Document:

Lease Extension and Amending Agreement dated June 1, 2004

 Exhibit 10.16 
  
 LEASE EXTENSION AND AMENDING AGREEMENT 
  
 THIS AGREEMENT dated for reference the 1st day of June, 2004 
  

			
	BETWEEN:	  	 
		
	 	  	 BTC PROPERTIES II LTD.,
 a body corporate, having its
head office
 at Suite 1800, Four Bentall Centre,
 1055 Dunsmuir
Street, in the City
 of Vancouver, in the Province of
 British
Columbia and
  
 WESTMINSTER MANAGEMENT CORPORATION,
 a body corporate, having a business office
 at Suite #820, 1090 West Georgia
Street, in the City
 of Vancouver, in the Province of British Columbia
  
 (hereinafter referred to as the “Landlord”)

		
	 	  	 OF THE FIRST PART

		
	AND:	  	 EXI WIRELESS SYSTEMS INC.,
 body corporate,
having a business office at
 Suite 100,13551 Commerce Parkway,
 Richmond, British Columbia
  
 (hereinafter referred to as the
“Tenant”)

		
	 	  	 OF THE SECOND PART

  
 WHEREAS: 
  
 A. By a lease made the 18th day of December, 2000, (the
“Lease”), BENTALL PROPERTIES LTD. AND WESTMINSTER MANAGEMENT CORPORATION (together the “Original Landlord”) leased to the
Tenant for a term (the “Term”) of three (3) years, commencing on the 1st day of June, 2001 and ending on the 31st day of May, 2004, certain premises (the “Leased Premises”) containing an area of approximately 11,596 square
feet shown outlined in red on the plan attached to the Lease as Schedule “A”, located in the building municipally described as 13551 Commerce Parkway (the “Building”) in the City of Richmond, in the Province of British, all upon
the further terms and conditions contained in the Lease; 
  
 B. On or about
January 10, 2002, the Landlord herein succeeded to the interest of the Original Landlord in and to the Lease and in and to the Leased Premises, becoming the landlord under the Lease; 
  
 C. Pursuant to an offer to lease dated December 1, 2000 between the Original Landlord and the Tenant which offer to lease was amended
by a subject removals/offer amendment executed by both the Original Landlord and the Tenant on December 20, 2000, EXI WIRELESS INC. (formerly known as EXI Technologies Inc.) (the “Indemnifier”) as
indemnifier agreed to indemnify and save harmless the Landlord from any loss, costs and damages arising out of the Lease during the Term; 
  
 D. The Term of the Lease was fully ended and completed on the 31st day of May, 2004; and 
  
 E. Notwithstanding the Tenant does not have an option to extend the Term of the Lease beyond May 31, 2004, the parties have agreed to
extend the Term of the Lease for a further period of five (5) years from the 1st day of June, 2004, upon the terms and conditions contained in this Agreement. 
  
 NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of Ten Dollars ($10.00) now paid by the Tenant to the Landlord, the
receipt of which is hereby acknowledged, and the mutual covenants and agreements herein set forth, the parties hereto covenant and agree as follows: 
  

	1.	The recitals as hereinbefore set out are true in substance and in fact. 

  

 - 1 - 

	2.	The Term of the Lease is hereby extended for a further period of five (5) years, commencing on the 1st day of June, 2004, (the “Effective Date”), and ending on the
31st day of May, 2009, upon the same terms and covenants and conditions as are contained in the Lease, except for: 

  

	 	(a)	the Tenant will accept the Leased Premises in an “as is, where is” condition; 

  

	 	(b)	the Landlord has no responsibility or liability for making any renovations, alterations or improvements in or to the Leased Premises; 

  

	 	(c)	all further renovations, alterations or improvements in or to the Leased Premises are the sole responsibility of the Tenant and shall be undertaken and completed at the
Tenant’s expense and strictly in accordance with the provisions of the Lease. Should the Tenant require additional utilities, additional heating, ventilation or air conditioning because of the nature of its business in excess of those already
provided to the Leased Premises, then the Tenant shall be responsible for the cost of installing and/or supplying such additional utilities, subject to the Landlord’s prior approval. No construction or demolition work shall commence until proof
of the Tenant’s insurance has been provided to the Landlord; and 

  

	 	(d)	the Lease shall be amended pursuant to the amendments contained in Paragraph 3 of this Agreement. 

  

	3.	The parties acknowledge and agree that as and from the Effective Date the Lease is hereby amended to provide as follows: 

  

	 	(a)	Basic Term .02 of the Lease is amended by adding the following to Basic Term .02: 

  
 “years four and five of the Term, $104,364.00 per annum, payable in equal monthly instalments of $8,697.00, based on an
annual rate of $9.00 per square foot of the Area of Leased Premises; 
  
 year six of the Term, $115,960.00 per annum, payable in equal monthly instalments of $9,663.33 , based on an annual rate of $10.00 per square foot of the Area of Leased Premises; 
  
 year seven of the Term, $127,556.00 per annum, payable in equal monthly
instalments of $10,629.67, based on an annual rate of $11.00 per square foot of the Area of Leased Premises; 
  
 year eight of the Term, $139,152.00 per annum, payable in equal monthly instalments of $11,596.00, based on an annual rate of $12.00 per square foot of
the Area of Leased Premises.”. 
  

	 	(b)	Article 2.01 of the Lease shall be amended by adding the following as a second paragraph: 

  
 “Notwithstanding anything to the contrary herein contained, but subject to the Tenant being in occupancy and not in
default, the Landlord shall provide the Tenant with twelve (12) months free Basic Rent. The free Basic Rent shall be applied by the Landlord against the payment of Basic Rent accruing due during the calendar months of: 
  

	 	(a)	JUNE 2004 through to and including NOVEMBER 2004 of the Term; and 

  

	 	(b)	JUNE 2005 through to and including NOVEMBER 2005 of the Term and Basic Term .02 hereto shall be deemed to have been amended accordingly.”.

  

	 	(c)	Article 2.02 of the Lease shall be amended by adding the following as a second paragraph: 

  
 “Notwithstanding anything to the contrary herein contained, but subject to the Tenant being in occupancy and not in
default, the Landlord shall provide the Tenant with twelve (12) months free Additional Rent. The free Additional Rent 

  

 - 2 - 

 
shall be applied by the Landlord against the payment of Additional Rent accruing due during the calendar months of: 
  

	 	(a)	JUNE 2004 through to and including NOVEMBER 2004 of the Term; and 

  

	 	(b)	JUNE 2005 through to and including NOVEMBER 2005 of the Term.”. 

  

	 	(d)	The Landlord’s address for notice as set out in Article 17.01 of the Lease is amended by deleting “Bentall Real Estate Services (Canada) Ltd.” and replacing with
“c/o Bentall Real Estate Services Limited Partnership”. 

  

	 	(e)	The following shall be added to the Lease as Article 20.03: 

  
 “20.03 ADDITIONAL TENANT IMPROVEMENT ALLOWANCE 
  
 Provided the Tenant is not in default, the Landlord shall
provide the Tenant with an improvement allowance which shall be solely applied to fixturing and modifying the Leased Premises in the amount of $9.50 per square foot of the Area of Leased Premises to plus Goods and Services Tax (the “Additional
Allowance”). Such Additional Allowance to be payable after provision of satisfactory evidence of payment of all of the Tenant’s contractors in full by the Tenant including but not limited to a statutory declaration that all fees and
payments resulting from the modification and fixturing of the Leased Premises have been made and provided the Lease Extension and Amending Agreement has been fully executed and the Tenant has fully occupied the Leased Premises and commenced business
operations therein. 
  
 Any unused portion of the
Additional Allowance shall be applied by the Landlord against the payment of Basic Rent accruing due as and from December 1, 2004 until it is fully absorbed. 
  
 All modifications to the Leased Premises are to the Tenant’s account and are subject to the
Landlord’s prior written approval and shall be made in accordance with the Crestwood Corporate Centre Tenant Guidelines manual. It is understood that the Landlord’s contractor shall be utilized for all changes to the mechanical, electrical
and life safety systems. All design and consultants’ fees and permits are to the Tenant’s account.”. 
  

	4.	Provided the Tenant is not then in default, the obligations of the Indemnifier shall cease effective 11:59 p.m. on May 31, 2004. 

  

	5.	The Tenant represents and warrants that it has the right, full power and authority to agree to these amendments to the Lease, and other provisions contained in this Agreement.

  

	6.	The parties confirm that in all other respects, the terms, covenants and conditions of the Lease remain unchanged and in full force and effect, except as modified by this Agreement.
It is understood and agreed that all terms and expressions when used in this Agreement shall, unless a contrary intention is expressed herein, have the same meanings as ascribed to them in the Lease. 

  

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	7.	This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and assigns as the case may be.

  
 IN WITNESS WHEREOF the Landlord and the Tenant have executed
this Agreement on the day and year first above written. 
  

					
	THE LANDLORD:	 	 
		
	BTC PROPERTIES II LTD. by its duly	 	)
	authorized Agent BENTALL REAL ESTATE	 	)
	SERVICES LIMITED PARTNERSHIP by its	 	)
	General Partner, Bentall Real Estate	 	)
	Services G.P. Ltd.	 	)
	 	 	)
	 	 	)
	 Per:
	 	/s/    TONY ASTLES, SENIOR VICE
PRESIDENT        	 	)
	Authorized Signatory	 	)
	 	 	)
	 Per:
	 	/s/    DOUG REID, SENIOR VICE
PRESIDENT        	 	)
	Authorized Signatory	 	)
		
	 The Corporate Seal of WESTMINSTER
	 	)
	 MANAGEMENT CORPORATION
	 	)
	 was hereunto affixed in the presence of:
	 	)
	 	 	)
	 Per:
	 	/s/    MEL SHANNON, PRESIDENT &
CEO        	 	)
	Authorized Signatory	 	)
	 	 	)
	 Per:
	 	/s/    PATTY HUNTER,
SECRETARY        	 	)
	Authorized Signatory	 	)
		
	THE TENANT:	 	 
		
	 THE CORPORATE SEAL of
	 	)
	EXI WIRELESS SYSTEMS INC.	 	)
	 was hereunto affixed in the presence of:
	 	)
	 	 	)
	 	 	)
	 Per:
	 	/s/    MALIK TALIB, CHIEF EXECUTIVE
OFFICER        	 	)
	Authorized Signatory	 	)
	 	 	)
	 Per:
	 	/s/    NUREZ KHIMJI, CHIEF FINANCIAL
OFFICER        	 	)
	Authorized Signatory	 	)
		
	I/We have the authority to bind the Corporation	 	 

  

 - 4 -Group Purchasing Agreement dated as of October 28, 2004

 Exhibit 10.17 
  
 GROUP PURCHASING PROGRAM AGREEMENT 
  
 THIS AGREEMENT is made and entered into as of October 28, 2004, by and between Henry Schein, Inc., a Delaware corporation (hereinafter
“HSI”) and VeriChip Corporation, a Delaware corporation (hereinafter referred to as “VeriChip”). 
  
 WITNESSETH: 
  
 WHEREAS, VeriChip wishes to appoint HSI as a distribution vendor for VeriChip product purchases; 
  
 WHEREAS, HSI is a distributor of a broad range of medical, surgical, laboratory and
pharmaceutical products and supplies to health care professionals, and wishes to assist VeriChip; and 
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, HSI and VeriChip agree as follows: 
  
 1. Term of Agreement. The term of this Agreement shall be for a period of two (2) years commencing on the date upon which the VeriChip Corporation
receives from the FDA written clearance to market the VeriChip system within the United States and completes all related regulatory documents. 
  
 2. Program. In consideration of the mutual covenants and conditions herein contained, HSI will distribute products as may mutually agreed by HSI and
pursuant to the terms and conditions set forth herein (the “Program”). 
  
 3. Obligations of HSI. HSI shall distribute (on a consignment basis) the VeriChip line of products (“Products”) that are compliant with all FDA requisite manufacturing, packaging and labeling standards to health care
professionals. HSI will accept a quantity of VeriChip products on consignment to their distribution center located in Indianapolis, IN; provided that such quantity has been be agreed to by both parties (it being understood that such amount shall
initially be an amount mutually agreed but no more than 100 starter sets and 100 boxes of 10-count insertion sets, although the Parties may agree to other amounts from time to time). HSI will be responsible for the Products in its warehouse, so it
agrees to maintain insurance on such Products in an amount at least equal to the wholesale value of such Products.. As it determines in its sole business judgment, HSI will promote VeriChip products in their line of direct to physician marketing
materials using such means as it deems appropriate. HSI will provide payment for product shipped to health care professionals to VeriChip within 30 days after the close of each month. The initial wholesale prices (i.e. the prices that HSI pays to
VeriChip) are set forth on Exhibit A. VeriChip may change its prices on 60 days’ notice to HSI. HSI will provide a monthly statement to VeriChip that details each transaction in which a VeriChip product was sold. HSI in a timely fashion will
provide a listing of the EID numbers of the VeriChip insertion sets sold to a specific physician’s office. 
  
 4. Obligations of VeriChip. VeriChip will provide the VeriChip line of products that are compliant with all FDA requisite manufacturing, packaging and
labeling standards. This includes: 
  

	 	•	 	VeriChip Starter Kit; 

  

	 	•	 	VeriChip Insertion Set; and 

  

	 	•	 	VeriChip Readers 

  

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 VeriChip will “activate” the VeriChip EID numbers upon written notification by HSI of sale. 
  
 VeriChip will provide requested Products to HSI within the prescribed period of time set
forth in this agreement, provided, however, that VeriChip shall not be obligated to leave amounts on consignment in HSI’s distribution facility in excess of the amounts mutually agreed to pursuant to Section 3. VeriChip will accept returns
within 30 days of shipping. If VeriChip requests that inventory being held on consignment be returned to it, VeriChip shall pay such cost of return shipping. VeriChip will notify HSI of product modifications or changes. 
  
 VeriChip will guarantee that if it reduces its MSRP on any Products, it will proportionately
reduce the prices charged to HSI (referenced in Exhibit A) on such Products. 
  
 5. Relationship of the Parties 
  

	 	5.1.	The relationship of HSI and under this Agreement is that of independent contractors and that relationship shall continue as such throughout the term of this Agreement and any
extension thereof. It is further agreed that nothing contained in this Agreement shall be construed to constitute either Party as a partner, officer, employee, or agent of the other, and no officer, employee or agent of either Party shall be deemed
to be the officer, employee, or agent of the other. Neither Party may use the others trademarks or trade names for any purpose except as set forth herein. 

  

	 	5.2.	Neither Party shall have the authority to make any agreement or commitment, or incur any liability on behalf of the other, nor shall either Party be liable for any acts, omissions
to act, contracts, commitments, promises, or representations made by the other Party, except as specifically authorized in this Agreement or as the Parties may hereafter agree in writing. 

  

	 	5.3.	(a) The indemnification obligations set forth in Exhibit B shall be incorporated herein and be binding on the Parties] 

  
 (b) The indemnity provisions, as set forth in this Article 5 and Exhibit B
shall survive the termination of this Agreement for any reason. 
  
 6.
Compliance with Laws. The Parties agree that in carrying out their duties and responsibilities under this Agreement, they will neither undertake nor cause nor permit to be undertaken, any activity which either 
  

	 	(i).	is illegal under any applicable laws, decrees, rules, or regulations in effect; or 

  

	 	(ii).	would have the effect of causing the other Party to be in violation of any laws, decrees, rules or regulations in effect in any jurisdiction where the other Party conducts business.

  
 7. Confidentiality of
Information.  
  

	 	7.1.	 VeriChip acknowledges that for purposes of effectuating this Agreement, there may be revealed to VeriChip in confidence certain trade secrets, proprietary or
confidential information of HSI; provided that VeriChip may disclose such information if required by 

  

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law or legal process. VeriChip acknowledges that no right is given to, or acquired by, to disclose or reveal any portion of thereof without the express prior
written consent of HSI. This obligation will survive the termination of this Agreement. 

  

	 	7.2.	HSI acknowledges that for purposes of effectuating this Agreement, there may be revealed to HSI in confidence certain trade secrets, proprietary or confidential information of
VeriChip; provided that HSI may disclose such information if required by law or legal process. HSI acknowledges that no right is given to, or acquired by, HSI to disclose or reveal any portion of thereof without the express prior written consent of
VeriChip. This obligation will survive the termination of this Agreement. 

  

	 	7.3.	Notwithstanding anything herein to the contrary, if required by applicable law (including securities laws and regulations) either party may disclose this Agreement.

  
 8. Termination. Either Party shall have the right
to terminate this Agreement for “cause” at any time, by giving written notice to the other Party in the event that the other Party: 
  

	 	(i).	commits a noncurable default or violation of this Agreement; or 

  

	 	(ii).	commits a curable default or violation of this Agreement, which is not remedied within thirty (30) days after written notice thereof. 

  
 On termination of this Agreement, HSI shall return any Products held by it
on consignment and shall, within 30 days of termination, pay for any Products shipped to it and not returned. 
  
 11. Arbitration. 
  

	 	11.1.	Any dispute, controversy, or claim between HSI and arising out of or relating to this Agreement, or the breach, termination, or validity thereof shall be finally settled by
arbitration, conducted on a confidential basis, under the then current Commercial Arbitration Rules of the American Arbitration Association (“Association”). The arbitrators shall determine the matters in dispute strictly in accordance with
the terms of this Agreement and the substantive domestic law of the State of New York, excluding its principals of conflicts of law. 

  

	 	11.2.	The arbitration shall be conducted by three arbitrators at the Association’s regional office located nearest to HSI. Each Party shall choose one arbitrator and the chosen
arbitrators shall select a third arbitrator. 

  

	 	11.3.	The award of the arbitrators shall be the sole and exclusive remedy between the Parties regarding any claims, counter claims, issues or accountings presented or pled to the
arbitrators, provided that the arbitrators shall have no authority to award punitive damages or any form of noncompensatory damages. Judgment upon the arbitrators’ award may be entered and enforced in any court of competent jurisdiction. Each
Party shall bear its own cost of the arbitration, including but not limited to the cost of attorney’s fees, and each shall bear one-half the cost of the arbitrators’ fees. 

  

 3 

	 	11.4.	Neither Party shall institute a proceeding hereunder unless at least sixty (60) days prior thereto such Party shall have furnished to the other Party written notice by
certified mail of its intent to do so. 

  

	 	11.5.	Neither Party shall be hereby excluded from seeking provisional remedies in the courts of any jurisdiction including, but not limited to, temporary restraining orders and
preliminary injunctions, to protect its rights and interest, but such shall not be sought as a means to avoid or stay arbitration. 

  
 12. Notices. Any and all notices, requests, demands, consents, approvals or other communications required or permitted to be given under any provision of
this Agreement shall be in writing and shall be deemed given upon personal delivery or the mailing thereof by first class certified mail, return receipt requested, postage prepaid, as follows: 
  
 If to HSI: 
 Henry Schein, Inc. 
 135 Duryea Road 
 Melville, NY 11747 
 Attention: Louis Ferraro 
  
 With a copy: 
 Michael
Ettinger, Esq. 
 Henry Schein, Inc. 
 135 Duryea Road 
 Melville, NY 11747 
  
 If to VeriChip: 
 VeriChip Corporation 
 1690 South congress Ave., Suite 200 
 Delray Beach, FL 33445 
 Attn: President 
  
 With a copy: 
 Applied Digital

 1690 South Congress Ave., Suite 200 
 Delray Beach, FL 33445 
 Attn: General Counsel 
  
 Any Party may change its
address for the purposes of this Agreement by notice to the other Parties given as aforesaid. 
  
 13. Entire Agreement. Each Party acknowledges that it has read this Agreement, fully understands it, and agrees to be bound by its terms and further agrees that it is the complete and exclusive statement
of the agreement between the Parties, which supersedes and merges all prior proposals, understandings and all other agreements, oral and written, between the Parties relating to the subject matter of this Agreement. This Agreement cannot be modified
or altered except by written instrument duly executed by authorized executive officers of both Parties. 
  

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 14. Assignment. This Agreement may not be assigned by a Party without the consent of the other Party, such
consent not to be unreasonably withheld. 
  
 15. Governing Law. This
Agreement shall be governed by the laws of the State of New York excluding its principles of conflicts of laws. 
  
 16. Waiver. No delay or omission by either Party to exercise any right or power hereunder shall impair such right or power or be construed to be a waiver
thereof. A waiver by either of the Parties of any of the covenants to be performed by the other or any breach thereof shall not be construed to be a waiver of any succeeding breach thereof or of any other covenant herein contained. All remedies
provided for in this Agreement shall be cumulative and in addition to and not in lieu of any other remedies available to either Party at law, in equity of otherwise. 
  
 17. Severability. If any provision of this Agreement is declared or found to be illegal, unenforceable, or void, then both
Parties shall be relieved of all obligations arising under such provision, but only to the extent that such provision is illegal, unenforceable, or void, it being the intent and agreement of the Parties that this Agreement shall be deemed amended by
modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent or, if that is not possible, by substituting therefore another provision that is legal and enforceable and achieves the same objective.

  
 18. Section Headings. The headings contained in this Agreement
are for convenience of reference only and are not intended to have any substantive significance in interpreting this Agreement. 
  
 IN WITNESS WHEREOF, the Parties have executed this Agreement under seal effective the date first written above. 
  

							
	HENRY SCHEIN, INC.	 	VERICHIP CORPORATION
				
	 By:
	 	 /s/ Louis Ferraro

	 	 By:
	 	 /s/ Kevin McLaughlin

	 	 	Louis Ferraro	 	 	 	Kevin McLaughlin
	 	 	V.P. General Manager	 	 	 	CEO
	 	 	 	 	 	 	November 4, 2004

  

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