EXHIBIT 2.1
MUTUAL RESCISSION AGREEMENT AND RELEASE
THIS
MUTUAL RESCISSION AGREEMENT AND RELEASE (the "Agreement"), is
entered
into as of June 27, 2005, by and among,
INNOVATIVE SOFTWARE TECHNOLOGIES, INC.,
a California corporation ("IST"), IST
INTEGRATED SOLUTIONS, INC., a Florida
corporation and a wholly owned subsidiary
of IST ("IST Integrated"), LIETZ
DEVELOPMENT, INC., a Florida corporation
("Lietz Development"), SAPPHIRE OF
TAMPA BAY, INC., a Florida corporation
("Sapphire," and together with Lietz
Development, referred to as "Data Tech"),
CHRISTOPHER LIETZ, an individual
residing in the State of Florida ("C.
Lietz"), and TODD LIETZ, an individual
residing in the State of Florida ("T.
Lietz," and together with C. Lietz,
referred to as the "Selling
Stockholders").
BACKGROUND:
The
parties entered into an Asset Purchase Agreement, dated May 6,
2005
(the "Asset Purchase Agreement"), pursuant
to which IST Integrated acquired on
such date substantially all of the assets
and operations of Data Tech (the
"Asset Purchase Transaction"). Subsequent
to the closing of the Asset Purchase
Transaction, IST and IST Integrated
identified and/or discovered certain facts
that constitute undisclosed liabilities or
breaches of representation or
warranty by Data Tech and the Selling
Stockholders under the Asset Purchase
Agreement. In addition, Data Tech and the
Selling Stockholders have not
completed the assignment of the Leases and
Contracts (as defined in the Asset
Purchase Agreement) in accordance with the
Asset Purchase Agreement.
In view of
the foregoing, the parties desire to rescind the Asset Purchase
Agreement and the Asset Purchase
Transaction effective as of the date thereof,
and to release each other from any and all
claims arising out of the Asset
Purchase Transaction. To date, no portion
of the Purchase Price or Performance
Consideration (as defined in Section 1.4 of
the Asset Purchase Agreement) have
been paid by IST Integrated in connection
with the Asset Purchase Transaction.
NOW,
THEREFORE, in consideration of the premises and of the covenants
and
agreements hereinafter set forth, the
parties agree as follows:
1.
Recitals. The parties agree that the foregoing recitals are true
and
correct.
2.
Rescission of Asset Purchase Transaction. The parties hereby
rescind
the Asset Purchase Agreement and Asset
Purchase Transaction in their entirety,
and in connection therewith, the parties
agree as follows:
(a) The Asset Purchase Agreement and Asset Purchase Transaction
is
hereby deemed to be rescinded effective as
of May 6, 2005, and such agreement
and transaction are hereby deemed by the
parties to be void ab initio.
(b) Data Tech and the Selling Stockholders hereby irrevocably
and
forever relinquish (i) their right to
receive any portion of the Purchase Price
or Performance Consideration under Section
1.4 of the Asset Purchase Agreement
and (ii) their right to receive any other
consideration, payment, or entitlement
under the Asset Purchase Agreement or
otherwise in connection with the Asset
Purchase Transaction.
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(c) The parties agree that the transfer of the Purchased Assets
pursuant to Section 1.1 of the Asset
Purchase Agreement is h
