Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.7

AMENDMENT TO THIRD AMENDED AND RESTATED

REVOLVING LINE OF CREDIT NOTE

Reference is made to that certain Third Amended and Restated Revolving Line of Credit Note,
dated February 8,2007, made by VeriChip Corporation to the order of Applied Digital Solutions, Inc.
in the principal amount of $ 14,500,000. (the “Note”), to which this instrument is to be attached.

The parties hereto agree that the Note is amended by deleting the following paragraph on page
2 of the Note:

“ The holder may impose upon the undersigned a delinquency charge of $35.00 or five
percent (5.00%) of the amount of the principal and/or interest payment not paid on
or before the thirtieth (30th) day after such installment is due, whichever is
greater. The entire principal balance hereof, together with accrued interest, shall
after maturity, whether by demand, acceleration or otherwise, bear interest at the
contract rate of this Note plus an additional three percent (3.00%) per annum. Upon
default by Borrower under the terms of this Note or any other Loan Documents,
interest shall accrue at a variable rate equal to the contract rate of this Note
plus three percent (3.00%).”

and replacing it with the following paragraph:

“ The holder may impose upon the undersigned a delinquency charge of $35.00 or five
percent (5.00%) of the amount of any regularly-scheduled payment of principal
and/or interest (other than at maturity, whether by acceleration or otherwise) not
paid on or before the fifth (5th) business day after such payment is due, whichever
is greater. The entire principal balance hereof, together with accrued interest,
shall after maturity, whether by demand, acceleration or otherwise, bear interest
at the contract rate of this Note plus an additional three percent (3.00%) per
annum. Upon default by Borrower under the terms of this Note or any other Loan
Documents, interest shall accrue at a variable rate equal to the contract rate of
this Note plus three percent (3.00%).”

This amendment is executed as an instrument under seal as of February 29, 2008.

	 	 	 	 	 
	 	VERICHIP CORPORATION

 	 
	 	By:  	/s/ William J. Caragol
 	 
	 	 	Name:  	William J. Caragol 	 
	 	 	Title:  	Chief Financial Officer, President,
Treasurer and Secretary 	 
	 
	 	APPLIED DIGITAL SOLUTIONS, INC.

 	 
	 	By:  	/s/ Lorraine M. Breece
 	 
	 	 	Name:  	Lorraine M. Breece 	 
	 	 	Title:  	Acting Chief Financial
Officer and Senior Vice PresidentFiled by Bowne Pure Compliance

 

Exhibit 10.8

February 29, 2008

LV Administrative Services, Inc., as Agent

c/o Laurus Capital Management, LLC

335 Madison Avenue, 10th Floor

New York, New York 10017

Gentlemen:

We understand that LV Administrative Services, Inc. (“Agent”), on behalf of itself and as agent for VALENS
OFFSHORE SPV II, CORP. (the “Purchaser”), XMark Corporation (“XMark”), and VeriChip Corporation
(“VeriChip” and collectively with XMark, “Borrowers”) have entered into a Securities Purchase
Agreement (the “SPA”) and other related documents, instruments and agreements (all such documents, instruments
and agreements, as hereafter modified, supplemented and/or amended from time to time, collectively the “Purchase
Agreements”) pursuant to which the Purchaser provides financial accommodations to Borrowers. The undersigned has
entered into a certain Amended and Restated Supply, License, and Development Agreement dated December 27, 2005 with
VeriChip (as modified, supplemented and/or amended from time to time, the “Supply Agreement”) pursuant to which the
undersigned has agreed to exclusively supply to VeriChip, any VeriChip reseller or other nominees within VeriChip’s
control certain Developed Products (as defined in the Supply Agreement). We are providing this letter agreement to
document our acknowledgment of Agent’s ability to exercise all of VeriChip’s rights under the Supply Agreement upon the
occurrence and continuance of an Event of Default (as defined in the Notes, as defined in the SPA).

In order to induce you to provide financial accommodations to Borrowers, the undersigned hereby acknowledges that
in connection with the exercise of your rights under the Purchase Agreements with respect to the assets of the
Borrowers including, without limitation, the Developed Products, you shall be entitled to the benefit of all of the
rights of VeriChip under the Supply Agreement including, without limitation, the right to sell any of the Developed
Products provided by the undersigned and the right to require the undersigned to manufacture the Developed Products and
supply such Developed Products; provided, however, you shall not be entitled to exercise any rights
under the Supply Agreement (the “Supply Agreement Rights”) unless (i) an Event of Default (as defined in the
Notes, as defined in the SPA) has occurred and is continuing, (ii) you have commenced exercising your rights under the
Purchase Agreements and (iii) in exercising the Supply Agreement Rights, you comply with the Supply Agreement and all
applicable laws. In addition, in the event Agent elects to sell all or substantially all of the assets of VeriChip
after the occurrence of an Event of Default under and as defined in any Purchase Agreement by way of foreclosure sale
or as otherwise permitted by any Purchase Agreement, applicable law or in equity, the purchaser of all or substantially
all of the assets of VeriChip shall, provided it agrees to be bound to all of the terms of the Supply Agreement, be
entitled to the benefits of the Supply Agreement in lieu of VeriChip and any such purchaser is an express third party
beneficiary of this agreement and is entitled to rely hereon as if a party hereto.

 

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The undersigned recognizes and acknowledges that any claim or claims that Agent, the Purchaser and/or any of their
successors or assigns has or may hereafter have against any finished product purchased from the undersigned is, by
virtue of the aforementioned Purchase Agreements, superior to any lien or claim of any nature which the undersigned now
has or may hereafter have to such products by statute, agreement or otherwise.

Agent may, without affecting the validity of this consent, extend the terms of payment of any indebtedness of
Borrowers to Agent and/or Purchaser or alter the performance of any of the terms and conditions of any of the Purchase
Agreements without the consent of the undersigned and without giving notice thereof to the undersigned.

We hereby acknowledge that, to the best of our knowledge, no default or event of default exists under the Supply
Agreement which would entitle us to terminate the Supply Agreement at the present time and if any such event should
occur, we will use our best efforts to promptly notify Agent at the address set forth above and Agent shall,
simultaneously with XMark, have the same time period as VeriChip under the Supply Agreement, within which to cure such
default or cause VeriChip to cure such default.

This letter shall be governed by, and construed in accordance with, the laws of the State of New York. This
letter sets forth the entire agreement between the parties hereto as to the matters set forth herein and supersede all
prior communications, written or oral, with respect to the matters herein.

 

2

 

This consent shall inure to the benefit of successors and assigns of Agent and Purchaser and shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.

	 	 	 	 	 	 	 
	 	 	 	 	Very truly yours,
 

	 	 	 	 	DIGITAL ANGEL CORPORATION
 

	
 
	 	 	 	By:
	 	/s/ Lorraine M. Breece
	
 
	 	 	 	 	 	 
	
 
	 	 	 	 	 	Name: Lorraine M. Breece
	
 
	 	 	 	 	 	Title: Vice President and Chief Financial Officer
	The undersigned has read the above and consents
	 	 	 	 
	and agrees to be bound thereby.
 
	 	 	 	 
	VERICHIP CORPORATION
 

	

	

	 	

	By

	 	/s/ William J. Caragol
	 	

	 	

	
 
	 	 
	 	

	 	

	
 
	 	Name: William J. Caragol
	 	

	 	

	
 
	 	Title: President and
Chief Financial Officer
	 	

	 	

SIGNATURE PAGE TO
 DIGITAL ANGEL LICENSE AGREEMENT

 

3Filed by Bowne Pure Compliance

 

Exhibit
10.9

KALLINA CORPORATION

c/o Laurus Capital Management, LLC

335 Madison Avenue, 10th Floor

New York, New York 10017

February 29, 2008

Applied Digital Solutions, Inc.

1690 South Congress Avenue, Suite 200

Delray Beach, FL 33445

Attention: President

Re: Amendment of $7,000,000 Note

Ladies and Gentlemen:

Reference is made to (a) the Securities Purchase Agreement dated as of August 31, 2007 by and
between Applied Digital Solutions, Inc. (the “Company”) and Kallina Corporation
(“Kallina”) (as amended, restated, modified and/or supplemented from time to time, the
“2007 SPA”); (b) the Secured Term Note dated as of August 31, 2007 issued by the Company in
favor of Kallina in the original principal amount of $7,000,000 (as amended, restated, modified
and/or supplemented from time to time, the “7,000,000 Note”); and (c) the Related
Agreements (as defined in the 2007 SPA and all agreements, documents and instruments executed in
connection with the 2007 SPA and the $7,000,000 Note (all as amended, modified, restated and/or
supplemented from time to time, and collectively with the 2007 SPA and the $7,000,000 Note, the
“Transaction Documents”).

Reference is further made to the fact that pursuant to one or more instruments of assignment,
Kallina assigned a portion of its interest in the Transaction Documents to Valens U.S. SPV I, LLC,
Valens Offshore SPV II, Corp. and Valens Offshore SPV I, Ltd. (each a “Kallina Assignee”
and collectively the “Kallina Assignees”).

The Company has requested that Kallina and the Kallina Assignees agree to a modification of
the payment terms under the $7,000,000 Note and Kallina and the Kallina Assignees have agreed to do
so on the terms set forth herein, on the condition that the Company enter into this letter
agreement and make a prepayment of the $7,000,000 Note in the amount of $1,133,624.

In consideration of the foregoing and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company hereby agrees to, and acknowledges, the
following:

1. Subject to receipt by Kallina and the Kallina Assignees of the aggregate sum of $1,133,624
in prepayment of the $7,000,000 Note (to be applied first against all accrued but unpaid interest
owing thereon and then to the principal balance thereunder), the $7,000,000 Note is amended by
deleting Section 1.3 thereof in its in entirety and replacing such Section with the following:

 

 

 

“Principal Payments. Amortizing payments of the Principal Amount shall be made
by the Company on October 1, 2008 and on the first business day of each succeeding month
thereafter through and including the Maturity Date (each, an “Amortization Date”). On the
first Amortization Date, the Company shall make a payment to the Holder of the outstanding
Principal Amount of $11,451.66, and on each Amortization Date thereafter, the Company shall
make payments in the amount of $143,134. All payments of the Principal Amount shall be
accompanied by accrued and unpaid interest on such portion of the Principal Amount plus any
and all other unpaid amounts which are then owing under this Note, the Purchase Agreement
and/or any other Related Agreement (collectively, the “Monthly Amount”). Any outstanding
Principal Amount together with any accrued and unpaid interest and any and all other unpaid
amounts which are then owing by the Company to the Holder under this Note, the Purchase
Agreement and/or any other Related Agreement shall be due and payable on the Maturity Date.”

2. From and after the execution and delivery hereof by the parties hereto, this letter shall
constitute a Related Agreement for all purposes of the Transaction Documents.

Except as specifically set forth herein, the Transaction Documents shall remain in full force
and effect, and are hereby ratified and confirmed. The execution, delivery and effectiveness of
this letter agreement shall not operate as a waiver of any right, power or remedy of Kallina or any
of Kallina Assignees, nor constitute a waiver of any provision of any of the Transaction Documents,
except to the extent expressly provided for herein. This letter agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of New York.

 

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This letter agreement may be executed by the parties hereto 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 or electronic transmission
shall be deemed to be an original signature hereto.

	 	 	 	 	 	 	 
	 	 	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	 	 	KALLINA CORPORATION
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Scott Bluestein
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Scott Bluestein
	 

	 	 	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 	 	 
	 	 	 	 	VALENS U.S. SPV I, LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	VALENS CAPITAL MANAGEMENT, LLC, its investment manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Scott Bluestein
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Scott Bluestein
	 

	 	 	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 	 	 
	 	 	 	 	VALENS OFFSHORE SPV I, LTD.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	VALENS CAPITAL MANAGEMENT, LLC, its investment manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Scott Bluestein
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Scott Bluestein
	 

	 	 	 	 	 	Title: Authorized Signatory

 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	VALENS OFFSHORE SPV II, CORP.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	VALENS CAPITAL MANAGEMENT, LLC, its investment manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Scott Bluestein
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Scott Bluestein
	 

	 	 	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 	 	 
	ACKNOWLEDGED AND AGREED:	 	 	 	 
	 
	 	 	 	 	 	 
	APPLIED DIGITAL SOLUTIONS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Patricia Petersen	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: Patricia Petersen	 	 	 	 
	 

	 	Title: Asst. Secretary

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