EXHIBIT 10.3
FIRST ADDENDUM TO THE STOCK ESCROW AND SECURITY AGREEMENT
BETWEEN D. ▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇") and INTEGRATED PERFORMANCE SYSTEMS,
Inc.("IPS") (collectively, "Transferors")
&
▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and BEST CIRCUIT BOARDS, Inc.("BCB") (collectively,
"Transferees")
November 24, 2004
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The following Agreement is made and entered into this 24th day of November,
2004, by, between, and among Transferors ▇▇▇▇▇ and IPS and Transferees
▇▇▇▇▇▇ and BCB (sometimes collectively referred to as the "Parties").
WHEREAS, Transferors and Transferees executed a "Stock Escrow and Security
Agreement" on September 16, 2004, in which Transferors transferred all
shares of common stock held in IPS by ▇▇▇▇▇ or entities affiliated with
▇▇▇▇▇, into escrow as security for the payment of certain liabilities;
WHEREAS, IPS and BCB executed an "Agreement and Plan of Merger" on October
22, 2004, and subsequently amended, in which BCB shall become a wholly owned
subsidiary of IPS ("the Merger Transaction");
WHEREAS, the Agreement and Plan of Merger provided for, in Section 7.2
therein, additions to the stock held in escrow pursuant to the Stock Escrow
and Security Agreement;
WHEREAS, both parties therefore wish to add to and modify certain provisions
of the Stock Escrow and Security Agreement to reflect these subsequent
agreements;
THEREFORE, the parties to the above-referenced agreement hereby make the
following changes to that agreement:
S1. Incorporation Clause: The above and foregoing preambles are
incorporated by reference as if fully set forth herein. Additionally,
the Agreement and Plan of Merger, including all amendments and addendums
thereto, is herein incorporated by reference as if fully set forth herein.
S2. "Article I: Escrow Deposit" is hereby amended to read as follows:
S1.01. Transferor ▇▇▇▇▇, contemporaneous with the closing of the Merger
Transaction, shall deposit all certificated securities he may have in
Integrated Performance Systems, Inc. (IPS) held as common stock with Escrow
Agent to secure Transferors' obligations as described in S1.04 below and as
supplemented by Article VII of the Agreement and Plan of Merger. The amount
or value of the certificates transferred shall constitute the "Escrow Fund."
By making such deposit, Transferor warrants that he has authority to pledge
such securities, that such deposit does not violate any known agreements or
covenants with any 3rd party, and that proper indorsement has been made on
such securities, if necessary.
Such securities are identified, in part, as follows:
Certificate
Held in the name of: Associates Funding Group, Inc.
Number of shares: 1,249,244 shares
Certificate
Held in the name of: Associates Funding Group, Inc.
Number of shares: 1,567,959 shares
Certificate
Held in the name of: BC&Q Corp.
Number of shares: 849,485 shares
Certificate
Held in the name of: Winterstone Management, Inc.
Number of shares: 905,244 shares
Additional deposits shall include all common shares issued by IPS as a
result of the conversion of Preferred shares of any series held by ▇▇▇▇▇ or
an entity in which ▇▇▇▇▇ is a shareholder, partner, member, or other equity
stakeholder, as well as shares issued by IPS to Landmark Lakes to be used as
satisfaction of delinquent property taxes under the lease with C Gate
Construction.
S1.02. For the duration of this Agreement, all voting rights represented
by stock transferred into the Escrow Fund pursuant to S1.01, as well as any
other rights appurtenant to the ownership of such stock, shall be exercised
by Transferee ▇▇▇▇ ▇▇▇▇▇▇.
S1.03. The assets in the Escrow Fund are to be retained by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, acting as Escrow Agent and Escrow Trustee pursuant to this Escrow
Agreement. The assets (and any income which might be earned on them) may be
disbursed from the Escrow Fund only in accordance with Article III or in
accordance with Article VII of the Agreement and Plan of Merger.
S1.04. The assets in the Escrow Fund shall be held as security against any
and all past or future advances by Transferees in favor of Transferors, as
well as all obligations described in the Agreement and Plan of Merger. Upon
request, Transferee will provide Transferor an accounting of the unpaid
obligations secured by the collateral in the Escrow Fund. A reasonable
charge may be applied for such accounting.
S1.05. Transferor ▇▇▇▇▇ hereby acknowledges Transferees' security interest
in the stock deposited into the Escrow Fund and waives any failure to
perfect such security interest if later found by a court of law.
S2. S2.02 of Article II: Duties of Escrow Agent is hereby amended to read
as follows:
S2.02. The Escrow Agent shall disburse part or all of the Escrow Fund only
in accordance with Article III herein or as described in Article VII of the
Agreement and Plan of Merger. All interest and other income earned, if any,
on the Escrow Fund at the time of disbursement shall be distributed in the
same proportion as the distribution of the Escrow Fund. On distribution of
all the Escrow Fund, except as otherwise provided under Article IV below,
this Escrow Agreement shall terminate.
S3. Article III is hereby amended to read as follows:
S3.01. No disbursements shall be made from the Escrow Fund except as
provided in this
Article III or as provided in Article VII of the Agreement and Plan of
Merger.
S3.02. No disbursements shall be made from the Escrow Fund prior to either
the closing of or the termination of the Merger Transaction (no matter which
party is responsible for the termination).
S3.03. Upon the closing or termination of the Merger Transaction and
thereafter, Escrow Agent shall disburse to Transferees an amount
representing the amount of funds advanced in favor of Transferors prior to
the closing or termination as well as amounts described in Article VII of
the Agreement and Plan of Merger. Transferees shall present documentation
sufficient to substantiate that amount. Prior to disbursement, Transferors
shall be given the opportunity to object to the amount as well as the
opportunity to satisfy such amount in cash or other payment acceptable to
Transferee.
S3.04. Escrow Agent shall give notice to both Transferors and Transferees
prior to making partial or complete disbursement of any amounts from the
Escrow Fund pursuant to this Article III or pursuant to Article VII of the
Agreement and Plan of Merger.
S3.05. Unless otherwise agreed, any stock deposited into the Escrow Fund
shall, upon disbursement, be valued at a price equal to that paid by
institutional investors pursuant to the Capital Raise as described in
the Agreement and Plan for Merger for purposes of satisfying advances or
liabilities.
S3.06. Prior to liquidation of any stock held in the Escrow Fund to be
disbursed in accordance with this Article, Transferors shall be allowed
to fund the disbursement in an equivalent amount of cash or other form of
payment acceptable to Transferees.
S3.07. Transferors shall pay Escrow Agent his customary fee for the
performance of Escrow Agent's services for such time that any Escrow Funds
remain in escrow and shall reimburse Escrow Agent for reasonable costs
and expenses incurred in connection with the performance of the services.
Escrow Agent shall have the authority to disburse an amount from the Escrow
Fund to satisfy any unpaid amounts under this section at the time of
termination of the Escrow Fund.
S3.08. Upon satisfaction of all amounts advanced by Transferees to
Transferors and upon satisfaction of the provisions of Article VII of the
Agreement and Plan of Merger, the Escrow Fund shall be terminated pursuant
to Article VII of the Agreement and Plan of Merger.
The parties to this First Addendum To The Stock Escrow And Security
Agreement have duly executed this Agreement on this the 24th day of
November, 2004.
/s/ D. ▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇
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D. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
On behalf of Transferors On behalf of Transferees
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Escrow Agent and Trustee