THIRD AMENDMENT TO SECURITY AGREEMENT
Exhibit
10.3
THIRD
AMENDMENT TO SECURITY AGREEMENT
This
Third Amendment to Security Agreement (the “Third Amendment”) is dated as of the
8th
day of
February, 2007 and is entered into 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”).
R E C I T A L S:
WHEREAS,
Secured Party and Debtor have previously entered into a Security Agreement
dated
as of December 27, 2005, as amended by that First Amendment to Security
Agreement, dated October 6, 2006 and that Second Amendment to Security
Agreement dated January 19, 2007 (the “Security Agreement”) securing the
obligations of Debtor under the Commercial Loan Agreement dated
December 27, 2005, as amended by that First Amendment to Commercial Loan
Agreement dated October 6, 2006 and that Second Amendment to Commercial
Loan Agreement dated January 19, 2007, and the Second Amended and Restated
Working Capital Revolving Line of Credit made pursuant to the Credit Agreement
dated January 19, 2007; and
WHEREAS,
Debtor and Lender have executed and delivered that certain Third Amendment
to
the Commercial Loan Agreement of even date herewith and that certain Third
Amended and Restated Revolving Line of Credit Note—Working Capital of even date
herewith in the principal amount of $14,500,000.00 (the “Loan”).
NOW
THEREFORE, in consideration of the mutual covenants, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereby agree as follows:
W I T N E S S E T H:
1.
Incorporation
and Recitals.
The
above recitals are true and correct and are incorporated herein by reference.
2.
Definitions.
All
capitalized terms used herein shall, except as modified herein, have the meaning
subscribed to them in the Security Agreement. All references to the “Security
Agreement” set forth in the Loan Documents are hereby deemed to include
reference to the Security Agreement, as hereby amended. All references to the
Security Agreement set forth in the Credit Agreement as amended by that First
Amendment to Commercial Loan Agreement dated as of October 6, 2006, as
amended by that Second Amendment to Commercial Loan Agreement dated as of
January 19, 2007, and as amended by that Third Amendment to Commercial Loan
Agreement dated as of even date herewith (the “Credit Agreement”) and all other
documents executed by Debtor, and/or Lender in connection with the Loan (the
“Loan Documents”) are hereby deemed to refer to the Security Agreement, as
hereby amended.
3.
Representations
and Warranties.
The
terms and conditions, representations and warranties, and covenants as set
forth
in the Security Agreement and all other loan documents executed by Debtor in
favor of Lender in connection with the Loan are hereby ratified and affirmed
by
Debtor, and Debtor hereby agrees that the said terms and conditions, and
covenants are valid, true and correct as if made on the date hereof. The Debtor
hereby ratifies, affirms and acknowledges the continuing and unconditional
security interest in the Collateral as described in the Security Agreement.
4.
Cooperation;
Further Assurances.
Debtor
agrees to cooperate with Lender so that the interests of Lender are protected
and the intent of the Security Agreement can be effectuated. Debtor agrees
to
execute all documents and to provide whatever further assurances Lender may
request or deem necessary to effectuate the terms of the Security Agreement.
5.
No
Implied Modifications.
Except
as expressly modified hereby, all terms and provisions of the Security Agreement
shall remain unchanged and in full force and effect.
6.
Counterparts.
The
Security Agreement may be executed in any number of counterparts, and all such
counterparts shall together constitute but one instrument.
[Signature
Page to Follow]
2
IN
WITNESS WHEREOF, the parties have executed this Third Amendment to Security
Agreement as of the day and year first written above.
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DEBTOR:
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VERICHIP
CORPORATION
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Print Name:
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Xxxxxxx
X. Xxxxxxx
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Title:
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Chief
Financial Officer
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LENDER:
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APPLIED
DIGITAL SOLUTIONS, INC.
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By:
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/s/
Xxxxxxxx Xxxxxx
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Print Name:
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Xxxxxxxx
Xxxxxx
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Title:
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Senior
Vice President and Chief Accounting
Officer
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