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EXHIBIT 10.42
RESCISSION AGREEMENT
This Rescission Agreement is entered into as of the 30th day of April,
1997 by and among Bristol Retail Solutions Inc., a Delaware corporation
(formerly known as Bristol Technology Systems, Inc.) ("Bristol"), International
Systems & Electronics Corporation, a Delaware Corporation (the "Company"), and
Xxxxx Xxxxxx, an individual who is a resident of the State of Florida
("Shareholder").
WITNESSETH:
WHEREAS, the parties entered into an Agreement and Plan of Merger, dated
as of March 26, 1997 (the "Merger Agreement"), pursuant to which the
International Systems & Electronics Corporation, a Florida corporation, merged
with and into (the "Merger") Bristol Merger Corporation, then a wholly-owned
subsidiary of Bristol, and the Merger was effected on April 30, 1997 (the
"Effective Date");
WHEREAS, pursuant to the terms of the Merger Agreement, on the Effective
Date the Shareholder exchanged all outstanding shares of capital stock of the
Company (the "Company Shares") with Bristol for cash in the amount of One
Million One Hundred Thousand Dollars ($1,100,000) in immediately available funds
and 130,434 shares of Bristol's Common Stock (the "Restricted Stock"); and
WHEREAS, each of Bristol, the Company and the Shareholder hereby
mutually agree to rescind, ab initio, the Merger Agreement, and each of the
other agreements related thereto, pursuant to the terms of this Rescission
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth below, the parties hereto hereby agree as follows:
SECTION 1.THE RESCISSION.
Each of Bristol, the Company and the Shareholder hereby mutually agrees
that the Merger Agreement is rescinded in its entirety, and is void ab initio.
The parties intend to restore themselves to their relative positions had the
Merger Agreement never been consummated under the following terms. Prior to the
Closing (as defined below), the Shareholder shall form a Florida corporation
("Florida Corp.") pursuant to which, at the Closing, the parties shall cause the
Company to be merged with and into Florida Corp. and the Florida Corp. shall be
the survivor (the "Rescission Merger"). The Shareholder shall own all of the
outstanding capital stock of Florida Corp. The parties shall use their best
efforts to prepare and finalize the Rescission Merger at the Closing.
Accordingly, at a Closing with respect to this Rescission Agreement which the
parties intend to use their best efforts to effect on or before August 15, 1997
(the "Closing"), the parties hereby intend to make the following deliveries:
(a) Deliveries of the Shareholder:
(i) The Shareholder shall deliver and transfer to Bristol
the Restricted Stock, with a duly executed stock assignment
separate from certificate;
(ii) The Shareholder shall deliver to Bristol cash in the
amount of Two Hundred Fifty Thousand Dollars ($250,000), payable
by check or wire transfer;
(iii) The Shareholder shall deliver to Bristol an executed
Promissory Note substantially in the form of Exhibit A hereto
(the "Note");
(iv) From time to time after the Closing, the Shareholder
shall cause Florida Corp. to transfer and deliver to Bristol
finished goods inventory as more particularly described on Annex
A hereto (the "Inventory") and at the time of each such delivery
shall cause Florida Corp. to deliver to Bristol an executed Xxxx
of Sale in substantially the form of Exhibit B hereto; and
(v) The Shareholder shall deliver to Bristol an executed
Consulting Agreement substantially in the form of Exhibit C
hereto (the "Consulting Agreement").
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(b) Deliveries of Bristol.
(i) Bristol shall deliver and transfer to the Shareholder
or to any person or entity directed by Shareholder, the Company
Shares, with a duly executed stock assignment separate from
certificate; and
(ii) Bristol shall deliver to the Shareholder an executed
Consulting Agreement.
SECTION 2.REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Representations of the Shareholder. The Shareholder hereby
represents as of the date hereof and on the Closing Date, and as of the Closing
Date the Shareholder will cause the Florida Corp. to hereby represent that:
(i) it has the full right, power and authority to execute
and deliver this Rescission Agreement, the Xxxx of Sale, the Note
and the Consulting Agreement, as applicable, and to carry out and
perform the provisions hereof and thereof;
(ii) the Inventory will consist of finished goods which
will be items of quality usable or saleable in the ordinary
course of business and will be saleable at values equal to at
least book value amounts thereof;
(iii) Bristol will receive good and valid title to the
Restricted Stock, free and clear of any claim, lien, encumbrance,
security interest or other defect in title created by or under
Shareholder. Shareholder and the Company make no warranty or
representation regarding securities laws or other state or
federal laws related to the ownership, surrender or conveyance of
the Restricted Stock;
(iv) this Rescission Agreement, the Note and the
Consulting Agreement are or will be, as applicable, and upon
execution each Xxxx of Sale will be, the valid and binding
obligations of each such party, enforceable against each such
party in accordance with its terms;
(v) the execution, delivery and performance by the
Shareholder of this Rescission Agreement and the transactions
contemplated hereby does not violate any law, statute or
regulation or any contract, agreement or instrument binding upon
the Company. Shareholder makes no warranty or representation
regarding securities laws or other state or federal laws related
to the ownership, surrender or conveyance of the Restricted
Stock;
(vi) Except for actions taken by Bristol without knowledge
and approval of Shareholder, Bristol shall have no liability with
respect to the ownership of the Company Shares on account of the
Merger Agreement;
(vii) Within 30 days after the Closing, the Shareholder
shall cause Bristol to be removed and released from each and
every guarantee entered into by Bristol or to which Bristol is
committed.
(b) Representations of Bristol. Bristol hereby represents that:
(i) it has the full right, power and authority to execute
and deliver this Rescission Agreement, the Consulting Agreement
and the Security Agreement, and to surrender the Company Shares
pursuant to Section 1 hereinabove. No action has been taken by
Bristol with respect to the Company except as has been previously
disclosed to or approved by the Shareholder in writing;
(ii) the Shareholder will receive good and valid title to
the Company Shares, free and clear of any claim, lien,
encumbrance, security interest or other defect in title;
(iii) this Rescission Agreement and the Consulting
Agreement are each the valid and binding obligation of Bristol,
enforceable against Bristol in accordance with its terms; and
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(iv) the execution, delivery and performance by Bristol of
this Rescission Agreement and the transactions contemplated
hereby does not violate any law, statute, or regulation or any
contract, agreement or instrument binding upon Bristol and does
not violate any securities laws or other laws related to transfer
of the Restricted Stock.
(c) Representations of all Parties. No representation or warranty
made by any party herein contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
not misleading.
(d) Covenants. Each of the parties will, at any time and from
time to time, use all reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable laws and regulations to fulfill their respective
obligations under this Rescission Agreement. The parties hereby agree that on or
before the Closing, they will cause to be terminated that certain Lease
Agreement between Penton Realty (an entity controlled by the Shareholder) and
the Company.
(e) Noncompetition. Bristol hereby agrees that from the date
hereof until December 31, 1998, Bristol will not compete directly with the
Company in the sale of any NCR "food" products within the Company's current
territory located within Southern Florida (from Key West to Palm Beach County on
the east coast to Sarasota on the west coast). Bristol will also not compete
with the Company in the sale of any NCR "hospitality" products within the entire
State of Florida for such period. The parties hereby acknowledge that Bristol
may compete with the Company at any time within the State of Florida with
respect to the sale of any other "non-NCR" product line. The parties also hereby
expressly acknowledge and agree that in the event that the Shareholder breaches
any of his obligations under or in respect of the Consulting Agreement,
Bristol's obligations under this Section 2(e) shall be of no force and effect.
SECTION 3.MERGER AGREEMENT VOID.
Each of the parties hereby agrees that the Merger Agreement is
null and void and is of no force and effect, ab initio, and each such party's
obligations are such that the Merger Agreement had never been entered into.
SECTION 4.INDEMNIFICATION.
(a) The Shareholder's Indemnification. After the Closing, the
Shareholder shall, and shall cause Florida Corp. to, jointly and severally,
indemnify and hold harmless Bristol and any of its officers, directors, agents,
and employees, and any of Bristol's parents or subsidiaries (each such person,
its successors and assigns, is referred to herein as an "Indemnified Bristol"),
at all times from and after the date of this Rescission Agreement, against and
in respect of the following:
(i) All liabilities of the Shareholder or the Company or
claims against the Shareholder or the Company, whether accrued,
absolute, contingent or otherwise which arise out of the
Shareholder's ownership of the Company Shares prior to the
Effective Date and on and after the Closing Date, or which arise
out of Bristol's day to day operation of the Company between the
Effective Date and the Closing Date;
(ii) Any loss, claim, liability, expense or other damage
incurred by any Indemnified Bristol caused by, resulting from or
arising out of any failure on the part of the Shareholder or the
Company to perform any covenant in this Rescission Agreement or
any exhibit, annex or other instrument or certificate delivered
pursuant hereto or any material breach of warranty or any
materially inaccurate or erroneous representation made by the
Shareholder or the Company in this Rescission Agreement or in any
exhibit, annex or other instrument or certificate delivered
pursuant hereto; and
(iii) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and legal and other expenses,
including attorneys' fees, incidental to any of the foregoing.
(b) Bristol's Indemnification. Bristol hereby indemnifies and
holds harmless the Shareholder and the Company (each such person, its successors
and assigns, is referred to herein as an "Indemnified Company"), at all times
from and after the date of this Agreement, against and in respect of the
following:
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(i) Any loss, claim, liability, expense or other damage
incurred by any Indemnified company caused by, resulting from or
arising out of any failure on Bristol's part to perform any
covenants in this Rescission Agreement or any exhibit, annex or
other instrument or certificate delivered pursuant hereto or any
material breach of warranty or any material inaccurate or
erroneous representation made by or on behalf of Bristol in this
Rescission Agreement or in any exhibit, annex or other instrument
or certificate delivered pursuant hereto; and
(ii) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and legal and other expenses,
including attorneys' fees, incidental to any of the foregoing.
SECTION 5.MISCELLANEOUS.
This Rescission Agreement, together with the agreements referred
to herein, contain the entire agreement between the parties with respect to the
transactions contemplated herein and supersede all previous written, oral
negotiations, commitments and undertakings.
The parties hereto agree to report the transactions contemplated
herein as a rescission, for purposes of all filings made to any local, state and
federal taxing authorities.
This Rescission Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
The parties hereto agree that (a) the contents of this Rescission
Agreement (but not the effect of the transaction) and (b) any and all
information delivered to the other in connection herewith concerning the
business and financial affairs of Bristol, the Shareholder and the Company shall
be held in confidence by the recipient party and its agents and representatives
and shall not be disclosed to other parties without the prior written consent of
the party to which such information pertains, which consent shall not be
unreasonably withheld; provided, however, that each party shall have the right
to make such public announcements and filings as it may deem appropriate to
comply with applicable law, including applicable securities laws; and provided,
further, however, that the material set forth above may be disclosed by Bristol,
the Shareholder or the Company as necessary to lending institutions and
auditors.
No performance or execution of this Rescission Agreement in whole
or in part by a party hereto shall constitute a waiver by such party or prevent
such party from asserting his or its rights hereunder, nor shall a waiver of or
failure to exercise one or more rights hereunder constitute a waiver of any
other rights.
Any amendment, supplement or modification of or to any provisions
of this Rescission Agreement, any waiver of any provision of this Rescission
Agreement, and any consent to any departure by any party from the terms of any
provision of this Rescission Agreement, shall be effective (i) only if it is
made or given in writing and signed by the other parties, and (ii) only in the
specific instance and for the specific purpose for which it is made or given.
This Rescission Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, except the conflict of laws
provisions thereof. All judicial proceedings brought in respect of this
Rescission Agreement or the transactions contemplated hereby may be brought in
any state or federal court of competent jurisdiction in the State of Delaware
and the parties accept for themselves the jurisdiction of such courts.
Every provision of this Rescission Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity of the
remainder of this Rescission Agreement.
Subject to the provisions regarding severability contained
herein, this Rescission Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns. The
provisions of this Rescission Agreement are intended solely for the benefit of
the parties hereto, and no other party is entitled to any rights, benefits, or
privileges created hereunder.
As of the Closing, the parties shall each execute and deliver a mutual
release with respect to all matters except the matters set forth in this
Rescission Agreement and the documents contemplated hereby, which release shall
be in form and substance satisfactory to each such party.
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IN WITNESS WHEREOF, the parties have duly executed this Rescission
Agreement as of the date first mentioned above.
BRISTOL RETAIL SOLUTIONS, INC., a Delaware
corporation (formerly Bristol Technology
Systems, Inc.)
By:
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Name:
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Title:
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INTERNATIONAL SYSTEMS & ELECTRONICS
CORPORATION, a Delaware corporation
By:
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Name:
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Title:
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XXXXX XXXXXX
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ANNEX A
INVENTORY
The Shareholder and the Company each hereby agree that the right to
receive up to $250,000 (valued at not more than market cost) in finished goods
inventory of the Company is hereby transferred to Bristol. Bristol may request
in writing specific inventory items no more than one time each month (not to
exceed $41,667 in inventory for any single month and promptly upon such request,
the Shareholder and the Company shall deliver to Bristol such Inventory).
The Company will permit Bristol to request orders of Inventory in excess
of such monthly amounts and such requests will be agreed to by the Company in
such quantities and at such prices in its sole discretion. Any amounts not paid
by Bristol to the Shareholder in accordance with the indemnification provisions
in the Rescission Agreement may be offset by the Shareholder with respect to any
Inventory and to Bristol hereunder. Any failure of the Company to deliver
Inventory to Bristol shall constitute a breach of the terms of the Rescission
Agreement for which Bristol shall be entitled to indemnification thereunder.
Annex A
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EXHIBIT A
UNSECURED PROMISSORY NOTE
$350,000 Newport Beach, California
April 30, 1997
FOR VALUE RECEIVED, Xxxxx Xxxxxx and International Systems & Electronics
Corporation, a Florida corporation (the "Borrower") hereby promises to pay to
the order of Bristol Retail Solutions, Inc., a Delaware corporation (the
"Lender"), at Lender's office located at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx
Xxxxx, XX 00000, in lawful money of the United States of America, the principal
sum of $350,000 dollars together with interest at the rate of 8.5% per annum on
the unpaid principal balance from January 1, 1998 to the date such principal
balance is paid in full. The outstanding principal amount of this Note, together
with all interest accrued thereon shall be payable in 30 monthly installments of
$12,991.24 commencing on January 1, 1998 and ending on June 1, 2000.
The outstanding principal amount of this Note, together with all
interest accrued, may be prepaid at any time, in whole or in part, at the option
of Borrower without penalty or premium.
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
(a) Borrower shall default in the payment within ten days after the date
when due of any principal or interest owed under this Note or the Borrower shall
breach any of its obligations under the Consulting Agreement with Bristol
entered into on the date hereof; or
(b) Borrower shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy" as now or hereafter in
effect; or an involuntary case is commenced against Borrower and the petition is
not controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian is appointed for, or takes charge of,
all or substantially all of the property of Borrower, or Borrower commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower, or there
is commenced against Borrower any such proceeding and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case, or Borrower is adjudicated insolvent or bankrupt;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, Lender may declare the principal of and any accrued
interest in respect of this Note, and all obligations owed hereunder to be,
whereupon the same shall become, due and payable without presentment, demand
protest, or other notice of any kind, all of which are hereby waived by
Borrower.
This Note is subject to the express condition that at no time shall
Borrower be obligated or required to pay interest on the balance owed at a rate
which could subject Lender to either civil or criminal liability as a result of
being in excess of the maximum rate permitted by law. If by the terms of this
Note Borrower is at any time required or obligated to pay interest on the
balance owed at a rate in excess of such maximum rate, the rate of interest
under this Note shall be deemed to be immediately reduced to such maximum rate
and interest payable hereunder shall be computed at such maximum rate and the
portion of all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance.
Borrower shall pay to Lender all fees and expenses incurred by Lender in
enforcing its rights under this Note, including, without limitation, all fees
and expenses of Lender's attorneys.
No failure or delay on the part of Lender in exercising any right, power
or privilege hereunder and no course of dealing between Borrower and Lender
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
of any other right, power or privilege hereunder or thereunder.
This Note shall be construed in accordance with and be governed by the
law of the State of Delaware. All judicial proceedings brought against Borrower
with respect to this Note may be brought in any state court or federal court of
competent jurisdiction in the State of Delaware, and by execution and delivery
of this Agreement, Borrower, accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and
Exhibit A-1
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irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Note from which no appeal has been taken or is available.
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Xxxxx Xxxxxx
Exhibit A-2
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EXHIBIT B
KNOW ALL MEN BY THESE PRESENTS:
That [Florida Corp.], a Florida corporation (the "Assignor"), for good
and valuable consideration paid to them by Bristol Retail Solutions, Inc., a
Delaware corporation ("Assignee") pursuant to a Rescission Agreement, dated as
of April 30, 1997 (the "Agreement"), and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, does
hereby by these presents sell to, and assign, transfer, convey and deliver unto
Assignee, its successors and assigns, the following: good and marketable title
to the Inventory described on the attached Exhibit and as more fully described
on Annex A to the Rescission Agreement.
TO HAVE AND TO HOLD, unto the said Assignee, its successors and assigns,
FOREVER.
Assignor hereby covenants that from time to time after delivery of this
instrument, at Assignee's request and without further consideration, Assignor
will duly execute, acknowledge and deliver or will cause to be done, executed,
acknowledged and delivered, all and every such further acts, deeds, conveyances,
transfers, assignments, consents, powers of attorney and assurances as Assignee
may reasonably request in order more effectively to convey, transfer or vest in
Assignee, and to put it in possession and operation and control of any such
Inventory.
IN WITNESS WHEREOF, Assignor has caused these presents to be signed as
of the 30th day of April, 1997.
[FLORIDA CORP.], a Florida corporation
By:______________________________________
Exhibit B-1
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EXHIBIT C
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered
into as of this 30th day of April, 1997, by and between BRISTOL RETAIL
SOLUTIONS, INC., a Delaware corporation (the "Company"), and XXXXX XXXXXX (the
"Consultant").
R E C I T A L S
The Company desires to retain Consultant to perform certain
services for the Company as hereinafter set forth, and the Consultant is willing
to perform such services for the Company, for the period and pursuant to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the Company and Consultant, intending to be legally
bound, hereby agree as follows:
1. ENGAGEMENT. The Company hereby engages and retains Consultant
to perform the services hereinafter set forth for the Company and Consultant
accepts such engagement and agrees to perform such services for the Company in a
diligent and timely manner.
2. TERM. The term of Consultant's engagement hereunder shall
commence on the date of this Agreement and terminate on December 31, 2001;
provided, that such engagement and this Agreement shall be subject to earlier
termination as specified in Paragraph 5 below.
3. SERVICES. During the term of this Agreement, Consultant agrees
to provide the following services to the Company (i) consultation regarding the
Company's national account program and international sales efforts, (ii)
consultation regarding the Company's dealer recruitment efforts and (iii) such
other services as may be reasonably requested by the Company's President, or any
designee thereof, from time to time during the term of this Agreement.
4. COMPENSATION. As compensation for all services to be rendered
by Consultant under this Agreement, the Company shall pay to Consultant an
aggregate fee of Two Hundred Fifty Thousand Dollars ($250,000), which has been
paid in full as of the date hereof, receipt of which is hereby acknowledged by
the Consultant. The Company shall reimburse Consultant for all expenses incurred
by Consultant which have been approved in advance.
5. TERMINATION. The Company may terminate this Agreement, for any
reason, immediately upon giving written notice ("Termination Notice") to
Consultant; provided that Consultant shall not be required to refund any of the
Compensation referenced in Section 4; provided, further that if the Company
terminates this Agreement by reason of a breach by the Consultant of his
obligations hereunder, then as its sole remedy, the Company's covenant not to
compete set forth in Section 2(e) of the Rescission Agreement dated April 30,
1997 by and among the Company, International Systems & Electronics Corporation,
a Delaware Corporation and the Consultant shall terminate and shall be of no
further force and effect.
6. BENEFITS. The Company shall not be obligated, under this
Agreement or otherwise, to provide any benefits to the Consultant.
7. ASSIGNMENT: This Agreement may not be assigned by Consultant,
but may be assigned by the Company to any corporation or other entity which
succeeds in interest to its business, by operation of law or otherwise.
Exhibit C-3
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8. NOTICES: All notices required by this Agreement may be
delivered by first class mail at the following addresses:
To the Company: Bristol Retail Solutions, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
To Consultant: Xx. Xxxxx Xxxxxx
0000 X.X. 00xx Xxxxxxx
Xxxxx, Xxxxxxx 00000
9. AMENDMENT: This Agreement may be modified only by written
agreement signed by both parties hereto.
10. CHOICE OF LAW: This Agreement shall be governed by the laws
of the State of Delaware. Venue for any action hereunder shall be in the State
of Delaware.
11. PARTIAL INVALIDITY: In the event any provision of this
Agreement is void or unenforceable, the remaining provisions shall continue in
full force and effect.
12. WAIVER: No waiver of any breach of this Agreement shall
constitute a waiver of any subsequent breach.
13. COMPLETE AGREEMENT: This Agreement contains the entire
agreement between the parties relating to the subject matter contained herein,
and supersedes any and all prior and contemporaneous oral and written agreements
relating thereto (if any), which shall have no further force and effect as of
the date hereof.
IN WITNESS WHEREOF, the parties to this Agreement have executed
this Agreement as of the day and year set forth above.
CONSULTANT
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Xxxxx Xxxxxx
COMPANY
BRISTOL RETAIL SOLUTIONS, INC.
By:
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Its:
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Exhibit C-3
