Exhibit 10.2
This Agreement is made the 15th day of February, 2014
BETWEEN
DSG TAG Systems, Inc. a Nevada Corporation, with executive principal
offices located Suite 214 - 5455 152nd Street, Surrey, BC, V3S 5A5
("OSG")
AND
DSG CANADIAN MANUFACTURING CORP. a BC Corporation, with executive
principal offices located at 208 - 1 Thrift Johnston Road, White Rock,
BC, V4B 3Z8
("CMC")
WHEREAS:
A. CMC has previously contracted DSG for the development of a product called
the TAG Touch which was designed to operate as an accessory for the DSG TAG
Fleet Management product. According to the contract, DSG retained an
exclusive right to manufacture and sell the TAG Touch after the product
development was completed.
B. CMC has decided to sell to DSG all the intellectual property (IP) related
to the DSG touch products in exchange for TAG Touch units and other
consideration described herein.
NOW THEREFORE the parties agree as follow:
1. Sale of IP. CMC hereby sells, transfers and assigns (collectively, the
"transfer") to DSG all of the IP, including moral rights, developed and
owned by CMC, in consideration of the transfers, deliveries and covenants
of DSG described herein.
2. No Encumbrances on IP. CMC represents and warrants that as of the date this
Agreement is made, such date being the "Transfer Date", the IP is free and
clear of all encumbrances, no third party consents are required to permit
the said transfer, and no person has rights to acquire the IP.
3. Payment. DSG agrees that
(a) on or before July 15, 2014 it will transfer ownership of 804 completed
fully functioning DSG TAG Touch units (the "Units"); and
(b) within 15 days of July 15, 2014, DSG will deliver to CMC a list of all
serial numbers to the Units; a listing of the Units location, and a
copy of any contract for the rental or lease of a Unit.
4. Inclusion in the Payment. DSG agrees that the transfer of each DSG Units
includes a touch screen, a DSG tag and associated connections and software;
5. Purchase Price. The purchase price for the IP is $1,231,128.
6. Warranty. The transfer of the Units includes the 1 year warrant within the
first 12 months after the Transfer Date, CMC has a 12 month option to
purchase from DSG an extended hardware warranty for the entire duration of
the term at a cost of $299.00 per Unit.
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7. DSG Covenants. DSG covenants and agrees that:
(a) it will identify end customers interested in renting the product and
sign rental agreements for the placement of all the Units on their
facilities;
(b) it will configure and install all of the Units at customer facilities
as soon as possible but no later than 12 months from the date of this
Agreement;
(c) it will operate the Units and will collect the monthly rental fees
from the end customers.
(d) it will pay CMC $22.00 per month for every Unit. The payments will
accrue from October 1, 2014 and the first payment will be January 1,
2015 and will continue to be made quarterly in arrears until the end
of the Agreement.
8. Terms. The "Term" will be 48 months commencing on January 1, 2914 ("Start
Date")
9. Conclusion of Term. At the end of the term, DSG will repurchase the 804
Units for $1,275,000 worth of DSG shares. The share value of DSG is to be
calculated on the average closing value of the previous 120 day of DSG
stock. Alternatively DSG has the option to operate the Units under a new
agreement should the parties agree to new pricing, term and conditions.
10. Currency. All sums of money which are referred to in this Agreement are
expressed in lawful money of Canada, unless otherwise specified.
11. Amendment. No alteration, amendment, modification or interpretation of this
Agreement or any provision of this Agreement shall be valid and binding
upon the parties hereto unless such alteration, amendment, modification or
interpretation is in written form executed by all of the parties to this
Agreement.
12. Independent Legal Advice. DSG acknowledges and agrees that this Agreement
was prepared by counsel for the CMC and acknowledges and agrees that the
CMC urges DSG, and the DSG has had the opportunity, to obtain independent
legal, accounting, investment and tax advice prior to the execution and
delivery of this Agreement, and in the event that the DSG did not avail
itself of that opportunity prior to signing this Agreement, the DSG did so
voluntarily and without any undue pressure or influence and agrees that any
failure to obtain independent legal, accounting, investment or tax advice
shall not be used as a defence to the enforcement of the DSG's obligations
under this Agreement.
13. Independent Contractors. Nothing herein contained shall be deemed or
construed as creating the relationship of principal and agent, nor of
partnership, nor of joint venture, nor of employer and employee between the
parties hereto, it being understood and agreed that no provisions contained
herein or any act or acts of the parties hereto shall be deemed to create
any relationship other than that of independent contractors, each acting on
its own behalf and in its own separate interest.
14. Governing Law. This Agreement shall be interpreted in accordance with the
laws of British Columbia and the federal laws of Canada applicable therein
16. Enurement. This Agreement binds and enures to the benefit of the parties
and their lawful succesors and permitted assigns.
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17. Severability. If any term or provision hereof or the application thereof in
any circumstance shall, in any jurisdiction and to any extent, be invalid
or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision in circumstances other
than those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
Effective Date first above written.
DSG TAG Systems, Inc.
/s/
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DSG CANADIAN MANUFACTURING CORP.
/s/
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