Document:

exv10w2

Exhibit
10.2

EXECUTION VERSION

[Applied Digital Letterhead]

May 15, 2008

The Stanley Works

1000 Stanley Drive

New Britain, Connecticut 06053

Attention: Corporate Secretary

Ladies and Gentlemen:

          Reference is made to that certain Stock Purchase Agreement (as amended, restated, supplemented
or otherwise modified from time to time, the “Agreement”), dated as of the date hereof, by and
among The Stanley Works (the “Beneficiary”) and VeriChip Corporation (the “Seller”). Capitalized
terms used but not defined in this guarantee (this “Guarantee”) are used as defined in the
Agreement.

	 	1.	 	To induce the Beneficiary to enter into the Agreement, the undersigned (the
“Guarantor”) hereby agrees to cause the Seller to comply with its obligations under Section
8.1(a)(iii) of the Agreement to the extent such obligations relate to Third-Party Claims
(the “Obligations”), and shall be directly liable from and after the Closing, as a primary
obligor, to the Beneficiary for the amount of any Obligations that are not completely paid
by the Seller when due. This is an unconditional guarantee of payment and not of
collectibility. It is understood that each of the obligations of Seller under the
Agreement (other than under Section 8.1(a)(iii) of the Agreement) shall not, by itself or
themselves, constitute a liability under Section 8.1(a)(iii), although it is possible that
the existence of a liability that is indemnifiable under Section 8.1(a)(iii) may arise from
the same set of facts that give rise to a breach of a representation, warranty or covenant
under the Agreement.
	 
	 	2.	 	The Guarantor hereby waives notice of acceptance of this Guarantee and notice of any
Obligations, and waives presentment, demand for payment, protest, notice of dishonor or
non-payment with respect to any of the Obligations or any suit or the taking of other
action by Beneficiary against, and any other notice to, the Seller, the Guarantor or others
(other than as required by the Agreement). The Beneficiary shall have the right to proceed
first and directly against the Guarantor under this Guarantee without proceeding against
any other Person or exhausting any other remedies that it may have and without resorting to
any other security held by it.
	 
	 	3.	 	The Beneficiary may at any time and from time to time without notice to or consent of
the Guarantor and without impairing or releasing the obligations of the Guarantor
hereunder: (1) agree with the Seller to make any change in the terms of any obligation or
liability of the Seller to the Beneficiary, (2) take or fail to take any action of any kind
in respect of any security for any obligation or liability of the Seller to the
Beneficiary, (3) exercise or refrain from exercising any rights against the Seller or
others, or (4) compromise or subordinate any obligation or liability of the Seller to the
Beneficiary including any security therefor; provided, however, that Beneficiary and Seller
may not make any change to Section 8.1(a)(iii) of the Agreement, or any change to the scope
of this Guarantee without the prior written consent of the Guarantor. All suretyship
defenses are hereby waived by the Guarantor (except as set forth clauses (a) or (b) in the
next paragraph).
	 
	 	4.	 	The Guarantor’s obligations under this Guarantee are absolute, irrevocable and
unconditional and shall not be affected by the validity or enforceability of any Obligation
or any instrument

 

 

	 	 	 	evidencing any Obligation, or by the validity, enforceability, perfection or existence of
any collateral therefor or by any other circumstance relating to any Obligation that might
otherwise constitute a legal or equitable discharge of or defense of a guarantor or surety
(other than as a result of the payment of the Obligations), provided that (a) the Guarantor
may interpose any counterclaim or setoff that the Seller is or would have been entitled to
interpose, except for so long as, and to the extent, such counterclaim or setoff has already
reduced the amount of the Obligations or (b) the Guarantor may interpose any defense that
the Seller is or would have been entitled to interpose (other than any defense arising by
reason of any disability, incapacity, bankruptcy or insolvency of the Seller, including by
reason of any lack of authorization of the Obligations by the Seller). The Guarantor agrees
that this Guarantee shall be reinstated if at any time payment, or any part thereof, of any
of the Obligations, or interest thereon is rescinded or must otherwise be restored or
returned by the Beneficiary upon the bankruptcy, insolvency, dissolution or reorganization
of the Seller.
	 
	 	5.	 	The Guarantor agrees to pay all reasonable out-of-pocket expenses incurred by the
Beneficiary (including the reasonable fees and expenses of counsel), to the extent incurred
after demand under this Guarantee has been made and not timely honored, in connection with
a breach of this Guarantee by the Guarantor.
	 
	 	6.	 	The Guarantor hereby represents as follows:

	 	a.	 	The Guarantor has full power and authority to execute and deliver this
Guarantee.
	 
	 	b.	 	No action on the part of the Guarantor is required to authorize the
execution and delivery of this Guarantee (other than such actions that have been
taken prior to the date hereof). The execution, delivery and performance of this
Guarantee do not contravene the organizational documents of the Guarantor, any Law
or any contractual restriction binding on the Guarantor or the Guarantor’s assets.
	 
	 	c.	 	No actions by, notices to, filings with, consents, licenses,
clearances, authorizations, and approvals of, and registration and declarations
with, any governmental or regulatory authority are necessary for the due execution
and delivery of this Guarantee.
	 
	 	d.	 	This Guarantee constitutes the legal, valid, and binding obligation of
the Guarantor, enforceable against the Guarantor in accordance with all of its
terms and conditions (subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar Law affecting creditors’ rights
generally). The enforceability of the Guarantor’s obligations is also subject to
the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
	 
	 	e.	 	The Guarantor currently has the financial capacity to pay and perform
the Guarantor’s obligations under this Guarantee.

	 	7.	 	Neither this Guarantee nor any of the rights, interests or obligations hereunder shall
be transferred by either party (whether by operation of law or otherwise) without the prior
written consent of the other party, provided, however, that the Beneficiary
may transfer any of its rights and obligations to any Affiliate of the Beneficiary, but no
such assignment shall relieve the Beneficiary of its obligations hereunder. Any transfer
of any rights, interests or obligations hereunder in violation of this section shall be
null and void.

2

 

	 	8.	 	This Guarantee may not be revoked or terminated and shall remain in full force and
effect and shall be binding on the Guarantor, the Guarantor’s successors and permitted
assignees until all of the Obligations to the extent payable under this Guarantee have been
paid in full. Notwithstanding the foregoing, this Guarantee shall terminate and the
Guarantor shall have no further obligation or liability under this Guarantee as of the
termination of the Agreement in accordance with its terms; provided, that this Guarantee
shall not so terminate as to any claim for which a notice setting forth in reasonable
detail the basis for such claim has been given to the Guarantor prior to such termination
until final resolution of such claim. Notwithstanding the foregoing, in the event that the
Beneficiary asserts in any litigation or other proceeding relating to this Guarantee that
any other provision of this Guarantee is illegal, invalid or unenforceable in whole or in
part, or asserts any theory of liability against the Guarantor or any other Person with
respect to this Guarantee, the Agreement or the transactions contemplated hereby or thereby
other than the liability of the Guarantor under this Guarantee or the liability of the
Seller under the Agreement, then (i) the obligations of the Guarantor under this Guarantee
shall terminate ab initio and shall thereupon be null and void, and (ii) if the Guarantor
has previously made any payments under this Guarantee, the Guarantor shall be entitled to
recover such payments from the Beneficiary.
	 
	 	9.	 	All notices and other communications hereunder shall be in writing and shall be deemed
given if mailed, delivered personally, telecopied (which is confirmed) or sent by an
overnight courier service, such as Federal Express, to the parties at the following
addresses (or at such other address for a party as shall be specified by like notice):

If to the Guarantor:

Applied Digital Solutions, Inc.

1690 South Congress Ave., #201

Delray Beach, FL 33445

Attention: Lorraine Breece

Facsimile: 561-805-8001

with a copy to:

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75225

Attention: Sarah M. Rechter

Facsimile: 214-661-4419

	 	 	 	If to the Beneficiary, as provided in the Agreement.
	 
	 	10.	 	To the fullest extent permitted by applicable Law, each party hereto (i) agrees that
any claim, action or proceeding by such party seeking any relief whatsoever arising out of,
or in connection with, this Guarantee or the transactions contemplated hereby shall be
brought only in the United States District Court for the Southern District of New York or
any New York State court, in each case, located in the Borough of Manhattan and not in any
other State or Federal court in the United States of America or any court in any other
country, (ii) agrees to submit to the exclusive jurisdiction of such courts located in the
Borough of Manhattan for purposes of all legal proceedings arising out of, or in connection
with, this Guarantee or the transactions contemplated hereby, (iii) waives and agrees not
to assert any objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court or any claim that any such

3

 

	 	 	 	proceeding brought in such a court has been brought in an inconvenient forum, (iv) agrees
that mailing of process or other papers in connection with any such action or proceeding in
the manner provided in Section 10 or any other manner as may be permitted by Law shall be
valid and sufficient service thereof and (v) agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by applicable Law.
	 
	 	11.	 	This Guarantee (a) constitutes the entire agreement and supersede all prior agreements
and understandings, both written and oral, between the parties with respect to the subject
matter hereof and thereof and (b) are not intended to confer upon any Person other than the
parties hereto and thereto any rights or remedies hereunder.
	 
	 	12.	 	This Guarantee may be amended, modified and supplemented in any and all respects, but
only by a written instrument signed by all of the parties hereto expressly stating that
such instrument is intended to amend, modify or supplement this Guarantee. Either party
hereto may extend the time for the performance of any of the obligations or other acts of
the other party. Any agreement on the part of a party to any such extension shall be valid
only if set forth in an instrument in writing signed by or on behalf of such party. The
failure of either party to this Guarantee to assert any of its rights under this Guarantee
or otherwise shall not constitute a waiver of those rights.
	 
	 	13.	 	This Guarantee may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when two or more
counterparts have been signed by each of the parties and delivered to the other parties.
	 
	 	14.	 	Promptly after entering into any agreement or arrangement with respect to, or
effecting, any proposed sale, exchange, dividend or other distribution or liquidation of
all or a significant portion of its assets in one or a series of transactions, any
significant recapitalization or reclassification of its outstanding securities or any
extraordinary transaction, the Guarantor will notify the Beneficiary in writing thereof
pursuant to Section 9.
	 
	 	15.	 	Each party shall be entitled to equitable relief, including specific performance, in
the event of any breach or threatened breach of this Guarantee.

[remainder of page intentionally left blank]

4

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	APPLIED DIGITAL SOLUTIONS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Joseph J. Grillo 	 	 
	 

	 	 	 	 	 	Name:	 	 
Joseph J. Grillo
	 	 
	 

	 	 	 	 	 	Title:	 	President and Chief Executive Officer 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Accepted and Agreed:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	THE STANLEY WORKS	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ John F. Lundgren 	 	 	 	 	 	 	 	 
	Name:

	 	 
John F. Lundgren
	 	 	 	 	 	 	 	 
	Title:
	 	Chairman and Chief Executive Officer	 	 	 	 	 	 	 	 

5exv10w3

Exhibit
10.3

EXECUTION VERSION

NON-COMPETITION AGREEMENT

          THIS NON-COMPETITION AGREEMENT (this “Agreement”) is made and entered into as of May
15, 2008 by and between Applied Digital Solutions, Inc., a Delaware corporation (the
“Company”) and The Stanley Works, a Connecticut corporation (“Purchaser”) and is
ancillary to the Stock Purchase Agreement (as hereinafter defined).

W I T N E S S E T H:

          WHEREAS, concurrently with the execution of this Agreement, VeriChip Corp, a subsidiary of the
Company and a Delaware corporation (“VeriChip”) and Purchaser have entered into a Stock
Purchase Agreement (the “Stock Purchase Agreement”), pursuant to which Purchaser will
purchase all of the outstanding capital stock of Xmark Corporation, a corporation governed under
the laws of Canada (“Xmark”);

          WHEREAS, all capitalized terms not otherwise defined herein shall have the meanings attributed
thereto in the Stock Purchase Agreement;

          NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth in this
Agreement, the mutual benefits to be gained by the performance thereof and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

          SECTION 1. Non-Competition and Non-Solicitation.

          (a) To induce Purchaser to enter into the Stock Purchase Agreement and consummate the
transactions contemplated thereby and more effectively to protect the value of Xmark, the Company
shall not from the Closing until the date that is three years after the Closing Date, directly or
indirectly, on its own behalf or for the benefit of any other Person, engage directly or indirectly
in Competitive Activities, it being agreed that for purposes of the Agreement, a Person shall be
deemed to be engaged in “Competitive Activities” if it engages in, or directly or indirectly,
controls or has an ownership interest in, any Person that is engaged in, the business of
manufacturing, selling, financing, supplying, marketing or distributing of Business Products,
anywhere in the world. “Business Products” means (a) human infant security systems, (b) wander
prevention systems for human beings (c) active RFID asset tracking systems marketed to the
healthcare industry and (d) vibration monitoring equipment for the mining, construction and
geotechnical markets.

          (b) The Company acknowledges and agrees that the restrictions contained in this Agreement are
reasonable in scope and duration, and are necessary to protect Purchaser after the Closing Date.
If any provision of this Agreement as applied to any party or to any circumstance is adjudicated by
a court to be invalid or unenforceable, the same will in no way affect any other circumstance or
the validity or enforcement of this Agreement or this Agreement. If any such provision, or any
part thereof, is held to be unenforceable because of the duration of such

 

 

provision or the area
covered thereby, the parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision and/or to delete specific words or phrases, to
the extent necessary to make it enforceable, and in its reduced form, such provision shall then be
enforceable and shall be enforced. The Company further acknowledges and agrees that if it breaches
or threatens to breach the provisions of this Agreement, then, in addition to monetary damages,
Purchaser shall be entitled to specific performance and injunctive and other equitable relief to
prevent or restrain a breach or threatened breach of such provision or to enforce its terms.

          SECTION 2. Miscellaneous.

          (a) Termination. With respect to those Competitive Activities in which a Competitive Entity
was engaged in prior to any Change in Control Effective Date, this Agreement shall terminate upon a
Change in Control Effective Date. “Change in Control Effective Date” means the first day
that any one or more of the following conditions shall have been satisfied:

     (i) the consummation of any bona fide transaction (including, without limitation, any
merger or consolidation) the result of which is that any “person” as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, (the “Exchange Act”), which is a
Competitive Entity is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of
the combined voting power of the Company’s then outstanding securities entitled generally to vote
in the election of the Board of Directors of the Company;

     (ii) the stockholders of the Company approve a bona fide merger or consolidation of the
Company with any other Competitive Entity, which is consummated, other than a merger or
consolidation which would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation; or

     (iii) the consummation of a bona fide agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets to a Competitive Entity.

“Competitive Entity” means any corporation, entity or “person” which, prior to any Change in
Control Effective Date, is presently engaged in Competitive Activities.

          (b) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles of conflicts of law thereof.

          (c) Severability. In the event that any portion of this Agreement becomes or is held by an
arbitrator or a court of competent jurisdiction to conflict with any federal, state or local law,
or to be otherwise illegal, void or unenforceable, the remainder of this Agreement will

2

 

continue in
full force and effect and be construed as if such portion had not been included in this Agreement.

          (d) No Assignment. Because the nature of the Agreement is specific to the actions of the
Company, the Company may not assign this Agreement. This Agreement shall inure to the benefit of
Purchaser and its successors and assigns.

          (e) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by commercial messenger or courier service, or mailed by
registered or certified mail (return receipt requested) or sent via facsimile (with acknowledgment
of complete transmission) to the parties at the following addresses (or at such other address for a
party as shall be specified by like notice); provided, however, that notices sent by mail will not
be deemed given until received:

          If to Purchaser, to:

The Stanley Works

1000 Stanley Drive

New Britain, Connecticut 06053

Attention: Corporate Secretary

Telecopy: (860) 827-3911

          with a copy to:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Ethan Klingsberg, Esq.

Telephone: (212) 225-2000

Telecopy: (212) 225-3999

          and

          if to the Company, to:

Applied Digital Solutions, Inc.

1690 South Congress Ave., #201

Delray Beach, FL 33445

Attention: Lorraine Breece

Telephone: (561) 276-0477

Telecopy: 561-805-8001

          with a copy to:

Baker Botts L.L.P.

2001 Ross Avenue, Suite 600

Dallas, Texas 75201

3

 

Attention: Sarah M. Rechter

Telephone: (214) 953-6419

Telecopy: (214) 661-4419

          (f) Entire Agreement. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior discussions, agreements and
understandings, written or oral, between the parties with respect to the subject matter hereof.

          (g) Waiver of Breach. No delay or omission by Purchaser in exercising any right under this
Agreement shall operate as a waiver of that right or any other right under this Agreement. The
waiver of a breach of any term or provision of this Agreement, which must be in writing, shall not
operate as or be construed to be a waiver of any other previous or subsequent breach of this
Agreement.

          (h) Counterparts. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.

          (i) Amendments and Modification. This Agreement may not be modified, amended, altered or
supplemented except by the execution and delivery of a written agreement executed by the parties
hereto.

          (j) Interpretation. The words “include,” “includes” and “including” when used herein shall be
deemed in each case to be followed by the words “without limitation.” The headings contained in
this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

[Signature Page Follows]

4

 

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

	 	 	 	 	 	 	 
	 	 	THE STANLEY WORKS	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ John F. Lundgren	 	 
	 

	 	 	 	 

Name: John F. Lundgren
	 	 
	 

	 	 	 	Title: Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	APPLIED DIGITAL SOLUTIONS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Joseph J. Grillo	 	 
	 

	 	 	 	 

Name: Joseph J. Grillo
	 	 
	 

	 	 	 	Title: CEO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}]]