EXECUTION COPY

                          TECHNOLOGY LICENSE AGREEMENT

This Technology  License Agreement  ("AGREEMENT") is made and entered into as of
October 19, 2000, between MCY Music World, Inc., a Delaware corporation ("MCY"),
and Applied Digital Solutions, Inc., a Missouri corporation ("ADSX").

In  consideration  of the mutual  covenants  and  conditions  contained  in this
Agreement, the parties agree as follows:

1.                LICENSE.

1.1      MCY hereby grants to ADSX a perpetual  (unless  terminated as set forth
         herein),  exclusive  (for  the  purposes  set  forth in  Section  1.2),
         nontransferable,  worldwide  paid-up license,  subject to the terms and
         conditions of this Agreement, to use:

(a)           all proprietary software of MCY relating to the digital encryption
              and  secure  distribution  of audio and video  content,  including
              without  limitation   software  related  to  streaming  video  and
              streaming audio technology and MCY's NETrax(TM) software (the "MCY
              TECHNOLOGY"); and

(b)           any designs,  computer programs,  data and artistic elements which
              have been or are in the course of being created for MCY by Sapient
              Corporation,  and which are owned by MCY pursuant to its agreement
              with Sapient Corporation,  or which are licensed to MCY by Sapient
              Corporation  and which MCY has the  right to  sublicense  (if any)
              (the "SAPIENT  TECHNOLOGY"  and together  with the MCY  Technology
              collectively the "LICENSED MATERIALS").

1.2      The license  granted to ADSX  hereunder  shall  entitle ADSX to use the
         Licensed  Materials in the  industries set out in Schedule "A" attached
         hereto but in no other industries.

1.3      Any computer programs included as part of the Licensed  Materials shall
         be provided  in both  source code and object code form,  and ADSX shall
         have the right to receive related technical  documentation for any such
         software.  The license granted  hereunder shall entitle ADSX to receive
         any new releases, or other modifications or alterations to:

                  (i)      any of the MCY  Technology,  made at any  time  after
                           delivery by MCY to ADSX  hereunder and offered by MCY
                           to its customers generally, and

                  (ii)     any of the Sapient Technology, made at any time after
                           delivery by MCY to ADSX hereunder and provided to MCY
                           by Sapient,

         in each  case  where  any  such  releases  or  other  modifications  or
         alterations  are not priced by MCY or Sapient as separate  new products
         or options.  ADSX  acknowledges that it shall be responsible for making
         all necessary  arrangements  at its own expense for obtaining any other
         modifications or alterations to the Licensed Materials or for obtaining

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         other  products  to be used with the  Licensed  Materials,  that may be
         necessary  to ensure that the Licensed  Materials  have any features or
         meet any standards that may be required by ADSX or that are required by
         ADSX  to  enable  it to use the  Licensed  Materials  for the  purposes
         intended by ADSX. Any modifications or alterations made solely by or on
         behalf of ADSX to any of the Licensed  Materials  supplied by MCY shall
         belong to ADSX, but shall be subject to the restrictions and conditions
         set out in this Agreement.

1.4      ADSX shall be entitled pursuant to the license granted hereunder to use
         the Licensed  Materials as an application or similar  service  provider
         and to  sublicense  the Licensed  Materials  to the  customers of ADSX,
         provided that such sublicenses are granted only in conjunction with the
         provision of services by ADSX to its  customers  and not to enable such
         customers to further  sublicense  the use of the Licensed  Materials to
         others.  Except as otherwise  expressly stated in this Agreement,  ADSX
         shall not be entitled to rent,  lease,  loan or  otherwise  transfer or
         grant any rights in or to the Licensed  Materials to any other  person,
         and ADSX  shall not  disassemble,  decompile  or reverse  engineer  the
         Licensed Materials. ADSX shall not use any of the Licensed Materials in
         any way not expressly provided for in this Agreement. ADSX acknowledges
         that  there are no  implied  licenses  and that ADSX  shall not use the
         Licensed  Materials  in any manner  that would  exceed the scope of the
         license granted herein.

1.5      ADSX shall not reproduce, duplicate, copy, sell, or otherwise disclose,
         or   disseminate   the   Licensed   Materials,    including   operating
         instructions,  user  manuals,  and  training  materials,  in any medium
         except as  authorized  herein.  ADSX may make  copies  of the  Licensed
         Materials,  in machine  readable form, only as is reasonably  necessary
         for its use of the  Licensed  Materials  as  permitted  herein  and for
         archival, testing and backup purposes.

1.6      The right to use the Licensed Materials granted to ADSX hereunder shall
         include use of the Licensed  Materials by any Affiliate (as hereinafter
         defined) of ADSX and any  successor of any  Affiliate.  For purposes of
         this Agreement,  "AFFILIATE" means any entity or person which, directly
         or  indirectly,  controls,  is controlled by or is under common control
         with ADSX.  ADSX shall cause any  Affiliate or successor to comply with
         the terms and  conditions of this Agreement in the same manner as ADSX,
         and shall indemnify MCY for any loss, damage or expense incurred by MCY
         as a result of any non-compliance  with this Agreement by any Affiliate
         or successor.

1.7      Except as expressly  provided herein,  the license granted to ADSX with
         respect to the Licensed  Materials  does not include the right to grant
         sublicenses to any portion of the Licensed  Materials without the prior
         written  authorization of MCY, which  authorization  may be withheld by
         MCY at its sole  discretion.  In each case in which ADSX is  authorized
         under  this  Agreement  to grant  such  sublicenses,  or in  which  MCY
         expressly  permits  ADSX to grant  any  such  sublicenses,  ADSX  shall
         require each sublicensee,  before it may use or install the sublicensed
         portion  of the  Licensed  Materials,  to  execute  a  written  license
         agreement in form and substance  that is approved by MCY, and that at a
         minimum  contains  the  same   restrictions  and  conditions  that  are
         applicable  to the use of the Licensed  Materials by ADSX, as set forth
         hereunder.  ADSX shall  indemnify MCY

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         for all losses, costs, damages,  expenses,  and liabilities caused by a
         sublicensee's  failure  to honor  the terms of such  sublicense,  or by
         ADSX's  failure  to  include  the  required  terms  in  its  sublicense
         agreements with its sublicensees.

2.       PAYMENT, PRICES.

2.1      In  consideration  of the  rights and  licenses  granted by MCY to ADSX
         hereunder,   ADSX  shall  pay  MCY  a  one-time  license  fee  of  U.S.
         $40,000,000  (the  "LICENSE  FEE").  The  License  Fee shall be paid in
         common stock of ADSX in accordance  with a certain  agreement  entitled
         the MCY Agreement made between MCY,  MCY.com,  Inc. and ADSX dated even
         date herewith (the "MCY AGREEMENT").

2.2      The License Fee is exclusive of any federal, state, municipal, or other
         governmental taxes,  duties, fees, excises, or tariffs now or hereafter
         imposed in connection with the production,  storage,  licensing,  sale,
         transportation,  import,  export,  use or  modification of the Licensed
         Materials,  or  otherwise  arising  out of or in  connection  with this
         Agreement.  ADSX shall be responsible for, and where MCY is required to
         collect any such  amounts,  shall  reimburse  MCY for,  all such taxes,
         duties, fees, excises, or tariffs, but ADSX shall not be liable for any
         governmental or local taxes imposed on MCY's corporate income.

3.       DELIVERY OF LICENSED MATERIALS

3.1      ADSX acknowledges  that as of the date of this Agreement,  the Licensed
         Materials consisting of the Sapient Technology have not been completed,
         but instead,  are in the process of being developed.  MCY shall deliver
         to ADSX (i) the MCY  Technology  within 45 days after the closing under
         the Purchase Agreement,  and (ii) the Sapient Technology within 45 days
         after MCY's receipt of the Sapient Technology from Sapient Corporation.
         MCY shall use reasonable efforts to deliver or to cause to be delivered
         the Sapient  Technology as set forth above, but shall not be liable for
         any delays in meeting any delivery  dates.  All deliveries will be made
         to ADSX at the  address  of ADSX  set  forth  in this  Agreement.  ADSX
         acknowledges  that the  Licensed  Materials  may be provided in printed
         and/or electronic form.

3.2      ADSX  acknowledges  that the  Licensed  Materials  do not  include  any
         software, specifications,  designs, documentation or any other products
         belonging  to any  third  party,  other  than  such  (if any) as may be
         licensed to MCY from Sapient and that MCY is entitled to  sublicense to
         ADSX,  and ADSX shall be  responsible  at its own expense for obtaining
         directly  from any third  party such  licenses  or other  rights to any
         software or other third party products that ADSX will require from time
         to time for use in conjunction  with any of the Licensed  Materials and
         for installing  configuring,  maintaining  and using any such products.
         Without limiting the foregoing,  ADSX acknowledges that it will require
         licenses for any or all of the software products  described in Schedule
         "B" attached hereto.  MCY does not warrant which software products that
         ADSX  will  require  in order  to use the  Licensed  Materials  for its
         intended purposes,  nor does MCY make any representation or warranty to
         ADSX as to the availability or prices of any software or other products
         ADSX  will  require  for use with  the  Licensed  Materials,  provided,
         however,  that  upon  request  by ADSX and at ADSX'  expense,  MCY will

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         provide  reasonable  information  to  assist  ADSX  in  obtaining  such
         products. ADSX also acknowledges that it will be responsible at its own
         expense for  selecting,  procuring,  configuring  and  maintaining  any
         hardware  products  that  will be  required  by ADSX  for use  with the
         Licensed  Materials,  provided  that upon  request by ADSX and at ADSX'
         expense,  MCY will provide  reasonable  information  to assist ADSX in
         selecting  and  configuring  hardware  products  to be  used  with  the
         Licensed Materials.

4.       SERVICES FOR MAINTENANCE AND/OR MODIFICATION OF LICENSED MATERIALS.

4.1      Except as provided in Section  1.3,  MCY shall not be  responsible  for
         providing  or causing to provide any  services or  performing  any work
         that may be  requested  or  required  by ADSX with  respect to the use,
         maintenance, support, modification, enhancement or alteration of any of
         the Licensed  Materials.  ADSX acknowledges that its ability to use any
         software or any other  components  of the  Licensed  Materials  for its
         intended purposes may require ADSX to enter into agreements with MCY or
         the developers of the applicable  components of the Licensed Materials,
         or with other third parties,  including  agreements for the support and
         maintenance  of any  software  products  forming  part of the  Licensed
         Materials.  ADSX shall be solely  responsible  for  entering  into such
         agreements or otherwise  making any such  arrangements,  and for paying
         any fees required in connection therewith.


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5.       TITLE TO LICENSED MATERIALS.

5.1      ADSX  acknowledges  that MCY or its licensors own all right,  title and
         interest,  including all copyright,  patent rights,  trademark  rights,
         trade secret rights and all other intellectual  property rights, in and
         to the Licensed Materials.

5.2      ADSX  shall  include  in  any  copies  of  the  Licensed  Materials  or
         associated  documentation  made by ADSX,  including  any  copies of any
         modified or altered  versions of the Licensed  Materials  made by ADSX,
         such copyright or other proprietary  rights notices as may be contained
         on the copies of the Licensed Materials  originally  provided by MCY to
         ADSX, or as may be reasonably requested by MCY from time to time.

6.       WARRANTY.

6.1      ADSX acknowledges that the Licensed Materials consisting of the Sapient
         Technology are in the course of being developed,  and accordingly,  MCY
         does not  provide any  representation  or  warranty  that the  Licensed
         Materials  will have any  features  or meet any  standards  that may be
         requested by ADSX, or will otherwise meet ADSX's requirements.

6.2      MCY  represents  and  warrants  to  ADSX  that it is the  owner  of the
         Licensed  Materials  or  otherwise  has the  right to grant to ADSX the
         licenses set forth in this  Agreement  without  violating any rights of
         any third  party,  including  Sapient,  and that there is  currently no
         actual or threatened  suit or claim by any such third party based on an
         alleged violation of such right by MCY provided,  however,  that ADSX's
         sole and exclusive remedy,  and MCY's sole and exclusive  obligation to
         ADSX, for breach of this warranty shall be to provide the  Intellectual
         Property Indemnification set forth in Section 8 below.

6.3      THE  WARRANTIES  CONTAINED  IN THIS  SECTION 6 ARE IN LIEU OF ALL OTHER
         WARRANTIES  AND  CONDITIONS,  EXPRESSED OR IMPLIED,  AND MCY  EXPRESSLY
         DISCLAIMS ANY IMPLIED  WARRANTIES  OR  CONDITIONS  OF  MERCHANTABILITY,
         FITNESS FOR A  PARTICULAR  PURPOSE,  TITLE,  OR  NON-INFRINGEMENT  WITH
         RESPECT TO THE LICENSED MATERIALS OR THE PERFORMANCE OF ANY OBLIGATIONS
         HEREUNDER.

7.       LIMITATION OF LIABILITY.

7.1      MCY's aggregate liability to ADSX under this Agreement or for any other
         reason  relating  to the  products  and  services  provided  under this
         Agreement,  including claims for contribution or indemnity, and whether
         the claim is in contract,  breach of warranty,  strict liability,  tort
         (including negligence) or otherwise,  shall be limited to not more than
         $1,000,000.  NEITHER  PARTY  SHALL BE LIABLE TO THE OTHER FOR  SPECIAL,
         INCIDENTAL,  OR  CONSEQUENTIAL  DAMAGES,  INCLUDING  BUT NOT LIMITED TO
         DAMAGES FOR LOST  PROFITS OR LOSS OF USE, OR FOR ANY LOSS OF DATA,  FOR
         ANY CLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,  EVEN IF
         THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

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8.       INTELLECTUAL PROPERTY RIGHTS INDEMNITY.

8.1      If notified  promptly  in writing of any action  brought  against  ADSX
         based on a claim that the Licensed  Materials infringe any valid United
         States patent,  copyright,  trademark or trade secret of a third party,
         MCY shall  indemnify,  defend and hold  harmless ADSX and its officers,
         directors  and  employees  against such action at MCY's expense and pay
         all  damages  finally  awarded  in such  action or  settlement  and any
         expenses (including  reasonable attorneys' fees) which are attributable
         to such claim.  MCY shall have sole  control of the defense of any such
         action and all  negotiations  for its  settlement or  compromise.  ADSX
         shall  cooperate  reasonably  with MCY in the  defense,  settlement  or
         compromise  of any  such  action.  Such  cooperation  shall be at MCY's
         expense.  In the event  that a final  injunction  is  obtained  against
         ADSX's use of the Licensed  Materials,  or if MCY  reasonably  believes
         that ADSX's use of the Licensed  Materials could be so enjoined,  or if
         in MCY's opinion any of the Licensed  Materials is likely to become the
         subject of a successful claim of such  infringement,  MCY shall, at its
         expense,  (i) procure for ADSX the right to continue using the Licensed
         Materials  as provided in this  Agreement,  (ii)  replace or modify the
         Licensed  Materials so that they become  non-infringing (so long as the
         functionality of the Licensed  Materials is essentially  unchanged) or,
         in the event  neither of the  previous  two  options can be effected by
         MCY,  (iii)  terminate  this  Agreement  with respect to the applicable
         portion of the Licensed Materials and the rights granted hereunder, and
         refund to ADSX a  reasonable  amount on account of that  portion of the
         License  Fee paid to MCY for the  applicable  portion  of the  Licensed
         Materials.  This  Section  states  MCY's  entire  liability  and ADSX's
         exclusive remedy for infringement.

8.2      Notwithstanding  the  foregoing,  MCY shall have no  liability  to ADSX
         under  this  Section 8 to the  extent  that any  infringement  or claim
         thereof is based upon (i) the  operation  or use of any of the Licensed
         Materials in combination with any equipment or software not supplied by
         MCY where the Licensed  Materials would not itself be infringing,  (ii)
         compliance with designs,  specifications  or  instructions  provided by
         ADSX,  (iii) use of any of  Licensed  Materials  in an  application  or
         environment for which it was not designed or (iv)  modifications of any
         of the Licensed Materials by anyone other than MCY where the unmodified
         version of the Licensed Materials would not be infringing.

8.3      THE FOREGOING INDEMNIFICATION  PROVISIONS STATE THE ENTIRE LIABILITY OF
         MCY WITH RESPECT TO  INFRINGEMENT  OR ALLEGED  INFRINGEMENT OF PATENTS,
         COPYRIGHTS,   TRADEMARKS,  TRADE  SECRETS  AND  OTHER  INTELLECTUAL  OR
         PROPRIETARY RIGHTS BY THE LICENSED MATERIALS OR THEIR USE.

9.       CONFIDENTIALITY AND NONDISCLOSURE.

9.1      Each party may have  access to  Confidential  Information  (as  defined
         below) of the other party (the "DISCLOSING PARTY"),  during the term of
         this  Agreement.  Each party agrees that it will not use or disclose to
         any third party any  Confidential  Information  except as  permitted by
         this Agreement or as authorized by the Disclosing Party's prior written

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         consent.  Each party that is a recipient  of  Confidential  Information
         (the  "RECIPIENT")  shall employ the same degree of care in  preventing
         the  disclosure of the  Confidential  Information  to a third party (or
         parties) as it uses with regard to its own confidential  information of
         similar  importance,  provided  that in no event  shall  the  Recipient
         employ  less than a  reasonable  degree of care.  The  Recipient  shall
         disclose  Confidential  Information  only to those of its employees who
         have a need  to know  the  Confidential  Information  for  purposes  of
         performing or exercising  rights granted under this Agreement and shall
         not use the  Confidential  Information of the other except for purposes
         of performing or exercising  rights granted under this  Agreement.  The
         Recipient   may  disclose   Confidential   Information   to  regulatory
         authorities with jurisdiction over the Recipient  provided it gives the
         other party prior notice of such disclosure. Neither party will use the
         other party's name or otherwise refer to the other party in any written
         materials  without the prior written consent of the other party in each
         instance.

9.2      For  purposes  of  this  Agreement,  "CONFIDENTIAL  INFORMATION"  means
         non-public  information.  Confidential  Information may include (but is
         not limited to) business methods, data,  information,  records,  plans,
         and  concepts.  ADSX agrees to treat the  Licensed  Materials  as MCY's
         Confidential  Information.  Confidential  Information  does not include
         information  that: (i) is or becomes publicly  available through no act
         or omission of the Recipient of the Confidential  Information;  (ii) is
         intentionally  disclosed  to a third  party  by the  party  owning  the
         Confidential  Information without restrictions on disclosure;  (iii) is
         rightfully  acquired  by the  Recipient  from a third party not under a
         confidentiality  restriction;  (iv) is independently  developed,  which
         independent  development  can be shown by written  evidence;  or (v) is
         required to be disclosed under operation of law or court order.

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9.3      On MCY's  reasonable  request,  ADSX  will  furnish  MCY with a written
         statement,  certified  by an  officer  of  ADSX,  confirming  that  the
         Licensed  Materials  are  being  used by ADSX in  accordance  with this
         Agreement.

10.      AUDIT RIGHTS.

10.1     At MCY's  request,  ADSX shall provide MCY with a report  detailing its
         use of the Licensed  Materials.  Upon reasonable notice provided by MCY
         to ADSX, MCY may audit ADSX's records to ensure compliance by ADSX with
         this  Agreement.  Any  such  audit  will be  conducted  during  regular
         business hours at ADSX's offices, shall not interfere unreasonably with
         ADSX's business  activities and shall be subject to the confidentiality
         provisions of this Agreement.

11.      TERM/TERMINATION.

11.1     This  Agreement  is  effective  as at the date  set  forth  above,  and
         continues until terminated as provided herein,  or by agreement of both
         parties.  Either MCY or ADSX may terminate  this Agreement if the other
         party is in  material  breach of any  material  obligation  under  this
         Agreement  (including  the obligation to pay amounts due hereunder) and
         fails to cure such  nonperformance  within  thirty (30) days  following
         written notice of such failure. MCY may terminate this Agreement if, as
         required  under  Section 1(c) of a certain MCY Agreement by and between
         MCY and ADSX dated of even date  herewith (the "MCY  Agreement"),  ADSX
         fails to cause the  registration  statement  on Form S-3 to be declared
         effective by the  Commission  (as defined in the MCY  Agreement)  by no
         later than seventy-five (75) days from the date hereof.  This Agreement
         may  also be  terminated  in the  manner  and on the  terms  set out in
         Section 4 of the Escrow and Payment  Agreement (the "Escrow and Payment
         Agreement")  which  is  incorporated  in and  forms  part  of  the  MCY
         Agreement, in which case the rights and obligations of the parties upon
         termination shall be as set forth in the Escrow and Payment Agreement.

11.2     Upon  termination of this  Agreement for any of the above reasons,  all
         licenses  granted   hereunder  shall  terminate  and  if  the  Licensed
         Materials have not been  delivered to ADSX at the time of  termination,
         MCY  shall  have no  obligation  to  effect  such  delivery  and if the
         Licensed Materials have been delivered,  ADSX will immediately  destroy
         the Licensed Materials and all copies in any form,  provided,  however,
         that except in the case of  termination  in accordance  with the Escrow
         and Payment Agreement,  if ADSX has paid all amounts owing to MCY as of
         the  termination  date,  and ADSX is in  compliance  with  and  remains
         subject to the  provisions  of  Articles 1, 5 , 6, 7, 8, 9, 10, and 12,
         the licenses granted  hereunder shall survive following the termination
         of this Agreement.  However, MCY may terminate ADSX's use of any of the
         Licensed  Materials  upon a  material  breach  of any of the  surviving
         sections.

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12.      GENERAL.

12.1     WAIVER/AMENDMENT.   No  waiver,   amendment,  or  modification  of  any
         provision of this  Agreement  shall be effective  unless in writing and
         signed  by  the  party   against  whom  such  waiver,   amendment,   or
         modification  is sought to be  enforced.  No failure or delay by either
         party in exercising  any right,  power or remedy under this  Agreement,
         except as specifically  provided herein, shall be deemed as a waiver of
         any such right, power, or remedy.

12.2     ASSIGNMENT.  Either  party  may  assign  this  Agreement  to an  entity
         acquiring  substantially all of its assets or merging with it, provided
         that such  assignee  agree in writing to assume all  obligations  under
         this Agreement. Except as set forth above, neither party may assign any
         of its rights or delegate any of its  obligations  under this Agreement
         to any third party  without the express  written  consent of the other.
         Any attempted  assignment  in violation of the foregoing  shall be void
         and of no effect. Subject to the above, this Agreement shall be binding
         upon and inure to the  benefit  of the  successors  and  assigns of the
         parties hereto.

12.3     GOVERNING LAW. The rights of the parties hereunder shall be governed by
         the laws of the State of New York without  giving  effect to principles
         of conflicts of laws. The parties  expressly exclude the application of
         the United Nations  Convention on Contracts for the International  Sale
         of Goods,  if  applicable.  The parties  hereby submit to the exclusive
         jurisdiction of the courts of New York in any action or proceeding that
         may be brought in connection with this Agreement.

12.4     EQUITABLE RELIEF. The parties acknowledge that Confidential Information
         contains trade secrets, the disclosure of which would cause substantial
         harm to  Disclosing  Party (as defined in Section 9 hereof)  that could
         not be  remedied  by the payment of damages  alone.  Accordingly,  said
         Disclosing   Party  will  be  entitled  to  preliminary  and  permanent
         injunctive   relief   and  other   equitable   relief  for  any  breach
         confidentiality.

12.5     SEVERABILITY.  If any  provision of this  Agreement  shall be held by a
         court of competent  jurisdiction  to be contrary to law, the  remaining
         provisions of this Agreement shall remain in full force and effect.

12.6     EXPORT.  ADSX  acknowledges that the laws and regulations of the United
         States may  restrict  the export of the  Software.  ADSX agrees that it
         will not export or re-export any of the Licensed  Materials in any form
         without  first  obtaining  the  appropriate  United  States and foreign
         government approvals.

12.7     NOTICE. Any notice,  consent, or other communication hereunder shall be
         in writing, and shall be given personally,  by confirmed fax or express
         delivery to either party at their respective addresses:

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                  (i)      to MCY at:
                           MCY Music World, Inc.
                           1133 Avenue of the Americas
                           New York, New York 10036
                           Attention:       Legal Department

                  with a copy to:
                           Brown Raysman Millstein Felder & Steiner LLP
                           1880 Century Park East

                           Suite 711
                           Los Angeles, California 90067
                           Attention:       Henry Silberberg

                  (i)      to ADSX at:
                           Applied Digital Solutions, Inc.
                           Suite 410
                           400 Royal Palm Way
                           Palm Beach, Florida 33480
                           Attention:  David I. Beckett, General Counsel

                  with a copy to:
                           Bryan Cave LLP
                           245 Park Avenue
                           New York, New York  10167

                           Attention:       Robert A. Ansehl

         or such other address as may be designated by written  notice of either
         party. Notices shall be deemed given when delivered or transmitted,  or
         seven days after deposit in the mail.

12.8     INDEPENDENT CONTRACTORS. The parties' relationship shall be solely that
         of independent contractor and nothing contained in this Agreement shall
         be construed to make either party an agent, partner, joint venturer, or
         representative of the other for any purpose.


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12.9     FORCE MAJEURE. If the performance of this Agreement,  or any obligation
         hereunder, except the making of payments, is prevented,  restricted, or
         interfered with by reason of any act or condition beyond the reasonable
         control of the affected  party,  the party so affected  will be excused
         from  performance  to the extent of such  prevention,  restriction,  or
         interference.

12.10    DUPLICATE  ORIGINALS.  This  Agreement may be executed in any number of
         counterparts,  each of which  shall be  deemed an  original  and all of
         which, when taken together, shall constitute but one document.

12.11    ENTIRE  AGREEMENT.  This  Agreement,  together  with  Schedules A and B
         attached hereto. the MCY Agreement referred to in Section 2.1 above and
         the  exhibits  and  attachments  to the MCY  Agreement  and  the  other
         documents  referred to therein,  constitute  the complete and exclusive
         agreement between the parties with respect to the subject matter hereof
         and  supersedes  all   proposals,   oral,  or  written,   all  previous
         negotiations,  and all other  communications  between the parties  with
         respect to the subject matter hereof. The terms of this Agreement shall
         prevail notwithstanding any different, conflicting, or additional terms
         that  may  appear  in any  purchase  order or  other  unsigned  license
         agreement  included in any equipment or software package.  All products
         and services  delivered by MCY to ADSX are subject to the terms of this
         Agreement,  unless specifically  addressed in a separate agreement.  No
         modification of this Agreement will be effective  unless contained in a
         writing executed by an authorized representative of each party.



                                                                        11 of 15
<PAGE>


IN WITNESS  WHEREOF,  THE PARTIES  HAVE CAUSED THIS  AGREEMENT TO BE EXECUTED BY
THEIR DULY AUTHORIZED REPRESENTATIVES.

MCY MUSIC WORLD, INC.

/s/ Bernhard Fritsch
-----------------------------------------------------
Signature

Bernhard Fritsch
--------------------------------------------
Printed Name

President
-----------------------------------------------------
Title

APPLIED DIGITAL SOLUTIONS, INC.

/s/ Garrett A. Sullivan
-----------------------------------------------------
Signature

Garrett A. Sullivan
President



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                                  SCHEDULE "A"

1.       Medical.
2.       Financial,  excluding  entertainment or sports activity. (In support of
         our financial vertical we intend to deliver e-business  strategies that
         include transmission of e-banking data via streaming video and audio in
         a secure  environment  allowing for tracking of where the data is going
         and where the request is coming from for authentication.)
3.       Agribusiness.
4.       Retail,  excluding entertainment or sports activity. (In support of our
         point of sale software we intend to deliver  streaming  video and audio
         for  purposes  of,  sales  training,  inventory  look up, help desk and
         enhanced announcement broadcasting and advertisements.)
5.       Education,  excluding  entertainment or sports activity. (In support of
         our  education  vertical we intend to enhance our existing  environment
         with video and audio  classroom  instruction  along with a  explanatory
         media  for  class  enrollment  and  other  educational   administrative
         applications.)
6.       Healthcare, excluding entertainment or sports activity
7.       Utilities,  excluding  entertainment or sports activity. (In support of
         our ERP and CRM  solutions  geared  toward  this  vertical we intend to
         provide enhanced collaboration.)
8.       Call  centers.  (In  support of our call  center  vertical we intend to
         deliver  streaming  audio and video so that the  outbound  call  center
         sales are enhanced by more visual and audio assistance. The sales agent
         will have media aids to deliver their sales message.)
9.       Hospitality, excluding entertainment or sports activity. (In support of
         our  hospitality  vertical we intend to enhance our network  monitoring
         capabilities   with  mixed  media  training  and   conference   meeting
         capabilities.)
10.      Insurance
11.      Chemical
12.      US Defense - Government/Military
13.      US Government, but excluding entertainment or sports activity
14.      Bio-Technology
15.      Transportation, excluding entertainment or sports activity. (In support
         of our  transportation  vertical  we  intend  to  enhance  our  traffic
         broadcasting and agribusiness  market  demonstrating video broadcasting
         of livestock in route to destinations for tracking purposes.)
16.      Drugs/Pharmaceuticals

For purposes of this Schedule "A", the term  "entertainment  or sports activity"
shall mean any activity, business or enterprise related to music, theatre, film,
dance or other performing  arts; any type of gaming;  interactive or video games
or other form of entertainment; books and magazines (including in either printed
or  electronic  form);  any type of sporting  event,  (whether as a spectator or
participant); and any other leisure activity regardless of the medium or mode of
communication or distribution,  whether now in existence or hereafter created or
conceived,  including  but not  limited  to,  live  performances,  print  media,
television,  cable television,  audio,  radio,  satellite,  compact disks, video
disks,  the Internet,  wireless or other electronic or digital platform or means
of distribution.


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<PAGE>


                                  SCHEDULE "B"

INFORMIX:

Database server software

NES:

Web server software. Serves up HTML and images. Industry standard web server for
high performing sites.

SSL SOFTWARE:

Secure web server  software.  This  software  encrypts data sent to and from web
browsers.  The whole  purchasing  process,  in which users transmit  credit card
information, uses this software.

BROADVISION:

Application  server  software.   Provides  base  level  e-commerce  and  content
management functionality on top of which mcy.com web site is built.

TRACEWARE SERVER SOFTWARE:

Software  that when given an IP address  can  determine  what  geography  the IP
address is in.  Enables  mcy.com to territory  block  products  because the site
determines what country a user is from based on the user's IP address.

AKAMAI:

GENERATOR FLASH:

Generates flash

SUN COMPILER:

Compiles the C++ objects that are used in Broadvision

ROGUEWAVE:

Software  library used to access the database from the  Broadvision  application
servers

PURIFY:

Software debugging tool that detects memory leaks in C++ code

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WEBLOAD:

Used for performance load testing

PC ANYWHERE:

Allows  remote access into NT machines.  Mcy.com uses the NT machines  primarily
for load testing

DIGITIZATION:

Thomson  Consumer  Electronic  Sales GmbH - MP3 technology  employed to digitize
music files in MP3 format

ENCRYPTION:

Fraunhofer Institut fur Integrierte Schaltungen - Multimedia Protection Protocol
or "MPP" advanced  encryption and security  protocol to ensure that transactions
conducted  on a website  are  secure  and music  selection  cannot be pirated or
unlawfully  distributed  over the  Internet.  Version 1 of the  proprietary  MMP
software permits the downloading of encrypted  versions of songs recorded in the
MP3 format.  Version 2 of the MMP  software  permits  more  advanced  encryption
capabilities,  such as  downloADSX  that can only be played a limited  number of
times.

SAPIENT:

Certain conventions, design patterns, and other design and development tools and
materials,  together  with  elements  of  code  and  techniques  for  importing,
exporting, displaying and manipulating programs, data and artistic elements.