Exhibit 10.8

February 29, 2008

LV Administrative Services, Inc., as Agent
c/o Laurus Capital Management, LLC
335 Madison Avenue, 10th Floor
New York, New York 10017

Gentlemen:

We understand that LV Administrative Services, Inc. (“Agent”), on behalf of
itself and as agent for VALENS OFFSHORE SPV II, CORP. (the “Purchaser”), XMark
Corporation (“XMark”), and VeriChip Corporation (“VeriChip” and collectively
with XMark, “Borrowers”) have entered into a Securities Purchase Agreement (the
“SPA”) and other related documents, instruments and agreements (all such
documents, instruments and agreements, as hereafter modified, supplemented
and/or amended from time to time, collectively the “Purchase Agreements”)
pursuant to which the Purchaser provides financial accommodations to Borrowers.
The undersigned has entered into a certain Amended and Restated Supply, License,
and Development Agreement dated December 27, 2005 with VeriChip (as modified,
supplemented and/or amended from time to time, the “Supply Agreement”) pursuant
to which the undersigned has agreed to exclusively supply to VeriChip, any
VeriChip reseller or other nominees within VeriChip’s control certain Developed
Products (as defined in the Supply Agreement). We are providing this letter
agreement to document our acknowledgment of Agent’s ability to exercise all of
VeriChip’s rights under the Supply Agreement upon the occurrence and continuance
of an Event of Default (as defined in the Notes, as defined in the SPA).

In order to induce you to provide financial accommodations to Borrowers, the
undersigned hereby acknowledges that in connection with the exercise of your
rights under the Purchase Agreements with respect to the assets of the Borrowers
including, without limitation, the Developed Products, you shall be entitled to
the benefit of all of the rights of VeriChip under the Supply Agreement
including, without limitation, the right to sell any of the Developed Products
provided by the undersigned and the right to require the undersigned to
manufacture the Developed Products and supply such Developed Products; provided,
however, you shall not be entitled to exercise any rights under the Supply
Agreement (the “Supply Agreement Rights”) unless (i) an Event of Default (as
defined in the Notes, as defined in the SPA) has occurred and is continuing,
(ii) you have commenced exercising your rights under the Purchase Agreements and
(iii) in exercising the Supply Agreement Rights, you comply with the Supply
Agreement and all applicable laws. In addition, in the event Agent elects to
sell all or substantially all of the assets of VeriChip after the occurrence of
an Event of Default under and as defined in any Purchase Agreement by way of
foreclosure sale or as otherwise permitted by any Purchase Agreement, applicable
law or in equity, the purchaser of all or substantially all of the assets of
VeriChip shall, provided it agrees to be bound to all of the terms of the Supply
Agreement, be entitled to the benefits of the Supply Agreement in lieu of
VeriChip and any such purchaser is an express third party beneficiary of this
agreement and is entitled to rely hereon as if a party hereto.

 

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The undersigned recognizes and acknowledges that any claim or claims that Agent,
the Purchaser and/or any of their successors or assigns has or may hereafter
have against any finished product purchased from the undersigned is, by virtue
of the aforementioned Purchase Agreements, superior to any lien or claim of any
nature which the undersigned now has or may hereafter have to such products by
statute, agreement or otherwise.

Agent may, without affecting the validity of this consent, extend the terms of
payment of any indebtedness of Borrowers to Agent and/or Purchaser or alter the
performance of any of the terms and conditions of any of the Purchase Agreements
without the consent of the undersigned and without giving notice thereof to the
undersigned.

We hereby acknowledge that, to the best of our knowledge, no default or event of
default exists under the Supply Agreement which would entitle us to terminate
the Supply Agreement at the present time and if any such event should occur, we
will use our best efforts to promptly notify Agent at the address set forth
above and Agent shall, simultaneously with XMark, have the same time period as
VeriChip under the Supply Agreement, within which to cure such default or cause
VeriChip to cure such default.

This letter shall be governed by, and construed in accordance with, the laws of
the State of New York. This letter sets forth the entire agreement between the
parties hereto as to the matters set forth herein and supersede all prior
communications, written or oral, with respect to the matters herein.

 

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This consent shall inure to the benefit of successors and assigns of Agent and
Purchaser and shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.

                      Very truly yours,
 
        DIGITAL ANGEL CORPORATION
 

 
      By:   /s/ Lorraine M. Breece
 
           
 
          Name: Lorraine M. Breece
 
          Title: Vice President and Chief Financial Officer The undersigned has
read the above and consents
        and agrees to be bound thereby.
 
       
VERICHIP CORPORATION
 

 

By
  /s/ William J. Caragol  
 

 
     
 

 
  Name: William J. Caragol  
 

 
  Title: President and Chief Financial Officer  

 

SIGNATURE PAGE TO
DIGITAL ANGEL LICENSE AGREEMENT

 

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