Exhibit 10.3
Agreement to Rescind Asset Purchase Agreement
This Agreement to Rescind Asset Purchase Agreement ("Rescission
Agreement") is made on the 22nd day of October, 2002, by and between CONOLOG
CORPORATION ("Conolog"), a Delaware corporation with its principal place of
business at 0 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx, and Independent Computer
Maintenance Corp. ("ICM"), formerly known as Lonogoc Corporation ("Lonogoc"), a
New Jersey corporation with its principal place of business at 0 Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx, xx the one hand, and NATONY CORP. ("Natony"), formerly
known as Independent Computer Maintenance Corp., with its principal place of
business at 0000 Xxxxx 00 Xxxx, Xxxxx X-000, Xxxxxxx, Xxx Xxxxxx, and Xxxxxxx
Xxxxxx ("Xxxxxx"), individually, on the other hand:
W I T N E S S E T H
WHEREAS, Conolog, as Parent of ICM, and ICM, as Buyer, then known as
Lonogoc, purchased substantially all of the assets and assumed certain
liabilities of Natony, as Seller, then known as ICM, under an Asset Purchase
Agreement dated July 21, 2000 ("Asset Purchase Agreement"); and
WHEREAS, there has occurred a misunderstanding and/or dispute
between the parties with regard to the intent and performance of the Asset
Purchase Agreement; and
WHEREAS, Conolog and ICM, on the one hand, and Natony and Xxxxxx, on
the other hand, have agreed to resolve any and all misunderstandings and/or
disputes between them by rescission of the Asset Purchase Agreement and by
placing, to the extent possible, the parties in the positions they would have
been had they never entered into and closed the Asset Purchase Agreement;
NOW, THEREFORE, Conolog and ICM, on the one hand, and Natony and
Xxxxxx, on the other hand, agree to the following terms and conditions intending
to be legally bound.
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1. RESCISSION. Conolog and ICM, on the one hand, and Natony and
Xxxxxx, on the other hand, agree to rescind the Asset Purchase Agreement.
A. Return of Assets. All assets transferred from Natony to ICM under
paragraph 1.01 (a) of the Asset Purchase Agreement, to the extent
they are owned by ICM and exist, shall be returned to Xxxxxx, free
and clear of all liens and encumbrances, including: (i) Merchandise
inventory;
(ii) Customer files and customer lists;
(iii) Goodwill of ICM, including the right to use the names
"Independent Computer Maintenance Corp." and "ICM, and
the internet domain name "XXXXXXXXXXXXXX.XXX;"
(iv) Any ICM security deposits held by others to secure ICM
performance of agreements;
(v) Customer service contracts and open purchase orders;
(vi) Unfilled customer service contracts and, with respect
to pre-paid service contracts, the pro-rata portion of
the fee paid for the un-expired term of the service
contract ("pre-paid fee"). The pre-paid fee may be
taken as a credit against the 10 year promissory note
forming a portion of the return of the purchase price;
(vii) Originals of all ICM's books and records, including
but not limited to customer invoices, bank statements,
cancelled checks; financial statements, sales and
earnings reports and figures through date of closing,
employee and payroll information;
(viii) All furniture, fixtures and equipment received by ICM
under the Asset Purchase Agreement, to be in the same
condition as when received by ICM;
(ix) Any and all rights to the telephone number
973.916.1800.
Conolog and ICM shall arrange to deliver the assets to Xxxxxx at
0000 Xxxxx 00 Xxxx, Xxxxx X-000, Xxxxxxx, Xxx Xxxxxx, xx or before
Friday, October 25, 2002, at
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its cost, subject to a $750 credit against the pre-paid fees set
forth in sub-paragraph 1.A. (vi) above.
B. Return of Purchase Price. The full amount of the purchase price
paid by ICM to Natoni and Xxxxxx under the Asset Purchase Agreement
($600,000) shall be returned and paid to Conolog as follows:
(i) Natony and Xxxxxx shall pay $300,000 to Conolog at
closing;
(ii) Xxxxxx shall deliver a promissory note to Conolog at
closing in the amount of $150,000, bearing interest of
7.5% per annum payable over 2 years in 24 equal
monthly payments of $6,749.94 per month, beginning on
December 30, 2002, and continuing for 24 months, with
the final payment due on November 30, 2004. The Note
shall be secured by a first mortgage on the
condominium owned by Xx. Xxxxxx at 0000 Xxxxx 00 Xxxx,
Xxxxx X-000, Xxxxxxx, Xxx Xxxxxx;
(iii) Natony and/or Independent Computer Maintenance, LLC
(Xxxxxxx Xxxxxx, Managing Member) shall deliver a
promissory note to Conolog at closing in the amount of
$150,000, less any prepaid fees, bearing interest of
5.0% per annum payable over 10 years in 120 equal
monthly payments beginning on December 30, 2004.
Interest only shall accrue for the first two years, so
that the balance on December 30, 2004, will be
$165,000 and will be payable in 120 equal monthly
payments of $1,750.08 per month.
The parties agree that the amount of pre-paid fees is
$13,400. Thus the amount of this 10 year Note shall be
$137,350 ($150,000 less $13,400 pre-paid fees plus
$750 moving reimbursement). The parties agree that the
principal balance due on December 30, 2004, shall be
$151,500, and will be payable in 120 equal monthly
payments of $1,606.89 per month.
C. Assumption of Liabilities. Natony and Xxxxxx shall assume and
shall be fully liable to pay and/or discharge, and shall hold
Conolog and ICM harmless from and against, the following
liabilities:
(i) Customer service contracts (maintenance);
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(ii) Customer service contracts (block of time);
(iii) DSL service contract at 0000 Xxxxx 00 Xxxx, Xxxxx
X-000, Xxxxxxx, Xxx Xxxxxx;
(iv) Telephone Directory Assistance Advertising Contracts.
D. Excluded Assets and Liabilities. Conolog and ICM shall retain any
and all accounts receivable for goods and services sold and provided
to customers up to and including October 26, 2002. In the event that
any payments are received by Natony and/or Xxxxxx for goods and
services sold and provided by ICM to customers prior to closing,
they shall remit such payments, in full, to Conolog within five (5)
business days of receipt. Conolog and ICM shall retain and be fully
liable to pay, and shall hold Natony and Xxxxxx harmless from and
against, any and all accounts payable for goods and services
purchased and received by Conolog and/or ICM prior to the closing.
In the event that any payments are received by Conolog and/or
ICM for goods and services sold and provided by Natoli to customers
after October 26, 2002, Conolog and/or ICM shall remit such
payments, in full, to Xxxxxx within five (5) business days of
receipt.
Conolog and ICM, on the one hand, and Natony and Xxxxxx, on
the other hand, shall cooperate with one another in the collection
of all payments due on all invoices.
2. Representations of Conolog and ICM. Conolog and ICM represent
only that the assets returned to Natony and Xxxxxx are free and clear of liens
and encumbrances, except to the extent set forth here (example: pre-paid
customer service contracts), that they have the authority to enter into and
close this Rescission Agreement in accordance with
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its terms and that the same will not violate any agreement, by-law or
certificate of incorporation, and that Xxxxxx Xxxxx is authorized to execute
this Rescission Agremeent and other documents reasonably necessary to close this
Rescission Agreement. In addition, Conolog and ICM represent that all furniture,
fixtures and equipment received by ICM under the Asset Purchase Agreement and
returned to Natony and Xxxxxx, shall be in the same condition as when received
by ICM. No other representations, express or implied, are made by Conolog and/or
ICM.
3. Representations by Natony and Xxxxxx. Natony and Xxxxxx represent
only that they have the authority to enter into and close this Rescission
Agreement in accordance with its terms and that the same will not violate any
agreement, by-law or certificate of incorporation, that Xxxxxxx Xxxxxx is
authorized to execute this Rescission Agreement and other documents reasonably
necessary to close this Rescission Agreement and that the office condominium
unit at 0000 Xxxxx 00 Xxxx, Xxxxx X-000, Xxxxxxx, Xxx Xxxxxx, is owned by Xxxxxx
free and clear of liens and encumbrances and that the mortgage given to secure
the $150,000 two (2) year note shall be a valid and binding 1st mortgage lien on
the property. No other representations, express or implied, are made by Natony
and Xxxxxx.
4. Natony and Xxxxxx Indemnity. Natony and Xxxxxx shall defend,
indemnify and hold harmless Conolog, ICM and all of their officers, directors,
employees and agents from and against any and all claims, actions and/or suits
against Conolog, ICM and/or Natony, and against Conolog and ICM officers,
directors, employees and agents arising from or related to the computer
maintenance business of ICM or Natony and/or claims arising from or related to
any conduct, acts or omissions of Xxxxxx (whether as an employee or agent of
Conolog, ICM or Natony, or individually) and/or claims arising from or related
to any and all liabilities and debts of Natony and Xxxxxx ("indemnity
obligations"). The indemnity
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obligations set forth herein shall apply regardless of when the claims, actions,
suits, liabilities and/or debts occurred or arose, and shall not be limited in
amount. Natony shall be personally liable for and shall personally guaranty the
indemnity obligations of Natony.
Notwithstanding anything to the contrary herein, Natony and Xxxxxx
shall have no liability for (i) trade payables incurred for goods and services
delivered or provided to Conolog or ICM prior to closing or for salary, benefits
or employee withholding taxes incurred for services rendered prior to closing,
which shall remain the liability and responsibility of ICM, or (ii) any
liabilities or claims against Conolog or ICM arising from the conduct of the
computer maintenance business by ICM, unless arising from acts or omissions of
Xxxxxx, between August 27, 2002, and October 26, 2002.
5. Non-Competition By Conolog and ICM. Conolog and ICM shall not
compete in the states of Connecticut, New Jersey, New York and/or Pennsylvania
in the computer maintenance business for a period of three (3) years after
closing. Conolog and ICM will not hire, retain or employ, as employees or
independent contractors, in the conduct of any business of providing computer
maintenance services to third parties any ICM technicians for a period of three
(3) years from the date of closing. Notwithstranding anything to the contrary
herein, this Rescission Agreement and the reversing and unwinding of the Asset
Purchase Agreement is not conditioned on ICM technicians agreeing to work for
Natony and/or Xxxxxx.
6. Mutual Non-Disparagement. The parties will agree not to make any
false or disparaging comments about the other.
7. Non-Disclosure of Confidential Information. Conolog and ICM agree
not to disclose any confidential and proprietary information concerning
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the business of ICM and/or Natony, and shall execute the Confidentiality and
Anti-Disparagement Agreement attached as Exhibit A.
Notwithstanding anything to the contrary herein, the fact and terms
of this Rescission Agreement and of the Confidentiality and Anti-Disparagement
Agreement shall not be confidential.
8. Use of Names "Independent Computer Maintenance Corp." and "ICM."
Conolog and ICM shall not use the names or marks "Independent Computer
Maintenance Corp." or "ICM" in any corporate name, bank account, letterhead,
internet domain name, advertising or marketing, and shall remove reference to
such names from any documents. ICM shall file an amendment to its certificate of
incorporation to change its name to eliminate any use of the names or marks
"Independent Computer Maintenance" or "ICM" within five (5) business days of
closing this Rescission Agreement.
9. Notice to Customers. Conolog shall send a notice to all customers
in the form of letter attached as Exhibit B.
10. Intent and Interpretation. It is the intent of the parties to
rescind and reverse the Asset Purchase Agreement as though it never occurred,
and to place the parties in the same positions they would have been had they
never entered into and closed the Asset Purchase Agreement. This Rescission
Agreement and its terms and conditions shall be interpreted to accomplish this
result. In the event of any ambiguity or doubt as to the intent of the parties,
this rescission Agreement and its terms should be interpreted and enforced in a
manner that puts the parties in the same position or in the position as close to
the same as reasonably possible had they never entered into and closed the Asset
Purchase Agreement.
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11. Notices. Any notice to be given pursuant to the terms of this
Agreement shall be in writing and forwarded to the other party and its attorney
by Federal Express (or any other established overnight courier delivery
service), or by facsimile, or by United States Certified Mail, return receipt
requested, and receipted by the postal authority, and such notice so dispatched
shall become effective on the date of receipt. For purposes thereof, the
addresses of the parties and attorneys are as follows:
AS TO CONOLOG and ICM: Xxxxxx Xxxxx
Conolog Corporation
0 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Facsimile: 908.722.5461
and
Xxxxxxx X. Xxxxx
Xxxxx, Xxxxx & Xxxxxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: 908.272.0909
AS TO NATONY and XXXXXX: Xxxxxxx Xxxxxx
0000 Xxxxx 00 Xxxx, Xxxxx X-000
Xxxxxxx, XX 00000
Facsimile: to be supplied
and
Xxxxxxx Xxxxxx
0000 Xxxxx 00, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: 973.472.7763
12. No Broker. All parties represent and warrant that they did not
employ, contract with and/or contact any person to value, market for sale, find
for purchase, or negotiate for purchase or sale all or any part of the assets
being sold, transferred and/or assigned pursuant to this Rescission Agreement or
otherwise to act as a broker or agent in connection with
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the subject matter of this Rescission Agreement. Conolog and ICM, and Natony and
Xxxxxx, represent and warrant that they know of no basis or reason for any
person to claim that any commission is due from the closing of this Rescission
Agreement and each agrees to defend, indemnify and hold harmless the other for
any claims arising from a breach of this paragraph (including settlements,
judgments, awards and reasonable attorneys' fees and costs).
13. Mutual Releases. Except as set forth in or to enforce or for
breach of this Rescission Agreement, Conolog and ICM, on the one hand, and
Natony and Xxxxxx, on the other hand, forever release, waive, discharge and give
up any and all claims and rights that they may have against the other (and the
other's officers, directors, employees, agents and assigns) for any acts or
omissions that have occurred up to the date of this Rescission Agreement,
including but not limited to any and all claims, known as well as unknown,
existing now or which may arise or accrue in the future from or related in any
way to any act, omission, conduct, theory of strict liability or other
occurrence which occurred or took place at any time up to the date on which this
Rescission Agreement is made, arising from or related to (i) the Asset Purchase
Agreement, (ii) the Employment Agreement between Xxxxxx and ICM as well as the
employment and termination of employment of Xxxxxx by Conolog and/or ICM, and
(iii) the lease and termination of lease by ICM with regard to office space at
0000 Xxxxx 00 Xxxx, Xxxxx X-000, Xxxxxxx, Xxx Xxxxxx. Except as set forth in or
to enforce or for breach of this Rescission Agreement, the parties acknowledge
and understand that they may never bring any claim against the other for any
reason related in any way to something that they did or did not do prior to the
date of this Rescission Agreement.
14. Miscellaneous.
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A. No Bulk Transfers. The parties have agreed to waive compliance
with the procedures and requirements set forth in all applicable
bulk transfer, bulk sale and similar laws of all jurisdictions in
connection with the transactions provided in this Rescission
Agreement.
B. Sales Taxes. Any and all sales taxes applicable to the sale and
tranfer of assets to Natony and Xxxxxx pursuant to this Rescission
Agreement shall be paid by Natony and Xxxxxx, which shall be in
addition to the purchase price and shall be paid at closing.
C. Complete Agreement. This Rescission Agreement represents the
complete understanding between the parties and supersedes any and
all previous negotiations, representations or agreements as to the
subject matter of this Rescission Agreement. This Rescission
Agreement may not be amended except by a written instrument signed
by all parties (or their respective legal counsel).
D. Binding Effect. All of the terms, covenants and conditions
contained in this Agreement are and shall be for the benefit of and
shall bind the parties and their successors and assigns,
respectively.
E. Waivers Only in Writing. No requirement, obligation, remedy or
provision of this Agreement shall be deemed to have been waived,
unless waived expressly in writing. The waiver of any such provision
in one or more instances shall not be considered a waiver of the
right to enforce such provision thereafter.
F. Legal Counsel and Expenses. Each party has had the benefit of
representation and advice by his own selected independent legal
counsel, and each party shall be solely responsible for all legal
and other professional fees and costs
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incurred to negotiate, draft and perform, or otherwise in way
related to advice concerning, the Rescission Agreement.
G. Choice of Law. This Rescission Agreement shall be constructed and
interpreted, and any and all disputes under the Rescission Agreement
resolved, in accordance with the laws of the State of New Jersey.
H. Headings and Pronouns. The "headings" contained in this Agreement
are the purposes of expediency and are not intended to interpret the
content of the paragraph language they precede. As used herein, the
masculine shall include the feminine; the singular shall include the
plural; the neuter shall include the masculine and feminine; and
vice versa.
[The remainder of this page is left blank intentionally. The next page is the
signature page.]
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IN WITNESS WHEREOF, the Parties sign this Rescission Agreement and
agree to the all of the terms and conditions set forth in this Rescission
Agreement intending to be legally bound as of the date first written above.
CONOLOG CORPORATION NATONY CORP.
-------------------------- -------------------------
Xxxxxx Xxxxx, President Xxxxxxx Xxxxxx, President
Independent Computer XXXXXXX XXXXXX, Individually
Maintenance Corp.
------------------------- -------------------------
Xxxxxx Xxxxx, Chairman Xxxxxxx Xxxxxx
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Exhibit A
CONFIDENTIALITY AND ANTI-DISPARAGEMENT AGREEMENT
This Confidentiality and Anti-Disparagement Agreement ("Confidentiality
Agreement") dated the 22nd day of October 22, 2002, is between Conolog Corp. (a
Delaware Corporation) and Independent Computer Maintenance Corp. (a New Jersey
Corporation), with offices at 0 Xxxxxxxx Xxxx, Xxxxxxxxxx, XX (referred to
herein jointly as "CONOLOG") and Xxxxxxx Xxxxxx, residing at 00 Xxxxxxx Xxxx,
Xxxxxx, XX (referred to herein as "XXXXXX").
1. Purpose. The purpose of this Confidentiality Agreement is to
protect confidential information and material (oral, written, by demonstration,
electronic or by any other media or means) of the business operations of ICM,
which Conolog purchased from XXXXXX in July of 2000, and which sale is being
rescinded by mutual consent. The parties acknowledge that information acquired
by CONOLOG, its officers, employees and agents regarding business practices,
procedures and transactions of ICM over the past 5 years has significant
personal, commercial and pecuniary value which would be diminished by
unauthorized disclosure to third parties. Accordingly, the commitments to
confidentiality in this Confidentiality Agreement are a condition of the
Rescission Agreement.
2. Confidential Information. The term "Confidential Information"
means all information, documents, books and records and materials conveyed by
XXXXXX to CONOLOG, and all information, documents, books and records and
materials obtained or received by CONOLOG during the time that it was operating
ICM. Confidential Information may include, by way of example, but without
limitation: clients; potential clients; prices and pricing policies; quoting
procedures; customer lists; client files; research; offering materials;
promotional material; sources; computer files and systems; database; invoices;
bank statements; checks;
forms; contracts; systems; billing practices and procedures; customer ordering
habits and business needs; payment practices and procedures of customers; and
internal and/or attorney investigations and reports concerning ICM and customer
billing and payment practices and procedures and customer relationships or any
other work product and information, whether anecdotal, factual or document
based, relating in any manner to the computer maintenance business of ICM and/or
Natony.
3. Non-Disclosure. In consideration of the Rescission Agreement and
return of the purchase price paid under the Asset Purchase Agreement from XXXXXX
to CONOLOG and other good and valuable consideration, CONOLOG agrees not to
disclose or divulge to any other person, firm, corporation or entity whatsoever,
any Confidential Information as defined in paragraph 2 above, other than (a) to
an officer, director, employee, attorney, accountant, auditor, and/or other
professional advisor of Conolog or ICM, (b) as required by law or order of a
court of competent jurisdiction; (c) as necessary to comply with any legal,
regulatory (including but not limited to any public listing agency or system for
publicly traded securities) or government requirement; (d) as necessary to
enforce the terms of the Rescission Agreement; or (e) as necessary to defend
against any claims against Conolog, ICM or its officers, directors, employees or
agents for matters indemnified by Natony and/or Xxxxxx.
4. Equitable Remedies for Breach. CONOLOG acknowledges that XXXXXX'x
remedy in the form of monetary damages for any breach by CONOLOG of any of the
provisions of this Confidentiality Agreement may be inadequate and that, in
addition to any legal remedies for such breach, XXXXXX shall be entitled to
institute and maintain any appropriate proceeding or proceedings seeking the
imposition of equitable remedies, including but not limited to the equitable
remedies of specific performance, injunction and/or rescission.
5. Effective Date. This Agreement is effective as of the date set
forth above.
CONOLOG CORPORATION
--------------------------------------
Xxxxxx Xxxxx, President
INDEPENDENT COMPUTER MAINTENANCE CORP.
--------------------------------------
Xxxxxx Xxxxx, Chairman
Exhibit B
Letter to Customers
Independent Computer Maintenance
0000 Xxxxx 00 Xxxx, Xxxxx X-000
Xxxxxxx, XX 00000
973.916.1800
October 25, 2002
Dear Customer:
Independent Computer Maintenance ("ICM") is pleased to announce that
it has re-established its principal place of business in Clifton, New Jersey,
under Xx. Xxxxxxx Xxxxxx'x original management team. ICM is no longer affiliated
with Conolog Corporation of Somerville, New Jersey.
ICM rendered services as a subsidiary of Conolog Corporation through
Sunday, October 27, 2002, and will invoice customers for all services rendered
through October 26, 2002. These invoices should be paid to ICM at the Somerville
address - 0 Xxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000.
All services on and after October 28, 2002, will be provided and
invoiced by ICM Clifton, and should be paid to ICM at the Clifton address --
0000 Xxxxx 00 Xxxx, Xxxxx X-000, Xxxxxxx, XX 00000.
We appreciate your business and look forward to continuing to
provide you with the same quality services you have always expected from ICM.
Sincerely,
Independent Computer Maintenance Corp.
Xxxxxxx Xxxxxx
