Exhibit 10.1


    
      

    

    Exhibit
      10.1

    


    VeriChip
      Authorized Dealer Agreement

    


    AN
      AGREEMENT,

    by
      and between

    VeriChip
      Corporation

    (“VeriChip”)

    and

    


    


    IR
      Security & Safety Americas

    the
      (“Dealer”)

    


    The
      parties mutually agree:

     

    1.
      General

    This
      Agreement governs all transactions hereafter entered into between VeriChip
      and
      Dealer concerning the Products developed and marketed by VeriChip.

     

    2.
      Appointment

    Subject
      to the terms set forth in this Agreement, VeriChip hereby appoints Dealer,
      and
      Dealer accepts the appointment by VeriChip, to be a non-exclusive, independent
      Dealer of the products (the “Product(s)”) described in Schedule “A” (“Authorized
      Products List”). Dealer shall be authorized to deal in additional products
      marketed by VeriChip only if VeriChip first signs a new Schedule “A” adding them
      to the Authorized Products List and provides written notification of the
      addition to Dealer.

     

    3.
      Territory

    Dealer
      shall have the non-exclusive right to promote, sell, and market Products only
      in
      the geographical territory and or market(s) described in Schedule “B” (the
“Territory”), except as otherwise specifically authorized by VeriChip in
      writing. VeriChip reserves the right to designate others to sell any of the
      Products in the Territory. Dealer shall not resell Products to any person or
      entity that Dealer has reason to believe will ship the Product outside the
      Territory.

     

    4.
      Government, National and Major Accounts

    VeriChip
      and Dealer acknowledge that in order to maximize market penetration for the
      Products, it might be appropriate for VeriChip, or other authorized VeriChip
      dealers, agents or parties, to sell or otherwise market Products to major
      end-user accounts, including national accounts, and government accounts, some
      of
      whom may have multiple end-user locations in different geographic areas
      including areas within or outside the Territory. VeriChip shall have the right
      to make arrangements directly with such accounts or with other parties to
      provide for installation, warranty and regular service and maintenance. Dealer
      agrees to use its best efforts to cooperate with VeriChip and other VeriChip
      agents or parties to adhere to such guidelines as VeriChip may from time to
      time
      establish in the implementation of any such programs. VeriChip shall have the
      right to designate by written notice to Dealer that such accounts are outside
      the

     

    
      
        
        

      

      
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    Territory
      of Dealer and Dealer shall not solicit, market or sell Products to such
      designated accounts.

     

    5.
      Dealer
      Network

    Dealer
      shall have no right to sublicense any of its rights herein to other dealers
      or
      similar third party marketers.

     

    6.
      Independent Contractor Relationship

    Nothing
      contained in this Agreement shall create an agency relationship, joint venture,
      partnership or other like arrangement between the parties, shall be construed
      to
      make either party the agent for the other party for any purposes, and neither
      party shall have any right whatsoever to incur any liabilities or obligations
      on
      behalf of or binding upon the other party. Dealer has not been granted a
      franchise, and Dealer is not an agent of VeriChip. Neither party shall have
      the
      power or authority to represent the other party in any manner. Each party will
      act as an independent contractor in accordance with the terms of this Agreement
      and will not at any time represent orally or in writing to any person or
      corporation or other business entity that it has any right, power or authority
      not expressly granted by this Agreement. Dealer shall not commit VeriChip to
      any
      contractual obligation, make any warranties or representations purportedly
      on
      behalf of or approved by VeriChip with respect to Products other than those
      set
      forth in VeriChip’s supplied material.

     

    7.
      Responsibilities Of VeriChip

    Subject
      to the terms of this Agreement, VeriChip may at its sole
      discretion:

    
      	
              (a)

            	
              provide
                Dealer, from time to time, with marketing literature, technical
                literature, technical advice and assistance and warranty literature
                as
                VeriChip deems appropriate for the Products and related
                goods;

            
	 	 
	
              (b)

            	
              conduct
                service training and sales and marketing training and programs for
                Dealer,
                as VeriChip may deem appropriate from time to time;

            
	 	 
	
              (c)

            	
              engage
                in advertising programs, which may include national, local, or cooperative
                advertising (on such terms, including cost allocation, as may be
                agreed
                from time to time by the parties), of such type and nature as VeriChip
                deems appropriate for the successful marketing of Products and related
                goods

            


    

     

    8.
      Responsibilities of Dealer

    Pre-sale
      and post-sale support of the Products by Dealer is critical to the reputation
      and success of the Products and related goods in the marketplace. Dealer
      acknowledges that its ability and commitment to provide such support and to
      market Products are extremely important elements in VeriChip’s decision to enter
      into this Agreement. Subject to the other provisions of this Agreement, Dealer
      specifically agrees as follows:

    


    
      	
              (a)

            	
              Best
                Efforts
                -
                Dealer shall exercise its best efforts to achieve (in a manner consistent
                with the other terms of this Agreement) maximum market penetration
                for the
                Products in the Territory. Dealer shall provide reasonable marketing
                coverage in the Territory. Dealer shall maintain inventories of Products
                at their discretion sufficient to meet market demand in a timely
                manner.

            
	 	 
	
              (b)

            	
              Sales
                Organization
                -
                Dealer shall train and maintain at each of its offices in the Territory
                a
                sales force of individuals knowledgeable with respect to the functional
                capabilities and operation of the Products. 

            
	 	 
	
              (c)

            	
              Installation
                and End-user Training
                -
                Dealer shall ensure that each end-user who acquires any of the Products
                from Dealer is provided proper installation support and operational
                training.

            


    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)

            	
              Reports
                -
                Dealer shall monitor its activities with respect to the Products
                and shall
                provide VeriChip with a report not less than ten (10) days after
                the end
                of each month setting forth in reasonable detail the
                following:

            


    

     

    
      	 	
              (i)

            	
              sales
                and inventory for the preceding month;

            
	 	
              (ii)

            	
              sales
                analysis within the Territory;

            
	 	
              (iii)

            	
              forecasts
                for future sales on a rolling one month, three month (quarter) and
                annual
                basis;

            
	 	
              (iv)

            	
              service
                and support activity.

            
	 	
              VeriChip
                shall have the right to prescribe the form of such reports and the
                level
                of detail required from time to time by written notice to
                Dealer.

            


    

    


    
      	
              (e)

            	
              Systems
                -
                Dealer shall incorporate the Products only into systems or with other
                products, including hardware and software, that are compatible with
                the
                Product. VeriChip shall have the right to publish lists of compatible
                and/or incompatible systems and
                products.

            


    

     

    9.
      Product Development

    VeriChip
      reserves the right, in its sole and absolute discretion, to make modifications,
      improvements or changes to Products or related goods or to discontinue the
      sale
      or distribution of any Products or related goods at any time without incurring
      any liability whatsoever to Dealer or others. Should Dealer require, VeriChip
      will fulfill outstanding accepted orders for such discontinued Products. Should
      Dealer have inventory of any Product purchased within sixty (60) days from
      VeriChip’s announced discontinuance of such Product, VeriChip will repurchase at
      Dealer’s cost such Product subject to receiving Dealer’s order for other
      Products of equal value. The cost of shipping and handling any returned Product
      shall be borne by Dealer.

     

    10.
      Software License

    
      	
              (a)

            	
              The
                Products may include software (“Software”) and its media, hardware and
                documentation related to software and hardware.

            
	 	 
	
              (b)

            	
              Software
                is normally accompanied by either a separate Software license agreement
                to
                be presented by Dealer to the end-user for execution at time of sale
                and
                prior to the delivery of the Product or by a prepackaged Software
                license
                agreement wherein the end-user accepts the terms of a pre-packaged
                Software license agreement by breaking a seal to access the Software.
                If
                the Software contains a separate Software license for execution by
                the
                end-user, it is the obligation of Dealer to ensure that such license
                is
                executed by the end-user and returned to VeriChip.

            
	 	 
	
              (c)

            	
              Title
                to all Software marketed to Dealer under this Agreement will remain
                with
                VeriChip or VeriChip’s suppliers. Dealer will acquire no rights to any
                such Software except that Dealer will be bound by the applicable
                end-user
                license agreement in respect of any Software it acquires for its
                own
                use.

            


    

     

    11.
      Purchases

    
      	
              (a)

            	
              Dealer
                shall order and purchase Products and related goods from VeriChip
                by
                written, purchase orders (“Purchase Orders”), which shall (i) be deemed to
                incorporate the terms and conditions of this Agreement whether or
                not
                reference to this Agreement is made, (ii) identify each Product ordered
                by
                model number, (iii) indicate quantity, price (on a pro forma basis,
                with
                the invoice price to be determined in accordance with the provisions
                of
                this Agreement) and shipping instructions and (iv) specify Dealer’s
                requested delivery dates. The terms of Dealer’s Purchase Orders shall be
                subject to and consistent with the terms
                of

            


    

     

     

    
      
        
        

      

      
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              this
                Agreement and shall be null and void to the extent they vary from,
                conflict with or supplement the terms of this Agreement. Purchase
                Orders
                will bind VeriChip only to the extent accepted by VeriChip’s written
                confirmation or delivery.

            
	 	 
	
              (b)

            	
              Delivery
                dates given by VeriChip as part of order acknowledgment for accepted
                orders for Products or related goods will be honored by VeriChip
                on a best
                effort basis.

            
	 	 
	
              (c)

            	
              Accepted
                orders for Products or related goods cannot be canceled or modified
                by
                Dealer without VeriChip’s prior written approval.

            
	 	 
	
              (d)

            	
              Dealer
                must accept all such Products that are not defective. Returned Products
                shall be subject to a restocking charge of twenty percent (20%) of
                the
                invoice price of the Products returned. 

            
	 	 
	
              (e)

            	
              VeriChip
                reserves the right to sell replacement tags and straps directly to
                the
                end-user. Notwithstanding the foregoing, Dealer shall continue to
                honour
                his service responsibility on the entire system as specified in Section
                14. Dealer shall have the right to supply replacement straps and
                tags to
                the end-user providing these are ordered in the minimum quantities
                specified by VeriChip from time to time.

            
	 	 
	
              (f)

            	
              VeriChip
                reserves the right, without limiting its other remedies under this
                Agreement, to refuse to supply Products to Dealer and/or to cancel
                this
                Agreement if (i) Dealer attempts to distribute any Product to persons
                or
                entities outside of the Territory or assists or permits anyone else
                to do
                so, (ii) VeriChip receives repeated complaints from end-users of
                the
                systems regarding the performance of Dealer’s systems incorporating a
                Product, and Dealer fails to cure such complaints to VeriChip’s
                satisfaction after reasonable notice, or (iii) Dealer has failed
                to send
                technical staff for training by VeriChip.

            
	 	 
	
              (g)

            	
              VeriChip
                reserves the right to reject or cancel any Purchase Order, in whole
                or in
                part, if Dealer is then in breach of this Agreement.

            
	 	 
	
              (h)

            	
              VeriChip
                reserves the right to establish minimum purchase quantities of Product
                as
                defined by VeriChip from time to
                time.

            


    

     

    12.
      Prices

    
      	
              (a)

            	
              Product
                prices are those in VeriChip’s then current Price List, less the
                applicable discount as set out in Schedule “C”. VeriChip reserves the
                right to change prices and/or discounts and the effective date of
                such
                change shall be the 30th
                calendar day following notice thereof to Dealer.

            
	 	 
	
              (b)

            	
              Any
                price decrease or discount increase will be applied to Products shipped
                after the effective date of price decrease or discount increase.
                VeriChip
                will provide a credit to Dealer in respect of its inventory of Products
                purchased up to ninety (90) days prior to the effective date of any
                price
                decrease or discount increase, provided that Dealer orders Products
                having
                a purchase price equal to such credit within such 90 day period.
                

            
	 	 
	
              (c)

            	
              Any
                price increase or discount decrease will apply to orders received
                by
                VeriChip after the effective date of price increase or discount
                decrease.

            
	 	 
	
              (d)

            	
              Prices
                do not include, and Dealer is responsible for, any sales, use, inventory,
                value added and like taxes or duties for Products in its possession,
                including Products to which title has not yet passed.

            
	 	 
	
              (e)

            	
              All
                prices are FOB (either Ottawa, Ontario or Ogdensburg, NY). VeriChip
                shall
                be deemed to have delivered all Products and related goods when such
                are
                put in the custody of a carrier at the FOB point, at which time all
                risk
                of loss or damage shall pass to Dealer not withstanding the reservation
                of
                title by VeriChip as provided in paragraph 13(c)
                of this Agreement. Dealer shall bear all costs of freight, freight
                insurance and associated costs and shall make all arrangements for
                same
                from the FOB point. Within fifteen (15) days after receipt of any
                Products
                or related goods by Dealer, Dealer shall notify VeriChip in writing
                of any
                defect in or damage to such Products or related goods which occurred
                in
                shipping prior to the passing of title of the Products to the Dealer.
                Failure to do so shall be deemed conclusive proof that such defect
                or
                damage is not attributable to the fault of VeriChip and shall constitute
                a
                waiver of all claims against VeriChip arising out of such defect
                or
                damage.

            


    

     

    
      
        
        

      

      
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    13.
      Payment

    
      	
              (a)

            	
              Dealer
                shall pay for Products in accordance with the terms of VeriChip’s
                invoices. The terms of payment are net thirty (30) days from shipment
                date
                to Dealer. VeriChip shall be entitled to charge and Dealer shall
                pay
                interest at the rate of two percent (2%) per month from the date
                of
                shipment on overdue invoices. VeriChip shall have the right to change
                the
                rate upon thirty (30) days notice. In the alternative, Dealer may
                pay for
                the Product through a credit company approved by VeriChip, in which
                case
                VeriChip will initiate the payment transaction with the credit company
                when Products are shipped to Dealer.

            
	 	 
	
              (b)

            	
              The
                supply of credit herein shall be at the discretion of VeriChip and
                VeriChip reserves the right to withhold delivery of Product if Dealer
                does
                not meet VeriChip’s credit requirements or the amount of Product ordered,
                or the amount of Product which remains unpaid (whether or not overdue)
                exceeds the limit established by VeriChip for Dealer. Dealer shall
                provide, at VeriChip’s request, an acceptable letter of credit or
                guarantee or security in a form and amount determined by
                VeriChip.

            
	 	 
	
              (c)

            	
              Title
                to Products (excluding any software or other intellectual property
                therein) purchased from VeriChip by Dealer shall pass upon transfer
                from
                VeriChip’s warehouse to the carrier as stated in 12(e)
                above. Notwithstanding the foregoing, VeriChip shall maintain a beneficial
                interest in the Product until VeriChip has been paid in
                full.

            
	 	 
	
              (d)

            	
              Without
                limiting any other rights it may have under this Agreement and applicable
                law, all of VeriChip’s obligations under this Agreement, including
                obligations of supply, or any Dealer purchase order, can be suspended
                should Dealer be delinquent in making payment for previously shipped
                Products.

            


    

     

    14.
      Service Responsibility

    Dealer
      acknowledges that the Products may require installation, warranty, and
      after-sale servicing and maintenance by skilled, trained and fully qualified
      technicians. Dealer will provide for professional, prompt, and expert
      installation, warranty and service support for Products sold in the Territory
      as
      outlined from time to time in VeriChip’s service program. Dealer shall:


    
      	
              (a)

            	
              strictly
                adhere to all installation, service and parts inventory policies
                and
                guidelines established by VeriChip from time to time;

            
	 	 
	
              (b)

            	
              maintain
                proper installation and servicing tools and facilities;

            
	 	 
	
              (c)

            	
              make
                available on-going Product maintenance at each of its offices and
                keep on
                hand at each such office an inventory of spare parts and/or units
                (which
                will be obtained solely from VeriChip) sufficient to perform its
                warranty
                and maintenance obligations;

            
	 	 
	
              (d)

            	
              employ
                a sufficient number of technicians so as to ensure that each installation
                and service call for a Product is personally handled only by a technician
                who has been properly trained for such Product as stated in section
                15
                below. 

            
	 	 
	
              (e)

            	
              make
                available and provide competent maintenance and service support,
                in a
                commercially reasonable manner, to all end-users of Products (and
                other
                Products as VeriChip may request in writing) in the Territory,
                irrespective of whether the Product was sold to the end-user by
                Dealer.

            


    

     

    15.
      Training Requirement

    Dealer
      shall send to VeriChip for training all service technicians involved in the
      installation and maintenance of the Product or related goods. Dealer shall
      also
      provide for additional training, as appropriate, at service schools or the
      like.


     

    
      
        
        

      

      
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    16.
      Warranty

    
      	
              (a)

            	
              VeriChip
                makes no warranties whatsoever as to Software or its media other
                than
                those set forth in the applicable user license. All other Product
                is sold
                with a limited warranty enclosed with the Product (the “Limited
                Warranty”). The limited warranty shall only apply if the Product is used
                in conjunction with compatible systems and products. VeriChip makes
                no
                warranty whatsoever with respect to any products or systems with
                which the
                Products are installed or used.

            
	 	 
	
              (b)

            	
              A
                Product replaced in warranty will carry the limited warranty for
                the
                balance of the warranty period of the Product that it replaces.
                Replacement parts and repaired equipment out-of-warranty will carry
                a
                ninety (90) day warranty on the part, assembly or component that
                was
                replaced or repaired and shall be subject to the same limitations
                and
                exclusions as the Limited Warranty for a similar new
                Product.

            
	 	 
	
              (c)

            	
              All
                warranty claims will be honored by authorized “Service Centers” of
                VeriChip under the guidelines of VeriChip’s Service program. VeriChip’s
                sole responsibility shall be to repair or replace Products under
                warranty,
                in accordance with the procedures set forth from time to time in
                VeriChip’s warranty policy.

            
	 	
              NO
                OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OR
                CONDITIONS REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR
                PURPOSE,
                RELATING TO THE USE OR PERFORMANCE OF THE PRODUCT, SOFTWARE, DOCUMENTATION
                OR SERVICES PROVIDED BY VERICHIP IS MADE BY VERICHIP TO DEALER, ITS
                DEALERS OR CUSTOMERS. 

            
	 	 
	
              (d)

            	
              All
                non-VeriChip hardware, firmware, software, and documentation which
                may be
                distributed by VeriChip with a Product is sold “as is” without warranty of
                any kind by VeriChip, including any implied warranty or condition
                regarding merchantability or fitness for a particular purpose. The
                sole
                warranty with respect to such items is given by the manufacturer
                or
                producer thereof.

            
	 	 
	
              (e)

            	
              VeriChip
                will not be liable for personal injury or property damages, loss
                of profit
                or other incidental, consequential or special damages arising out
                of the
                use or inability to use any Product or any hardware, firmware, software
                or
                documentation which may be distributed by VeriChip, whether on account
                of
                Dealer’s negligence or any other cause, or for any damages or losses
                (regardless of their nature) caused in whole or in part by Dealer’s
                failure to fulfill its responsibilities as set forth in this
                Agreement.

            


    

     

    17.
      Limitation of Liability

    Dealer
      shall ensure the following limitation of liability is communicated to the
      appropriate personnel at the end-user. 

    


    Limitation
      of Liability

    This
      Product has been designed for use to a) assist personnel in summoning help
      when
      they are under personal duress, b) assist in the prevention of infant abduction
      and/or mother/infant mismatching c) locate assets d) assist in the prevention
      of
      the loss of assets and/or e) reduce the risk of resident wandering through
      remote detection.

    


    The
      range, accuracy, function and performance of this Product may vary from the
      published specifications due to many factors, including, without limitation,
      site impairments from structural effects, metal objects in the vicinity,
      placement of the receiver and transmitter, interference from other electrical
      devices, atmospheric effects, installation, and maintenance. There may be other
      factors, which also affect performance of this Product. 

     

    VeriChip
      does not guarantee that this Product will a) detect 100% of the calls for
      personal assistance, b) detect 100% of infant abductions and/or mother/infant
      mismatches, c) locate all assets 100% of the time, d) prevent the loss of assets
      and/or e) detect 100% of resident wanderings. VeriChip does not guarantee that
      this Product will not return false reports of a)

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    calls
      for
      personal assistance, b) infant abductions and/or mother/infant mismatches,
      c)
      location of assets, d) loss of assets and/or e) false reports of resident
      wandering. 

    


    Monthly
      or weekly testing and maintenance of this Product, as described in the Product
      documentation, is essential to verify the system is operating correctly and
      to
      ensure that the probability of detecting an alarm and/or locating the
      transmitter are maximized. 

    


    The
      failure to undertake regular testing and maintenance will increase the risk
      of
      system failure and a) failure to report personal duress calls, b) failure to
      detect infant abductions and/or mother/infant mismatches, c) failure to locate
      assets, d) failure to prevent the loss of assets and/or e) failure to detect
      resident wandering. The failure to undertake regular testing and maintenance
      will increase the risk of false reports of a) calls for personal assistance,
      b)
      infant abductions and/or mother/infant mismatches, c) location of assets, d)
      loss of assets and/or e) resident wandering.

    


    VeriChip
      hereby disclaims all warranties, express or implied, arising out of or in
      connection with any of its Products of the use or performance thereof, including
      but not limited to, where allowable by law, all other implied warranties or
      conditions of merchantable quality and fitness for a particular purpose and
      those arising by statute or otherwise in law or from a course of dealing or
      usage of trade.

    


    VeriChip’s
      liability to you or anyone claiming through or on behalf of you with respect
      to
      any claim or loss arising out of the use or misuse of VeriChip’s Product,
      defective products or materials, improper installation or maintenance of
      VeriChip’s Product or products or the system in which they are incorporated, or
      alleged to have resulted from an act or omission of VeriChip or any person,
      negligent or otherwise, shall be limited to:

    


    
      	 	
              a)

            	
              the
                repair or replacement of defective Product or materials supplied
                by
                VeriChip during the warranty period as set out in the Product
                documentation; or, at the option of VeriChip,

            
	 	 	 
	 	
              b)

            	
              refund
                of the purchase price of the Product supplied by
                VeriChip.

            


    

    


    In
      no
      event shall VeriChip be liable for general, specific, indirect, consequential,
      incidental, exemplary or punitive damages or any losses or expenses suffered
      by
      you or anyone else, whether or not VeriChip, or its employees, officers, agents,
      resellers or installers has been informed of the risk of such loss or expense
      and whether or not such losses or expenses were foreseeable.”

     

    18.
      Indemnification of VeriChip by Dealer 

    Dealer
      agrees to indemnify and hold VeriChip harmless from and against any and all
      loss, damage or cost, including legal expenses and counsel fees, for which
      VeriChip becomes liable to third parties by reasons of acts, or failures to
      act,
      of Dealer in marketing, selling, installing and servicing the Product and/or
      its
      systems incorporating the Product, including, but not limited to

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	
              (a)

            	
              representations
                and warranties made by Dealer regarding such Product, system or the
                Product incorporated therein, or the use or performance of the Product
                in
                connection with any other system components or software programming,
                and
                

            
	 	 
	
              (b)

            	
              representations
                and warranties made by Dealer in respect of the Products or the system
                within which it is incorporated which are not contained in VeriChip
                product literature or are not authorized in writing by
                VeriChip.

            
	 	 
	
              (c)

            	
              improper
                installation, support or maintenance of any system in which the Product
                is
                incorporated.

            


    

     

    19.
      Infringement by Product

    In
      the
      event of any claim by a third party against Dealer asserting a patent,
      copyright, trade secret or other proprietary right infringement involving the
      Product, VeriChip will, at its expense, defend and/or settle such claim, and
      will indemnify Dealer against any reasonable cost, legal fees, other expenses
      and damages required for such defense or settlement, provided that Dealer
      promptly notifies VeriChip in writing of such claim, and furnishes to VeriChip
      copies of all letters and other documents relating to the allegation of
      infringement. VeriChip shall be given full and sole authority to defend and
      settle such claim, action or allegation of infringement. If VeriChip requests,
      Dealer agrees to assist and/or cooperate with VeriChip in such defense and/or
      settlement. VeriChip shall not be obligated to defend or settle or be liable
      for
      costs, fees, expenses or damages if the infringement claim arises out of
      Dealer’s special specifications, designs, drawings, instructions or other
      requirements or out of any addition to or modification of the Product or any
      combination thereof with other products after delivery by VeriChip or from
      use
      of the Product in the practice of a process or system, in which case Dealer
      shall assume the defense and/or settlement thereof and pay all costs, fees,
      expenses or damages incurred by VeriChip. If any infringement claim is brought
      against Dealer or VeriChip, or if in VeriChip’s opinion the Product is likely to
      become a subject of a claim of infringement or violation of any patent,
      copyright, trade secret or other proprietary right of any third party, VeriChip
      shall be entitled at its option: (a) to procure for Dealer the right to continue
      the sale and/or use of the Product at VeriChip’s expense by acquiring a license
      in the name of VeriChip, (b) to replace or modify the Product so as not to
      infringe such third party’s rights while conforming, as closely as possible to
      original specifications or (c) to discontinue further supply of the Product.
      THE
      FOREGOING STATES THE ENTIRE LIABILITY OF VERICHIP AND DEALER IN RESPECT OF
      INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET OR ANY OTHER PROPRIETARY
      RIGHT OF ANY THIRD PARTY AND IS IN LIEU OF ALL WARRANTIES, EXPRESS OR IMPLIED,
      IN REGARD THERETO, AND IN NO EVENT SHALL VERICHIP OR DEALER BE LIABLE FOR
      DIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED
      TO, LOSS OF ANTICIPATED PROFITS OR OTHER ECONOMIC LOSS. 

     

    20.
      Restrictions

    Dealer
      shall not alter or modify any of the Products or their constituent elements
      and
      shall not:

    
      	
              (a)

            	
              reverse
                engineer, interrogate, or decode any of the Products or program components
                of the Products; or

            
	 	 
	
              (b)

            	
              attempt
                to bypass or to defeat any protection methods which have been applied
                by
                VeriChip to prevent unauthorized uses of the Products;
                or

            
	 	 
	
              (c)

            	
              attempt
                any other procedure to put any of the program components into human
                readable form.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    21.
      Intellectual Property Rights

    
      	
              (a)

            	
              Dealer
                acknowledges and agrees that it has no right, title or interest in
                or to
                the name “VeriChip” or to any logos, trade-names, or trademarks
                (registered or not) (collectively the “Marks”) used in connection with
                VeriChip or any goods or services from time to time marketed by VeriChip
                (including, without limitation, with respect to the Products). Dealer
                shall not use the Marks in any way in connection with marketing or
                servicing goods or services, other than in accordance with the provisions
                of this Agreement or except as may be expressly authorized by VeriChip
                in
                writing. Under no circumstances shall Dealer deface, alter, remove
                or
                cover a Mark, insignia, serial number or lettering which is on a
                Product
                at the time of delivery.

            
	 	 
	
              (b)

            	
              Dealer
                shall not include the name “VeriChip” or any variation thereof in any
                portion of Dealer’s name or any name under which Dealer does business. In
                accordance with the above, Dealer shall have the right to use the
                trademark “VeriChip” in its approved standard form solely in connection
                with the sales, advertising and promotion of the Products and not
                for any
                other purpose. Dealer shall not use any mark or name other than as
                herein
                permitted in connection with the sale of Products.

            
	 	 
	
              (c)

            	
              Dealer
                will abide by any usage rules established from time to time by VeriChip
                in
                respect to its Marks.

            
	 	 
	
              (d)

            	
              Dealer
                may refer to itself as a “Authorized VeriChip Dealer” in connection with
                the promotion, sale, marketing or service of Authorized Products
                in the
                Territory, provided such right shall cease upon termination of this
                Agreement. Dealer shall submit to VeriChip full particulars prior
                to use
                of the same and shall not proceed with such use until VeriChip’s written
                approval shall have been obtained.

            
	 	 
	
              (e)

            	
              Dealer
                acknowledges that any and all of the patents, designs, trademarks,
                copyrights, and other rights including any unpatented confidential
                production method used or embodied in connection with the Product
                will
                remain the sole property of VeriChip. Except as expressed in this
                Agreement, nothing in this Agreement shall be construed as granting
                or
                conferring to Dealer or its’ customers any rights by license or otherwise,
                expressly implied or otherwise, for such patents, designs, trademarks,
                copyrights or other rights, including any unpatented confidential
                production method.

            


    

     

    22.
      Term

    
      	
              (a)

            	
              The
                effective date of this Agreement is the date it is signed by VeriChip.
                This Agreement shall extend for one (1) year following its effective
                date
                and shall be automatically renewed thereafter from year to year.
                Either
                party may terminate this Agreement on not less than ninety (90) days
                written notice to the other.

            
	 	 
	
              (b)

            	
              Other
                than as set forth above, termination or cancellation shall not relieve
                either party of obligations incurred prior thereto (including Dealer’s
                obligations to pay the purchase price of the Product theretofore
                shipped
                to Dealer and to continue to comply fully with Dealer’s representations
                and warranties set forth herein).

            
	 	 
	
              (c)

            	
              VeriChip
                shall have the right at any time thereafter to terminate or cancel
                this
                Agreement upon giving written notice to Dealer and which shall be
                effective immediately if: (i) Dealer fails to meet the terms of payment
                hereunder for any two (2) months in any twelve (12) consecutive months
                of
                the term of this Agreement; (ii) a petition of bankruptcy has been
                filed
                by or against Dealer; (iii) Dealer has made an assignment for the
                benefit
                of creditors; (iv) a trustee, receiver or liquidator or similar person
                has
                been appointed or applied for by Dealer or has taken possession of
                its
                assets; (v) Dealer becomes insolvent; (vi) there is a bulk sale or
                attempted bulk sale of Dealer’s assets; (vii) there is an institution of
                proceedings for the dissolution or liquidation of Dealer’s assets by a
                third party; (viii) Dealer fails an audit of its service and support
                capability conducted by VeriChip as referenced in section 14
                and does not rectify the problem within the time specified by VeriChip;
                or
                (ix) if there is any other breach of the provisions of this Agreement
                by
                Dealer and Dealer does not rectify such breach within thirty (30)
                days of
                written notification from VeriChip. Dealer agrees to immediately
                notify
                VeriChip of any circumstances that would give VeriChip grounds to
                terminate this Agreement.

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	 	 
	
              (d)

            	
              VeriChip
                shall not by reason of the termination of this Agreement be liable
                to
                Dealer for any loss, reimbursement, compensation or damages including,
                without limitation, the loss of present or prospective profits on
                sales or
                anticipated sales or of expenditures, investments or commitments
                made
                either in connection therewith or in connection with the establishment,
                development or maintenance of Dealer’s business.

            
	 	 
	
              (e)

            	
              On
                termination of this Agreement, Dealer agrees that it shall upon the
                effective date of the termination or cancellation: (i) refrain from
                exercising or attempting to exercise any right or privilege granted
                to it
                under this Agreement; (ii) discontinue its use of and relinquish
                any and
                all rights to the Marks that VeriChip has authorized or permitted
                Dealer
                to use (iii) to return or destroy all promotional, advertising or
                technical material bearing such designations, and any other material
                furnished to Dealer free of charge by VeriChip during the term of
                this
                Agreement.

            


    

     

    23.
      Events Upon Termination

    
      	
              (a)

            	
              Upon
                the effective date of termination, Dealer shall pay VeriChip for
                all
                Products delivered irrespective of the date of delivery and all other
                amounts to which VeriChip is entitled under this Agreement or any
                Purchase
                Orders. Dealer will have the right to market and distribute, in accordance
                with the terms of this Agreement, Products in its inventory which
                VeriChip
                does not elect to repurchase; after Dealer has sold such Products
                or
                earlier upon VeriChip’s request, Dealer will return or destroy related
                unused advertising and promotion materials, relevant information
                including
                price lists.

            
	 	 
	
              (b)

            	
              Termination
                will not affect VeriChip’s warranty obligations to
                Dealer.

            
	 	 
	
              (c)

            	
              Regardless
                of the reason for termination, Dealer will be required to maintain
                the
                confidentiality of any confidential/proprietary information it has
                received during the course of the Agreement until such information
                becomes
                part of the public domain through no breach of this Agreement or
                if
                written permission for disclosure has been given by
                VeriChip.

            


    

     

    24.
      Force
      Majeure

    VeriChip
      shall not be liable to Dealer or customers or others, for failure of VeriChip
      to
      fulfill its obligations under this Agreement, and/or for delays in shipment
      or
      failure to manufacture or provide Products, documentation, education or other
      services if such delay or failure results directly or indirectly from any cause
      or event beyond its reasonable control, including but not limited to acts of
      God, of civil or military authorities, of public enemy, terrorism, war, riots,
      civil disturbances, insurrection, accidents, fire, explosions, earthquakes,
      floods, the elements, strikes, labor disputes, shortage of suitable materials,
      labor or transportation. Neither VeriChip nor Dealer shall be in default on
      any
      obligation hereunder if such default results from the aforementioned causes
      (which are not within the reasonable control of the party
      affected).

     

    25.
      Dispute Resolution

    In
      the
      event of any dispute, claim, question or difference arising out of or relating
      to this Agreement, the parties hereto shall use their best endeavors to settle
      such disputes, claims, questions or differences. To this effect, they shall
      consult and negotiate with each other, in good faith and understanding of their
      mutual interest, to reach a just and equitable resolution satisfactory to
      both parties.
      If they do not reach such resolution the disputes, claims, questions or
      differences shall be finally settled by Mediation pursuant to (a) below and
      in
      the event that a resolution is not achieved by mediation by arbitration pursuant
      to (b) below:

    
      	
              (a)

            	
              Mediation
                shall be conducted in accordance with the “Rules of Procedure for the
                Conduct of Mediations” of the Arbitration and Mediation Institute of
                Ontario;

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	
              (b)

            	
              Arbitration
                shall be final and binding and conducted under the “Rules of Procedure for
                the Conduct of Arbitrations” of the Arbitration and Mediation Institute of
                Ontario pursuant to The Arbitration Act (1991) S.O. 1991 Chapter
                17 if the
                arbitration is an arbitration domestic to Canada, and otherwise pursuant
                to the International Commercial Arbitration Act, R.S.O. 1990, Chap.
                I.9.
                In addition to the foregoing, the following shall apply to an
                arbitration:

            


    

    


    
      	 	
              i)

            	
              The
                Arbitration Tribunal shall consist of one (1)
                arbitrator.

            
	 	
              ii)

            	
              The
                arbitrator shall be instructed that time is of the essence in proceeding
                with his determination of any dispute, claim, questions or
                indifference.

            
	 	
              iii)

            	
              The
                arbitration shall be conducted in English and shall take place in
                Ottawa,
                Ontario, or such other place as the parties may agree.

            
	 	
              iv)

            	
              The
                arbitration award shall be given in writing and shall be final, binding
                on
                the parties, not subject to any appeal, and shall deal with the question
                of costs of arbitration and all matters related
                thereto.

            
	 	
              v)

            	
              Judgment
                upon the award rendered may be entered into any court having competent
                jurisdiction, or application may be made to such court for a judicial
                recognition of the award or an order of enforcement thereof, as the
                case
                may be.

            


    

     

    26.
      General

    
      	
              (a)

            	
              The
                parties agree to observe complete confidentiality with regard to
                any
                confidential information which is disclosed to one party by another.
                For
                the purposes hereof, “confidential information” shall mean all financial
                information (including without limitation all financial statements,
                forecasts and financial records), all operating information (including
                without limitation all information relating to pricing and distribution
                of
                the Products and all customer lists), all technical information (including
                without limitation description of the Software and its development)
                and
                all strategic corporate plans including marketing plans acquired
                by a
                party from the other party or others employed or engaged by such
                party; it
                being understood, for greater certainty, that “confidential information”
                does not include information which:

            


    

    


    
      	 	
              i)

            	
              is
                available to the public or in the public domain or later falls in
                the
                public domain otherwise than as a result of a breach of this Agreement;
                

            
	 	
              ii)

            	
              is
                disclosed with the prior written approval of the Party supplying
                such
                information;

            
	 	
              iii)

            	
              is
                not identified as confidential information; or

            
	 	
              iv)

            	
              is
                compelled by law or judicial process to be
                disclosed.

            


    

    


    
      	
              (b)

            	
              If
                any term of this Agreement shall for any reason be held to be
                unenforceable, invalid or illegal, the remainder of this Agreement
                shall
                remain valid, legal and enforceable according to its terms. This
                Agreement
                shall be binding upon the successors and permitted assigns of the
                parties.

            
	 	 
	
              (c)

            	
              Should
                any dispute be commenced between the parties or their personal
                representatives concerning any provision of this Agreement or the
                rights
                and duties of any person in relation thereto, the party prevailing
                in such
                dispute shall be entitled, in addition to such other relief as may
                be
                granted, to a reasonable sum as and for their attorney’s fees in such
                proceeding which shall be determined by the court or arbitrator,
                as the
                case may be in such proceeding or in a separate action brought for
                that
                purpose.

            
	 	 
	
              (d)

            	
              This
                Agreement may not be modified or amended except in writing signed
                by the
                parties.

            
	 	 
	
              (e)

            	
              This
                Agreement constitutes the entire Agreement between the parties with
                respect to its subject matter and supersedes all prior oral and written
                proposals and communications. The terms of this Agreement shall prevail
                notwithstanding any variance with the terms and conditions of any
                purchase
                order submitted by Dealer. No representation or statement not contained
                on
                the original copy of this Agreement shall be binding on VeriChip
                as a
                warranty or otherwise.

            


    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	
              (f)

            	
              All
                notices under this Agreement shall be in writing and shall be effective
                when mailed or otherwise placed in transmission to the other party
                at its
                office address indicated below or such other address as may be designated
                by either party to the other in writing.

            
	 	 
	
              (g)

            	
              This
                Agreement shall be governed by and construed in accordance with the
                laws
                of the province of Ontario and the laws of Canada applicable therein.
                Dealer consents to the jurisdiction and venue of the provincial and
                federal courts situated within the province of Ontario upon service
                of
                process made in accordance with the laws of Ontario and Canada, provided
                that VeriChip at its option may commence legal proceedings in any
                jurisdiction in which Dealer carries on business and in such case
                Dealer
                consents to the jurisdiction and venue of the courts situated in
                such
                jurisdiction upon service made in accordance with the applicable
                laws of
                such jurisdiction. Dealer further agrees that suits initiated by
                Dealer
                upon any and all causes of action, whether or not such causes of
                action
                have arisen under this Agreement and regardless of the legal theory
                upon
                which such causes of action are based, shall be brought exclusively
                in a
                provincial or federal court situated within the province of Ontario.
                Any
                suit between the parties, other than for payment of the purchase
                price of
                the Products or for indemnification under section 18
                of
                this Agreement, shall be commenced, if at all, within one (1) year
                of the
                date that the cause of action accrues.

            
	 	 
	
              (h)

            	
              This
                Agreement or any performance due under it may not be assigned by
                Dealer
                without the prior written consent of VeriChip. Any purported assignment
                by
                Dealer or any substantial change in the ownership or control of Dealer
                shall permit VeriChip to terminate for cause. Dealer must notify
                VeriChip
                immediately of any change in control of Dealer. For the purposes
                hereof, a
                “change in control” means the acquisition by a person of shares
                representing at least 50% of the voting shares of Dealer or of any
                person
                controlling Dealer.

            
	 	 
	
              (i)

            	
              VeriChip
                may assign its interest in this Agreement or any portion thereof
                without
                the consent of Dealer.

            
	 	 
	
              (j)

            	
              Dealer
                shall pay all sums owing to VeriChip in accordance with the terms
                of this
                Agreement, without any deduction or abatement and Dealer shall have
                no
                right of set-off.

            
	 	 
	
              (k)

            	
              No
                waiver by VeriChip of any breach/default shall operate as a waiver
                of any
                other breach/default or of the same breach/default on a future occasion.
                No delay, course of dealing, or omission on the part of VeriChip
                in
                exercising any right or remedy shall operate as a waiver thereof,
                and no
                single or partial exercise by VeriChip of any right or remedy shall
                preclude any other or further exercise thereof or the exercise of
                any
                other right or remedy.

            
	 	 
	
              (l)

            	
              The
                provisions of sections 13
                and 16
                to
                23
                inclusive shall survive the termination of this
                Agreement.

            
	 	 
	
              (m)

            	
              This
                Agreement shall not be binding upon VeriChip until it has been executed
                by
                VeriChip’s President and CEO.

            
	 	 
	
              (n)

            	
              This
                Agreement shall be executed in duplicate, each copy being considered
                an
                original but both taken together shall constitute but one
                Agreement.

            


    

    


     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement under the
      hands
      of their duly authorized representatives:

    


    


    Agreed
      to: 

    


     

    /s/
      Scott A Deininger  

    (Signature)

    


    
      	
              Name:

            	
              Scott
                A. Deininger

            
	
              Position:

            	
              Director,
                Business Development

            
	
              Date:

            	
              December
                19th,
                2005

            
	 	 
	
              Dealer:

            	
              Ingersoll
                Rand Security Technologies

            
	
              Address:

            	
              111
                Congressional Blvd., Suite 200

            
	 	
              Carmel,
                IN 46302

            


    

    


    


    


    


    Accepted
      by:

     

    /s/
      Kevin McLaughlin 

    Kevin
      McLaughlin, CEO

    


     

    Date: 01/04/06

    


    VeriChip

    1690
      South Congress Ave., Suite 200

    Delray
      Beach, FL 33445

    USA

    


    
      
        
        

      

      
        13