Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.35

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
DIGITAL ANGEL CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

Right to Purchase up to 967,742 Shares of Common Stock of

Digital Angel Corporation

(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

			
	 	 	 
	No.                     
	 	Issue Date: August 31, 2007

DIGITAL ANGEL CORPORATION, a corporation organized under the laws of the State of Delaware
(the “Company”), hereby certifies that, for value received, KALLINA CORPORATION, or assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company (as
defined herein) from and after the Issue Date of this Warrant and at any time or from time to time
before 5:00 p.m., New York time, through the close of business August 31, 2014 (the “Expiration
Date”), up to 967,742 fully paid and nonassessable shares of Common Stock (as hereinafter defined),
$0.005 par value per share, at the applicable Exercise Price per share (as defined below). The
number and character of such shares of Common Stock and the applicable Exercise Price per share are
subject to adjustment as provided herein.

As used herein the following terms, unless the context otherwise requires, have the following
respective meanings:

(a) The term “Common Stock” includes (i) the Company’s Common Stock, par value $0.005
per share; and (ii) any other securities into which or for which any of the securities
described in the preceding clause (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.

(b) The term “Company” shall include Digital Angel Corporation and any person or entity
which shall succeed, or assume the obligations of, Digital Angel Corporation hereunder.

(c) The “Exercise Price” applicable under this Warrant shall be a price of $1.69 for
all shares acquired hereunder;

 

 

 

(d) The term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the holder of
the Warrant at any time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in replacement of Common
Stock or Other Securities pursuant to Section 4 or otherwise.

(e) The term “Security Agreement” means the Security Agreement dated as of the date
hereof among the Holder, the Company and various Subsidiaries of the Company party thereto,
as amended, modified, restated and/or supplemented from time to time.

1. Exercise of Warrant.

1.1 Number of Shares Issuable upon Exercise. From and after the date hereof through
and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this
Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the
form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.

1.2 Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of
Common Stock as of a particular date (the “Determination Date”) shall mean:

(a) If the Company’s Common Stock is traded on the American Stock Exchange or another
national exchange or is quoted on the National or Capital Market of The Nasdaq Stock Market,
Inc. (“Nasdaq”), then the closing or last sale price, respectively, reported for the last
business day immediately preceding the Determination Date.

(b) If the Company’s Common Stock is not traded on the American Stock Exchange or
another national exchange or on the Nasdaq but is traded on the NASD Over The Counter
Bulletin Board, then the mean of the average of the closing bid and asked prices reported
for the last business day immediately preceding the Determination Date.

(c) Except as provided in clause (d) below, if the Company’s Common Stock is not
publicly traded, then as the Holder and the Company agree or in the absence of agreement by
arbitration in accordance with the rules then in effect of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided.

(d) If the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s
charter, then all amounts to be payable per share to holders of the Common Stock pursuant to
the charter in the event of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all
of the shares of Common Stock then issuable upon exercise of the Warrant are
outstanding at the Determination Date.

 

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1.3 Company Acknowledgment. The Company will, at the time of the exercise of this
Warrant, upon the request of the holder hereof acknowledge in writing its continuing obligation to
afford to such holder any rights to which such holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the holder shall fail to make any
such request, such failure shall not affect the continuing obligation of the Company to afford to
such holder any such rights.

1.4 Trustee for Warrant Holders. In the event that a bank or trust company shall have
been appointed as trustee for the holders of this Warrant pursuant to Subsection 3.2, such bank or
trust company shall have all the powers and duties of a warrant agent (as hereinafter described)
and shall accept, in its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this Section 1.

2. Procedure for Exercise.

2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder as the record owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such shares in accordance herewith. As
soon as practicable after the exercise of this Warrant in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as
such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for the number of duly and validly
issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such
Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such
holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market
Value of one full share, together with any other stock or other securities and property (including
cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1
or otherwise.

2.2 Exercise.

(a) Payment may be made either (i) in cash by wire transfer of immediately available
funds or by certified or official bank check payable to the order of the Company equal to
the applicable aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of
Common Stock and/or Common Stock receivable upon exercise of this Warrant in accordance with
the formula set forth in subsection (b) below, or (iii) by a combination of any of the
foregoing methods, for the number of Common Shares specified in such Exercise Notice (as
such exercise number shall be adjusted to reflect any adjustment in the total number of
 shares of Common Stock issuable to the Holder per the terms of this Warrant) and the Holder
shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or
Other Securities) determined as provided herein.

 

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(b) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of
one share of Common Stock is greater than the Exercise Price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the portion
thereof being exercised) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Exercise Notice in which event the Company shall issue
to the Holder a number of shares of Common Stock computed using the following formula:

	 	 	 	 	 
	X =

	 	Y(A-B)
	 	 
	 

	 	 	 	 
	 

	 	A	 	 
	 
	 	 	 	 
	Where X =	 	the number of shares of Common Stock to be issued to the Holder
	 
	 	 	 	 
	Y =	 	the number of shares of Common Stock purchasable under this Warrant or, if
only a portion of this Warrant is being exercised, the portion of this Warrant being
exercised (at the date of such calculation)
	 
	 	 	 	 
	A =	 	the Fair Market Value of one share of the Company’s Common Stock (at the date
of such calculation)
	 
	 	 	 	 
	B =	 	the Exercise Price per share (as adjusted to the date of such calculation)

3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

3.1 Reorganization, Consolidation, Merger, Etc. If there occurs (i) any capital
reorganization or any reclassification of the Common Stock of the Company; (ii) any consolidation
or merger of the Company with or into another person (A) where the Company is not the continuing
entity, (B) which results in any reorganization or reclassification of its outstanding Common
Stock; or (C) which results in the Common Stock of the Company being changed into or exchanged for
common stock or other securities of any other entity or cash or any other assets, or (iii) the sale
or conveyance of all or substantially all of the assets of the Company to another person, then, as
a condition precedent to any such reorganization, reclassification, consolidation, merger, sale or
conveyance, proper and adequate provision shall be made by the Company whereby the Holder will be
entitled to receive upon surrender of the Warrant to the Company (x) to the extent there are cash
proceeds resulting from the consummation of such reorganization, reclassification, consolidation,
merger, sale or conveyance, in exchange for such Warrant, cash in an amount equal to the cash
proceeds that would have been payable to the Holder had the Holder exercised such Warrant
immediately prior to the consummation of such reorganization, reclassification, consolidation,
merger, sale or conveyance, less the aggregate Exercise Price payable upon exercise of the Warrant,
and (y) to the extent that the Holder would be entitled to receive Common Stock (or Other
Securities) (in addition to or in lieu of cash in connection with any such reorganization,
reclassification, consolidation, merger, sale or conveyance), the same kind and amounts of
securities or other

 

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assets, or both, that are issuable or distributable to the holders of outstanding Common Stock
(or Other Securities) of the Company with respect to their Common Stock (or Other Securities) upon
such reorganization, reclassification, consolidation, merger, sale or conveyance, as would have
been deliverable to the Holder had the Holder exercised such Warrant immediately prior to the
consummation of such reorganization, reclassification, consolidation, merger, sale or conveyance
less an amount of such securities having a value equal to the aggregate Exercise Price payable upon
exercise of the Warrant. The Company shall provide the Holder notice of its intent to affect
such reorganization, reclassification, consolidation, merger, sale or conveyance promptly after
such notice is mailed or otherwise provided to the holders of the Common Stock, but in no event
less than fifteen (15) days prior to the consummation of such transaction. If Holder elects to
exercise this Warrant in connection with the consummation of such transaction, Holder shall
promptly notify the Company, provided, however, that such notification shall in no case be provided
less than five (5) days prior to the scheduled consummation or effective date, as the case may be,
of the transaction. If the Holder does not choose to exercise this Warrant at the time such
reorganization, reclassification, consolidation, merger, sale or conveyance, then this Warrant
shall continue in full force pursuant to Section 3.3 below.

3.2 Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company, concurrently with
any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be
delivered to the Holder the stock and other securities and property (including cash, where
applicable) receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so instruct
the Company, to a bank or trust company specified by the Holder and having its principal office in
New York, NY as trustee for the Holder.

3.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer
(and any dissolution following any transfer) referred to in this Section 3, so long as a portion of
this Warrant remains unexercised, this Warrantshall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and property receivable on
the exercise of this Warrant after the consummation of such reorganization, consolidation or merger
or the effective date of dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the case of any such
transfer, the person acquiring all or substantially all of the properties or assets of the Company,
whether or not such person shall have expressly assumed the terms of this Warrant as provided in
Section 4. The Holder of this Warrant, on exercise hereof at any time after the consummation or
effective date of any reorganization, consolidation, merger or transfer, shall receive, in lieu of
the Common Stock issuable on such exercise prior to the date of such Reorganization, the stock and
other securities and property (including cash) to which such holder would have been entitled upon
the date of such transaction if such holder had exercised this Warrant immediately prior thereto
less an amount of cash and/or securities having a value equal to the aggregate Exercise Price
payable upon exercise of the Warrant. In the event this Warrant does not continue in full force and
effect after the consummation of the transactions described in this Section 3, then the Company’s
securities and property (including cash, where applicable) receivable by the Holder will be
delivered to the Holder or the Trustee as contemplated by Section 3.2.

 

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4. Extraordinary Events Regarding Common Stock. In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding
Common Stock or any preferred stock issued by the Company, (b) subdivide its outstanding shares of
Common Stock, (c) combine its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be the Exercise Price
then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4. The number of
shares of Common Stock that the holder shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the
number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would
otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise (taking into account the provisions of this
Section 4). Notwithstanding the foregoing, in no event shall the Exercise Price be less than the
par value of the Common Stock.

5. Certificate as to Adjustments. In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of this Warrant, the
Company at its expense will promptly cause its Chief Financial Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the terms of this Warrant
and prepare a certificate setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of Common Stock (or
Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in
effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as
provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the
holder and any Warrant agent of the Company (appointed pursuant to Section 11 hereof).

6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at
all times reserve and keep available, solely for issuance and delivery on the exercise of this
Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of
this Warrant.

7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder
hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with
the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement
Form”) and together with evidence reasonably satisfactory to the

 

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Company demonstrating compliance with applicable securities laws, which shall include, without
limitation, a legal opinion from the Transferor’s counsel (at the Company’s expense) that such
transfer is exempt from the registration requirements of applicable securities laws, the Company at
its expense (but with payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of
the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a
“Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of
Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation,
on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver,
in lieu thereof, a new Warrant of like tenor.

9. Registration Rights. The Holder has been granted certain registration rights by
the Company. These registration rights are set forth in a Registration Rights Agreement entered
into by the Company and Holder dated as of the date hereof, as the same may be amended, modified
and/or supplemented from time to time.

10. Maximum Exercise. Notwithstanding anything herein to the contrary, in no event
shall the Holder be entitled to exercise any portion of this Warrant in excess of that portion of
this Warrant upon exercise of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of this Warrant or the
unexercised or unconverted portion of any other security of the Holder subject to a limitation on
conversion analogous to the limitations contained herein) and (2) the number of shares of Common
Stock issuable upon the exercise of the portion of this Warrant with respect to which the
determination of this proviso is being made, would result in beneficial ownership by the Holder and
its Affiliates of any amount greater than 9.99% of the then outstanding shares of Common Stock
(whether or not, at the time of such exercise, the Holder and its Affiliates beneficially own more
than 9.99% of the then outstanding shares of Common Stock). As used herein, the term “Affiliate”
means any person or entity that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a person or entity, as such terms are
used in and construed under Rule 144 under the Securities Act. For purposes of the second
preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such sentence. For any reason at any time, upon written or
oral request of the Holder, the Company shall within three (3) business days confirm orally and in
writing to the Holder the number of shares of Common Stock outstanding as of any given date. The
limitations set forth herein (x) may be waived by the Holder upon provision of no less than
sixty-one (61) days prior written notice to the Company and (y) shall automatically become null and
void following notice to the Company upon the occurrence and during the continuance of an Event of
Default (as defined in the

 

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Security Agreement), except that at no time shall the Company be obligated to issue any shares
of Common Stock pursuant to the terms of this Warrant, the Purchase Agreement, any Related
Agreement (as defined in the Purchase Agreement) if the issuance of such shares of Common Stock
would exceed the aggregate number of shares of Common Stock which the Company may issue pursuant to
the terms of this Warrant, the Purchase Agreement or any Related Agreement without violating the
rules or regulations of the Principal Market (the “Exchange Cap”), except that such limitation
shall not apply in the event that the Company obtains the approval of its stockholders as required
by the applicable rules or regulations of the Principal Market for issuances of Common Stock in
excess of such amount. Notwithstanding anything contained herein to the contrary, the number of
shares of Common Stock issuable by the Company and acquirable by the Holder pursuant to the terms
of this Warrant, the Purchase Agreement, any Related Agreement (as defined in the Purchase
Agreement) or otherwise, shall not exceed an aggregate of 8,923,813 shares of Common Stock (subject
to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations
affecting the Common Stock).”

11. Warrant Agent. The Company may, by written notice to the each Holder of the
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

12. Transfer on the Company’s Books. Until this Warrant is transferred on the books
of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.

13. Rights of Shareholders. No Holder shall be entitled to vote or receive dividends
or be deemed the holder of the shares of Common Stock or any other securities of the Company which
may at any time be issuable upon exercise of this Warrant for any purpose (the “Warrant Shares”),
nor shall anything contained herein be construed to confer upon the Holder, as such, any of the
rights of a shareholder of the Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon the recapitalization, issuance of shares, reclassification of
shares, change of nominal value, consolidation, merger, conveyance or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise, in each case,
until the earlier to occur of (x) the date of actual delivery to Holder (or its designee) of the
Warrant Shares issuable upon the exercise hereof or (y) the third business day following the date
such Warrant Shares first become deliverable to Holder, as provided herein.

14. Notices, Etc. All notices and other communications from the Company to the Holder
shall be mailed by first class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company in writing by such Holder or, until any such Holder
furnishes to the Company an address, then to, and at the address of, the last Holder who has so
furnished an address to the Company.

 

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15. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY
THIS WARRANT SHALL BE BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN
THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND
BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The individuals executing this Warrant on behalf of
the Company agree to submit to the jurisdiction of such courts and waive trial by jury. The
prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees
and costs. In the event that any provision of this Warrant is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision of this Warrant. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision hereof. The Company acknowledges that legal
counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party shall not be applied in
the interpretation of this Warrant to favor any party against the other party.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

	 	 	 	 	 
	 	 	DIGITAL ANGEL CORPORATION
	 
	 	 	 	 
	WITNESS:
	 	 	 	 
	/s/ Carol E. Olson

	 	By:
	 	/s/ Lorraine M. Breece
	 

	 	 	 	 
	Carol E. Olson

	 	Name:
	 	Lorraine M. Breece
	 

	 	Title:
	 	Vice President, Acting Chief

Financial Officer

 

10Filed by Bowne Pure Compliance

 

Exhibit 10.36

STOCK PLEDGE AGREEMENT

This Stock Pledge Agreement (this “Agreement”), dated as of August 31, 2007, among
Kallina Corporation (the “Pledgee”), Digital Angel Corporation, a Delaware corporation (the
“Company”), and each of the other undersigned parties (other than the Pledgee) (the Company
and each such other undersigned party, a “Pledgor” and collectively, the
“Pledgors”).

BACKGROUND

The Company and certain subsidiaries of the Company have entered into a Security Agreement
dated as of the date hereof (as amended, modified, restated or supplemented from time to time, the
“Security Agreement”), pursuant to which the Pledgee provides or will provide certain
financial accommodations to the Company and certain subsidiaries of the Company.

In order to induce the Pledgee to provide or continue to provide the financial accommodations
described in the Security Agreement, each Pledgor has agreed to pledge and grant a security
interest in the collateral described herein to the Pledgee on the terms and conditions set forth
herein.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration
the receipt of which is hereby acknowledged, the parties hereto agree as follows:

1. Defined Terms. All capitalized terms used herein which are not defined shall have
the meanings given to them in the Security Agreement.

2. Pledge and Grant of Security Interest. To secure the full and punctual payment
and performance of (the following clauses (a) and (b), collectively, the “Obligations”)
(a) the obligations under the Security Agreement and the Ancillary Agreements (other than the
Registration Rights Agreement or Warrant) referred to in the Security Agreement (the Security
Agreement and the Ancillary Agreements, as each may be amended, restated, modified and/or
supplemented from time to time, collectively, the “Documents”) and (b) all other
obligations and liabilities of each Pledgor to the Pledgee whether now existing or hereafter
arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due
and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or
otherwise (in each case, irrespective of the genuineness, validity, regularity or enforceability
of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral
therefor or of the existence or extent of such collateral, and irrespective of the allowability,
allowance or disallowance of any or all of such in any case commenced by or against any Pledgor
under Title 11, United States Code, including, without limitation, obligations of each Pledgor for
post-petition interest, fees, costs and charges that would have accrued or been added to the
Obligations but for the commencement of such case), each Pledgor hereby pledges, assigns,
hypothecates, transfers and grants a security interest to Pledgee in all of the following (the
“Collateral”):

 

 

 

(a) the shares of stock or other equity interests set forth on Schedule A annexed
hereto and expressly made a part hereof (together with any additional shares of stock or other
equity interests acquired by any Pledgor, the “Pledged Stock”), the certificates
representing the Pledged Stock and all dividends, cash, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Stock;

(b) all additional shares of stock or other equity interests of any issuer (each, an
“Issuer”) of the Pledged Stock from time to time acquired by any Pledgor in any manner,
including, without limitation, stock dividends or a distribution in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets, combination of
shares, stock split, spin-off or split-off (which shares shall be deemed to be part of the
Collateral), and the certificates representing such additional shares, and all dividends, cash,
instruments and other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares; and

(c) all options and rights, whether as an addition to, in substitution of or in exchange for
any shares of any Pledged Stock and all dividends, cash, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or in exchange for
any or all such options and rights.

3. Delivery of Collateral. All certificates representing or evidencing the Pledged
Stock shall be delivered to and held by or on behalf of Pledgee pursuant hereto and shall be
accompanied by duly executed instruments of transfer or assignments in blank, all in form and
substance satisfactory to Pledgee. Each Pledgor hereby authorizes the Issuer upon demand by the
Pledgee to deliver any certificates, instruments or other distributions issued in connection with
the Collateral directly to the Pledgee, in each case to be held by the Pledgee, subject to the
terms hereof. Upon the occurrence and during the continuance of an Event of Default (as defined
below), the Pledgee shall have the right, during such time in its discretion and without notice to
the Pledgor, to transfer to or to register in the name of the Pledgee or any of its nominees any
or all of the Pledged Stock. In addition, the Pledgee shall have the right at such time to
exchange certificates or instruments representing or evidencing Pledged Stock for certificates or
instruments of smaller or larger denominations.

4. Representations and Warranties of each Pledgor. Each Pledgor jointly and
severally represents and warrants to the Pledgee that except as set forth in the Companies’
Disclosure Schedules attached to the Security Agreement or in the Exchange Act Filings with
respect to those representations and warranties set forth below that have parallel representations
and warranties set forth in the Security Agreement which permit exceptions as set forth in the
Companies’ Disclosure Schedules and/or the Exchange Act Filings:

(a) the execution, delivery and performance by each Pledgor of this Agreement and the pledge
of the Collateral hereunder do not and will not result in any violation of any agreement,
indenture, instrument, license, judgment, decree, order, law, statute, ordinance or other
governmental rule or regulation applicable to any Pledgor;

 

2

 

(b) this Agreement constitutes the legal, valid, and binding obligation of each Pledgor
enforceable against each Pledgor in accordance with its terms, except

i. as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors’ rights; and

ii. general principles of equity that restrict the availability of equitable or legal
remedies.

(c) (i) all Pledged Stock owned by each Pledgor is set forth on Schedule A hereto and
(ii) each Pledgor is the direct and beneficial owner of each share of the Pledged Stock;

(d) all of the shares of the Pledged Stock have been duly authorized, validly issued and are
fully paid and nonassessable;

(e) no consent or approval of any person, corporation, governmental body, regulatory authority
or other entity, is or will be necessary for (i) the execution, delivery and performance of this
Agreement, (ii) the exercise by the Pledgee of any rights with respect to the Collateral or (iii)
the pledge and assignment of, and the grant of a security interest in, the Collateral hereunder;

(f) there are no pending or, to each Pledgor’s knowledge, threatened actions or proceedings
before any court, judicial body, administrative agency or arbitrator which would have, or could
reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect
on the Collateral;

(g) each Pledgor has the requisite power and authority to enter into this Agreement and to
pledge and assign the Collateral to the Pledgee in accordance with the terms of this Agreement;

(h) each Pledgor owns each item of the Collateral and, except for the pledge and security
interest granted to Pledgee hereunder, the Collateral shall be, immediately following the closing
of the transactions contemplated by the Documents, free and clear of any other security interest,
mortgage, pledge, claim, lien, charge, hypothecation, assignment, offset or encumbrance whatsoever
(collectively, “Liens”), , other than:

i. those resulting from taxes which have not yet become delinquent;

ii. minor liens and encumbrances which do not materially detract from the value of the
property subject thereto or materially impair the operations of the Company or any of its
Subsidiaries, so long as in each such case, such liens and encumbrances have no effect on the lien
priority of the Pledgee in such property; and

iii. those that have otherwise arisen in the ordinary course of business, so long as they have
no effect on the lien priority of the Pledgee therein;

 

3

 

(i) there are no restrictions on transfer of the Pledged Stock contained in the certificate of
incorporation or by-laws (or equivalent organizational documents) of the Issuer or otherwise which
have not otherwise been enforceably and legally waived by the necessary parties;

(j) none of the Pledged Stock has been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any jurisdiction to which such issuance or
transfer may be subject;

(k) the pledge and assignment of the Collateral and the grant of a security interest under
this Agreement vest in the Pledgee all rights of each Pledgor in the Collateral as contemplated by
this Agreement; and

(l) The Pledged Stock constitutes one hundred percent (100%) of the issued and outstanding
shares of capital stock of each Issuer.

5. Covenants. Each Pledgor jointly and severally covenants that, until the
Obligations shall be indefeasibly satisfied in full:

(a) No Pledgor will sell, assign, transfer, convey, or otherwise dispose of its rights in or
to the Collateral or any interest therein; nor will any Pledgor create, incur or permit to exist
any Lien whatsoever with respect to any of the Collateral or the proceeds thereof other than that
created hereby.

(b) Each Pledgor will, at its expense, defend Pledgee’s right, title and security interest in
and to the Collateral against the claims of any other party.

(c) Each Pledgor shall at any time, and from time to time, upon the written request of
Pledgee, execute and deliver such further documents and do such further acts and things as Pledgee
may reasonably request in order to effectuate the purposes of this Agreement including, but without
limitation, delivering to Pledgee, upon the occurrence of an Event of Default, irrevocable proxies
in respect of the Collateral in form satisfactory to Pledgee. Until receipt thereof, upon an Event
of Default that has occurred and is continuing beyond any applicable grace period, this Agreement
shall constitute Pledgor’s proxy to Pledgee or its nominee to vote all shares of Collateral then
registered in each Pledgor’s name.

(d) No Pledgor will consent to or approve the issuance of (i) any additional shares of any
class of capital stock or other equity interests of the Issuer; or (ii) any securities convertible
either voluntarily by the holder thereof or automatically upon the occurrence or nonoccurrence of
any event or condition into, or any securities exchangeable for, any such shares, unless, in either
case, such shares are pledged as Collateral pursuant to this Agreement.

(e) Each Pledgor agrees to execute and deliver to each Issuer that is a limited liability
company or a limited partnership a control acknowledgment (“Control Acknowledgement”) substantially
in the form of Exhibit A hereto. Each Pledgor shall cause each such Issuer to acknowledge in
writing its receipt and acceptance thereof. Such Control
Acknowledgement shall instruct such Issuer to follow instructions from Pledgee without any
Pledgor’s consultation or consent.

 

4

 

6. Voting Rights and Dividends. So long as no Event of Default occurs and remains
continuing:

(a) i. Each Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Collateral, or any part thereof, for any purpose not inconsistent with the
terms of this Agreement; provided, however, that such Pledgor shall not exercise,
or shall refrain from exercising, any such right if it would result in an Event of Default.

ii. Any and all dividends or distributions declared in respect of the Collateral shall be
applied toward payment of the Note in accordance with Section 5(d) hereof.

(b) In addition to the Pledgee’s rights and remedies set forth in Section 8 hereof, in case an
Event of Default shall have occurred and be continuing, beyond any applicable cure period, the
Pledgee shall (i) be entitled to vote the Collateral, (ii) be entitled to give consents, waivers
and ratifications in respect of the Collateral (each Pledgor hereby irrevocably constituting and
appointing the Pledgee, with full power of substitution, the proxy and attorney-in-fact of each
Pledgor for such purposes) and (iii) be entitled to collect and receive for its own use cash
dividends paid on the Collateral. Unless and until there shall have occurred and be continuing an
Event of Default, each Pledgor shall be permitted to exercise or refrain from exercising any voting
rights or other powers; provided that, in each case, no vote shall be cast or any
consent, waiver or ratification given or any action taken or omitted to be taken if, in the
reasonable judgment of the Pledgee, such action would have a material adverse effect on the value
of the Collateral or any part thereof; and, provided, further, that each Pledgor
shall give at least five (5) days’ written notice of the manner in which such Pledgor intends to
exercise, or the reasons for refraining from exercising, any voting rights or other powers other
than with respect to any election of directors and voting with respect to any incidental matters.
Following the occurrence of an Event of Default, all rights of each Pledgor to vote and to give
consents, waivers and ratifications shall cease and all dividends and all other distributions in
respect of any of the Collateral, shall be delivered to the Pledgee to hold as Collateral and
shall, if received by any Pledgor, be received in trust for the benefit of the Pledgee, be
segregated from the other property or funds of any other Pledgor, and be forthwith delivered to the
Pledgee as Collateral in the same form as so received (with any necessary endorsement).

7. Event of Default. An “Event of Default” under this Agreement shall occur upon the
happening of any of the following events:

(a) An “Event of Default” under any Document shall have occurred and be continuing beyond any
applicable cure period;

(b) Any representation or warranty of any Pledgor made herein, in the Security Agreement or
the Note shall be false or misleading in any material respect;

(c) Any portion of the Collateral is subjected to a material post-judgment levy of execution,
attachment, distraint or other judicial process or any portion of the Collateral is the
subject of a claim (other than by the Pledgee) of a Lien or other right or interest in or to
the Collateral and such levy or claim shall not be cured, disputed or stayed within a period of
thirty (30) business days after the occurrence thereof; or

 

5

 

(d) Any Pledgor shall (i) apply for, consent to, or suffer to exist the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or other fiduciary of itself or
of all or a substantial part of its property, (ii) make a general assignment for the benefit of
creditors, (iii) commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to
take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, or fail to
have dismissed, within thirty (30) days, any petition filed against it in any involuntary case
under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the
foregoing.

8. Remedies. In case an Event of Default shall have occurred and is continuing, the
Pledgee may:

(a) Transfer any or all of the Collateral into its name, or into the name of its nominee or
nominees;

(b) Exercise all corporate rights with respect to the Collateral including, without
limitation, all rights of conversion, exchange, subscription or any other rights, privileges or
options pertaining to any shares of the Collateral as if it were the absolute owner thereof,
including, but without limitation, the right to exchange, at its discretion, any or all of the
Collateral upon the merger, consolidation, reorganization, recapitalization or other readjustment
of the Issuer thereof, or upon the exercise by the Issuer of any right, privilege or option
pertaining to any of the Collateral, and, in connection therewith, to deposit and deliver any and
all of the Collateral with any committee, depository, transfer agent, registrar or other designated
agent upon such terms and conditions as it may determine, all without liability except to account
for property actually received by it; and

(c) Subject to any requirement of applicable law, sell, assign and deliver the whole or, from
time to time, any part of the Collateral at the time held by the Pledgee, at any private sale or at
public auction, with or without demand, advertisement or notice of the time or place of sale or
adjournment thereof or otherwise (all of which are hereby waived, except such notice as is required
by applicable law and cannot be waived), for cash or credit or for other property for immediate or
future delivery, and for such price or prices and on such terms as the Pledgee in its sole
discretion may determine, or as may be required by applicable law.

Each Pledgor hereby waives and releases any and all right or equity of redemption, whether
before or after sale hereunder. At any such sale, unless prohibited by applicable law, the Pledgee
may bid for and purchase the whole or any part of the Collateral so sold free from any such right
or equity of redemption. All moneys received by the Pledgee hereunder, whether upon sale of the
Collateral or any part thereof or otherwise, shall be held by the Pledgee and applied by it as
provided in Section 10 hereof. No failure or delay on the part of the Pledgee in exercising any
rights hereunder shall operate as a waiver of any such rights nor shall any single or partial
exercise of any such rights preclude any other or future exercise

 

6

 

thereof or the exercise of any other rights hereunder. The Pledgee shall have no duty as to
the collection or protection of the Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in accordance with the
requirements of Section 10 hereof. The Pledgee may exercise its rights with respect to property
held hereunder without resort to other security for or sources of reimbursement for the
Obligations. In addition to the foregoing, Pledgee shall have all of the rights, remedies and
privileges of a secured party under the Uniform Commercial Code of New York (the “UCC”) regardless
of the jurisdiction in which enforcement hereof is sought.

9. Private Sale. Each Pledgor recognizes that the Pledgee may be unable to effect
(or to do so only after delay which would adversely affect the value that might be realized from
the Collateral) a public sale of all or part of the Collateral by reason of certain prohibitions
contained in the Securities Act, and may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account, for investment and not with a view to the distribution or resale
thereof. Each Pledgor agrees that any such private sale may be at prices and on terms less
favorable to the seller than if sold at public sales and that such private sales shall be deemed
to have been made in a commercially reasonable manner. Each Pledgor agrees that the Pledgee has
no obligation to delay sale of any Collateral for the period of time necessary to permit the
Issuer to register the Collateral for public sale under the Securities Act.

10. Proceeds of Sale. The proceeds of any collection, recovery, receipt,
appropriation, realization or sale of the Collateral shall be applied by the Pledgee as follows:

(a) First, to the payment of all costs, reasonable expenses and charges of the Pledgee and to
the reimbursement of the Pledgee for the prior payment of such costs, reasonable expenses and
charges incurred in connection with the care and safekeeping of the Collateral (including, without
limitation, the reasonable expenses of any sale or any other disposition of any of the Collateral),
attorneys’ fees and reasonable expenses, court costs, any other fees or expenses incurred or
expenditures or advances made by Pledgee in the protection, enforcement or exercise of its rights,
powers or remedies hereunder;

(b) Second, to the payment of the Obligations, in whole or in part, in such order as the
Pledgee may elect, whether or not such Obligations is then due;

(c) Third, to such persons, firms, corporations or other entities as required by applicable
law including, without limitation, Section 9-615(a)(3) of the UCC; and

(d) Fourth, to the extent of any surplus to the Pledgors or as a court of competent
jurisdiction may direct.

In the event that the proceeds of any collection, recovery, receipt, appropriation,
realization or sale are insufficient to satisfy the Obligations, each Pledgor shall be jointly and
severally liable for the deficiency plus the costs and fees of any attorneys employed by Pledgee to
collect such deficiency.

 

7

 

11. Waiver of Marshaling. Each Pledgor hereby waives any right to compel any
marshaling of any of the Collateral.

12. No Waiver. Any and all of the Pledgee’s rights with respect to the Liens granted
under this Agreement shall continue unimpaired, and Pledgor shall be and remain obligated in
accordance with the terms hereof, notwithstanding (a) the bankruptcy, insolvency or reorganization
of any Pledgor, (b) the release or substitution of any item of the Collateral at any time, or of
any rights or interests therein, or (c) any delay, extension of time, renewal, compromise or other
indulgence granted by the Pledgee in reference to any of the Obligations. Each Pledgor hereby
waives all notice of any such delay, extension, release, substitution, renewal, compromise or
other indulgence, and hereby consents to be bound hereby as fully and effectively as if such
Pledgor had expressly agreed thereto in advance. No delay or extension of time by the Pledgee in
exercising any power of sale, option or other right or remedy hereunder, and no failure by the
Pledgee to give notice or make demand, shall constitute a waiver thereof, or limit, impair or
prejudice the Pledgee’s right to take any action against any Pledgor or to exercise any other
power of sale, option or any other right or remedy.

13. Expenses. The Collateral shall secure, and each Pledgor shall pay to Pledgee on
demand, from time to time, all reasonable costs and expenses, (including but not limited to,
reasonable attorneys’ fees and costs, taxes, and all transfer, recording, filing and other
charges) of, or incidental to, the custody, care, transfer, administration of the Collateral or
any other collateral, or in any way relating to the enforcement, protection or preservation of the
rights or remedies of the Pledgee under this Agreement or with respect to any of the Obligations.

14. The Pledgee Appointed Attorney-In-Fact and Performance by the Pledgee. Upon the
occurrence of an Event of Default, each Pledgor hereby irrevocably constitutes and appoints the
Pledgee as such Pledgor’s true and lawful attorney-in-fact, with full power of substitution, to
execute, acknowledge and deliver any instruments and to do in such Pledgor’s name, place and
stead, all such acts, things and deeds for and on behalf of and in the name of such Pledgor, which
such Pledgor could or might do or which the Pledgee may deem necessary, desirable or convenient to
accomplish the purposes of this Agreement, including, without limitation, to execute such
instruments of assignment or transfer or orders and to register, convey or otherwise transfer
title to the Collateral into the Pledgee’s name. Each Pledgor hereby ratifies and confirms all
that said attorney-in-fact may so do and hereby declares this power of attorney to be coupled with
an interest and irrevocable. If any Pledgor fails to perform any agreement herein contained, the
Pledgee upon the occurrence and during the continuance of an Event of Default, may itself perform
or cause performance thereof, and any costs and expenses of the Pledgee incurred in connection
therewith shall be paid by the Pledgors as provided in Section 10 hereof.

15. Waivers. THE PARTIES HERETO DESIRES THAT THEIR DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE
JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE BETWEEN PLEDGEE, AND/OR ANY COMPANY ARISING OUT OF, CONNECTED WITH,
RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEN IN CONNECTION WITH THIS
AGREEMENT, ANY OTHER DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

 

8

 

Recapture. Notwithstanding anything to the contrary in this Agreement, if the Pledgee
receives any payment or payments on account of the Obligations, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under the United States
Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization, moratorium
or insolvency law relating to or affecting the enforcement of creditors’ rights generally, common
law or equitable doctrine, then to the extent of any sum not finally retained by the Pledgee, each
Pledgor’s obligations to the Pledgee shall be reinstated and this Agreement shall remain in full
force and effect (or be reinstated) until payment shall have been made to Pledgee, which payment
shall be due on demand. 

16. Captions. All captions in this Agreement are included herein for convenience of
reference only and shall not constitute part of this Agreement for any other purpose.

17. Miscellaneous.

(a) This Agreement constitutes the entire and final agreement among the parties with respect
to the subject matter hereof and may not be changed, terminated or otherwise varied except by a
writing duly executed by the parties hereto.

(b) No waiver of any term or condition of this Agreement, whether by delay, omission or
otherwise, shall be effective unless in writing and signed by the party sought to be charged, and
then such waiver shall be effective only in the specific instance and for the purpose for which
given.

(c) In the event that any provision of this Agreement or the application thereof to any
Pledgor or any circumstance in any jurisdiction governing this Agreement shall, to any extent, be
invalid or unenforceable under any applicable statute, regulation, or rule of law, such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform to such statute, regulation or rule of law, and the remainder of this Agreement
and the application of any such invalid or unenforceable provision to parties, jurisdictions, or
circumstances other than to whom or to which it is held invalid or unenforceable shall not be
affected thereby, nor shall same affect the validity or enforceability of any other provision of
this Agreement.

(d) This Agreement shall be binding upon each Pledgor, and each Pledgor’s successors and
assigns, and shall inure to the benefit of the Pledgee and its successors and assigns.

(e) Any notice or other communication required or permitted pursuant to this Agreement shall
be given in accordance with the Security Agreement.

 

9

 

(f) THIS AGREEMENT AND THE OTHER DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

(g) EACH PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN ANY PLEDGOR, ON THE ONE HAND, AND THE PLEDGEE, ON THE OTHER HAND,
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS, PROVIDED, THAT EACH PLEDGOR
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PLEDGEE FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE INDEBTEDNESS, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE PLEDGEE. EACH PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PLEDGOR HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS. EACH PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND
OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT
AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PLEDGOR AT THE
ADDRESS SET FORTH IN THE SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE EARLIER OF THE SUCH PLEDGOR’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID.

(h) It is understood and agreed that any person or entity that desires to become a Pledgor
hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant
to the requirements of any Document, shall become a Pledgor hereunder by (x) executing a Joinder
Agreement in form and substance satisfactory to the Pledgee, (y) delivering supplements to such
exhibits and annexes to such Documents as the Pledgee shall reasonably request and/or set forth in
such joinder agreement and (z) taking all actions as specified in this Agreement as would have been
taken by such Pledgor had it been an original party to this Agreement, in each case with all
documents required above to be delivered to the Pledgee and with all documents and actions required
above to be taken to the reasonable satisfaction of the Pledgee.

 

10

 

(i) This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original and all of which when taken together shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed an original signature
hereto.

[Remainder of Page Intentionally Left Blank]

 

11

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first
written above.

	 	 	 	 	 
	 	 	DIGITAL ANGEL CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lorraine M. Breece
	 

	 	 	 	 
	 

	 	Name:
	 	Lorraine M. Breece
	 

	 	Title:
	 	Vice President, Acting Chief Financial

Officer
	 
	 	 	 	 
	 	 	DIGITAL ANGEL TECHNOLOGY CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lorraine M. Breece
	 

	 	 	 	 
	 

	 	Name:
	 	Lorraine M. Breece
	 

	 	Title:
	 	Vice President, Acting Chief Financial

Officer
	 
	 	 	 	 
	 	 	KALLINA CORPORATION
	 	 	By: Laurus Capital Management, LLC, as investment

manager
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Grin
	 

	 	 	 	 
	 

	 	Name:
	 	David Grin
	 

	 	Title:
	 	Principal

 

12

 

SCHEDULE A to the Stock Pledge Agreement

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Stock	 	 	 	Number	 	% of
	 	 	 	 	 	 	Certificate	 	 	 	of	 	outstanding
	Pledgor	 	Issuer	 	Class of Stock	 	Number	 	Par Value	 	Shares	 	Shares
	Digital Angel 

Corporation
	 	Digital Angel

Technology

Corporation
	 	Common Stock
	 	1
	 	$0.01
	 	1,000
	 	100%
	Digital Angel 

Corporation
	 	Digital Angel

International
	 	Common Stock
	 	1
	 	$0.01
	 	1,000
	 	100%
	Digital Angel 

Corporation
	 	Digital Angel

Holdings, LLC
	 	Membership Units
	 	1
	 	$0.10
	 	1,000
	 	100%
	Digital Angel 

Technology 

Corporation
	 	Fearing

Manufacturing
Co.
Inc.
	 	Common Stock
	 	15
	 	$1.00
	 	1,000
	 	100%

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