Exhibit 10.58


    
      
        

      
Exhibit 10.58

    AMENDED
      AND RESTATED
      TRANSITION SERVICES AGREEMENT 

    This
      AMENDED AND RESTATED TRANSITION
      SERVICES AGREEMENT (this “Agreement”), dated as of
      December 21, 2006, is entered into between Applied Digital Solutions,
      Inc., a Missouri corporation (“ADSX”), and VeriChip Corporation, a
      Delaware corporation (“VeriChip”; references to VeriChip in this
      Agreement shall include VeriChip’s direct and indirect subsidiary companies).


    Preliminary
      Statements


    A.
      ADSX and VeriChip are parties to
      a Transition Services Agreement, dated December 27, 2005 (the “Original
      Agreement”) providing for ADSX’s provision to VeriChip of transition services.


    B.
      ADSX and VeriChip desire to amend
      and restate the Original Agreement to reflect the terms and conditions set
      forth
      herein, with the terms hereof superseding the terms of the Original Agreement.
      

    C.
      ADSX and VeriChip desire that
      this Amended and Restated Transition Services Agreement become effective as
      of
      the date of completion of VeriChip’s initial public offering (the
“Offering”) of securities (the “Effective Date”), at which time
      VeriChip will pay to ADSX, out of the net proceeds of the Offering, the amounts
      due and payable under the terms of the Original Agreement, which VeriChip
      acknowledges have been added to VeriChip’s indebtedness under the terms of the
      separate loan agreement between the parties. 

    Agreement
      

    In
      consideration of the mutual
      covenants contained herein, together with other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, the parties hereto
      agree as follows: 

    1.
      Services and
      Compensation.

    1.1
Transition
      Services.
      During the Term (as defined below), ADSX shall provide or cause to be provided
      to VeriChip certain administrative services that ADSX has provided to VeriChip
      prior to December 27, 2005 (i.e., the effective date of the Original
      Agreement) and ADSX shall pay certain expenses, in each case as requested from
      time to time by VeriChip. These services and payment of expenses include those
      transition services set forth on Schedule 1-A and those transition expenses
      set
      forth on Schedule 1-B. Such “transition services” and the “transition expenses”
are referred to collectively in this Agreement as the “Transition
      Services”). ADSX shall not be obligated to expand the scope of the
      Transition Services significantly beyond the scope of those services and
      expenses being provided to VeriChip prior to the Offering (as defined below).
      

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
    

    1.2
Additional
      Services. The
      parties agree to use commercially reasonable efforts to reach agreement
      regarding the provision of additional services which VeriChip may request of
      ADSX beyond those included in the Transition Services set forth on Schedule
      1-A
      or 1-B (the “Additional Services”), and the applicable service fees,
      payment procedures and other rights and obligations with respect thereto. In
      the
      event the parties reach agreement as to the provision of Additional Services,
      Schedules 1-A and 1-B shall be amended to reflect such Additional Services
      and
      the applicable fees relating thereto. 

    
       

       1.3
Compensation
        for
        Transition Services and Additional Services. 

    

    (a)
      As compensation for the
      Transition Services and Additional Services to be provided by ADSX to VeriChip
      hereunder, the following shall be payable by VeriChip Corporation on a monthly
      basis: 

    (i)
      the amounts specified as “Costs
      Allocated to VeriChip” on Schedule 1-C, as such schedule may be amended from
      time to time upon the mutual agreement of the parties, 

    (ii)
      the reasonable out-of-pocket
      direct expenses incurred by ADSX in connection with providing Transition
      Services and/or Additional Services, 

    (iii)
      the costs of the services and
      expenses incurred by ADSX on behalf of VeriChip in connection with the Offering,
      and 

    (iv)
      charges by third party service
      providers incurred in connection with the Offering that are attributable to
      Transition Services provided to or for VeriChip and are not included in
      (i) or (ii) above. 

    (b)
      Charges for the Transition
      Services and Additional Services shall be invoiced by ADSX, on or about the
      tenth day of the calendar month next following the calendar month in which
      the
      Transition Services or Additional Services have been performed, and such invoice
      shall be accompanied with reasonable documentation supporting each of the
      invoiced amounts. Unless VeriChip disagrees as to the amounts (or any amount)
      invoiced, including, without limitation, whether the Transition Services and/or
      Additional Services or costs thereof covered by the invoice are properly
      allocable to VeriChip, such invoice shall be payable by VeriChip within 30
      days
      following receipt thereof. In the event of any such disagreement between ADSX
      and VeriChip, VeriChip shall pay the amount of the invoice not in dispute and
      the parties hereto agree to negotiate in good faith to resolve such dispute.
      ADSX shall maintain accurate and complete books of account in accordance with
      generally accepted accounting principles and practices necessary to support
      the
      amounts set forth on all invoices. 

    (c)
      ADSX shall use commercially
      reasonable efforts to (i) utilize resources and otherwise provide the
      Transition Services and Additional Services in a cost-effective manner and
      to
      otherwise minimize expenses, and (ii) minimize any costs allocated to
      VeriChip. Without limiting the foregoing, if, upon the request of VeriChip
      or
      for any other reason, the volume of any Transition Services or Additional
      Services is reduced or terminated, ADSX shall use commercially reasonable
      efforts to reduce the costs associated with providing the remaining Transition
      Services or Additional Services, to the extent and as soon as reasonably
      practicable. 

     

     

     

    
      
        
        

      

      
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    (d)
      VeriChip, its agents and
      accountants will have the right during normal business hours to inspect ADSX’s
      books and records pertaining to ADSX’s costs and expenses, and the
      determinations and allocations relating thereto, with respect to the Transition
      Services and Additional Services. In connection with the audit of the annual
      financial statements of VeriChip, ADSX shall permit the accountants retained
      by
      VeriChip to audit and verify the amounts paid or payable by VeriChip in respect
      of the immediately preceding fiscal year as said accountants may deem
      appropriate. VeriChip shall provide ADSX with reasonable advance notice of
      such
      inspection, audit or verification. In the event of any disagreement between
      VeriChip and ADSX as to the amounts paid or payable in respect of the Transition
      Services and/or Additional Services following such inspection, audit or
      verification, the parties hereto agree to negotiate in good faith to resolve
      such dispute. VeriChip shall bear all out-of-pocket costs and expenses
      associated with such inspection, audit or verification. This Section 1.3(d)
      shall survive the termination or expiration of this Agreement. 

    1.4
Cooperation.
      VeriChip and
      ADSX agree to use commercially reasonable efforts to cooperate with and provide
      the other with any information necessary to facilitate ADSX’s ability to provide
      the Transition Services and the Additional Services and to obtain any consents
      or approvals from third parties necessary to facilitate the ability of ADSX
      to
      provide the Transaction Services and the Additional Services. 

    2.
      Term and Termination.


    2.1
Term.
      The term of this
      Agreement (the “Term”) shall commence on the Effective Date and shall
      continue in effect with respect to any Transition Service or Additional Service
      until such time as VeriChip shall request ADSX to cease performing such
      services; provided that ADSX shall not be obligated, except as provided in
      Section 2.2, to continue to provide the Transition Services or any
      Additional Services after the second anniversary of the Effective Date unless
      the parties otherwise agree to do so. Notwithstanding the provisions of this
      Section 2.1 or Section 1.3(c), in no event may VeriChip request that
      ADSX reduce or terminate, as applicable (i) insurance oversight services or
      any insurance coverage with respect to VeriChip other than during the 60-day
      period prior to the expiration of the applicable insurance policy, or
      (ii) the amount of office space leased by VeriChip from ADSX, except upon
      120 days prior written notice. 

    2.2
Termination.
      Except as
      provided in Section 2.1, this Agreement may not be terminated by either
      party for any reason other than upon thirty days’ prior written notice to the
      other party of a material default in the delivery of Transition Services or
      Additional Services by ADSX or in payment therefor by VeriChip. Unless otherwise
      extended by agreement of the parties in writing, this Agreement shall terminate
      on the second anniversary of the Effective Date, except for any Transition
      Services or Additional Services not then completed, as to which this Agreement
      shall expire upon completion of those Transition Services or Additional
      Services, but in no event more than thirty days after the second anniversary
      of
      the Effective Date. 

     

     

    
      
        
        

      

      
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    2.3
Transition.
      Upon the
      expiration or termination of this Agreement or upon VeriChip’s request, ADSX
      shall provide all other services necessary for an orderly transition of the
      Transition Services and Additional Services, in whole or in part, to another
      provider and/or to VeriChip itself, including, without limitation, the transfer
      of all employee records, financial or tax records and other data in the
      possession, custody or control of ADSX; provided, however, that VeriChip
      agrees that ADSX shall retain copies of all records and other data transferred
      to VeriChip under this provision, including, without limitation, workpapers
      and
      other documents that form the basis of the ADSX audit or review of its financial
      statements, and memoranda, correspondence, communications, other documents,
      and
      records (including electronic records), which are created, sent or received
      in
      connection with the audit or review, or as otherwise required by federal
      securities statutes and regulations, ADSX corporate document retention policies
      and other applicable law. The provisions of this Section 2.3 shall survive
      the expiration or termination of this Agreement. 

    3.
      Cooperation of the
      Parties. 

    3.1
Access
      to Personnel and
      Records. ADSX and VeriChip shall cooperate with each other in providing
      reasonable access to personnel and records needed to perform or document the
      Transition Services and the Additional Services and their cost. 

    3.2
Further
      Assurances. ADSX
      and VeriChip shall take all other actions reasonably necessary for the
      Transition Services and Additional Services to be performed on a timely basis
      and in a manner consistent with past standards and practice unless otherwise
      specifically agreed in writing. 

    3.3
Information
      Technology
      Security and other IT Related Matters. 

    (a)
      Neither ADSX nor VeriChip shall,
      nor shall ADSX nor VeriChip permit its affiliates or its and their applicable
      vendors to, access or use the information systems of any other party made
      available under in connection with this Agreement, except as expressly permitted
      and required for receipt or provision of the Transition Services or Additional
      Services, as applicable, and as contemplated to otherwise perform its
      obligations or exercise its rights under this Agreement. 

    (b)
      No one shall tamper with,
      compromise or attempt to circumvent, any physical or electronic security or
      audit measures employed by any other party (or its affiliates and their
      respective third party vendors). ADSX and VeriChip shall not, without the
      express written consent of the other party or as otherwise provided in this
      Agreement, and without complying with such party’s security policies and
      procedures, access any computer system of such other party or remove from such
      party’s premises any of such party’s confidential information or any other
      property of party, its affiliates, employees, franchisees, members, or
      customers. 

    (c)
      ADSX and VeriChip shall comply
      with (i) any and all applicable privacy and information security laws,
      regulations, statutes, and guidelines, and (ii) the policies, standards,
      and guidelines for privacy, information protection, and information and system
      security in effect as of the Effective Date, as such may be modified by mutual
      agreement to address security exposures and risks that may be discovered, such
      agreement not to be unreasonably withheld or 

     

     

    
      
        
        

      

      
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    delayed.
      Each party shall maintain
      security controls over resources it provides hereunder or personnel who may
      access the other party’s (or such other party’s affiliates’) electronic mail,
      Web site, systems, or confidential information, which controls shall protect
      the
      confidentiality, privacy, integrity and availability of information.


    (d)
      Neither ADSX nor VeriChip shall
      knowingly or willfully introduce into any computer systems, databases, or
      software of the other party or its affiliates, or of any third party to which
      access is provided, any viruses or any other contaminants (including, but not
      limited to, codes, commands, instructions, devices, techniques, bugs, web bugs,
      or design flaws) that may be used to access, alter, delete, threaten, infect,
      assault, vandalize, defraud, disrupt, damage, disable, inhibit, or shut down
      the
      other party’s or its affiliates’ or applicable third parties’ computer systems,
      databases, software, or other information or property. To the extent that ADSX
      will (i) perform services or tasks via any electronic means (including, but
      not limited to, electronic mail, Web site, and/or the Internet), and/or
      (ii) provide or cause to be provided to another party or its affiliates
      access to its electronic mail systems, Web sites, computer systems, and/or
      other
      Internet systems, ADSX shall implement or cause to be implemented
      industry-standard security to protect the VeriChip’s and any applicable third
      parties’ computer systems, network devices and/or the data processed thereon
      against the risk of penetration by, or exposure to, a third party. Unless
      otherwise agreed to, any hardware or software accessed by any party or provided
      to a party in connection with the Transition Services or Additional Services
      shall remain the original party’s property (as the case may be) and must be
      surrendered upon the original party’s request and/or when this Agreement
      terminates. 

    4.
      Standard of Care; Taxes,
      Limitations on Liability; Intellectual Property 

    4.1
Standard
      of Care. In the
      performance of the Transition Services and Additional Services, ADSX shall
      provide the Transition Services and Additional Services promptly and in a
      professional manner, and shall exercise the degree of care normally exercised
      by
      it in connection with its own affairs, but in no event less than the standard
      of
      care exercised by it in delivering services to VeriChip prior to the Effective
      Date. Except in cases of gross negligence or willful misconduct, ADSX shall
      have
      no liability to VeriChip with regard to the breach of any duty or obligation
      to
      VeriChip herein set forth. 

    4.2
Taxes.
      VeriChip shall pay
      or cause to be paid all sales, service, valued added, use, excise, occupation,
      and other similar taxes and duties (together in each case with all interest,
      penalties, fines and additions thereto) that are assessed against it in
      connection the provision of the Transition Services and Additional Services
      pursuant to Agreement. 

    4.3
Limitation
      on Damages. In
      no event shall ADSX be liable to VeriChip for any special, indirect, incidental,
      consequential, punitive or similar damages, including but not limited to lost
      profits, loss of data or business interruption losses. This limitation shall
      apply even if ADSX has been notified of the possibility or likelihood of such
      damages occurring and regardless of the form of action, whether in contract,
      negligence, strict liability, tort, products liability or otherwise.


     

     

    
      
        
        

      

      
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    4.4
Intellectual
      Property and
      Data. 

    (a)
      Unless otherwise expressly
      agreed to by the parties, any and all intellectual property and data that are
      created, generated or collected by ADSX specifically for VeriChip in the course
      of rendering the Transition Services or Additional Services, but excluding
      any
      of the foregoing either created by ADSX in the ordinary course of maintaining
      its information technology infrastructure to provide services to VeriChip or
      generated in providing the Transition Services or Additional Services that
      relate to the operation of ADSX’s information technology infrastructure
      (collectively, “Work Product”), shall be owned exclusively by VeriChip,
      and ADSX expressly disclaims any and all right, title, or interest in and to
      such Work Product. In addition, in the event and to the extent that any Work
      Product contains any pre-existing ADSX technology or other non-Work Product
      intellectual property and data, then ADSX (or its licensors or subcontractors,
      if applicable) shall be deemed to have granted to VeriChip a nonexclusive,
      perpetual and royalty-free license to use such pre-existing ADSX technology
      or
      other non-Work Product intellectual property and data (subject to any
      restrictions set forth elsewhere in this Agreement) only in connection with
      VeriChip’s use of such Work Product. 

    (b)
      Subject to the terms and
      conditions of this Agreement and any applicable third party agreements under
      which VeriChip obtains rights to intellectual property and data, VeriChip grants
      ADSX, a limited, non-exclusive, royalty-free license to copy, display, perform,
      transmit, create derivative works from and otherwise modify, make, use and
      otherwise exploit, during the Term, such intellectual property and data that
      is
      provided or otherwise made available by VeriChip to ADSX for performance of
      ADSX’s obligations under this Agreement. The foregoing license grant is limited
      to use or other exploitation solely as reasonably necessary in connection with
      the performance of Transition Services and Additional Services. 

    (c)
      Subject to the terms and
      conditions of this Agreement and any applicable third party agreements pursuant
      to which ADSX obtains rights to intellectual property and data, ADSX grants
      to
      VeriChip a limited, non-exclusive, royalty-free license to copy, display,
      perform, transmit, create derivative works from and otherwise modify, make,
      use
      and otherwise exploit, during the Term, such intellectual property and data
      that
      is provided or otherwise made available by ADSX to VeriChip for receipt and
      use
      of the Transition Services or Additional Services or for performance by VeriChip
      under this Agreement. The foregoing license grant is limited to use or other
      exploitation solely as reasonably necessary in connection with the receipt
      and
      use of the Transition Services and Additional Services. 

    (d)
      Except for the ownership of Work
      Product and the licenses granted herein, each party will retain all right,
      title
      and interest in and to its technology, other intellectual property and data
      used
      in connection with the Transition Services and Additional Services, including
      ownership of any technology, other intellectual property and data created by
      such party or its affiliates in providing or using, as applicable, the
      Transition Services or Additional Services. Each party and its affiliates may
      independently create or acquire any technology, other intellectual property
      or
      data that is deemed by this Agreement to be owned by the other party and its
      affiliates hereunder; provided, that such independent creation or
      acquisition does not include or use the technology, other intellectual property
      or data of the other party and its affiliates, and such independent creation
      or
      acquisition does not breach any other obligations under this Agreement,
      including, without limitation, the obligations of confidentiality. 

     

     

    
      
        
        

      

      
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    (e)
      To the extent that any right,
      title or interest in or to any intellectual property or data vests in a party
      or
      an affiliate thereof, by operation of law or otherwise, in a manner contrary
      to
      the agreed upon ownership as set forth in this Agreement, such party shall
      or
      cause its affiliates to, and hereby does, perpetually and irrevocably assign
      to
      the appropriate party designated by the owner thereof under this
      Section 4.4 any and all such right, title and interest throughout the world
      in and to such intellectual property and data, free and clear of all liens
      and
      encumbrances. 

    (f)
      Notwithstanding anything to the
      contrary in this Section 4.4, nothing in this Agreement shall preclude ADSX
      from using any general information, ideas, concepts, know-how, techniques,
      programming routines and subroutines, methodologies, processes, skills, or
      expertise (collectively, “Residual Information”) which ADSX employees or
      contractors retain in their unaided memory and derive from the provision of
      the
      Transition Services or Additional Services, and which are no more than skillful
      variations of general processes known to the computer data processing and/or
      information technology industries (and, as such, are neither proprietary,
      confidential, nor trade secret information); provided, however,
      that ADSX does not breach its other obligations under this Agreement including,
      without limitation, the obligations of confidentiality. 

    (g)
      ADSX will promptly provide to
      VeriChip (and shall not withhold for any reason) copies of Work Product and
      data
      owned by VeriChip or to which it has a perpetual license in accordance with
      this
      Section 4.4. Such data shall be delivered in a mutually agreed to format
      (but in no event other than a generally available commercial format if the
      parties are unable to agree on format). VeriChip shall be responsible for the
      incremental actual costs of such deliveries, to the extent such costs are not
      already included in the cost for Transition Services or Additional Services.
      

    (h)
      Except as set forth in the
      preceding subsections of this Section 4.4, ADSX and VeriChip retain all
      right, title and interest in and to their respective technology, other
      intellectual property and data, and no other license or other right, express
      or
      implied, is granted to any other third party or its affiliates under this
      Agreement with respect to either party’s or its affiliates’ technology, other
      intellectual property or data. 

    5.
      Miscellaneous.


    5.1
Entire
      Agreement . This
      Agreement constitutes the entire agreement of the parties hereto and supersedes
      all prior and contemporaneous agreements and understandings (including term
      sheets), both written and oral, between the parties hereto, or either of them,
      with respect to the subject matter hereof. 

    5.2
Certain
      Audit Rights.


    (a)
      ADSX and VeriChip acknowledge
      and agree that VeriChip may require ADSX perform an audit or such other review,
      with respect to the Transition Services or Additional 

     

    
      
        
        

      

      
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    Services
      that is sufficient to allow
      VeriChip to demonstrate compliance with the requirements set forth in
      Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Section
      404”), if required. VeriChip shall provide ADSX with reasonable advance
      notice of such Section 404 audit (if required). ADSX and VeriChip shall
      then promptly meet to discuss the scope of review required. VeriChip shall
      have
      final decision-making authority regarding the scope of review (if required),
      provided that VeriChip and ADSX will cooperate and act reasonably to minimize
      disruption to, and effort by, ADSX, as well as to minimize the costs and
      expenses of such Section 404 audit; and (ii) the parties shall
      cooperate to consolidate, to the extent applicable, Section 404 audits
      whenever reasonably practicable. 

    (b)
      VeriChip shall bear all
      out-of-pocket costs and expenses associated with such Section 404 audit. If
      the Section 404 audit reveals non-compliance with any applicable law, rule,
      regulation or requirement of the Section 404 audit, ADSX shall promptly
      remedy such non-compliance. ADSX and VeriChip shall bear all out-of-pocket
      costs
      and expenses associated with such remediation equally. 

    (c)
      This Section 5.2 shall
      survive the expiration or termination of this Agreement for purposes of allowing
      VeriChip to comply with its obligations under Section 404 with respect to
      the year in which this Agreement expires or is terminated. 

    5.3
Governing
      Law. This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Florida. NO ACTION, SUIT OR PROCEEDING MAY BE BROUGHT OR MAINTAINED
      CONCERNING MATTERS COVERED BY THIS AGREEMENT EXCEPT IN A COURT OF THE STATE
      OF
      FLORIDA OR COURTS OF THE UNITED STATES OF AMERICA SITTING IN THE COUNTY OF
      PALM
      BEACH, STATE OF FLORIDA. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
      IRREVOCABLY AND UNCONDITIONALLY AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS
      AND
      SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF FLORIDA AND OF THE
      FEDERAL COURTS SITTING IN THE COUNTY OF PALM BEACH, STATE OF FLORIDA.


    5.4
Amendment
      and
      Modification. This Agreement may be amended, modified or supplemented only
      by a written agreement signed by each of ADSX and VeriChip. 

    5.5
Assignment;
      Binding
      Effect. Neither this Agreement nor any of the rights, benefits or
      obligations hereunder may be assigned by ADSX or VeriChip (whether by operation
      of law or otherwise) without the prior written consent of the other party.
      Subject to the preceding sentence, this Agreement shall be binding upon, inure
      to the benefit of and be enforceable by ADSX and VeriChip and their respective
      successors and permitted assigns. 

    5.6
No
      Third Party
      Beneficiaries. Nothing in this Agreement, express or implied, is intended to
      or shall confer upon any person (other than VeriChip, its subsidiaries, ADSX
      and
      their respective successors or permitted assigns) any legal or equitable right,
      benefit or remedy of any nature whatsoever under or by reason of this Agreement
      and no person (other than as so specified) shall be deemed a third party
      beneficiary under or by reason of this Agreement. 

     

     

    
      
        
        

      

      
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    5.7
Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute one
      agreement binding on ADSX and VeriChip, notwithstanding that not all parties
      are
      signatories to the same counterpart. 

    5.8
Confidentiality.
      ADSX and
      VeriChip shall preserve in strict confidence any confidential information
      obtained from the other party and identified as such by such other party, and
      shall refrain from: (i) disclosing any such information without the prior
      written consent of the other party, except as otherwise required by law,
      including without limitation, the Securities Act of 1933, as amended, and the
      rules and regulations promulgated thereunder, the Securities Exchange Act of
      1934, as amended, and the rules and regulations promulgated thereunder, the
      Internal Revenue Code of 1986, as amended, and the Canadian Income Tax Act,
      or
      (ii) using such information other than in the performance of Transition
      Services and Additional Services under this Agreement, unless such information
      (a) is in the public domain through no fault of such party, (b) is or
      hereafter becomes known to the public through no fault of the receiving party
      or
      (c) is provided to the receiving party by a third party having no
      confidential obligation to the other party to this Agreement with regard to
      such
      information. 

    5.9
Independent
      Contractor.
      The relationship of the parties to each other under this Agreement shall be
      that
      of independent contractor. 

    5.10
Personnel.
      Both parties
      hereto agree that they shall take appropriate action by instruction of or
      agreement with their respective personnel to ensure that all personnel
      performing or otherwise involved with Transition Services and Additional
      Services under this Agreement shall be bound by and comply with all of the
      terms
      and conditions of this Agreement, including, but not limited to, the terms
      and
      conditions of Section 5.7 hereof. 

    5.11.
Negotiation
      and
      Mediation. Any disputes arising under this Agreement shall be resolved by
      negotiation between the Chief Financial Officers ADSX and VeriChip. In the
      event
      that they cannot agree, then the Chief Executive Officers shall negotiate in
      good faith to resolve the dispute. In the event of any such dispute, VeriChip
      shall continue to pay for the Transition Services and Additional Services in
      accordance with this Agreement, and the Service Provider shall continue to
      provide the Transition Services and Additional Services in accordance with
      the
      terms and conditions of this Agreement, pending resolution of such dispute.
      The
      obligations of the parties pursuant to this Section 5.11 shall survive any
      termination of this Agreement 

    5.12
Notices.
      All notices,
      requests, consents and other communications hereunder must be in writing and
      will be deemed to have been duly given: (i) when received if personally
      delivered or sent by facsimile, (ii) one business day after being sent by
      nationally recognized overnight delivery service, or (iii) five business
      days after being sent by nationally registered or certified mail, return receipt
      requested, postage prepaid, and in each case addressed as follows (any party
      by
      written notice to the other party in the manner prescribed by this
      Section 5.10 may change the address or the persons to whom notices thereof
      shall be directed): 

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
    

    
      	
            	
            	
            
	To ADSX at:	 	Applied
              Digital Solutions, Inc.
	
            	 	1690
              South Congress Avenue, Suite 200
	
            	 	Delray
              Beach, Florida 33445
	
            	 	Attention:
              Michael E. Krawitz, Esq.
	
            	 	Fax
              Number: 561-805-8001
	
            	
            
	with a copy to:	 	Holland
&
Knight
              LLP
	
            	 	701
              Brickell Avenue
	
            	 	Suite
              3000
	
            	 	Miami,
              Florida 33131
	
            	 	Attention:
              Harvey A. Goldman, Esq.
	
            	 	Fax
              Number: 305-789-7799
	
            	
            
	To VeriChip at:	 	VeriChip
              Corporation
	
            	 	1690
              South Congress Avenue, Suite 200
	
            	 	Delray
              Beach, Florida 33445
	
            	 	Attention:
              William Caragol
	
            	 	Fax
              Number: 561-805-8001
	
            	
            
	with
              a
              copy to:	 	Steptoe
&
Johnson
              LLP
	
            	 	1330
              Connecticut Avenue, N.W.
	
            	 	Washington,
              D.C. 20036
	
            	 	Attention:
              Donald H. Meiers, Esq.
	
            	 	Fax
              Number: 202-261-0575


    

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
    

    IN
      WITNESS WHEREOF, the parties
      hereto have duly caused the execution of this Agreement by their duly authorized
      representative or officer, as of the day and year first above written.


     

    
      	
            	
            	
            
	APPLIED
              DIGITAL SOLUTIONS, INC.
	
            	
            
	By:	 	
              /s/
                Evan
                McKeown

            
	Name:	 	Evan
              McKeown
	Title:	 	Chief
              Financial Officer
	
            
	VERICHIP
              CORPORATION
	
            	
            
	By:	 	
              /s/
                William
                Caragol

            
	Name:	 	William
              Caragol
	Title:	 	Chief
              Financial Officer


    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
    

    Schedule
      1-A 

    Transition
      Services


     

    
      	1.	Payroll
              services (including payment for a portion of ADSX payroll
              administrator’s salary and benefits – estimated 50% of Payroll
              Administrator’s total time related to VeriChip matters)
              


    

     

    
      	2.	Legal
              services (including payment for a portion of a general
              counsel’s salary and benefits and a portion of a paralegal’s salary and
              benefits - estimated at 10% of general counsel’s total time and 30% of
              paralegal’s total time related to VeriChip matters)



    

     

    
      	3.	Finance
              services (including payment for a portion of ADSX Finance
              Staff salary and benefits (based on 6 staff members)—estimated 20% of
              finance staff’s total time related to VeriChip matters)
              


    

     

    
      	4.	Accounting
              Services (including payment for a portion of ADSX
              accounting fees – estimated 15% of total ADSX accounting fees related to
              VeriChip matters) 


    

     

    
      	5.	IT
              Services - frame relay 


    

     

    
      	6.	Banking
              oversight and controls 


    

     

    
      	7.	Cash
              management system 


    

     

    
      	8.	Insurance
              oversight 


    

     

    
      	9.	Administration
              of stock option plans and warrants
              


    

     

    
      	10.	Compliance
              services for Section 404 of Sarbanes-Oxley Act of
              2002 


    

     

    
      	11.	Press
              releases and investor relations



    

     

    
      	12.	Tax
              matters 


    

     

    
      	13.	Offering
              services including, without limitation, Form S-1
              Registration 


    

     

    
      	14.	Leasing
              of office space 


    

     

    
    

    

    Schedule
      1-B 

    Transition
      Expenses


     

    
      	1.	IT
              expenses 


    

     

    
      	2.	Telephone
              expenses 


    

     

    
      	3.	Office
              supply and building and office expense



    

     

    
      	4.	Postage,
              freight and delivery expenses



    

     

    
      	5.	Rent
              expense 


    

     

    
      	6.	Insurance
              policy expense (excluding products liability)
              


    

     

    
      	7.	Tax
              return preparation 


    

     

    
      	8.	Federal
              and state securities laws registration and reporting
              expenses 


    

    
    

    

    Schedule
      1-C 

    Estimated
      Monthly Costs Allocated
      to VeriChip 

     

    
      	
            	
            	
            	
            	
            	
            
	1.	  	Payroll	  	$  6,500	 
	
            	
            	
            
	2.	  	Legal	  	$  3,465	 
	
            	
            	
            
	3.	  	Finance	  	$11,982	 
	
            	
            	
            
	4.	  	Accounting	  	$  9,250	 
	
            	
            	
            
	5.	  	IT	  	$  5,426	 
	
            	
            	
            
	6.	  	Telephone
              (included in IT)	  	$     —  	 
	
            	
            	
            
	7.	  	Office
              supply and building and office expense	  	$  2,360	 
	
            	
            	
            
	8.	  	Postal,
              freight and delivery	  	$     142	 
	
            	
            	
            
	9.	  	Rent
              expense	  	$  9,850	 
	
            	
            	
            
	10.	  	Banking
              oversight and controls	  	(Included in Finance cost	)
	
            	
            	
            
	11.	  	Cash
              management system	  	As
              charged	 
	
            	
            	
            
	12.	  	Insurance
              policies (excluding products liability)	  	$16,808	 
	
            	
            	
            
	13.	  	Insurance
              oversight (included with insurance policies)	  	$     —  	 
	
            	
            	
            
	14.	  	Administration
              of stock option plans and warrants	  	(Included in Payroll cost	)
	
            	
            	
            
	15.	  	Compliance
              Services for Section 404	  	(Included in Finance cost	)
	
            	
            	
            
	16.	  	Press
              Releases and Investor Relations	  	$  6,000	 
	
            	  	
            	  	 	 
	Estimated
              Monthly Charges:	  	$71,783