SETTLEMENT AGREEMENT AND GENERAL RELEASE

Exhibit 10.1

SETTLEMENT AGREEMENT AND GENERAL RELEASE

This Settlement Agreement and General Release (the “Agreement”) is entered into as of March 3, 2009, by and among Jerome C. Artigliere (“Artigliere” or “Plaintiff”), Artigliere, Clark & Martino, P.A. (“C&M”) and Baker & Hostetler, LLP (“B&H”; each a “Stock Recipient” and collectively, the “Stock Recipients”), Digital Angel Corporation f/k/a Applied Digital Solutions, Inc. (“DIGA”), VeriChip Corporation (“VeriChip”), Scott Silverman (“Silverman”), Michael Krawitz (“Krawitz”) , and Kevin McLaughlin (“McLaughlin,” together with DIGA, VeriChip, Silverman and Krawitz, collectively, the “Defendants”), and Baker & Hostetler, LLP (“Escrow Agent”).

RECITALS

A. On or about July 8, 2008, Plaintiff filed a lawsuit against DIGA and VeriChip entitled Artigliere v. VeriChip Corporation, et al. , in the Circuit Court of the Fifteenth Judicial District in and for Palm Beach County, Florida, and on September 12, 2008, Plaintiff amended his complaint to add, among other things, claims against Silverman, Krawitz, and McLaughlin (collectively, the “Action”).

B. The parties, through their counsel, reached a settlement of the Action on February 12, 2009 during a voluntary mediation in the Action.

C. The parties entered into a Settlement Agreement, dated February 12, 2009 (the “Original Agreement”) and now desire to enter into this Agreement in furtherance of their settlement.

AGREEMENT

In consideration of the recitals and mutual promises contained in this Agreement, the adequacy of which are hereby acknowledged, the parties agree to settle their disputes on the following terms.

1.  Consideration .

a. Cash . The Cash Component of the settlement amounts to Three Hundred Fifty Thousand Dollars (US$350,000.00) payable as follows: Two Hundred Seventy-Five Thousand Dollars (US$275,000.00) from VeriChip and Seventy-Five Thousand Dollars (US$75,000.00) from its insurer, XL Specialty Insurance Company (“XL”). XL shall pay $75,000; and VeriChip shall pay the sum of One Hundred Ninety Four Thousand Five Hundred Fifty Three and Twenty One Cents(US$194,553.21) via wire transfer pursuant to the wire transfer instructions attached hereto as Exhibit A or delivery of a check made payable to the Baker & Hostetler, LLP Trust Account (“Cash Consideration”), within ten (10) calendar days of the execution of this Agreement by all parties hereto (the “Execution Date”). The $75,000 of the Cash Consideration payable by XL Specialty Insurance Company is in settlement of claims asserted in the Action unrelated to any wages or compensation purportedly due to Artigliere as payment for such wages or compensation is excluded from coverage under the policy. One Hundred Twenty Eight Thousand Two Hundred Twelve Dollars and Eighty Four Cents (US$128,212.84) of the Cash Component represents attorneys’ fees and costs payable to C&M and B&H for litigating this Action (“Law Firm Cash Consideration”). One Hundred Forty Six Thousand Seven Hundred Eighty Seven Dollars and Sixteen Cent (US$146,787.16) of the Cash Component shall be transferred to Artigliere from the Baker & Hostetler LLP Trust Account in settlement of the claims asserted by him in this Action involving his purported entitlement to certain options to purchase VeriChip common stock (“Artigliere Cash Consideration”).

b. DIGA Promissory Note . DIGA shall execute and deliver to Plaintiff, or Plaintiff’s assignee or designee, a promissory note in the principal sum of Two Hundred Fifty Thousand Dollars (US$250,000.00) in the form attached hereto as Exhibit B (“Note Consideration”). The Note Consideration represents payment solely for the claims asserted in this Action involving the purported failure of DIGA to timely register the DIGA shares Artigliere claimed he was entitled to and not any wages or compensation to Artigliere.

c. VeriChip Stock . VeriChip agrees to give Plaintiff, or Plaintiff’s assignee or designee, in the manner specified in Section 3 below, unregistered shares of VeriChip common stock (the “VeriChip Common Stock”) which, as of the dates specified below, shall be worth Two Hundred Fifty Thousand Dollars (US$250,000.00) (the “Stock Consideration”). Plaintiff may direct that the shares be issued in three (3) separate certificates, each to be issued to a different person or entity, with the total shares not to exceed the number of shares set forth above. $75,000 of the Stock Consideration represents attorneys’ fees and costs payable to C&M and B&H for litigating this Action (“Law Firm Stock Consideration”). $175,000 of the Stock Consideration represents the settlement of the claims asserted by Artigliere in this Action involving his purported entitlement to certain options to purchase VeriChip stock (“Artigliere Stock Consideration”).

d. Sole Consideration . The consideration set forth in Sections 1(a)-(c) above shall be the only payments, in cash or otherwise, now or in the future, due to Plaintiff or his successors, heirs and assigns, from the Defendants or any other Defendant Released Parties (as defined below). The Defendants obligations under this Agreement shall be several and not joint.

2.  Dismissal of the Action . Within ten (10) days from the Execution Date, Plaintiff shall file with the court a dismissal with prejudice (the “Dismissal”) of the Action.

3. Stock Consideration .

a. Name . The stock certificates evidencing the shares for the Stock Consideration shall be issued to Stock Recipients in the percentage and number of shares opposite such Stock Recipient’s name on Exhibit C .

b. Delivery of Stock Consideration . Within five (5) business days of the Execution Date (the “Issuance Date”), VeriChip shall cause its transfer agent to issue and deliver to Escrow Agent duly authorized, validly issued, fully paid and non-assessable shares of VeriChip Common Stock (the “Restricted Shares”) valued at Three Hundred Thousand Dollars (US$300,000.00) in the name of the Stock Recipients in accordance with Exhibit C (the “Escrow”). The Restricted Shares to be placed in Escrow shall be determined by dividing the sum of Three Hundred Thousand Dollars ($300,000.00) by the VeriChip Average Trading Price (as defined below) preceding the Execution Date. For example, if the calculation of the VeriChip Average Trading Price is forty cents ($0.40) per share on the Execution Date, the number of unregistered shares to be deposited into Escrow shall be Seven Hundred Fifty Thousand (750,000) shares. Notwithstanding anything herein to the contrary, VeriChip shall not be required to issue Stock Consideration to Stock Recipients if the aggregate Stock Consideration issued hereunder would exceed 19.9% of the common stock of VeriChip outstanding on any of the following dates: the Issuance Date or any Escrow Release Date (as defined below).

c. Restrictive Legend . The stock certificates representing the Restricted Shares or Additional Shares (as defined below) will bear a legend stating that they have not been registered and that they are subject to the restrictions set forth in this Agreement. VeriChip agrees to issue certificates without the legend representing the Restricted Shares, upon resale subject to an effective registration statement after such Restricted Shares are registered under the Securities Act of 1933, as amended (the “Securities Act”). VeriChip agrees to issue certificates without the legend representing the Additional Shares, after the date which is six (6) months from the date such Additional Shares were issued to Stock Recipients in compliance with Rule 144.

d. Delivery Of Unrestricted Stock Certificates . Within forty-five (45) days of the Execution Date, VeriChip will cause to be filed with the Securities and Exchange Commission (“SEC”) a registration statement (each a “Registration Statement”) covering the Restricted Shares issued so as to insure that those shares are registered for resale on or before September 3, 2009 (the “Registration Deadline). Upon the effectiveness of the Registration Statement (the “Effective Date”), the Escrow Agent may request on behalf of the Stock Recipients that VeriChip remove the restrictive legend thereon; provided such shares are registered and sold pursuant to an effective Registration Statement.

e. Average Trading Price . As used herein, “VeriChip Average Trading Price” shall mean the volume weighted average price per share of the VeriChip Common Stock as reported on The NASDAQ Global Market (or, if the Common Stock is not then listed or quoted and traded on The NASDAQ Global Market, then the NASDAQ Capital Market or over-the-counter or other market on which the VeriChip Common Stock is traded) for the 10 consecutive trading day period preceding the applicable measurement date.

f. Amount of Stock Payment Prior to the Registration Deadline . In the event the Registration Statement is declared effective by the SEC on or prior to the Registration Deadline, the Escrow Agent shall be promptly notified of the effective date of the Registration Statement. Within one (1) business day of being provided notice of the Effective Date, Escrow Agent shall notify VeriChip of the proposed number of shares of VeriChip Common Stock to be released from Escrow (the “Escrow Agent Notice”) that have a value, based on the VeriChip Average Trading Price preceding the Effective Date, of Two Hundred Fifty Thousand Dollars (US$250,000.00) (the “Target Value”). If on or before 5:00 p.m. on the date which is two (2) business days following VeriChip’s receipt of the Escrow Agent Notice, VeriChip shall object to the number of shares of VeriChip Common Stock to be released to Stock Recipients (“VeriChip Objection Notice”), then Escrow Agent shall not disburse the shares to Stock Recipients which exceed the number of undisputed shares to which VeriChip has no objection until the dispute is resolved. However, if VeriChip does not deliver a VeriChip Objection Notice to Escrow Agent on or before 5:00 p.m. on the date which is four (4) business days following VeriChip’s receipt the Escrow Agent Notice, then Escrow Agent may disburse that number of shares equaling the Target Value to Stock Recipients in accordance with their percentage interests set forth in Exhibit C.

g. Amount of Stock Payment after the Registration Deadline . In the event the Registration Statement is not declared effective by the SEC by the Registration Deadline, the Escrow Agent shall within one (1) business day after the Registration Deadline provide VeriChip with an Escrow Agent Notice notifying VeriChip of the proposed number of shares of VeriChip Common Stock to be released from Escrow that have a value based on the VeriChip Average Trading Price preceding the Escrow Release Date, of Three Hundred Thousand Dollars (US$300,000.00) (the “Penalty Value” and the Target Value, each an “Applicable Value”). The date(s) the Escrow Agent releases the Restricted Shares or any Additional Shares to the Stock Recipients shall be known as an “Escrow Release Date.” If on or before 5:00 p.m. on the date which is two (2) business days following VeriChip’s receipt of the Escrow Agent Notice, VeriChip provides the Escrow Agent with VeriChip Objection Notice, then Escrow Agent shall not disburse the shares to Stock Recipients which exceed the number of undisputed shares to which VeriChip has no objection until the dispute is resolved. However, if VeriChip does not deliver a VeriChip Objection Notice to Escrow Agent on or before 5:00 p.m. on the date which is four (4) business days following VeriChip’s receipt the Escrow Agent Notice, then Escrow Agent may disburse that number of shares equaling the Penalty Value to Stock Recipients. After the Registration Deadline, VeriChip’s obligations to have the Registration Statement declared effective shall terminate on the earlier of the date (i) any Stock Recipient is able to sell the Restricted Shares pursuant to an exemption from registration under Rule 144 or (ii) that is twelve (12) months following the issuance of the Restricted Shares.

h. Difference In Value . If the aggregate number of Restricted Shares in the Escrow is less than the Applicable Value on the Escrow Release Date, then VeriChip shall cause its transfer agent to issue in each Stock Recipient’s name (in accordance with their percentage interests set forth on Exhibit C) stock certificates representing such number of additional shares of VeriChip Common Stock (“Additional Shares”) that have a value, based on the VeriChip Average Trading Price

preceding the Effective Date, equal to the difference between the value of the Restricted Shares held in the Escrow and the Applicable Value. Such Additional Shares shall be delivered to the Escrow Agent to be held for the benefit of the Stock Recipients. If the value of the Restricted Shares held in the Escrow exceeds the Applicable Value on the Escrow Release Date, those shares representing the excess value (the “Excess Shares”) shall be immediately returned to VeriChip for cancellation. The certificate(s) representing Excess Shares must be returned bearing the such Stock Recipient’s endorsement(s) with Medallion signature guarantee(s), or with stock power(s) bearing such Stock Recipient’s signature with Medallion signature guarantee(s), as required by VeriChip’s transfer agent to allow cancellation of the Restricted Shares. The Stock Recipients or their assigns will reasonably assist in paperwork required by VeriChip’s transfer agent required to cancel the shares.

4.  Sale of VeriChip Common Stock by Plaintiff or Stock Recipients . Plaintiff, Stock Recipients and their designees and assignees agree that in the aggregate they, he or it will not sell on the open market in any one day a number of shares of VeriChip Common Stock which exceeds the average daily trading volume of the VeriChip Common Stock for the 10 consecutive trading day period preceding the Execution Date.

5.  VeriChip Option To Pay Cash . Notwithstanding anything herein to the contrary, in its sole and absolute discretion, VeriChip shall have the option of paying the Applicable Value, in whole or in part, through a payment by a check, wire transfer of funds or other cash equivalent.

6.  Merger, Etc . If there occurs any merger of VeriChip with or into another Person (other than a merger or consolidation of VeriChip in which VeriChip is the continuing entity and which does not result in any reorganization or reclassification of VeriChip’s outstanding Common Stock) or the sale or conveyance of all or substantially all of the assets of VeriChip to another person, then, the Stock Recipients will be entitled to receive upon surrender of the Restricted Shares the same kind and amounts of securities or other assets, or both, that are issuable or distributable to the holders of outstanding VeriChip Common Stock upon such merger, sale or conveyance. “Person” means and includes an individual, bank, partnership, joint venture, limited liability company, corporation, trust, unincorporated organization and government or any department or agency thereof.

7.  Release of Escrow . The Escrow Agent agrees to release the Stock Consideration from Escrow as provided in Section 3 above. The parties acknowledge that the only terms and conditions upon which the Stock Consideration is to be released from Escrow is as set forth in Section 3 of this Agreement. Any dispute with respect to the release of the Stock Consideration shall be resolved pursuant to Section 26 or by written agreement among the parties. VeriChip shall be obligated, however, under any circumstance, to authorize the Escrow Agent to release any amounts of undisputed shares to which VeriChip agrees the Stock Recipients are entitled.

8.  Termination of Escrow . The Escrow shall terminate upon the earlier to occur of the following:

a. upon the mutual written consent of VeriChip and Stock Recipients (written notice of which shall be given jointly to the Escrow Agent); or

b. upon the disbursement of all of the Stock Consideration from Escrow.

9. Mutual General Releases .

a. By Plaintiff . Except for obligations under this Agreement, Plaintiff (for himself and his successors in interest, predecessors in interest, heirs, assigns, employees, attorneys, partners, officers and directors) hereby unconditionally remises, releases, acquits, satisfies and forever discharges Defendants and their respective past and present parents, subsidiaries, affiliates, predecessor entities, officers, directors, stockholders, employees, insurers, attorneys, accountants, heirs, predecessors, successors and assigns (collectively, the “Defendant Released Parties”), of and from any and all claims, actions, causes of action, suits, debts, sums of money, accounts, reckonings, contracts, controversies, agreements,

promises, damages, costs, expenses (including but not limited to attorneys’ fees), and demands whatsoever, in law or in equity, which Plaintiff had or now has, or which any successor or assign of Plaintiff hereafter can, shall or may have, against any of the Defendant Released Parties for, upon, or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the date of this Agreement, whether known or unknown, direct or indirect, vested or contingent, suspected or unsuspected, asserted or unasserted (the “Claims”). Without limiting the generality of the foregoing, this release includes the release of any and all Claims which were or could have been raised or asserted by Plaintiff against the Defendant Released Parties in the Action. Notwithstanding the foregoing, Plaintiff expressly excludes from the effect of this release and does not release the Defendant Released Parties from: (a) the terms and conditions of the definitive settlement documents to which reference is made above, and (b) to the extent the Defendant Released Parties have any authority to bind IFTH Acquisition Corp., Plaintiff’s rights to exercise Plaintiff’s options in IFTH Acquisition Corp., formerly known as Infotech and referred to hereafter as “Infotech.” The parties also agree that nothing contained in this Agreement shall have any effect on Plaintiff’s rights to exercise Plaintiff’s options in Infotech, to the extent the Defendant Released Parties hav