AMENDED AND RESTATED TRANSITION SERVICES AGREEMENT

AMENDED AND RESTATED TRANSITION SERVICES AGREEMENT

This AMENDED AND RESTATED TRANSITION SERVICES AGREEMENT (this “ Agreement ”), dated as of December 21, 2006, is entered into between Applied Digital Solutions, Inc., a Missouri corporation (“ ADSX ”), and VeriChip Corporation, a Delaware corporation (“ VeriChip ”; references to VeriChip in this Agreement shall include VeriChip’s direct and indirect subsidiary companies).

Preliminary Statements

A. ADSX and VeriChip are parties to a Transition Services Agreement, dated December 27, 2005 (the “Original Agreement”) providing for ADSX’s provision to VeriChip of transition services.

B. ADSX and VeriChip desire to amend and restate the Original Agreement to reflect the terms and conditions set forth herein, with the terms hereof superseding the terms of the Original Agreement.

C. ADSX and VeriChip desire that this Amended and Restated Transition Services Agreement become effective as of the date of completion of VeriChip’s initial public offering (the “ Offering ”) of securities (the “ Effective Date ”), at which time VeriChip will pay to ADSX, out of the net proceeds of the Offering, the amounts due and payable under the terms of the Original Agreement, which VeriChip acknowledges have been added to VeriChip’s indebtedness under the terms of the separate loan agreement between the parties.

Agreement

In consideration of the mutual covenants contained herein, together with other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Services and Compensation.

1.1 Transition Services . During the Term (as defined below), ADSX shall provide or cause to be provided to VeriChip certain administrative services that ADSX has provided to VeriChip prior to December 27, 2005 (i.e., the effective date of the Original Agreement) and ADSX shall pay certain expenses, in each case as requested from time to time by VeriChip. These services and payment of expenses include those transition services set forth on Schedule 1-A and those transition expenses set forth on Schedule 1-B. Such “transition services” and the “transition expenses” are referred to collectively in this Agreement as the “ Transition Services ”). ADSX shall not be obligated to expand the scope of the Transition Services significantly beyond the scope of those services and expenses being provided to VeriChip prior to the Offering (as defined below).

1.2 Additional Services . The parties agree to use commercially reasonable efforts to reach agreement regarding the provision of additional services which VeriChip may request of ADSX beyond those included in the Transition Services set forth on Schedule 1-A or 1-B (the “ Additional Services ”), and the applicable service fees, payment procedures and other rights and obligations with respect thereto. In the event the parties reach agreement as to the provision of Additional Services, Schedules 1-A and 1-B shall be amended to reflect such Additional Services and the applicable fees relating thereto.

(a) As compensation for the Transition Services and Additional Services to be provided by ADSX to VeriChip hereunder, the following shall be payable by VeriChip Corporation on a monthly basis:

(i) the amounts specified as “Costs Allocated to VeriChip” on Schedule 1-C, as such schedule may be amended from time to time upon the mutual agreement of the parties,

(ii) the reasonable out-of-pocket direct expenses incurred by ADSX in connection with providing Transition Services and/or Additional Services,

(iii) the costs of the services and expenses incurred by ADSX on behalf of VeriChip in connection with the Offering, and

(iv) charges by third party service providers incurred in connection with the Offering that are attributable to Transition Services provided to or for VeriChip and are not included in (i) or (ii) above.

(b) Charges for the Transition Services and Additional Services shall be invoiced by ADSX, on or about the tenth day of the calendar month next following the calendar month in which the Transition Services or Additional Services have been performed, and such invoice shall be accompanied with reasonable documentation supporting each of the invoiced amounts. Unless VeriChip disagrees as to the amounts (or any amount) invoiced, including, without limitation, whether the Transition Services and/or Additional Services or costs thereof covered by the invoice are properly allocable to VeriChip, such invoice shall be payable by VeriChip within 30 days following receipt thereof. In the event of any such disagreement between ADSX and VeriChip, VeriChip shall pay the amount of the invoice not in dispute and the parties hereto agree to negotiate in good faith to resolve such dispute. ADSX shall maintain accurate and complete books of account in accordance with generally accepted accounting principles and practices necessary to support the amounts set forth on all invoices.

(c) ADSX shall use commercially reasonable efforts to (i) utilize resources and otherwise provide the Transition Services and Additional Services in a cost-effective manner and to otherwise minimize expenses, and (ii) minimize any costs allocated to VeriChip. Without limiting the foregoing, if, upon the request of VeriChip or for any other reason, the volume of any Transition Services or Additional Services is reduced or terminated, ADSX shall use commercially reasonable efforts to reduce the costs associated with providing the remaining Transition Services or Additional Services, to the extent and as soon as reasonably practicable.

(d) VeriChip, its agents and accountants will have the right during normal business hours to inspect ADSX’s books and records pertaining to ADSX’s costs and expenses, and the determinations and allocations relating thereto, with respect to the Transition Services and Additional Services. In connection with the audit of the annual financial statements of VeriChip, ADSX shall permit the accountants retained by VeriChip to audit and verify the amounts paid or payable by VeriChip in respect of the immediately preceding fiscal year as said accountants may deem appropriate. VeriChip shall provide ADSX with reasonable advance notice of such inspection, audit or verification. In the event of any disagreement between VeriChip and ADSX as to the amounts paid or payable in respect of the Transition Services and/or Additional Services following such inspection, audit or verification, the parties hereto agree to negotiate in good faith to resolve such dispute. VeriChip shall bear all out-of-pocket costs and expenses associated with such inspection, audit or verification. This Section 1.3(d) shall survive the termination or expiration of this Agreement.

1.4 Cooperation . VeriChip and ADSX agree to use commercially reasonable efforts to cooperate with and provide the other with any information necessary to facilitate ADSX’s ability to provide the Transition Services and the Additional Services and to obtain any consents or approvals from third parties necessary to facilitate the ability of ADSX to provide the Transaction Services and the Additional Services.

2. Term and Termination.

2.1 Term . The term of this Agreement (the “ Term ”) shall commence on the Effective Date and shall continue in effect with respect to any Transition Service or Additional Service until such time as VeriChip shall request ADSX to cease performing such services; provided that ADSX shall not be obligated, except as provided in Section 2.2, to continue to provide the Transition Services or any Additional Services after the second anniversary of the Effective Date unless the parties otherwise agree to do so. Notwithstanding the provisions of this Section 2.1 or Section 1.3(c), in no event may VeriChip request that ADSX reduce or terminate, as applicable (i) insurance oversight services or any insurance coverage with respect to VeriChip other than during the 60-day period prior to the expiration of the applicable insurance policy, or (ii) the amount of office space leased by VeriChip from ADSX, except upon 120 days prior written notice.

2.2 Termination . Except as provided in Section 2.1, this Agreement may not be terminated by either party for any reason other than upon thirty days’ prior written notice to the other party of a material default in the delivery of Transition Services or Additional Services by ADSX or in payment therefor by VeriChip. Unless otherwise extended by agreement of the parties in writing, this Agreement shall terminate on the second anniversary of the Effective Date, except for any Transition Services or Additional Services not then completed, as to which this Agreement shall expire upon completion of those Transition Services or Additional Services, but in no event more than thirty days after the second anniversary of the Effective Date.

2.3 Transition . Upon the expiration or termination of this Agreement or upon VeriChip’s request, ADSX shall provide all other services necessary for an orderly transition of the Transition Services and Additional Services, in whole or in part, to another provider and/or to VeriChip itself, including, without limitation, the transfer of all employee records, financial or tax records and other data in the possession, custody or control of ADSX; provided, however , that VeriChip agrees that ADSX shall retain copies of all records and other data transferred to VeriChip under this provision, including, without limitation, workpapers and other documents that form the basis of the ADSX audit or review of its financial statements, and memoranda, correspondence, communications, other documents, and records (including electronic records), which are created, sent or received in connection with the audit or review, or as otherwise required by federal securities statutes and regulations, ADSX corporate document retention policies and other applicable law. The provisions of this Section 2.3 shall survive the expiration or termination of this Agreement.

3. Cooperation of the Parties.

3.1 Access to Personnel and Records . ADSX and VeriChip shall cooperate with each other in providing reasonable access to personnel and records needed to perform or document the Transition Services and the Additional Services and their cost.

3.2 Further Assurances . ADSX and VeriChip shall take all other actions reasonably necessary for the Transition Services and Additional Services to be performed on a timely basis and in a manner consistent with past standards and practice unless otherwise specifically agreed in writing.

3.3 Information Technology Security and other IT Related Matters .

(a) Neither ADSX nor VeriChip shall, nor shall ADSX nor VeriChip permit its affiliates or its and their applicable vendors to, access or use the information systems of any other party made available under in connection with this Agreement, except as expressly permitted and required for receipt or provision of the Transition Services or Additional Services, as applicable, and as contemplated to otherwise perform its obligations or exercise its rights under this Agreement.

(b) No one shall tamper with, compromise or attempt to circumvent, any physical or electronic security or audit measures employed by any other party (or its affiliates and their respective third party vendors). ADSX and VeriChip shall not, without the express written consent of the other party or as otherwise provided in this Agreement, and without complying with such party’s security policies and procedures, access any computer system of such other party or remove from such party’s premises any of such party’s confidential information or any other property of party, its affiliates, employees, franchisees, members, or customers.

(c) ADSX and VeriChip shall comply with (i) any and all applicable privacy and information security laws, regulations, statutes, and guidelines, and (ii) the policies, standards, and guidelines for privacy, information protection, and information and system security in effect as of the Effective Date, as such may be modified by mutual agreement to address security exposures and risks that may be discovered, such agreement not to be unreasonably withheld or

delayed. Each party shall maintain security controls over resources it provides hereunder or personnel who may access the other party’s (or such other party’s affiliates’) electronic mail, Web site, systems, or confidential information, which controls shall protect the confidentiality, privacy, integrity and availability of information.

(d) Neither ADSX nor VeriChip shall knowingly or willfully introduce into any computer systems, databases, or software of the other party or its affiliates, or of any third party to which access is provided, any viruses or any