Exhibit 2.1
MUTUAL TERMINATION AGREEMENT
This MUTUAL TERMINATION AGREEMENT dated February 29, 2004 (the
"Agreement") is made and entered into by and among Xxxxxxx Digital Corporation
(formally known as ESCAgenetics Corporation), a Delaware corporation ("Xxxxxxx")
and the former shareholders ("Shareholders") of Shecom Corporation, a Colorado
corporation ("Shecom"). Xxxxxxx, the Shareholders and Shecom are collectively
referred to as the "Parties" and each individually as a "Party".
WHEREAS, on August 22, 2003, Xxxxxxx, Shecom Acquisition Corp, a Colorado
corporation and wholly owned subsidiary of Xxxxxxx ("Mergeco") and Shecom
entered into an Agreement and Plan of Reorganization, as amended on September
24, 2003 (collectively, the "Merger Agreement"); and
WHEREAS, the Merger Agreement provided for a tax-free issuance of
securities pursuant to the provisions of Section 368(a) of the Internal Revenue
Code, whereby Xxxxxxx acquired 100% of the capital stock of Shecom through the
merger of Mergeco with and into Shecom (the "Merger") pursuant to which the
separate corporate existence of Mergeco ceased and Shecom continued unimpaired
as the surviving corporation of such Merger as a wholly owned subsidiary of
Xxxxxxx; and
WHEREAS, in consideration of the Merger and the receipt by Xxxxxxx of 100%
of the capital stock of Shecom, Xxxxxxx agreed to issue to the Shareholders that
number of shares of Xxxxxxx common stock and warrants to purchase additional
shares of Xxxxxxx common stock as represented (assuming full exercise of
warrants held by them to purchase additional shares of Shecom) 87.5% of the
issued and outstanding shares of common stock of Xxxxxxx on a fully diluted
basis, after giving effect to the Merger; and
WHEREAS, on November 5, 2003, the effective date of the Merger (the
"Effective Date"), Xxxxxxx issued 19,823,438 shares of Krystal's common stock
and warrants to purchase an additional 2,051,619 shares of Krystal's common
stock (the "Merger Securities") to the Shareholders in exchange for 21,257,737
shares of Shecom common stock together with warrants to purchase an additional
2,200,000 shares of Shecom common stock for an aggregate of 23,457,000 fully
diluted outstanding shares of Shecom common stock which constituted 100% of the
issued and outstanding capital stock of Shecom (the "Exchange Securities"), such
calculations not giving effect to a subsequent one for five reverse stock split;
and
WHEREAS, the Merger Agreement provided that after the Effective Date all
of the officers and directors of Xxxxxxx would be replaced by persons designated
by the shareholders of Shecom; and
1
WHEREAS, on the Effective Date a Certificate of Merger by and between
Shecom and Mergeco ("Certificate of Merger") was filed with the Colorado
Secretary of State pursuant to which the separate legal existence of Mergeco
ceased and Shecom continued as the surviving corporation; and
WHEREAS, the Board of Directors of Xxxxxxx and the Shareholders have
determined that as a result of Shecom's inability to produce audited financial
statements which has resulted in Krystal's inability to comply with the
Securities and Exchange Commission requirements of reporting entities, it is in
the best interests of all Parties to rescind the Merger Agreement, for each
party to return to the other the consideration received in connection with the
Merger and to release each other from all duties, rights, claims, causes of
action, obligations and liabilities arising from, in connection with or relating
to the Merger Agreement, all as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:
1. Agreement to Rescind. Subject to the terms and conditions set forth
herein, the Parties agree to rescind the Merger Agreement and the
Merger Agreement will be rescinded and of no further force and
effect as of the Closing. The Parties agree at the Closing to
exchange the Merger Securities and Exchange Securities as more fully
set forth in Section 3, so that Xxxxxxx will divest itself of and no
longer will have any ownership interest in Shecom and the
Shareholders will divest themselves of and no longer have any
ownership interest in Xxxxxxx and that after the Closing, the
Shareholders will own 100% of the capital stock of Shecom.
2. Regulatory Compliance. Xxxxxxx undertakes and agrees after to the
execution of this Agreement to (a) file a Current Report on Form 8-K
pursuant to the Securities Exchange Act of 1934 (the "Act") to
disclose this Agreement; (b) to file an Information Statement
pursuant to Section 14(c) of the Act ("Information Statement") and
(c) to issue a press release regarding the Agreement.
3. Closing. The closing ("Closing") of the transaction and the
effectiveness of this Agreement as contemplated by Section 1 shall
take place at the offices of ______________________ as ____ a.m. on
the twentieth day after the Information Statement is mailed to the
shareholders of Xxxxxxx, or at such other time and place as the
Parties may agree ("Closing Date").
4. Approval. Prior to Closing, the Board of Directors of Xxxxxxx and a
majority of its shareholders will have consented in writing to the
actions contemplated hereby.
2
5. Return of Consideration. At the Closing, each Party agrees to return
to the other the consideration received by it in connection with the
Merger Agreement as follows:
a) Merger Securities: The Shareholders hereby agrees to endorse,
assign and transfer to Xxxxxxx all of their right title and
interest in and to the Merger Securities. From time to time
after the Closing, and without further consideration, the
Shareholders agree to execute and deliver such other
instruments of transfer and take such other actions as Xxxxxxx
may reasonably request in order to effectively transfer the
Merger Securities to Xxxxxxx.
b) Exchange Securities: Xxxxxxx hereby agrees to endorse, assign
and transfer to the Shareholders all of its right, title and
interest in and to the Exchange Securities. From time to time
after the Closing, and without further consideration, Xxxxxxx
agrees to execute and deliver such other instruments of
transfer and take such other actions as the Shareholders may
reasonably request in order to effectively transfer the
Exchange Securities to the Shareholders.
6. Management. At the Closing, Krystal's Board of Directors shall
appoint Xxxxx X. Xxxxxxx as its sole Officer and Director and each
shall tender his resignation as an officer and/or director of
Xxxxxxx effective as of the Closing. Concurrently, the Shareholders
shall assume their respective corporate positions they held in
Shecom prior to the Merger.
7. Releases: Each Party hereby unequivocally releases and discharges
the other Party and any of its directors, agents, representatives,
shareholders, financial advisors, affiliates, principals, or
parents, and any administrators, successors and assigns of any
action, choses in action, cases, claims, suits, injuries, damages,
judgments and liabilities whatsoever, in law, equity or otherwise
arising under, in connection with or relating to the Merger
Agreement or any transactions contemplated thereby or in connection
with the events leading to the termination of the Merger and the
rescission of the Merger Agreement. Notwithstanding the foregoing,
the Parties specifically acknowledge and agree that any and all
claims or actions, asserted or unasserted against the Shareholders
and /or Shecom in connection with bridge loans made to Shecom and/or
its officers, directors affiliates or shareholders by Xxxxxxx
Investments, LLC, Xxxxxxx Xxxxxx, LLC and their respective
affiliates and investors are not hereby released, discharged or
compromised.
8. Publicity and Disclosure. Except as required by law, no press
releases except as set forth herein shall be issued regarding the
rescission of the Merger Agreement by any Party without the prior
written consents of the other Parties.
3
9. Representations of the Parties. Each Party represents to the other
that it has all requisite power and authority to execute and perform
its obligations under this Agreement; that it has taken all
necessary action to authorize such execution, delivery and
performance; that such execution, delivery and performance does not
violate or conflict with any law applicable to it, any provision of
its charter or bylaws, or any order or judgment or order of any
court or other agency of government applicable to it and that it has
obtained any and all consents necessary such that this Agreement,
when executed, will constitute the legal, valid and binding
obligation of the Parties, enforceable in accordance with its
respective terms.
10. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the Parties with respect to the subject
matter hereof and supercedes all prior and contemporaneous
agreements and understandings. This Agreement is binding upon and
shall inure to the benefit of the Parties hereto and their legal
representatives, successors and permitted assigns. This Agreement
may not be assigned and, except as stated herein, may not be altered
or amended except in writing executed by all of the Parties hereto.
11. Governing Law, Dispute Resolution and Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of
the State of Colorado, without giving effect to the conflicts of
laws principles thereof. All disputes, controversies or claims
("Disputes") arising out of or relating to this Agreement shall in
the first instance be the subject of a meeting between a
representative of each Party who has decision-making authority with
respect to the matter in question. Should the meeting either not
take place or not result in a resolution of the Dispute within
twenty (20) business days following notice of the Dispute to the
other Party, then the Dispute shall be resolved in a binding
arbitration proceeding to be held in Denver, Colorado, in accordance
with the international rules of the American Arbitration
Association. The Parties agree that a panel of three arbitrators
shall be required. Any award of the arbitrators shall be deemed
confidential information for a minimum period of five years. The
arbitrators may award attorneys' fees and other arbitration related
expense, as well as pre- and post-judgment interest on any award of
damages, to the prevailing Party, in their sole discretion.
12. Notices. All notices or other communications to be sent by any Party
to this Agreement to any other Party shall be sent by certified
mail, personal delivery or national overnight courier to the
addresses herein designated or as may hereafter be designated in
writing by a Party. Notice shall be deemed given and received on the
date of actual delivery to the address specified thereon.
13. Counterparts. This Agreement may be executed in counterparts, all of
which, when taken together, shall constitute the entire Agreement.
4
14. Severability. The provisions of this Agreement shall be severable,
so that the unenforceability, validity or legality of any one
provision shall not affect the enforceability, validity or legality
of the remaining provisions thereof.
15. Joint Drafting. This Agreement shall be deemed to have been drafted
jointly by the Parties hereto, and no inference or interpretation
against any Party shall be made solely by virtue of such Party
allegedly having been the draftsperson of the Agreement.
IN WITNESS WHEREOF, the Parties have made and executed this Agreement as
of the day and year first above written.
XXXXXXX DIGITAL CORPORATION
a Delaware corporation
By: /s/ Raju Shewa
-----------------------------------
Name: Raju Shewa
Title:
Address: 000 Xxxx Xxxxxxx Xxxx
Xxxxx X
Xxxx, XX 00000
SHAREHOLDERS:
By:/s/ Raju Shewa
-----------------------------------
Name:
Address:
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name:
Address:
By: /s/ Xxxxxxx X. Trad
-----------------------------------
Name:
Address:
By: /sl Xxxxxxx Xxxxxxxxx
-----------------------------------
Name:
Address:
5
