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Exhibit 10.1
FIRST AMENDMENT TO
COMMERCIAL LOAN AGREEMENT
 
This FIRST AMENDMENT TO COMMERCIAL LOAN AGREEMENT, dated as of October 6, 2006
(this “First Amendment”), is between VERICHIP CORPORATION, a Delaware
corporation (the “Borrower”), and APPLIED DIGITAL SOLUTIONS, INC., a Missouri
corporation (the “Lender”).
 
Recitals:

WHEREAS, on December 27, 2005, the Borrower and the Lender entered into a
Commercial Loan Agreement (the “Agreement”) pursuant to which Lender made a Loan
to Borrower subject to the terms and conditions contained in the Agreement;
 
WHEREAS, Borrower has requested and Lender has agreed, subject to the terms and
conditions set forth herein, to increase the principal amount of the Loan by
Four Million Five Hundred Dollars ($4,500,000.00) (including a change in the
applicable interest rate) in order to meet the Borrower's working capital needs,
IPO costs, and cash needs in connection with Perceptis' potential election to
take its final (deferred) payment in cash and to make certain other amendments
to the Agreement contained herein;
 
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
 
Agreement.
 
1.
Recitals. The foregoing recitals are true and correct and are hereby
incorporated by this reference.
   
2.
 
Definitions. All capitalized terms used herein, except as modified or defined in
this First Amendment, shall have the meaning given to such terms in the
Agreement. All references to the Agreement in all documents executed by
Borrower, Guarantor and/or Bank in connection with the Agreement are hereby
deemed to refer to the Agreement, as hereby amended.
   
3
Amendments: The following sections of the Agreement are hereby amended as
follows:

 
a. Revolving Line of Credit: The amount of the Revolving Line of Credit on page
1 of the Agreement shall be amended by replacing “$8,500,000.00” with
“$13,000,000.00”.

b. Review Date for Revolving Line of Credit: The Review Date for Revolving Line
of Credit on page 1 of the Agreement shall be amended by replacing “June 27,
2007” with “July 1, 2008”.

c. Register to be Maintained: Section I, Paragraph B (Advances and Repayments)
shall be amended by inserting the following sentence at the end of the existing
language: “Each advance or readvance made by Lender pursuant to the Loan
Documents shall be evidenced by one or more accounts or records
 
 
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maintained by such Lender in the ordinary course of business (the “Register”).
The Register maintained by the Lender shall include notations of the advances or
readvances as well as the interest and payments thereon. In the event of any
conflict between the Register and the accounts and records of the Borrower in
respect of such matters, the accounts and records of the Borrower shall control
in the absence of manifest error or proof by Lender in contradiction thereof.”

4.
Conditions Precedent. This First Amendment shall not be effective until Lender
has received the following duly executed documents:

 
a. This First Amendment;
 
b. Amended and Restated Revolving Line of Credit Note - Working Capital of even
date herewith in the principal amount of $13,000,000.00; and
 
c. First Amendment to Security Agreement of even date herewith.
 
5.
 
Representations and Warranties. The terms and conditions, representations and
warranties, and covenants as set forth in the Agreement and all other loan
documents executed by Borrower in favor of Lender in connection with the Loan
are hereby ratified and affirmed by Borrower, and Borrower hereby agrees that
the said terms and conditions, and covenants are valid, true and correct as if
made on the date hereof.
   
6.
 
No Implied Modifications; Inconsistencies. Except as expressly modified hereby,
all terms and provisions of the Agreement shall remain unchanged and in full
force and effect. In the event of an inconsistency between the terms of this
First Amendment and the terms of the Agreement, the terms hereof shall control.
   
7.
Counterparts. This First Amendment may be executed in any number of
counterparts, and all such counterparts shall together constitute but one
instrument.
   
8.
Governing Law. This First Amendment shall be governed by and construed in
accordance with the laws of the State of New Hampshire.

 
IN WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this First Amendment on the date first above written.
 
 
BORROWER:
     
VERICHIP CORPORATION, a Delaware corporation
   
 
By: /s/ William Caragol
 
Print Name: William Caragol
 
Title: CFO
   
 
LENDER:
   
 
APPLIED DIGITAL SOLUTIONS, INC., a Missouri corporation
       
 
By: /s/ Evan C. McKeown
 
Print Name: Evan C. McKeown
 
Title: CFO

 

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