Document:

Exhibit 10.1

    
      

    

    Exhibit
      10.1

    FIRST
      AMENDMENT TO 

    COMMERCIAL
      LOAN AGREEMENT

     

    This
      FIRST AMENDMENT TO COMMERCIAL LOAN AGREEMENT, dated as of October 6, 2006 (this
      “First Amendment”), is between VERICHIP
      CORPORATION,
      a
      Delaware corporation (the “Borrower”), and APPLIED
      DIGITAL SOLUTIONS, INC.,
      a
      Missouri corporation (the “Lender”).

     

    Recitals:

    

    WHEREAS,
      on December 27, 2005, the Borrower and the Lender entered into a Commercial
      Loan
      Agreement (the “Agreement”) pursuant to which Lender made a Loan to Borrower
      subject to the terms and conditions contained in the Agreement; 

     

    WHEREAS,
      Borrower has requested and Lender has agreed, subject to the terms and
      conditions set forth herein, to increase the principal amount of the Loan by
      Four Million Five Hundred Dollars ($4,500,000.00) (including a change in the
      applicable interest rate) in order to meet the Borrower's working capital needs,
      IPO costs, and cash needs in connection with Perceptis' potential election
      to
      take its final (deferred) payment in cash and to make certain other amendments
      to the Agreement contained herein; 

     

    NOW
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      herein, and other good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, the parties agree as follows:

     

    Agreement.

     

    
      	
              1.

            	
              Recitals.
                The foregoing recitals are true and correct and are hereby incorporated
                by
                this reference.

            
	 	 
	
              2.

               

            	
              Definitions. All
                capitalized terms used herein, except as modified or defined in this
                First
                Amendment, shall have the meaning given to such terms in the Agreement.
                All references to the Agreement in all documents executed by Borrower,
                Guarantor and/or Bank in connection with the Agreement are hereby
                deemed
                to refer to the Agreement, as hereby amended. 

            
	 	 
	
              3

            	
              Amendments:
                The following sections of the Agreement are hereby amended as
                follows:

            

    

    

     

    a. Revolving
      Line of Credit:
      The
      amount of the Revolving Line of Credit on page 1 of the Agreement shall be
      amended by replacing “$8,500,000.00” with “$13,000,000.00”. 

    

    b. Review
      Date for Revolving Line of Credit:
      The
      Review Date for Revolving Line of Credit on page 1 of the Agreement shall be
      amended by replacing “June 27, 2007” with “July 1, 2008”.

    

    c. Register
      to be Maintained:
      Section
      I, Paragraph B (Advances and Repayments) shall be amended by inserting the
      following sentence at the end of the existing language: “Each
      advance or readvance made by Lender pursuant to the Loan Documents shall be
      evidenced by one or more accounts or records

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    maintained
      by such Lender in the ordinary course of business (the “Register”). The
Register
      maintained
      by the Lender shall include notations of the advances or readvances as well
      as
      the interest and payments thereon. In the event of any conflict between the
Register
      and
      the
      accounts and records of the Borrower in respect of such matters, the accounts
      and records of the Borrower shall control in the absence of manifest
      error
      or proof
      by Lender in contradiction thereof.”

    

    
      	
              4.

            	
              Conditions
                Precedent.
                This First Amendment shall not be effective until Lender has received
                the
                following duly executed documents:

            

    

     

    a. This
      First Amendment;

     

    b. Amended
      and Restated Revolving Line of Credit Note - Working Capital of even date
      herewith in the principal amount of $13,000,000.00; and

     

    c. First
      Amendment to Security Agreement of even date herewith.

     

    
      	
              5.

               

            	
              Representations
                and Warranties.
                The terms and conditions, representations and warranties, and covenants
                as
                set forth in the Agreement and all other loan documents executed
                by
                Borrower in favor of Lender in connection with the Loan are hereby
                ratified and affirmed by Borrower, and Borrower hereby agrees that
                the
                said terms and conditions, and covenants are valid, true and correct
                as if
                made on the date hereof. 

            
	 	 
	
              6.

               

            	
              No
                Implied Modifications; Inconsistencies.
                Except as expressly modified hereby, all terms and provisions of
                the
                Agreement shall remain unchanged and in full force and effect. In
                the event of an inconsistency between the terms of this First Amendment
                and the terms of the Agreement, the terms hereof shall control.
                

            
	 	 
	
              7.

            	
              Counterparts.
                This First Amendment may be executed in any number of counterparts,
                and
                all such counterparts shall together constitute but one instrument.
                

            
	 	 
	
              8.

            	
              Governing
                Law.
                This First Amendment shall be governed by and construed in accordance
                with
                the laws of the State of New
                Hampshire.

            

    

     

    IN
      WITNESS WHEREOF, the parties hereto have by their duly authorized
      representatives executed this First Amendment on the date first above
      written.

     

    
      	
               

            	
              BORROWER:

            
	 	 
	 	
              VERICHIP
                CORPORATION, a Delaware corporation

            
	 	 
	
               

            	
              By:
                /s/
                William Caragol

            
	
               

            	
              Print
                Name: William
                Caragol

            
	
               

            	
              Title:
                CFO

            
	 	 
	
               

            	
              LENDER:

            
	 	 
	
               

            	
              APPLIED
                DIGITAL SOLUTIONS, INC., a Missouri corporation

            
	 	 
	 	 
	
               

            	
              By:
                /s/
                Evan C. McKeown

            
	
               

            	
              Print
                Name: Evan
                C. McKeown

            
	
               

            	
              Title:
                CFO

            

    

     

    

    
      
        
        

      

      
        2Exhibit 10.2

    
      

    

    

      Exhibit
        10.2

      

      AMENDED
        AND RESTATED

      REVOLVING
        LINE OF CREDIT NOTE

      WORKING
        CAPITAL

      

      
        	
                $13,000,000.00
                  U.S.

              	
                October
                  6, 2006

              

      

      

      FOR
        VALUE
        RECEIVED, the undersigned, VeriChip Corporation, a Delaware corporation with
        a
        principal place of business at 1690 South Congress Avenue, Suite 200, Delray
        Beach, Florida 33445 (the “Borrower”), hereby promises to pay to the order of
        Applied Digital Solutions, Inc., a Missouri corporation located at 1690 South
        Congress Avenue, Suite 200, Delray Beach, Florida 33445 (the “Lender”), at such
        address, or such other place or places as the holder hereof may designate
        in
        writing from time to time hereafter, the maximum principal sum of Thirteen
        Million Dollars ($13,000,000.00), or, if less, so much thereof as may be
        advanced or readvanced by the Lender to the Borrower pursuant to the terms
        of
        the Loan Agreement (as hereinafter defined), together with interest as provided
        for hereinbelow, in lawful money of the United States of America. 

       

      Interest
        shall be calculated and charged daily on the basis of actual days elapsed
        over a
        three hundred sixty (360) day banking year, on the unpaid principal balance
        outstanding from time to time at a fixed rate equal to twelve percent (12%)
        per
        annum (the “Interest Rate”). The Interest Rate will apply to the outstanding
        amount under the Loan Agreement and this Note effective from and after the
        date
        hereof. For avoidance of doubt, the interest rate described in the Original
        Note
        (defined below) applied to the outstanding amounts under the Original Note
        prior
        to the date of this Note. 

       

      The
        Borrower shall make a balloon payment of principal, interest and any fees
        or
        expenses outstanding on December 27, 2010 (the “Maturity Date”) unless a change
        of ownership or management occurs, as defined in Section IX. C. of the Loan
        Agreement as defined below, or an initial public offering of the Borrower’s
        common stock is consummated, in which case the Borrower shall, within two
        business days of such event, repay in full all principal, interest and any
        fees
        or expenses outstanding hereunder. 

       

      The
        Note
        is issued under, and is subject to, the Commercial Loan Agreement of even
        date
        between the Borrower and the Lender, as it may be amended from time to time
        (the
“Loan Agreement”). The holder of this Note is entitled to all of the benefits
        and rights of the Lender under the Loan Agreement. However, neither this
        reference to the Loan Agreement nor any provision thereof shall impair the
        absolute and unconditional obligation of the undersigned to pay the principal
        and interest on this Note as herein provided. Any capitalized term used in
        this
        Note that is not otherwise expressly defined herein shall have the meaning
        ascribed thereto in the Loan Agreement. 

       

      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%). 

       

      The
        undersigned agrees to pay on demand all reasonable out-of-pocket costs of
        collection hereof, including court costs, service fees, and reasonable
        attorney’s fees, whether or not any foreclosure or other action is instituted by
        the holder in its discretion. 

       

      The
        word
“holder”, as used in this Note, shall mean the payee or endorsee of this Note
        who is in possession of it, or the bearer, if this Note is at that time payable
        to the bearer. 

       

      The
        indebtedness evidenced by this Note is secured by the Loan Documents as defined
        in the Loan Agreement. Any default by the undersigned under the Loan Documents
        shall constitute a default under this Note entitling the holder to declare
        the
        entire principal amount of the indebtedness evidenced hereby, together with
        all
        accrued interest thereon, immediately due and payable. 

       

      No
        delay
        or omission on the part of the holder in exercising any right, privilege
        or
        remedy shall impair such right, privilege or remedy or be construed as a
        waiver
        thereof or of any other right, privilege or remedy. No waiver of any right,
        privilege or remedy or any amendment to this Note shall be effective unless
        made
        in writing and signed by the holder. Under no circumstances shall an effective
        waiver of any right, privilege or remedy on any one occasion constitute or
        be
        construed as a bar to the exercise of or a waiver of such right, privilege
        or
        remedy on any future occasion. The acceptance by the holder hereof of any
        payment after any default hereunder shall not operate to extend the time
        of
        payment of any amount then remaining unpaid hereunder or constitute a waiver
        of
        any rights of the holder hereof under this Note. 

       

      All
        rights and remedies of the holder, whether granted herein or otherwise, shall
        be
        cumulative and may be exercised singularly or concurrently, and the holder
        shall
        have, in addition to all other rights and remedies, the rights and remedies
        of a
        secured party under the Uniform Commercial Code of New Hampshire. The holder
        shall have no duty as to the collection or protection of the Collateral or
        of
        any income thereon, or as to the preservation of any rights pertaining thereto
        beyond the safe custody thereof. Surrender of this Note, upon payment or
        otherwise, shall not affect the right of the holder to retain the Collateral
        as
        security for the payment and performance of any other liability of the
        undersigned to the holder. 

       

      Every
        maker, endorser, or guarantor of this Note, or the obligations represented
        by
        this Note, waives all exemption rights, valuation and appraisement, presentment,
        protest and demand, demand for payment, notice of dishonor and protest and
        all
        other demands and notices in connection with the delivery, acceptance,
        performance, default or enforcement of this Note, and assents to any extension
        or postponement of the time of payment or any other indulgence, to any
        substitution, exchange or release of Collateral, and/or to the addition or
        release of any other party or person primarily or secondarily liable.

       

      This
        Note
        may be prepaid in whole or in part without penalty. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      This
        Note
        and the provisions hereof shall be binding upon the undersigned and the
        undersigned’s heirs, administrators, executors, successors, legal
        representatives and assigns and shall inure to the benefit of the holder,
        the
        holder’s heirs, administrators, executors, successors, legal representatives and
        assigns. 

       

      This
        Note
        amends and restates that certain promissory note dated December 27, 2005,
        in the
        principal amount of $8,500,000.00 from the Borrower in favor if the Lender
        (“Original Note”). This Note may not be amended, changed or modified in any
        respect except by a written document that has been executed by each party.
        This
        Note constitutes a New Hampshire sealed instrument and contract to be governed
        by the laws of such state and to be paid and performed therein. 

       

      IN
        THE
        PRESENCE OF:

      

      
        	
                 

              	
                VeriChip
                  Corporation 

              
	
                /s/Joseph
                  L. Stark

              	
                By:
                  /s/ William Caragol

              
	
                Joseph
                  L. Stark

              	
                Print
                  Name: William
                  Caragol

              
	
                Wachovia
                  Bank

              	
                Title:
                  CFO

              

      

      

      

      

      

      
        
          
          

        

        
          3

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