EXHIBIT 4.2
Stock Escrow Agreement
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AGREEMENT AND INSTRUCTION of escrow made and entered in multiple parts this
23rd, October, 2003 by and between Integrated Performance Systems, Inc. (the
"Seller"); and Xxxxxx Xxxxx & Associates Ltd., a Nevis corporation (the
"Advisor"); and Xxxxx Xxxxx, a private citizen of USA (the "Escrow Agent").
WHEREAS, the Seller intends to sell in reliance on Regulation S, restricted
common stock of Integrated Performance Systems, Inc., to certain purchasers
who are not "U.S. Persons" as defined in Regulation S (the " Investors" or
"purchasers") pursuant to stock purchase agreements.
WHEREAS, pending the sale of shares of Integrated Performance Systems, Inc.,
the Advisor desires to deposit funds contributed by the Investors with an
Escrow Agent and
WHEREAS, the Seller intends to privately offer common stock of Integrated
Performance Systems, Inc., (the "Shares") only to Investors, and only in
full compliance with Regulation S, promulgated under the Securities Act of
1933, as amended ("Regulation S").
WHEREAS, the Advisor has negotiated an arrangement with one or more
Investors to introduce or arrange for the purchase of Shares in Integrated
Performance Systems, Inc.
WHEREAS, the Escrow Agent is willing to accept appointment as Escrow Agent
for only the expressed duties, terms and conditions outlined herein.
NOW, THEREFORE, in consideration of the premises and agreements set forth
herein, the parties hereto agree as follows:
1. Consideration. Each party hereto recognizes and agrees that this Escrow
Agreement is fully supported by the consideration recited here in and,
independently, by the mutual covenants and promises contained hereto.
2. Purposes of Escrow and Description of Deposits. The purpose of this
Escrow is to create a depository account for the receipt and safe
keeping of Integrated Performance Systems, Inc., share certificates
during the term of a Share Purchase Agreement between the Seller and
the Investors.
The Advisor shall cause the payment of the funds necessary to purchase
the Shares and cause the delivery of such funds to the Escrow Agent by
wire transfer. Escrow Agent shall deposit such funds in a firm escrow
account until disbursements are made according to the terms of this
Agreement.
The Advisor shall provide any information necessary to identify the
Investors, including, but not, limited to their legal names to be shown
on all Share Certificates, their addresses for delivery of such,
passport numbers and Country of issuance or other identification
numbers as may be required by any transfer agent, and number of shares
purchased. Escrow Agent shall remit to Seller an amount equal to thirty
six percent (36%) of the offer price at the end of the business day
prior to the trade date multiplied by the number of shares sold on such
trade date. It is understood that any funds paid by the Investor for
the Shares in excess of such thirty six percent (36%) of the offer
price at the end of the business day i.e. 4:00 o'clock PM Eastern
Standard Time in New York City, New York USA) prior to the trade date
shall be paid by the Escrow Agent to the Advisor when such sales are
settled. The "trade date" is the date the Advisor actually accepts an
order for the purchase of all or a portion of the Shares from an
Investor. Seller shall cause the Shares sold to be delivered to the
Escrow Agent within two business days following receipt by Seller of
notice from Escrow Agent of the amount of Shares sold, and the
information described above pertaining to the Investors.
COMPLIANCE WITH REGULATION S.
The Shares shall not be sold to any person that is, or could be expected
to be, a "U.S. Person" as such term defined in Regulation S, promulgated
under the Securities Act of 1933, as amended ("Regulation S"). Advisor
and Escrow Agent shall comply in all respects, with Regulation S, and
Advisor will provide any and all required notices and information to each
purchaser of Shares.
Each purchaser of the Shares (Investor) must certify to Advisor that it
is not a U.S. Person and is not acquiring the securities for the account
or benefit of any U.S. Person. In addition, the purchaser of the Shares
(Investor) must agree not to resell such Shares except in accordance and
full compliance with the provisions of Regulation S (Rule 901 through
Rule 905, and Preliminary Notes) pursuant to registration under the
Securities Act, or pursuant to an available exemption from registrations;
and must further agree not to engage in hedging transactions with regard
to such securities. All parties including the Investor, acknowledge, and
in the case of Investor, will be informed by Advisor, that any failure to
comply with this restriction is a violation of United Slates federal
securities laws.
Advisor shall send a confirmation or other notice to the purchaser
stating that the purchaser is subject to the restrictions on offers and
sales set forth in Regulation S.
Each certificate representing the Shares shall have the following legend,
in addition to the standard Restricted Securities/Rule 144 Legend;
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE OFFERED AND SOLD IN
RELIANCE UPON REGULATION S UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED, SOLD OR TRANFERRED, DIRECTLY OR
INDIRECILY, TO ANY "U.S. PERSON" AS DEFINED IN REGULATION S OR IN THE
UNITED STATES OF AMERICA (INCLUDING ITS POSSESSIONS AND TERRITORIES)
UNLESS THE SHARES ARE FIRST REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT IS AVAILABLE.
HEDGING TRANSACTIONS INVOLVING IN ANY WAY THE SECURITIES REPRESENTED
BY THIS CERTIFICATE MAY NOT BE CONDUCTED, DIRECTLY OR INDIRECTLY."
3. Terms of Withdrawal and Close of Escrow. The Escrow Agent shall receive
the Share Certificates from the Seller and shall hold the certificates
until the Investors have completed payment to the Seller in accordance
with the Stock Purchase Agreement. In no event shall the Escrow Agent
transfer any shares of the Seller to the Investors without the
Investors showing they have completed the Agreement and Seller
confirming in writing (or by electronic mail) to Escrow Agent receipt
of the proceeds of the sale of Shares.
Upon receipt by the Escrow Agent of funds sufficient to consummate the
sale and purchase of all or a portion of the Shares under the terms
stated herein and upon receipt by the Escrow Agent of notice sufficient
to the Escrow Agent of such funds having cleared Escrow Agents bank and
being funds free, clear and available for payment by the Escrow Agent,
Escrow Agent shall notify the Advisor and Seller, on a weekly basis, of
the funds availability for uses in the consummation of a sale and
purchase of all or a portion of the Shares. Escrow Agent shall maintain
adequate records to ensure that each purchaser is properly credited
with any amount remitted to Escrow Agent by such purchaser, and that
such purchaser receives the proper number of shares purchased by such
purchaser.
Upon receipt by the Escrow Agent of notice of the funds availability
the Escrow Agent shall give written notice by telefax or email to the
Advisor of the number of shares to be purchased and the amount to be
paid to the Advisor as stated above, the Advisor shall execute its
agreement to such sale and purchase by way of a release letter. The
Advisor agrees to return a copy of the executed release letter by
telefax or email to the Escrow Agent.
Upon receipt by the Escrow Agent of the telefaxed copy of the Release
Agreement, the Escrow Agent shall either instruct Seller to deliver
certificates, registered in the name of the individual purchasers, to
the Escrow Agent for subsequent delivery to such purchases, or Escrow
Agent is authorized to and agrees to send to the Integrated Performance
Systems, Inc., Transfer Agent (currently American Registrar & Transfer
Company) sufficient certificates of stock on hand and instructions
sufficient to consummate the sale and purchase of the shares of stock
to the ultimate Investor. The Escrow Agent shall forward to the Advisor
that portion of the funds payable to the Advisor as defined above, net
of costs and expenses for bank charges, mail charges, transfer agent
fees or courier charges. Upon request from time to time, Escrow Agent
shall reimburse Seller for any fees for issuance of certificates paid
by Seller to the transfer agent. The Escrow Agent shall be entitled to
pay such amount to the Advisor by wire transfer as soon as the Escrow
Agent is reasonably able to go to Escrow Agents bank to execute the
instructions to the bank for such wire transfer, subject to a minimum
available escrow balance of $10,000.
All moneys and funds contemplated in this Agreement shall be in United
States Dollars.
4. Duty and Liability of the Escrow Agent. The sole duty of the Escrow
Agent, other than as herein specified, shall be to receive said funds
and certificates and hold them subject to release, in accordance
herewith, and the Escrow Agent shall be under no duty to determine
whether the Seller and the Investors are complying with requirements of
this Agreement in tendering to the Escrow Agent said proceeds of the
sale of said Shares. The Escrow Agent may conclusively rely upon and
shall be protected in acting upon any statement, certificate, notice,
request, consent, order or other document believed by it to be genuine
and to have been signed or presented by the proper party or parties.
The Escrow Agent shall have no duty or liability to verify any such
statement, certificate, notice, request. consent order or other
document and its sole responsibility shall be to act only as expressly
set forth in this Agreement. The Escrow Agent shall be under no
obligation to institute or defend any action, suit or proceeding in
connection with this Agreement unless first indemnified to its
satisfaction. The Escrow Agent may consult counsel in respect of any
question arising under this Agreement and the Escrow Agent shall not be
liable for any action taken or omitted in good faith upon advice of
such counsel.
5. Escrow Agents Fee. The Escrow Agent shall be entitled to compensation
of $100.00, due upon execution of this agreement which compensation
shall be paid by the Seller. The fee agreed upon for the services
rendered hereunder is intended as full compensation for the Escrow
Agents services as contemplated by this Agreement however the Escrow
Agent may also charge against Funds payable to the Advisor any
necessary and reasonable costs such as, though not limited to certified
mailings or any filing and service fees related to any Interpleader
Action.
6. Notices. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been
duly given (a) on the date of service if served personally on the party
to whom notice is to be given (b) on the day of transmission if sent by
facsimile to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of
transmission, (c) on the day after delivery to Federal Express or
similar overnight courier or the Express Mail service maintained by the
United States Postal Service, or (d) on the fifth day after mailing, if
mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed,
return receipt requested, to the party as follows:
If to the Seller:
C/O: 00000 XX 00X Xxxx
Xxxxxx, XX 00000, XXX
If to the Advisor:
C/O: X.X. Xxx 000, Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxx
If to the Escrow Agent:
C/O: 000 0xx Xxxxxx Xxxx
Xxxxxx, XX 00000, XXX
Any party may change its address for purposes of this paragraph by giving
the other party written notice of the new address in the manner set forth
above.
7. Indemnification of Escrow Agent. All parties hereby indemnifies and
holds harmless the Escrow Agent from and against, any and all loss,
liability, cost, damage and expense, including without limitation,
reasonable counsel fees, which the Escrow Agent may suffer or incur by
reason of any action, claim or proceeding brought against the Escrow
Agent by the indemnifying party arising out of or relating in any way
to this Agreement or any transaction to which this Agreement relates
unless such action, claim or proceeding is the result of the willful
misconduct of the Escrow Agent.
8. Successors and Assigns. Except as otherwise provided in this Agreement,
no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other
parties hereto and any such attempted assignment without such prior
written consent shall be void and of no force and effect. This
Agreement shall inure to the benefit of and shall be binding upon the
successors and permitted assigns of the parties hereto,
9. Governing Law,. Jurisdiction. This Agreement shall be construed,
performed, and enforced in accordance with, and governed by, the
internal laws of the State of California. USA without giving effect to
the principles of conflicts of laws thereof.
10. Severability. In the event that any part of this Agreement is declared
by any court or other judicial or administrative body to be null, void,
or unenforceable, said provision shall survive to the extent it is not
so declared, and all of the other provisions of this Agreement shall
remain in full force and effect.
11. Amendments: Waivers. This Agreement may be amended & modified, and any
of the terms, covenants, representations, warranties, or conditions
hereof may be waive, only by a written instrument executed by the
parties hereto, or in the case of a waiver, by the party waiving
compliance. Any waiver by any party of any condition, or of the breach
of any provision, term, covenant, representation, or warranty contained
in this Agreement, in any one or more instances, shall not be deemed to
be nor construed as further or continuing waiver of any such condition,
or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
12. Entire Agreement. This Agreement contains the entire understanding
among the parties hereto with respect to the escrow contemplated hereby
and supersedes and replaces all prior and contemporaneous agreements
and understandings, oral or written, with regard to such escrow.
13. Headings. The section headings in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of
this Agreement.
14. Counterparts. This Agreement may be executed in counterparts each of
which shall be deemed an original, but all of which shall constitute
the same instrument.
15. Resignation. Escrow Agent may resign upon 30 days advance written
notice to. If a successor Escrow Agent is not appointed within the 30-
day period following such notice, Escrow Agent may petition any court
of competent jurisdiction to name a successor Escrow Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first set forth above.
Seller:
/s/ D. Xxxxxx Xxxxx
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By: D. Xxx Xxxxx
Its: President
Advisor:
/s/ Xxxxx Xxxxxx
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By: Xxxxx Xxxxxx
Its: Attorney-In-Fact under Power of Attorney Escrow Agent:
/s/ Xxxxx Xxxxx
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By: Xxxxx Xxxxx
