Exhibit
10.1
TRANSITION SERVICES
AGREEMENT
This TRANSITION SERVICES AGREEMENT (this “
Agreement ”), dated as of December 27, 2005 (the
“ Effective Date ”), 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
subsidiary companies Verichip Inc. and Instantel Inc.).
Preliminary
Statements
A. Verichip desires that ADSX provide certain
Transition Services (as defined below) to Verichip upon the terms
and subject to the conditions of this Agreement.
B. ADSX is willing to provide such Transition
Services to Verichip upon the terms and subject to the conditions
of this Agreement.
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 transition services and payment of
expenses that ADSX has provided to Verichip prior to the Effective
Date, as requested from time to time by Verichip. These transition
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 (the “transition services” and the
“transition expenses” shall be 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 Compensation for Transition Services
.
(a) As compensation for the Transition 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,
(ii) the reasonable out-of-pocket direct
expenses incurred by ADSX in connection with providing Transition
Services,
(iii) services and expenses incurred by ADSX on
behalf of Verichip in connection with the contemplated initial
public offering (the “ Offering ”) by Verichip
of shares of its common stock, and
(iv) charges by third party service providers
that may or may not be incurred as part of 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 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
have been performed, and such invoice shall be payable by Verichip
within 30 days following receipt thereof. ADSX shall submit to
Verichip, together with each invoice, reasonable documentation
supporting each of the invoiced amounts and shall maintain accurate
and complete books of account necessary to support the amounts set
forth on all invoices.
1.3 Additional Services . The parties
agree to use commercially reasonable efforts to reach agreement on
any additional services which Verichip may require of ADSX beyond
the scope of the Transition Services (the “ Additional
Services ”), and the applicable service fees, payment
procedures and other rights and obligations with respect
thereto.
1.4 Cooperation . Verichip and ADSX agree
to use their commercially reasonable efforts to cooperate with and
provide the other with any information necessary to facilitate
ADSX’s ability to provide the Transition Services. Each party
will use its commercially reasonable efforts, and will cooperate as
reasonably required, 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 the Transition
Services 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 after the second anniversary of the
Effective Date unless the parties otherwise agree to do
so.
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 in payment therefor by such
other party as herein provided. 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 not then completed, as to which this Agreement
shall expire upon completion of those Transition Services, but in
no event longer than thirty days after the second anniversary of
the Effective Date.
2.3 Transition . Upon the expiration or
termination of this Agreement or upon Verichip’s request,
ADSX shall provide conversion and all other serv
