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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 25, 2009
VERIFY SMART CORP.
(Exact name of registrant as specified in its charter)
Commission File Number 333-136492
Nevada 20-5005810
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
Fort Legend Towers, Suite 2002 - 3rd Avenue corner 31st Street E. Square
Fort Bonifacio Global City, Taguig Metro Manila, Philippines
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: 011-632-755-8870
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Effective November 25, 2009, Verify Smart Corp. (the "Company") entered into a
settlement and license agreement (the "S&L Agreement") with Vinema Company Ltd.
("Vinema"), whereby:
* Vinema has agreed to forbear collecting on a debt in the amount of
$500,000 owed by the Company to Vinema (the "Debt") and making other
claims against the Company.
* Subject to the S&L Agreement remaining in good standing and being
honoured by the Company, Vinema agrees to defer the collection of the
Debt to be paid from fifty percent (50%) of revenue due to the Company
under this S&L Agreement (and such Debt being diminished if Vinema
elects to collect, and does collect, from other debtors of the Debt)
and, again subject to the S&L Agreement being honoured, Vinema agrees
to release and indemnify the Company and its directors and officers of
and from all causes of action, damages and demands which may arise
hereafter from any matter whose cause materially or substantially
arises from a fact or claim or circumstance existing on or prior to
the date of the S&L Agreement.
* The Company granted Vinema the following licenses (the "Licenses") to
develop, market, distribute, sell, joint venture or otherwise freely
and fully employ certain software and processes for credit card, debit
card, internet and other forms of financial security systems for
electronic verification systems (collectively, the "Technology", as
more particularly described in the S&L Agreement):
(1) an exclusive license in Europe, Russia and the Mid-East (the
"Europe Territory");
(2) an exclusive license with the Bank of America, Citibank, Wells
Fargo and Wachovia (the "Banks");
(3) an exclusive license in the Philippines and Indonesia and a
non-exclusive license in Asia generally (collectively, the "Asia
Territory"); and
(4) a non-exclusive license in North and South America (however, if
the Company does not establish at least one paying customer
within six months of the S&L Agreement, Vinema may elect for a
period of six months thereafter to have an exclusive license in
North America) (the "NS Territory").
* Vinema shall have full rights to use and enjoyment of the Technology
in the foregoing territories without restriction and shall be
unrestricted in its right to develop, sell, license, market, joint
venture or in any other way employ the Technology.
* The Company granted Vinema exclusive management of the Company's
Indonesia venture (the "Indonesia Territory").
* The Company has granted Vinema a right of first refusal in the event
the Company wishes to alienate any of its interest in the Technology.
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* Vinema may employ all of the Company's trademarks, patents, copyright
and other intellectual right, property and information of or in
relation to the Technology as part of the license rights.
* Vinema may assign, license or sub-license, contract or sub-contract,
place with a consultant, transfer, mortgage, charge or otherwise
release, dispose of or encumber any or all of the rights, privileges,
duties or obligations granted to Vinema under the S&L Agreement.
* All developments or improvements relating to the Technology after the
effective date of the S&L Agreement shall be effected by Vinema at its
own cost and shall belong exclusively to Vinema.
* Vinema agreed to pay the following fees to the Company (collectively,
the "Fees"):
(1) for the Europe Territory and the Banks, twenty-five (25%) percent
of before tax profit to a maximum of $10,000,000US and thereafter
ten (10%) percent of before tax profits to an additional
$25,000,000 and thereafter payments shall cease;
(2) for the Asia Territory, twenty-five (25%) percent of before tax
profit to a maximum of $10,000,000 and thereafter ten (10%)
percent of before tax profits to an additional $25,000,000 and
thereafter payments shall cease;
(3) for the Indonesia Territory, Vinema, after receiving return of
all costs to enable and service the arrangement the Company has,
shall receive fifteen (15%) percent interest in the venture and
the Licensor shall receive thirty-five (35%) percent of the
venture. Should the Indonesia parties renegotiate terms then
Vinema shall have authority to do so and shall grant to the
Company twenty-five (25%) of the Company's before tax profit
therefrom to a maximum of ten million US dollars ($10,000,000US)
and thereafter ten (10%) percent of before tax profits to an
additional twenty-five Million dollars ($25,000,000US) and
thereafter payments shall cease;
(4) for the NS Territory, if non-exclusive, fifteen (15%) percent of
before tax profit to a maximum of $10,000,000 or, if exclusive,
twenty-five (25%) percent of before tax profit to a maximum of
$10,000,000, and thereafter ten (10%) percent of before tax
profits to an additional $25,000,000 and thereafter payments
shall cease.
The S&L Agreement is for a term of ten years and is governed by the laws of
London, England. Upon and after termination at the end of the term the parties
shall have full rights to employ such of the Technology and developments as they
may possess or develop to compete in the industry.
The foregoing description of the S&L Agreement does not purport to be complete
and is qualified in its entirety by reference to the S&L Agreement, which is
attached hereto as Exhibit 10.1, and which is incorporated herein by reference.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit No. Description of Exhibit
----------- ----------------------
10.1 Settlement and License Agreement between Verify Smart Corp. and
Vinema Company Ltd., dated effective as of November 25, 2009.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 3, 2009
VERIFY SMART CORP.
By: /s/ Ralph Santos
--------------------------------
Name: Ralph Santos
Title: President and Director
