SECOND AMENDMENT TO SECURITY AGREEMENT
Exhibit
10.3
SECOND
AMENDMENT TO SECURITY AGREEMENT
This
Second Amendment to Security Agreement (the “Second Amendment”) is dated as of
the 19th day of January, 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 (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 (the "Credit Agreement") and the Amended and Restated Working
Capital Revolving Line of Credit made pursuant to the Credit Agreement (the
"Loan").
WHEREAS,
Debtor has requested and Lender has agreed to increase the principal amount
of
the Loan in the amount of $1,500,000.00 subject to certain terms and conditions;
WHEREAS,
Debtor and Lender have agreed to certain modifications to the Security
Agreement, as amended; and
WHEREAS,
Debtor and Lender have executed and delivered that certain Second Amendment
to
the Credit Agreement of even date herewith and that certain Second Amended
and
Restated Revolving Line of Credit Note - Working Capital of even date herewith
in the principal amount of $14,500,000.00.
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, and as amended by that Second 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. Amendment
to Amount of Loan:
The
first whereas clause is amended by replacing "Thirteen Million Dollars
($13,000,000.00)" with "Fourteen Million Five Hundred Thousand Dollars
($14,500,000.00)".
4. 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.
5. 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.
6. 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.
IN
WITNESS WHEREOF, the parties have executed this Second Amendment to Security
Agreement as of the day and year first written above.
DEBTOR:
VERICHIP
CORPORATION
By: /s/
Xxxxxxx X. Xxxxxxx
Print Name: Xxxxxxx X. Xxxxxxx
Title: CFO
LENDER:
APPLIED
DIGITAL SOLUTIONS, INC.
By: /s/
Xxxx
XxXxxxx
Print Name: Xxxx XxXxxxx
Title: CFO
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