RESCISSION AGREEMENT
This RESCISSION AGREEMENT (this “Agreement”), dated as of April 8, 2013, is by and
among IGX GLOBAL INC., a New Jersey corporation (“IGX NJ”), XXXXXX XXXXX, (“Xxxxx”),
IGXGLOBAL CORP., a Delaware corporation (“IGX DE”) and IGAMBIT INC., a Delaware
corporation (“iGambit”). IGX NJ, Xxxxx, IGX DE and iGambit collectively referred to herein
as “Parties” and each a “Party”.
WHEREAS, IGX NJ, Xxxxx, IGX DE and iGambit are parties to a certain Asset and Stock
Purchase Agreement dated as of December 28, 2012 (as amended and in effect, the “Purchase
Agreement”) pursuant to which (a) IGX DE purchased from IGX NJ substantially all of the
assets of IGX NJ (the assets so purchased being the “IGX NJ Assets”) and (b) IGX DE
purchased from Xxxxx the entire issued share capital of IGXGlobal UK Limited (“IGX UK”),
being 1 ordinary share of £1.00 (the “IGX UK Shares”); and
WHEREAS, pursuant to the terms and conditions of this Agreement, the Parties desire to
cancel, rescind and render null and void, ab initio, the Purchase Agreement, and all other
documents, instruments, securities and other certificates executed or delivered in connection with
the transactions described by the Purchase Agreement, including without limitation those
documents, instruments, securities and other certificates listed on Schedule I hereto (collectively
with the Purchase Agreement, the “Purchase Documents”);
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:
1.
Rescission. Effective upon the Effective Time (as defined in Section 2 below), the
Parties shall, and effective upon the Effective Time hereby do, (a) cancel and rescind each of the
Purchase Documents, and the transactions contemplated therein, and (b) declare each of the
Purchase Documents, and the transaction contemplated therein, null and void, ab initio for all
purposes, including, without limitation, tax purposes (collectively, the “Rescission”). The
Parties hereby acknowledge and agree that, as a result of the Rescission, each party shall be in
the same position it was in in immediately prior to the consummation of the transactions
contemplated by the Purchase Documents, in every respect other than as otherwise expressly
contemplated by this Agreement.
2.
Effectiveness. Subject to Section 6, the Rescission shall be effective at the time and date
(the “Effective Time”) that all conditions to the obligations of the Parties to consummate the
Rescission set forth in Sections 3(a) and (b) below have been satisfied or waived.
3.
Conditions.
(a)
Conditions to Obligations of IGX NJ and Xxxxx. All obligations of IGX NJ and
Xxxxx to effect the Rescission are subject to the fulfillment (or waiver by IGX NJ and Xxxxx,
except as otherwise provided, and subject to, Section 3(c) below) of the following conditions:
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(i)
IGX DE and iGambit shall have performed in all material respects all
obligations respectively required under this Agreement by them; and
(ii)
Each of IGX DE and iGambit shall have delivered or caused to be
delivered each of the following:
(A)
A Certificate of the Secretary of each of IGX DE and iGambit
showing the signatures of those officers of IGX DE and iGambit, respectively, authorized to sign
on behalf of IGX DE and iGambit this Agreement and all other documents, instruments,
securities and other certificates executed or delivered in connection with the transactions
described by this Agreement (collectively with this Agreement, the “Rescission Documents”)
and certifying that said signatures are the signatures of said authorized officers, which certificate
shall be delivered to IGX NJ and Xxxxx concurrently with the execution of this Agreement;
(B)
Resolutions of the shareholders (if necessary) and the directors of
each of IGX DE and iGambit certified by the Secretary of each of IGX DE and iGambit as
having been duly and validly adopted and as being in full force and effect on the date hereof,
authorizing the execution and delivery by each of IGX DE and iGambit of this Agreement and
other Rescission Documents, and authorizing the performance by IGX DE and iGambit of the
transactions contemplated hereby and thereby, which certificate shall be delivered to IGX NJ and
Xxxxx concurrently with the execution of this Agreement;
(C)
For avoidance of doubt, notwithstanding the fact that the
transactions contemplated herein shall be a rescission of the Purchase Documents:
(1)
a Xxxx of Sale and Assignment, in form attached hereto as
Exhibit A, executed by IGX DE (the “Rescission Xxxx of Sale”);
(2)
an Assignment and Assumption Agreement, in form
attached hereto as Exhibit B, executed by IGX DE (the “Rescission Assignment-
Assumption Agreement”); and
(3)
an Assignment and Assumption of Lease, in form attached
hereto as Exhibit C, executed by IGX DE, and the consent of the landlord under such
applicable lease to such assignment (the “Rescission Assignment-Assumption of
Lease”); and
(D)
an Assignment and Assumption of Employment Agreement, in
form attached hereto as Exhibit D, executed by iGambit, pursuant to which that certain
Employment Agreement between iGambit and Xxxxx Xxxx is assigned to IGX NJ (the “Mayo
Assignment-Assumption Agreement”); and
(E)
One or more share certificates representing the IGX UK Shares (or
an appropriate indemnity if such certificate has been lost) for cancellation by IGX UK, together
with a stock transfer form in respect of the same in favor of IGX NJ executed by IGX DE (the
“IGX UK Share Transfer Documents”); and
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(iii) IGX NJ and/or Xxxxx shall have secured adequate financing (the
“Financing”) in an aggregate amount equal or exceeding the sum of: (a) the Initial iGambit
Payment (as defined in Section 3(b)(iii) below); (b) the amount necessary to fully repay the
indebtedness (the “Keltic Debt”) of iGambit and IGX DE to Keltic Financial Partners II, LP
(“Keltic”) under the Loan and Security Agreement dated December 31, 2012 by and between
Keltic Financial Services II LLP and IGXGLOBAL Corp. (collectively with all other documents,
instruments, securities and other certificates executed or delivered in connection with the Keltic
Debt, the “Keltic Debt Documents”); (c) any outstanding audit fees due and owing from
iGambit to Xxxxxxxxx, Xxxxxx & XxXxxxxxxx LLP relating to IGX NJ, which the Parties hereby
acknowledge to be $75,000.00 (the “Audit Fees”); (d) up to $95,000 of fees due and owing from
iGambit to Frontrunner (the “Frontrunner Fees”); and (e) up to $10,500 of fees due and owing
from iGambit to MK Appraisal Group for appraisal services (the “Appraisal Fees”); and
(iv)
A payoff letter (the “Keltic Payoff Letter”) in a form reasonably
acceptable to IGX NJ and Xxxxx pursuant to which (A) Keltic provides amount to repay, in full,
the Keltic Debt (and per diem), and (B) upon such repayment, (x) all Parties shall be released
from any obligations under the Keltic Debt Documents, (y) all Keltic Debt Documents shall be
terminated and no force or effect and (z) any and all liens, encumbrances and security interests
held by Keltic against any IGX NJ Assets or IGX UK Shares shall be terminated and released,
and all Parties shall be authorized to file such necessary UCC termination statements to effect the
same; and
(v)
iGambit and/or IGX DE shall have delivered to IGX NJ and Xxxxx true
and accurate copies of all invoices evidencing the Audit Fees, Frontrunner Fees and Appraisal
Fees.
(b)
Conditions to Obligations of IGX DE and iGambit. All obligations of IGX DE
and iGambit to effect the Rescission are subject to the fulfillment (or waiver by IGX DE and
iGambit, except as otherwise provided, and subject to, Section 3(c) below) of the following
conditions:
(i)
IGX NJ and Xxxxx shall have performed in all material respects all
obligations respectively required under this Agreement by them; and
(ii)
Each of IGX NJ and Xxxxx shall deliver or cause to be delivered each of
the following:
(A)
A Certificate of the Secretary of IGX NJ showing the signatures of
those officers of IGX NJ authorized to sign on behalf of IGX NJ this Agreement and all other
Rescission Documents and certifying that said signatures are the signatures of said authorized
officers, which certificate shall be delivered to iGambit concurrently with the execution of this
Agreement;
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(B)
Resolutions of the shareholders (if necessary) and the directors of
each of IGX NJ certified by the Secretary of IGX NJ as having been duly and validly adopted
and as being in full force and effect on the date hereof, authorizing the execution and delivery by
each of IGX NJ of this Agreement and other Rescission Documents, and authorizing the
performance by IGX NJ of the transactions contemplated hereby and thereby, which certificate
shall be delivered to iGambit concurrently with the execution of this Agreement;
(C)
For avoidance of doubt, notwithstanding the fact that the
transactions contemplated herein shall be a rescission of the Purchase Documents:
(1)
the Rescission Assignment-Assumption Agreement,
executed by IGX NJ; and
(2)
the Rescission Assignment-Assumption of Lease, executed
by IGX NJ, and the consent of the landlord under such applicable lease to such
assignment; and
(D)
the Mayo Assignment-Assumption Agreement, executed by IGX
NJ;
(E)
A release by Keltic of IGX DE and iGambit from any obligations
and/or liabilities under the Keltic Debt Documents; and
(F)
Copies of all Tax Returns (as defined by the Purchase Agreement)
and evidence of tax payments for the period January 1, 2013 until the Effective Time (as defined
in Section 2); and
(iii) iGambit shall have received by wire transfer to a designated account of
iGambit the sum of $275,000 (the “Initial iGambit Payment”), which shall be paid via the
Deposit (as defined in Section 7) and, after payment of the Keltic Debt pursuant to Section
3(b)(v) below, Escrow Funds (as defined in Section 7); and
(iv)
IGX NJ and/or Xxxxx shall have remitted payment of, or iGambit shall
have received written releases from the applicable vendor from any obligations or liabilities for
(x) the Audit Fees to Xxxxxxxxx, Xxxxxx & LaSaracina LLP, (y) the Frontrunner Fees to
Frontrunner, and (z) the Appraisal Fees to MK Appraisal Group; provided that, in each case,
IGX DE and/or iGambit shall have delivered to IGX NJ and Xxxxx true and accurate copies of
invoices for such fees from the applicable vendor, as contemplated by Section 3(a)(iv); and
(v)
IGX NJ and/or Xxxxx shall have remitted payment of the Keltic Debt
pursuant to the terms of the Keltic Payoff Letter; and
(vi)
Xxxxx shall have withdrawn his Notice of Default; Reservation of Rights
to iGambit dated March 13, 2013 and Xxxxx shall receive no interest installment payments under
the Promissory Note dated December 31, 2012 made by iGambit to Xxxxx until Rescission under
this Agreement is effective.
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(c)
Notwithstanding any contrary provision of this Agreement, the Parties hereby
acknowledge and agree that the effectiveness of the Rescission is conditioned upon, and the
Rescission shall not occur, unless and until: (i) the Keltic Payoff Letter is delivered to the Parties
pursuant to which (A) Keltic provides amount to repay, in full, the Keltic Debt (and per diem),
and (B) upon such repayment, (x) all Parties shall be released from any obligations under the
Keltic Debt Documents other than those continuing obligations that survive termination of the
Keltic Debt Documents as provided in the Keltic Payoff Letter, (y) all Keltic Debt Documents
shall be terminated and no force or effect other than those continuing obligations that survive
termination of the Keltic Debt Documents as provided in the Keltic Payoff Letter and (z) any and
all liens, encumbrances and security interests held by Keltic against any IGX NJ Assets or IGX
UK Shares shall be terminated and released other than those liens that survive termination as
provided in the Keltic Payoff Letter, and all Parties shall be authorized to file such necessary
UCC termination statements to effect the same; and (ii) IGX NJ and/or Xxxxx shall have remitted
payment of the Keltic Debt in full pursuant to the terms of the Keltic Payoff Letter. The
foregoing conditions may not be waived by either Party without the prior written consent of
Keltic.
4.
Additional Consideration.
(a)
As additional consideration for iGambit’s agreement to effect the Rescission,
commencing upon the Rescission, IGX NJ shall pay and deliver to iGambit the sum of $350,000
(the “Consideration Balance”) in equal monthly installments of $19,444.44 (the “Installments”)
on or before the ten (10th) business day of each calendar month commencing with the first full
calendar month immediately following the Effective Time.
(b)
All payments hereunder shall be made by check to iGambit at 0000 X. Xxxxxxx
Xxxx., Xxxxx X, Xxxxxxxxx, XX 00000, or by wire transfer to iGambit’s bank account(s), such
bank account information to be provided to IGX NJ by iGambit. Any and all late payments of
Installments hereunder will be subject to a late payment charge from the date the amount was due
until paid in full at a rate per annum equal to the of lesser of six percent (6%) per annum or the
maximum interest rate permitted by law that may be charged under these circumstances. In the
event of default in the payment of any of the Installments or said interest when due as herein
provided, iGambit may, without notice or demand, declare the entire Consideration Balance then
unpaid immediately due and payable.
5.
Covenants; Representations and Warranties.
(a)
Consents and Approvals. Each Party shall use its reasonable best efforts to
obtain, at its own expense, those authorizations, consents, orders and approvals of, and give those
notices to and make all filings with, all governmental authorities and other persons that may be or
become necessary or advisable for the performance of its obligations under this Agreement and
the consummation of the transactions contemplated hereby. Each Party shall cooperate fully with
the other Parties in promptly seeking to obtain all such authorizations, consents, orders and
approvals, giving such notices, and making such filings, including, but not limited to, providing
all such information, financial or otherwise, reasonably required to complete filings by any Party
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with the U.S. Securities and Exchange Commission, the Internal Revenue Service and/or other
governmental regulators. The Parties shall not take any action that is reasonably likely to have
the effect of unreasonably delaying, impairing or impeding the receipt of any such required
authorizations, consents, orders or approvals.
(b)
Operation of Business. From the date hereof through the Rescission, IGX DE
and iGambit covenant and agree that they will: (a) use their commercially reasonable efforts to
operate the business of IGX DE, IGX UK and the IGX NJ Assets (collectively, the “Business”) in
all material respects in the ordinary course consistent with past practice of IGX DE, IGX UK and,
prior to the Purchase Documents, IGX NJ; (b) promptly notify IGX NJ and Xxxxx, in writing, of
any material development with respect to the Business or any of the IGX NJ Assets or IGX UK
Shares; (c) not distribute, transfer, assign or sell any funds of IGX DE, IGX UK or the Business to
iGambit or any other person without the prior consent of Xxxxx; and (d) Xxxxx, as President of
IGX DE, will promptly notify iGambit, in writing, of any material development with respect to
IGX DE, the Business or any of the IGX NJ Assets or IGX UK Shares.
(c)
Inspection. At any time between the date hereof and the Rescission, IGX NJ and
Xxxxx shall be entitled, through its employees and representatives, to enter upon and make such
reasonable investigation of the IGX NJ Assets, IGX UK Shares and the Business, and to make
such examination of the books and records, financial condition and operations of the IGX NJ
Assets, IGX UK Shares and the Business as IGX NJ and/or Xxxxx may reasonably request, and
IGX DE and iGambit will permit IGX NJ and Xxxxx to make copies thereof.
(d)
Publicity. The Parties shall cooperate with each other in the development and
distribution of all news releases and other public disclosures relating to the transactions
contemplated by this Agreement. None of the Parties shall issue or make, or allow to have issued
or made, any press release, public announcement or public disclosure concerning the transactions
contemplated by this Agreement without the advance approval in writing of the form and
substance thereof by the other Parties.
(e)
Exclusivity. From and after the date of this Agreement until the earlier of the
Rescission or the termination of this Agreement, neither IGX DE nor iGambit shall, directly or
indirectly, through any of their respective representatives or otherwise, initiate, solicit or
encourage (including by way of furnishing non-public information or assistance), or enter into
negotiations of any type, directly or indirectly, or enter into a confidentiality agreement, letter of
intent or purchase agreement, merger agreement or other similar agreement with any person other
than IGX NJ and/or Xxxxx with respect to a sale of all or any portion of the IGX NJ Assets, IGX
UK Shares or Business, or a merger, consolidation, recapitalization, business combination, sale of
all or any portion of IGX DE or IGX UK, or the liquidation or similar extraordinary transaction
with respect IGX DE or IGX UK.
(f)
Confidentiality. IGX DE and iGambit recognize that IGX NJ’s business interests
require the fullest practical protection and confidential treatment of all information not generally
known within the relevant trade group or by the public, including all documents, writings,
memoranda, business plans, illustrations, designs, plans, processes, programs, inventions,
computer software, reports, sources of supply, customer lists, supplier lists, trade secrets and all
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other valuable or unique information and techniques acquired, developed or used by any of IGX
DE, IGX UK and/or IGX NJ relating to their businesses, operations, employees and customers
(hereinafter collectively termed “Protected Information”). IGX DE and iGambit expressly
acknowledge and agree that, after giving effect to the Rescission, Protected Information
constitutes trade secrets and confidential and proprietary business information of IGX NJ.
Protected Information shall not include information which is or becomes part of the public
domain through no breach of this Agreement by any of IGX DE or iGambit. IGX DE and
iGambit acknowledge that Protected Information is essential to the success of Business, and it is
the policy of IGX NJ to maintain as secret and confidential Protected Information, which gives
IGX NJ a competitive advantage over those who do not know the Protected Information and is
expressly and implicitly protected by IGX NJ from unauthorized disclosure. Accordingly, each of
IGX DE and iGambit agree, and agree to require each affiliate controlled by IGX DE or iGambit
(as applicable), to hold such Protected Information in a fiduciary capacity, to keep secret and to
treat confidentially and not to, and not to permit any other person to, directly or indirectly,
appropriate, divulge, disclose or otherwise disseminate to any other person nor use in any manner
for their, or any other person’s purposes or benefit any Protected Information, except to the extent
that disclosure is required by law; provided, however, that IGX DE or iGambit (as applicable)
shall provide IGX NJ with notice as far in advance of any required disclosure as is practicable in
order for IGX NJ to obtain an order or other assurance that any information required to be
disclosed will be treated as Protected Information and IGX DE or iGambit (as applicable) shall
use all reasonable efforts to cooperate with IGX NJ in connection therewith and in furtherance
thereof. This obligation of non-disclosure of information shall continue to exist for so long as
such information remains Protected Information.
(g)
No Disparagement. Each Party agrees that it will not in any way disparage the
other Party, and/or any officer, director, agent, representative, employee, parent, subsidiary or
other affiliate thereof, or make or solicit any comments, statements, or the like to the media or to
others that may be considered to be derogatory or detrimental to the good name or business
reputation of any of the aforementioned parties or entities.
(h)
Taxes and Tax Returns. For the period January 1, 2013 until the Effective Time,
as pertains to the operations of IGX DE: (i) IGX NJ and/or Xxxxx have collected and remitted to
the appropriate Governmental Authority (as defined by the Purchase Agreement) all payroll,
quarterly value added Tax Returns, sales and use or similar Taxes (as defined by the Purchase
Agreement) required to have been collected, including any interest and any penalty, addition to
tax or additional amount unpaid, and has been furnished properly completed exemption
certificates for all exempt transactions; and (ii) IGX NJ and/or Xxxxx have collected and/or
remitted to the appropriate Governmental Authority all property Taxes, customs duties, fees, and
assessments which are other than in the nature of income taxes or charge of any kind whatsoever
(including Taxes assessed to real property and water and sewer rents relating thereto), including
any interest and any penalty, addition to tax or additional amount unpaid. Copies of all such Tax
Returns and evidence of payments for the period January 1, 2013 until the Effective Time have
been given to iGambit.
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(i)
Discontinuance of IGX DE. Subsequent to the Effective Time, and upon
iGambit’s receipt of all applicable Tax Returns pursuant to Section 5(h) above, iGambit
acknowledges and agrees that iGambit shall file a Certificate of Dissolution of IGX Global Corp.
with the Delaware Secretary of State; provided that, if iGambit does not file such Certificate of
Dissolution upon the Effective Time, it shall nonetheless file, upon the Effective Time, with the
Delaware Secretary of State such necessary documents to change the corporate name of IGX
Global Corp. to a name which does not include “IGX” or “IGX Global” or derivations thereof.
Notwithstanding the foregoing, iGambit may maintain the corporate name of IGX Global Corp.
so long as it is required to maintain the Lockbox under and as defined by the Keltic Payoff Letter,
provided that it shall not use “IGX” or “IGX Global” in any commercial manner other than
maintaining such Lockbox.
(j)
Acknowledgment of Reimbursements.
IGX DE and iGambit hereby
acknowledge and agree that, previous to the date hereof, IGX DE has remitted $130,000 in cash
to iGambit, which iGambit shall apply as reimbursements for the expenses listed on Schedule II
hereto.
(k)
Financing. IGX NJ and Xxxxx shall use their best efforts, in good faith, to secure
Financing on or before April 30, 2013. If by April 15, 2013, IGX NJ and Xxxxx have not received
reasonably acceptable terms of Financing with a financing partner, IGX NJ and Xxxxx agree that
IGX DE and iGambit may commence continuation of the audit and appraisal of IGX NJ and the
2013 audit of IGX DE in anticipation and preparation of potential SEC filings that may be
required should Rescission not occur; provided, however, that iGambit shall be solely responsible
for any and all fees, costs and/or expenses thereafter incurred in connection with such audit and
appraisal of IGX NJ and the 2013 audit of IGX DE.
(l)
Fees and Invoices. iGambit and/or IGX DE hereby represents and warrants that
the invoices delivered to IGX NJ and Xxxxx as contemplated by Section 3(a)(v) are true and
accurate copies of the applicable invoices evidencing the Audit Fees, Frontrunner Fees and
Appraisal Fees.
(m)
Keltic Debt. Until the Effective Time, iGambit shall not borrow any amounts
under, nor shall it amend or terminate any provisions of, the Keltic Debt Documents. The
foregoing shall not prevent IGX DE from borrowing funds under the Keltic Debt Documents in
the ordinary course of its business, provided that any such borrowing shall require the prior
approval of Xxxxx, whether as President of IGX DE or otherwise.
6.
Indemnifications; Releases.
(a)
Indemnification of IGX DE and iGambit. IGX NJ and Xxxxx hereby covenant
and agree to jointly and severally indemnify and hold harmless IGX DE and iGambit, and their
respective successors and assigns, at all times from and after the Effective Time, against and in
respect of any and all demands, Claims (as defined by the Purchase Agreement), causes of action,
administrative orders and notices, losses, costs, fines, liabilities, penalties, interest, damages and
expenses (including, without limitation, reasonable attorney fees and expenses), resulting from, in
connection with or arising out of any:
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(i)
damage or loss resulting from (A) any misrepresentation, breach of
warranty or breach or non-fulfillment of covenant on the part of IGX NJ or Xxxxx under (x) this
Agreement, including, but not limited to, IGX NJ’s and Xxxxx’x covenants and representations
regarding the Taxes and Tax Returns as set forth in Section 5(h) (entitled “Taxes and Tax
Returns”), or (y) any other Rescission Document, or (B) any inaccuracy or misrepresentation in
or omission from any certificate or other instrument or document furnished or to be furnished by
or on behalf of IGX NJ or Xxxxx at the Effective Time, or (C) any of IGX NJ or Xxxxx (or any of
their respective officers, directors or shareholders) asserts any Claim against any of iGambit or
IGX DE (or any of its affiliates, representatives, officers, directors or shareholders) that arises
from any Released Claims (as defined in Section 6(c)(iii)); and
(ii)
all Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any liability for sales Taxes (x) owing from IGX NJ at any
time and/or (y) resulting from operations of IGX DE during the period commencing upon the
Closing (as defined in the Purchase Agreement) and expiring at the Effective Time; and
(iii) Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any of the matters indemnified against pursuant to this Section
6(a), including, without limitation, all such costs and expenses incurred in the defense thereof or
in the enforcement by IGX DE and/or iGambit of any rights hereunder.
(b)
Indemnification of IGX NJ and Xxxxx. IGX DE and iGambit hereby covenant
and agree to jointly and severally indemnify and hold harmless IGX NJ and Xxxxx, and their
respective successors, heirs and assigns, at all times from and after the Effective Time, against
and in respect of any and all demands, Claims, causes of action, administrative orders and notices,
losses, costs, fines, liabilities, penalties, interest, damages and expenses (including, without
limitation, reasonable attorney fees and expenses), resulting from, in connection with or arising
out of any:
(i)
damage or loss resulting from (A) any misrepresentation, breach of
warranty or breach or non-fulfillment of covenant on the part of IGX DE or iGambit under (x)
this Agreement, or (y) any other Rescission Document, or (B) any inaccuracy or
misrepresentation in or omission from any certificate or other instrument or document furnished
or to be furnished by or on behalf of IGX DE or iGambit at the Effective Time, or (C) any of
IGX DE or iGambit (or any of their respective officers, directors or shareholders) asserts any
Claim against any of Xxxxx or IGX NJ (or any of its affiliates, representatives, officers, directors
or shareholders) that arises from any Released Claims (as defined in Section 6(c)(iii)); and
(ii)
all Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any liability for sales Taxes (x) owing from iGambit at any
time and/or (y) resulting from operations of IGX DE at any time prior to the Closing or at any
time after the Effective Time; and
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(iii) Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any of the matters indemnified against pursuant to this Section
6(b), including, without limitation, all such costs and expenses incurred in the defense thereof or
in the enforcement by IGX NJ and/or Xxxxx of any rights hereunder.
(c)
Mutual Releases.
(i)
Except with respect to the obligations set forth in this Agreement
(including without limitation the indemnification obligations of Xxxxx and IGX NJ under Section
6(a)), and effective upon the Effective Time, IGX DE and iGambit hereby fully and forever
releases any and all claims, demands, actions, suits, obligations, debts, sums of money, accounts,
covenants, controversies, agreements, promises, damages, judgments, breaches of contract,
breaches of duty, acts, omissions, misfeasance, malfeasance, costs, losses and expenses of every
type, kind, nature, description or character, of any jurisdiction, foreign or domestic, known or
unknown, whether vicarious, derivative, or direct, that IGX DE or iGambit ever had, may now
have, or hereafter have or may have, in law or equity, against Xxxxx or IGX NJ, and/or any
officer, director, agent, representative, employee, parent, subsidiary or other affiliate thereof,
relating to, or arising out of, the Rescission, or the operation of IGX DE from the Closing (as
defined in the Purchase Agreement) until the Effective Time.
(ii)
Except with respect to the obligations set forth in this Agreement
(including without limitation the indemnification obligations of iGambit and IGX DE under
Section 6(b)), and effective upon the Effective Time, IGX NJ and Xxxxx hereby fully and forever
releases any and all claims, demands, actions, suits, obligations, debts, sums of money, accounts,
covenants, controversies, agreements, promises, damages, judgments, breaches of contract,
breaches of duty, acts, omissions, misfeasance, malfeasance, costs, losses and expenses of every
type, kind, nature, description or character, of any jurisdiction, foreign or domestic, known or
unknown, whether vicarious, derivative, or direct, that IGX NJ or Xxxxx ever had, may now
have, or hereafter have or may have, in law or equity, against iGambit or IGX DE, and/or any
officer, director, agent, representative, employee, parent, subsidiary or other affiliate thereof,
relating to, or arising out of, the Rescission, or the operation of IGX DE prior to the Closing or
after the Effective Time.
(iii) Each of the Parties covenants not to bring any Claim, which is released
pursuant to Section 6(c)(i) or (ii) above (a “Released Claim”) against any released Party in any
capacity before any court, arbitrator or other tribunal in any jurisdiction, whether as a claim, a
cross-claim or counterclaim. Any Party released as provided in this Section 6(c) may plead this
Agreement as a complete bar to any Released Claim brought in derogation of this covenant not to xxx.
7.
Methods of Termination.
(a)
This Agreement may be terminated and the transactions contemplated hereby may
be abandoned at any time prior to the Rescission:
(i)
by mutual written consent of the Parties;
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(ii)
by any Party, if a governmental authority shall have issued an order,
decree or ruling or taken any other action, in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree,
ruling or other action shall have become final and nonappealable;
(iii) by IGX NJ or Xxxxx, at any time when iGambit or IGX DE is in breach of
any of its covenants pursuant to this Agreement; provided that such breach shall not have been
cured, in the case of a covenant, within ten (10) business days following receipt by the breaching
party of notice of such breach;
(iv)
by IGX DE or iGambit, at any time when Xxxxx or IGX NJ is in breach of
any of its covenants pursuant to this Agreement; provided that such breach shall not have been
cured, in the case of a covenant, within ten (10) business days following receipt by the breaching
party of notice of such breach; or
(v)
by any Party, if the Rescission has not occurred on or before April 30,
2013; provided, however, that the right to terminate this Agreement shall not be available to any
Party whose breach of this Agreement has been the cause of, or resulted in, the failure of the
Rescission to occur on or before such date.
(b)
In the event of termination of this Agreement, this Agreement shall immediately
become void and there shall be no liability hereunder on the part of any Party except this Section
7(b) and Sections 6, 8 and 9 shall remain in full force and effect.
(c)
Nothing contained in this Agreement shall relieve any Party hereto from any
liability for any fraud or any breach of any covenant contained herein, and the rights of the Parties
to pursue all remedies for any such fraud or breach will survive such termination unimpaired.
Each Party’s right of termination under this Section 7 is in addition to any other rights it may have
under this Agreement or otherwise, and the exercise of a right of termination will not be an
election of remedies.
8.
Deposit; Escrow. Concurrently with the execution of this Agreement: (a) each of IGX
NJ, Xxxxx, iGambit and Xxxxxxx & Xxxxxxx (the “Escrow Agent”) shall have entered into an
Escrow Agreement, in the form attached hereto as Exhibit E (the “Escrow Agreement”); and
(b) each of IGX NJ, Xxxxx, IGX DE and iGambit (as applicable) shall execute and deliver to the
Escrow Agent to hold in escrow pursuant to the terms of the Escrow Agreement (i) the
Rescission Xxxx of Sale, (ii) the Rescission Assignment-Assumption Agreement, (iii) the
Rescission Assignment-Assumption of Lease, (iv) the Mayo Assignment-Assumption
Agreement and (v) the IGX UK Share Transfer Documents (collectively, the “Escrowed
Documents”). Furthermore, on or before April 2, 2013, IGX NJ and/or Xxxxx shall have
delivered: (x) to the Escrow Agent a dollar amount equal to $200,000 (i.e. the Initial iGambit
Payment less the Deposit) to be held in escrow by the Escrow Agent pursuant to the terms of the
Escrow Agreement (the “Escrow Funds”); and (y) to iGambit $75,000 as a good faith, non-
refundable deposit (the “Deposit”) which shall be credited against the Initial iGambit Payment
due and owing from IGX NJ and Xxxxx upon Rescission. The Escrow Agreement shall provide
the release of the Escrowed Documents to IGX NJ and Xxxxx, and the Escrow Funds to iGambit
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as payment of the Initial iGambit Payment, upon written notice from any Party that the
conditions for Rescission have been met pursuant to this Agreement. Upon termination of this
Agreement pursuant to Section 6, the Escrowed Documents shall be returned to iGambit and be
deemed void and of no force or effect, and the Escrow Funds and Deposit shall be returned to
IGX NJ or Xxxxx.
9.
Miscellaneous.
(a)
Mutual Construction. The Parties hereby mutually acknowledge and represent
that they have been fully advised by their respective legal counsel of their rights and
responsibilities under this Agreement, that they have read, know and understand completely the
contents hereof, and that they have voluntarily executed the same. The Parties further hereby
mutually acknowledge that they have had input into the drafting of this Agreement and, therefore,
this Agreement shall not be construed for or against any Party, but rather shall be given a fair and
reasonable interpretation, based on the plain language of the Agreement and the expressed intent
of the Parties.
(b)
Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the Parties relating to the subject matter contained herein, and this
Agreement may not be altered, amended or modified in any respect whatsoever, except by a
writing duly executed by each of the Parties.
(c)
Further Assurances. The Parties agree to execute and deliver such other
agreements, documents or instruments, and to take such other action, as may reasonably
necessary or desirable for the implementation of this Agreement and the consummation of the
transactions hereby contemplated. Notwithstanding the above, in the event that the Parties do not
receive the full benefits of this Agreement as a result of a government agency or regulatory board
decision, the Parties will use their commercially best efforts to cause all of the IGX DE assets to
be transferred and assigned to IGX NJ and Xxxxx, and all related expenses shall be borne equally
by the Parties.
(d)
Counterparts; Electronic Signatures. This Agreement may be executed in
several counterparts, each of which shall be an original, so that all of which taken together shall
constitute one and the same instrument. This Agreement may also be executed and delivered
through counterpart signature pages transmitted by facsimile, e-mail or other electronic means or
media.
(e)
Governing Law. This Agreement shall be interpreted under, and construed in
accordance with, the laws of the State of Connecticut.
(f)
Rules of Usage. In this Agreement, unless a clear intention appears otherwise:
(i) the singular number includes the plural number and vice versa; (ii) reference to any person
includes such person’s successors and assigns but, if applicable, only if such successors and
assigns are not prohibited by this Agreement, and reference to a person in a particular capacity
excludes such person in any other capacity or individually; (iii) reference to any gender includes
each other gender; (iv) reference to any agreement, document or instrument means such
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agreement, document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof; (v) reference to any law means such law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder; (vi) “hereunder,” “hereof,” “hereto” and
words of similar import shall be deemed references to this Agreement as a whole and not to any
particular section or other provision hereof; (vii) “including” (and with correlative meaning
“include”) means including without limiting the generality of any description preceding such
term; (viii) “or” is used in the inclusive sense of “and/or”; (ix) with respect to the determination of
any period of time, “from” means “from and including” and “to” means “to but excluding”;
(x) references to documents, instruments or agreements shall be deemed to refer as well to all
addenda, schedules or amendments thereto; (xi) section references shall be deemed to refer to all
subsections thereof, unless otherwise expressly indicated; and (xii) “person” means any individual
or any corporation, limited liability company, association, partnership, limited partnership, trust
or estate, or government (or any agency or political subdivision thereof), or other business or legal
entity.
(g)
Attorney Fees. In the event either party retains the services of an attorney or
attorneys to enforce the terms of this Agreement or to file or defend any action arising out of this
Agreement, then the prevailing party in any such action shall be entitled to recover from the other
party its reasonable fees for attorneys, plus such court costs and expenses as may be fixed by any
court of competent jurisdiction.
[Intentionally Left Blank – Signature Page Follows]
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[Signature Page to Rescission Agreement]
IN WITNESS WHEREOF, and in agreement herewith, the Parties have executed and
delivered this Agreement as of the date set forth in the preamble hereof.
IGX GLOBAL INC.
By:________________________
Name:
Title:
________________________
Xxxxxx Xxxxx
IGXGLOBAL CORP.
By:________________________
Name:
Title:
IGAMBIT INC.
By:________________________
Name:
Title:
652541
Schedule I
Employment Agreement dated as of January 1, 2013 between IGX DE and Xxxxx
$1,000,000 Promissory Note dated December 28, 2012 issued by IGX DE to IGX NJ and
Xxxxx, and guaranteed by iGambit
Xxxx of Sale and Assignment dated as of December 28, 2012 between IGX NJ and IGX
DE
Assignment and Assumption Agreement dated as of December 28, 2012 between IGX NJ
and IGX DE
Assignment and Assumption of Lease dated as of December 28, 2012 among IGX NJ,
IGX DE and Xxxxx
Assignment and Assumption of Lease dated as of December 28, 2012 among IGX UK,
IGX DE and Xxxxx
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Schedule II
$60,000 paid to Keltic Financial Services for Work Fee ($35,000) and Good Faith
Deposit ($25,000)
$25,000 paid to Frontrunner Consulting
$10,000 paid to MK appraisers for Valuation
$29,146 for Xxxxx Xxxx payroll and expenses ($17,182.76 net pay, $10,169.89
applicable payroll taxes, $1793.35 expense reimbursement)
$10,000 FML (Towards IGX DE portion of YE 2012 Audit Fees for 10K filing)
652541
Exhibit A
Form of Xxxx of Sale and Assignment
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Exhibit B
Form of Assignment and Assumption Agreement
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Exhibit C
Form of Assignment and Assumption of Lease
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Exhibit D
Form of Assignment and Assumption of Employment Agreement
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Exhibit E
Form of Escrow Agreement
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