SECOND AMENDMENT TO COMMERCIAL LOAN AGREEMENT
Exhibit
10.1
SECOND
AMENDMENT TO
This
SECOND AMENDMENT TO COMMERCIAL LOAN AGREEMENT, dated as of January 19, 2007
(this "Second Amendment"), is between VERICHIP
CORPORATION,
a
Delaware corporation (the "Borrower"), and APPLIED
DIGITAL SOLUTIONS, INC.,
a
Missouri corporation (the "Lender").
Recitals:
WHEREAS,
on December 27, 2005, the Borrower and the Lender entered into a Commercial
Loan
Agreement (the "Agreement") pursuant to which Lender made a Loan to Borrower
subject to the terms and conditions contained in the Agreement;
WHEREAS,
on October 6, 2006, the Borrower and the Lender entered into a First Amendment
to Commercial Loan Agreement pursuant to which Lender increased the principal
amount of the Loan by Four Million Five Hundred Thousand Dollars ($4,500,000.00)
(including a change in the applicable interest rate) in order to meet the
Borrower's working capital needs, IPO costs, and cash needs in connection with
Perceptis' potential election to take its final (deferred) payment in cash
and
to make certain other amendments to the Agreement contained herein;
WHEREAS,
Borrower has requested and Lender has agreed, subject to the terms and
conditions set forth herein, to increase the principal amount of the Loan by
One
Million Five Hundred Dollars ($1,500,000.00) in order to meet the Borrower's
working capital needs and IPO costs;
NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
Agreement.
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1.
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Recitals.
The foregoing recitals are true and correct and are hereby incorporated
by
this reference.
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2.
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Definitions.
All
capitalized terms used herein, except as modified or defined in this
Second Amendment, shall have the meaning given to such terms in the
Agreement. All references to the Agreement in all documents executed
by
Borrower, Guarantor and/or Bank in connection with the Agreement
are
hereby deemed to refer to the Agreement, as hereby amended.
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3.
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Amendments:
The following sections of the Agreement are hereby amended as
follows:
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a. Revolving
Line of Credit:
The
amount of the Revolving Line of Credit on page 1 of the Agreement shall be
amended by replacing "$13,000,000.00" with "$14,500,000.00".
1
b. Review
Date.
Upon
the consummation of an initial public offering of the Borrower's common stock
pursuant to an effective registration statement filed with the Securities and
Exchange Commission (an "IPO"), all references to a "Review Date" and an "Annual
Review" at the top of the first page of the Agreement shall be deleted without
further need to amend the Agreement.
c.
Termination
of Revolver.
Upon
the consummation of an IPO, without further need to amend the Agreement, Section
I.C. of the Agreement shall be deleted and replaced with the following: "C.
Termination
of Revolver.
Notwithstanding anything contained in this Section 1 or elsewhere to the
contrary, from and after the initial public offering of the Borrower's common
stock and the payment by Borrower of the Seven Million Dollars ($7,000,000.00)
as required under the Second Amended and Restated Revolving Line of Credit
Note,
Borrower shall not be entitled to reborrow any amounts hereunder and the Loans
shall thereafter be considered a term loan payable in accordance with the terms
of such note."
d.
Events
of Default; Acceleration.
The
second sentence of Section XI of the Agreement shall be deleted and replaced
with the following: "Notwithstanding anything herein or in the other Loan
Documents to the contrary, an Event of Default shall not be deemed to be
occurring hereunder or under any Loan Documents during any period from
(X) the date the Borrower files a registration statement with respect to an
IPO until (Y) the earlier of (i) ten days after the date such initial
public offering is consummated, and (ii) the date the Borrower withdraws
such registration statement (such period, the “IPO Preparation Period”);
provided that the Company is diligently pursuing an initial public offering
during the IPO Preparation Period."
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4.
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Conditions
Precedent.
This Second Amendment shall not be effective until Lender has received
the
following duly executed documents:
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a. This
Second Amendment;
b. Second
Amended and Restated Revolving Line of Credit Note - Working Capital of even
date herewith in the principal amount of $14,500,000.00; and
c. Second
Amendment to Security Agreement of even date herewith.
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5.
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Representations
and Warranties.
The terms and conditions, representations and warranties, and covenants
as
set forth in the Agreement and all other loan documents executed
by
Borrower in favor of Lender in connection with the Loan are hereby
ratified and affirmed by Borrower, and Borrower hereby agrees that
the
said terms and conditions, and covenants are valid, true and correct
as if
made on the date hereof.
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6.
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No
Implied Modifications; Inconsistencies.
Except as expressly modified hereby, all terms and provisions of
the
Agreement shall remain unchanged and in full force and effect. In
the event of an inconsistency between the terms of this Second Amendment
and the terms of the Agreement, the terms hereof shall control.
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7.
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Acknowledgement.
Lender
acknowledges and agrees that the appointment of Xxxxx Xxxxxxxxx as
Borrower's Chief Executive Officer and the issuance of 500,000 restricted
shares of Borrower's common stock to Xx. Xxxxxxxxx did not violate
the
negative covenant contained in Section IX.C of the Loan Agreement.
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2
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8.
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Counterparts.
This Second Amendment may be executed in any number of counterparts,
and
all such counterparts shall together constitute but one instrument.
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9.
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Governing
Law.
This Second Amendment shall be governed by and construed in accordance
with the laws of the State of New
Hampshire.
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IN
WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this Second Amendment on the date first above
written.
BORROWER:
VERICHIP
CORPORATION, a Delaware
corporation
By: /s/
Xxxxxxx X. Xxxxxxx
Print
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
LENDER:
APPLIED
DIGITAL SOLUTIONS, INC., a
Missouri
corporation
By: /s/
Xxxx XxXxxxx
Print
Name: Xxxx
XxXxxxx
Title: CFO
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