute any equity securities of the Company,
except in connection with such underwritten registration; provided that each
officer and director of the Company and each holder of more than five percent
(5%) of the issued and outstanding shares of Common Stock shall enter into
similar agreements.
(b) RESTRICTIONS ON PUBLIC SALE BY COMPANY. The Company agrees not
to effect any public sale or other distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such equity
securities, during the period commencing on the seventh day prior to, and ending
on the ninetieth day following, the effective date of any
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underwritten Demand Registration or any underwritten Piggyback Registration,
except in connection with any such underwritten registration.
Section 5. REGISTRATION PROCEDURES. If and whenever the Company
shall, in accordance with the terms of this Agreement, become obligated to
effect any registration (whether a Demand Registration or a Piggyback
Registration) of any Registrable Securities, the Company will use its best
efforts in good faith to effect promptly the registration of such Registrable
Securities under the Securities Act and to permit the public offering and sale
of such Registrable Securities in accordance with the intended method of
disposition thereof, and in connection therewith, the Company, as expeditiously
as shall be reasonably possible, will:
(a) prepare and file (within 45 days of a request in the case of a
Demand Registration pursuant to Section 2(b)(i)(A) and within 60 days of a
request in the case of a Demand Registration pursuant to Section 2(b)(i)(B), and
otherwise as promptly as practicable) with the Commission a registration
statement with respect to such Registrable Securities, and use its best efforts
in good faith to cause such registration statement to become and remain
effective until the earlier of two (2) years after the effectiveness of such
registration statement with the Commission or the date on which all such shares
are sold; it being understood and acknowledged that the Company may be required
to suspend effectiveness of such registration statement or notify the Investors
to suspend any effort to effect sales of such shares if, in the good faith
judgment of the Board of Directors of the Company, such suspension is required
to prevent a material adverse effect on a material proposed or pending
acquisition, merger or other similar corporate event to which the Company is or
expects to be a party, provided that the Company may only cause any such
suspension or a refusal pursuant to Section 2(b)(iv) hereof once within any
consecutive twelve month period; it being further understood and acknowledged
that any period of any such suspension shall toll the two (2) year period set
forth in the first clause of this Section 5(a).
(b) enter into such customary agreements (including, if applicable,
underwriting agreements) and take all such other action in connection therewith
as the Investors holding a majority in interest of Registrable Securities being
registered reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities;
(c) notify each seller of Registrable Securities and other securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and subject to Section
5(e) hereof, prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act and the Exchange Act with
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respect to the disposition of all Registrable Securities covered by such
registration statement until such time as all of such Registrable Securities
have been disposed of in accordance with the method of disposition set forth in
such registration statement;
(d) before filing any registration statement or prospectus or any
amendments or supplements thereto, furnish to and afford the Investors then
holding Registrable Securities, one firm of counsel for such Investors
designated by the holders of a majority of the Registrable Securities included
in the registration statement (the "Investors' Counsel") and the managing
underwriters, if any designated by such Investors, a reasonable opportunity to
review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed
(at least five (5) business days prior to such filing). The Company shall not
file any registration statement or prospectus or any amendments or supplements
thereto in respect of which the Investors must be afforded an opportunity to
review prior to the filing of such document, if the holders of a majority of the
shares of Registrable Securities covered by such registration statement, the
Investors' Counsel, or the managing underwriters, if any, shall reasonably
object. Any registration statement, when declared effective by the Commission
or when subsequently amended (by an amendment which is declared effective by the
Commission) or any prospectus in the form included in the registration statement
as declared effective by the Commission or when subsequently supplemented will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(e) use its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness of a registration statement, and in any event
shall, within thirty (30) days of such cessation of effectiveness, use its best
efforts to amend the registration statement in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof;
(f) if requested by the managing underwriters, if any, or the holders
of a majority of the Registrable Securities being sold in connection with an
underwritten offering, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters, if any,
or such holders or counsel reasonably request to be included therein, (ii) make
all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such registration
statement;
(g) furnish to each seller of Registrable Securities covered by such
registration statement such reasonable number of copies of such drafts and final
conformed versions of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits and any documents
incorporated by reference), such number of copies of such drafts and final
versions of the prospectus contained in such registration statement
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(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such seller may
reasonably request in writing;
(h) use its best efforts in good faith to register and qualify the
Registrable Securities covered by such registration statement under such
securities or Blue Sky laws of such jurisdictions as any seller or underwriter
shall reasonably require and do any and all such other acts and things as may be
reasonably necessary or advisable to enable such seller or underwriter to
consummate the disposition in such jurisdictions of the Registrable Securities
held by such seller or underwriter; provided that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not then so subject;
(i) use its best efforts to cause all the Registrable Securities
covered by such registration statement (i) to be listed on a national securities
exchange on which similar securities issued by the Company are then listed, if
the listing of such Registrable Securities is then permitted under the rules of
such exchange or (ii) if the Company is not required pursuant to clause (i)
above to list such securities covered by such registration statement on a
national securities exchange, use its best efforts to secure designation of all
Registrable Securities covered by such registration statement as a NASDAQ
"national market system security" within the meaning of Rule 11Aa2-l of the
Commission or, failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register with the NASD as such with respect to
such Registrable Securities or (iii) failing listing or designation under
clauses (i) and (ii) above, use its best efforts to cause all such Registrable
Securities to be listed on the Nasdaq Stock Market's Small-Cap Market;
(j) file all annual and quarterly reports required by the Exchange
Act, and, in the event that the Company is no longer subject to the reporting
requirements of the Exchange Act, furnish to the Investors reports substantially
comparable to those previously required to be filed by the Company under the
Exchange Act and the rules and regulations adopted by the Commission thereunder
in the same manner and at such times as if it were subject to such reporting
requirements; and
(k) furnish to each prospective seller a signed counterpart,
addressed to the prospective sellers, of (i) an opinion of counsel for the
Company, dated the effective date of the registration statement, and (ii) in the
case of any underwritten registration which includes Registrable Securities, a
"comfort" letter signed by the independent public accountants who have certified
the Company's financial statements included in the registration statement,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and (in the case of the "comfort
letter") with respect to events subsequent to the date of the financial
statements, as are customarily covered (at the time of such registration) in
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opinions of issuer's counsel and in "comfort" letters delivered to the
underwriters in underwritten public offerings of securities.
Section 6. COOPERATION BY PROSPECTIVE SELLERS, ETC.
(a) Each prospective seller of Registrable Securities will furnish to
the Company in writing such information as the Company may reasonably require
from such seller in connection with any registration statement with respect to
such Registrable Securities.
(b) The failure of any prospective seller of Registrable Securities
to furnish any information or documents in accordance with any provision
contained in this Agreement shall not affect the obligations of the Company
under this Agreement to any remaining sellers who furnish such information and
documents unless, in the reasonable opinion of counsel to the Company or the
underwriters, such failure impairs or may impair the viability of the offering
or the legality of the registration statement or the underlying offering.
(c) The Investors holding Registrable Securities included in any
registration statement will not (until further notice) effect sales thereof
after receipt of telegraphic or written notice from the Company to suspend sales
to permit the Company to correct or update such registration statement or
prospectus; but the obligations of the Company with respect to maintaining any
registration statement current and effective shall be extended by a period of
days equal to the period such suspension is in effect.
(d) At the end of any period during which the Company is obligated to
keep any registration statement current and effective as provided by Section 5
hereof (and any extensions thereof required by the preceding paragraph (c) of
this Section 6), the Investors holding Registrable Securities included in such
registration statement shall discontinue sales of shares pursuant to such
registration statement upon receipt of notice from the Company of its intention
to remove from registration the shares covered by such registration statement
which remain unsold, and such Investors shall notify the Company of the number
of shares registered which remain unsold promptly after receipt of such notice
from the Company.
Section 7. REGISTRATION EXPENSES.
(a) All costs and expenses incurred or sustained in connection with
or arising out of each registration pursuant to Section 2 or Section 3 (as the
case may be), including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or Blue Sky laws (including
reasonable fees and disbursements of counsel for the underwriters in connection
with the Blue Sky qualification of Registrable Securities), printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of counsel
for the Company and for the sellers of Registrable Securities (subject to the
limitations contained in paragraph (b) of this Section 7), fees and
disbursements of all independent certified public accountants (including the
expenses relating to the preparation and delivery of any special audit or
"comfort" letters required by or incident to such registration), and fees and
disbursements of
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underwriters (excluding discounts and commissions, but including underwriters'
liability insurance if the Company or if the underwriters so require), the
reasonable fees and expenses of any special experts retained by the Company of
its own initiative or at the request of the managing underwriters in connection
with such registration, and fees and expenses of all (if any) other persons
retained by the Company (all such costs and expenses being herein called,
collectively, the "Registration Expenses"), will be borne and paid by the
Company as provided by the provisions contained in this Agreement. The Company
will, in any case, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the expense of liability
insurance referred to above, and the fees and expenses incurred in connection
with the listing of the securities to be registered on each securities exchange
on which similar securities of the Company are then listed.
(b) In connection with each registration of Registrable Securities
pursuant to this Agreement, the Company will reimburse the Investors holding
Registrable Securities being registered in such registration for the reasonable
fees and disbursements of any one counsel chosen by the holders of a majority in
interest of such Registrable Securities; provided, however, that (i) in the
event of a Demand Registration pursuant to Section 2(b)(i)(B), the Company shall
not be required to bear more than $20,000 of the reasonable legal expenses
incurred by the Investors and (ii) in the event of a Demand Registration
pursuant to Section 2(b)(i)(A), the Company shall not be required to bear any of
the legal expenses of the Investors. The Company will not bear the cost of nor
pay for any stock transfer taxes imposed in respect of the transfer of any
Registrable Securities to any purchaser thereof by any Investor in connection
with any registration of Registrable Securities pursuant to this Agreement.
(c) To the extent that Registration Expenses incident to any
registration are, under the terms of this Agreement, not required to be paid by
the Company, each Investor holding Registrable Securities included in such
registration will pay all Registration Expenses which are clearly solely
attributable to the registration of such Investor's Registrable Securities so
included in such registration, and all other Registration Expenses not so
attributable to one holder will be borne and paid by all sellers of securities
included in such registration in proportion to the number of securities so
included by each such seller.
Section 8. INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. The Company will indemnify each
Investor requesting or joining in a registration, the officers, directors and
partners of each such Investor, each person who controls any thereof (within the
meaning of the Securities Act) and each underwriter of the securities so
registered, against any and all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of any material fact contained in any prospectus,
offering circular or other document incident to any registration, qualification
or compliance (or in any related registration statement, notification or the
like) or any omission (or alleged omission) to state
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<PAGE>
therein any material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation promulgated under the Securities Act applicable to the Company in
connection with any such registration, qualification or compliance, and the
Company will reimburse each such Investor, officer, director, partner,
controlling person and underwriter for any reasonable legal and any other
reasonable expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
such holder, officer, director, partner, controlling person, or underwriter and
stated to be specifically for use therein.
(b) INDEMNIFICATION BY EACH INVESTOR. Each Investor holding
Registrable Securities requesting or joining in a registration, and each
underwriter of the securities so registered, will indemnify each other Investor,
the Company and its officers and directors and each person, if any, who controls
any thereof (within the meaning of the Securities Act) and their respective
successors in title and assigns against any and all claims, losses, damages and
liabilities (or actions in respect thereof) arising out or based on any untrue
statement (or alleged untrue statement) of any material fact contained in any
prospectus, offering circular or other document incident to any registration,
qualification or compliance (or in any related registration statement,
notification or the like) or any omission (or alleged omission) to state therein
any material fact required to be stated therein or necessary to make the
statement therein not misleading, and such Investor will reimburse the Company
and each other person indemnified pursuant to this paragraph (b) for any legal
and any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however,
that this paragraph (b) shall apply only if (and only to the extent that) such
statement or omission was made in reliance upon written information furnished to
the Company by such Investor or underwriter and stated by such Investor or
underwriter to be specifically for use in such prospectus, offering circular or
other document (or related registration statement, notification or the like) or
any amendment or supplement thereto. The maximum liability under this paragraph
(b) of each Investor joining in any registration shall be limited to the
aggregate amount of all sales proceeds actually received by such Investor upon
the sale of such Investor's Registrable Securities in connection with such
registration.
(c) INDEMNIFICATION PROCEEDINGS. Each party entitled to
indemnification pursuant to this Section 8 (the "indemnified party") shall give
notice to the party required to provide indemnification pursuant to this Section
8 (the "indemnifying party") promptly after such indemnified party acquires
actual knowledge of any claim as to which indemnity may be sought, and shall
permit the indemnifying party (at the indemnifying party's expense) to assume
the defense of any claim or any litigation resulting therefrom; provided that
counsel for the indemnifying party, who shall conduct the defense of such claim
or litigation, shall be reasonably acceptable to the indemnified party, and the
indemnified party may participate in such defense at such party's expense; and
provided further that, if any indemnified party shall have reasonably
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concluded that there may be one or more legal defenses available to such
indemnified party which are different from or additional to and are inconsistent
with those available to the indemnifying party, or that such claim or litigation
involves or could have an effect upon matters beyond the scope of the indemnity
agreement provided in this Section 8, the indemnified party shall have the right
to select separate counsel to participate in such defense and the indemnifying
party shall reimburse such indemnified party and any person controlling such
indemnified party for that portion of the fees and expenses of any counsel so
retained by the indemnified party which are reasonably related to the matters
covered by the indemnity agreement provided in this Section 8; and provided,
further, that the failure by any indemnified party to give notice as provided in
this paragraph (c) shall not relieve the indemnifying party of its obligations
under this Section 8 except to the extent that the failure results in a failure
of actual notice to the indemnifying party and such indemnifying party is
damaged (or the indemnification liability of such indemnifying party hereunder
would be increased) solely as a result of the failure to give notice. No
indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation. The
reimbursement required by this Section 8 shall be made by periodic payments
during the course of the investigation or defense, as and when bills are
received or expenses incurred.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 8 shall for any reason be unavailable to an indemnified party under
subsection (a) or (b) of this Section 8 in respect of any claims, losses,
damages and liabilities (collectively, "Losses"), then, in lieu of the amount
paid or payable under subsection (a) or (b) of this Section 8, the indemnified
party and the indemnifying party under subsection (a) or (b) of this Section 8
shall contribute to the aggregate Losses (including reasonable legal or other
reasonable expenses reasonably incurred in connection with investigating the
same) (i) in such proportion as is appropriate to reflect the relative fault of
the Company and the prospective sellers of Registrable Securities covered by the
registration statement which resulted in such Loss or action in respect thereof,
with respect to the statements, omissions or action which resulted in such Loss
or action in respect thereof, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, on the one hand, and such
prospective sellers, on the other hand, from their sale of Registrable
Securities; provided that, for purposes of this clause (ii), the relative
benefits received by the prospective sellers shall be deemed not to exceed the
amount received by such sellers. No person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any other person or entity who was not
guilty of such fraudulent misrepresentation. The obligations, if any, of the
selling holders of Registrable Securities to contribute as provided in this
subsection (d) are several in proportion to the relative value of their
respective Registrable Securities covered by such registration statement and not
joint. In addition, no person or entity
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shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or Loss effected without the consent of such person or
entity.
Section 9. RULE 144 REQUIREMENTS. The Company will make every effort
in good faith to make publicly available and available to the Investors holding
Registrable Securities, pursuant to Rule 144 of the Commission under the
Securities Act, such information as shall be necessary to enable such Investors
to make sales of Registrable Securities pursuant to that Rule. The Company will
furnish to any Investor holding Registrable Securities, upon request made by
such Investor, a written statement signed by the Company, addressed to such
Investor, describing briefly the action the Company has taken or proposes to
take to comply with the current public information requirements of Rule 144.
The Company will, at the request of any Investor holding Registrable Securities,
upon receipt from such Investor of a certificate certifying (i) that such
Investor currently intends to transfer such Registrable Securities, (ii) that
such Investor has held such Registrable Securities for a period of not less than
two (2) consecutive years within the meaning of Rule 144(d) or any successor
rule, and (iii) that such Investor has not been an affiliate (as defined in Rule
144) of the Company for more than the ninety (90) preceding days, remove from
the stock certificates representing such Registrable Securities that portion of
any restrictive legend which relates to the registration provisions of the
Securities Act.
Section 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No person
may participate in any underwritten registration pursuant to this Agreement
unless such person (a) agrees to sell such person's securities on the basis
provided in any underwriting arrangements approved by the persons entitled,
under the provisions contained in this Agreement, to approve such arrangements,
and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required by
the terms of such underwriting arrangements; provided, however, that no such
indemnities or underwriting agreements shall provide for indemnification or
contribution obligations of any Investor to a greater extent than the
obligations of such Investor set forth in Section 8 hereof. Any Investor
holding Registrable Securities to be included in any underwritten registration
shall be entitled at any time to withdraw such Registrable Securities from such
registration in the event that such Investor shall disapprove of any of the
terms of the related underwriting agreement.
Section 11. NO INCONSISTENT AGREEMENTS. The Company will not, at any
time after the effective date of this Agreement, enter into, and, except as set
forth on SCHEDULE 11 hereto, is not now a party to or otherwise bound by, any
agreement or contract (whether written or oral) with respect to any of its
securities which is inconsistent in any respect with the registration rights
granted by the Company to the Investors pursuant to this Agreement.
Section 12. NO OTHER GRANT OF REGISTRATION RIGHTS. The Company will
not at any time, without the prior written consent of Investors holding a
majority in interest of Registrable Securities, grant to any other persons any
rights with respect to the registration of any of securities of the Company
which have priority over or are inconsistent with the registration rights
granted by the Company to the Investors pursuant to this Agreement.
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Section 13. REGISTRABLE SECURITIES HELD BY THE COMPANY. Whenever the
consent or approval of Investors holding Registrable Securities is required
pursuant to this Agreement, Registrable Securities held by the Company shall not
be counted in determining whether such consent or approval was duly and properly
given by such Investors pursuant to and in compliance with any of the terms of
this Agreement.
Section 14. NOTICES.
(a) All notices and other communications pursuant to this Agreement
shall be in writing, either delivered in person or duly sent by registered mail,
postage prepaid, return receipt requested, or by overnight courier guaranteeing
next day delivery, and shall be sent addressed to such party at the address
specified below or at such other address as may hereafter be designated in
writing by the addressee to the addressor:
IF TO THE COMPANY:
Nicollet Process Engineering, Inc.
420 North Fifth Street
Ford Centre, Suite 1040
Minneapolis, Minnesota 55401
Attn: Robert A. Pitner
with a copy to:
Oppenheimer Wolff & Donnelly
45 South Seventh Street
Suite 3400
Minneapolis, Minnesota 55402
Attn: Kristine L. Gabel, Esq.
IF TO ANY INVESTOR: at their respective addresses set forth
on the signature pages hereto
(b) Any notice or other communication shall be deemed given at the
time delivered by hand, if personally delivered, four business days after being
deposited in the mail, postage prepaid, if mailed, the next business day after
timely delivery to the courier, if sent by overnight courier guaranteeing next
day delivery, and when receipt is acknowledged, if telecopied.
Section 15. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York without regard
to the conflict of laws principles thereof.
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Section 16. AMENDMENTS AND WAIVERS.
(a) Except as otherwise provided by paragraph (b) of this Section 16,
none of the terms or provisions contained in this Agreement, and none of the
agreements, obligations or covenants of any party contained in this Agreement,
may be amended, modified, supplemented, waived or terminated unless (i) the
Company shall execute an instrument in writing agreeing or consenting to such
amendment, modification, supplement, waiver or termination, and (ii) the Company
shall receive, in writing, the consent, approval, or vote of Investors holding
more than fifty percent (50%) in interest of all Registrable Securities.
(b) Any action taken pursuant to and in compliance with paragraph (a)
of this Section 16 shall be binding upon the Company and upon all Investors,
including all of such Investors who shall have failed or refused to give a
written consent or approval for such action.
Section 17. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings or agreements concerning the subject matter
hereof.
Section 18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns of each
of the parties. Any Investor may assign to any permitted Transferee (as
permitted under applicable law) of its Registrable Securities its rights and
obligations under this Agreement, provided that such Transferee shall agree in
writing with the parties hereto prior to the assignment to be bound by this
Agreement as if it were an original party hereto, whereupon such assignee shall
for all purposes be deemed to be an Investor under this Agreement. Except as
provided above or otherwise permitted by this Agreement, neither this Agreement
nor any right, remedy, obligation or liability arising hereunder or by reason
hereof shall be assignable by any Investor without the prior written consent of
the other parties hereto. The Company may not assign this Agreement or any
right, remedy, obligation or liability arising hereunder or by reason hereof.
Section 19. COUNTERPARTS. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
In making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by each of the parties hereto.
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
NICOLLET PROCESS ENGINEERING, INC.
By: /s/ Pierce A. McNally
------------------------------
Name: Pierce A. McNally
Title: Chairman
<PAGE>
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
OSCAR CAPITAL MANAGEMENT, LLC
By: /s/ Andrew K. Boszhardt, Jr.
---------------------------------
Name: Andrew K. Boszhardt, Jr.
Title: Chairman and CEO
Address for Notices:
-------------------
900 Third Avenue
New York, NY 10022
/s/ Andrew K. Boszhardt
--------------------------------------
Andrew K. Boszhardt
Address for Notices:
-------------------
900 Third Avenue
New York, NY 10022
/s/ Anthony Scaramucci
--------------------------------------
Anthony Scaramucci
Address for Notices:
-------------------
900 Third Avenue
New York, NY 10022
/s/ David R. Chamberlin
--------------------------------------
David R. Chamberlin, TTEE
David A. Chamberlin Trust
Address for Notices:
-------------------
P.O. Box 7926
Aspen, CO 81612
<PAGE>
SCHEDULE A
Name of Investor Number of Shares
---------------- ----------------
Oscar Capital Management, LLC 233,333
Andrew K. Boszhardt, Jr. 500,000
Anthony Scaramucci 116,667
David R. Chamberlin 316,667
