Document:

Exhibit 10.1

    
      

    

     

    Exhibit
      10.1

     

    SATISFACTION
      OF LOAN AGREEMENT

     

    This
      Satisfaction of Loan Agreement (this “Agreement”) is made and entered into as of
      May 15, 2007, between APPLIED DIGITAL SOLUTIONS, INC., a Missouri corporation
      (“Borrower”), and INFOTECH USA, INC., a Delaware corporation (“Lender”).

     

    Recitals

     

    A. On
      or about June 27, 2003, Lender made a loan to Borrower in the original principal
      amount of $1,000,000 (the "Loan").

     

    B. The
      Loan is evidenced and secured by the following loan documents, all of which
      are
      dated June 27, 2003, and all of which were amended by that certain First
      Amendment to Loan Documents dated June 29, 2004, that certain Second Amendment
      to Loan Documents dated June 28, 2005 and that certain Third Amendment to Loan
      Documents dated June 23, 2006 (collectively, the "Loan Documents"):

     

    (i)    
      Commercial
      Loan Agreement between Borrower and Lender; 

     

    (ii)   
      Term
      Note from Borrower to Lender (the "Note"); and 

     

    (iii)  
      Stock
      Pledge Agreement between Borrower and Lender (the "Pledge Agreement").

     

    C. Borrower
      desires to repay the Loan in full and Lender agrees to the repayment of the
      Loan
      pursuant to the terms herein.

     

    NOW,
      THEREFORE, 
      in consideration of the foregoing and other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto
      agree as follows:

    

    1. Satisfaction
      of Loan.
      In full satisfaction of Borrower's obligations under the Loan Agreement and
      subject to the conditions precedent set forth herein, including the provisions
      of Section 3 below, Borrower agrees to issue and deliver to Lender, on the
      date
      hereof, that number of shares of Borrower's common stock that it believes in
      good faith equals $1,000,000, or Eight Hundred Thirty Three Thousand, Three
      Hundred and Thirty Three (833,333) shares of common stock (the "Shares"). In
      consideration of the Shares and subject to the conditions precedent set forth
      herein, including the terms and conditions set forth in Section 6(b) of this
      Agreement, Lender hereby acknowledges that it is entering into this Agreement
      in
      full satisfaction of all principal, interest and other monies owed under the
      Loan Documents and any obligations arising under Loan Documents and any
      documents and instruments evidencing same. Following its receipt of the legal
      opinion of Borrower described in Section 6(b) below, Lender shall surrender
      the
      Note marked cancelled within three (3) business days after effectiveness of
      the
      Registration Statement as set forth in Section 2 of this Agreement. So long
      as
      Borrower is not in breach of this Agreement, any and all obligations under
      the
      Loan Documents, including the payment of

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    principal
      on the Maturity Date, shall be stayed until such time as the conditions set
      forth in Section 6(b) of this Agreement are satisfied. In the event Borrower
      does not fully satisfy its obligations under Section 6(b), upon written notice
      from Borrower to Lender which sets forth the breach and, following a thirty
      (30)
      day period to cure any such breach capable of being cured by Borrower, the
      provisions of this Agreement shall be of no further force and effect and the
      Lender shall be entitled to enforce all of the terms and provisions of the
      Note,
      the Loan Agreement and Pledge Agreement. 

    

    2. Registration
      Rights.
      Within sixty (60) days following the issuance of the Shares, Borrower
agrees
      to prepare and file with the Securities and Exchange Commission (the
      "Commission") a
      Registration Statement covering the Shares. The Registration Statement shall
      be
      on Form S-3 (except if Borrower is not then eligible to register for resale
      the
      Shares on Form S-3, in which case such registration shall be on another
      appropriate form in accordance herewith). Borrower shall use commercially
      reasonable efforts to cause the Registration Statement to be declared effective
      under the Securities Act of 1933, as amended (the "Securities Act"), as promptly
      as possible after the filing thereof. Borrower shall use commercially reasonable
      efforts to keep the Registration Statement continuously effective under the
      Securities Act, until the date which is the earlier date of when (i) all Shares
      covered by such Registration Statement have been sold or (ii) all Shares covered
      by such Registration Statement may be sold immediately without registration
      under the Securities Act and without volume restrictions pursuant to Rule
      144(k), as determined by the counsel to Borrower pursuant to a written opinion
      letter to such effect, addressed and acceptable to Borrower's transfer agent
      and
      Lender. In no event will Borrower be required (i) to pay a penalty for failure
      to cause each Registration Statement to be declared effective or for failure
      to
      cause each Registration Statement to remain effective; (ii) to pay liquidating
      damages in connection with the Shares; or (iii) to make a cash payment in
      connection with the settlement of the Shares. Borrower shall continue to pay
      Lender interest in cash on the sum of $1,000,000.00 at the existing rate per
      annum under the Note until the date the Shares are registered and the legal
      opinion is received. Within three (3) business days following the effective
      date
      of the Registration Statement for the correct number of Shares (as determined
      under Section 3 below) (and payment of cash, if applicable, thereunder) and
      subject to compliance by Borrower of its obligations hereunder, Lender will
      return to Borrower the 750,000 shares of Digital Angel Corporation common stock
      pledged to Lender pursuant to the Pledge Agreement and each of the Pledge
      Agreement, Loan Agreement and Note shall be terminated and of no further force
      and effect. Lender will execute any and all Uniform Commercial Code financing
      statement terminations, mortgage releases and other such lien release documents
      as Borrower may request in order to evidence or otherwise give public notice
      of
      the termination of such security interest. 

     

    3. Additional
      Obligations.
      The number of Shares issued to Lender may be more or less than the number of
      Shares that Lender is due pursuant to Section 1. On
      the effective date of the Registration Statement, Borrower shall determine
      the
      exact number of shares to be delivered to Lender by
      dividing the outstanding principal amount of the Note of $1,000,000 by the
      average of the daily closing prices for a share of Borrower's common stock
      on
      each Trading Day occurring during the ten (10) Trading Day period ending on
      (and
      including) the Trading Day immediately preceding the effective
      date of the Registration Statement (the “Registration Shares”). In
      the event the number of Shares issued in the name of Lender pursuant to Section
      1 exceeds the Registration Shares, Lender agrees to promptly return the excess
      shares to Borrower,

     

     

    
      
        
        

      

      
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    including
      the execution of any stock transfer powers or other necessary documentation.
      In
      the event the number of Registration Shares is less than the amount of the
      obligations under Section 1 hereof on the date the Shares are registered,
      Borrower shall, in it sole discretion, within 5 business days following such
      date either (i) issue additional shares to
      Lender which it will subsequently register within the Commission on the same
      registration statement as provided in Section 2 above, to the extent available
      or if not available, within 60 days thereafter or (ii) pay
      the remaining obligation in cash. “Trading Day” means any day on which
      Borrower's common stock is purchased and sold on the Nasdaq Capital Market.
      Should the cumulative number of shares calculated pursuant to Section 1 exceed
      19.9% of the current shares outstanding of Borrower, then Borrower shall not
      issue more than 19.9% of the current shares outstanding and shall satisfy the
      remaining obligation in cash.

     

    4. Representations
      and Warranties of Lender.
      

     

    a. Except
      as contemplated hereunder, the Shares to be received hereunder by Lender will
      be
      acquired for its own account, not as nominee or agent, for investment purposes
      and not with a current view to, or for their current offer or sale in connection
      with directly or indirectly, any distribution in violation of the Securities
      Act
      of 1933, as amended or any other applicable securities law (the “Securities
      Act”) and with no intention of participating in the formulation, determination
      of direction of the basic business decisions of Borrower;

     

    b. Lender
      is not a registered broker dealer or engaged in the business of being a broker
      dealer;

     

    c. Lender
      (i) has such knowledge and experience in financial or business matters that
      it
      is capable of evaluating the merits and risks of the investment contemplated
      hereby, (ii) that there may be material adverse nonpublic information regarding
      Borrower that could affect the value of the Shares; and (iii) it is not in
      possession of material nonpublic information in connection with the
      investment.

     

    d. Lender
      has had access to such financial and other information concerning Borrower
      and
      the Shares as it deems necessary in order to make a decision regarding the
      consideration to be received hereunder, including an opportunity to ask
      questions of and receive information from management of Borrower;
      and

     

    e. Lender
      is not acting as an underwriter on behalf of Borrower, is not acting as a
      conduit for a public distribution of shares, and has no prearrangement with
      Borrower in connection with a sale of the Shares.

     

    5. Representations
      and Warranties of Borrower.
      

     

    a.
      Reporting
      Company.
      Borrower is a publicly-held company subject to reporting obligations pursuant
      to
      Section 13 of the Securities Exchange Act of 1934, as amended (the “1934
      Act”)
      and has a class of common shares registered pursuant to Section 12(g) of the
      1934 Act. Pursuant to the provisions of the 1934 Act, Borrower has timely filed
      all reports and other materials required to be filed thereunder with the
      Commission during the preceding twelve months.

     

    
      
        
        

      

      
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    b.
      No
      Integrated Offering.
      Neither Borrower, nor any of its affiliates, nor any person acting on its or
      their behalf, has directly or indirectly made any offers or sales of any
      security or solicited any offers to buy any security under circumstances that
      would cause the offer of the Shares pursuant to this Agreement to be integrated
      with prior offerings by the Borrower for purposes of the 1933 Act or any
      applicable stockholder approval provisions, including, without limitation,
      under
      the rules and regulations of the Nasdaq Capital Market. Nor will Borrower or
      any
      of its affiliates or subsidiaries take any action or steps that would cause
      the
      offer or issuance of the Shares to be integrated with other offerings. Borrower
      will not conduct any offering other than the transactions contemplated hereby
      that will be integrated with the offer or issuance of the Shares. Borrower
      is
      eligible to use Form S-3 for the registration of the Shares.

     

    c.
      Freely
      Tradeable Shares.
      The Shares will be free-trading, and freely transferable, and will not contain
      a
      legend restricting the resale or transferability of the Shares provided
      that the
      Shares are being sold pursuant to an effective registration statement covering
      the Shares or are otherwise exempt from registration.

     

    d.
      Listing.
      Borrower shall promptly secure the listing of the Shares upon each national
      securities exchange, or automated quotation system upon which they are or become
      eligible for listing (subject to official notice of issuance) and shall maintain
      such listing so long as any Shares are outstanding. Borrower will maintain
      the
      listing of its common stock on the American Stock Exchange, Nasdaq Global
      Market, Nasdaq Capital Market, OTC Bulletin Board, or New York Stock Exchange
      (whichever of the foregoing is at the time the principal trading exchange or
      market for the Common Stock (the “Principal
      Market”)),
      and will comply in all respects with the reporting, filing and other obligations
      under the bylaws or rules of the Principal Market, as applicable. 

     

    e.
      Non-Public
      Information.
      Borrower represents, warrants, covenants and agrees that neither it nor any
      other person acting on its behalf will provide Lender or its agents or counsel
      with any information that it believes constitutes material non-public
      information, unless prior thereto Lender shall have agreed in writing to receive
      such information. Borrower understands and confirms that Lender shall be relying
      on the foregoing representations in effecting transactions in securities of
      the
      Company.

     

    6. Obligations
      of Borrower.
      

     

    a. Borrower
      shall permit
      counsel for Lender to review the Registration Statement and all amendments
      and
      supplements thereto, and any comments made by the staff of the Commission
      concerning the Lender and/or the transactions contemplated hereby and the
      Borrower's responses thereto, within a reasonable period of time prior to the
      filing thereof with the Commission (or, in the case of comments made by the
      staff of the Commission, within a reasonable period of time following the
      receipt thereof by Borrower); and

     

    b. Within
      three (3) business days of the effective date of the Registration Statement,
      Borrower shall cause its counsel to issue a blanket opinion to the transfer
      agent stating that the shares are registered under an effective registration
      statement, are freely tradable without restriction, and can be reissued free
      of
      restrictive legend upon notice of a sale by Lender

     

     

    
      
        
        

      

      
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    and
      confirmation by Lender that it has complied with the prospectus delivery
      requirements In the event this opinion is not delivered or is withdrawn,
      Borrower shall be deemed in breach hereof and Lender shall be entitled to
      enforce all of its rights and remedies hereunder, including, without limitation,
      those set forth in Section 1 of this Agreement.

     

    7. Disclosure
      of Agreement.
      Borrower will, at its option, timely file a Form 8-K disclosing the material
      terms of this Agreement or include such disclosure in Item 5 of its Form 10-Q
      to
      be filed on or before May 10, 2007.

     

    8. Amendments
      and Waivers.
      The provisions of this Agreement, including the provisions of this sentence,
      may
      not be amended, modified or supplemented, and waivers or consents to departures
      from the provisions hereof may not be given, unless the same shall be in writing
      and signed by Borrower and Lender.

     

    9. Successors
      and Assigns.
      This Agreement shall inure to the benefit of and be binding upon the successors
      and assigns of each of the parties and shall inure to the benefit of Lender.
      

     

    10. Execution
      and Counterparts.
      This Agreement may be executed in any number of counterparts, each of which
      when
      so executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    11. Headings.
      The headings in this Agreement are for convenience of reference only and shall
      not limit or otherwise affect the meaning hereof.

     

    12. Governing
      Law.
      This Agreement shall be governed by and construed in accordance with the laws
      of
      the State of Florida. 

     

    13. Wells
      Fargo.
      Notwithstanding anything to the contrary contained in this Agreement, it is
      understood and agreed that this Agreement is expressly conditioned and
      contingent upon the prior written consent of Wells Fargo Business Credit, Inc.
      In the event such consent is not obtained on or before the date hereof, this
      Agreement shall be void and no effect as if never executed and delivered.

     

    [Balance
      of page intentionally left blank; signature page follows]

     

    
 

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      written above.

     

    
      	
               

            	
              APPLIED
                DIGITAL SOLUTIONS, INC.

            
	 	 
	 	 
	 	
              By:
                /s/
                Michael Krawitz 

            	
            
	
               

            	
              Name:
                Michael
                Krawitz

            	
            
	
               

            	
              Title:
                CEO

            	
            
	 	 
	 	 
	
               

            	
              INFOTECH
                USA, INC. 

            
	 	 
	 	 
	
               

            	
              By:
                /s/
                Jonathan McKeage

            	
            
	
               

            	
              Name:
                Jonathan
                McKeage 

            	
            
	
               

            	
              Title:
                President
                & CEO 

            	
            
	 	 

    

     

    
 

    
      
        
        

      

      
        6Exhibit 10.2

     

      
        

      

    

     

    Exhibit
      10.2

     

    [Wells
      Fargo Letterhead]

     

    May
      14, 2007

     

    Infotech
      USA, Inc.

    7
      Kingsbridge Road

    Fairfield,
      New Jersey 07004

     

    Attn:
      Mr. Robert Patterson

     

    
      	
               

            	
              Re:

            	
              Consent
                to Satisfaction of Loan to Applied Digital Solutions,
                Inc.

            
	
               

            	
               

            	
              (“ADS”)

            

    

     

    Gentlemen:

     

    We
      refer to: (a) that certain Credit and Security Agreement, dated as of
      June 29, 2004 (as amended, the “Credit Agreement”), among Infotech USA, Inc., a
      New Jersey corporation (“Borrower”), Infotech USA, Inc., a Delaware corporation
      (“Parent”), Information Technology Services, Inc. and Wells Fargo Bank, National
      Association, operating through its Wells Fargo Business Credit operating
      division (“Lender”); and (b) that certain Satisfaction of Loan Agreement, dated
      on our about the date hereof (the “Satisfaction Agreement”), between ADS and
      Parent. Capitalized terms used herein and not otherwise defined shall have
      the
      meanings assigned thereto in the Credit Agreement.

    Lender
      hereby consents to the consummation of the transactions
      contemplated by the Satisfaction Agreement, provided that: (a) the first
      $500,000 of cash proceeds received by Parent from the sale of any shares of
      stock of ADS shall be delivered to Lender and deposited in a Pledged Account
      as
      cash collateral securing the Obligations; (b) if any of the shares of stock
      of
      ADS received by Parent pursuant to the Satisfaction Agreement shall not have
      been sold by Parent by the 120th day after the date on which the
      legal opinion required under Section 6(b) of the Satisfaction Agreement shall
      have been delivered to the applicable transfer agent, then Parent shall pledge
      all of such shares of stock to Lender, pursuant to documentation that is in
      form
      and substance satisfactory to Lender, and deliver the related stock certificates
      to Lender; and (c) Borrower shall pay Lender a $5,000 fee for this consent,
      which fee shall be due, payable and earned on the date hereof.

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Mr.
      Robert Patterson

    May
      14, 2007

    Page
      2

     

     

    This
      letter shall become effective on the date it is executed by all of
      the parties below.

    
      	
               

            	
              Very
                truly yours,

            
	
               

            	
               

            
	
               

            	
               

            
	
               

            	
              /s/
                Sal Mutone

            
	
               

            	
              Sal
                Mutone

            

    

     

     

    Agreed
      to by:

     

    INFOTECH
      USA, INC.,

    a
      New Jersey corporation

     

    
      	
              By:

            	
              /s/
                Jonathan
                McKeage        

            

    

    
      	
              Name:  

            	
              Jonathan
                McKeage

            

    

    
      	
              Title:  

            	
              President

            

    

     

    INFOTECH
      USA, INC.,

    a
      Delaware corporation

     

    
      	
              By:

            	
              /s/
                Jonathan
                McKeage        

            

    

    
      	
              Name:  

            	
              Jonathan
                McKeage

            

    

    
      	
              Title:  

            	
              President
&
CEO

            

    

     

     

    INFORMATION
      TECHNOLOGY SERVICES, INC.

     

    
      	
              By:

            	
              /s/
                Jonathan
                McKeage        

            

    

    
      	
              Name:  

            	
              Jonathan
                McKeage

            

    

    
      	
              Title:  

            	
              President

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