EXHIBIT 10.1
COMPROMISE AND SETTLEMENT AGREEMENT
This Compromise and Settlement Agreement (the "Settlement Agreement")
is entered into this 26th day of May, 2005, by and between Integrated
Performance Systems, Inc., a New York corporation (the "Company"), and La
Jolla Cove Investors, Inc., a California corporation ("La Jolla"). Each of
the Company and La Jolla are sometimes referred to herein as a "Party", or
collectively as the "Parties".
RECITALS
WHEREAS, the Company and La Jolla entered into (i) that certain
Securities Purchase Agreement, dated on or about October 24, 2003 (the
"Purchase Agreement"), and (ii) that certain Registration Rights Agreement,
dated on or about October 24, 2003 (the "Rights Agreement," and together
with the Purchase Agreement, the "Agreements");
WHEREAS, the Company, upon the terms and conditions of the Purchase
Agreement, issued and sold to La Jolla (i) that certain 8% Convertible
Debenture, dated on or about October 24, 2003 (the "Debenture"), and (ii)
that certain Warrant to Purchase Common Stock, dated on or about October 24,
2003 (the "Warrant");
WHEREAS, bona fide disputes and controversies relating to the
Agreements, the Debenture and the Warrant exist between the Parties;
WHEREAS, the Company and La Jolla desire to (i) terminate the
Agreements, (ii) provide for the conversion, satisfaction and accord of the
Debenture, and (iii) cancel the Warrant; and
WHEREAS, La Jolla desires to release and forever discharge any and all
claims or causes of action that it may have against the Company and other
parties, as provided herein; and
WHEREAS, the Company desires to release and forever discharge any and
all claims or causes of action that it may have against La Jolla and other
parties, as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and legal sufficiency of which are
hereby expressly acknowledged, the Parties hereby agree as follows:
1. Settlement. Subject to the terms and conditions of this
Agreement, in full and final settlement of the Claims (defined below), if
any, that either Party and its Related Persons (defined below) had, has or
hereafter can, shall or may have against the other Party and its Related
Persons, (i) the Parties have entered into the mutual release set forth in
Section 2 below and (ii) the Company has herewith paid and granted to La
Jolla and La Jolla has accepted the following from the Company: (A)
US$200,000.00 (the "Cash"), (B) 2,400,000 unregistered shares of common
stock of the Company, par value $0.01 (the "Shares") which are being issued
to La Jolla in full conversion and satisfaction of the Debenture and (C) the
Registration Rights (defined below, and collectively with the Cash and the
Shares, the "Settlement Payment"). Simultaneously with the execution of
this Settlement Agreement, La Jolla will (i) deliver to the Company its
election to convert the Debenture into the Shares and (ii) surrender the
original Warrant and Debenture to the Company for cancellation.
2. Mutual Release. La Jolla, on behalf of itself and each of
its Related Persons, hereby unconditionally, irrevocably and completely,
fully and forever, releases and discharges the Company and its Related
Persons from any and all claims, rights, demands, contracts, obligations,
liabilities, suits, actions, and causes of action, at law or at equity,
known or unknown, liquidated or unliquidated, asserted or unasserted, direct
or derivative, or of any other nature, related to, based on or arising from
any fact existing at any time from the beginning of the world (collectively
"Claims"), which La Jolla or any of its Related Persons may now or hereafter
have against the Company or any of its Related Persons that are related to,
based on or arise from the Agreements, the Debenture, the Warrant, any other
securities of the Company, any disclosures made by the Company prior to the
date hereof that are subject to the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as amended,
or any other dealings with the Company prior to the date hereof. Without
limiting the generality of the foregoing, La Jolla hereby waives, releases,
discharges and terminates the Agreements, the Debenture and the Warrant.
The Company, on behalf of itself and each of its Related Persons,
hereby unconditionally, irrevocably and completely, fully and forever,
releases and discharges La Jolla and its Related Persons from any and all
Claims which the Company or any of its Related Persons may now or hereafter
have against La Jolla or any of its Related Persons that are related to,
based on or arise from the Agreements, the Debenture, the Warrant or any
other dealings with La Jolla prior to the date hereof. Without limiting the
generality of the foregoing, the Company hereby waives, releases, discharges
and terminates the Agreements, the Debenture and the Warrant.
Notwithstanding the foregoing, the two previous paragraphs shall not
affect the rights of the Parties expressly provided in this Settlement
Agreement.
As used herein, "Related Persons" means a person's or entity's
past, present or future successors, assigns, agents, attorneys, trustees,
representatives, employees, officers, directors, affiliates or associates
(as such terms are defined in Rule 405 promulgated pursuant to the
Securities Act) and in the case of any natural person, shall also include
his or her spouse, heirs, executors and administrators.
3. Representations, Warranties and Covenants of La Jolla. La Jolla
hereby represents, warrants and covenants to the Company as follows:
3.1 Authority. La Jolla has all requisite power and authority to
enter into this Settlement Agreement. This Settlement Agreement has been
duly and validly authorized, executed and delivered by La Jolla and
constitutes a legal, valid and binding obligation of La Jolla, enforceable
against La Jolla in accordance with its terms. La Jolla owns all beneficial
and record title and interest in and to the Agreements, the Debenture and
the Warrant. La Jolla has made no sale, assignment, conveyance, pledge,
grant of a security interest in, encumbrance or other transfer of (i) the
Agreements, the Debenture or the Warrant or any of its rights or obligations
thereunder or (ii) any Claims that relate to, are based on or arise from the
Agreements, the Debenture or the Warrant.
3.2 No Conflict. Neither the execution, delivery, or performance
of this Settlement Agreement, nor the consummation of the transactions
contemplated hereby, will result in any violation of the terms of,
contravene or conflict with or constitute a default under La Jolla's
articles of incorporation or bylaws (or similar organizational documents) or
any instrument, judgment, order, writ, decree, agreement, statute, law, rule
or regulation applicable to La Jolla, or to which it is a party or by which
it or its property or assets are bound.
3.3 Shares Acquired Entirely for Own Account. La Jolla is
acquiring the Shares for investment purposes for its own account, not as a
nominee or agent, and not with a view to the resale or distribution of any
part thereof, and La Jolla has no present intention of selling, granting any
participation in, or otherwise distributing the same. La Jolla does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third party
with respect to any of the Shares.
3.4 Reliance upon La Jolla's Representations. La Jolla
understands that the Shares are not registered under the Securities Act on
the ground that the issuance of the Shares hereunder is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof, and
that the Company's reliance on such exemption is predicated on La Jolla's
representations set forth herein.
3.5 Disclosure of Information. La Jolla has received all the
information it considers necessary or appropriate for deciding whether
to receive the Shares. La Jolla has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
issuance of the Shares and the Company's condition (financial or otherwise),
assets, liabilities, results of operations, cash flows, properties, or
business as presently conducted or proposed to be conducted and to obtain
additional information (to the extent the Company possessed such information
or could acquire it without unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to La Jolla or to which La
Jolla had access. Furthermore, La Jolla acknowledges that on or about
November 24, 2004 the Company's wholly owned subsidiary, LSC Merger
Corporation, a Texas corporation, merged with and into Best Circuit Boards,
Inc., d/b/a Lone Star Circuits Inc., a Texas corporation ("LSC") in a change
of control transaction (the "Merger") and that, in the Merger, the Company
was treated as having been acquired by LSC. Consequently, La Jolla
acknowledges that it has not relied on any information in its decision to
acquire the Shares, with the exception of the information expressly set
forth in (i) the Company's Form 8-K as filed with the Securities and
Exchange Commission (the "SEC") on or about December 1, 2004, (ii) the
Company's Form 8-K/A as filed with the SEC on or about February 7, 2005, and
(iii) the Company's Form 10-QSB as filed with the SEC on or about April 27,
2005, but excluding the exhibits to any of the foregoing. La Jolla agrees
and acknowledges that any other information relating to the Company or
its condition (financial or otherwise), assets, liabilities, results of
operations, cash flows, properties or business is not relevant or material
and has not been taken into consideration or relied upon by La Jolla in
connection with its decision to enter into this Settlement Agreement, to
acquire the Shares or to otherwise consummate the transactions contemplated
hereby.
3.6 Investment Experience; Economic Risk. La Jolla understands
that an investment in the Company involves substantial risks. La
Jolla is experienced in evaluating and investing in private placement
transactions of securities of companies similarly situated to the Company
and acknowledges that La Jolla is able to fend for itself. La Jolla has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment in the Shares.
La Jolla can bear the economic risk of its investment and is able, without
impairing its financial condition, to hold the Shares for an indefinite
period of time and to suffer a complete loss of its investment.
3.7 Accredited Investor. La Jolla is an "accredited investor"
as defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.
3.8 Residence. The state of La Jolla's principal place of
business California.
3.9 Restricted Securities. La Jolla understands that the
Shares are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such federal
securities laws and applicable regulations such Shares may be resold without
registration under the Securities Act only in certain limited circumstances.
In this connection, La Jolla represents that it is aware of the provisions
of Rule 144 promulgated under the Securities Act ("Rule 144") which permits
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the
existence of a public market for the shares, the availability of certain
current public information about the Company, the resale occurring not less
than one year after a party has purchased and paid for the security to be
sold, the sale being effected through a "broker's transaction" or in
transactions directly with a "market maker" and the number of shares being
sold during any three-month period not exceeding specified limitations.
La Jolla acknowledges that the certificates representing the Shares
will contain legends in substantially the form set forth below, such
legends containing certain restrictions, including without limitation the
requirement that the holder of the Shares provide to the Company an opinion
of counsel in connection with certain transfers of the Shares.
3.10 No Pending or Future Lawsuits. Neither La Jolla nor any of
its Related Persons has any lawsuits, claims, or actions pending against the
Company or any of its Related Persons. La Jolla does not intend to and
covenants that it will not xxx or bring any claims on its own behalf or on
behalf of any of its Related Persons against the Company or its Related
Persons, except for claims, if necessary, to enforce the terms of this
Settlement Agreement or any other claims arising from events occurring
subsequent to execution of this Settlement Agreement.
3.11 No Other Securities. Except for the Agreement, the
Debenture, the Warrant and this Settlement Agreement, and rights hereunder
and thereunder, La Jolla has not owned and does not own any other securities
of the Company or any options, warrants or other rights to purchase or
acquire securities of the Company, and has not held and does not hold any
rights, derivatives, positions or other similar rights or obligations
relating to securities of the Company.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to La Jolla as follows:
4.1 Authority. The Company has all requisite power and authority
to enter into this Settlement Agreement. This Settlement Agreement has
been duly and validly authorized, executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
4.2 No Conflict. Neither the execution, delivery, or performance
of this Settlement Agreement, nor the consummation of the transactions
contemplated hereby, will result in any violation of the terms of,
contravene or conflict with or constitute a default under the Company's
certificate of incorporation or bylaws or any judgment, order, writ, decree,
statute, law, rule or regulation applicable to the Company, or to which it
is a party or by which it or its property or assets are bound, or under any
instrument or agreement listed as an exhibit to the Company's Form 10-QSB as
filed with the SEC on or about April 27, 2005.
5. Registration Rights. In accordance with Section 1 of this
Settlement Agreement, the Company hereby grants to La Jolla the following
registration rights (the "Registration Rights"):
5.1 "Piggy Back" Registrations. If the Company proposes to
register for resale under the Securities Act shares of the Company's common
stock for the account of a stockholder (other than (i) a registration
relating solely to employee benefit or similar plans or (ii) a registration
that is part of a transaction subject to Rule 145 promulgated under the
Securities Act), the Company shall, at such time, promptly give La Jolla
written notice of such registration. Upon the written request of La Jolla
given within twenty (20) calendar days of the date such notice is given, the
Company shall, subject to this Settlement Agreement, include in the
registration that the portion of the Shares that La Jolla has requested to
be registered (the "Requested Shares"). The Company shall not be obligated
to effect, or to take any action to effect, any registration pursuant to
this Section 5:
(a) for Shares that (i) have been previously registered for
resale under the Securities Act, whether pursuant to this Settlement
Agreement or otherwise or (ii) have been sold or transferred pursuant to
Rule 144;
(b) as a part of any registration statement pertaining to
a public offering of securities solely for the Company's account; or
(c) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act.
5.2 Underwritten Offering. If the registration involves an
underwritten offering, the Company will so advise La Jolla. In such event,
La Jolla shall, together with the Company, enter into an underwriting
agreement in customary form with the underwriter or underwriters selected by
the Company for such underwriting. If the total amount of securities,
including shares requested by La Jolla or other stockholders, to be included
in such offering exceeds the amount of securities to be sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall not be
required to register securities in excess of the amount that the principal
underwriter reasonably and in good faith recommends may be included in such
offering (a "Cutback"). If such Cutback occurs, the number of shares that
are entitled to be included in the registration and underwriting shall be
allocated in the following manner: (i) first, to the Company for any
securities it proposes to sell for its own account, and (ii) second, to La
Jolla and the other holders requesting inclusion in the registration, pro
rata among La Jolla and the respective holders thereof on the basis of the
number of shares for which La Jolla and each such requesting holder has
requested registration.
5.3 Delay of Registration. La Jolla shall have no right to
obtain or seek an injunction restraining or otherwise delaying any
registration of Company securities as a result of any controversy that might
arise with respect to such registration.
5.4 Obligations of La Jolla.
(a) It shall be a condition precedent to the Company's
obligations to take any action pursuant to this Section 5 with respect to
the Requested Shares that La Jolla shall furnish to the Company such
information regarding La Jolla, the Requested Shares, and the intended
method of disposition of such securities as shall be reasonably required by
the Company or the managing underwriters, if any, to effect the registration
of such Requested Shares. Without limiting the generality of the foregoing,
La Jolla agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any registration
statement covering the Shares.
(b) If, after a registration statement becomes effective,
the Company advises La Jolla that the registration statement is required to
be amended under applicable federal securities laws, La Jolla shall suspend
any further sales of Shares until the Company advises La Jolla that the
registration statements has been amended.
(c) The Company may delay the disclosure in any registration
statement covering the Shares of material non-public information concerning
the Company (as well as prospectus or registration statement updating) the
disclosure of which at the time is not, in the good faith opinion of the
Company, in the best interests of the Company (an "Allowed Delay"). The
Company shall promptly (i) notify La Jolla in writing of the existence of
(but in no event shall the Company be required to disclose to La Jolla any
of the facts or circumstances regarding) material non-public information
giving rise to an Allowed Delay and (ii) advise La Jolla in writing to cease
all sales under a registration statement covering the Shares. La Jolla
agrees that, upon receipt of any notice from the Company of the existence of
(i) material non-public information giving rise to an Allowed Delay or (ii)
any stop order or other suspension of effectiveness of any registration
statement covering the Shares, La Jolla will immediately discontinue
disposition of Shares pursuant to the registration statement covering such
Shares until La Jolla's receipt of copies of the supplemented or amended
prospectus disclosing such material non-public information or the withdrawal
of the stop order or other suspension, as the case may be.
5.5 Transfer or Assignment of Registration Rights. The
Registration Rights may be transferred or assigned, but only with all
related obligations, by La Jolla to a transferee or assignee who acquires
the Shares from La Jolla as restricted securities (as defined in Rule 144);
provided, that (a) the Company is furnished with written notice stating the
name and address of such transferee or assignee and identifying the
securities with respect to which such registration rights are being
transferred or assigned, (b) such transferee or assignee agrees in writing
to be bound by and subject to all of the terms and conditions of this
Settlement Agreement, and (c) such transfer or assignment shall be effective
only if immediately following such transfer or assignment, the further
disposition of such securities by the transferee or assignee is restricted
under the Securities Act.
5.6 "Market Stand-Off" Agreement. La Jolla hereby agrees that,
if requested by the managing underwriter, it will not, without the prior
written consent of the Company, during the period commencing on the date of
the final prospectus relating to any registration of the Shares, and ending
on the date specified by the Company and the managing underwriter (such
period not to exceed one hundred eighty (180) calendar days) (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any of the Shares or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any of the Shares. The foregoing
covenants shall not apply to the sale of any of the Shares by La Jolla to an
underwriter pursuant to an underwriting agreement. La Jolla agrees to
execute an agreement(s) reflecting (i) and (ii) above as may be requested by
the managing underwriters at the time of any offering relating to the
registration of the Shares, and further agrees that the Company may impose
stop transfer instructions with its transfer agent in order to enforce the
covenants in (i) and (ii) above. Any discretionary waiver or termination of
the restrictions of any or all such agreements by the Company shall apply to
La Jolla pro rata based on the number of shares of stock or options to
purchase shares of stock held by those subject to such agreements. The
restrictions in this Section 5.6 shall not apply to transfers to affiliates
of La Jolla or purchases made in the open market following the completion of
any offering covered by this Section 5.6, or, to any secondary public
offerings in which La Jolla is not selling shares of common stock for its
own account.
5.7 Expenses of Registration. All expenses (other than
underwriting discounts and commissions) incurred in connection with
registrations, filings or qualifications pursuant to this Section 5,
including without limitation all registration, filing and qualification
fees, printer's fees, accounting fees and fees and disbursements of counsel
for the Company and one counsel for all selling stockholders (including La
Jolla) shall be borne by the Company.
6. Voluntary and Knowing Execution. Each of the Parties acknowledges
that (i) this Settlement Agreement is made and executed by and of its own
free will, (ii) it knows all of the relevant facts and rights in connection
therewith, (iii) it has not been improperly influenced or induced to make
this compromise and settlement as a result of any act or action on the part
of any Party or its Related Persons, and (iv) it has had the opportunity to
consult with counsel prior to entering into this Settlement Agreement.
7. Amendment. This Settlement Agreement represents the entire
agreement between the Parties with respect to the subject matter hereof and
may be amended, or any provision herein waived, only by a written document
signed by all the Parties.
8. Assignment; Beneficiaries. This Settlement Agreement shall be
binding upon and shall inure to the benefit of the Parties and their
respective heirs (if applicable), successors and permitted assigns. Except
as provided in Section 5.5 of this Settlement Agreement, neither this
Settlement Agreement nor any right hereunder may be assigned by any Party
without the consent of the other Parties hereto. Except as provided herein
with respect to Related Persons, no person other than the Parties hereto and
their permitted assigns is intended to be a third party beneficiary
hereunder or have any right hereunder or with respect hereto.
9. Counterparts. This Settlement Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all
of which together shall constitute one instrument. A facsimile, telecopy or
other reproduction of this Settlement Agreement may be executed by one or
more Parties hereto, and an executed copy of this Settlement Agreement may
be delivered by one or more Parties hereto by facsimile or similar
electronic transmission device pursuant to which the signature of or on
behalf of such Party can be seen, and such execution and delivery shall
be considered valid, binding and effective for all purposes. At the
request of any Party, all Parties hereto agree to execute an original
of this Settlement Agreement as well as any facsimile, telecopy or other
reproduction hereof.
10. Legends. The share certificates evidencing the Shares shall be
endorsed with legends in substantially the following form:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE ISSUED AND
SHALL BE HELD SUBJECT TO ALL THE PROVISIONS OF THE CERTIFICATE OF
INCORPORATION AND THE BYLAWS OF THE CORPORATION AND ANY AMENDMENTS
THERETO, TO ALL OF WHICH THE HOLDER OF THIS CERTIFICATE BY
ACCEPTANCE HEREOF, ASSENTS. A STATEMENT OF ALL OF THE RIGHTS,
PREFERENCES, PRIVILEGES AND RESTRICTIONS GRANTED TO OR IMPOSED
UPON THE RESPECTIVE CLASSES AND/OR SERIES OF SHARES OF STOCK OF
THE CORPORATION AND UPON THE HOLDERS THEREOF MAY BE OBTAINED BY
ANY STOCKHOLDER UPON REQUEST AND WITHOUT CHARGE FROM THE SECRETARY
OF THE CORPORATION AT THE PRINCIPAL OFFICE OF THE CORPORATION.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS
THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND MAY
BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF, CERTAIN
RESTRICTIONS ON TRANSFER, INCLUDING A 180-DAY LOCK-UP AGREEMENT,
AS SET FORTH IN A COMPROMISE AND RELEASE AGREEMENT BETWEEN THE
CORPORATION AND THE HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE CORPORATION'S PRINCIPAL EXECUTIVE OFFICES.
11. Severability. If any provision of this Settlement Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
invalid, unenforceable or void, portions of such provision, or such
provision in its entirety, to the extent necessary, shall be severed from
this Settlement Agreement, and the validity, legality, and enforceability of
the remaining provisions contained herein shall not in any way be affected
thereby and such illegal, invalid, unenforceable or void provisions shall be
reformed to achieve, to the extent possible, the intent of the Parties in a
manner that is legal, valid and enforceable. The balance of this Settlement
Agreement shall be enforceable in accordance with its terms.
12. Notices. Any notices required or permitted to be given under
the terms hereof shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be
effective five days after being placed in the mail, if mailed by regular
United States mail, or upon receipt, if delivered personally or by courier
(including a recognized overnight delivery service) or by facsimile, in each
case addressed to a party. The addresses for such communications shall be:
If to the Company:
Integrated Performance Systems, Inc.
000 Xxxxxxx Xxxx
Xxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx and Xxxxx, LLP
0000 X. Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to La Jolla:
La Jolla Cove Investors, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Atlas, Corporate Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
13. Governing Law; Venue; Waiver of Jury Trial. This Settlement
Agreement shall be governed in all respects by the laws of the State of
California as such laws are applied to agreements between California
residents entered into and to be performed entirely within California
without regard to conflict of laws rules. Any proceeding arising out of or
relating to this Settlement Agreement or any transaction contemplated hereby
(a "Proceeding") shall be brought in the state courts of the State of
California, County of San Diego, and each Party irrevocably (i) submits to
the exclusive jurisdiction of such courts in any such Proceeding, (ii)
waives any objection it may now or hereafter have to venue or to convenience
of forum, (iii) agrees that all claims in respect of any Proceeding shall be
heard and determined only in such courts and (iv) agrees not to bring any
Proceeding in any other court. The Parties hereby waive any right to trial
by jury in any Proceeding and hereby agree and acknowledge that any
Proceeding shall instead be tried in the courts named above by a judge
sitting without a jury. Process in any Proceeding may be served on any
party anywhere in the world.
* * * * * *
EXECUTED on the date first written above.
INTEGRATED PERFORMANCE SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------------
Xxxx Xxxxxx
President and Chief Executive Officer
LA JOLLA COVE INVESTORS, INC.
By: /s/ Xxxx Atlas
-------------------------------------
Xxxx Atlas
Corporate Counsel
