|
Exhibit
10.9
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 services necessary for an orderly transition of the
Transition 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 , Verichip agrees that ADSX
| 
