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Exhibit 10.25    
    

 
 

ACCELRYS, INC.    
    
    EMPLOYMENT AGREEMENT    
    

        This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of September 13, 2004 and effective as of
the Effective Time as defined in the Merger Agreement (as defined below) (the "Effective Date") by and between Accelrys, Inc. (the
"Company") and Mathew Hahn ("Employee"). 

        WHEREAS,
prior to the Effective Date, Employee was the Chief Executive Officer of Scitegic, Inc. ("Scitegic"); 

        WHEREAS,
at the Effective Time (as defined in the Merger Agreement), Nashville Acquisition Company, a California corporation ("Merger
Sub"), will be merged with and into Scitegic (the "Merger") pursuant to that certain Agreement and Plan of Merger and
Reorganization, dated as of September 13, 2004, by and among the Company, Merger Sub, Scitegic, Employee and the other parties thereto (the "Merger
Agreement"); 

        WHEREAS,
as a condition precedent to its obligations pursuant to the Merger Agreement, the Company has required the execution and delivery of this Agreement by Employee; and 

        WHEREAS,
following the Effective Time, the Company desires to retain Employee's services to facilitate the conduct of the Company's business. 

        NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows: 

        1.    Position and Duties.    

        a.     As
of the Effective Date, Employee will serve as a Vice President of the Company. As of the Effective Date, Employee shall also serve as General Manager of the Scitegic
business division. Employee will render such business and professional services in the performance of his duties, consistent with Employee's position within the Company, as shall reasonably be
assigned to him by Employee's then current direct manager or the Company's Chief Executive Officer (as of the date hereof, Mark Emkjer). Employee acknowledges that Employee's duties and
responsibilities may be changed by the Company to other duties and responsibilities typically reserved for executives of the Company, which change(s) shall not give rise to any rights to Employee in
connection with any Employee resignation for Good Reason (as defined below). The period of Employee's employment under this Agreement is referred to herein as the "Employment
Term." 

        b.     During
the Employment Term, Employee will devote Employee's full business time and best efforts to the performance of Employee's duties hereunder and will not engage in
any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior
written consent of the Company's Chief Executive Officer (as of the date hereof, Mark Emkjer); provided,  however, that nothing herein shall preclude
Employee from (i) performing his responsibilities as the Shareholder Representative as contemplated
under the Merger Agreement, or (ii) subject to the prior approval of the Company's Chief Executive Officer (as of the date hereof, Mark Emkjer), accepting appointment to any board of directors
or trustees of any business corporation; provided further, in each case, and in the aggregate, that such activities do not conflict or interfere in any
material respect with the performance of Employee's duties hereunder or under the Confidential Information Agreement (as defined below) or Protective Covenant Agreement (as defined below). 

        2.    Base Salary.    From the Effective Date through March 31, 2005, the Company shall pay Employee a base
salary at the annual rate of $209,000, payable in regular installments in accordance with the Company's usual payment practices and be subject to the usual, required withholding. From April 1,
2005 to the end of the Employment Term, the Company shall pay Employee a base salary at the annual rate of $230,000, subject to any increase or decrease as determined by the Company, 

 

payable
in regular installments in accordance with the Company's usual payment practices and be subject to the usual, required withholding; provided,  however that
from April 1, 2005 through the earlier of (i) the end of the Employment Term or (ii) September 30, 2006,
Employee's base salary shall be no less than an annual rate of $230,000. Employee's annual base salary, as in effect from time to time, is hereinafter referred to as the "Base
Salary." 

        3.    Annual Bonus.    

        a.     For
the period from the Effective Date to December 31, 2004 (the "2004 Bonus Period"), Employee shall be eligible
to earn a bonus award equal to the product of (X) $100,500 multiplied by (Y) the quotient obtained by dividing (i) the dollar amount of bookings in calendar year 2004 by customers
of the Scitegic business division for Scitegic products and services by (ii) $[10,400,000] [get exact number from Scitegic Board Plan—this number
will be the target amount of bookings for calendar year 2004]. 

        b.     For
the period from January 1, 2005 to March 31, 2005 (the "Q4 2004 Period" and together with the 2004 Bonus
Period, the "Periods"), Employee shall be eligible to earn a bonus award equal to the product of (X) $37,500 multiplied by (Y) the
quotient obtained by dividing (i) the dollar amount of bookings in the Q4 2004 Period by customers of the Scitegic business division for Scitegic products and services by (ii) a target
dollar amount of bookings in the Q4 2004 Period, determined by the Company in its sole discretion, by customers of the Scitegic business division for Scitegic products and services. 

        c.     With
respect to each full fiscal year of the Company commencing on April 1, 2005, Employee shall be eligible to earn an annual bonus award (an
"Annual Bonus") in an amount to be determined by the Company; each Annual Bonus shall be in a target amount of 30% of Employee's then current Base
Salary. In addition, Employee may, subject to the Company's determination, earn an additional amount up to 25% of the Annual Bonus for each such fiscal year. Currently, the Company's bonus plan is
based upon the achievement of corporate objectives and any payments thereunder are determined in the sole discretion of the Board of Directors of the Company (the
"Board"). Employee must be continuously employed by the Company during each Period and fiscal year to receive the bonus award for each such Period or
fiscal year, respectively; no bonus award will be earned in the event Employee is not so continuously employed during such Period or fiscal year, respectively. 

        4.    Stock Option.    Subject to Board approval, Employee will be granted a stock option to purchase 50,000 shares of
the Company's Common Stock at an exercise price equal to the then current fair market value per share, as reflected in the closing price quoted on the Nasdaq Stock Market on the date of grant (the
"Option"). The Option will vest twenty five percent twelve months after the Effective Date, and as to 1/48th of the shares subject to the Option monthly
thereafter, so that the Option will be fully vested and exercisable four (4) years from the date of grant, subject to Employee's continued service to the Company through each of the relevant
vesting dates. The Option will be subject to the terms, definitions and provisions of the Company's Employee New Hire Stock Plan and the stock option agreement by and between Employee and the Company
(the "Option Agreement"), which documents are incorporated herein by reference. In addition, the Company will request, as soon as administratively
possible, approval of its Board of Directors, to the extent necessary, to permit Employee to exercise the Option and sell shares thereunder pursuant to and in compliance with
Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended, if possible. 

        5.    Employee Benefits.    During the Employment Term, Employee shall be eligible to participate in and receive
benefits under the Company's employee benefit plans (other than annual bonus and incentive plans) as in effect from time to time (collectively "Employee
Benefits"), on the same basis as those benefits are generally made available to other executives of the Company. 

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        6.    Business Expenses.    During the Employment Term, reasonable business expenses incurred by Employee in the
performance of Employee's duties hereunder shall be promptly reimbursed by the Company in accordance with Company policies. 

        7.    Termination.    Employee's employment hereunder may be terminated by either party at any time and for any
reason; provided, however, that Employee will be required to give the Company at least 60 days
advance written notice of any resignation of Employee's employment. Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Employee's
rights upon termination of employment with the Company and its affiliates. 

        a.    By the Company For Cause or By Employee Resignation Without Good Reason.    

          (i)  Employee's
employment hereunder may be terminated by the Company for Cause (as defined below) and shall terminate automatically upon Employee's resignation without Good
Reason (as defined in Section 7(c)); provided that Employee will be required to give the Company at least 60 days advance written notice
of a resignation without Good Reason. 

         (ii)  For
purposes of this Agreement, "Cause" shall mean (A) Employee's continued willful failure substantially to
perform Employee's duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company to
Employee of such failure, (B) material dishonesty in dealings with the Company or in the performance of Employee's duties hereunder, (C) an act or acts on Employee's part constituting a
felony under the laws of the United States or any state thereof, (D) Employee's willful malfeasance or willful misconduct in connection with Employee's duties hereunder or in dealings with the
Company or any intentional act or omission of Employee which is materially injurious to the financial condition or business reputation of the Company or any of its subsidiaries or affiliates,  provided
that no act or omission on the part of Employee shall be deemed to constitute "Cause" under this clause (D) if committed at the
direction of the Board or otherwise by Employee in good faith and in the reasonable belief that such act or omission is in the Company's best interest, or (E) Employee's continuous material
breach of the provisions of the Confidential Information Agreement or Protective Covenant Agreement for a period of 10 days following written notice by the Company to Employee of such material
breach. 

        (iii)  If
Employee's employment is terminated by the Company for Cause, or if Employee resigns without Good Reason, Employee shall be entitled to receive: 

        (A)  the
Base Salary through the date of termination; 

        (B)  reimbursement
for any unreimbursed business expenses properly incurred by Employee in accordance with Company policy prior to the date of Employee's termination; and 

        (C)  such
Employee Benefits, if any, as to which Employee may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) through
(C) hereof being referred to as the "Accrued Rights"). 

        (iv)  Following
a termination of Employee's employment by the Company for Cause or resignation by Employee without Good Reason, except as set forth in
Section 7(a)(iii), Employee shall have no further rights to any compensation or any other benefits under this Agreement. 

        b.    Disability or Death.    

          (i)  The
Employment Term and Employee's employment hereunder shall terminate upon Employee's death and, upon notice as provided in the next succeeding sentence, may be 

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terminated
by the Company if Employee becomes physically or mentally incapacitated and is therefore unable for a period of 183 consecutive days or for an aggregate of 270 days in any
twenty-four (24) consecutive month period to perform Employee's duties (such incapacity is hereinafter referred to as "Disability").
Termination for Disability shall be effected by delivery of written notice to Employee at least 30 days prior to the date of termination stated therein;  provided, however, that if Employee resumes the performance of substantially all of his duties hereunder
before his incapacity constitutes "Disability", the notice of termination shall automatically be deemed to have been revoked. Any question as to the existence of the Disability of Employee as to which
Employee and the Company cannot agree shall be determined in writing by a qualified licensed independent physician mutually acceptable to Employee and the Company. If Employee and the Company cannot
agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of
Disability made in writing to the Company and Employee shall be final and conclusive for all purposes of the Agreement. 

         (ii)  Upon
termination of Employee's employment hereunder for either Disability or death, Employee or Employee's estate (as the case may be) shall be entitled to receive the
Accrued Rights. 

        (iii)  Following
Employee's termination of employment due to death or Disability, except as set forth in Section 7(b)(ii), Employee shall have no further rights to any
compensation or any other benefits under this Agreement. 

        c.    By the Company Without Cause or Resignation by Employee for Good Reason.    

          (i)  Employee's
employment hereunder may be terminated by the Company without Cause or by Employee's resignation for Good Reason. 

         (ii)  For
purposes of this Agreement, "Good Reason" shall mean (A) the failure of the Company to pay or cause to be
paid Employee's Base Salary or Annual Bonus, when due hereunder, or any other continuous material breach of this Agreement by the Company for a period of 10 days following written notice by the
Employee to the Company of such material breach, (B) any substantial and sustained diminution in Employee's authority or responsibilities consistent with Employee's position within the Company
(or, in the case of a Change of Control of the Company, the acquiring company); provided that (i) any such diminution as part of a
Company-wide reduction in force or reorganization and (ii) in the case of a Change of Control of the Company, any such diminution resulting solely from the Company being acquired by
and made a part of a larger entity (as, for example, when a chief financial officer becomes an employee of the acquiring company following a Change of Control but is not the chief financial officer of
the acquiring company) shall not constitute Good Reason, (C) the relocation of Employee's principal place of employment hereunder to a location more than 50 miles from Employee's then present
principal place of employment, without Employee's express written consent, or (D) the failure of the Company to obtain the assumption of its obligations under this Agreement by any successor of
the Company; provided, however, that any of the events described in clauses (A), (B), (C) or
(D) of this Section 7(c)(ii) shall constitute Good Reason only if the Company fails to cure such event within 30 days after receipt from Employee of written notice of the
event which constitutes Good Reason; provided, further, that "Good Reason" shall cease to exist for an
event on the 90th day following the later of its occurrence or Employee's knowledge thereof, unless Employee has given Company written notice thereof prior to such date. 

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        (A)  For
purposes of this Agreement, "Change of Control" of means: 

        (1)   any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then
outstanding voting securities; 

        (2)   the
consummation of a merger or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger or
consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company; or 

        (3)   the
consummation of the sale or disposition by the Company of all or substantially all the Company's assets. 

        (iii)  If
Employee's employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Employee resigns for Good Reason, Employee
shall be entitled to receive: 

        (A)  the
Accrued Rights; and 

        (B)  subject
to Employee's execution of a general release of claims containing customary provisions and reasonably acceptable to the Company and Employee's continued
compliance with the provisions of the Confidential Information Agreement, continued payment of the Base Salary for a six month period following the date of such termination (such period, the
"Severance Period"); provided, however, that the
aggregate amount described in this clause (iii) shall be reduced by the present value of any other cash severance or termination benefits payable to Employee under any other plans, programs or
arrangements of the Company or its affiliates. 

        (iv)  Following
Employee's termination of employment by the Company without Cause (other than by reason of Employee's death or Disability) or by Employee's designation for
Good Reason, except as set forth in Section 7(c)(iii), Employee shall have no further rights to any compensation or any other benefits under this Agreement. 

        d.    Notice of Termination.    Any purported termination of employment by the Company or by Employee (other than due
to Employee's death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 10(h) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated. 

        8.    Confidentiality; Intellectual Property; Protective Covenants.    Employee agrees to enter into (i) the
Company's standard Confidential Information and Invention Assignment Agreement (the "Confidential Information Agreement") and (ii) a Protective
Covenant Agreement (the "Protective Covenant Agreement") upon commencing employment hereunder. 

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        9.    Arbitration.    

        a.    General.    In consideration of Employee's service to the Company, its promise to arbitrate all employment
related disputes and Employee's receipt of the compensation, pay raises and other benefits paid to Employee by the Company, at present and in the future, Employee agrees that any and all
controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising
out of, relating to, or resulting from Employee's service to the Company under this Agreement or otherwise or the termination of Employee's service with the Company, including any breach of this
Agreement, will be subject to binding arbitration under the Arbitration Rules set forth in California Code of Civil Procedure Section 1280 through 1294.2, including Section 1283.05 (the
"Rules") and pursuant to California law and held in the county of San Diego. Disputes which Employee agrees to arbitrate, and thereby agrees to waive
any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the California Fair Employment and Housing Act, the California Labor Code, claims
of harassment, discrimination or wrongful termination and any statutory claims. Employee further understands that this Agreement to arbitrate also applies to any disputes that the Company may have
with Employee. 

        b.    Procedure.    Employee agrees that any arbitration will be administered by the American Arbitration Association
("AAA") and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes. The
arbitration proceedings will allow for discovery according to the rules set forth in the National Rules for the Resolution of Employment Disputes or California Code of Civil
Procedure. Employee agrees that the arbitrator will have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or
adjudication and motions to dismiss and demurrers, prior to any arbitration hearing. Employee agrees that the arbitrator will issue a written decision on the merits. Employee also agrees that the
arbitrator will have the power to award any remedies, including attorneys' fees and costs, available under applicable law. Employee understands the Company will pay for any administrative or hearing
fees charged by the arbitrator or AAA except that Employee will pay the first $125.00 of any filing fees associated with any arbitration Employee initiates. Employee agrees that the arbitrator will
administer and conduct any arbitration in a manner consistent with the Rules and that to the extent that the AAA's National Rules for the Resolution of Employment Disputes conflict with the Rules, the
Rules will take precedence. 

        c.    Remedy.    Except as provided by the Rules, arbitration will be the sole, exclusive and final remedy for any
dispute between Employee and the Company. Accordingly, except as provided for by the Rules, neither Employee nor the Company will be permitted to pursue court action regarding claims that are subject
to arbitration. Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to
adopt a policy not otherwise required by law which the Company has not adopted. 

        d.    Availability of Injunctive Relief.    In addition to the right under the Rules to petition the court for
provisional relief, Employee agrees that any party may also petition the court for injunctive relief where either party alleges or claims a violation of this Agreement, the Confidential Information
Agreement, the Protective Covenant Agreement or any other agreement regarding trade secrets, confidential information, nonsolicitation or Labor Code §2870. In the event either party seeks
injunctive relief, the prevailing party shall be entitled to reasonable costs, expenses and attorneys' fees incurred in such action. 

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        e.    Administrative Relief.    Employee understands that this Agreement does not prohibit Employee from pursuing an
administrative claim with a local, state or federal administrative body such as the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission or the workers' compensation
board. This Agreement does, however, preclude Employee from pursuing court action regarding any such claim. 

        f.    Voluntary Nature of Agreement.    Employee acknowledges and agrees that Employee is executing this Agreement
voluntarily and without any duress or undue influence by the Company or anyone else. Employee further acknowledges and agrees that Employee has carefully read this Agreement and that Employee has
asked any questions needed for Employee to understand the terms, consequences and binding effect of this Agreement and fully understand it, including that Employee is waiving Employee's right to a
jury trial. Finally, Employee agrees that Employee has been provided an opportunity to seek the advice of an attorney of Employee's choice before signing this Agreement. 

        10.    Miscellaneous.    

        a.    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of
California, without regard to conflicts laws principles thereof. 

        b.    Entire Agreement; Amendments.    This Agreement, together with the Merger Agreement, Stock Option Agreement,
Confidential Information Agreement, Protective Covenant Agreement and any other
agreements referred to therein, contains the entire understanding of the parties with respect to the employment of Employee by the Company and supersedes and replaces any and all prior or
contemporaneous agreements between the parties (and any predecessors thereto) whether written or oral. There are no restrictions, agreements, promises, warranties, covenants or undertakings between
the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended accept by written instrument signed by the
parties hereto. 

        c.    No Waiver.    The failure of a party to insist upon strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver of such party's rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. 

        d.    Severability.    In the event that any one or more of the provisions of this Agreement shall be or become
invalid, illegal or unenforceable in any aspect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. 

        e.    Assignment.    This Agreement and all of Employee's rights and duties hereunder, shall not be assignable or
delegable by Employee. Any purported assignment or delegation by Employee in violation of the foregoing shall be null and void ab initio and of no force
and effect. This Agreement may be assigned by the Company to a person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company. Upon
such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor or person or entity. 

        f.    Set Off; Mitigation.    Subject to Section 2.6 of the Merger Agreement, the Company's obligation to pay
Employee the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Employee to the Company or its
affiliates. Anything in this Agreement to the contrary notwithstanding, in the event that Employee provides services for pay (other than pursuant to a consulting or dependent contractor relationship)
to anyone other than the Company or any of its affiliates from the date Employee's employment hereunder is terminated until the end of the Restricted Period and Employee's employment is terminated
pursuant to Section 7(c)(iii), the amounts paid to 

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Employee
during such period pursuant to Section 7(c)(iii)(B) shall be reduced (or if paid to Employee, refunded to the Company by Employee) by the amounts of salary, bonus or other cash or kind
compensation earned by, or granted to Employee during such period as a result of Employee's performing such services (regardless of when such earned amounts are actually paid to Employee). 

        g.    Successors: Binding Agreement.    This Agreement shall inure to benefit of and be binding upon personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If Employee should die while any amounts are still payable to Employee hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to
Employee's devisee, legatee, or other designee or, if there be no such designee, to Employee's estate. 

        h.    Notice.    For the purpose of this Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or within three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective only upon receipt. 

If
to the Company: 

Accelrys, Inc.

9685 Scranton Road

San Diego, CA 92121-3752

Attention: Chief Executive Officer 

With
a copy to: 

Wilson
Sonsini Goodrich & Rosati

Professional Corporation

12235 El Camino Real, Suite 200

San Diego, CA 92130

Attn: Martin J. Waters, Esq. 

If
to Employee: 

To
the most recent address of Employee set forth in the personnel records of the Company, 

With
a copy to: 

Cooley
Godward LLP

4401 Eastgate Mall

San Diego, CA 92121

Attn: Thomas Coll, Esq. 

        i.    Employee Representation.    Employee hereby represents to the Company and covenants that the execution and
delivery of this Agreement by Employee and the Company and the performance by Employee of Employee's duties hereunder for the Company shall not constitute a breach of, or otherwise contravene, the
terms of any employment agreement or other agreement or policy to which Employee is a party or otherwise bound and/or otherwise infringe or violate the rights of any former employer or third party. 

        j.    Cooperation.    Employee shall, without further remuneration, provide Employee's reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or proceeding) that relates to events occurring during Employee's employment hereunder. If 

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Employee's
cooperation is needed under this paragraph, the Company shall use reasonable best efforts to schedule Employee's participation at a mutually convenient time, and shall reimburse Employee
for reasonable travel and out-of-pocket expenses (following presentment of reasonable substantiation). This provision shall survive termination of this Agreement or Employee's
employment. 

        k.    Withholding Taxes.    The Company may withhold from any accounts payable under this Agreement such federal,
state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. 

        l.    Acknowledgment.    Employee acknowledges that he has had the opportunity to discuss this matter with and obtain
advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this
Agreement. 

        m.    Counterparts.    This Agreement may be signed in counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument. 

[Remainder of page intentionally left blank.]

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        IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. 

	 	 	ACCELRYS, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/  MARK EMKJER      

	

 	
 	

Name:	
 	

 
	 	 	 	 	/s/  MARK EMKJER      

	

 	
 	

Title:	
 	

 
	 	 	 	 	President and CEO

	

 	
 	
EMPLOYEE
	

 	
 	

/s/  MATHEW HAHN      
 Mathew Hahn
	

    	
 	

 	
 	

 
	

    	
 	

 	
 	

 
	

    	
 	

 	
 	

 

ACCELRYS, INC.

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT 

10

QuickLinks

Exhibit 10.25

ACCELRYS, INC. EMPLOYMENT AGREEMENTExhibit 10.1

    
      

    

     

     

    Exhibit
      10.1

    
 

    Execution
      Version

    

    

    

    

    

    

    

    

    

    SHARE
      PURCHASE AGREEMENT

     

    by
      and among

     

    INSTANTEL
      INC.,

     

    INSTANTEL
      HOLDING COMPANY s.àr.l., as sole shareholder of Instantel
      Inc.,

     

    PERCEPTIS,
      L.P., as sole shareholder of Instantel Holding Company
      s.àr.l.,

     

    VERICHIP
      INC.

     

    and

     

    solely
      for purposes of Section
      1.4

     

    APPLIED
      DIGITAL SOLUTIONS, INC.

     

    and

     

    VERICHIP
      CORPORATION

     

    

     

    Dated
      as of June 10, 2005

     

    

    

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

    

      
        	
                ARTICLE
                  1 PURCHASE AND SALE OF SHARES

              	
                1

              
	 	
                1.1

              	
                Purchase
                  and Sale of Shares

              	
                1

              
	 	
                1.2

              	
                The
                  Closing

              	
                2

              
	 	
                1.3

              	
                [Intentionally
                  Omitted]

              	
                3

              
	 	
                1.4

              	
                The
                  Second Payment

              	
                3

              
	 	
                1.5

              	
                Section
                  116 Certificate

              	
                9

              
	 	 	 	 
	
                ARTICLE
                  2 CONDITIONS TO CLOSING

              	
                9

              
	 	
                2.1

              	
                Conditions
                  to the Buyer’s Obligations

              	
                9

              
	 	
                2.2

              	
                Conditions
                  to the Holder’s and the Seller’s Obligations

              	
                11

              
	 	 	 	 
	
                ARTICLE
                  3 REPRESENTATIONS AND WARRANTIES OF THE HOLDER AND THE
                  SELLER

              	
                12

              
	 	
                3.1

              	
                Execution,
                  Delivery; Valid and Binding Agreements

              	
                12

              
	 	
                3.2

              	
                Authority

              	
                12

              
	 	
                3.3

              	
                Ownership
                  of Shares

              	
                12

              
	 	
                3.4

              	
                Investment
                  Representation

              	
                13

              
	 	
                3.5

              	
                Brokerage

              	
                13

              
	 	
                3.6

              	
                Residency

              	
                13

              
	 	 	 	 
	
                ARTICLE
                  4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY,

              	 
	 	
                THE
                  HOLDER AND THE SELLER

              	
                13

              
	 	
                4.1

              	
                Organization
                  and Corporate Power

              	
                13

              
	 	
                4.2

              	
                No
                  Subsidiaries

              	
                13

              
	 	
                4.3

              	
                Authorization;
                  No Breach

              	
                14

              
	 	
                4.4

              	
                Capitalization

              	
                14

              
	 	
                4.5

              	
                Financial
                  Statements

              	
                15

              
	 	
                4.6

              	
                Absence
                  of Certain Developments

              	
                16

              
	 	
                4.7

              	
                Title
                  to Properties

              	
                18

              
	 	
                4.8

              	
                Tax
                  Matters

              	
                18

              
	 	
                4.9

              	
                Contracts
                  and Commitments

              	
                20

              
	 	
                4.10

              	
                Intellectual
                  Property Rights

              	
                21

              
	 	
                4.11

              	
                Litigation

              	
                21

              
	 	
                4.12

              	
                Brokerage

              	
                22

              
	 	
                4.13

              	
                Governmental
                  Consents, etc

              	
                22

              
	 	
                4.14

              	
                Employee
                  Benefit Plans

              	
                22

              
	 	
                4.15

              	
                Insurance

              	
                23

              
	 	
                4.16

              	
                Compliance
                  with Laws

              	
                23

              
	 	
                4.17

              	
                Environmental
                  Compliance and Conditions

              	
                23

              
	 	
                4.18

              	
                Banking
                  and Agency Arrangements

              	
                24

              
	 	
                4.19

              	
                Books
                  and Records

              	
                25

              
	 	
                4.20

              	
                Customer
                  Warranties

              	
                25

              
	 	
                4.21

              	
                Products
                  Liability

              	
                25

              
	 	
                4.22

              	
                Accounts
                  Receivable; Inventories

              	
                25

              
	 	
                4.23

              	
                Customers
                  and Suppliers

              	
                26

              

      

      

      
        
          
          

        

        
          -
            i
            -

          
            

          

        

        
          
          

        

      

      

      
        	 	
                4.24

              	
                Permits

              	
                26

              
	 	
                4.25

              	
                Improper
                  and Other Payments

              	
                26

              
	 	
                4.26

              	
                Employees
                  and Consultants

              	
                26

              
	 	
                4.27

              	
                Disclosure

              	
                27

              
	 	 	 	 
	
                ARTICLE
                  5 REPRESENTATIONS AND WARRANTIES OF THE BUYER

              	
                27

              
	 	
                5.1

              	
                Organization
                  and Corporate Power

              	
                27

              
	 	
                5.2

              	
                Authorization

              	
                27

              
	 	
                5.3

              	
                No
                  Violation

              	
                28

              
	 	
                5.4

              	
                Financing

              	
                28

              
	 	
                5.5

              	
                ADSX
                  Shares and VeriChip Shares

              	
                28

              
	 	
                5.6

              	
                Governmental
                  Authorities; Consents

              	
                28

              
	 	
                5.7

              	
                Litigation

              	
                28

              
	 	
                5.8

              	
                Brokerage

              	
                29

              
	 	
                5.9

              	
                Investment
                  Representation

              	
                29

              
	 	
                5.10

              	
                No
                  Knowledge of Misrepresentations or Omissions

              	
                29

              
	 	 	 	 
	
                ARTICLE
                  6 COVENANTS OF THE BUYER

              	
                29

              
	 	
                6.1

              	
                Confidentiality
                  of Information

              	
                29

              
	 	
                6.2

              	
                Access
                  to Books and Records

              	
                29

              
	 	
                6.3

              	
                Director
                  and Officer Liability and Indemnification

              	
                30

              
	 	
                6.4

              	
                Regulatory
                  Filings

              	
                30

              
	 	
                6.5

              	
                Transaction
                  Payments

              	
                30

              
	 	 	 	 
	
                ARTICLE
                  7 ADDITIONAL COVENANTS

              	
                31

              
	 	
                7.1

              	
                Survival

              	
                31

              
	 	
                7.2

              	
                Indemnification

              	
                31

              
	 	
                7.3

              	
                Limitation
                  of Recourse

              	
                35

              
	 	
                7.4

              	
                ACKNOWLEDGMENT
                  BY THE BUYER

              	
                35

              
	 	
                7.5

              	
                Tax
                  Matters

              	
                36

              
	 	
                7.6

              	
                Employee
                  Benefit Plans and Arrangements

              	
                37

              
	 	
                7.7

              	
                Further
                  Assurances

              	
                38

              
	 	
                7.8

              	
                Short
                  Sales and Hedging

              	
                38

              
	 	 
	
                ARTICLE
                  8 DEFINITIONS

              	
                38

              
	 	
                8.1

              	
                Definitions

              	
                38

              
	 	
                8.2

              	
                Cross
                  References to Other Defined Terms

              	
                42

              
	 	 	 	 
	
                ARTICLE
                  9 MISCELLANEOUS

              	
                44

              
	 	
                9.1

              	
                Press
                  Releases and Communications

              	
                44

              
	 	
                9.2

              	
                Expenses

              	
                44

              
	 	
                9.3

              	
                Notices

              	
                44

              
	 	
                9.4

              	
                Assignment

              	
                45

              
	 	
                9.5

              	
                Severability

              	
                45

              
	 	
                9.6

              	
                No
                  Strict Construction

              	
                45

              
	 	
                9.7

              	
                Amendment
                  and Waiver

              	
                45

              
	 	
                9.8

              	
                Complete
                  Agreement

              	
                46

              

      

      

      
        
          
          

        

        
          -
            ii
            -

          
            

          

        

        
          
          

        

      

      

      
        	 	
                9.9

              	
                Counterparts

              	
                46

              
	 	
                9.10

              	
                Governing
                  Law

              	
                46

              
	 	
                9.11

              	
                Waiver
                  of Jury Trial

              	
                46

              
	 	
                9.12

              	
                Consent
                  to Jurisdiction, Service of Process

              	
                46

              
	 	
                9.13

              	
                Descriptive
                  Headings; Interpretation

              	
                46

              
	 	
                9.14

              	
                No
                  Third Party Beneficiaries

              	
                47

              

      

      

 

    

    
      
        
        

      

      
        -
          iii
          -

        
          

        

      

      

        INDEX
          OF EXHIBITS

         

        
          	
                  Exhibit
                    A

                	
                  ADSX
                    Share Escrow Agreement

                
	
                  Exhibit
                    B

                	
                  Irrevocable
                    Proxy

                
	
                  Exhibit C

                	
                  ADSX
                    Registration Agreement

                
	
                  Exhibit
                    D

                	
                  VeriChip
                    Registration Agreement

                
	
                  Exhibit
                    E

                	
                  Section
                    116 Escrow Agreement

                
	
                  Exhibit
                    F

                	
                  Company
                    Certificate

                
	
                  Exhibit
                    G

                	
                  Opinion
                    of Kirkland & Ellis LLP

                
	
                  Exhibit
                    H

                	
                  Opinion
                    of McMillan
                    Binch Mendelsohn LLP

                
	
                  Exhibit
                    I

                	
                  Opinion
                    of Allen & Overy

                
	
                  Exhibit
                    J

                	
                  Buyer
                    Certificate

                
	
                  Exhibit
                    K

                	
                  Opinion
                    of Thompson Coburn LLP

                
	
                  Exhibit
                    L

                	
                  Opinion
                    of Michael Krawitz

                
	
                  Exhibit
                    M

                	
                  Example
                    of Calculation of Total Operating
                    Assets

                

        

        

        INDEX
          OF SCHEDULES

         

        
          	
                  Schedule
                    1.1

                	
                  -

                	
                  Indebtedness
                    of the Company Which Shall Reduce Aggregate

                  Proceeds
                    Payable to the Holder and the Seller

                
	
                  Schedule
                    4.3

                	
                  -

                	
                  Authorization;
                    No Breach

                
	
                  Schedule
                    4.4

                	
                  -

                	
                  Capitalization

                
	
                  Schedule
                    4.5(a)

                	
                  -

                	
                  Management
                    Representation Letter

                
	
                  Schedule
                    4.5(b)

                	
                  -

                	
                  Financial
                    Statements - Undisclosed Liabilities

                
	
                  Schedule
                    4.5(c)

                	
                  -

                	
                  Financial
                    Statements - Affiliated Transactions

                
	
                  Schedule
                    4.6

                	
                  -

                	
                  Absence
                    of Certain Developments

                
	
                  Schedule
                    4.7(a)

                	
                  -

                	
                  Title
                    to Properties - Leased Real Property

                
	
                  Schedule
                    4.7(c)

                	
                  -

                	
                  Title
                    to Properties - Personal Property

                
	
                  Schedule
                    4.8

                	
                  -

                	
                  Tax
                    Matters

                
	
                  Schedule
                    4.9

                	
                  -

                	
                  Contracts
                    and Commitments

                
	
                  Schedule
                    4.9(c)

                	
                  -

                	
                  Contracts
                    and Commitments - Breaches, etc.

                
	
                  Schedule
                    4.10

                	
                  -

                	
                  Proprietary
                    Rights

                
	
                  Schedule
                    4.11

                	
                  -

                	
                  Litigation

                
	
                  Schedule
                    4.13

                	
                  -

                	
                  Governmental
                    Consents, etc.

                
	
                  Schedule
                    4.14

                	
                  -

                	
                  Employee
                    Benefit Plans

                
	
                  Schedule
                    4.15

                	
                  -

                	
                  Insurance

                
	
                  Schedule
                    4.17

                	
                  -

                	
                  Environmental
                    Compliance and Conditions

                
	
                  Schedule
                    4.18

                	
                  -

                	
                  Banking
                    and Agency Arrangements

                
	
                  Schedule
                    4.19

                	
                  -

                	
                  Books
                    and Records

                
	
                  Schedule
                    4.20

                	
                  -

                	
                  Customer
                    Warranties

                
	
                  Schedule
                    4.21

                	
                  -

                	
                  Products
                    Liability

                
	
                  Schedule
                    4.23

                	
                  -

                	
                  Customers
                    and Suppliers

                
	
                  Schedule
                    4.24

                	
                  -

                	
                  Permits

                
	Schedules
                  4.26	-	Employees
                  and Consultants

        

        

        
          
            
            

          

          
            -
              iv
              -

            
              

            

          

          
            
            

          

        

        

        
          	
                  Schedule
                    5.5

                	
                  -

                	
                  Capitalization
                    of ADSX and VeriChip

                
	
                  Schedule
                    5.6

                	
                  -

                	
                  Governmental
                    Consents, etc.

                

        

        

      
        
          
          

        

        
          -
            v
            -

          
            

          

        

        
          
          

        

      

    

    SHARE
      PURCHASE AGREEMENT

     

    THIS
      SHARE PURCHASE AGREEMENT is made as of June 10, 2005, by and among Instantel
      Inc., a corporation formed under the Business Corporations Act (Ontario) (the
      “Company”),
      Instantel Holding Company s.àr.l., a Luxembourg société  à responsibilité
      limitée (the “Holder”),
      Perceptis, L.P., a Delaware limited partnership (the “Seller”),
      VeriChip Inc., a corporation formed under the Business Corporations Act (British
      Columbia) (the “Buyer”),
      and,
      solely for purposes of Section
      1.4,
      VeriChip Corporation, a Delaware corporation (“VeriChip”),
      and
      Applied Digital Solutions, Inc., a Missouri corporation (“ADSX”).
      Unless otherwise provided herein, capitalized terms used herein are defined
      in
Article 8
      below.

     

    Recitals

     

    WHEREAS,
      the Holder beneficially and of record owns all of the issued and outstanding
      capital stock of the Company, consisting of 6,251,601 shares of common stock,
      which are referred to collectively herein as the “Shares.”

     

    WHEREAS,
      the
      Seller beneficially and of record owns all of the issued and outstanding
      ordinary shares of the Holder.

     

    WHEREAS,
      both the Buyer and VeriChip are subsidiaries of ADSX.

     

    WHEREAS,
      subject
      to
      the terms and conditions set forth herein, the Buyer desires to acquire from
      the
      Holder all of the Shares, and the Holder and the Seller desire to sell to the
      Buyer all of such Shares owned by the Holder as of the Closing
      Date.

     

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

     

    ARTICLE
      1

     

    PURCHASE
      AND SALE OF SHARES

     

    1.1 Purchase
      and Sale of Shares. At the Closing (as defined in Section 1.2(a)),
      upon
      the terms and subject to the conditions set forth in this Agreement, the Holder
      shall sell, assign, transfer and convey to the Buyer, and the Buyer shall
      purchase and acquire from the Holder, all of the Shares, free
      and
      clear of any and all Liens other than Permitted Liens, for an aggregate
      consideration consisting of the sum (such sum, the “Total
      Purchase Price”)
      of
      (a) an aggregate amount of cash equal to $14,383,147.46 (the “Closing
      Payment”),
      which
      is $22,000,000 minus
      $6,391,694.87 (the amount of the indebtedness for borrowed money described
      on
Schedule 1.1,
      including accrued interest thereon and related fees and expenses) minus
      $1,225,157.67 (the amount of the Transaction Payments), plus
      the
      amount of Closing Cash, which shall be paid in accordance with Section 1.2(b),
      plus
      (b) the issuance to the Seller (as the assignee of the Holder) of the
      ADSX
      Shares, as defined below, and the related covenants in Section 1.4
      (including the possible issuance of VeriChip Shares or the Cash Second Payment
      Obligation, as defined below, in exchange therefor) (collectively, the
“Second
      Payment”).
      The

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Estimated
      Purchase Price”
      means
      $17,133,147.46 (which is the Closing Payment plus
      $2,750,000).

     

    1.2 The
      Closing. 

     

    (a) The
      closing of the transactions contemplated by this Agreement (the “Closing”)
      shall
      take place at the offices of Kirkland & Ellis LLP, 200 East Randolph Drive,
      Chicago, Illinois 60601 at 10:00 A.M. on the date hereof. The date and time
      of
      the Closing are herein referred to as the “Closing
      Date.”

     

    (b) Subject
      to the terms and conditions set forth in this Agreement, the parties hereto
      shall consummate the following transactions (the “Closing
      Transactions”)
      on the
      Closing Date:

     

    (i) the
      Holder shall deliver to the Buyer share certificates representing the Shares,
      duly endorsed in blank for transfer or accompanied by duly executed stock
      transfer powers;

     

    (ii) the
      Buyer
      shall deliver (A) the Withheld Amount to the Section 116 Escrow Agent, (B)
      an
      amount equal to the Transaction Payments (by way of loan or contribution to
      share capital) to the Company and (C) an amount equal to the Closing
      Payment minus
      the
      Withheld Amount to the Holder, in each case by wire transfer of immediately
      available funds to the accounts (and in the amounts) designated by the
      recipients of such amounts to the Buyer prior to the Closing;

     

    (iii) immediately
      after transfer of the Shares to the Buyer, the Buyer shall repay on behalf
      of
      the Company or cause the Company to repay in full all amounts necessary to
      discharge fully the then outstanding balance of the indebtedness for borrowed
      money set forth on Schedule 1.1
      hereto
      (including accrued interest and any related fees and expenses) by wire transfer
      of immediately available funds to the accounts designated by the creditors
      listed on Schedule 1.1;

     

    (iv) the
      Buyer
      shall deliver to the Seller (as the assignee of the Holder) the ADSX Shares
      (as
      defined below), duly issued by ADSX in the name of the Seller and contributed
      to
      the Buyer for delivery to the Seller, and the Buyer shall deposit the
      certificates evidencing the ADSX Shares into an escrow account pursuant to
      the
      terms and conditions of an Escrow Agreement substantially in the form attached
      hereto as Exhibit A
      (the
“ADSX
      Escrow Agreement”)
      to be
      governed by the terms and conditions set forth therein;

     

    (v) the
      Buyer
      and the Seller shall deliver to each other (A) counterparts to the ADSX Escrow
      Agreement duly executed by ADSX and the Seller and (B) counterparts to the
      Section 116 Escrow Agreement duly executed by the Buyer and the
      Holder;

     

    (vi) the
      Seller shall duly execute and deliver to ADSX an irrevocable proxy in the form
      attached hereto as Exhibit B;

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (vii) the
      Buyer
      shall deliver to the Seller counterparts to (A) a Registration Agreement
      between ADSX and the Seller in the form attached hereto as Exhibit C
      (the
“ADSX
      Registration Agreement”)
      duly
      executed by ADSX, and (B) a Registration Agreement between VeriChip and the
      Seller in the form attached hereto as Exhibit D
      (the
“VeriChip
      Registration Agreement”
      and,
      together with the ADSX Registration Agreement, the “Registration
      Agreements”)
      duly
      executed by VeriChip; and

     

    (viii) the
      Buyer, the Company, the Holder and the Seller shall make such other deliveries
      as are required by and in accordance with Article 2
      hereof.

     

    1.3 [Intentionally
      Omitted].

     

    1.4 The
      Second Payment.

     

    (a) Issuance.
      At the
      Closing, ADSX will issue and deliver to the Seller (as the assignee of the
      Holder) a number of duly authorized, validly issued, fully-paid and
      non-assessable shares of ADSX common stock (the “ADSX
      Shares”),
      free
      and clear of all Liens (other than encumbrances under this Agreement) and
      preemptive rights, equal to $3 million divided by the Trailing Price as of
      the
      Closing. The Seller hereby agrees that, until the earlier of the Election Date
      and the VeriChip Exchange Date, and unless ADSX otherwise consents, the Seller
      shall not sell, assign or otherwise transfer or dispose of the ADSX Shares
      other
      than to ADSX or to the Seller’s limited partners, Prairie Capital II, L.P., SE
      Capital Fund I, L.P., Banc One Capital Partners II, LLC, Dan Gunther and Lee
      Buchanan (provided each such Person executes a counterpart to this Agreement,
      agreeing to be bound by all of the provisions hereof respecting the ADSX Shares
      and the Second Payment to the same extent as the Seller). The ADSX Shares may
      contain only the following Securities Act and transfer legends
      (respectively):

     

    (i) “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”).
      THE
      SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT
      IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER
      THE SECURITIES ACT, OR IN COMPLIANCE WITH RULE 144 OR PURSUANT TO ANOTHER
      EXEMPTION. THE SECURITIES ARE ALSO SUBJECT TO PROVISIONS OF A REGISTRATION
      AGREEMENT.”

     

    (ii) “THE
      TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
      CONDITIONS SPECIFIED IN THE SHARE PURCHASE AGREEMENT, DATED AS OF JUNE 10,
      2005
      (AS THE SAME MAY BE AMENDED FROM TIME TO TIME), BETWEEN THE ISSUER (THE
“COMPANY”) AND CERTAIN OTHER PERSONS, AND THE COMPANY RESERVES THE RIGHT TO
      REFUSE THE TRANSFER OF SUCH SECURITIES. A COPY OF SUCH CONDITIONS SHALL BE
      FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
      CHARGE. THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AN
      IRREVOCABLE PROXY DATED JUNE 10, 2005, A COPY OF WHICH IS

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    ON
      FILE
      AT THE PRINCIPAL OFFICE OF THE COMPANY. THE SHARES OF STOCK EVIDENCED BY THIS
      CERTIFICATE ARE SUBJECT TO AN ESCROW AGREEMENT DATED JUNE 10, 2005, COPIES
      OF
      WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. THE FOREGOING PROXY
      AND ESCROW AGREEMENT SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF
      UPON
      WRITTEN REQUEST AND WITHOUT CHARGE.”

     

    Notwithstanding
      the foregoing but in each case subject to any applicable delivery requirements
      pursuant to the immediately following paragraph, (A) promptly upon the request
      of the Seller (but in any event within 5 business days, although no earlier
      than
      the Election Date), ADSX shall remove the legend in clause (ii) above from
      the
      certificate for such shares, (B) if after the Election Date any such
      ADSX
      shares become eligible for sale pursuant to Rule 144(k), ADSX shall
      deliver
      a new certificate which bears only a legend requiring compliance with the
      requirements Rule 144(k), as applicable, promptly (but in any event within
      10
      business days) upon the request of the holder thereof, (C) on or after
      the
      Election Date, upon the request of the holder thereof in connection with a
      distribution to the public through a broker, dealer or market maker pursuant
      to
      Rule 144 (or any similar provision then in force) under the Securities Act,
      ADSX
      shall as promptly as practicable deliver a new certificate which does not bear
      the Securities Act legend, (D) ADSX shall as promptly as practicable
      deliver a new certificate which does not bear the Securities Act legend upon
      registration of the ADSX Shares pursuant to the ADSX Registration Agreement
      and
      (E) if in connection with any transfer of the ADSX Shares (other than
      those
      described in the previous clauses of this paragraph) the holder thereof delivers
      to ADSX an opinion of Kirkland & Ellis LLP or such other counsel which (to
      ADSX’s reasonable satisfaction) is knowledgeable in securities law matters to
      the effect that no subsequent transfer of the ADSX Shares shall require
      registration under the Securities Act, then ADSX promptly (but in any event
      within 10 business days) upon such contemplated transfer shall deliver a new
      certificate which does not bear the Securities Act legend.

     

    Upon
      receipt by ADSX (or ADSX’s designated representative) of a representation letter
      (or a facsimile thereof) in a form reasonably acceptable to ADSX from a selling
      holder indicating such selling holder’s intent to transfer a number of ADSX
      Shares in a transfer exempt from the registration of the Securities Act (other
      than pursuant to Rule 144) in compliance with the representation letter and
      any
      other reasonably requested and customary delivery requirements, ADSX will
      deliver promptly (but in any event with sufficient time for the applicable
      time
      period in the immediately preceding paragraph to be met) to its transfer agent
      an opinion or letter of instruction enabling such selling holder to sell its
      ADSX Shares in the transaction(s) in accordance with the terms of the
      representation letter. If ADSX is not of the opinion that such transfer is
      exempt from the registration requirements of the Securities Act, then ADSX
      shall
      promptly (but in any event with sufficient time for the applicable time period
      in the immediately preceding paragraph to be met) provide written notice thereof
      to the selling holder, and thereafter upon ADSX’s receipt of an opinion from
      Kirkland & Ellis LLP or other legal counsel which (to ADSX’s reasonable
      satisfaction) is knowledgeable in securities law matters that such transfer
      is
      exempt from the registration requirements of the Securities Act ADSX shall
      deliver promptly (but in any event with sufficient time for the applicable
      time
      period in the immediately preceding paragraph to be met) to its transfer agent
      a
      letter of instruction enabling such selling holder to sell its ADSX Shares
      in
      the transaction(s) in accordance with the terms of

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    the
      representation letter. ADSX shall reimburse the Seller and hold the Seller
      harmless against the payment of all fees and expenses incurred by the Seller
      in
      complying with the terms of this Agreement with respect to a transfer of
      securities exempt from the registration requirements of the Securities Act
      (including, without limitation, reasonable attorneys’ fees, including those
      incurred in connection with the delivery of opinions of counsel).

     

    (b) True-up.
      

     

    (i) On
      the
      earliest of the VeriChip Exchange Date (immediately prior to the VeriChip
      Exchange), the Election Date and the VeriChip Exchange Right Termination Date
      (such date, the “Measurement
      Date”),
      (1) if (I) the product of the number of ADSX Shares multiplied by
      the
      Trailing Price as of the Measurement Date (such product, the “ADSX
      Share Value”)
      is
      less than (II) $3 million minus
      the
      aggregate Indemnification Offset Amount (if any) to be included under this
      Section
      1.4(b)(i)
      pursuant
      to Section 7.2(f)
      (such
      difference in this clause (II), the “Target
      ADSX Share Value”),
      then
      ADSX will issue to the Seller for no additional consideration an additional
      number of duly authorized, validly issued, fully-paid and non-assessable shares
      of ADSX common stock (which thereafter will be considered “ADSX
      Shares”),
      free
      and clear of all Liens (other than encumbrances under this Agreement),
      preemptive rights and restrictive legends (unless otherwise provided herein)
      equal to (i) the amount by which the ADSX Share Value is less than the Target
      ADSX Share Value divided by
      (ii) the
      Trailing Price as of the Measurement Date, and (2) if the ADSX Share
      Value
      is greater than the Target ADSX Share Value, then the Seller will transfer
      to
      ADSX for no additional consideration, free and clear of all Liens, a number
      of
      ADSX Shares equal to (i) the amount by which the ADSX Share Value is greater
      than the Target ADSX Share Value divided by
      (ii) the
      Trailing Price as of the Measurement Date. The actions described in this
      paragraph are referred to as the “True-Up.”

     

    (ii) Notwithstanding
      the foregoing, in no event shall ADSX be required to issue all of the additional
      shares of ADSX common stock to the Seller otherwise required to be issued in
      the
      True-Up if the aggregate number of shares of ADSX common stock issued or
      issuable under the Satellite Securities Purchase Agreement dated June 9,
      2005, and the Warrants and the Senior Unsecured Notes issued in connection
      therewith, together with the ADSX Shares issued at Closing and any additional
      shares of ADSX common stock required to be issued under Section 1.4(b)(i)
      hereof,
      would exceed 19.99% of the number of shares of ADSX common stock outstanding
      on
      the date hereof (subject to adjustment upon a stock split, stock dividend or
      similar event) (the “Cap
      Amount”).
      If
      the number of ADSX shares to be issued under Section
      1.4(b)(i)
      would
      cause ADSX to exceed the Cap Amount, ADSX on the date of the True-Up shall
      (A) issue such number of shares of ADSX common stock which do not cause
      ADSX to exceed the Cap Amount and (B) pay the Seller an amount in cash
      within five business days of the Measurement Date by wire transfer of
      immediately available funds equal to the product of the number of shares of
      ADSX
      common stock which are not issued to the Seller under this Section
      1.4(b)
      because
      they would cause ADSX to exceed the Cap Amount multiplied by
      the
      Trailing Price as of the Measurement Date.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (c) VeriChip
      Exchange.

     

    (i) If
      VeriChip consummates an initial public offering of its common stock under the
      Securities Act (an “IPO”)
      on or
      before the VeriChip Exchange Right Termination Date, then on the VeriChip
      Exchange Date (immediately after the True-Up) the Seller will transfer to
      VeriChip a number of ADSX Shares which, when multiplied by the Trailing Price
      as
      of the Measurement Date, equals an amount equal to the lesser of $2 million
      and
      the Target ADSX Share Value (the “Initial
      VeriChip Share Value”),
      free
      and clear of all Liens, and in exchange therefor VeriChip will issue to the
      Seller a number of duly authorized, validly issued, fully-paid and
      non-assessable shares of VeriChip common stock (the “VeriChip
      Shares”),
      free
      and clear of all Liens, preemptive rights and restrictive legends (unless
      otherwise provided herein) equal to (A) the Initial VeriChip Share Value
      divided by
      (B) the price at which shares of VeriChip common stock are issued to
      the
      public in the VeriChip IPO (the “VeriChip
      Exchange”).
      VeriChip shall provide the Seller with written notice at least two (2) business
      days before the consummation of an IPO. Any VeriChip Shares issued pursuant
      to
      this Section
      1.4(c)(i)
      shall be
      accompanied by an opinion letter from Michael Krawitz or such other counsel
      to
      VeriChip as may be reasonably acceptable to the Seller, addressed to the Seller,
      giving such counsel’s opinion that the VeriChip Shares then being issued are
      validly issued, fully paid and non-assessable.

     

    (ii) If
      the
      managing underwriter(s) of VeriChip’s IPO (A) pursuant to Section 1(a)
      of the VeriChip Registration Agreement do not permit the VeriChip Shares to
      be
      included in a Form S-1 shelf registration statement effective on the date
      VeriChip consummates its IPO and (B) require as a condition to such
      IPO
      that both (I) all VeriChip shareholders that (together with their
      Affiliates) own at least as many shares of VeriChip common stock as the Seller
      and (II) all members of ADSX’s, VeriChip’s or the Buyer’s senior management
      which hold shares of VeriChip common stock enter into a lock-up agreement,
      then
      as a condition to the VeriChip Exchange the Seller will enter into a customary
      lock-up agreement for the period (the “Lock-Up
      Period”)
      beginning on the date of the VeriChip IPO and ending on the earliest of (1)
      the
      date required by the managing underwriter(s), (2) the earliest date
      on
      which any shareholder immediately prior to the IPO that (together with its
      Affiliates) owns at least as many shares of VeriChip common stock as the Seller
      or (II) any member of ADSX’s, VeriChip’s or the Buyer’s senior management
      which hold shares of VeriChip common stock is no longer subject to a lock-up
      and
      (3) 180 days after VeriChip consummates its IPO.

     

    (iii) “VeriChip
      Exchange Right Termination Date”
      means
      (A) September 30, 2006, if either (or both) (1) VeriChip
      delivers
      a No Extension Certification to the Seller or (2) the Seller delivers
      an
      Early Termination Notice or (B) December 31, 2006, if VeriChip does not deliver
      to the Seller a No Extension Certification and the Seller does not deliver
      to
      VeriChip an Early Termination Notice. “No
      Extension Certification”
      means
      written notice delivered by VeriChip to the Seller on or after August 1, 2006,
      but before September 1, 2006, representing and certifying that VeriChip is
      not
      preparing for an IPO of VeriChip which is reasonably likely to occur on or
      before December 31, 2006. “Early
      Termination Notice”
      means
      written notice delivered by the Seller to VeriChip

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    before
      September 30, 2006, stating that the Seller elects that the VeriChip
      Exchange Right Termination Date be September 30, 2006.

     

    (d) Price
      Protection Provisions.
      If
      pursuant to Section 1(a) of the VeriChip Registration Agreement the managing
      underwriter(s) of VeriChip’s IPO do not permit the VeriChip Shares to be
      included in a Form S-1 shelf registration statement on the date VeriChip
      consummates its IPO, then the Seller at its sole election may at any time and
      from time to time on up to four occasions prior to the “Required Registration”
      as defined in the VeriChip Registration Agreement (the “VeriChip
      Required Registration”)
      is
      declared effective provide written notice to VeriChip (each, a “Sale
      Notice”)
      that
      it desires to sell to VeriChip all or any portion of the VeriChip Shares (the
      portion so offered to be sold, the “Offered
      Shares”).
      VeriChip at its sole election may elect to repurchase such Offered Shares at
      a
      price per Offered Share equal to the VeriChip VWAP Price (determined as of
      the
      date the Seller delivered the Sale Notice) by delivering written notice of
      such
      election to the Seller within two business days of receipt of the Seller’s Sale
      Notice, in which case the repurchase will be consummated within five business
      days following VeriChip’s acceptance of such offer. At the closing of the
      repurchase, the Seller will deliver to VeriChip the Offered Shares, free and
      clear of all Liens, and VeriChip will deliver to the Seller by wire transfer
      of
      immediately available funds to an account designated by the Seller an amount
      equal to the number of Offered Shares times
      the
      VeriChip VWAP Price (determined as of the date the Seller delivered the Sale
      Notice). If (i) VeriChip does not elect to repurchase any Offered Shares
      or
      does not consummate any repurchase of any Offered Shares in accordance with
      the
      foregoing, and (2) the VeriChip VWAP Price as of the date immediately
      prior
      to the date the VeriChip Required Registration is declared effective is less
      than the price paid by the public for a share of VeriChip’s common stock in
      VeriChip’s IPO, then on the date (but prior to the time) the VeriChip Required
      Registration is declared effective VeriChip will issue to the Seller for no
      additional consideration an additional number of duly authorized, validly
      issued, fully-paid and non-assessable shares of VeriChip common stock (which
      thereafter will be considered “VeriChip
      Shares”),
      free
      and clear of all Liens (other than encumbrances under this Agreement),
      preemptive rights and restrictive legends, equal to (i) such amount
      by
      which the VeriChip VWAP Price as of the date the VeriChip Required Registration
      is declared effective is less than the price paid by the public for a share
      of
      VeriChip’s common stock in VeriChip’s IPO multiplied by
      (ii) the number of Offered Shares which the Company did not repurchase
      pursuant to this Section 1.4(d).

     

    (e) Cash
      Payment Election Right.
      If
      VeriChip does not consummate an IPO on or before the VeriChip Exchange Right
      Termination Date, then during the 60 day-period beginning on the VeriChip
      Exchange Right Termination Date the Seller by written notice to the Buyer and
      ADSX may demand (the “Election
      Right”
      and the
      date on which such notice is delivered the “Election
      Date”)
      either
      (i) registration of the ADSX Shares under the ADSX Registration Agreement
      or (ii) payment of $2,500,000 in immediately available funds pursuant
      to
Section
      1.4(f)
      below,
      upon the payment of which (and as a condition thereto) the Seller shall transfer
      to ADSX for no additional consideration the ADSX Shares, free and clear of
      all
      Liens. In the event the Seller does not exercise the Election Right on or before
      the 60th
      day
      after the VeriChip Exchange Right Termination Date the Seller shall be deemed
      to
      have elected option (i).

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (f) Second
      Cash Payment Obligation.
      Upon
      the Seller’s exercise of the Election Right demanding $2,500,000 pursuant to
Section
      1.4(e)(ii)
      above,
      VeriChip shall pay to the Seller $2,500,000 (the “Cash
      Second Payment Obligation”)
      by
      wire transfer of immediately available funds to the account(s) designated by
      the
      Seller within five business after such demand (plus simple interest thereon
      from
      the date of demand through and including the date of payment at an interest
      rate
      equal to the Prime Rate, if not paid within five business days as obligated
      herein). VeriChip’s obligations under this Section 1.4(f)
      shall be
      absolute and unconditional, shall not be subject to any setoff (except as set
      forth in Section 1.4(b)(i)
      and
Section 7.2(f))
      or
      counterclaim and shall not be affected by any recharacterization. In the event
      that, for any reason, VeriChip is required to turn over, remit or disgorge
      any
      portion of the Cash Second Payment Obligation which has been made to any person
      for any reason, such amounts shall be immediately and automatically reinstated
      and shall be due and payable obligations of VeriChip. VeriChip agrees that
      any
      delay on the part of the Seller in exercising any rights under this Section
      1.4(f)
      shall
      not operate as a waiver of such rights.

     

    (g) Guaranty
      of Obligations.
      ADSX
      (for purposes of this Section
      1.4(g),
      the
“Guarantor”)
      hereby
      unconditionally guarantees (i) the timely, full and complete payment
      and
      performance by VeriChip of all covenants and agreements contained in
Section 1.4(f);
      provided
      that,
      without limiting the foregoing or any other obligations of ADSX or any other
      party, ADSX automatically and without further notice shall be obligated to
      satisfy the Cash Second Payment Obligation (including simple interest thereon
      from the date of demand through and including the date of payment at an interest
      rate equal to the Prime Rate) if VeriChip has not satisfied such obligation
      within five business days after demand; and (ii) the timely, full and
      complete payment and performance by the Buyer of all of its obligations under
      this Agreement; and (iii) the timely, full and complete performance
      by
      VeriChip of all of its obligations under the VeriChip Registration Agreement.
      The obligation of the Guarantor is primary, absolute and unconditional, is
      a
      continuing guaranty, and shall remain in force at all times hereafter, until
      all
      of each primary obligor’s and the Guarantor’s obligations hereunder have been
      satisfied in full. ADSX hereby waives notice, presentment, demand, protest
      and
      notice of dishonor of any of the liabilities or obligations guaranteed pursuant
      to clause (i) of this Section 1.4(g),
      and
      hereby waives any failure to promptly commence suit against any party or to
      give
      any notice to or make any claim or demand upon Guarantor or other Person
      respecting such liabilities or obligations guaranteed pursuant to clause (i)
      of
      this Section
      1.4(g).
      Guarantor further agrees that this guaranty shall continue to be effective
      or be
      reinstated, as the case may be, if at any time any payment, or any part thereof,
      is rescinded or must otherwise be restored or returned upon the insolvency,
      bankruptcy or reorganization of any Person, or otherwise, all as though such
      payment had not been made. This guaranty shall inure to the benefit of the
      Holder and the Seller. There shall be no duty or obligation upon the Holder
      or
      the Seller (i) to proceed against any other Person, (ii) to initiate any
      proceeding or exhaust any remedy against any other Person, or (iii) to give
      any
      notice to the Guarantor whatsoever before bringing suit, or instituting
      proceedings of any kind against the Guarantor for any of the liabilities or
      obligations guaranteed pursuant to clause (i) of this Section 1.4(g).
      Until
      all of the obligations of the Buyer, the Company and VeriChip under this
      Agreement and the VeriChip Registration Agreement have been satisfied in full,
      the Guarantor shall have no right of subrogation and hereby waives any right
      to
      enforce any remedy which the Seller now has or may hereafter have against the
      Guarantor. All rights and remedies

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    under
      this Section
      1.4(g)
      are
      cumulative and those granted hereunder are in addition to any rights and
      remedies available under law.

     

    (h) Covenant
      Regarding ADSX Share Escrow Agreement.
      The
      Buyer and the Seller acknowledge and agree that (i) the ADSX Escrow
      Agreement requires a joint direction executed by both of them be delivered
      to
      the Escrow Agent (as defined in the ADSX Escrow Agreement) as a condition to
      any
      release of the certificate evidencing the ADSX Shares from the escrow
      established by the ADSX Escrow Agreement and (ii) the Buyer and the Seller
      shall
      deliver a joint direction to the Escrow Agent instructing the release to the
      Seller of the certificate evidencing the ADSX Share in connection with the
      Measurement Date (which notice shall be delivered reasonably in advance of
      the
      Measurement Date, if the Measurement Date is the VeriChip Exchange Date or
      the
      VeriChip Exchange Right Termination Date, and on the Measurement Date, if the
      Measurement Date is the Election Date), and the escrow established by the ADSX
      Escrow Agreement shall terminate upon such release.

     

    1.5 Section
      116 Certificate.
      If a
      certificate issued by the Minister of National Revenue under section 116
      of
      the Income Tax Act (Canada) (such certificate, a “Section
      116 Certificate,”
      and
      such Act, the “Tax
      Act”)
      in
      respect of the disposition of the Shares by the Holder to the Buyer, specifying
      a certificate limit in an amount which is not less than the Estimated Purchase
      Price, is not delivered to the Buyer on or before Closing, then the Buyer shall
      withhold from the payment to be made to the Holder under Section
      1.1
      an
      amount equal to 25% of the amount, if any, by which the portion of the Estimated
      Purchase Price exceeds the certificate limit in respect of any Section 116
      Certificate issued in connection with the disposition of the Shares by the
      Holder to the Buyer (the “Withheld
      Amount”).
      The
      Withheld Amount will be deposited by the Buyer into an escrow account pursuant
      to the terms and conditions of an Escrow Agreement substantially in the form
      attached hereto as Exhibit E
      (the
“Section
      116 Escrow Agreement”)
      to be
      governed by the terms and conditions set forth therein.

     

    ARTICLE
      2

     

    CONDITIONS
      TO CLOSING

     

    2.1 Conditions
      to the Buyer’s Obligations.
      The
      obligation of the Buyer to consummate the transactions contemplated by this
      Agreement is subject to the satisfaction of the following conditions as of
      the
      Closing Date:

     

    (a) The
      representations and warranties set forth in Articles 3
      and
4
      hereof
      shall be true and correct in all material respects;

     

    (b) The
      Company, the Holder and the Seller shall have performed in all material respects
      all of the covenants and agreements required to be performed by them under
      this
      Agreement at or prior to the Closing;

     

    (c) All
      consents that are set forth on Schedule 4.3
      shall
      have been obtained;

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (d) All
      material governmental filings, consents, authorizations and approvals that
      are
      required for the consummation of the transactions contemplated hereby shall
      have
      been made and obtained;

     

    (e) No
      action
      or proceeding before any court or government body shall be pending wherein
      an
      unfavorable judgment, decree or order would prevent the performance of this
      Agreement or the consummation of any of the transactions contemplated hereby,
      declare unlawful the transactions contemplated by this Agreement or cause such
      transactions to be rescinded;

     

    (f) The
      Company, the Holder or the Seller, as the case may be, shall have delivered
      to
      the Buyer each of the following:

     

    (i) an
      Officer’s Certificate of the Company in the form set forth in Exhibit F
      attached
      hereto, dated the Closing Date, stating that the preconditions specified in
      subsections (a) through (e) hereof, inclusive, as they relate to the Company,
      the Holder and the Seller have been satisfied;

     

    (ii) copies
      of
      the third party and governmental consents required by subsections (c) and (d)
      above;

     

    (iii) the
      share
      certificates representing the Shares, duly endorsed for transfer or accompanied
      by duly executed stock transfer powers;

     

    (iv) all
      minute books, ledgers and registers, corporate seals and other corporate records
      relating to the organization, ownership and maintenance of the
      Company;

     

    (v) resignations
      effective as of the Closing Date from each of the members of the Company’s Board
      of Directors and officers of the Company (but for the avoidance of doubt not
      including a resignation by Daniel A. Gunther in his capacity as an employee
      of
      the Company);

     

    (vi) a
      copy of
      the Company’s certificate and articles of amalgamation and bylaws (the
“Organizational
      Documents”);
      

     

    (vii) a
      Certificate of Status with respect to the Company from Ontario’s Ministry of
      Consumer and Business Services;

     

    (viii) resolutions
      of the Company, the Holder and the Seller authorizing the Company’s entering
      into this Agreement and the transactions contemplated hereby; and

     

    (ix) an
      opinion of Kirkland & Ellis LLP, counsel to the Seller, dated as of the
      Closing Date, in substantially the form attached hereto as Exhibit G,
      an
      opinion of McMillan Binch Mendelsohn LLP, special counsel to the Company, dated
      as of the Closing Date, in substantially the form attached hereto as
Exhibit H,
      and
an
      opinion of Allen & Overy, counsel to the Holder, dated as of the Closing
      Date, in substantially the form attached hereto as Exhibit I;

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (g) The
      transactions contemplated hereby shall have been approved by the Buyer’s,
      VeriChip’s and ADSX’s Boards of Directors; and

     

    (h) The
      Company shall have Total Operating Assets as of the open of business on the
      Closing Date of no less than $4,476,000.

     

    The
      Buyer
      may waive any condition specified in this Section 2.1
      if it
      executes a writing so stating at or prior to the Closing; provided
      that if
      the Closing is consummated, all such conditions shall be deemed to have been
      satisfied.

     

    2.2 Conditions
      to the Holder’s and the Seller’s Obligations.
      The
      obligations of the Holder and the Seller to consummate the transactions
      contemplated by this Agreement are subject to the satisfaction of the following
      conditions as of the Closing Date:

     

    (a) The
      representations and warranties set forth in Article 5
      hereof
      shall be true and correct in all material respects;

     

    (b) The
      Buyer
      shall have performed in all material respects all the covenants and agreements
      required to be performed by it under this Agreement at or prior to the
      Closing;

     

    (c) All
      material governmental filings, consents, authorizations and approvals that
      are
      required for the consummation of the transactions contemplated hereby shall
      have
      been duly made and obtained;

     

    (d) No
      action
      or proceeding before any court or government body shall be pending wherein
      an
      unfavorable judgment, decree or order would prevent the performance of this
      Agreement or the consummation of any of the transactions contemplated hereby,
      declare unlawful the transactions contemplated by this Agreement or cause such
      transactions to be rescinded;

     

    (e) ADSX
      and
      VeriChip shall have entered into the ADSX Registration Agreement and VeriChip
      Registration Agreement, respectively, and such agreements shall be in full
      force
      and effect as of the Closing;

     

    (f) The
      Buyer
      shall have delivered to the Seller each of the following:

     

    (i) an
      Officer’s Certificate in the form set forth as Exhibit J
      attached
      hereto, dated the Closing Date, stating that the preconditions specified in
      subsections (a) through (e) hereof, inclusive, as they relate to the Buyer
      have
      been satisfied;

     

    (ii) a
      copy of
      VeriChip’s and ADSX’s respective certificates of incorporation and
      bylaws;

     

    (iii) a
      Certificate of Status with respect to the Buyer from the appropriate Authority
      in British Columbia and certificates of good standing with respect to VeriChip
      and ADSX from the Delaware and Missouri Secretaries of State, respectively;
      and

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (iv) an
      opinion of Thompson Coburn LLP, counsel to ADSX, dated as of the Closing Date,
      in substantially the form attached hereto as Exhibit K,
      and an
      opinion of Michael Krawitz, counsel
      to VeriChip, dated as of the Closing Date, in substantially the form attached
      hereto as Exhibit L;

     

    (g) The
      Closing Transactions set forth in Sections 1.2(b)(ii),
      (iii),
      (iv) (v)
      and
(vii)
      shall
      have been completed; and

     

    (h) Simultaneously
      with the Closing as a reduction to the Closing Payment as set forth in
Section
      1.1,
      the
      Buyer shall repay or cause the Company to repay, on behalf of the Company,
      in
      full all amounts necessary to discharge fully the then outstanding balance
      of
      the indebtedness for borrowed money described on Schedule 1.1
      (and any
      accrued interest and related fees and expenses) by wire transfer of immediately
      available funds to the accounts designated by the creditors listed on
Schedule
      1.1.

     

    The
      Seller (on behalf of itself and the Holder) may waive any condition specified
      in
      this Section 2.2
      if the
      Seller executes a writing so stating at or prior to the Closing; provided
      that if
      the Closing is consummated, all such conditions shall be deemed to have been
      satisfied.

     

    ARTICLE
      3

     

    REPRESENTATIONS
      AND WARRANTIES

    OF
      THE
      HOLDER AND THE SELLER

     

    The
      Holder and the Seller hereby jointly and severally represent and warrant to
      the
      Buyer as of the Closing Date as follows:

     

    3.1 Execution,
      Delivery; Valid and Binding Agreements.
      This
      Agreement has been duly executed and delivered by such Person, and assuming
      that
      this Agreement is the valid and binding obligation of the Buyer, ADSX and
      VeriChip, this Agreement constitutes the valid and binding obligation of such
      Person, enforceable in accordance with its terms, except as enforceability
      may
      be limited by bankruptcy laws, similar laws of debtor relief and general
      principles of equity.

     

    3.2 Authority.
      Such
      Person has all requisite power and authority to execute and deliver this
      Agreement and to perform its obligations hereunder (in the case of the Holder
      including, without limitation, all right, power, capacity and authority to
      sell,
      transfer and convey the Shares as provided by this Agreement, subject to
      applicable federal, provincial and state securities law
      restrictions).

     

    3.3 Ownership
      of Shares.
      The
      Holder is the beneficial and record owner of all of the issued and outstanding
      shares of the Company, consisting of 6,251,601 Shares of common stock. On the
      Closing Date, the Holder shall transfer to the Buyer title to such Shares,
      free
      and clear of all Liens, options, proxies, voting trusts or agreements and other
      restrictions, other than Permitted Liens, applicable federal, provincial and
      state securities law restrictions and those set forth in the Organizational
      Documents. The Seller is the beneficial and record owner of all of the issued
      and outstanding ordinary shares of the Holder. 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    3.4 Investment
      Representation.
      The
      Holder is acquiring the ADSX Shares to transfer them immediately to the Seller.
      The Seller is acquiring the ADSX Shares for its own account with the present
      intention of holding the ADSX Shares for investment purposes and not with a
      view
      to or for sale in connection with any public distribution of the ADSX Shares
      in
      violation of any federal or state securities laws. Each of the Holder and the
      Seller has such knowledge and experience in financial and business matters
      that
      it is capable of evaluating the merits and risks of an investment in the ADSX
      Shares. Each of the Holder and the Seller acknowledges that the ADSX Shares
      have
      not been registered under the Securities Act or any state or foreign securities
      laws and that the ADSX Shares may not be sold, transferred, offered for sale,
      pledged hypothecated or otherwise disposed of unless such transfer, sale,
      assignment, pledge, hypothecation or other disposition is pursuant to the terms
      of an effective registration statement under the Securities Act and is
      registered under any applicable state or foreign securities laws or pursuant
      to
      an exemption from registration under the Securities Act and any applicable
      state
      or foreign securities laws.

     

    3.5 Brokerage.
      There
      are no claims for brokerage commissions, finders’ fees or similar compensation
      in connection with the transactions contemplated by this Agreement based on
      any
      arrangement or agreement made by or on behalf of the Seller or the Holder other
      than the fees and expenses of Harris Nesbitt Corp. which shall be paid by the
      Seller or the Holder.

     

    3.6 Residency.
      The
      Holder is a non-resident of Canada for purposes of the Tax Act.

     

    ARTICLE
      4

     

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY, THE HOLDER AND THE SELLER

     

    The
      Company, the Holder and the Seller hereby jointly and severally represent
      and warrant to the Buyer that, except as disclosed on the Schedules attached
      hereto: 

     

    4.1 Organization
      and Corporate Power.
      The
      Company is a corporation amalgamated and duly organized under the laws of the
      Province of Ontario and is in good standing with respect to the filing of annual
      reports, and the Company has all requisite corporate power and authority and
      all
      authorizations, licenses and permits necessary to own and operate its properties
      and to carry on its businesses as now conducted, except where the failure to
      hold such authorizations, licenses and permits would not have a Material Adverse
      Effect. The Company is not required to be extra-provincially registered to
      do
      business in any jurisdiction other than Ontario, except where the failure to
      be
      so registered would not have a Material Adverse Effect.

     

    4.2 No
      Subsidiaries.
      The
      Company does not own, control or hold the right to acquire any stock,
      partnership interest or joint venture interest or other equity ownership
      interest in any other corporation, organization or entity.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    4.3 Authorization;
      No Breach.

     

    (a) The
      Company has full power and authority to enter into this Agreement and the
      agreements contemplated hereby to which the Company is a party and to consummate
      the transactions contemplated hereby and thereby. The execution, delivery and
      performance of this Agreement and all other agreements and transactions
      contemplated hereby to which the Company is a party have been duly authorized
      by
      the Board of Directors and (to the extent required) the shareholder(s) of the
      Company and no other corporate proceedings on their part are necessary to
      authorize this Agreement and the agreements contemplated hereby and the
      transactions contemplated hereby and thereby. Assuming that this Agreement
      and
      any other agreements contemplated hereby to be executed and delivered by the
      Company are valid and binding obligations of the Buyer, ADSX and/or VeriChip,
      as
      the case may be, this Agreement and all other agreements contemplated hereby
      to
      be entered into by the Company each constitutes a legal, valid and binding
      obligation of the Company enforceable against the Company in accordance with
      its
      terms, except as enforceability may be limited by bankruptcy laws, similar
      laws
      of debtor relief and general principles of equity.

     

    (b) Except
      as
      set forth on Schedule 4.3,
      the
      execution, delivery and performance of this Agreement by the Company, the Holder
      and the Seller and the consummation of the transactions contemplated hereby
      do
      not and will not conflict with or result in any breach of any of the provisions
      of, or constitute a default under (whether with or without due notice, the
      passage of time or both), result in a violation of, result in the creation
      of
      any Lien (other than Permitted Liens) upon the Shares or any assets of the
      Company, give any third party the right to modify, terminate or accelerate
      any
      obligation under, or require any authorization, consent, approval, exemption
      or
      other action by or notice to any court or other governmental body, under the
      provisions of the Organizational Documents or any indenture, mortgage, lease,
      loan agreement or other agreement or instrument to which the Company is bound,
      or any material law, statute, rule, regulation, order, judgment or decree to
      which the Company is subject, in each case except for such conflicts, breaches,
      defaults, violations, Lien creations, rights the exercise of which or
      requirements the failure of which to meet would not have a Material Adverse
      Effect.

     

    4.4 Capitalization.
      The
      authorized capital stock of the Company consists of an unlimited number of
      preferred shares and an unlimited number of common shares, of which no preferred
      shares are outstanding and of which 6,251,601 common shares (which constitute
      the Shares) are outstanding. As of the date hereof, all of the issued and
      outstanding Shares of the Company are owned of record by the Holder and are
      free
      and clear of any Liens other than Permitted Liens. All of the outstanding Shares
      of the Company have been duly authorized and are validly issued, fully paid
      and
      non-assessable. Except as set forth on Schedule 4.4,
      the
      Company does not have any other capital stock, equity securities or securities
      containing any equity features authorized, issued or outstanding, and there
      are
      no agreements or other rights or arrangements existing or outstanding which
      provide for the sale or issuance of any of the foregoing by the Company. Except
      as set forth

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    on
      Schedule 4.4,
      there
      are no rights, subscriptions, warrants, options, conversion rights, preemptive
      rights, rights of first refusal, shareholder agreements, or agreements of any
      kind outstanding to purchase or otherwise acquire any shares of Shares or other
      equity securities of the Company of any kind. Except as set forth on
Schedule 4.4,
      there
      are no agreements or other obligations (contingent or otherwise) which require
      the Company to repurchase or otherwise acquire or retire any shares of the
      Company or other equity securities. No
      shares
      of capital stock of the Company are currently reserved for issuance for any
      purpose or upon the occurrence of any event or condition. Other than this
      Agreement, there are no existing contracts or options between the Holder or
      the
      Seller on the one hand, and any other Person, on the other hand, regarding
      the
      Shares. There are no contracts between or among the Holder, the Seller or any
      other Persons that are binding upon the Company with respect to the voting,
      transfer, encumbrance of the Company’s capital stock or options to acquire
      capital stock or securities that are exchangeable or convertible into capital
      stock of the Company or with respect to any aspect of the Company’s governance
      or dividends or distributions. The shareholder’s ledger of the Company that has
      been delivered to the Buyer for inspection prior to the date hereof is complete
      and correct. The Company has not redeemed any securities in violation of any
      contract, order or regulation. 

     

    4.5 Financial
      Statements.
      

     

    (a) The
      Company has furnished the Buyer with copies of (i) its unaudited
      consolidated balance sheet as of April 2, 2005, and the related statements
      of operations, shareholders’ equity and cash flows for the three-month period
      then ended (such balance sheet is referred to herein as the “Latest
      Balance Sheet”),
      and
      (ii) its audited consolidated balance sheet and statements of income
      and
      cash flows for the fiscal years ended December 31, 2004, December 31,
      2003, and December 31, 2002 (the “Financial
      Statements”).
      Such
      financial statements have been based upon the information contained in the
      Company’s books and records, have been prepared in accordance with GAAP,
      consistently applied, and present fairly in all material respects the financial
      condition and results of operations of the Company as of the times and for
      the
      periods referred to therein, subject in the case of the unaudited financial
      statements to (i) the absence of footnote disclosures and other
      presentation items and (ii) changes resulting from normal year-end
      adjustments. Schedule
      4.5(a)
      hereof
      is a true and complete copy of the management representation letter provided
      by
      certain members of the Company’s management to its auditors in connection with
      the audit of its 2004 Financial Statements.

     

    (b) Except
      as
      set forth on Schedule
      4.5(b),
      the
      Company does not have any liabilities, guarantees, indebtedness or obligations
      (whether accrued, absolute, contingent, unliquidated or otherwise, whether
      due
      or to become due) (“Liabilities”)
      in
      excess of $50,000 individually or in the aggregate arising out of transactions
      entered into at or prior to the Closing or any state of facts existing at or
      prior to the Closing, other than (i) Liabilities reflected on the Latest
      Balance Sheet of the Company or Liabilities of a nature not required to be
      reflected on a balance sheet in accordance with GAAP, (ii) Liabilities
      that
      have arisen after the date of the Latest Balance Sheet in the ordinary course
      of
      business (none of which is a liability resulting from breach of a contract,
      breach of warranty, tort, infringement or a claim), (iii) Liabilities
      under
      contracts or commitments disclosed on Schedule 4.9,
      Schedule 4.4
      or
Schedule
      4.14
      or under
      contracts or commitments not required to be disclosed thereon (but not
      liabilities for breaches thereof) and (iv) Liabilities under this Agreement
      or in connections with the negotiation, execution and delivery of this Agreement
      and the other instruments required to be delivered by this Agreement and the
      consummation of the transactions contemplated hereby.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (c) Except
      as
      described on Schedule
      4.5(c),
      (i) there are (and since January 1, 2004, there have been) no contracts,
      agreements, loans, business dealings or other transactions between (A) the
      Company, on the one hand, and (B) the Holder, the Seller and any Affiliate
      of the foregoing (other than the Company), or any partner, director or officer
      of the Holder, the Seller or any of their respective Affiliates (other than
      the
      Company), on the other hand, and (ii) neither the Seller nor the Holder
      nor
      any of their Affiliates (other than the Company) has (since January 1, 2004)
      engaged in any transaction relating to the Company that was for the Company’s
      benefit and which would be required to be reported on the Company’s financial
      statements if engaged in by the Company but was not so reported.

     

    (d) No
      Person
      has guaranteed, or provided any financial accommodation of, any indebtedness,
      obligation or liability of the Company or for the benefit of the Company for
      the
      periods covered by the Financial Statements other than the Holder’s and the
      Seller’s guaranties of and related security arrangements respecting the
      Company’s senior and subordinated indebtedness and as set forth in the Financial
      Statements.

     

    4.6 Absence
      of Certain Developments.
      The
      Company’s Total Operating Assets as of the open of business on the Closing Date
      are at least $4,476,000. Except as set forth on Schedule 4.6
      or as
      otherwise contemplated by this Agreement, since the date of the Latest Balance
      Sheet, the Company has not:

     

    (a) borrowed
      any amount or incurred or become subject to any material liabilities, except
      liabilities incurred in the ordinary course of business, liabilities under
      contracts entered into in the ordinary course of business and borrowings from
      banks (or similar financial institutions) necessary to meet ordinary course
      working capital requirements;

     

    (b) mortgaged,
      pledged or subjected to any lien, charge or other encumbrance, any portion
      of
      its assets, except Permitted Liens;

     

    (c) sold,
      assigned or transferred any of its tangible assets, except in the ordinary
      course of business;

     

    (d) sold,
      assigned or transferred any patents, trademarks, trade names, copyrights, trade
      secrets or other intangible assets;

     

    (e) suffered
      any material damage, destruction or extraordinary losses, whether or not covered
      by insurance;

     

    (f) issued,
      sold, assigned or transferred any of its Shares or other equity securities,
      securities convertible into its Shares or other equity securities or warrants,
      options or other rights to acquire its Shares or other equity securities, or
      any
      bonds or debt securities;

     

    (g) declared
      or paid any dividends or made any distributions on the Company’s Shares or other
      equity securities or redeemed or purchased any shares of the Company’s Shares or
      other equity securities or, other than pursuant to contracts or commitments
      disclosed on Schedule 4.9,
      made
      any other payments to the Seller, the Holder or any of their respective
      Affiliates (other than the Company);

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    (h) to
      the
      Knowledge of the Company, had any change in its assets, liabilities, financial
      condition, prospects
      or operations that individually or in the aggregate has had or is reasonably
      expected to have a Material Adverse Effect;

     

    (i) had
      any
      resignation or termination, or any hiring or engagement of, any manager,
      officer, key employee or group of employees of the Company; and the Company
      has
      no Knowledge of the impending resignation or termination of employment of any
      such director, officer, key employee or group of employees, except as provided
      for in this Agreement or on Schedule
      4.6;
      

     

    (j) had
      any
      change in its obligations by way of guaranty, endorsement, indemnity, warranty
      or otherwise that has had a Material Adverse Effect;

     

    (k) waived
      any rights of material value or material debt owed to it;

     

    (l) made
      any
      direct or indirect loans to any shareholder, employee, officer or director
      of
      the Company, the Seller, or the Holder, other than advances to employees in
      the
      ordinary course of business;

     

    (m) materially
      changed any compensation arrangements or agreements with any employee, officer,
      director or shareholder of the Company, the Seller or the Holder, other than
      as
      required under agreements or Plans disclosed on Schedule
      4.9
      or
4.14
      to this
      Agreement or in the ordinary course of business;

     

    (n) adopted
      a
      plan of liquidation or resolutions providing for liquidation, dissolution,
      merger, consolidation or other reorganization of the Company;

     

    (o) made
      any
      material amendments to any agreement to which it is a party or by which it
      is
      bound;

     

    (p) changed
      its accounting methods or principles or booked any write-down, write-up or
      revaluation of any assets of the Company; 

     

    (q) failed
      to
      promptly pay and discharge current liabilities, or entered into an agreement
      with any party to extend the payment of any current liability; 

     

    (r) taken
      any
      action outside of the ordinary course of business with the intent of increasing
      Total Operating Assets for purposes of meeting the condition contained in
Section 2.1(h)
      of this
      Agreement or otherwise under this Agreement;

     

    (s) to
      the
      Knowledge of the Company, suffered any adverse allegation or finding by any
      governmental agency or Authority; or

     

    (t) committed
      orally or in writing to do any of the foregoing.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    4.7 Title
      to Properties.

     

    (a) The
      real
      property covered by the leases described on Schedule 4.7(a)
      constitutes all of the real property leased by the Company. The leases described
      on Schedule 4.7(a)
      are in
      full force and effect, and the Company holds a valid and existing leasehold
      interest under each of the leases for the term set forth on Schedule 4.7(a).
      None of
      the Company, the Holder or the Seller has received any written notice of any,
      and there exists no, event of default by the Company or event which constitutes
      or would constitute (with notice or lapse of time or both) a default by the
      Company under any such lease. All rent and other amounts due and payable with
      respect to the Company’s leases have been paid through the date of this
      Agreement. All lessors under any real property leases being transferred
      hereunder have consented (where such consent is required under the lease) to
      the
      consummation of the transactions contemplated by this Agreement. None of the
      Seller, the Holder or the Company has received written notice that the landlord
      with respect to any real property lease would refuse to renew such lease upon
      expiration of the period thereof, upon substantially the same terms, except
      for
      rent increases consistent with past experience or market rentals. The Company
      has delivered to the Buyer complete and accurate copies of each of the leases
      described on Schedule 4.7(a),
      and
      none of the leases have been modified, except to the extent that such
      modifications are disclosed by the copies delivered to the Buyer.

     

    (b) The
      Company does not own any real property.

     

    (c) The
      Company is the owner of and has good and marketable title to all material items
      of its personal property, tangible and intangible, and other assets shown on
      the
      Latest Balance Sheet free and clear of all Liens except Permitted Liens, except
      (i) such personal property which has been disposed of in the ordinary
      course of business since the date of the Latest Balance Sheet, and
      (ii) such items as are set forth on Schedule 4.7(c).

     

    4.8 Tax
      Matters.

     

    (a) The
      Company has filed all federal and all foreign, provincial, state, county and
      local income, excise, property and other Tax Returns which are required to
      be
      filed by it. Except as set forth on Schedule 4.8,
      all
      Taxes due and payable have been fully paid or properly accrued (whether or
      not
      shown on any return). All of the Company’s Tax Returns are true and correct in
      all material respects, to the Company’s Knowledge the provision for taxes on the
      Latest Balance Sheet is sufficient for all accrued and unpaid Taxes as of the
      date thereof, and all Taxes which the Company is obligated to withhold from
      amounts owing to any employee, creditor or third party have been fully paid
      or
      properly accrued. 

     

    (b) The
      Company has not extended the time within which to file any Tax Return.
No
      claim
      has been made in writing, or to Company’s Knowledge otherwise, by an authority
      in a jurisdiction where the Company currently does not file Tax Returns that
      Company is
      or may
      be subject to taxation by that jurisdiction. There are no Liens
      for
      Taxes (other than Taxes not yet due and payable or which are being contested
      in
      good faith) upon any of the assets
      of
      Company.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (c) The
      Company has not waived any statute of limitations in respect of Taxes or agreed
      to any extension of time with respect to a Tax assessment or
      deficiency.

     

    (d) The
      Company will not be required to include any
      item
      of income exceeding $25,000 in, or exclude any material item of deduction
      exceeding $25,000 from, taxable income for
      any
      taxable period (or portion thereof) ending after the Closing Date as a
result
      of
      any:

     

    (i) change
      in
      method of accounting for a taxable period ending on or prior to the Closing
      Date; or

     

    (ii) prepaid
      amount received on or prior to the Closing Date.

     

    (e) Except
      as
      specified on Schedule
      4.8,
      the
      Company has not: 

     

    (i) made
      any
      election under s. 85 of the Tax Act with respect to the acquisition or
      disposition of any assets;

     

    (ii) made
      any
      election under s. 83 of the Tax Act with respect to the payment out of the
      capital dividend account of the Company;

     

    (iii) acquired
      or had the use of any assets from a person with whom it was not dealing at
      arm’s
      length other than at fair market value;

     

    (iv) disposed
      of any assets to a person with whom it was not dealing at arm’s length (within
      the meaning of the Tax Act) for proceeds less than the fair market value
      thereof; or

     

    (v) discontinued
      carrying on any business in respect of which non-capital losses were incurred,
      and any non-capital losses which the Company has are not losses from property
      or
      business investment losses.

     

    (f) The
      Company has made all elections required to be made under Part III of the Tax
      Act
      in connection with any distributions by the Company and all such elections
      were
      true and correct and in the prescribed form and were made within the prescribed
      time periods. 

     

    (g) There
      are
      no contingent Tax liabilities nor any grounds which could prompt a reassessment
      of Taxes.

     

    (h) The
      Financial Statements and schedules filed with the income Tax Returns as filed
      by
      the Company for each of its taxation years commencing after 2001 reflect and
      disclose, to the extent required by the Tax Act or other applicable revenue
      laws, all material related-party transactions to which the Company was a
      party.

     

    (i) With
      respect to the goods and services tax under the Excise Tax Act (“GST”):

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    (i) the
      Company is registered for GST purposes under registration number 10249 6569
      RT0001;

     

    (ii) the
      Company does not have any material deferred obligations or liabilities under
      any
      section of the Excise Tax Act;

     

    (iii) the
      Company has not supplied property or rendered service to a Person with whom
      the
      Company was not dealing at arm’s length (within the meaning of the Tax Act) for
      proceeds less than the fair market value thereof;

     

    (iv) all
      GST
      required to be collected by the Company has been collected and all GST amounts
      required to be remitted to the Receiver General for Canada have been remitted;
      and

     

    (v) the
      reporting period of the Company for purposes of GST is monthly and all GST
      returns and reports of the Company required by law to be filed have been filed
      prior to the Closing in a timely manner and are true, complete and correct
      in
      all material respects.

     

    4.9 Contracts
      and Commitments.

     

    (a) Except
      as
      set forth on Schedule 4.9,
      the
      Company is not a party to any oral or written: (i) collective bargaining
      agreement or contract with any labor union, (ii) bonus, pension, profit
      sharing, retirement or other form of deferred compensation plan, other than
      as
      described in Section 4.4
      or on
Schedule 4.14,
      (iii) stock purchase plan, option plan or similar plan, (iv) contract
      for the employment of any officer, employee or other person on a full-time,
      part-time, or consulting basis, (v) agreement or indenture relating
      to the
      borrowing of money or to mortgaging, pledging or otherwise placing a lien on
      any
      of the Company’s assets, (vi) guaranty of any obligation for borrowed money
      or other material guaranty, (vii) lease or agreement under which it
      is
      lessee of, or holds or operates any personal property owned by any other party,
      for which the annual rental exceeds $25,000, (viii) lease or agreement
      under which it is lessor of or permits any third party to hold or operate any
      property, real or personal, for which the annual rental exceeds $25,000, (ix)
      contract or group of related contracts with the same party for the purchase
      of
      products or services, under which the undelivered balance of such products
      and
      services has a selling price in excess of $50,000 or under which an amount
      in
      excess of $50,000 remains due to the Company, (x) contract or group
      of
      related contracts with the same party for the sale of products or services
      for
      each party to whom the Company has sold products or services with a sales price
      in excess of $200,000 during the last twelve calendar months preceding the
      date
      of this Agreement, (xi) contract or non-competition provision in any
      contract prohibiting the Company from freely engaging in any business or
      competing anywhere in the world or otherwise limiting in any material respect
      the use, license, transfer, exploitation, commercialization or sale of the
      Company’s products, (xii) contract with any officer, director or
      shareholder (other than for employment on customary terms), (xiii) contract
      with
      independent agents, brokers, dealers or distributors not terminable on 60 days
      or less notice without liability to the Company, (xiv) material sales,
      commissions, advertising or marketing contract not

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    terminable
      on 60 days or less notice without liability to the Company or (xv) contract
      entered into other than in the ordinary course of business and that is material
      to the Company.

     

    (b) The
      Buyer
      has been supplied with a true and correct copy of all written contracts which
      are listed on Schedule 4.9,
      together with all amendments, waivers or other changes thereto.

     

    (c) Except
      as
      set forth on Schedule
      4.9(c),
      (i) the
      Company is not in material default under, or in material breach of, and has
      not
      cancelled, any contract listed on Schedule
      4.9
      and, to
      the Company’s Knowledge, no other party to any contract listed on Schedule
      4.9
      is in
      default under, or in breach of or has cancelled any such contract; (ii) to
      the Company’s Knowledge, no event has occurred that with the passage of time or
      the giving of notice or both would result in a breach or default under any
      such
      contract or agreement; and (iii) each contract and agreement listed
      on
Schedule
      4.9
      is
      legal, valid, binding and enforceable against the Company and, to the Company’s
      Knowledge, the other parties thereto.

     

    4.10 Intellectual
      Property Rights.
      Except
      as set forth on Schedule 4.10,
      there
      are no patents, patent applications, trademarks, service marks, trade names,
      corporate names, domain names, copyrights (but excluding software), or
      registrations or applications for industrial designs, copyrights, mask works,
      trademarks or trade dress necessary to the conduct of the Company’s businesses
      as now conducted. Except as set forth on Schedule 4.10,
      the
      Company owns, licenses or otherwise possesses the right to use the Intellectual
      Property Rights necessary to the conduct of its businesses as now conducted,
      and, except for licenses disclosed on Schedule 4.10,
      such
      rights have not been licensed or assigned to any third party. Any inbound
      licenses required for the conduct of the Company’s business, as now conducted,
      will continue to be effective after the Closing, except for any such license
      that if not effective would not have a Material Adverse Effect. Except as set
      forth on Schedule 4.10,
      during
      the two year period prior to the date of this Agreement, none of the Company,
      the Seller or the Holder has received any written or, to the Company’s
      Knowledge, verbal notices, accusations, or allegations of infringement or
      misappropriation from any third party with respect to the Intellectual Property
      Rights which are listed on Schedule 4.10.
      To the
      Company’s Knowledge, the Company has not infringed during such two year period
      and is not currently infringing on the Intellectual Property Rights of any
      other
      Person. To the Company’s Knowledge, no third parties are using (other than
      pursuant to licenses disclosed on Schedule 4.10)
      or
      infringing the Intellectual Property Rights owned by the Company.

     

    4.11 Litigation.
      Except
      as set forth on Schedule 4.11,
      there
      are no actions, suits proceedings, or (to the Company’s Knowledge)
      investigations pending or, to the Company’s, Knowledge, threatened against the
      Company, at law or in equity, or before or by any federal, provincial, state,
      municipal or other governmental department, commission, board, bureau, agency
      or
      instrumentality, domestic or foreign, which if determined adversely to the
      Company would have a Material Adverse Effect. Except as set forth on
Schedule
      4.11
      hereto,
      the Company is fully insured with respect to each of the matters set forth
      on
Schedule
      4.11.
      Except
      in connection with matters disclosed on Schedule
      4.11,
      the
      Company has not received any written opinion or memorandum or written advice
      from legal counsel to the effect that it is

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    exposed,
      from a legal standpoint, to any liability or obligation which could have an
      adverse effect in excess of $25,000.

     

    4.12 Brokerage.
      There
      are no claims for brokerage commissions, finders’ fees or similar compensation
      in connection with the transactions contemplated by this Agreement based on
      any
      arrangement or agreement made by or on behalf of the Company other than the
      fees
      and expenses of Harris Nesbitt Corp., which shall be paid by the Seller or
      the
      Holder.

     

    4.13 Governmental
      Consents, etc.
      Except
      as set forth on Schedule 4.13,
      to the
      Company’s Knowledge, no Permit, consent, approval or authorization of, or
      declaration to or filing with, any governmental or regulatory authority is
      required in connection with any of the execution, delivery or performance of
      this Agreement by the Company, the Holder or the Seller or the consummation
      by
      the Company, the Holder or the Seller of any other transaction contemplated
      hereby.

     

    4.14 Employee
      Benefit Plans.
      

     

    (a) Schedule
      4.14
      sets
      forth a complete list of all Plans. Current copies of the Plans listed on
Schedule
      4.14
      and the
      latest financial statements and actuarial reports for the Plans (if applicable)
      have been made available to the Buyer.

     

    (b) The
      Plans
      are duly registered where required by all applicable law and, to the Company’s
      Knowledge, there exists no state of facts known to the Company that could
      jeopardize such status.

     

    (c) With
      respect to the Plans, all required contributions to be made or remitted under
      the Plans have been fully paid or remitted to the date hereof in a timely
      fashion in accordance with the terms of that Plan and all applicable
      laws.

     

    (d) All
      material obligations of the Company required to be performed in connection
      with
      the Plans and funding media established therefor up to the date hereof have
      been
      performed, and to the Company’s Knowledge there are no outstanding material
      defaults or violations by any party thereto.

     

    (e) Except
      as
      described on Schedule
      4.14,
      the
      execution of this Agreement and the consummation of the transactions
      contemplated hereby will not (either alone or in conjunction with the occurrence
      of any additional or subsequent events) constitute an event under any Plan
      that
      will result in any material payment (whether of severance pay or otherwise),
      acceleration, forgiveness of indebtedness, vesting, distribution, increase
      in
      benefits or obligation to fund benefits with respect to any officer or employee
      of the Company.

     

    (f) The
      Company is not a party to any management agreement, pay equity plan, vacation
      or
      vacation pay policy, or any bonus, deferred compensation, incentive
      compensation, stock purchase or option, severance or termination pay,
      hospitalization or medical expense benefits, employee life or other insurance,
      supplemental unemployment benefits, profit sharing or retirement plan, program,
      agreement or arrangement, or to any executive or key personnel incentive or
      other special compensation arrangement, or to other contracts or

     

    
      
        
        

      

      
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    agreements
      with or with respect to officers, employees or agents other than those plans,
      programs, agreements and arrangements listed and described on Schedule
      4.14
      (the
“Benefit
      Plans”).
      The
      Company does not have any formal plan or commitment to create any additional
      Benefit Plan or to modify or amend any existing Benefit Plan that would affect
      any employee, other than such modification or amendment as may be required
      to
      secure the continued registration of an existing Benefit Plan with any
      applicable regulatory authority. 

     

    (g) Except
      as
      disclosed on Schedule
      4.14,
      none of
      the Benefit Plans provide benefits, including, without limitation, life
      insurance or medical benefits, to employees following their retirement or other
      termination of service. 

     

    (h) There
      are
      no pending or to the Company’s Knowledge threatened or anticipated Claims
      against, or otherwise involving, any of the Benefit Plans by an employee or
      a
      beneficiary or otherwise, other than routine claims for benefits payable under
      the Benefit Plan.

     

    4.15 Insurance.
      Schedule 4.15
      hereto
      sets forth a complete and accurate summary of all insurance policies maintained
      by the Company, including name of insurer, the types, dates and amounts of
      coverage, and a statement of the claims pending, as to each policy. All premiums
      due and payable with respect thereto covering all periods up to and including
      the Closing Date have been paid. All of such insurance policies are in full
      force and effect, and no written or, to the Company’s Knowledge, other notice of
      cancellation or termination has been received with respect to any Policy. The
      Company has not breached or otherwise failed to perform in any material respect
      its obligations under such policies nor has the Company, the Seller, or the
      Holder received any adverse written or, to the Company’s Knowledge, other notice
      from any of the insurers party to such policies with respect to any such alleged
      breach or failure in connection with any of such policies. All policies are
      sufficient for compliance in all material respects with all regulations and
      all
      contracts to which the Company is subject and are, to the Company’s Knowledge,
      valid, outstanding, collectible and enforceable policies and will not terminate
      or lapse solely by reason of the execution and delivery of this Agreement or
      the
      consummation of the transactions contemplated hereby. Except as set forth on
      Schedule
      4.15
      hereto,
      all of the policies currently remain in full force and effect through thirty
      (30) days after the Closing Date. The Company has not during the last three
      (3)
      years been refused any insurance with respect to its assets or its business
      operations, nor has any of its coverage ever been limited by any insurance
      carrier to which the Company has applied for any policy or with which it has
      carried an insurance policy during the past three (3) years.

     

    4.16 Compliance
      with Laws.
      To the
      Company’s Knowledge, the Company is in compliance with each applicable statute,
      rule, regulation, order, and restriction of any domestic or foreign government
      or any instrumentality or agency thereof in respect of the conduct of its
      business and the ownership of its assets.

     

    4.17 Environmental
      Compliance and Conditions.
      

     

    (a) Except
      as
      set forth on Schedule 4.17,
      the
      Company has all material permits, licenses, approvals and other authorizations
      required under federal, provincial, state and local laws and regulations
      relating to the pollution or protection of the environment,
      including,

     

    
      
        
        

      

      
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    but
      not
      limited to, laws relating to emissions, discharges, releases or threatened
      releases of pollutants, contaminants or hazardous or toxic materials or wastes
      into ambient air, surface water, groundwater, or lands or otherwise relating
      to
      the manufacture, processing, distribution, use, treatment, storage, disposal,
      transport, or handling of pollutants, contaminants or hazardous or toxic
      materials or waste (“Environmental
      Requirements”),
      except where the failure to hold such licenses, permits, approvals and
      authorizations would not have a Material Adverse Effect. Except as set forth
      on
Schedule 4.17,
      the
      Company is in compliance in all material respects with all federal, provincial,
      state and local environmental laws and regulations and all terms and conditions
      of any and all required permits, licenses, approvals and authorizations and
      are
      also in compliance with all other limitations, restrictions, conditions,
      standards, prohibitions, requirements, obligations, schedules and timetables
      contained in any Environmental Requirements or any written notice or demand
      letter issued, entered, promulgated or approved thereunder, except where the
      failure to so comply would not have a Material Adverse Effect.

     

    (b) The
      Company has not caused or permitted, nor has the Company any Knowledge of,
      the
      Release of any Hazardous Substances on or offsite of the Company’s business
      facility or property, or of any Release from a facility or property owned or
      operated by third parties, including previous owners, in each case giving rise
      to any material liability under Environmental Requirements.

     

    (c) Schedule
      4.17
      lists
      and describes any prosecutions of the Company for an offence for non-compliance
      with any Environmental Requirement and any convictions, settlements or other
      disposition of such prosecutions short of conviction.

     

    (d) Schedule
      4.17
      lists
      and describes any Orders issued with respect to Environmental Requirements
      relating to the business of the Company that are still in full force and effect
      on the date hereof. The Company has received no written notice, nor does the
      Company have Knowledge of any facts which would give rise to any notice, that
      any such Orders will be issued against the Company in the near
      future.

     

    (e) No
      representations or warranties elsewhere in this Agreement, including but not
      limited to those regarding the Company’s compliance with applicable laws or any
      other aspects of the Company’s operations, shall be deemed to relate to
      Environmental Requirements or other environmental matters, the representations
      and warranties in this Section
      4.17
      being
      the Company’s sole representations and warranties regarding Environmental
      Requirements and other environmental matters.

     

    4.18 Banking
      and Agency Arrangements.

     

    (a) Schedule 4.18
      sets
      forth a correct and complete list of:

     

    (i) each
      bank, trust company or similar financial institution in which the Company has
      an
      account or safe deposit box or other custodial arrangement and the numbers
      of
      such accounts or safe deposit boxes maintained by the Company; and

     

    (ii) the
      names
      of all Persons authorized to draw on each such account or to have access to
      any
      such safe deposit box facility.

     

    
      
        
        

      

      
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    (b) Except
      as
      set forth on Schedule 4.18,
      the
      Company has not granted any general or special powers of attorney or any other
      agency arrangement.

     

    4.19 Books
      and Records.
      The
      corporate minute books of the Company are complete and correct in all material
      respects and contain all of the proceedings of the shareholders and directors
      of
      the Company. A true and complete list of the incumbent directors and officers
      of
      the Company immediately prior to the closing is set forth on Schedule 4.19
      hereto.

     

    4.20 Customer
      Warranties.
      There
      are no pending or, to the Knowledge of the Company, threatened Claims for the
      breach of any warranty, whether expressed or implied, on products or services
      sold prior to the Closing Date by the Company that are not (a) listed
      on
Schedule
      4.20,
      (b) referred to in the Financial Statements or by footnote therein or
      the
      Latest Balance Sheet or by footnote therein, (c) fully reserved against
      in
      accordance with GAAP or (d) standard
      warranty obligations (to replace, repair or refund) in the ordinary course
      of
      business.

     

    4.21 Products
      Liability.
      Except
      as set forth on Schedule 4.21
      hereto,
      (a) there are no outstanding or, to the Company’s Knowledge, threatened product
      liability Claims by or before any Authority or in any court or similar tribunal
      against the Company or concerning any product shipped, sold or delivered by
      or
      on behalf of the Company relating to or resulting from an alleged defect in
      design, manufacture, materials or workmanship of any product manufactured,
      shipped, sold or delivered by or on behalf of the Company or any alleged failure
      to warn, or any alleged breach of implied warranties or
      representations,
      other
      than pursuant to standard warranty obligations (to replace, repair or refund)
      in
      the ordinary course of business,
      and (b)
      in the last three (3) years
      there have not been any recalls conducted with respect to any product
      manufactured, shipped, sold or delivered by or on behalf of the Company, or
      to
      the Company’s Knowledge any investigation or consideration of or decision made
      by any Authority con-cerning whether to undertake or not undertake any
      recalls.

     

    4.22 Accounts
      Receivable; Inventories.
      The
      accounts receivable of the Company reflected in the Financial State-ments and
      such additional accounts receivable as are reflected on the books of the Company
      on the date hereof are (except to the extent reserved against) valid and genuine
      and arise out of bona fide sales and deliveries of goods, performance of
      services or other business transactions and are not (except to the extent of
      any
      reserves on the Company’s balance sheet) subject to set-offs or counterclaims,
      other than returns in the ordinary course of business. Other than accounts
      receivable arising out of the sale of beta products in an aggregate amount
      not
      exceeding $50,000, none of such accounts receivable reflected on the books
      of
      the Company on the date hereof are subject to extended payment terms granted
      by
      the Company beyond the time periods customers have in the ordinary course of
      business. The inventories reflected on the Financial Statements and held by
      the
      Company on the date hereof are usable or saleable in the ordinary course of
      business of the Company, subject to the reserves set forth on the Company’s
      books and records. All such inventories are owned free and clear and are not
      subject to any Lien except to the extent reserved against on the Company’s
      balance sheet or reflected in the Financial Statements and except for Permitted
      Liens.

     

    
      
        
        

      

      
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    4.23 Customers
      and Suppliers.
      Schedule
      4.23
      hereto
      sets forth a complete and accurate list of (a) the top 10 customers (by revenue)
      of the Company during the last full fiscal year prior to the Closing Date,
      and
      (b) the top 10 suppliers (by expenditure) of the Company during the last full
      fiscal year prior to the Closing Date. No such customer of the Company disclosed
      on Schedule
      4.23
      has
      advised the Company in writing or, to the Company’s Knowledge, otherwise since
      the end of the last full fiscal year prior to the Closing Date that it will
      stop, or materially decrease the rate of, buying materials, products or services
      from the Company. To the Knowledge of the Company, no unfilled customer order
      or
      commitment obligating the Company to process, manufacture or deliver products
      or
      perform services will result in a material loss to the Company upon completion.
      No such supplier of the Company disclosed on Schedule
      4.23
      has
      advised the Company in writing since the end of the last full fiscal year that
      it will stop, or materially decrease the rate of, supplying materials, products,
      or services to the Company.
      Since
      January 1, 2004, other than in the ordinary course of business, to the
      Company’s Knowledge the Company has not offered any customer rebates, free
      products or services, pricing discounts, sales incentives or similar promotions
      that would have the effect of accelerating pre-Closing sales and decreasing
      post-Closing sales.

     

    4.24 Permits.
      Except
      as indicated on Schedule
      4.24,
      the
      Company owns or possesses all right, title and interest in and to all of the
      Permits required by any Authority having or claiming jurisdiction over the
      Company’s business and properties or that are necessary to own and operate the
      Company’s business as presently conducted. The Company is in compliance in all
      material respects with the terms and conditions of such Permits and has not
      received any written or, to the Company’s Knowledge, other notices that it is in
      violation of any of the terms or conditions of such Permits. All of such Permits
      are in full force and effect and no claim is pending or, to the Knowledge of
      the
      Company, threatened to revoke, suspend, or terminate any such Permit or declare
      any such Permit invalid in any material respect.

     

    4.25 Improper
      and Other Payments.
      Neither
      the Company, nor any director, officer, or key employee thereof, nor, to the
      Company’s Knowledge, any agent or representative of the Company, nor, to the
      Company’s Knowledge, any Person acting on behalf of any of them, (a) has
      made, paid or received any unlawful bribes, kickbacks or other similar payments
      to or from any Person or Authority, (b) has made, directly or indirectly, any
      illegal contributions to a domestic or foreign political party or candidate
      or
      (c) to the extent the United States Foreign Corrupt Practices Act is applicable
      to any payment made by any of the foregoing Persons, has made any “improper
      foreign payment” (as defined in the United States Foreign Corrupt Practices
      Act).

     

    4.26 Employees
      and Consultants.
      Schedule
      4.26
      sets
      forth a list of all employees and consultants of the Company, together with
      each
      such employee’s or consultant’s base salary for 2005 and total bonus and
      commission in 2004. The Company has conducted its business in compliance in
      all
      material respects with all rules and regulations affecting employment and
      employment practices applicable to the Company, including the payment of wages
      and hours. The Company does not have any collective bargaining agree-ments
      and
      there have been no strikes, work stoppages nor any demands for collective
      bargaining by any union, labor organization or other Person. There is no dispute
      or controversy with any union or other organization of the Company’s employees
      and no arbitration proceedings are pending or, to the

     

    
      
        
        

      

      
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    Knowledge
      of the Company, threatened involving a dispute or controversy affecting the
      Company. Except as set forth on Schedule
      4.26,
      the
      Company has not taken any action, or failed to take any action, that has
      resulted in any Claim by an employee that he or she has been constructively
      terminated or is due severance payments. Except for the Employee Obligations
      as
      set forth, and obligations under the other agreements expressly listed, on
      Schedule
      4.26,
      the
      consummation of the transactions contemplated hereby will not cause the Company
      to incur any “change in control” bonus or other obligations to any of its
      employees or consultants and, upon payment of the Employee Obligations set
      forth
      in the last two columns in the table and under the other agreements expressly
      listed on Schedule 4.26,
      the
      Company will have no obligation for any “change in control” bonus or other
      similar obligation as a result of the consummation of the transactions
      contemplated by this Agreement.

     

    4.27 Disclosure.
      To
      the
      Company’s Knowledge, this Agreement (including the Schedules) does not contain
      any untrue statement of a material fact or omit a material fact necessary to
      make this Agreement (including the Schedules), considered in its entirety,
      not
      misleading. 

     

    ARTICLE
      5

     

    REPRESENTATIONS
      AND WARRANTIES OF THE BUYER

     

    The
      Buyer
      represents and warrants to the Seller and the Company that:

     

    5.1 Organization
      and Corporate Power.
      The
      Buyer is a corporation continued and duly organized under the laws of the
      Province of British Columbia and is in good standing with respect to filing
      of
      annual reports, and has full corporate power and authority to enter into this
      Agreement and perform its obligations hereunder. VeriChip is a corporation
      duly
      organized, validly existing and in good standing under the laws of the State
      of
      Delaware with full corporate power and authority to enter into this Agreement
      and perform its obligations hereunder. ADSX is a corporation duly organized,
      validly existing and in good standing under the laws of the State of Missouri
      with full corporate power and authority to enter into this Agreement and perform
      its obligations hereunder.

     

    5.2 Authorization.
      The
      execution, delivery and performance of this Agreement by the Buyer, VeriChip
      and
      ADSX, and of each applicable Registration Agreement by VeriChip and ADSX, and
      the consummation of the transactions contemplated hereby and thereby have been
      duly and validly authorized by all requisite corporate action, and no other
      corporate proceedings on Buyer’s part, VeriChip’s part or ADSX’s part are
      necessary to authorize the execution, delivery or performance of this Agreement
      or the Registration Agreements. Assuming that this Agreement is a valid and
      binding obligation of the Company, the Holder and the Seller, this Agreement
      constitutes a valid and binding obligation of the Buyer, VeriChip and ADSX,
      enforceable in accordance with its terms, except as enforceability may be
      limited by bankruptcy laws, similar laws of debtor relief and general principles
      of equity. Assuming that each Registration Agreement is a valid and binding
      obligation of the Seller, each Registration Agreement constitutes a valid and
      binding obligation of VeriChip and ADSX, as

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    applicable,
      enforceable in accordance with its terms, except as enforceability may be
      limited by bankruptcy laws, similar laws of debtor relief and general principles
      of equity.

     

    5.3 No
      Violation.
      None of
      the Buyer, VeriChip, or ADSX is subject to or obligated under its respective
      constating documents, certificate or articles of incorporation, bylaws and/or
      comparable governing documents, any applicable law, or rule or regulation of
      any
      governmental authority, or any material agreement or instrument, or any license,
      franchise or permit, or subject to any order, writ, injunction or decree, which
      would be breached or violated by its execution, delivery or performance of
      this
      Agreement and/or in the case of VeriChip and ADSX, by its execution, delivery
      or
      performance of the respective Registration Agreement and the issuance of the
      ADSX Shares and VeriChip Shares.

     

    5.4 Financing.
      The
      Buyer has sufficient cash, available lines of credit or other sources of
      immediately available funds to enable it to make payment of the Closing Payment
      and any other amounts to be paid by it hereunder on and after the Closing Date.
      The Buyer is not incurring or causing the Company to incur any indebtedness
      for
      borrowed money in connection with the transactions contemplated by this
      Agreement.

     

    5.5 ADSX
      Shares and VeriChip Shares.
      Each of
      VeriChip and ADSX has the authorized and issued and outstanding capital stock
      as
      set forth on Schedule 5.5.
      Each of
      the Buyer and VeriChip is a direct or indirect subsidiary of ADSX. Each of
      VeriChip and ADSX has duly authorized and reserved for issuance the VeriChip
      Shares and ADSX Shares, respectively, issuable pursuant to Section 1.4
      as the
      Second Payment and, upon the issuance thereof, all such shares so issued shall
      be validly issued, fully-paid and non-assessable and free and clear of any
      Liens, preemptive rights, options, proxies, voting trusts and other agreements
      and other restrictions, other than applicable federal and state securities
      law
      restrictions.

     

    5.6 Governmental
      Authorities; Consents.
      Except
      as set forth on Schedule
      5.6
      none of
      the Buyer, VeriChip or ADSX is required to submit any notice, report or other
      filing with any governmental authority in connection with the execution or
      delivery by the Buyer, VeriChip or ADSX of this Agreement, the Registration
      Agreements, as applicable, or the consummation of the transactions contemplated
      hereby or thereby. No consent, approval or authorization of any governmental
      or
      regulatory authority or any other party or Person is required to be obtained
      by
      the Buyer, VeriChip or ADSX in connection with its execution, delivery and
      performance of this Agreement and the Registration Agreements, as applicable,
      compliance with the terms here and thereof or the consummation of the other
      transactions contemplated hereby or thereby (including the issuance of the
      ADSX
      Shares and VeriChip Shares).

     

    5.7 Litigation.
      There
      are no actions, suits or proceedings pending or, to the Buyer’s knowledge,
      overtly threatened in writing against or affecting the Buyer, VeriChip or ADSX,
      at law or in equity, or before or by any federal, provincial, state, municipal
      or other governmental department, commission, board, bureau, agency or
      instrumentality, domestic or foreign, which would adversely affect the Buyer’s,
      VeriChip’s or ADSX’s performance under this Agreement, the issuance of the ADSX
      Shares or VeriChip Shares, compliance with the terms thereof or the consummation
      of the transactions contemplated hereby or thereby.

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    5.8 Brokerage.
      There
      are no claims for brokerage commissions, finders’ fees or similar compensation
      in connection with the transactions contemplated by this Agreement based on
      any
      arrangement or agreement made by or on behalf of the Buyer, VeriChip or
      ASDX.

     

    5.9 Investment
      Representation.
      The
      Buyer is purchasing the Shares for its own account with the present intention
      of
      holding the Shares for investment purposes and not with a view to or for sale
      in
      connection with any public distribution of the Shares in violation of any
      federal, provincial or state securities laws. The Buyer has such knowledge
      and
      experience in financial and business matters that it is capable of evaluating
      the merits and risks of an investment in the Shares. The Buyer acknowledges
      that
      the Shares have not been registered under the Securities Act or any state or
      foreign securities laws, that the Company is not a “reporting issuer” within the
      meaning of the Securities Act (Ontario) and that the Shares may not be sold,
      transferred, offered for sale, pledged hypothecated or otherwise disposed of
      unless such transfer, sale, assignment, pledge, hypothecation or other
      disposition is pursuant to the terms of an effective registration statement
      under the Securities Act and/or is registered under any applicable state or
      foreign securities laws or pursuant to an exemption from registration under
      the
      Securities Act and any applicable state or foreign securities laws.

     

    5.10 No
      Knowledge of Misrepresentations or Omissions.
      The
      Buyer has no actual knowledge that any of the representations and warranties
      of
      the Company in this Agreement and the Schedules hereto are not true and correct
      in all material respects, and the Buyer has no actual knowledge of any material
      errors in, or material omissions from, the Schedules to this
      Agreement.

     

    ARTICLE
      6

     

    COVENANTS
      OF THE BUYER

     

    6.1 Confidentiality
      of Information.
      The
      Buyer acknowledges that the terms and provisions of the Confidentiality
      Agreement are in full force and effect. In the event that this Agreement is
      terminated and the transactions contemplated hereby are not consummated, the
      Confidentiality Agreement shall continue to be in full force and effect in
      accordance with its terms.

     

    6.2 Access
      to Books and Records.
      From
      and after the Closing and for a period of (a) six years thereafter with
      respect to any information related to Taxes and (b) 18 months thereafter
      with respect to any other information (in either case, or such longer time
      as
      required to finally resolve any audit, investigation, litigation, arbitration,
      claim, proceeding, indemnification claim or similar circumstance initiated
      on or
      prior to such date), the Buyer shall, and shall cause the Company, to provide
      the Seller and its agents with reasonable access (for the purpose of examining
      and copying), during normal business hours, to the books and records of the
      Company with respect to periods or occurrences prior to the Closing Date in
      connection with any matter whether or not related to or arising out of this
      Agreement or the transactions contemplated hereby to the extent necessary or
      desirable in connection with any audit, investigation, litigation, arbitration,
      claim, proceeding, indemnification claim or similar circumstance. Unless
      otherwise consented to in writing by the Seller, the Company shall not,
      for

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    a
      period
      of six years following the Closing Date, destroy, alter or otherwise dispose
      of
      any of the books and records of the Company for the period prior to the Closing
      Date without first offering to surrender to the Seller such books and records
      or
      any portion thereof which the Buyer or the Company may intend to destroy, alter
      or dispose of.

     

    6.3 Director
      and Officer Liability and Indemnification.
      Without
      limiting any other rights of the Company’s pre-Closing officers and directors
      (whether contractual or under applicable law), for a period of three years
      after
      the Closing, the Buyer shall not, and shall not permit the Company to amend,
      repeal or modify any provision in the Organizational Documents or other
      agreements entered into with any of the Company’s past or present officers or
      directors relating to the exculpation or indemnification of former officers
      and
      directors (unless required by law), it being the intent of the parties that
      the
      officers and directors of the Company prior to the Closing shall continue to
      be
      entitled to such exculpation and indemnification for claims by third parties
      (not including the Seller or the Holder) to the fullest extent permitted under
      applicable law, in particular under laws applicable to indemnification or
      exculpation. If the Company or any of its successors or assigns (i) shall
      consolidate with, merge into or amalgamate with any other Person and shall
      not
      be the continuing or surviving corporation or entity of such consolidation,
      merger or amalgamation or (ii) shall transfer all or substantially all
      of
      its properties and assets to any Person, then, and in each such case, the
      Company (or its successor or assign) shall use its best efforts to ensure proper
      provisions are made so that the successors and assigns of the Company shall
      assume all of the obligations set forth in this Section
      6.3.
      The
      provisions of this Section
      6.3
      are
      intended for the benefit of each and any current and former officer and director
      of the Company and his or her heirs and representatives (provided the Seller
      or,
      upon its liquidation and dissolution, any single Person appointed by it (and
      of
      whom the Seller notifies the Buyer in writing has been appointed) shall act
      on
      behalf of any officer or director desiring to enforce the provisions of this
      Section
      6.3),
      and
      are in addition to, and not in substitution for, any other rights to
      indemnification or contribution that any such person may have had by contract
      or
      otherwise.

     

    6.4 Regulatory
      Filings.
      The
      Buyer shall make or cause to be made within the time periods prescribed by
      law
      any applicable filings, notifications and submissions under the Investment
      Canada Act and any other laws or regulations applicable to the Buyer as may
      be
      required of the Buyer for the consummation of the transactions contemplated
      herein, and the Buyer shall be responsible for all filing or notification fees,
      as may be applicable, under the Investment Canada Act and any other laws or
      regulations applicable to the Buyer.

     

    6.5 Transaction
      Payments.
      

     

    (a) By
      the
      execution and delivery of this Agreement and the execution of a separate
      Assumption Agreement between the Company and the Seller dated as of June 9,
      2005, in each case prior to the transfer of the Shares to the Buyer, the Company
      hereby and thereby declares and confirms (and shall take any other steps
      required to confirm) its obligations to pay certain employee bonuses and other
      compensation amounts as a result of the transactions contemplated by this
      Agreement to the recipients and in the amounts identified in the last two
      columns in the table on Schedule 4.26
      (the
“Employee
      Obligations”).
      The
      amount of the Employee Obligations plus
      1.95%
      thereof is equal to the Transaction Payments.

     

    
      
        
        

      

      
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    (b) Pursuant
      to Section
      1.2(b)(ii)
      above,
      at the Closing, the Buyer will contribute $1,225,157.67 to the Company by way
      of
      loan or contribution to
      share
      capital (as a reduction against the Closing Payment as set forth in Section
      1.1),
      such
      amount being equal to the aggregate of the Employee Obligations and the
      liability of the Company under the Employer Health Tax Act (Ontario) arising
      from its payment of the Employee Obligations (the “Transaction
      Payments”).
      At or
      promptly after the Closing (and in no event later than the Company’s next
      regular payroll date after the date hereof), the Company shall (and the Buyer
      shall cause the Company to) pay amounts equal in the aggregate to the Employee
      Obligations, net of withholdings for employee (but not employer) income or
      other
      payroll Taxes, which the Buyer shall cause to be remitted forthwith to the
      appropriate governmental authorities, to those individuals so entitled, with
      reference to the amounts set forth in the last two columns of the table attached
      to Schedule
      4.26,
      in
      satisfaction of the Employee Obligations. In addition, the Company shall (and
      the Buyer shall cause the Company to) remit, to the appropriate governmental
      or
      other authority in accordance with applicable law, all employer payroll Taxes
      with respect to the Employee Obligations. The Buyer and the Company acknowledge
      and agree that the Transaction Payments shall include an amount sufficient
      to
      allow the Company to satisfy the Employee Obligations and its obligations under
      the Employer Health Tax Act (Ontario) with respect to the Employee Obligations,
      but shall exclude any other amounts, including any amount required to satisfy
      the Company’s employer obligations for Canada pension plan and employment
      insurance obligations with respect to the Employee Obligations, which excluded
      amounts shall be borne by the Company without recourse against the
      Seller or the Holder notwithstanding any other provision of this
      Agreement.

     

    ARTICLE
      7

     

    ADDITIONAL
      COVENANTS

     

    7.1 Survival.
      The
      representations, warranties, covenants and agreements of Buyer, the Company,
      the
      Holder and the Seller set forth in this Agreement and in any certificates
      delivered at the Closing in connection with this Agreement shall survive until
      September 30, 2006 (the “Survival
      Period”)
      and
      shall thereafter be of no further force or effect; provided
      that
      with respect to any covenant or agreement contained herein that contemplates
      performance following the Closing (including, without limitation, Sections 1.4
      and
7.5),
      the
      Survival Period shall continue through such performance or time of contemplated
      performance; provided,
      however,
      that,
      notwithstanding the foregoing, (a) the representations and warranties
      contained in Section 3.2
      (Authority), Section 3.3
      (Ownership of Shares), Section 3.5
      (Brokerage), Section 4.3
      (Authorization; No Breach), Section 4.4
      (Capitalization), Section 4.12
      (Brokerage), Section 5.2
      (Authorization), Section 5.5
      (ADSX
      Shares and VeriChip Shares) and Section 5.8
      (Brokerage) shall survive forever and (b) the representations and warranties
      contained in Section
      4.7
      (Title
      to Properties), Section
      4.10
      (Intellectual Property Rights) and Section
      4.17
      (Environmental Compliance and Conditions) shall survive until the sixth
      anniversary of the Closing Date.

     

    7.2 Indemnification.

     

    (a) Subject
      to the provisions of this Section
      7.2
      and
Section
      7.3
      below,
      after the Closing the Seller and the Holder agree to, and shall, jointly and
      severally, indemnify the

     

    
      
        
        

      

      
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    Buyer,
      its parents, subsidiaries and the Company and their respective officers,
      directors, employees, stockholders, representatives, successors, assigns and
      agents (each, a “Buyer
      Indemnitee”)
      and
      hold each of them harmless against any actual Claim, loss, liability,
      obligation, cost, damage or expense (including reasonable legal fees and
      expenses) (but in any event excluding (and no party shall be required to
      indemnify any other Person under this Agreement for) incidental, consequential
      and punitive damages, except to the extent actually paid by an Indemnitee as
      a
      result of Third Party Claims made against such Person) (collectively,
“Losses”
      and
      individually, a “Loss”)
      which
      any such Buyer Indemnitee suffers as a result of (i) any breach of
      representation or warranty on the part of the Company, the Holder or the Seller
      under this Agreement, or contained in any schedule or exhibit to this Agreement
      or any certificate or instrument delivered by the Seller, the Holder or the
      Company in connection herewith, (ii) any breach of any covenant or
      agreement of the Holder or the Seller under this Agreement, (iii) any
      failure of the Holder to have, free and clear of all Liens other than Permitted
      Liens, good, valid and marketable title to the Shares held by the Holder, and
      (iv) all demands, assessments, judgments, costs and legal (including,
      reasonable attorney’s fees) and other expenses arising from, or in connection
      with, any action, suit, proceeding or Claim incident to any of the foregoing;
      provided
      that the
      Buyer Indemnitees’ right to seek indemnification hereunder (including, without
      limitation, for a breach of Section
      7.5(d))
      shall
      be limited to an amount of Losses not to exceed $3,000,000, provided
      that the
      foregoing limitation (i.e., the cap) shall not apply with respect to any Loss
      arising from or related to a breach of the representations and warranties of
      the
      Company, the Holder and/or the Seller set forth in Section 3.1
      (Execution, Delivery; Valid and Binding Agreements), Section
      3.2
      (Authority), Section
      3.3
      (Ownership of Shares), Section
      3.5
      (Brokerage), Section
      4.3(a)
      (Authorization), Section
      4.4
      (Capitalization), Section
      4.7
      (Title
      to Properties), Section
      4.10
      (Intellectual Property Rights), Section
      4.12
      (Brokerage) and Section
      4.17
      (Environmental Compliance and Conditions) or of the covenants and agreements
      set
      forth in clause (iii) of this Section
      7.2(a)
      or a
      breach of a representation, warranty or covenant by such the Seller or the
      Holder that constitutes actual fraud; provided further
      that
      (other than for a breach of the covenants set forth in Section
      9.2,
      for
      which the limitation in this proviso shall not apply) the Buyer Indemnitees
      shall not be entitled to seek indemnification with respect to any Losses
      hereunder until all such Losses exceed $150,000 in the aggregate, in which
      case
      the Buyer Indemnitees shall be entitled to indemnification only for the amount
      of such excess; provided further
      that the
      Buyer Indemnitees shall not be entitled to seek indemnification with respect
      to
      any Loss of which, or resulting from any breach of the representations or
      warranties of the Company, the Holder and/or the Seller set forth herein of
      which the Buyer or its representatives or agents had actual knowledge on or
      prior to the Closing Date.

     

    (b) Subject
      to the provisions of this Section
      7.2
      and
Section
      7.3
      below,
      after the Closing (i) the Buyer and the Company shall, jointly and severally,
      indemnify the Seller and the Holder and their respective affiliates, officers,
      directors, employees, stockholders, partners, representatives, successors,
      assigns and agents and hold them harmless against any Loss (which excludes,
      for
      the avoidance of doubt, incidental, consequential and punitive damages, except
      to the extent actually paid by an Indemnitee as a result of Third Party Claims
      made against such Person) which any such Person suffers as a result of any
      breach by the Buyer, VeriChip or ADSX of its covenants, representations and
      warranties set forth herein and as restated in any certificates delivered by
      the
      Buyer at the Closing, and (ii) to the extent the Seller and the
      Holder

     

    
      
        
        

      

      
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    do
      not
      bear responsibility for such Loss as a result of their actions, the Company
      shall indemnify the Seller and the Holder and their respective affiliates,
      officers, directors, employees, stockholders, partners, representatives,
      successors, assigns and agents and hold them harmless against any Loss (which
      excludes, for the avoidance of doubt, incidental, consequential and punitive
      damages, except to the extent actually paid by an Indemnitee as a result of
      Third Party Claims made against such Person) which any such Person suffers
      as a
      result of the operations of the Company following the Closing.

     

    (c) Any
      party
      seeking indemnification, damages, or any other recovery whatsoever (the
“Indemnitees”)
      from
      another party or parties (individually or collectively, the “Indemnitors”)
      under
      subsections (a) or (b) above shall notify the Indemnitors of the claim in
      writing, specifying in reasonable detail the nature of the claim for
      indemnification, the estimated amount of Losses and the basis for
      indemnification. No Person shall be liable for any claim for indemnification
      under subsection (a) or (b) above unless such notice is delivered by the
      Indemnitee to the Indemnitor prior to the expiration of the Survival Period,
      in
      which case the representation, warranty, covenant or agreement which is the
      subject of such claim shall survive, to the extent of such claim only, until
      such claim is resolved, whether or not the amount of the Losses resulting from
      such breach has been finally determined at the time the notice is given, if,
      but
      only if, in the case of any claim made other than by reason of a Third Party
      Claim, some Losses (including the incurrence of costs) shall have been incurred
      in good faith at or prior to the date of such notice.

     

    (d) Promptly
      after the assertion by any third party of any claim (a “Third
      Party Claim”)
      against any Indemnitee under this Section 7.2
      that
      results or may result in the incurrence by such Indemnitee of any Loss for
      which
      such Indemnitee would be entitled to indemnification pursuant to this Agreement,
      such Indemnitee shall promptly provide notice of such Third Party Claim to
      the
      Indemnitors, the Seller and the Holder. The Seller shall act on behalf of all
      Indemnitors in the case of all Third Party Claims with respect to which the
      Indemnitee is seeking indemnification under subsection (a) above and may, at
      its
      option, assume the defense of the Indemnitee against such Third Party Claim
      (including the employment of counsel and the payment of reasonable expenses).
      Any Indemnitee shall have the right to employ separate counsel in any such
      Third
      Party Claim and to participate in the defense thereof, but the fees and expenses
      of such counsel shall not be an expense of the Indemnitor unless (i) the
      Indemnitor shall have failed, within a reasonable time after having been
      notified by the Indemnitee of the existence of such Third Party Claim as
      provided in the preceding sentence, to assume the defense of such Third Party
      Claim or (ii) the employment of such counsel has been specifically
      authorized by the Indemnitor and/or the Seller in the case of all Third Party
      Claims with respect to which any Buyer Indemnitee is entitled to indemnification
      under subsection (a) above. In no event will an Indemnitee consent to the entry
      of any judgment or enter into any settlement with respect to any Third Party
      Claim without the prior written consent of the Indemnitor. The
      Indemnitee and the Indemnitor shall each use commercially reasonable efforts
      to
      cooperate with the other such party in connection with the defense of Third
      Party Claims.

     

    (e) The
      amount of any Loss subject to indemnification hereunder or of any claim therefor
      shall be calculated net of (i) any Tax Benefit (as defined below) actually
      realized by the Buyer, the Company or any of their respective Affiliates on
      account of such Loss and

     

    
      
        
        

      

      
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    (ii) any
      insurance proceeds (net of direct collection expenses, any retro-premiums and
      any increase (present or future) in insurance premiums related to such recovery)
      received by the Buyer and the Company or any of their Affiliates on account
      of
      such Loss. If the Buyer, the Company or any of their Affiliates receives a
      Tax
      Benefit for fiscal years 2005 or 2006 after an indemnification payment is made,
      the Buyer shall promptly pay to the Seller the amount of such Tax Benefit at
      such time or times as and to the extent that such Tax Benefit is realized.
      For
      purposes hereof, “Tax
      Benefit”
      shall
      mean any refund of Taxes paid or reduction in the amount of Taxes which
      otherwise would have been paid on account of a Loss (net of any Tax detriment
      from the receipt of any indemnification payment). The Buyer and the Company
      shall seek full recovery under all insurance policies covering any Loss to
      the
      same extent as they would if such Loss were not subject to indemnification
      hereunder. In the event that an insurance recovery is made by the Buyer, the
      Company or any of their Affiliates with respect to any Loss for which any such
      Person has been indemnified hereunder, then a refund equal to the aggregate
      amount of the recovery (net of all direct collection expenses, any
      retro-premiums and any increase in premiums) shall be made promptly to the
      Seller. The Indemnitors shall be subrogated to all rights of the Indemnitees
      in
      respect of any Losses indemnified by the Indemnitors and shall be entitled
      to
      exercise any such rights to the extent the Buyer and the Company do not promptly
      and diligently do so.

     

    (f) At
      either
      the Seller’s or (in the case of Section
      7.2(f)(i)
      below)
      the Buyer’s respective sole election, the Seller or the Buyer, as the case may
      be, shall be entitled to satisfy any Losses agreed upon or finally determined
      in
      connection with any indemnification obligation of the Seller by reducing the
      Second Payment by the amount of all indemnification obligations for which the
      Seller or the Buyer (with a copy of such notice to the other) has notified
      ADSX
      in writing (each, an “Offset
      Notice”)
      that
      it wishes to satisfy by reducing the Second Payment (each such amount in an
      Offset Notice, an “Indemnification
      Offset Amount”)
      as
      follows:

     

    (i) with
      respect to each Offset Notice delivered prior to the True-Up, by including
      the
      aggregate Indemnification Offset Amounts included in all such Offset Notices
      delivered prior to the True-Up in the calculations to be made pursuant to
Section 1.4(b);
      and

     

    (ii) with
      respect to each Offset Notice delivered after the True-Up, (1) if the
      VeriChip Exchange has been consummated, then by delivering to ADSX or VeriChip,
      as the case may be, with the applicable Offset Notice a number of shares, free
      and clear of all Liens, of either (at the Seller’s sole election) (I) a
      number of ADSX Shares equal to the Indemnification Offset Amount in such Offset
      Notice divided by
      the ADSX
      VWAP Price as of the date of such Offset Notice or (II) a number of
      VeriChip Shares equal to the Indemnification Offset Amount in such Offset Notice
      divided by
      the
      VeriChip VWAP Price as of the date of such Offset Notice; (2) if the
      VeriChip Exchange has not been consummated, then on the Election Date by either
      (depending on the Seller’s choice in exercising the Election Right)
      (I) having the Cash Second Payment Obligation reduced by the aggregate
      amount of Indemnification Offset Amounts in Offset Notices delivered after
      the
      True-Up

     

    
      
        
        

      

      
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    but
      prior
      to the Election Date or (II) delivering to ADSX with the written notice
      exercising the Election Right a number of ADSX Shares equal to the aggregate
      Indemnification Offset Amount in Offset Notices delivered after the True-Up
      but
      prior to the Election Date divided by
      the ADSX
      VWAP Price as of the Election Date; or (3) if the VeriChip Exchange has not
      been
      consummated and the Seller did not exercise the Election Right for the Cash
      Second Payment Obligation on the Election Date, by delivering to ADSX a number
      of ADSX Shares equal to the aggregate Indemnification Offset Amount in Offset
      Notices delivered after the True-Up and after any other Offset Notice delivered
      hereunder after the True-Up divided by
      the ADSX
      VWAP Price as of the date of such Offset Notice.

     

    (g) All
      indemnification payments made hereunder shall be treated by all parties as
      adjustments to the Total Purchase Price.

     

    (h) Notwithstanding
      anything to the contrary contained in this Section
      7.2
      or
Section
      7.5,
      there
      shall be no recovery for any Loss by any Buyer Indemnitee under this
Section 7.2
      or any
      liability of the Seller for Losses under Section
      7.5,
      and the
      Loss shall not be included in meeting the stated thresholds hereunder, to the
      extent such item has been accrued for on the Company’s books and records as of
      the Closing Date (it being understood that any Buyer Indemnitee’s right to
      indemnification for any such Losses in excess of the accruals on the Company’s
      books and records shall not be affected by this Section
      7.2(h)).

     

    7.3 Limitation
      of Recourse.
      The
      indemnification provided by Section 7.2(a)
      shall be
      the sole and exclusive remedy for any Losses of the Buyer and the Company and
      the other Indemnitees thereunder arising from or in any way relating to this
      Agreement, the agreements contemplated hereby or any of the transactions
      contemplated hereby or thereby (including, without limitation, any
      misrepresentation or inaccuracy in, or breach of, any representations or
      warranties made by the Company, the Holder or the Seller in this Agreement
      or in
      any exhibit or schedules hereto or any certificate delivered hereunder). Except
      as set forth in Section
      7.2,
      neither
      the Holder nor the Seller shall have any liability or obligation to indemnify
      the Buyer or any other Person for any claim or any Loss arising from or in
      any
      way relating to this Agreement, the agreements contemplated hereby or any of
      the
      transactions contemplated hereby or thereby (including, without limitation,
      any
      misrepresentation or inaccuracy in, or breach of, any representations or
      warranties made by the Company, the Holder or the Seller in this Agreement
      or in
      any exhibit or schedules hereto or any certificate delivered hereunder). Except
      as provided in Section
      7.2,
      no claim
      shall be brought or maintained by the Buyer or the Company or their respective
      successors or permitted assigns against any officer, director or employee
      (present or former) of the Company, the Holder or the Seller. Without limiting
      the generality of the foregoing, in no event shall the Company, the Buyer or
      their respective successors or permitted assigns be entitled to claim or seek
      any rescission of the transactions consummated under this Agreement or other
      remedy at law or in equity. Nothing in this Section
      7.3
      shall in
      any way limit or foreclose the availability to the parties of actions
      (i) for specific performance or (ii) based on a breach of
      representation, warranty, covenant or agreement which constitutes
      fraud.

     

    7.4 ACKNOWLEDGMENT
      BY THE BUYER.
      THE
      BUYER CONDUCTED ITS OWN INDEPENDENT INVESTIGATION AND VERIFICATION OF THE
      FINANCIAL CONDITION, RESULTS OF OPERATIONS, ASSETS, LIABILITIES, PROPERTIES
      AND
      PROJECTED OPERATIONS OF THE COMPANY. THE BUYER 

     

    
      
        
        

      

      
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    ACKNOWLEDGES
      AND AGREES THAT ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE OTHER
      THAN THOSE SET FORTH IN THIS AGREEMENT, EXPRESSED OR IMPLIED (INCLUDING, BUT
      NOT
      LIMITED TO, ANY RELATING TO THE FUTURE OR HISTORICAL FINANCIAL CONDITION,
      RESULTS OF OPERATIONS, ASSETS OR LIABILITIES OF THE COMPANY OR THE QUALITY,
      QUANTITY OR CONDITION OF THE ASSETS OF THE COMPANY) ARE SPECIFICALLY DISCLAIMED
      BY THE COMPANY, THE HOLDER AND THE SELLER. FOR THE AVOIDANCE OF DOUBT, THE
      FOREGOING IN NO WAY SHALL LIMIT ANY CAUSE OF ACTION AGAINST THE COMPANY, THE
      HOLDER OR THE SELLER BASED ON CONDUCT BY SUCH PERSON CONSTITUTING ACTUAL
      FRAUD.

     

    7.5 Tax
      Matters.
      The
      following provisions shall govern the allocation of responsibility as between
      the Buyer and the Company, on the one hand, and the Holder and the Seller,
      on
      the other hand, for certain tax matters following the Closing:

     

    (a) Buyer
      and
      the Company shall prepare or cause to be prepared and file or cause to be filed
      all Tax Returns required to be filed by or on behalf of the Company after the
      Closing Date with respect to any tax periods beginning before and ending before,
      on or after the Closing Date. Subject to the requirements of applicable law,
      each such Tax Return shall be prepared in a manner consistent with past
      practices of the Company and its Subsidiaries. The Buyer and the Company shall
      be responsible for paying any Taxes required to be paid by or on behalf of
      the
      Company with respect to such Tax Returns.

     

    (b) The
      Buyer
      and the Seller shall cooperate fully, as and to the extent reasonably requested
      by the other party, in connection with the filing of Tax Returns pursuant to
      this Section 7.5
      and any
      audit, litigation or other proceeding with respect to such Tax Returns. Such
      cooperation shall include the retention and (upon the other party’s request) the
      provision of records and information which are reasonably relevant to any such
      audit, litigation or other proceeding and making employees available on a
      mutually convenient basis to provide additional information and explanation
      of
      any material provided hereunder. The Company shall retain all books and records
      with respect to Tax matters pertinent to the Company relating to any tax periods
      and shall abide by all record retention agreements entered into with any taxing
      authority, and shall give the Seller reasonable written notice prior to
      transferring, destroying or discarding any such books and records prior to
      the
      expiration of the applicable statute of limitations for that tax period, and,
      if
      the Seller so requests, the Company shall allow the Seller (or its successor)
      to
      take possession of such books and records.

     

    (c) All
      transfer, documentary, sales, use, stamp, registration and other such Taxes
      and
      fees (including any penalties and interest) incurred in connection with this
      Agreement, shall be paid by the Buyer when due, and the Buyer shall, at its
      own
      expense, file all necessary Tax Returns and other documentation with respect
      to
      all such transfer, documentary, sales, use, stamp, registration and other Taxes
      and fees, and, if required by applicable law, the Holder and/or the Seller
      will
      join in the execution of any such Tax Returns and other documentation. For
      the
      avoidance of doubt, this Section 7.5(c)
      does not
      include the Withheld Amount, which shall be borne by the Holder and paid out
      of
      the Closing Payment.

     

    
      
        
        

      

      
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    (d) Following
      the Closing, the Seller shall fully indemnify the Buyer, the Company and any
      Subsidiary of the Company for all federal, provincial or local income Taxes
      that
      may be asserted or imposed on or relating to the Company for which it is
      asserted they are liable for any taxable period (or portion thereof) that ends
      on or prior to the Closing Date, and the Buyer and the Company shall fully
      indemnify the Holder and the Seller for all federal, provincial or local income
      Taxes that may be asserted or imposed on or relating to the Company for which
      it
      is asserted they are liable for any taxable period (or portion thereof) that
      ends after the Closing Date or (as limited below) includes the Closing Date.
      In
      the case of any taxable period that includes (but does not end on) the Closing
      Date (a “Straddle
      Period”),
      the
      amount of any Taxes based on or measured by income or receipts of the Company
      for the Pre-Closing Tax Period shall be determined based on an interim closing
      of the books as of the close of business on the Closing Date (and for such
      purpose, the taxable period of any partnership or other pass-through entity
      in
      which the Company holds a beneficial interest shall be deemed to terminate
      at
      such time) and the amount of other Taxes of the Company for a Straddle Period
      that relates to the Pre-Closing Tax Period shall be deemed to be the amount
      of
      such Tax for the entire taxable period multiplied by a fraction the numerator
      of
      which is the number of days in the taxable period ending on the Closing Date
      and
      the denominator of which is the number of days in such Straddle
      Period.

     

    (e) The
      Buyer
      and the Seller acknowledge for purposes of this Section
      7.5
      that the
      Employee Obligations shall be treated for Canadian federal and provincial income
      Tax reporting purposes as an expenditure of the Company in respect of the period
      ending on or prior to the Closing Date, and all Canadian income Tax Returns
      shall be filed consistent therewith. The parties further agree to make, or
      cause
      the Company to make, all elections necessary or desirable to give effect to
      the
      foregoing, including an election by the Company under subsection 256
      (9) of
      the Tax Act in a form prepared by the Seller acting reasonably and having a
      designated time on the Closing Date which follows the effective time of the
      transaction described in Section
      6.5(a)
      and
      which precedes the time on the Closing Date at which the Shares are transferred
      to the Buyer. For greater certainty, all liabilities of the parties to each
      other under this Section
      7.5,
      insofar
      as Canadian federal and provincial Taxes are concerned, shall be determined
      on
      the basis that the Employee Obligations represent an expenditure incurred by
      the
      Company in respect of the period ending on or prior to the Closing
      Date.

     

    (f) There
      are
      no tax-sharing agreements or similar agreements with
      respect to or involving the Company as of the Closing Date.

     

    7.6 Employee
      Benefit Plans and Arrangements.
      

     

    (a) From
      and
      after the Closing Date for the three-month period immediately following the
      Closing Date (or such longer period as required by the terms thereof), the
      Buyer
      shall cause the Company to honor all employment, severance, termination,
      consulting, retirement and other compensation and benefit plans, arrangements
      and agreements to which the Company is a party, as such plans, arrangements
      and
      agreements are in effect on the date hereof which are disclosed on Schedule 4.9(a)(iv)
      or
4.14
      hereto.
      For the three-month period immediately following the Closing Date, the Buyer
      shall continue to employ and shall cause the Company to provide those employees
      who are employees of the Company as of immediately prior to the

     

    
      
        
        

      

      
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    Closing
      with compensation and benefits that are no less favorable to such employees
      than
      the compensation and benefits of the Company available to such employees
      immediately prior to the Closing. Notwithstanding the foregoing, nothing in
      this
      Agreement shall be deemed to prohibit or otherwise restrict the Company from
      terminating the employment of any employee at any time on or after the Closing
      Date in accordance with the Company’s customary policies and practices with
      respect thereto; provided
      that any
      such employees terminated within the three month period immediately following
      the Closing Date shall be entitled to notice, pay in lieu of notice, severance
      pay and related entitlements no less favorable than those to which the
      applicable employee is legally entitled.

     

    (b) With
      respect to any Plans in which any employees of the Company participate on or
      after the Closing, the Buyer shall cause the Company to use commercially
      reasonable efforts to: (i) waive all pre-existing conditions, exclusions
      and waiting periods with respect to participation and coverage requirements
      applicable to such employees, except to the extent such pre-existing conditions,
      exclusions or waiting periods applied under the similar plan in effect
      immediately prior to the Closing; (ii) provide each such employee with
      credit for any co-payments and deductibles paid (to the same extent such credit
      was given for the year under the similar plan in effect immediately prior to
      the
      Closing) in satisfying any applicable deductible or out-of-pocket requirements;
      and (iii) recognize all continuous service of the Company’s employees with
      the Company for all purposes (including, without limitation, for purposes of
      eligibility to participate, vesting credit and entitlement to benefits, but
      excluding benefit accrual under a defined benefit pension plan) under any Plan
      in which such employees may be eligible to participate after the Closing;
provided
      that the
      foregoing shall not apply to the extent it would result in a duplication of
      benefits.

     

    7.7 Further
      Assurances.
      From
      time to time, as and when requested by any party hereto, any other party shall
      execute and deliver, or cause to be executed and delivered, all such documents
      and instruments and shall take, or cause to be taken, all such further or other
      actions as such other party may reasonably deem necessary or desirable to
      evidence and effectuate the transactions contemplated by this
      Agreement.

     

    7.8 Short
      Sales and Hedging.
      From
      and after the Closing until the earlier of the VeriChip Exchange Date and
      September 30, 2006, the Seller and the Holder agree not to enter into short
      sales or engage in other hedging activity with respect to the ADSX Shares or
      the
      VeriChip Shares.

     

    ARTICLE
      8

     

    DEFINITIONS

     

    8.1 Definitions.
      The
      following terms, as used herein, have the following meanings:

     

    “Affiliate”
      of any
      particular Person means any other Person controlling, controlled by or under
      common control with such particular Person. For the purposes of this definition,
      “control” means the possession, directly or indirectly, of the power to direct
      the

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

    management
      and policies of a Person whether through the ownership of voting securities,
      contract or otherwise.

     

    “Authority”
      means
      any federal, state, provincial, local, county or municipal government,
      governmental, regulatory or administrative body, agency, department, commission,
      board, bureau, arbitrator or authority, any court or judicial authority, any
      public, private or industry regulatory authority, whether international,
      national, federal, state or local.

     

    “Claim”
      means
      any action, suit, claim, lawsuit, demand, inquiry, hearing, investigation,
      notice of a violation or noncompliance, litigation, proceeding, arbitration,
      appeals or other dispute, whether civil, criminal, administrative or
      otherwise.

     

    “Closing
      Cash”
      means
      all cash, cash equivalents and marketable securities of the Company as of the
      Closing (including checks and deposits in transit), before giving effect to
      the
      transactions contemplated hereby, determined on a consolidated basis in
      accordance with GAAP applied consistently with the principles utilized in
      preparing the audited balance sheet as of December 31, 2004 and the
      Latest
      Balance Sheet.

     

    “Confidentiality
      Agreement”
      means
      the Confidentiality Agreement between BMO Capital Corporation (on behalf of
      the
      Company) and ADSX dated as of September 9, 2004.

     

    “GAAP”
      means
      United States generally
      accepted accounting principles consistently applied, as in existence from time
      to time.

     

    “Hazardous
      Substance”
      means
      any hazardous or toxic substance or material that is on the Closing Date
      prohibited, controlled or regulated by any Authority including, without
      limitation, any contaminant, pollutant, dangerous substance, toxic substance,
      designated substance, hazardous waste, subject waste, hazardous material, or
      petroleum, its derivatives, by-products or other hydrocarbons, all as defined
      in
      or pursuant to any Environmental Requirements or Orders.

     

    “Intellectual
      Property Rights”
      means
      any invention, patent, patent application, trade secret, trademark, service
      mark, trade name, corporate name, domain name, copyright, license, software
      or
      any other intellectual property right recognized anywhere in the
      world.

     

    “Knowledge”
      means,
      with
      respect to the Company, the Holder, and the Seller, the actual awareness or
      knowledge of Daniel A. Gunther, Jeffrey C. Kvam, Brad A. Bernstein,
      C. Bryan Daniels, Stephen V. King, Rob Lee, Dan Poirier, Ian McKechnie
      and
      Greg Klowak. Phrases
      such as “to the Company’s Knowledge,”  “to the Knowledge of the Company”
      and phrases of similar import are used to establish the scope of any
      representation or warranty in which it appears, such that the representation
      or
      warranty is not true and correct and therefore breached only if the specified
      individuals have “Knowledge” (i.e., actual awareness or knowledge) of an
      undisclosed exception to such representation and warranty which the Company
      is
      required to disclose; the use of “to the Company’s Knowledge,”“to the Knowledge
      of the Company” or a phrase of similar import is not an affirmation of any
      Person’s “superior knowledge” with respect to the subject matter of the
      representation or warranty.

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

    “Lien”
      means
      any (a) security interest, lien, mortgage, pledge, hypothecation, encumbrance,
      Claim, easement, charge, restriction on transfer or otherwise, or interest
      of
      another Person of any kind or nature; (b) any filing or agreement to file a
      financing statement as debtor under the Personal Property Security Act (Ontario)
      or any similar statute; and (c) any subordination arrangement in favor of
      another Person.

     

    “Material
      Adverse Effect”
      means
      any effect or change that is materially adverse to the business, assets,
condition
      (financial or otherwise), operating results, operations, or business prospects
      of the Company
      taken as
      a whole, or on the ability of the Company, the Holder or the Seller to
      consummate timely the transactions contemplated hereby; provided
      that,
      for purposes of this Agreement, a Material Adverse Effect shall not include
      the
      effect of or changes resulting from (a) changes to the industry or markets
      in which the business of the Company operates that are not unique to such
      business, (b) catastrophic economic or significant regulatory or political
      conditions or changes, (d) military action or any act of terrorism,
      or
      (e) changes in law after the date hereof.

     

    “Officer’s
      Certificate”
      means a
      certificate delivered by a Person’s president or its chief financial officer,
      stating that the officer signing such certificate has made or has caused to
      be
      made such investigations as are necessary in order to permit him to verify
      the
      accuracy of the information set forth in such certificate.

     

    “Orders”
      means
      all applicable orders, decisions, directives, directions or the like rendered
      by
      any Authority as in effect on the Closing Date.

     

    “Permits”
      means
      all material permits, licenses, registrations, certificates, orders,
      qualifications or approvals required by any Authority or other
      Person.

     

    “Permitted
      Liens”
      means
      (i) liens securing obligations arising under the Senior Credit Agreement
      or
      the senior subordinated notes (all of which will be discharged simultaneously
      with the Closing upon the payments described in Section
      1.2(b)(iii));
      (ii) statutory liens for current Taxes or other governmental charges
      not
      yet due and payable or the amount or validity of which is being contested in
      good faith by appropriate proceedings; (iii) liens on goods in transit
      incurred pursuant to documentary letters of credit, (iv) liens arising
      under worker’s compensation, employment insurance, unemployment insurance,
      social security, retirement, national insurance and similar legislation,
      (v) mechanics’, carriers’, workers’, repairers’ and similar statutory liens
      arising or incurred in the ordinary course of business for amounts which are
      not
      delinquent and which are not, individually or in the aggregate, significant
      or
      which are being contested in good faith by appropriate proceedings;
      (vi) zoning, entitlement, building and other land use regulations imposed
      by governmental agencies having jurisdiction over the Company’s leased real
      property which are not violated by the current use and operation of the
      Company’s leased real property; (vii) covenants, conditions, restrictions,
      easements and other similar matters of record affecting title to Company’s
      leased real property which do not materially impair the occupancy or use of
      the
      Company’s leased real property for the purposes for which it is currently used
      in connection with the Company’s businesses; (viii) public roads and
      highways; (ix) matters which would be disclosed by an inspection or
      accurate survey of each

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

    parcel
      of
      leased real property; (x) purchase money security liens and liens securing
      rental payments under capital lease arrangements; and (xi) liens under
      applicable securities laws.

     

    “Person”
      means
      an individual, a partnership, a corporation, an association, a joint stock
      company, a trust, a joint venture, an unincorporated organization and a
      governmental entity or any department, agency or political subdivision
      thereof.

     

    “Plans”
      means
      all employee benefit plans maintained or contributed to by the Company
      including, without limitation, all profit sharing, savings, post-retirement,
      supplemental retirement, retiring allowance, severance, pension, deferred
      compensation, welfare, bonus, incentive compensation, phantom stock, benefit
      plans or arrangements and all life, health, dental and disability plans and
      arrangements in which the employees or former employees of the Company
      participate or are eligible to participate, or for which the Company has any
      liability. 

     

    “Pre-Closing
      Tax Period”
      means
      any taxable period ending on or prior to the Closing Date.

     

    “Prime
      Rate”
      means
      the interest rate per annum listed as the “Prime Rate” in The
      Wall Street Journal
      in its
“Money Rates” section as of the Closing Date. 

     

    “Purchase”
      means
      the transaction of purchase and sale of the Shares contemplated under this
      Agreement.

     

    “Release”
      includes release, discharge, add, deposit, emit, spill, leak, pump, pour, empty,
      inject, escape, leach, migrate, disperse, dispose or dump.

     

    “Securities
      Act”
      means
      the Securities Act of 1933, as amended.

     

    “Senior
      Credit Agreement”
      means
      that certain Amended and Restated Loan and Security Agreement, dated as of
      November 16, 2001, by and between the Company and Fifth Third Bank,
      a
      Michigan banking corporation, as amended, modified or waived from time to time
      in accordance with its terms.

     

    “Tax”
      or
“Taxes”
      means
      any federal, provincial, state, territorial, local or foreign income, capital
      (including large corporations), gross receipts, capital stock, franchise,
      profits, withholding, social security, unemployment, disability, real property
      ad valorem/personal property, stamp, excise, occupation, sales, use, transfer,
      value added, alternative minimum, estimated or other tax, including any
      interest, penalty or addition thereto, whether disputed or not.

     

    “Tax
      Returns”
      means
      any return, report, information return or other document (including schedules
      or
      any related or supporting information) filed or required to be filed with any
      governmental entity or other authority in connection with the determination,
      assessment or collection of any Tax or the administration of any laws,
      regulations or administrative requirements relating to any Tax.

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

    “Total
      Operating Assets” means,
      as
      of a given time, the net book value of the Company’s total operating assets
      derived from its balance sheet, calculated in a manner consistent with
Exhibit M,
      and in
      each case determined on a consolidated basis in accordance with GAAP applied
      consistently with the principles utilized in preparing the audited balance
      sheet
      as of December 31, 2004 and the Latest Balance Sheet. “Total
      Operating Assets”
      shall
      be derived from the Company’s balance sheet by calculating the sum of the
      balances in the following accounts on the Company’s balance sheet: Account
      Receivable, Income Tax Receivables, Inventories, Other Current Assets and Fixed
      Assets (but in any event excluding the accounts Intangibles, Goodwill and Cash
      and S/T Investments and excluding any other cash, cash equivalents, marketable
      securities or other current assets included in the calculation of Closing Cash).
      With respect to any calculation of Total Operating Assets, no change in
      accounting principles will be made from those utilized in preparing the Latest
      Balance Sheet including, without limitation, with respect to the nature of
      accounts, types of reserves or accruals, and/or methodology and assumptions
      for
      determining the levels of reserves or accruals. For purposes of the preceding
      sentence, “changes in accounting principles” includes all changes in United
      States generally accepted accounting principles, policies, practices, procedures
      or methodologies with respect to financial statements, their classification
      or
      their display, as well as all changes in practices, methods, conventions or
      assumptions utilized in making accounting estimates. Since the date of the
      Latest Balance Sheet, the Company has not taken any action outside of the
      ordinary course of business with the intent of increasing Total Operating Assets
      for purposes of meeting the condition contained in Section 2.1(h)
      of this
      Agreement or otherwise under this Agreement.

     

    “Trailing
      Price”
      means,
      as of any date of determination, the arithmetic average (rounded to the nearest
      cent) of the Closing Price per share of ADSX common stock as quoted on the
      NASDAQ National Market (or such other principal stock exchange on which shares
      of ADSX common stock are then traded) over the ten consecutive trading days
      ending on the trading day immediately prior to the date of
      determination.

     

    “VeriChip
      Exchange Date”
      means
      the date on which VeriChip consummates its IPO; provided
      that, if
      pursuant to Section 1(a) of the VeriChip Registration Agreement the managing
      underwriter(s) of VeriChip’s IPO do not permit the VeriChip Shares to be
      included in a Form S-1 shelf registration statement on the date VeriChip
      consummates its IPO, then it shall be a date no later than 14 days after
      VeriChip consummates its IPO.

     

    “VWAP
      Price”
      means,
      as of any date of determination, the average of the daily volume weighted
      average price (rounded to the nearest cent) of ADSX or VeriChip common stock,
      as
      applicable, on the principal United States stock exchange on which shares of
      VeriChip or ADSX common stock, as applicable, are then traded for the three
      consecutive trading days ending on the trading day immediately prior to the
      date
      of determination as reported by Bloomberg Financial Markets or, if Bloomberg
      Financial Markets is not then reporting such prices, by a comparable reporting
      service of national reputation.

     

    8.2 Cross
      References to Other Defined Terms.
      Each
      term listed below is defined in the Section of this Agreement listed opposite
      such term:

     

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        

      

    

    
       

       

      
        	
                Term

              	
                Section

              
	 	 
	
                ADSX

              	
                Preface

              
	
                ADSX
                  Registration Agreement

              	
                Section
                  1.2(b)

              
	
                ADSX
                  Share Value

              	
                Section
                  1.4(b)

              
	
                ADSX
                  Shares

              	
                Section
                  1.4(a)

              
	
                Benefit
                  Plan

              	
                Section
                  4.14(f)

              
	
                Buyer
                  

              	
                Preface

              
	
                Buyer
                  Indemnitees

              	
                Section
                  7.2(a)

              
	
                Cash
                  Second Payment Obligation

              	
                Section
                  1.4(f)

              
	
                Closing
                  

              	
                Section 1.2(a)

              
	
                Closing
                  Date 

              	
                Section 1.2(a)

              
	
                Closing
                  Payment 

              	
                Section 1.1

              
	
                Closing
                  Transactions 

              	
                Section 1.2(b)

              
	
                Company
                  

              	
                Preface

              
	
                Early
                  Termination Notice

              	
                Section
                  1.4(c)

              
	
                Election
                  Date

              	
                Section
                  1.4(e)

              
	
                Election
                  Right

              	
                Section
                  1.4(e)

              
	
                Employee
                  Obligations

              	
                Section
                  6.5(a)

              
	
                Environmental
                  Requirements 

              	
                Section 4.17(a)

              
	
                Estimated
                  Purchase Price

              	
                Section
                  1.1

              
	
                GST

              	
                Section
                  4.8(i)

              
	
                Guarantor

              	
                Section
                  1.4(g)

              
	
                Holder

              	
                Preface

              
	
                Indemnitees
                  

              	
                Section 7.2(c)

              
	
                Indemnitors
                  

              	
                Section 7.2(c)

              
	
                Initial
                  VeriChip Share Value

              	
                Section
                  1.4(c)

              
	
                IPO

              	
                Section
                  1.4(c)

              
	
                Latest
                  Balance Sheet 

              	
                Section 4.5(a)

              
	
                Liabilities

              	
                Section
                  4.5(b)

              
	
                Lock-Up
                  Period

              	
                Section
                  1.4(c)

              
	
                Loss

              	
                Section 7.2(a)

              
	
                Measurement
                  Date

              	
                Section
                  1.4(b)

              
	
                Offered
                  Shares

              	
                Section
                  1.4(d)

              
	
                Organizational
                  Documents

              	
                Section 2.1(f)

              
	
                Pension
                  Plan 

              	
                Section 4.14(e)

              
	
                Sale
                  Notice

              	
                Section
                  1.4(d)

              
	
                Second
                  Payment 

              	
                Section 1.1

              
	
                Section
                  116 Certificate

              	
                Section
                  1.5

              
	
                Seller
                  

              	
                Preface
                  

              
	
                Shares

              	
                Preface

              
	
                Straddle
                  Period

              	
                Section
                  7.5(d)

              
	
                Survival
                  Period 

              	
                Section 7.1

              
	
                Target
                  ADSX Share Value

              	
                Section
                  1.4(b)

              
	
                Tax
                  Act

              	
                Section
                  1.5

              
	
                Tax
                  Benefit 

              	
                Section 7.2(e)

              

      

      

      
        
          
          

        

        
          -43-

          
            

          

        

        
          
          

        

      

      

      
        	
                Third
                  Party Claim 

              	
                Section 7.2(d)

              
	
                Total
                  Purchase Price 

              	
                Section 1.1

              
	
                Transaction
                  Payments

              	
                Section
                  6.5(b)

              
	
                True-Up

              	
                Section
                  1.4(b)

              
	
                VeriChip

              	
                Preface

              
	
                VeriChip
                  Exchange

              	
                Section
                  1.4(c)

              
	
                VeriChip
                  Registration Agreement

              	
                Section
                  1.2(b)

              
	
                VeriChip
                  Required Registration

              	
                Section
                  1.4(d)

              
	
                VeriChip
                  Shares

              	
                Section
                  1.4

              
	
                Withheld
                  Amount

              	
                Section
                  1.5

              

      

      

    ARTICLE
      9

     

    MISCELLANEOUS

     

    9.1 Press
      Releases and Communications.
      No
      press release or public announcement related to this Agreement or the
      transactions contemplated herein shall be issued or made without the joint
      approval of the Buyer and the Seller, unless required by law (in the reasonable
      opinion of legal counsel) in which case the Buyer and the Seller shall have
      the
      right to review such press release or announcement prior to
      publication.

     

    9.2 Expenses.
      Except
      as otherwise expressly provided herein, all of the Company’s, the Holder’s and
      the Seller’s costs and expenses (including, without limitation, costs and
      expenses of legal counsel, investment bankers, brokers or other representatives
      and consultants, appraisal fees, costs and expenses, and change of control
      fees
      and bonuses paid or to be paid in connection with the transaction contemplated
      hereby) incurred in connection with the negotiation of this Agreement and the
      other agreements contemplated hereby, the performance of their respective
      obligations hereunder, and the consummation of the transactions contemplated
      hereby (whether consummated or not) shall be paid by the Seller or the
      Holder.

     

    9.3 Notices.
      All
      notices, demands and other communications to be given or delivered under or
      by
      reason of the provisions of this Agreement shall be in writing and shall be
      deemed to have been given when personally delivered, delivered by Federal
      Express or similar overnight courier service or on the third business day after
      being mailed by first class or registered mail, return receipt requested.
      Notices, demands and communications to the Buyer, the Company, the Holder and
      the Seller shall, unless another address is specified in writing, be sent to
      the
      address indicated below:

     

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        

      

    

    
      	
              Notices
                to the Buyer, VeriChip, ADSX and the Company:

               

              c/o
                Applied Digital Solutions, Inc.

              1690
                South Congress Avenue

              Suite
                200

              Delray
                Beach, Florida 33445

              Attn: 
                Michael
                Krawitz

            	
              with
                a copy to:

               

              Holland
                & Knight LLP

              701
                Brickell Avenue, Suite 3000

              Miami,
                Florida 33131

              Attn: 
                Harvey
                Goldman

            

    

    

    
      	
              Notices
                to the Holder and the Seller:

               

              Perceptis,
                L.P.

              c/o
                SE Capital, LLC

              One
                North Wacker Drive, Suite 4330

              Chicago,
                Illinois 60606

              Attn: 
                Jeffrey
                Kvam

                       
                Brad Bernstein

            	
              with
                a copy to:

               

              Kirkland
                & Ellis LLP

              200
                East Randolph Drive

              Chicago,
                Illinois 60601

              Attn: 
                Margaret
                A. Gibson, P.C.

                        
                Brian C. Van Klompenberg

            

    

     

    9.4 Assignment.
      This
      Agreement and all of the provisions hereof shall be binding upon and inure
      to
      the benefit of the parties hereto and their respective successors and permitted
      assigns. Neither this Agreement nor any of the rights, interests or obligations
      hereunder may be assigned by any of the parties hereto without the prior written
      consent of (a) the Buyer, in the case of the Holder or the Seller, or
      (b)
      the Seller, in the case of the Company or the Buyer; provided, however, that
      this
      Agreement and the rights hereunder may be assigned by the Buyer without the
      Holder’s or the Seller’s prior written consent to an affiliate of the Buyer
      provided that Buyer, VeriChip, and ADSX shall remain fully liable for their
      respective obligations hereunder. 

     

    9.5 Severability.
      Any
      term or provision of this Agreement that is invalid or unenforceable in any
      situation in any jurisdiction shall not affect the validity or enforceability
      of
      the remaining terms and provisions hereof or the validity or enforceability
      of
      the offending term or provision in any other situation or in any other
      jurisdiction. If the final judgment of a court of competent jurisdiction
      declares that any term or provision hereof is invalid or unenforceable, the
      parties hereto agree that the court making the determination of invalidity
      or
      unenforceability shall have the power to reduce the scope, duration or area
      of
      the term or provision, to delete specific words or phrases or to replace any
      invalid or unenforceable term or provision with a term or provision that is
      valid and enforceable and that comes closest to expressing the intention of
      the
      invalid or unenforceable term or provision, and this Agreement shall be
      enforceable as so modified after the expiration of the time within which the
      judgment may be appealed.

     

    9.6 No
      Strict Construction.
      The
      language used in this Agreement shall be deemed to be the language chosen by
      the
      parties hereto to express their mutual intent, and no rule of strict
      construction shall be applied against any Person.

     

    9.7 Amendment
      and Waiver.
      Any
      provision of this Agreement or the Schedules or Exhibits hereto may be amended
      or waived only in writing signed by the Buyer,

     

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        

      

    

    the
      Company and the Seller. No waiver of any provision hereunder or any breach
      or
      default thereof shall extend to or affect in any way any other provision or
      prior or subsequent breach or default.

     

    9.8 Complete
      Agreement.
      This
      Agreement and the documents referred to herein (including the Confidentiality
      Agreement) contain the complete agreement between the parties hereto and
      supersede any prior understandings, agreements or representations by or between
      the parties, written or oral, which may have related to the subject matter
      hereof in any way.

     

    9.9 Counterparts.
      This
      Agreement may be executed in multiple counterparts, any one of which need not
      contain the signatures of more than one party, but all such counterparts taken
      together shall constitute one and the same instrument.

     

    9.10 Governing
      Law.
      All
      matters relating to the interpretation, construction, validity and enforcement
      of this Agreement shall be governed by and construed in accordance with the
      domestic laws of the State of Delaware without giving effect to any choice
      or
      conflict of law provision or rule (whether of the State of Delaware or any
      other
      jurisdiction) that would cause the application of laws of any jurisdiction
      other
      than the State of Delaware.

     

    9.11 Waiver
      of Jury Trial.
      EACH OF
      THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
      IT
      MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY SCHEDULE
      OR
      EXHIBIT HERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR STATEMENTS
      (WHETHER VERBAL OR WRITTEN) RELATING TO THE FOREGOING. THIS PROVISION IS A
      MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS
      AGREEMENT.

     

    9.12 CONSENT
      TO JURISDICTION, SERVICE OF PROCESS.
      THE
      COMPANY, THE HOLDER AND THE SELLER HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
      JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED IN NEW CASTLE COUNTY,
      DELAWARE IN CONNECTION WITH ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT
      OF
      OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AND
      HEREBY AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE IN
      ANY
      SUCH SUIT, ACTION OR PROCEEDING THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT
      IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING
      IS
      IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED
      BY SUCH COURTS.

     

    9.13 Descriptive
      Headings; Interpretation.
      The
      descriptive headings of this Agreement are inserted for convenience only and
      do
      not constitute a Section of this Agreement. The use of the word “including” in
      this Agreement shall be by way of example rather than by limitation. All
      references to dollars shall be to United States dollars, unless otherwise
      specified. Unless otherwise indicated, reference to any “Section” shall be
      deemed to be a reference to a Section of this Agreement.

     

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        

      

    

    9.14 No
      Third Party Beneficiaries.
      Except
      for the provisions of Section 6.3, which are for the benefit of and enforceable
      by the current and former directors and officers of the Company, this Agreement
      is for the sole benefit of the parties and their permitted successors and
      assigns and nothing herein express or implied shall be construed to give any
      person, other than the parties of such permitted successors and assigns, any
      legal or equitable rights hereunder.

     

    

    *    *    *    *

     

    
      
        
        

      

      
        -47-

        
          

        

      

      
        
        

        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Share Purchase Agreement
      on the day and year first above written.

     

    
      	 	
              INSTANTEL
                INC.

               

               

              By:
                /s/ Daniel A. Gunther  

               

              Its:
                Chief Executive
                Officer                     
                

               

            
	 	
              INSTANTEL
                HOLDING COMPANY S.ÀR.L.

               

              By:
                /s/ C. Bryan
                Daniels                            
                

               

              Its:
                Secretary                                        
                     

               

            
	 	
              PERCEPTIS,
                L.P.

               

              By: InterAir
                GP, Inc.

              Its: General
                Partner

               

              By:
                /s/ C. Bryan
                Daniels                            
                

               

              Its:
                President                                              
                

               

            
	 	
              VERICHIP
                INC.

               

               

              By:
                /s/ Kevin
                McLaughlin                         
                

               

              Its:
                Director                                                
                

               

            
	 	
              Solely
                for purposes of Section
                1.4:

               

              VERICHIP
                CORPORATION

               

               

              By:
                /s/ Kevin
                McLaughlin                        
                

               

              Its:
                CEO                                                     
                

            

    

    
       

       

      
        
        

        
          

        

      

      
        
        

      

    

    
       

    
      	 	
              Solely
                for purposes of Section
                1.4:

               

              APPLIED
                DIGITAL SOLUTIONS, INC.

               

               

              By:
                /s/ Evan C.
                McKeown                           
                

               

              Its:
                SVP,
                CFO                                               

            

    

    
 

     

     

     

    

      
        [Signature
          Page to Share Purchase Agreement]

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