AMENDED AND RESTATED TRANSITION SERVICES AGREEMENT
AMENDED
AND RESTATED
TRANSITION SERVICES AGREEMENT
This
AMENDED AND RESTATED TRANSITION
SERVICES AGREEMENT (this “Agreement”), dated as of
December 21, 2006, is entered into between Applied Digital Solutions,
Inc., a Missouri corporation (“ADSX”), and VeriChip Corporation, a
Delaware corporation (“VeriChip”; references to VeriChip in this
Agreement shall include VeriChip’s direct and indirect subsidiary companies).
Preliminary
Statements
A.
ADSX and VeriChip are parties to
a Transition Services Agreement, dated December 27, 2005 (the “Original
Agreement”) providing for ADSX’s provision to VeriChip of transition services.
B.
ADSX and VeriChip desire to amend
and restate the Original Agreement to reflect the terms and conditions set
forth
herein, with the terms hereof superseding the terms of the Original Agreement.
C.
ADSX and VeriChip desire that
this Amended and Restated Transition Services Agreement become effective as
of
the date of completion of VeriChip’s initial public offering (the
“Offering”) of securities (the “Effective Date”), at which time
VeriChip will pay to ADSX, out of the net proceeds of the Offering, the amounts
due and payable under the terms of the Original Agreement, which VeriChip
acknowledges have been added to VeriChip’s indebtedness under the terms of the
separate loan agreement between the parties.
Agreement
In
consideration of the mutual
covenants contained herein, together with other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1.
Services and
Compensation.
1.1
Transition
Services.
During the Term (as defined below), ADSX shall provide or cause to be provided
to VeriChip certain administrative services that ADSX has provided to VeriChip
prior to December 27, 2005 (i.e., the effective date of the Original
Agreement) and ADSX shall pay certain expenses, in each case as requested from
time to time by VeriChip. These services and payment of expenses include those
transition services set forth on Schedule 1-A and those transition expenses
set
forth on Schedule 1-B. Such “transition services” and the “transition expenses”
are referred to collectively in this Agreement as the “Transition
Services”). ADSX shall not be obligated to expand the scope of the
Transition Services significantly beyond the scope of those services and
expenses being provided to VeriChip prior to the Offering (as defined below).
1.2
Additional
Services. The
parties agree to use commercially reasonable efforts to reach agreement
regarding the provision of additional services which VeriChip may request of
ADSX beyond those included in the Transition Services set forth on Schedule
1-A
or 1-B (the “Additional Services”), and the applicable service fees,
payment procedures and other rights and obligations with respect thereto. In
the
event the parties reach agreement as to the provision of Additional Services,
Schedules 1-A and 1-B shall be amended to reflect such Additional Services
and
the applicable fees relating thereto.
1.3
Compensation
for
Transition Services and Additional Services.
(a)
As compensation for the
Transition Services and Additional Services to be provided by ADSX to VeriChip
hereunder, the following shall be payable by VeriChip Corporation on a monthly
basis:
(i)
the amounts specified as “Costs
Allocated to VeriChip” on Schedule 1-C, as such schedule may be amended from
time to time upon the mutual agreement of the parties,
(ii)
the reasonable out-of-pocket
direct expenses incurred by ADSX in connection with providing Transition
Services and/or Additional Services,
(iii)
the costs of the services and
expenses incurred by ADSX on behalf of VeriChip in connection with the Offering,
and
(iv)
charges by third party service
providers incurred in connection with the Offering that are attributable to
Transition Services provided to or for VeriChip and are not included in
(i) or (ii) above.
(b)
Charges for the Transition
Services and Additional Services shall be invoiced by ADSX, on or about the
tenth day of the calendar month next following the calendar month in which
the
Transition Services or Additional Services have been performed, and such invoice
shall be accompanied with reasonable documentation supporting each of the
invoiced amounts. Unless VeriChip disagrees as to the amounts (or any amount)
invoiced, including, without limitation, whether the Transition Services and/or
Additional Services or costs thereof covered by the invoice are properly
allocable to VeriChip, such invoice shall be payable by VeriChip within 30
days
following receipt thereof. In the event of any such disagreement between ADSX
and VeriChip, VeriChip shall pay the amount of the invoice not in dispute and
the parties hereto agree to negotiate in good faith to resolve such dispute.
ADSX shall maintain accurate and complete books of account in accordance with
generally accepted accounting principles and practices necessary to support
the
amounts set forth on all invoices.
(c)
ADSX shall use commercially
reasonable efforts to (i) utilize resources and otherwise provide the
Transition Services and Additional Services in a cost-effective manner and
to
otherwise minimize expenses, and (ii) minimize any costs allocated to
VeriChip. Without limiting the foregoing, if, upon the request of VeriChip
or
for any other reason, the volume of any Transition Services or Additional
Services is reduced or terminated, ADSX shall use commercially reasonable
efforts to reduce the costs associated with providing the remaining Transition
Services or Additional Services, to the extent and as soon as reasonably
practicable.
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(d)
VeriChip, its agents and
accountants will have the right during normal business hours to inspect ADSX’s
books and records pertaining to ADSX’s costs and expenses, and the
determinations and allocations relating thereto, with respect to the Transition
Services and Additional Services. In connection with the audit of the annual
financial statements of VeriChip, ADSX shall permit the accountants retained
by
VeriChip to audit and verify the amounts paid or payable by VeriChip in respect
of the immediately preceding fiscal year as said accountants may deem
appropriate. VeriChip shall provide ADSX with reasonable advance notice of
such
inspection, audit or verification. In the event of any disagreement between
VeriChip and ADSX as to the amounts paid or payable in respect of the Transition
Services and/or Additional Services following such inspection, audit or
verification, the parties hereto agree to negotiate in good faith to resolve
such dispute. VeriChip shall bear all out-of-pocket costs and expenses
associated with such inspection, audit or verification. This Section 1.3(d)
shall survive the termination or expiration of this Agreement.
1.4
Cooperation.
VeriChip and
ADSX agree to use commercially reasonable efforts to cooperate with and provide
the other with any information necessary to facilitate ADSX’s ability to provide
the Transition Services and the Additional Services and to obtain any consents
or approvals from third parties necessary to facilitate the ability of ADSX
to
provide the Transaction Services and the Additional Services.
2.
Term and Termination.
2.1
Term.
The term of this
Agreement (the “Term”) shall commence on the Effective Date and shall
continue in effect with respect to any Transition Service or Additional Service
until such time as VeriChip shall request ADSX to cease performing such
services; provided that ADSX shall not be obligated, except as provided in
Section 2.2, to continue to provide the Transition Services or any
Additional Services after the second anniversary of the Effective Date unless
the parties otherwise agree to do so. Notwithstanding the provisions of this
Section 2.1 or Section 1.3(c), in no event may VeriChip request that
ADSX reduce or terminate, as applicable (i) insurance oversight services or
any insurance coverage with respect to VeriChip other than during the 60-day
period prior to the expiration of the applicable insurance policy, or
(ii) the amount of office space leased by VeriChip from ADSX, except upon
120 days prior written notice.
2.2
Termination.
Except as
provided in Section 2.1, this Agreement may not be terminated by either
party for any reason other than upon thirty days’ prior written notice to the
other party of a material default in the delivery of Transition Services or
Additional Services by ADSX or in payment therefor by VeriChip. Unless otherwise
extended by agreement of the parties in writing, this Agreement shall terminate
on the second anniversary of the Effective Date, except for any Transition
Services or Additional Services not then completed, as to which this Agreement
shall expire upon completion of those Transition Services or Additional
Services, but in no event more than thirty days after the second anniversary
of
the Effective Date.
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2.3
Transition.
Upon the
expiration or termination of this Agreement or upon VeriChip’s request, ADSX
shall provide all other services necessary for an orderly transition of the
Transition Services and Additional Services, in whole or in part, to another
provider and/or to VeriChip itself, including, without limitation, the transfer
of all employee records, financial or tax records and other data in the
possession, custody or control of ADSX; provided, however, that VeriChip
agrees that ADSX shall retain copies of all records and other data transferred
to VeriChip under this provision, including, without limitation, workpapers
and
other documents that form the basis of the ADSX audit or review of its financial
statements, and memoranda, correspondence, communications, other documents,
and
records (including electronic records), which are created, sent or received
in
connection with the audit or review, or as otherwise required by federal
securities statutes and regulations, ADSX corporate document retention policies
and other applicable law. The provisions of this Section 2.3 shall survive
the expiration or termination of this Agreement.
3.
Cooperation of the
Parties.
3.1
Access
to Personnel and
Records. ADSX and VeriChip shall cooperate with each other in providing
reasonable access to personnel and records needed to perform or document the
Transition Services and the Additional Services and their cost.
3.2
Further
Assurances. ADSX
and VeriChip shall take all other actions reasonably necessary for the
Transition Services and Additional Services to be performed on a timely basis
and in a manner consistent with past standards and practice unless otherwise
specifically agreed in writing.
3.3
Information
Technology
Security and other IT Related Matters.
(a)
Neither ADSX nor VeriChip shall,
nor shall ADSX nor VeriChip permit its affiliates or its and their applicable
vendors to, access or use the information systems of any other party made
available under in connection with this Agreement, except as expressly permitted
and required for receipt or provision of the Transition Services or Additional
Services, as applicable, and as contemplated to otherwise perform its
obligations or exercise its rights under this Agreement.
(b)
No one shall tamper with,
compromise or attempt to circumvent, any physical or electronic security or
audit measures employed by any other party (or its affiliates and their
respective third party vendors). ADSX and VeriChip shall not, without the
express written consent of the other party or as otherwise provided in this
Agreement, and without complying with such party’s security policies and
procedures, access any computer system of such other party or remove from such
party’s premises any of such party’s confidential information or any other
property of party, its affiliates, employees, franchisees, members, or
customers.
(c)
ADSX and VeriChip shall comply
with (i) any and all applicable privacy and information security laws,
regulations, statutes, and guidelines, and (ii) the policies, standards,
and guidelines for privacy, information protection, and information and system
security in effect as of the Effective Date, as such may be modified by mutual
agreement to address security exposures and risks that may be discovered, such
agreement not to be unreasonably withheld or
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delayed.
Each party shall maintain
security controls over resources it provides hereunder or personnel who may
access the other party’s (or such other party’s affiliates’) electronic mail,
Web site, systems, or confidential information, which controls shall protect
the
confidentiality, privacy, integrity and availability of information.
(d)
Neither ADSX nor VeriChip shall
knowingly or willfully introduce into any computer systems, databases, or
software of the other party or its affiliates, or of any third party to which
access is provided, any viruses or any other contaminants (including, but not
limited to, codes, commands, instructions, devices, techniques, bugs, web bugs,
or design flaws) that may be used to access, alter, delete, threaten, infect,
assault, vandalize, defraud, disrupt, damage, disable, inhibit, or shut down
the
other party’s or its affiliates’ or applicable third parties’ computer systems,
databases, software, or other information or property. To the extent that ADSX
will (i) perform services or tasks via any electronic means (including, but
not limited to, electronic mail, Web site, and/or the Internet), and/or
(ii) provide or cause to be provided to another party or its affiliates
access to its electronic mail systems, Web sites, computer systems, and/or
other
Internet systems, ADSX shall implement or cause to be implemented
industry-standard security to protect the VeriChip’s and any applicable third
parties’ computer systems, network devices and/or the data processed thereon
against the risk of penetration by, or exposure to, a third party. Unless
otherwise agreed to, any hardware or software accessed by any party or provided
to a party in connection with the Transition Services or Additional Services
shall remain the original party’s property (as the case may be) and must be
surrendered upon the original party’s request and/or when this Agreement
terminates.
4.
Standard of Care; Taxes,
Limitations on Liability; Intellectual Property
4.1
Standard
of Care. In the
performance of the Transition Services and Additional Services, ADSX shall
provide the Transition Services and Additional Services promptly and in a
professional manner, and shall exercise the degree of care normally exercised
by
it in connection with its own affairs, but in no event less than the standard
of
care exercised by it in delivering services to VeriChip prior to the Effective
Date. Except in cases of gross negligence or willful misconduct, ADSX shall
have
no liability to VeriChip with regard to the breach of any duty or obligation
to
VeriChip herein set forth.
4.2
Taxes.
VeriChip shall pay
or cause to be paid all sales, service, valued added, use, excise, occupation,
and other similar taxes and duties (together in each case with all interest,
penalties, fines and additions thereto) that are assessed against it in
connection the provision of the Transition Services and Additional Services
pursuant to Agreement.
4.3
Limitation
on Damages. In
no event shall ADSX be liable to VeriChip for any special, indirect, incidental,
consequential, punitive or similar damages, including but not limited to lost
profits, loss of data or business interruption losses. This limitation shall
apply even if ADSX has been notified of the possibility or likelihood of such
damages occurring and regardless of the form of action, whether in contract,
negligence, strict liability, tort, products liability or otherwise.
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4.4
Intellectual
Property and
Data.
(a)
Unless otherwise expressly
agreed to by the parties, any and all intellectual property and data that are
created, generated or collected by ADSX specifically for VeriChip in the course
of rendering the Transition Services or Additional Services, but excluding
any
of the foregoing either created by ADSX in the ordinary course of maintaining
its information technology infrastructure to provide services to VeriChip or
generated in providing the Transition Services or Additional Services that
relate to the operation of ADSX’s information technology infrastructure
(collectively, “Work Product”), shall be owned exclusively by VeriChip,
and ADSX expressly disclaims any and all right, title, or interest in and to
such Work Product. In addition, in the event and to the extent that any Work
Product contains any pre-existing ADSX technology or other non-Work Product
intellectual property and data, then ADSX (or its licensors or subcontractors,
if applicable) shall be deemed to have granted to VeriChip a nonexclusive,
perpetual and royalty-free license to use such pre-existing ADSX technology
or
other non-Work Product intellectual property and data (subject to any
restrictions set forth elsewhere in this Agreement) only in connection with
VeriChip’s use of such Work Product.
(b)
Subject to the terms and
conditions of this Agreement and any applicable third party agreements under
which VeriChip obtains rights to intellectual property and data, VeriChip grants
ADSX, a limited, non-exclusive, royalty-free license to copy, display, perform,
transmit, create derivative works from and otherwise modify, make, use and
otherwise exploit, during the Term, such intellectual property and data that
is
provided or otherwise made available by VeriChip to ADSX for performance of
ADSX’s obligations under this Agreement. The foregoing license grant is limited
to use or other exploitation solely as reasonably necessary in connection with
the performance of Transition Services and Additional Services.
(c)
Subject to the terms and
conditions of this Agreement and any applicable third party agreements pursuant
to which ADSX obtains rights to intellectual property and data, ADSX grants
to
VeriChip a limited, non-exclusive, royalty-free license to copy, display,
perform, transmit, create derivative works from and otherwise modify, make,
use
and otherwise exploit, during the Term, such intellectual property and data
that
is provided or otherwise made available by ADSX to VeriChip for receipt and
use
of the Transition Services or Additional Services or for performance by VeriChip
under this Agreement. The foregoing license grant is limited to use or other
exploitation solely as reasonably necessary in connection with the receipt
and
use of the Transition Services and Additional Services.
(d)
Except for the ownership of Work
Product and the licenses granted herein, each party will retain all right,
title
and interest in and to its technology, other intellectual property and data
used
in connection with the Transition Services and Additional Services, including
ownership of any technology, other intellectual property and data created by
such party or its affiliates in providing or using, as applicable, the
Transition Services or Additional Services. Each party and its affiliates may
independently create or acquire any technology, other intellectual property
or
data that is deemed by this Agreement to be owned by the other party and its
affiliates hereunder; provided, that such independent creation or
acquisition does not include or use the technology, other intellectual property
or data of the other party and its affiliates, and such independent creation
or
acquisition does not breach any other obligations under this Agreement,
including, without limitation, the obligations of confidentiality.
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(e)
To the extent that any right,
title or interest in or to any intellectual property or data vests in a party
or
an affiliate thereof, by operation of law or otherwise, in a manner contrary
to
the agreed upon ownership as set forth in this Agreement, such party shall
or
cause its affiliates to, and hereby does, perpetually and irrevocably assign
to
the appropriate party designated by the owner thereof under this
Section 4.4 any and all such right, title and interest throughout the world
in and to such intellectual property and data, free and clear of all liens
and
encumbrances.
(f)
Notwithstanding anything to the
contrary in this Section 4.4, nothing in this Agreement shall preclude ADSX
from using any general information, ideas, concepts, know-how, techniques,
programming routines and subroutines, methodologies, processes, skills, or
expertise (collectively, “Residual Information”) which ADSX employees or
contractors retain in their unaided memory and derive from the provision of
the
Transition Services or Additional Services, and which are no more than skillful
variations of general processes known to the computer data processing and/or
information technology industries (and, as such, are neither proprietary,
confidential, nor trade secret information); provided, however,
that ADSX does not breach its other obligations under this Agreement including,
without limitation, the obligations of confidentiality.
(g)
ADSX will promptly provide to
VeriChip (and shall not withhold for any reason) copies of Work Product and
data
owned by VeriChip or to which it has a perpetual license in accordance with
this
Section 4.4. Such data shall be delivered in a mutually agreed to format
(but in no event other than a generally available commercial format if the
parties are unable to agree on format). VeriChip shall be responsible for the
incremental actual costs of such deliveries, to the extent such costs are not
already included in the cost for Transition Services or Additional Services.
(h)
Except as set forth in the
preceding subsections of this Section 4.4, ADSX and VeriChip retain all
right, title and interest in and to their respective technology, other
intellectual property and data, and no other license or other right, express
or
implied, is granted to any other third party or its affiliates under this
Agreement with respect to either party’s or its affiliates’ technology, other
intellectual property or data.
5.
Miscellaneous.
5.1
Entire
Agreement . This
Agreement constitutes the entire agreement of the parties hereto and supersedes
all prior and contemporaneous agreements and understandings (including term
sheets), both written and oral, between the parties hereto, or either of them,
with respect to the subject matter hereof.
5.2
Certain
Audit Rights.
(a)
ADSX and VeriChip acknowledge
and agree that VeriChip may require ADSX perform an audit or such other review,
with respect to the Transition Services or Additional
7
Services
that is sufficient to allow
VeriChip to demonstrate compliance with the requirements set forth in
Section 404 of the Xxxxxxxx-Xxxxx Act of 2002, as amended (“Section
404”), if required. VeriChip shall provide ADSX with reasonable advance
notice of such Section 404 audit (if required). ADSX and VeriChip shall
then promptly meet to discuss the scope of review required. VeriChip shall
have
final decision-making authority regarding the scope of review (if required),
provided that VeriChip and ADSX will cooperate and act reasonably to minimize
disruption to, and effort by, ADSX, as well as to minimize the costs and
expenses of such Section 404 audit; and (ii) the parties shall
cooperate to consolidate, to the extent applicable, Section 404 audits
whenever reasonably practicable.
(b)
VeriChip shall bear all
out-of-pocket costs and expenses associated with such Section 404 audit. If
the Section 404 audit reveals non-compliance with any applicable law, rule,
regulation or requirement of the Section 404 audit, ADSX shall promptly
remedy such non-compliance. ADSX and VeriChip shall bear all out-of-pocket
costs
and expenses associated with such remediation equally.
(c)
This Section 5.2 shall
survive the expiration or termination of this Agreement for purposes of allowing
VeriChip to comply with its obligations under Section 404 with respect to
the year in which this Agreement expires or is terminated.
5.3
Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Florida. NO ACTION, SUIT OR PROCEEDING MAY BE BROUGHT OR MAINTAINED
CONCERNING MATTERS COVERED BY THIS AGREEMENT EXCEPT IN A COURT OF THE STATE
OF
FLORIDA OR COURTS OF THE UNITED STATES OF AMERICA SITTING IN THE COUNTY OF
PALM
BEACH, STATE OF FLORIDA. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS
AND
SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF FLORIDA AND OF THE
FEDERAL COURTS SITTING IN THE COUNTY OF PALM BEACH, STATE OF FLORIDA.
5.4
Amendment
and
Modification. This Agreement may be amended, modified or supplemented only
by a written agreement signed by each of ADSX and VeriChip.
5.5
Assignment;
Binding
Effect. Neither this Agreement nor any of the rights, benefits or
obligations hereunder may be assigned by ADSX or VeriChip (whether by operation
of law or otherwise) without the prior written consent of the other party.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by ADSX and VeriChip and their respective
successors and permitted assigns.
5.6
No
Third Party
Beneficiaries. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any person (other than VeriChip, its subsidiaries, ADSX
and
their respective successors or permitted assigns) any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement
and no person (other than as so specified) shall be deemed a third party
beneficiary under or by reason of this Agreement.
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5.7
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one
agreement binding on ADSX and VeriChip, notwithstanding that not all parties
are
signatories to the same counterpart.
5.8
Confidentiality.
ADSX and
VeriChip shall preserve in strict confidence any confidential information
obtained from the other party and identified as such by such other party, and
shall refrain from: (i) disclosing any such information without the prior
written consent of the other party, except as otherwise required by law,
including without limitation, the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder, the
Internal Revenue Code of 1986, as amended, and the Canadian Income Tax Act,
or
(ii) using such information other than in the performance of Transition
Services and Additional Services under this Agreement, unless such information
(a) is in the public domain through no fault of such party, (b) is or
hereafter becomes known to the public through no fault of the receiving party
or
(c) is provided to the receiving party by a third party having no
confidential obligation to the other party to this Agreement with regard to
such
information.
5.9
Independent
Contractor.
The relationship of the parties to each other under this Agreement shall be
that
of independent contractor.
5.10
Personnel.
Both parties
hereto agree that they shall take appropriate action by instruction of or
agreement with their respective personnel to ensure that all personnel
performing or otherwise involved with Transition Services and Additional
Services under this Agreement shall be bound by and comply with all of the
terms
and conditions of this Agreement, including, but not limited to, the terms
and
conditions of Section 5.7 hereof.
5.11.
Negotiation
and
Mediation. Any disputes arising under this Agreement shall be resolved by
negotiation between the Chief Financial Officers ADSX and VeriChip. In the
event
that they cannot agree, then the Chief Executive Officers shall negotiate in
good faith to resolve the dispute. In the event of any such dispute, VeriChip
shall continue to pay for the Transition Services and Additional Services in
accordance with this Agreement, and the Service Provider shall continue to
provide the Transition Services and Additional Services in accordance with
the
terms and conditions of this Agreement, pending resolution of such dispute.
The
obligations of the parties pursuant to this Section 5.11 shall survive any
termination of this Agreement
5.12
Notices.
All notices,
requests, consents and other communications hereunder must be in writing and
will be deemed to have been duly given: (i) when received if personally
delivered or sent by facsimile, (ii) one business day after being sent by
nationally recognized overnight delivery service, or (iii) five business
days after being sent by nationally registered or certified mail, return receipt
requested, postage prepaid, and in each case addressed as follows (any party
by
written notice to the other party in the manner prescribed by this
Section 5.10 may change the address or the persons to whom notices thereof
shall be directed):
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| To ADSX at: | Applied Digital Solutions, Inc. | |
| 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxx Xxxxx, Xxxxxxx 00000 | ||
| Attention: Xxxxxxx X. Xxxxxxx, Esq. | ||
| Fax Number: 000-000-0000 | ||
| with a copy to: | Holland & Knight LLP | |
| 000 Xxxxxxxx Xxxxxx | ||
| Xxxxx 0000 | ||
| Xxxxx, Xxxxxxx 00000 | ||
| Attention: Xxxxxx X. Xxxxxxx, Esq. | ||
| Fax Number: 000-000-0000 | ||
| To VeriChip at: | VeriChip Corporation | |
| 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxx Xxxxx, Xxxxxxx 00000 | ||
| Attention: Xxxxxxx Xxxxxxx | ||
| Fax Number: 000-000-0000 | ||
| with a copy to: | Steptoe & Xxxxxxx LLP | |
| 0000 Xxxxxxxxxxx Xxxxxx, X.X. | ||
| Xxxxxxxxxx, X.X. 00000 | ||
| Attention: Xxxxxx X. Xxxxxx, Esq. | ||
| Fax Number: 000-000-0000 | ||
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IN
WITNESS WHEREOF, the parties
hereto have duly caused the execution of this Agreement by their duly authorized
representative or officer, as of the day and year first above written.
| APPLIED DIGITAL SOLUTIONS, INC. | ||
| By: |
/s/
Xxxx
XxXxxxx
|
|
| Name: | Xxxx XxXxxxx | |
| Title: | Chief Financial Officer | |
| VERICHIP CORPORATION | ||
| By: |
/s/
Xxxxxxx
Xxxxxxx
|
|
| Name: | Xxxxxxx Xxxxxxx | |
| Title: | Chief Financial Officer | |
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Schedule
1-A
Transition
Services
| 1. | Payroll services (including payment for a portion of ADSX payroll administrator’s salary and benefits – estimated 50% of Payroll Administrator’s total time related to VeriChip matters) |
| 2. | Legal services (including payment for a portion of a general counsel’s salary and benefits and a portion of a paralegal’s salary and benefits - estimated at 10% of general counsel’s total time and 30% of paralegal’s total time related to VeriChip matters) |
| 3. | Finance services (including payment for a portion of ADSX Finance Staff salary and benefits (based on 6 staff members)—estimated 20% of finance staff’s total time related to VeriChip matters) |
| 4. | Accounting Services (including payment for a portion of ADSX accounting fees – estimated 15% of total ADSX accounting fees related to VeriChip matters) |
| 5. | IT Services - frame relay |
| 6. | Banking oversight and controls |
| 7. | Cash management system |
| 8. | Insurance oversight |
| 9. | Administration of stock option plans and warrants |
| 10. | Compliance services for Section 404 of Xxxxxxxx-Xxxxx Act of 2002 |
| 11. | Press releases and investor relations |
| 12. | Tax matters |
| 13. | Offering services including, without limitation, Form S-1 Registration |
| 14. | Leasing of office space |
Schedule
1-B
Transition
Expenses
| 1. | IT expenses |
| 2. | Telephone expenses |
| 3. | Office supply and building and office expense |
| 4. | Postage, freight and delivery expenses |
| 5. | Rent expense |
| 6. | Insurance policy expense (excluding products liability) |
| 7. | Tax return preparation |
| 8. | Federal and state securities laws registration and reporting expenses |
Schedule
1-C
Estimated
Monthly Costs Allocated
to VeriChip
| 1. | Payroll | $ 6,500 | |||
| 2. | Legal | $ 3,465 | |||
| 3. | Finance | $11,982 | |||
| 4. | Accounting | $ 9,250 | |||
| 5. | IT | $ 5,426 | |||
| 6. | Telephone (included in IT) | $ — | |||
| 7. | Office supply and building and office expense | $ 2,360 | |||
| 8. | Postal, freight and delivery | $ 142 | |||
| 9. | Rent expense | $ 9,850 | |||
| 10. | Banking oversight and controls | (Included in Finance cost | ) | ||
| 11. | Cash management system | As charged | |||
| 12. | Insurance policies (excluding products liability) | $16,808 | |||
| 13. | Insurance oversight (included with insurance policies) | $ — | |||
| 14. | Administration of stock option plans and warrants | (Included in Payroll cost | ) | ||
| 15. | Compliance Services for Section 404 | (Included in Finance cost | ) | ||
| 16. | Press Releases and Investor Relations | $ 6,000 | |||
| Estimated Monthly Charges: | $71,783 | ||||
