SECURITY AGREEMENT
Exhibit
10.3
SECURITY
AGREEMENT (the “Agreement”) made December 27, 2005 by and between VeriChip
Corporation, a Delaware corporation with a principal place of business at 0000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxx 00000 (the “Debtor”),
and Applied Digital Solutions, Inc., a Missouri corporation located at 0000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxx 00000 (the “Secured
Party”).
WITNESSETH:
WHEREAS,
pursuant to a Commercial Loan Agreement of even date (the “Loan Agreement”),
Secured Party has granted to Debtor Eight Million Five Hundred Thousand Dollars
($8,500,000.00) in a Working Capital Revolving Line of Credit (the “Loan”); and
WHEREAS,
the obligation of the Secured Party to make the Loan to the Debtor is subject
to
the condition, among others, that the Debtor shall execute and deliver this
Agreement and grant the security interests hereinafter described. Terms not
otherwise defined herein shall have the meanings ascribed to them in the Loan
Agreement.
NOW,
THEREFORE, in consideration of the willingness of the Secured Party to make
the
Loan to the Debtor and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1.
Security
Interest.
As
security for the Secured Obligations described in Section 2 hereof, the Debtor
hereby grants to the Secured Party a first priority security interest in and
lien on all of the property described below (hereinafter referred to
collectively as the “Collateral”):
a.
All
equipment, including machinery, motor vehicles, office equipment, furniture,
fixtures, along with all other parts, tools, trade-ins, repairs, accessories,
accessions, modifications and replacements, whether now owned or subsequently
acquired, constructed or attached or added to or placed in, the foregoing
(collectively, the “Equipment”);
b.
All
inventory, wherever located, including goods, merchandise and other personal
property, held for sale or lease or furnished or to be furnished under a
contract of service, or constituting raw materials, work in process or materials
used or consumed in the Debtor’s business, or consigned to others or held by
others for return to the Debtor, whether now owned or subsequently acquired
or
manufactured and wherever located (collectively, the “Inventory”);
c.
All
accounts receivable, including, without limitation, accounts, contracts,
contract rights, chattel paper, instruments, rents, deposits, general
intangibles and any other obligations of any kind, whether now existing or
hereafter arising out of or in connection, with the sale or lease of goods
or
the rendering of services and all rights now or hereafter existing in and to
all
security agreements, notes, leases, licenses, franchises, supply agreements
and
other contracts securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, instruments, rents, deposits, general
intangibles or obligations (any and all such accounts, contracts, contract
rights, chattel paper, instruments, rents, deposits, general intangibles and
obligations being the “Receivables” and any and all such security agreements,
notes, leases, licenses, franchises, supply agreements and other contracts
being
the “Related Contracts”);
Page
2
d.
All
general intangibles, including, but not limited to, corporate names, trade
names, trademarks, trade secrets, books and records, customer lists, blue prints
and plans, computer programs, tapes and related electronic data, processing
software and all corporate ledgers;
e.
Any
and all additions, accessions, substitutions or replacements to or for any
of
the foregoing;
f.
Any
and all products and proceeds of any or all of the foregoing, including, without
limitation, cash, cash equivalents, tax refunds and the proceeds of insurance
policies providing coverage against the loss or destruction of or damage to
any
of the Collateral, or any indemnity, warranty or guarantee payable by reason
of
loss or damage to or otherwise with respect to any of the Collateral (whether
or
not the Secured Party is the loss payee thereof);
g.
All of
the Debtor’s after-acquired property of the kinds and types described in
paragraphs (a) - (f) herein;
h.
All
records and data relating to any of the property described above, whether in
the
form of a writing, photograph, microfilm, microfiche or electronic media,
together with all of the Debtor’s right, title and interest in and to all
computer software required to utilize, create, maintain and process any of
such
records or data or electronic media; and also in (i) all checks, money,
securities, bank accounts, deposit accounts and other accounts in the possession
of or held by the Secured Party whether in the name of the Debtor or in the
name
of the Secured Party, and (ii) all other property given by the Debtor to the
Secured Party pursuant to this agreement. The property described in (i) and
(ii)
above are held in the possession of the Secured Party by agreement of Debtor
and
Secured Party. All of the said Collateral (which throughout this Agreement
includes after-acquired Collateral) is to secure the payment and performance
of
all of the Secured Obligations.
2.
Secured
Obligations.
The
security interest hereby granted shall secure the following (the “Secured
Obligations”):
a.
The
Debtor’s repayment of the principal amount of the Loan, together with interest,
late charges and any other applicable charges to the Secured Party pursuant
to
the Loan;
b.
The
Debtor’s payment or performance of its obligations under the Loan Agreement and
under the other Loan Documents (as defined, described and identified in the
Loan
Agreement, hereinafter the “Loan Documents”), as the same may be amended,
modified, extended, renewed, replaced or restated; and
c.
The
payment of all other sums with interest and charges thereon advanced in
accordance herewith to protect the validity, security and priority of this
Agreement, the Loan Agreement or the Loan Documents.
Page
3
3.
Warranties
and Representations of the Debtor.
Debtor
hereby makes the following representations and warranties that shall survive
the
execution and delivery of this Agreement and shall be continuing representations
and warranties as long as any Secured Obligations remains outstanding:
a.
All
representations and warranties made in the Loan Agreement and the Loan Documents
relating to the Debtor and the Collateral are true, accurate and complete in
all
material respects;
b.
The
Debtor’s principal place of business is located at 0000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxx; the Debtor’s executive offices and the office
where its books and records are kept and are to be kept concerning the
Receivables, Related Contracts, and other Collateral are at the aforesaid
address; and the Debtor has no other places of business except those set forth
on Schedule I hereto;
c.
The
Debtor conducts business only under and through the business and trade name
“VeriChip Corporation.”
d.
No
material authorization, approval or other action by, and no notice to or filing
with, any governmental authority or other person is required either (i) for
the
grant by the Debtor of the security interests granted hereby or for the
execution, delivery or performance of this Agreement by the Debtor, or (ii)
for
the perfection of or the remedies hereunder, except the filing of financing
statements;
e.
The
Debtor has good and marketable title to all of the Collateral pledged by it
hereunder, free and clear of any liens, security interests, encumbrances or
interests or claims of any other person or entity, except those set forth on
Schedule II hereto and there are no sums owed with respect to the Collateral.
f.
Upon
the filing of UCC-1 financing statements being delivered at or prior to the
execution hereof, the Secured Party will have a valid, perfected first security
interest in all of the Collateral;
g.
The
Debtor has not performed any acts which might prevent the Secured Party from
enforcing any of the material terms and conditions of this Agreement or which
would limit any of them in any such enforcement;
h.
Schedule III attached hereto sets forth the description and location of all
Collateral not located at the Debtor’s principal place of business, together
with a list of the record owners of and record holders of liens against the
real
estate on which such Collateral is located; and
i.
No
effective financing statements or other similar instrument in effect covering
all or any part of the Collateral is on file in any recording office, except
as
may have been filed in favor of Secured Party relating to this Agreement.
Page
4
4.
Affirmative
Covenants of the Debtor.
a.
The
Debtor shall promptly notify and provide the Secured Party with a complete
description of the opening of any new places of business, the closing of any
existing places of business, the conduct of business under any names or through
any entities other than those set forth herein, the relocation of any of the
Collateral to any new place of business or any other act which would affect
the
financing statements filed by the Secured Party;
b.
The
Debtor shall continuously take all steps that are necessary or prudent to
protect the security interests of the Secured Party in the Collateral;
c.
The
Debtor shall defend the Collateral against the claims and demands of all
persons;
d.
The
Debtor shall deliver and pledge to the Secured Party, endorsed or accompanied
by
instruments of assignment or transfer satisfactory to the Secured Party, any
Instruments, documents and chattel paper which the Secured Party may reasonably
specify;
e.
The
Debtor shall comply, in all material respects, with all governmental regulations
applicable to the Collateral or any part thereof or to the operation of the
Debtor’s business; provided, however, that the Debtor may contest any
governmental regulation in any reasonable manner which shall not, in the
reasonable opinion of the Secured Party, adversely affect the Secured Party’s
rights or the first priority of its security interest in the Collateral;
f.
The
Debtor shall pay promptly when due, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of its income or
profits therefrom, as well as all claims of any kind, except that no such charge
need be paid if (i) the validity thereof is being contested in good faith by
appropriate proceedings, (ii) such proceedings do not involve any danger of
the
sale, forfeiture or loss of any of the Collateral or any interest therein;
and
(iii) such charge is adequately reserved against in accordance with the
generally accepted accounting principles;
g.
The
Debtor shall cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new and shall make all repairs,
replacements, additions and other improvements necessary to maintain the
Equipment in such good condition;
h.
The
Debtor shall maintain Inventory sufficient to meet the needs of its business;
i.
The
Debtor shall preserve all beneficial Related Contracts;
j.
The
Debtor shall take all commercially reasonable steps necessary to collect the
Receivables;
k.
The
Debtor shall assure that (i) no Receivable is or shall be subject to any
defense, offset, counterclaim, discount or allowance, (ii) no agreement under
which any deduction, discount, credit or allowance of any kind may be granted
or
allowed shall have been or shall thereafter be made by Debtor with any account
party without the consent of Secured Party, (iii) all statements
Page
5
made
and
all unpaid balances appearing in the invoices, documents and agreements relating
to each Receivable are and shall be true, genuine, and correct in all respects,
and (iv) no Receivable shall be converted to a note or other instrument unless
the same shall be delivered to the possession of the Secured Party within ten
(10) days of the date of execution of such note or instrument;
l.
The
Debtor shall, with respect to any Collateral which consists of trucks,
automobiles or other motor vehicles, or any other Collateral required to be
titled, deliver all titles thereto to the Secured Party to be held by the
Secured Party and shall make, execute and deliver any and all applications,
and
take such other action to assure that the Secured Party is listed of record
as a
lienholder on all title certificates;
m.
Debtor
shall keep accurate and complete records listing and describing the Collateral
and, when requested by Secured Party, Debtor shall give Secured Party a
certificate listing and describing the Collateral and setting forth the total
value of the Inventory, the total value of the Equipment, the amount of the
Receivables designating how many dates the Receivables are from the date of
invoice, the face value of any instruments, and any other information Secured
Party may request. Upon reasonable notice, Secured Party shall have the right
at
any time to inspect the Collateral and to audit and make copies of any records
or other writings that relate to the Collateral or the general financial
condition of Debtor. Bank shall use its best efforts to commence such
inspections during reasonable business hours. Secured Party may remove such
records and writings for the purpose of having copies made thereof;
n.
The
Debtor shall advise the Secured Party promptly, in reasonable detail, (i) of
any
lien, security interest, encumbrance or claim made or asserted against any
of
the Collateral, (ii) of any material change, substantial loss or depreciation
in
the composition of the Collateral, and (iii) of the occurrence of any other
material adverse effect on the aggregate value, enforceability or collectibility
of the Collateral or on the security interests created hereunder;
o.
The
Debtor shall give, execute, deliver and file or record in the proper
governmental offices any instrument, paper or document, including, but not
limited to, one or more financing statements under the Uniform Commercial Code,
reasonably satisfactory to the Secured Party or take any action which the
Secured Party may deem necessary or desirable in order to create, preserve,
perfect, extend, continue, modify, terminate or otherwise effect any security
interest granted pursuant hereto, or to enable the Secured Party to exercise
or
enforce any of its rights hereunder; and
5.
Negative
Covenants of the Debtor.
Except
as otherwise provided in the Loan Agreement, without the prior written consent
of the Secured Party, the Debtor shall not:
a.
Transfer, sell or assign any of the Collateral other than in the ordinary course
of business;
b.
Allow
or permit any other security interest or lien to attach to any of the Collateral
(other than the Maytag subordinated debt);
Page
6
c.
File,
authorize or permit to be filed in any jurisdiction any financing statement
relating to any of the Collateral unless the Secured Party is named as sole
secured party;
d.
Permit
any of the Collateral to be levied upon under any legal process;
e.
Permit
anything to be done that may materially impair the value of any of the
Collateral or the security therein intended to be afforded hereby; or
f.
Use
the Collateral in violation of any law or in any manner inconsistent with any
policy of insurance thereon.
6.
Fixtures.
It is
the intention of the parties hereto that none of the Collateral shall become
fixtures. Without limiting the generality of the foregoing, the Debtor will,
if
requested by the Secured Party, obtain waivers of lien, in form satisfactory
to
the Secured Party, from each mortgagee or lessor of real property (other than
the Secured Party) on which any of the Collateral is or is to be located.
7.
Insurance.
Debtor
shall, at its own expense, maintain insurance covering the Collateral against
such risks, with such insurers, in such form and in such amounts as shall,
from
time to time, be required by Secured Party, but in any event, in such amounts
and with such coverage as is customary in Debtor’s type of business. All
insurance policies shall be written so as to be payable in the event of loss
to
Secured Party and shall provide for thirty (30) days written notice to Secured
Party of cancellation or modification. At the request of Secured Party, all
insurance policies shall be furnished to and held by Secured Party. Debtor
hereby assigns to Secured Party return premiums, dividends and other amounts
which may be or become due upon cancellation of any such policies for any reason
whatsoever and directs the insurers to pay Secured Party any sums so due.
Secured Party is hereby appointed as attorney irrevocable to collect return
premiums, dividends and other amounts due on any insurance policy and the
proceeds of such insurance, to settle any claim with the insurers in the event
of loss or damage, to endorse settlement drafts and, upon occurrence of an
Event
of Default (as defined hereinbelow), to cancel, assign or surrender any
insurance policies. If, while any Secured Obligations are outstanding, any
return premiums, dividends, other amounts or proceeds are paid to Secured Party
under such policies, Secured Party may, at Secured Party’s option, take either
or both of the following actions: (i) apply such return premiums, dividends,
other amounts and proceeds in whole or in part to the payment or satisfaction
of
any of the Secured Obligations in whatever order Secured Party determines;
or
(ii) pay over such return premiums, dividends, other amounts and proceeds in
whole or in part to Debtor for the purpose of repairing or replacing the
Collateral destroyed or damaged, any return premiums, dividends, other amounts
and proceeds so paid over by Secured Party to be secured by this Agreement.
8.
Receivables.
Debtor
agrees that Secured Party may communicate with account debtors in order to
verify the existence, amount, and terms of any Receivables. Secured Party may
notify account debtors of the security interests established herein and require
that payments on Receivables be made directly to Secured Party, and upon the
request of Secured Party, Debtor shall notify account debtors and indicate
on
all xxxxxxxx that payments and returns are to be made directly to Secured Party.
In furtherance of the foregoing, Debtor hereby appoints Secured Party attorney
Page
7
irrevocable
with full power to collect, compromise, endorse, sell or otherwise deal with
the
Receivables or proceeds thereof and to perform the terms of any contract in
order to create Receivables in Secured Party’s name or in the name of Debtor.
This Agreement may be, but need not be, supplemented by separate assignment
of
Receivables and contract rights and, if such assignments are given, the rights
and security interests given thereby shall be in addition to and not in
limitation of the rights and security interests granted by this Agreement.
9.
Events
of Default.
The
following events shall be deemed “Events of Default” hereunder:
a.
An
Event of Default under the Loan Agreement or any of the Loan Documents;
b.
Any
representation or warranty or statement of fact made to Secured Party at any
time by Debtor is false or misleading or becomes false or misleading in any
material respect;
c.
Debtor
fails to materially observe or perform any covenant, warranty or agreement
required to be observed or performed by it under this Agreement;
d.
Debtor
shall be in default under any obligation undertaken by Debtor which default
has
a material adverse effect on the financial condition of Debtor or on the value
of the Collateral;
e.
Uninsured loss, theft, damage or destruction of any substantial portion of
any
of the Collateral; or
f.
Debtor
or any guarantor of any of the Secured Obligations is or becomes insolvent
or is
involved in any financial difficulty as evidenced by (i) an assignment,
composition or similar device for the benefit of creditors, (ii) general failure
to pay debts when due, (iii) attachment or receivership of assets not dissolved
within thirty (30) days, (iv) the appointment of a custodian, trustee or
receiver for a substantial portion of any of their respective properties, (v)
the liquidation or sale of all or substantially all of their respective
properties, (vi) the filing by Debtor or any guarantor of a petition under
any
Chapter of the United States Bankruptcy Code or the institution of any other
proceeding under any law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of Debtors, or (vii) the filing against Debtor or any
guarantor of an involuntary petition under any Chapter of the United States
Bankruptcy Code or the institution of any other proceeding under any law
relating to bankruptcy, bankruptcy reorganization, insolvency or relief of
debtors where such proceeding is not dismissed within sixty (60) days from
the
date on which it is filed or instituted.
10.
Rights
and Remedies of Secured Party on Default.
Upon
the occurrence of any Event of Default, Secured Party shall have, by way of
example and not of limitation, the following rights and remedies:
a.
Secured Party may declare the Secured Obligations, or any of them, to be
immediately due and payable without presentment, demand, protest or notice
of
any kind, all of which are hereby expressly waived;
Page
8
b.
In
addition to all other rights and remedies contained in this Agreement, the
Loan
Agreement, and in the Loan Documents, Secured Party may exercise the rights
and
remedies accorded Secured Party by the Uniform Commercial Code or by any other
applicable law, all of which rights and remedies shall be cumulative and
non-exclusive to the extent permitted by law;
c.
Secured Party shall have the right to enter and/or remain upon the Premises
of
Debtor, or any other place or places where any of the Collateral is located
and
kept, without any obligation to pay rent to Debtor or others, and remove
Collateral therefrom to the premises of the Secured Party or any agent of
Secured Party for such time as Secured Party may desire in order to maintain,
collect, sell and/or prepare the Collateral for sale, liquidation or collection;
d.
Secured Party may require the Debtor at Debtor’s cost to assemble the Collateral
and make it available to Secured Party at a place designated by Secured Party;
e.
Secured Party may take possession of and use and operate the Collateral in
the
manner and for the purposes as set forth in Section 11 hereinbelow;
f.
Secured Party may sell, lease or otherwise dispose of the Collateral as set
forth in Section 12 hereinbelow;
g.
Secured Party shall have the right to set-off, without notice to the Debtor,
any
and all deposits or other sums at any time or times credited or due from Secured
Party to Debtor, whether in a special account or other account or represented
by
a certificate of deposit (whether or not matured); which deposit and other
sums
shall, at all times, constitute additional security for the Secured Obligations;
h.
Secured Party may perform any warranty, covenant or agreement which Debtor
has
failed to perform under this Agreement; and
i.
Secured Party may take any other action that Secured Party deems necessary
or
desirable to protect the Collateral or the security interests granted herein.
11.
Rights
of Secured Party to Use and Operate Collateral.
Upon
the occurrence of any Event of Default, but subject to the provisions of the
Uniform Commercial Code or other applicable law, the Secured Party shall have
the right and power to take possession of all or any part of the Collateral,
and
to exclude the Debtor and all persons claiming under the Debtor wholly or partly
therefrom, and thereafter to hold, store and/or use, operate, manage and control
the same. Upon any such taking of possession, the Secured Party may, from time
to time, at the expense of the Debtor, make all such repairs, replacements,
alterations, additions and improvements to and of the Collateral as the Secured
Party may reasonably deem proper. In any such case, subject as aforesaid, the
Secured Party shall have the right to manage and control the Collateral and
to
carry on the business and to exercise all rights and powers of the Debtor in
respect thereto as the Secured Party shall deem best, including the right to
enter into any and all such agreements with respect to the leasing and/or
operation of the Collateral or any part thereof as the Secured Party may see
fit; and the Secured Party shall be entitled to collect and receive all rents,
issues, profits, fees, revenues and other income of the same and every part
thereof. Such rents, issues, profits, fees, revenues and
Page
9
other
income shall be applied to pay the expenses of holding and operating the
Collateral and of conducting the business thereof and of all maintenance,
repairs, replacements, alterations, additions and improvements and to make
all
payments which the Secured Party may be required or may elect to make, if any,
for taxes, assessments, insurance and other charges upon the Collateral or
any
part thereof and all other payments which the Secured Party may be required
or
authorized to make under any provision of this Agreement (including reasonable
legal costs and attorneys’ fees). The remainder of such rents, issues, profits,
fees, revenues and other income shall be applied to the payment of the Secured
Obligations in such order of priority as the Secured Party shall determine
and
any surplus shall be returned to the Debtor. Without limiting the generality
of
the foregoing, the Secured Party shall have the right to apply for and have
a
receiver appointed by a court of competent jurisdiction in any action taken
by
the Secured Party to enforce its rights and remedies hereunder in order to
manage, protect and preserve the Collateral and continue the operation of the
business of the Debtor and to collect all revenues and profits thereof and
apply
the same to the payment of all expenses and other charges of such receivership
including the compensation of the receiver and to the payment of the Secured
Obligations as aforesaid until a sale or other disposition of such Collateral
shall be finally made and consummated.
12.
Rights
of Secured Party to Sell Collateral.
Upon
ten (10) days prior written notice by registered or certified mail by Secured
Party to Debtor at the address of the Debtor set forth above (or at such other
address or addresses as the Debtor shall specify in writing by like notice
to
the Secured Party) of the time and place of any intended disposition of
Collateral, then Secured Party shall have the right and power to sell, assign,
lease or otherwise dispose of the Collateral from any business premises of
the
Debtor, either at public auction or private sale, by liquidation sale or other
disposition, or as if the sale was being made in the ordinary course of Debtor’s
business, with or without notice to the public that the said sale or disposition
is for the benefit of the Secured Party; provided, however, that if the
Collateral is perishable or threatens to decline speedily in value or is of
a
type customarily sold on a recognized market, then Secured Party shall have
the
right and power to dispose of the Collateral without prior notice to Debtor
and
Debtor expressly waives any rights to notice under such circumstances. The
notices described above shall be deemed to meet any requirement hereunder or
under any applicable law (including the Uniform Commercial Code) that reasonable
notification be given of the time and place of such sale or other disposition.
After deducting all costs and expenses of collection, storage, custody, sale
or
other disposition and delivery (including reasonable legal costs and attorneys’
fees) and all other charges against the Collateral, the residue of the proceeds
of any such sale or disposition shall be applied to the payment of the Secured
Obligations in such order of priority as the Secured Party shall determine
and
any surplus shall be returned to the Debtor. In the event the proceeds of any
sale, lease or other disposition of the Collateral hereunder are insufficient
to
pay all of the Secured Obligations in full, the Debtor will be liable for the
deficiency, together with interest thereon at the maximum rate provided in
the
Loan Agreement and the cost and expenses of collection of such deficiency,
including, without limitation, reasonable fees of attorneys, experts and agents,
expenses and disbursements.
13.
Attorney-in-Fact.
The
Secured Party is hereby appointed the attorney-in-fact, with full power of
substitution, of the Debtor for the purpose of carrying out the provisions
of
this Agreement and taking any action and executing any instruments (including,
without limitation, financing or continuation statements, conveyances,
assignments and transfers) which the Secured
Page
10
Party
may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is coupled with an interest and is irrevocable. The Debtor
shall indemnify and hold harmless the Secured Party from and against any
liability or damage that it may incur in the exercise and performance, in good
faith, of the Secured Party’s powers and duties as such attorney-in-fact.
14.
Waiver,
etc.
The
Debtor hereby waives presentment, demand, notice, protest and, except as is
otherwise provided herein, all other demands and notices in connection with
this
Agreement or the enforcement of the Secured Party’s rights hereunder or in
connection with any Secured Obligations or any Collateral. The Debtor further
consents to and waives notice of the granting of renewals, extensions of time
for payment or other indulgences to the Debtor or to any account debtor in
respect of any Receivable, substitution, release or surrender of any Collateral,
addition or release of persons primarily or secondarily liable on any Secured
Obligation or on any Receivable or other Collateral, or the acceptance of
partial payments on any Secured Obligation or on any account receivable or
other
Collateral and/or the settlement or compromise thereof. No delay or omission
on
the part of the Secured Party in exercising any right hereunder shall operate
as
a waiver of such right or of any other right hereunder. Any waiver of any such
right on any one occasion shall not be construed as a bar to or waiver of any
such right on any such future occasion.
15.
Termination;
Assignments, etc.
This
Agreement and the security interest in the Collateral created hereby shall
terminate when all of the Secured Obligations have been paid, performed and
finally discharged in full. In the event of a sale or assignment by the Secured
Party of all or any of the Secured Obligations held by it, such Secured Party
may assign or transfer its rights and interests under this Agreement in whole
or
in part to the purchaser or purchasers of such Secured Obligations, whereupon
such purchaser or purchasers shall become vested with all of the powers and
rights of such Secured Party hereunder, and such Secured Party shall thereafter
be forever released and fully discharged from any liability or responsibility
hereunder, with respect to the rights and interests so assigned.
16.
Notices.
All
notices, requests, demands and other communications provided for hereunder
shall
be in writing (including telegraphic communication) and shall be either mailed
by certified mail, return receipt requested, or delivered by overnight courier
service to the applicable party at the following addresses:
|
If to the Debtor:
|
|
VeriChip
Corporation
|
|
|
|
0000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
|
|
|
|
Xxxxxx
Xxxxx, Xxxxxxx 00000
|
|
If to the Secured Party:
|
|
Applied
Digital Solutions, Inc.
|
|
|
|
0000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
|
|
|
|
Xxxxxx
Xxxxx, Xxxxxxx 00000
|
|
with
a copy to:
|
|
Xxxxxxxx
X. Xxxxxx, Esquire
|
|
|
|
Merra,
Kanakis, Creme & Xxxxxx, PC
|
|
|
|
00
Xxxx Xxxxxx
|
|
|
|
Xxxxxx,
Xxx Xxxxxxxxx 00000
|
Page
11
or,
as to
each party, at such other address as shall be designated by such parties in
a
written notice to the other party complying as to delivery with the terms of
this Section. All such notices, requests, demands and other communication shall
be effective on the date of first attempted delivery.
17.
Miscellaneous.
a.
The
powers conferred on the Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise
any
such powers. Except for the safe custody of any Collateral in its possession
and
the accounting for monies actually received by it hereunder, the Secured Party
shall not have any duty as to any Collateral or as to the taking of any
necessary steps to parties pertaining to any Collateral;
b.
No
provision hereof shall be amended except by a writing signed by the Secured
Party and the Debtor;
c.
Any
provision of this Agreement that is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof;
d.
This
Agreement shall be binding upon and shall inure to the benefit of the successors
and assigns of the Secured Party and the Debtor;
e.
No
delay, failure to enforce, or single or partial exercise on the part of the
Secured Party in connection with any of its rights hereunder shall constitute
an
estoppel or waiver thereof, or preclude other or further exercises or
enforcement thereof and no waiver of any default hereunder shall be a waiver
of
any subsequent default; and
f.
This
Agreement shall be governed as to its validity, interpretation and effect in
accordance with the laws of the State of New Hampshire.
IN
WITNESS WHEREOF, the undersigned have set their hands and seals to this
Agreement all as of the day and year first above written.
|
|
|
VeriChip
Corporation
|
||
|
/s/
Xxxxx
Xxxxxx
|
|
By:
|
|
/s/
Xxxxx
XxXxxxxxxx
|
|
Witness
|
|
Name:
|
|
Xxxxx
XxXxxxxxxx
|
|
|
|
Title:
|
|
Chief
Executive Officer
|
|
|
|
Applied
Digital Solutions, Inc.
|
||
|
/s/
Xxxxx
Xxxxxx
|
|
By:
|
|
/s/
Xxxx
XxXxxxx
|
|
Witness
|
|
Name:
|
|
Xxxx
XxXxxxx
|
|
|
|
Title:
|
|
Chief
Financial Officer
Senior
Vice President
|
