You have to do a factory reset of the phone. To do this, you need to install Android SDK tools + Platform tools within the software modules section.
Android SDK Tools: http://developer.android.com/sdk/index.html#Other
After installation, start SDK Manager and check the platform tools option. Apply the changes and wait for the process to be completed. After it completes, open a Command Prompt and type: adb shell recovery --wipe_data while the phone is attached to PC. The phone will restart and then it will initiate the factory reset procedure.
