Document:

Exhibit 10.29

Exhibit 10.29

EXECUTIVE AGREEMENT

Ronnie Robinson

THIS EXECUTIVE AGREEMENT (“Agreement”) is effective as of September 26, 2008 by and between
Tween Brands, Inc., a Delaware corporation (the “Company”) and Ronnie Robinson (the “Executive”)
(hereinafter collectively referred to as “the parties”).

WHEREAS, The Executive will serve as a key executive of the Company and possesses an intimate
knowledge of the business and affairs of the Company and its policies, procedures, methods and
personnel; and

WHEREAS, the Company has determined that it is essential and in its best interest to retain
the services of key management personnel and to ensure their continued dedication and efforts; and

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Board”) has
determined that it is in the best interest of the Company to secure the services and employment of
the Executive, and the Executive is willing to render such services on the terms and conditions set
forth herein.

NOW, THEREFORE, in consideration of the foregoing and the respective agreements of the parties
hereby agree as follows:

1. EMPLOYMENT

(a) AT WILL. Executive and the Company agree that Executive’s employment with the
Company is and at all times shall be “at will,” which means that subject to the terms of this
Agreement either the Company or the Executive may terminate Executive’s employment at any time, for
any reason or for no reason.

(b) POSITION. The Executive shall be employed as Executive Vice President,
Production Services, or such other position of reasonably comparable or greater status and
responsibilities as may be determined by the Board. The Executive shall perform the duties,
undertake the responsibilities and exercise the authority customarily performed, undertaken and
exercised by persons employed in a similar executive capacity.

(c) OBLIGATIONS. The Executive agrees (1) to devote the Executive’s best efforts and
full business time and attention to the business and affairs of the Company; (2) to exercise the
highest degree of loyalty and care with respect to the affairs of the Company; and (3) not to
commit any willful or intentional act with an objective to harm the Company’s business or
reputation. The foregoing, however, shall not preclude the Executive from serving on corporate,
civic or charitable boards or committees or managing personal investments, so long as such
activities do not interfere with the performance of the Executive’s responsibilities hereunder.

(d) BASE SALARY. Effective as of August 21, 2008, the Company agrees to pay or cause
to be paid to the Executive a minimum annual Base Salary of $450,000 (hereinafter referred to as
the “Base Salary”). This Base Salary will be subject to annual review and may be increased from
time to time by the Board considering factors such as the Executive’s responsibilities,
compensation of executives in other companies, performance of the Executive and other pertinent
factors. Such Base Salary shall be payable in accordance with the Company’s customary practices
applicable to similarly situated executives of the Company.

(e) EQUITY COMPENSATION. The Company shall grant to the Executive rights to receive
shares of the Company’s common stock and options to acquire shares of the Company’s common stock as
the Board or Compensation Committee of the Board determines.

(f) EMPLOYEE BENEFITS. The Executive shall be entitled to participate in
tax-qualified and nonqualified deferred compensation and retirement plans, group term life
insurance plans, short-term and long-term disability plans, employee
benefit plans, practices, and programs maintained by the Company and made available to similarly
situated executives generally, and as may be in effect from time to time.

 

 

 

(g) BONUS AND LONG-TERM INCENTIVES. The Executive shall be entitled to participate
in such Company bonus and long-term incentive compensation programs which include similarly
situated executives of the Company as may exist from time to time (the “Incentive Plans”). The
Executive’s participation in such Incentive Plans, practices and programs shall be on the same
general basis and terms as are applicable to similarly situated executives of the Company, although
bonuses, target levels and criteria may differ among such executives as determined by the Board or
Compensation Committee of the Board.

(h) OFFICE AND FACILITIES. The Executive shall be provided with appropriate offices
and with such secretarial and other support facilities as are commensurate with the Executive’s
status with the Company and adequate for the performance of the Executive’s duties hereunder.

(i) EXPENSES. Subject to applicable Company policies, the Executive shall be entitled
to receive prompt reimbursement of all expenses reasonably incurred by the Executive in connection
with the performance of the Executive’s duties hereunder or for promoting, pursuing or otherwise
furthering the business or interests of the Company including, without limitation, travel,
automobile, and meal and entertainment expenses.

(j) VACATION. The Executive shall be entitled to four weeks of annual vacation or,
if greater, in accordance with the policies as periodically established by the Board for similarly
situated executives of the Company.

2. DEFINITIONS, TERMS AND CONDITIONS. The Executive’s employment hereunder is subject to
the following terms and conditions:

(a) CAUSE. “Cause” means that the Executive:

(1) was grossly negligent in the performance of Executive’s duties with the
Company (other than a failure resulting from the Executive’s incapacity due to
physical or mental illness) causing material harm to the Company; or

(2) has pled “guilty” or “no contest” to or has been convicted of an act which is
defined as a felony under federal or state law; or

(3) engaged in intentional misconduct or fraud which caused, or could reasonably
be expected to cause, material harm to the Company’s business or its reputation; or

(4) committed a material breach of this Agreement (including a violation of the
noncompete and nondisclosure provisions) which is materially and demonstrably
injurious to the Company.

(b) CHANGE IN CONTROL. “Change in Control” means the occurrence of any of the
following:

(1) Any “Person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is or becomes the
“Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing twenty-five percent (25%) or
more of the combined voting power of the Corporation’s then outstanding securities (a
“25% Shareholder”) provided however, that the term 25% Shareholder shall not include
any Person if such Person would not otherwise be a 25% Shareholder but for a reduction
in the number of outstanding voting shares resulting from a stock repurchase program
or other similar plan of the Corporation or from a self-tender offer of the
Corporation, which plan or tender offer commenced on or after the date hereof
provided, however, that the term “25% Shareholder” shall include such Person from and
after the first date upon which (A) such Person, since the date of the commencement of
such plan or tender offer, shall have acquired Beneficial Ownership of, in the
aggregate, a number of voting shares of the Corporation equal

 

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 to one percent (1%) or more of the voting shares of the Corporation then
outstanding, and (B) such Person, together with all affiliates and associates of such
Person, shall Beneficially Own twenty-five percent (25%) or more of the voting shares
of the Corporation then outstanding. In calculating the percentage of the outstanding
voting shares that are Beneficially Owned by a Person for purposes of this subsection
(b)(1), voting shares that are Beneficially Owned by such Person shall be deemed
outstanding, and voting shares that are not Beneficially Owned by such Person and that
are subject to issuance upon the exercise or conversion of outstanding conversion
rights, exchange rights, rights, warrants or options shall not be deemed outstanding.
Notwithstanding the foregoing, if the Board of Directors of the Corporation determines
in good faith that a Person that would otherwise be a 25% Shareholder pursuant to the
foregoing provisions of this subsection has become such inadvertently, and such Person
(a) promptly notifies the Board of Directors of such status and (b) as promptly as
practicable thereafter, either divests of a sufficient number of voting shares so that
such Person would no longer be a 25% Shareholder, or causes any other circumstance,
such as the existence of an agreement respecting voting shares, to be eliminated such
that such Person would no longer be a 25% Shareholder as defined pursuant to this
subsection (b)(1), then such Person shall not be deemed to be a 25% Shareholder for
any purposes of this Agreement. Any determination made by the Board of Directors of
the Corporation as to whether any Person is or is not a 25% Shareholder shall be
conclusive and binding; or

(2) A change in composition of the Board of Directors of the Corporation
occurring any time during a consecutive two-year period as a result of which fewer
than a majority of the Board of Directors are Continuing Directors (for purposes of
this section, the term “Continuing Director” means a director who was either (A) first
elected or appointed as a Director prior to the date of this Agreement; or (B)
subsequently elected or appointed as a director if such director was nominated or
appointed by at least a majority of the then Continuing Directors); or

(3) Any of the following occurs:

(A) a merger or consolidation of the Corporation, other than a merger or
consolidation in which the voting securities of the Corporation immediately
prior to the merger or consolidation continue to represent (either by remaining
outstanding or being converted into securities of the surviving entity) sixty
percent (60%) or more of the combined voting power of the Corporation or
surviving entity immediately after the merger or consolidation with another
entity;

(B) a sale, exchange, or other disposition (in a single transaction or a
series of related transactions) of all or substantially all of the assets of
the Corporation which shall include, without limitation, the sale of assets
aggregating more than fifty percent (50%) of the assets of the Corporation on a
consolidated basis;

(C) a liquidation or dissolution of the Corporation;

(D) a reorganization, reverse stock split, or recapitalization of the
Corporation which would result in any of the foregoing; or

(E) a transaction or series of related transactions having, directly or
indirectly, the same effect as any of the foregoing.

 

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(c) NOTICE OF TERMINATION. “Notice of Termination” means a written notice indicating
the specific termination provision in this Agreement relied upon and, to the extent applicable,
setting forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment under the provision so indicated. Except for a termination for
Cause, any termination of employment by the Company or by the Executive shall be communicated by a
Notice of Termination to the other party thirty (30) days prior to the Termination Date. However,
the Company may elect to
pay the Executive thirty (30) days of Base Salary in lieu of thirty (30) days written notice.
If the Company notifies the Executive that it will pay the Executive in lieu of thirty (30) days
written notice, the Company may deny the Executive further access to the Company’s offices subject
to the Executive’s right to recover any personal effects at an agreed upon time. For purposes of
this Agreement, no such purported termination of employment shall be effective without a Notice of
Termination.

(d) PRO-RATED BONUS AMOUNT. “Pro-Rated Bonus Amount” means any accrued but unpaid
bonus for a completed bonus period, plus a pro-rated portion of the Executive’s semi-annual bonus
calculated as of the Termination Date. The portion of the semi-annual bonus payment shall be the
amount of semi-annual bonus payable to the Executive with respect to the bonus period in which the
Termination Date occurs, based on the actual financial performance of the Company for such bonus
period, pro-rated by multiplying such amount by a fraction, the numerator of which is the number of
days during the bonus period which occur prior to the Termination Date, and the denominator of
which is one hundred eighty-two and one-half (182-1/2).

(e) TERMINATION DATE. “Termination Date” means the date specified in the Notice of
Termination.

3. TERMINATION OF EMPLOYMENT; COMPENSATION UPON TERMINATION

(a) TERMINATION BY COMPANY WITH CAUSE, OR VOLUNTARY TERMINATION BY EXECUTIVE. The
Company shall be entitled to immediately terminate the Executive’s employment for Cause after
giving a Notice of Termination. Such Notice of Termination shall state in detail the particular
act or acts or failure or failure to act that constitute the grounds on which the proposed
termination for Cause is based. The Executive may voluntarily terminate employment for any reason
after giving a Notice of Termination. If the Executive’s employment is terminated by the Company
for Cause, or if the Executive voluntarily terminates employment, subject to the execution by the
Executive and the Company of a mutual release in favor of each of the Parties, the Company’s sole
obligation hereunder shall be to pay or reimburse the Executive (or facilitate a tax qualified
rollover of) the following amounts:

(1) the Executive’s accrued Base Salary and accrued vacation not paid as of the Termination
Date;

(2) the Executive’s vested benefits as of the Termination Date pursuant to the Company’s
benefit, retirement, incentive and other plans; and

(3) any and all monies advanced to or expenses incurred by the Executive pursuant to Section 8
through the Termination Date.

(b) TERMINATION BY COMPANY WITHOUT CAUSE OR UPON A CHANGE IN CONTROL. The Company
may terminate the Executive without Cause after giving a Notice of Termination. If the Executive’s
employment is terminated by the Company (i) without Cause or (ii) at any time six (6) months prior
to a Change in Control if such termination was in contemplation of such Change in Control and was
done to avoid the effects of this Agreement or within twelve (12) months after a Change in Control
(a “Change in Control Termination”), the Company’s sole obligation hereunder shall be to pay,
maintain or reimburse the Executive (or facilitate a tax qualified rollover of) the following
items, which payments shall occur upon the execution by the Executive and the Company of a mutual
release in favor of each of the other:

(1) the Executive’s accrued Base Salary and accrued vacation not paid as of the Termination
Date;

(2) the Executive’s Pro-Rated Bonus Amount;

(3) the Executive’s vested benefits as of the Termination Date pursuant to the Company’s
benefit, retirement, incentive and other plans;

 

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(4) the Company shall continue to pay the Executive one hundred percent (100%) of the Base
Salary for twelve (12) months following the Termination Date if Executive’s employment is
terminated by the Company without Cause, or for twenty-four (24) months following the Termination
Date if a Change in Control Termination occurs, minus the deductions required by law and subject to
a deduction of any salary or compensation that Executive earns from other employment or
self-employment during the time period in question, regardless of when such amount is payable. The
Executive agrees to immediately inform the Company if Executive accepts employment or begins
self-employment during the period of salary payments so that deductions can be made. The continued
payment of the Base Salary hereunder shall be terminated if Executive is found to have violated any
of the covenants set forth in Section 4 herein;

(5) any and all monies advanced to the Company by the Executive or expenses incurred by the
Executive pursuant to Section 1(i) through the Termination Date;

(6) the Company shall maintain in full force and effect for the continued benefit of the
Executive, for a twelve (12) month period after the Termination Date if Executive’s employment is
terminated by the Company without Cause, or for twenty-four (24) months following the Termination
Date if a Change in Control Termination occurs, all medical coverage, programs or arrangements in
which the Executive was participating immediately prior to the Termination Date, provided that
Executive’s continued participation is possible under the general terms and provisions of such
medical plans and programs; provided further, however, that the Company’s obligation to provide
such benefits shall cease upon the earlier of Executive becoming employed or self-employed or the
expiration of Executive’s rights to continue such medical benefits under COBRA; and

(7) expenses for outplacement services up to a maximum amount of ten thousand dollars
($10,000).

The Company and Executive agree that, in the case of a Change in Control Termination, the Base
Salary continuation shall be paid to Executive as follows:

(i) The Company would make bi-weekly payments to Executive beginning on the first pay period
following the date the Termination Date in an amount such that the total of such bi-weekly payments
over twenty-four (24) months would total $460,000 (“Stream One Bi-Weekly Payments”). Subject to
3(b)(4) above, the Stream One Bi-Weekly Payments would continue for a period of twenty-four (24)
months;

(ii) Beginning with the first pay period following six months after the Termination Date, the
Company would make bi-weekly payments to Executive in an amount such that the total of such
bi-weekly payments over twelve (12) months would total the difference between your current Base
Salary for twenty-four months and $460,000 (if any) (“Stream Two Bi-Weekly Payments”). Subject to
3(b)(4) above, the Stream Two Bi-Weekly Payments would continue for a period of twelve (12) months;
and

(iii) The Stream One Bi-Weekly Payments and the Stream Two Bi-Weekly Payments would be subject
to the deductions outlined Paragraph 3(b)(4) of the Agreement.

(c) SECTION 409A COMPLIANCE. The Executive and the Company desire to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in accordance with the
transition rules applicable under IRS Notice 2007-86 and Final Regulations issued under Section
409A of the Code. Therefore, notwithstanding any provision of this Agreement to the contrary, if
the Company determines that Executive is a “specified employee” as defined in Section 409A of the
Code or any guidance promulgated thereunder (“Code Section 409A”), Executive shall not be entitled
to any payments under Section 3(b) of this Agreement after the Termination Date that otherwise
would cause Executive to incur any additional tax or interest under Code Section 409A, until the
earlier of (i) the date which is six months after the Termination Date, or (ii) the date of
Executive’s death. If any provision of this Agreement (or of any award of compensation, including
equity compensation or benefits) would cause Executive to incur any additional tax or interest
under Code Section 409A, the Company shall, after consulting with Executive and receiving
Executive’s approval (which shall not be
unreasonably withheld), reform such provision in such a manner as shall not cause Executive to
incur any such tax or interest.

 

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4. EXECUTIVE COVENANTS.

(a) UNAUTHORIZED DISCLOSURE, NONDISPARAGEMENT. The Executive shall not, during the
term of this Agreement and thereafter, make any disparaging comments which may be harmful to the
Company’s reputation or any Unauthorized Disclosure. For purposes of this Agreement, “Unauthorized
Disclosure” shall mean disclosure by the Executive without the prior written consent of the Board
to any person other than a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of duties as an executive of the Company or as may
be legally required, of any information relating to the business or prospects of the Company
(including, but not limited to, any confidential information with respect to any of the Company’s
customers, products, methods of distribution, strategies, business and marketing plans and business
policies and practices); provided, however, that such term shall not include the use or disclosure
by the Executive, without consent, of any information known generally to the public (other than as
a result of disclosure by the Executive in violation of this Section 4(a)). This confidentiality
covenant has no temporal, geographical or territorial restriction.

(b) NON-COMPETITION. During the Non-Competition Period defined below, the Executive
shall not, directly or indirectly, without the prior written consent of the Company, own, manage,
operate, join, control, be employed by, consult with or participate in the ownership, management,
operation or control of, or be connected with (as a stockholder, partner, or otherwise), any
business, individual, partner, firm, corporation, or other entity that competes or plans to
compete, directly or indirectly, with the Company, its products, or any division, subsidiary or
affiliate of the Company; provided, however, that the “beneficial ownership” by the Executive after
termination of employment with the Company, either individually or as a member of a “group,” as
such terms are used in Rule 13d of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended,(the “Exchange Act”), of not more than two percent (2%) of the voting stock
of any publicly held corporation shall not be a violation of Section 12 of this Agreement.

The “Non-Competition Period” means the period the Executive is employed by the Company plus
one (1) year from the Termination Date.

(c) NON-SOLICITATION. During the No-Raid Period defined below, the Executive shall
not, either directly or indirectly, alone or in conjunction with another party, attempt to recruit
or hire, interfere with or harm, or attempt to interfere with or harm, the relationship of the
Company, its subsidiaries and/or affiliates, with any person who at any time was an employee,
customer or supplier of the Company, its subsidiaries and/or affiliates or otherwise had a business
relationship with the Company, its subsidiaries and/or affiliates.

The “No-Raid Period” means the period the Executive is employed by the Company plus one (1)
year from the Termination Date.

(d) DELIVERY OF DOCUMENTS UPON TERMINATION. The Executive shall deliver to the
Company or its designee at the termination of the Executive’s employment all correspondence,
memoranda, notes, records, drawings, sketches, plans, customer lists, product compositions, and
other documents and all copies thereof, made, composed or received by the Executive, solely or
jointly with others, that are in the Executive’s possession, custody, or control at termination and
that are related in any manner to the past, present, or anticipated business of the Company, its
subsidiaries and/or affiliates. In this regard, the Executive hereby grants and conveys to the
Company all right, title and interest in and to, including without limitation, the right to
possess, print, copy, and sell or otherwise dispose of, any reports, records, papers, summaries,
photographs, drawings or other documents, and writings, and copies, abstracts or summaries thereof,
that may be prepared by the Executive or under the Executive’s direction or that may come into the
Executive’s possession in any way during the term of the Executive’s employment, with the Company
that relate in any manner to the past, present or anticipated business of the Company.

 

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(e) INTELLECTUAL PROPERTY. The Executive shall hold in trust for the benefit of the
Company, and shall disclose promptly and fully to the Company in writing, and hereby assigns, and
binds the Executive’s heirs, executors, and administrators to assign, to the Company any and all
inventions, discoveries, ideas, concepts, improvements, copyrightable works, and other developments
(the “Developments”) conceived, made, discovered or developed by the Executive, solely or jointly
with others, during the term of the Executive’s employment by the Company, whether during or
outside of usual working hours and whether on the Company’s premises or not, that relate in any
manner to the past, present or anticipated business of the Company, its subsidiaries and/or
affiliates. All works of authorship created by the Executive, solely or jointly with others, shall
be considered works made for hire under the Copyright Act of 1976, as amended, and shall be owned
entirely by the Company. Any and all such Developments shall be the sole and exclusive property of
the Company, whether patentable, copyrightable, or neither, and the Executive shall assist and
fully cooperate in every way, at the Company’s expense, in securing, maintaining, and enforcing,
for the benefit of the Company or its designee, patents, copyrights or other types of proprietary
or intellectual property protection for such Developments in any and all countries. Within one (1)
year following the end of the term of this Agreement and without limiting the generality of the
foregoing, any Development of the Executive relating to any subject matter on which the Executive
worked or was informed during the Executive’s employment by the Company shall be conclusively
presumed to have been conceived and made prior to the termination of the Executive’s employment
(unless the Executive clearly proves that such Development was conceived and made following the
termination of the Executive’s employment), and shall accordingly belong and be assigned to the
Company and shall be subject to this Agreement.

(f) REMEDIES. The Executive agrees that any breach of the terms of this Section 4
would result in irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any
threat of breach, the Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any
and all persons and/or entities acting for and/or with the Executive, without having to prove
damages, and to all costs and expenses, including reasonable attorneys’ fees and costs, in addition
to any other remedies to which the Company may be entitled under this Agreement, at law or in
equity. The terms of this paragraph shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including but not limited to the
recovery of damages from the Executive. The Executive and the Company further agree that the
provisions of the covenants not to compete and solicit are reasonable and that the Company would
not have entered into this Agreement but for the inclusion of such covenants herein. Should a
court determine, however, that any provision of the covenants is unreasonable, either in period of
time, geographical area, or otherwise, the parties hereto agree that the covenant should be
interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable.

The provisions of this Section 4 shall survive any termination of this Agreement, and the
existence of any claim or cause of action by the Executive against the Company, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements of this Section 4; provided, however, that this paragraph shall not,
in and of itself, preclude the Executive from defending against the enforceability of the covenants
and agreements of this Section 4.

5. SUCCESSORS AND ASSIGNS.

(a) This Agreement shall be binding upon and shall inure to the benefit of the Company, its
successors and assigns and the Company shall require any successor or assign to expressly assume
and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession or assignment had taken place. The term “the
Company” as used herein shall include any such successors and assigns to the Company’s business
and/or assets. The term “successors and assigns” as used herein shall mean a corporation or other
entity acquiring or otherwise succeeding to, directly or indirectly, all or substantially all the
assets and business of the Company (including this Agreement) whether by operation of law or
otherwise.

 

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(b) Neither this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, the Executive’s beneficiaries or legal representatives, except by
will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s legal personal representative.

6. ARBITRATION. Except with respect to the remedies set forth in Section 4, as the method
for resolving any dispute arising out of this Agreement, the Executive, in the Executive’s sole
discretion, may select binding arbitration in accordance with this Section. Except as provided
otherwise in this Section, arbitration pursuant to this Section shall be governed by the Commercial
Arbitration Rules of the American Arbitration Association. If the Executive wishes to arbitrate an
issue under this Section 6, the Executive shall deliver written notice to the Company, including a
description of the issue to be arbitrated. Within fifteen (15) days after the Executive demands
arbitration, the Company and the Executive shall each appoint an arbitrator. Within fifteen (15)
additional days, these two arbitrators shall appoint the third arbitrator by mutual agreement; if
they fail to agree within this fifteen (15) day period, then the third arbitrator shall be selected
promptly pursuant to the rules of the American Arbitration Association for Commercial Arbitration.
The arbitration panel shall hold a hearing in Columbus, Ohio, within ninety (90) days after the
appointment of the third arbitrator. The fees and expenses of the arbitrators, and any American
Arbitration Association fees, shall be paid by the Company. Both the Company and the Executive may
be represented by counsel and may present testimony and other evidence at the hearing. Within
ninety (90) days after commencement of the hearing, the arbitration panel will issue a written
decision; the majority vote of two of the three arbitrators shall control. The majority decision
of the arbitrators shall be binding on the parties, and the parties may not pursue other available
legal remedies if the parties are not satisfied with the majority decision of the arbitrator. The
Executive shall be entitled to seek specific performance of the Executive’s rights under this
Agreement during the pendency of any dispute or controversy arising under or in connection with
this Agreement.

7. NOTICE. For the purposes of this Agreement, notices and all other communications
provided for in the Agreement (including the Notice of Termination) shall be in writing and shall
be deemed to have been duly given when personally delivered or sent by registered or certified
mail, return receipt requested, postage prepaid, or upon receipt if overnight delivery service or
facsimile is used, addressed as follows:

TO THE EXECUTIVE:

Ronnie Robinson

                                        

                                        

TO THE COMPANY:

Tween Brands, Inc.

8323 Walton Parkway

New Albany, Ohio 43054

Attn: Senior Vice President-Human Resources

8. SETTLEMENT OF CLAIMS. Except as otherwise provided, the Company’s obligation to make
the payments provided for in this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any circumstances, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right which the Company may have against the Executive
or others.

9. MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by the Executive
and the Company. No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement.

 

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10. GOVERNING LAW. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Ohio without giving effect to conflict of law principles
thereof. The parties hereby consent to the exclusive jurisdiction of the state courts of the
State of Ohio and venue in Franklin County, Ohio.

11. SEVERABILITY. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.

12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and the Executive has executed this Agreement as of the day and year first above
written.

	 	 	 	 	 
	 	TWEEN BRANDS, INC.

 	 
	 	By:  	/s/ Michael Rayden
 	 
	 	 	Name:  	Michael Rayden 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Ronnie Robinson
 	 
	 	Ronnie Robinson 	 

 

9Exhibit 10.101 Letter Agreement

Exhibit 10.101

LETTER AGREEMENT

November 26, 2008

Digital Angel Corporation

490 Villaume Avenue

South St. Paul, MN 55075

Attention: President

Re: Amendment to Notes

Ladies and Gentlemen:

Reference is made to (a) the Securities Purchase Agreement dated as of August 31, 2007 between
Digital Angel Corporation f/k/a Applied Digital Solutions, Inc. (the “Company”) and Kallina
Corporation (“Kallina”) (as amended, restated, modified and/or supplemented from time to
time, the “Kallina SPA”); (b) the Secured Term Note dated as of August 31, 2007 from 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 “2007 Kallina Note”); and (c) the other
Related Agreements as defined in the Kallina SPA (collectively with the Kallina SPA, the 2007
Kallina Note and all instruments, documents and agreements related
thereto, the “Existing Kallina Agreements”). Capitalized terms used herein that are not defined shall have the
meanings given to them in the Kallina SPA.

Reference is also made to the (a) the Securities Purchase Agreement dated as of August 24,
2006 between the Company and Laurus Master Fund, Ltd. (“Laurus”) (as amended, restated,
modified and/or supplemented from time to time, the “Laurus SPA”); (b) the Secured Term
Note dated as of August 24, 2006 from the Company in favor of Laurus in the original principal
amount of $13,500,000 (as amended, restated, modified and/or supplemented from time to time, the
“2006 Laurus Note,” and collectively with the 2007 Kallina Note, the “Notes”); and
(c) the other Related Agreements as defined in the Laurus SPA (collectively with the Laurus SPA,
the 2006 Laurus Note and all instruments, documents and agreements related thereto, the
“Existing Laurus Agreements,” and collectively with the Existing Kallina Agreements, the
“Existing Agreements”).

As you are aware, by way of one or more instruments of partial assignment, Kallina’s and
Laurus’ respective rights in and interests under the Existing Kallina Agreements and the Existing
Laurus Agreements, respectively, were assigned to one or more of the following entities: Valens
Offshore SPV II, Corp. (“Valens Offshore II”), Valens U.S. SPV I, LLC (“Valens
U.S.”), Valens Offshore SPV I, Ltd. (“Valens Offshore I”) and PSource Structured Debt
Limited (“PSource,” and collectively with Kallina, Laurus, Valens Offshore II,
Valens U.S. and Valens Offshore I, each a “Laurus/Kallina Related Party” and collectively,
the “Laurus/Kallina Related Parties”).

 

1

 

The Company has requested that the Laurus/Kallina Related Parties amend the Notes and the
Laurus/Kallina Related Parties are willing to do so on the terms and conditions set forth below.

In consideration of the foregoing and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

(a) Subject to satisfaction of the conditions precedent set forth below, the Notes are hereby
amended as follows:

(i) The 2007 Kallina Note is hereby amended by deleting Section 1.3 thereof and replacing such
section in its entirety with the following:

“1.3 Principal Payments. Amortizing payments of the Principal
Amount shall be made by the Company on the first business day of each month
through and including the Maturity Date (each, an “Amortization Date”). The
Company shall make monthly payments to the Holder on each Amortization Date.
Each monthly payment of the outstanding Principal Amount due during the
period commencing December 1, 2008 through and including April 1, 2009 is to
be in the amount of $42,143.61 and each monthly payment of the outstanding
Principal Amount due during the period commencing May 1, 2009 through and
including January 1, 2010 is to he in the amount of $75,095.39, together, in
each case, with any 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.”

(ii) The 2006 Laurus Note is hereby amended by deleting Section 1.3 thereof and replacing
such section in its entirety with the following:

“1.3 Principal Payments. Amortizing payments of the aggregate
principal amount outstanding under this Note at any time (the “Principal
Amount”) shall be made by the Company on the first business day of each month
through and including the Maturity Date (each, an “Amortization Date”). The
Company shall make monthly payments to the Holder on each Amortization Date.
Each monthly payment of the outstanding Principal Amount due during the
period commencing December 1, 2008 through and including April 1, 2009 is to
be in the amount of $66,189.73 and each monthly payment of the outstanding
Principal Amount due during the period commencing May 1, 2009 through and
including January 1, 2010 is to be in the amount of $133,237.95, together, in
each case, with any 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

 

(b) To induce the Laurus/Kallina Related Parties to, among other things, agree to the
amendments set forth above, the Company:

(i) acknowledges, agrees, ratifies and confirms that, in consideration of the amendments set
forth above, the holders of the Notes have earned, and the Company shall pay to such holders, a
payment (the “Deferral Payment”) in the aggregate amount of $800,000 (subject to increase
as set forth in clause (d)(i)(C) below), which Deferral Payment shall be deemed fully earned on the
date hereof and shall not be subject to rebate or proration for any reason. The Deferral Payment
shall be due and payable by the Company to the holders of the Notes ($168,621 to Valens Offshore II
and $631,379 to PSource, or otherwise in accordance with the instructions of LV Administrative
Services, Inc., as the administrative agent for the holders of the Notes (“Agent”)), on the
earliest of (the “Deferral Payment Due Date”): (I) the Maturity Date (as defined in the
Notes), (II) the date on which the Notes are prepaid at the option of the Company or (III) the date
on which the indebtedness evidenced by the Notes is paid in full or otherwise becomes due upon
acceleration after the occurrence of an Event of Default (as defined in each Note). The fair market
value of the Deferral Payment received in consideration of the amendments herein made by holders of
the Notes hereunder shall be treated for U.S. federal income tax purposes as a payment of
additional interest. The parties further agree to file all applicable tax returns in accordance
with such characterization and shall not take a position on any tax return or in any judicial or
administrative proceeding that is inconsistent with such characterization. Notwithstanding the
foregoing, nothing contained in this paragraph shall or shall be deemed to modify or impair in any
manner whatsoever the Company’s obligations from time to time owing to the holders of Notes.

(A) (1) The Company shall have the option (subject to the limitation set forth in clause
(b)(i)(A)(3) below) to pay the Deferral Payment either in cash or in shares of the Company’s common
stock (the “Common Stock”), or a combination of both. The number of shares of Common Stock
to be issued to the holders of the Notes (in their capacity as recipients of such Common Stock,
each a “Stock Recipient”) if the Company elects to issue shares of Common Stock as payment
of some or all of the Deferral Payment shall be based on a twenty percent (20%) discount to the
VWAP of the Common Stock for the ten (10) Trading Days immediately preceding the Deferral Payment
Due Date. “VWAP” means, as of any date of determination, the price determined by the first
of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for such date (or
nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as
reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:00
p.m. Eastern Time); (b) if the Common Stock is not then listed or quoted on a Trading Market and if
prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted average
price of the Common Stock for such date (or nearest preceding date) on the OTC Bulletin Board; (c)
if the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price
per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser selected in good faith by the
Agent. “Trading Day” means (a) a day on which the Common Stock is traded on a Trading
Market, or (b) if the Common Stock is not traded on a Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of reporting prices);
provided, however, that in the event that the Common Stock is not listed or quoted
as set forth in (a) of (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and
any day which shall be a legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close. “Trading
Market” means any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market, the
NASDAQ Global Market, the American Stock Exchange or the New York Stock Exchange. Common Stock to
be issued by the Company as payment of the Deferral Payment shall be
referred to herein as “Deferral Payment Shares.”

 

3

 

(2) In the event that the Company elects, and is permitted by the terms of this Letter
Agreement, to pay any portion of the Deferral Payment by way of the issuance of Common Stock, the
Company shall cause its transfer agent to transmit the certificates representing the Deferral
Payment Shares to the applicable Stock Recipient(s) by crediting the accounts of Stock
Recipient(s)’ designated broker with the Depository Trust Corporation (“DTC”) through its
Deposit Withdrawal Agent Commission (“DWAC”) system, in accordance with the instructions of
Agent, on the Deferral Payment Due Date.

(3) Notwithstanding anything herein to the contrary, in no event shall the Company be entitled
to pay any portion of the Deferral Payment in Common Stock in excess of that portion of the
Deferral Payment upon the payment of which in Common Stock the sum of (x) the number of shares of
Common Stock beneficially owned by the applicable Stock Recipient and its Affiliates (other than
shares of Common Stock which may be deemed beneficially owned through the unexercised or
unconverted portion of any security of the applicable Stock Recipient and its Affiliates subject to
a limitation analogous to the limitations contained herein), and (y) the number of shares of Common
Stock issuable upon the payment of the portion of the Deferral Payment with respect to which the
determination of this proviso is being made would result in beneficial ownership by such Stock
Recipient and its Affiliates of any amount greater than 9.99% of the then outstanding shares of
Common Stock (whether or not, at the time of such issuance, the Stock Recipient and its Affiliates
beneficially own more than 9.99% of the then outstanding shares of Common Stock). As used herein,
the term “Affiliate” means any person or entity that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control with a person or
entity, as such terms are used in and construed under Rule 144 under the Securities Act. For
purposes of the second preceding sentence, beneficial ownership shall be determined in accordance
with Section I3(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G
thereunder, except as otherwise provided in clause (x) of such sentence. For any reason at any
time, upon written or oral request of the Agent, the Company shall within one (1) business day
confirm orally and in writing to the Agent the number of shares of Common Stock outstanding as of
any given date. Any portion of the Deferral Payment which may not be paid in Common Stock as a
result of the application of the terms of this clause (b)(i)(A)(3) shall be paid by the Company in
cash on the Deferral Payment Due Date.

(4) In the event that any Stock Recipient or any assignee of any Stock Recipient attempts to
sell any of the Deferral Payment Shares after the date which is six (6) months from the date such
Deferral Payment Shares shall have been issued to the applicable Stock Recipient and is unable, for
any reason, to do so pursuant to an exemption to registration under Rule 144, the Company shall,
upon demand of a Stock Recipient or any assignee of the Deferral Payment Shares, file a
registration statement within twenty-one (21) days of such demand covering such Deferral Payment
Shares, use its best efforts to have such registration statement become effective within ninety
(90) of its filing (the “90 Day Period”) and enter into a registration rights agreement in
favor of the applicable Stock Recipient and any and all assignees of the Deferral Payment Shares in
form and substance satisfactory to such Stock Recipient and such assignees. The Company’s
obligations under this paragraph shall (i) no longer be required if each Stock Recipient and each
assignee thereof is able to sell the Deferral Payment Shares pursuant to an exemption to
registration under Rule 144 prior to the expiration of the 90 Day Period and (ii) terminate one
year following the issuance of the Deferral Payment Shares so long as each Stock Recipient and each
assignee of the Stock Recipients are, at such date of determination, Rule 144 eligible without any
volume restriction. The failure of the Company to cause the registration statement to become
effective and to remain effective as provided herein shall not convey to any Stock Recipient or any
assignee of the Deferral Payment Shares any rights to the recovery of monetary and or liquidated
damages.

 

4

 

(B) The Company acknowledges, agrees, ratifies and confirms that its failure to pay the
Deferral Payment (whether in cash or by delivery of the original stock certificates evidencing the
Deferral Payment Shares) on or prior to the Deferral Payment Due Date shall constitute an Event of
Default under and as defined in each Existing Agreement where such term is defined; and

(ii) covenants and agrees that, as of the date of the issuance of the Deferral Payment Shares
to the applicable Stock Recipient(s), except as disclosed in the Company’s Exchange Act Filing and
the disclosure schedule attached to the Letter Agreement dated as of September 30, 2008 by and
among the Laurus/Kallina Related Parties, the Company, Destron Fearing Corporation, Digital Angel
Technology Corporation, Digital Angel International, Inc. and Fearing Manufacturing Co. Inc. (the
“September 2008 Omnibus Amendment Letter”) (A) other than the Deferral Payment Shares,
there shall be no outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any
kind for the purchase or acquisition from the Company of any of its securities, (B) the issuance of
the Deferral Payment Shares will not result in a change in the price or number of any securities of
the Company outstanding under anti-dilution or other similar provisions contained in or affecting
any such securities, (C) all issued and outstanding shares of the Company’s common stock shall have
been duly authorized and validly issued and shall be fully paid and nonassessable, (D) the rights,
preferences, privileges and restrictions of the shares of the Company’s common stock shall he as
stated in the Company’s Certificate of Incorporation as amended through the date hereof, (E) the
Deferral Payment Shares shall be validly issued, fully paid and nonassessable, and will be free of
any liens or encumbrances, (F) the Deferral Payment Shares shall not be subject to any preemptive
rights or rights of first refusal that shall not have not been properly waived or complied with and
(G) all issued and outstanding shares of the Company’s capital stock shall have been and shall be
issued in compliance with all applicable state and federal laws concerning the issuance of
securities.

(c) To induce the Laurus/Kallina Related Parties to, among other things, agree to the
amendments set forth above, each of the undersigned (other than the Laurus/Kallina Related
Parties):

(i) acknowledges, agrees, ratifies and confirms that all of the terms, conditions,
representations and covenants contained in the Existing Agreements to which it is a party are in
full force and effect and shall remain in full force and effect after giving effect to the
execution and effectiveness of this letter agreement (this “Letter Agreement”);

(ii) acknowledges, agrees, ratifies and confirms that the defined term “Obligations” under the
Master Security Agreement dated August 31 2007 from the Company in favor of Kallina, the Stock
Pledge Agreement dated as of August 31, 2007 by and among Kallina, the Company, Computer Equity
Corporation, Destron Fearing Corporation f/k/a Digital Angel Corporation and Digital Angel
Technology Corporation, the Master Security Agreement dated August 24, 2006 from the Company in
favor of Laurus and the Stock Pledge Agreement dated as of August 24, 2006 by and between Laurus
and the Company, each as amended, restated, modified and/or supplemented from time to time,
include, without limitation, all obligations and liabilities of the Company under this Letter
Agreement;

(iii) acknowledges, agrees, ratifies and confirms that (A) the occurrence of a breach and/or
an Event of Default under this Letter Agreement shall constitute a breach and/or an Event of
Default under each of the Existing Agreements and (B) the occurrence of a breach and/or an Event of
Default under any of the Existing Agreements shall constitute a breach and/or an Event of Default
under this Letter Agreement;

(iv) represents and warrants that no offsets, counterclaims or defenses exist as of the date
hereof with respect to the undersigned’s obligations under the Existing Agreements to
which they are a party;

 

5

 

(v) acknowledges, agrees, ratifies and confirms (A) that the security interest grants and
pledges to each of Kallina and Laurus set forth in the Existing Agreements extend to each
Laurus/Kallina Related Party, as assignees of Kallina and Laurus or their assignees, to the extent
such Laurus/Kallina Related Parties have heretofore been assigned an interest in an Existing
Agreement, (B) that the grant by the Company and each of the undersigned parties which have granted
a security interest to Kallina and/or Laurus and/or any of the other Laurus/Kallina Related Parties
under the Existing Agreements (each, a “Security Party” and collectively, the “Security
Parties”) extends to and covers all assets (including, without limitation, the equity interests
owned by such Security Party) of each Security Party as more specifically set forth in the Existing
Agreements and this Letter Agreement, as applicable (the “Security Interest Grants”), (C)
that the Security Interest Grants secure all obligations and liabilities of each of the undersigned
to any Laurus/Kallina Related Party under each Existing Agreement and this Letter Agreement
(including interest accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or
post-petition interest is allowed or allowable in such proceeding), whether now existing or
hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent
(collectively, the “Obligations”); and (D) that each Laurus/Kallina Related Party has all
rights and remedies of a secured creditor under the Existing Agreements, this Letter Agreement,
applicable law and in equity. To the extent not otherwise granted by the terms of the Existing
Agreements and to secure all Obligations, each Security Party grants to each Laurus/Kallina Related
Party a security interest in all cash, cash equivalents, accounts, accounts receivable, deposit
accounts, inventory, equipment, goods, fixtures, documents, instruments (including, without
limitation, promissory notes and equity securities), contract rights, general intangibles
(including, without limitation, payment intangibles), chattel paper, supporting obligations,
investment property, letter-of-credit rights, trademarks, trademark applications, tradestyles,
patents, patent applications, copyrights, copyright applications and other intellectual property in
which each Security Party now has or hereafter may acquire any right, title or interest, all
proceeds and products thereof (including, without limitation, proceeds of insurance) and all
additions, accessions and substitutions thereto or therefor;

(vi) represents and warrants that except as disclosed in the disclosure schedule attached to
the September 2008 Omnibus Amendment Letter (A) all of the representations made by or on behalf of
the undersigned in the Existing Agreements to which it is a party are true and correct in all
material respects on and as of the date hereof, (B) each of the undersigned has the corporate power
and authority to execute and deliver this Letter Agreement; (C) all corporate action on the part of
each of the undersigned (including their respective officers and directors) necessary for the
authorization of this Letter Agreement, the performance of all obligations of the undersigned
hereunder and, the authorization, issuance and delivery of the Deferral Payment Shares has been
taken; and (D) this Letter Agreement, when executed and delivered, will be valid and binding
obligations of the undersigned; and

(vii) releases, remises, acquits and forever discharges each Laurus/Kallina Related Party and
its respective employees, agents, representatives, consultants, attorneys, fiduciaries, officers,
directors, partners, predecessors, successors and assigns, subsidiary corporations, parent
corporations, and related corporate divisions (all of the foregoing hereinafter called the
“Released Parties”), from any and all actions and causes of action, judgments, executions,
suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every
character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, for or because of any matter or things done, omitted or suffered to be done by any of the
Released Parties prior to and including the date of execution hereof, and in any way directly or
indirectly arising out of or in any way connected to this letter agreement, the Existing
Agreements, this Letter Agreement and any other document, instrument or agreement made by the
undersigned in favor of a Laurus/Kallina Related Party.

 

6

 

(d) (i) As partial consideration for the Laurus/Kallina Related Parties giving their consent
to Florida Decision Corporation, formerly Pacific Decision Sciences Corporation (“FDC”), to
sell substantially all of their assets to Customer Service Delivery Platform Corporation
(“CSDPC”), as more fully described in that certain Consent and Agreements Regarding Asset
Sale dated as of June 2, 2008 by and among the Laurus/Kallina Related Parties, Agent, the Company
and FDC (“FDC Asset Sale Consent”), FDC and the Company collaterally assigned to Agent, for
the benefit of certain of the Laurus/Kallina Related Parties, all of their respective rights in, to
and under, among other instruments and agreements, that certain Secured Promissory Note dated June
2, 2008 from CSDPC in favor of FDC in the original principal amount of $1,800,000 (the “FDC
Note”) pursuant to that certain Collateral Assignment dated as of June 2, 2008 by FDC and D1GA
to Agent (the “Collateral Assignment”). FDC and DIGA have informed Agent that they would
like to negotiate with CSDPC a proposed discounted lump sum payment in full satisfaction of the FDC
Note (the “Compromise”) which, the Company and FDC acknowledge, requires the consent of
Agent pursuant to the terms of the Collateral Assignment. Agent hereby agrees that it shall consent
to a discounted prepayment of the FDC Note provided all of the following terms and conditions have
been satisfied (as determined by Agent in its sole discretion):

(A) the discounted amount to be paid in satisfaction of the FDC Note (the “Compromise
Payment”) shall be not less than seventy percent (70%) of the unpaid principal balance of the
FDC Note at the time of the making of such Compromise Payment;

(B) the Company and FDC shall direct the payor of the Compromise Payment to pay the Compromise
Payment directly to Agent in accordance with the wiring instructions attached hereto as Exhibit
A or such other wiring instructions as supplied to the Company by Agent and shall not instruct,
cause or permit any payment of the Compromise Payment to be made to any other Person other than
Agent without Agent’s prior written consent; and

(C) the amount of the Deferral Payment shall, effective contemporaneously with the Company
and/or FDC entering into an agreement concerning a Compromise; automatically and without the need
for any further agreement on the part of the Company or any further action on the part of any
Laurus/Kallina Related Party, be deemed increased by an additional amount of $75,000, with such
amount being deemed fully earned at such time and thereupon not subject to rebate or proration for
any reason. All provisions of this Letter Agreement referring to the Deferral Payment shall be
deemed to refer to the Deferral Payment as increased, if applicable, pursuant to the terms of this
clause (d)(i)(C). The allocation of the Deferral Payment among the holders of the Notes set forth
in clause (b)(i) above shall be adjusted to reflect a ratable allocation of the additional amount
required to be paid pursuant to the terms of this clause (d)(i)(C) based on the respective
percentage interests the then current holders of the Notes have in such Notes at the time such
amounts are deemed earned in accordance with this clause (d)(i)(C).

(ii) Provided no Event of Default shall have occurred and be continuing under and as defined
in any of the Existing Agreements at the time of Agent’s receipt of the Compromise Payment, in
good, cleared funds, Agent shall remit to FDC an amount (the “FDC Retention Amount”)
equal to the difference between the amount of the Compromise Payment so received by Agent and
$150,000. All amounts paid to Agent on account of the Compromise Payment which Agent is not
required to remit to FDC in accordance with the preceding sentence (including any payments received
after the occurrence and during the continuance of any Event of Default under and as defined in any
of the Existing Agreements) shall be applied against the then outstanding indebtedness evidenced by
the Notes in such manner as the Agent shall elect in its sole discretion.

(iii) Any amounts received by either the Company or FDC on account of the Compromise Payment
shall be held in trust for the benefit of Agent and shall be immediately remitted by such recipient
to Agent in the folic, received.

 

7

 

(e) This Letter Agreement shall become effective upon satisfaction of the following conditions
precedent: (i) such certificates, instruments, documents, agreements and opinions of counsel as may
be required by the Laurus/Kallina Related Parties or their counsel, each of which shall be in form
and substance satisfactory to the Laurus/Kallina Related Parties and their counsel, shall have been
delivered to the Laurus/Kallina Related Parties, and (ii) the Company shall have reimbursed the
Laurus/Kallina Related Parties for the full amount of all of the Laurus/Kallina Related Parties’
attorneys’ fees and costs incurred in connection with the preparation and negotiation of this
Letter Agreement and in connection with the closing of the transactions described herein and
therein by wire transfer of such amounts pursuant to the wiring instructions set forth on
Exhibit A.

(f) Nothing contained herein shall (i) limit in any manner whatsoever the Company’s, each
guarantor’s and each other Person’s obligation to comply with, and the Laurus/Kallina Related
Parties’ right to insist on the Company’s, such guarantor’s and such other Person’s compliance
with, each and every term of the Existing Agreements and this Letter Agreement, or (ii) constitute
a waiver of any Event of Default or any right or remedy available to any Laurus/Kallina Related
Party, or of the Company’s, any guarantor’s or any other Person’s obligation to pay and perform all
of its obligations, in each case whether arising under the Existing Agreements, this Letter
Agreement, applicable law and/or in equity, all of which rights and remedies howsoever arising are
hereby expressly reserved, are not waived and may be exercised by any Laurus/Kallina Related Party
at any time.

(g) The Company acknowledges that it has an affirmative obligation to make prompt public
disclosure of material agreements and material amendments to the Existing Agreements. The Company
intends to file a Folio 8-K with respect to the transactions contemplated by this letter agreement
no later than four (4) Business Days following the date hereof, a copy of which shall be delivered
to the Laurus/Kallina Related Parties.

(h) Except as specifically amended herein, the Existing Agreements 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 any
Laurus/Kallina Related Party, nor constitute a waiver of any provision of any of the Existing
Agreements. 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.

(i) 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 transmission shall be
deemed to be an original signature hereto.

[SIGNATURE PAGES FOLLOW]

 

8

 

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	LAURUS MASTER FUND, LTD	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Laurus Capital Management LLC,	 	 
	 

	 	 	 	its investment manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Scott Bluestein
 

Name: Scott Bluestein
	 	 
	 

	 	 	 	Title:   Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	KALLINA CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Laurus Capital Management LLC,	 	 
	 

	 	 	 	its investment manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Scott Bluestein
 

Name: Scott Bluestein
	 	 
	 

	 	 	 	Title:   Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	VALENS U.S. SPV I, LLC	 	 
	 	 	VALENS OFFSHORE SPV I, LTD.	 	 
	 	 	VALENS OFFSHORE SPV II, CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Valens Capital Management LLC,	 	 
	 

	 	 	 	its investment manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Scott Bluestein
 

Name: Scott Bluestein
	 	 
	 

	 	 	 	Title:   Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	LV
ADMINISTRATIVE SERVICES, INC.
 as
Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Scott Bluestein	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Scott Bluestein	 	 
	 

	 	 	 	Title:   Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	PSOURCE STRUCTURED DEBT LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	PSource Capital Limited, its	 	 
	 

	 	 	 	investment manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Gilfillan	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John Gilfillan	 	 
	 

	 	 	 	Title:   Authorized Signatory	 	 

 

9

 

	 	 	 	 	 
	CONSENTED AND AGREED TO:	 	 
	 
	 	 	 	 
	DIGITAL ANGEL CORPORATION

(f/k/a Applied Digital Solutions, Inc.)	 	 
	 
	 	 	 	 
	By:

	 	/s/ Lorraine M. Breece
 

Name: Lorraine M. Breece
	 	 
	 

	 	Title:   SVP, CFO	 	 
	 
	 	 	 	 
	DESTRON FEARING CORPORATION

(f/k/a Digital Angel Corporation)	 	 
	 
	 	 	 	 
	By:

	 	/s/ Lorraine M. Breece	 	 
	 

	 	 	 	 
	 

	 	Name: Lorraine M. Breece	 	 
	 

	 	Title:   SVP, CFO	 	 
	 
	 	 	 	 
	DIGITAL ANGEL TECHNOLOGY CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	/s/ Lorraine M. Breece	 	 
	 

	 	 	 	 
	 

	 	Name: Lorraine M. Breece	 	 
	 

	 	Title:   SVP, CFO	 	 
	 
	 	 	 	 
	DIGITAL ANGEL INTERNATIONAL, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Lorraine M. Breece	 	 
	 

	 	 	 	 
	 

	 	Name: Lorraine M. Breece	 	 
	 

	 	Title:   SVP, CFO	 	 
	 
	 	 	 	 
	FEARING MANUFACTURING CO. INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Patricia M. Petersen	 	 
	 

	 	 	 	 
	 

	 	Name: Patricia M. Petersen	 	 
	 

	 	Title:   Secretary	 	 
	 
	 	 	 	 
	FLORIDA DECISION CORPORATION

(f/k/a Pacific Decision Sciences Corporation)	 	 
	 
	 	 	 	 
	By:

	 	/s/ Patricia M. Petersen	 	 
	 

	 	 	 	 
	 

	 	Name: Patricia M. Petersen	 	 
	 

	 	Title:   Secretary	 	 

 

10

 

EXHIBIT A

Wiring Instructions

Capital One Bank NA

404 Fifth Ave, New York, NY

ABA# 021407912

LV Administrative Services

Account #270-406-0132

Reference: DIGA

 

11

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