**Exhibit
      10.106**




2006
        TAX
        ALLOCATION AGREEMENT
 
 THIS
        2006
        TAX ALLOCATION AGREEMENT ("Agreement") is entered into effective as of the
        Deconsolidation Date among Applied Digital Solutions Inc., a Missouri
        corporation with its principal place of business at Delray Beach, Florida
        ("Applied Digital"), VeriChip Corporation, a Delaware corporation also with
        its
        principal place of business at Delray Beach, Florida ("VeriChip") and each
        other
        corporation that is a member of the Consolidated Group as defined below.
        Applied
        Digital and VeriChip are hereinafter collectively referred to as the "Parties"
        and singularly as a "Party".
 
 RECITALS
 
 WHEREAS,
        VeriChip is considering selling a certain number of its newly- issued shares
        of
        common stock so that Applied Digital’s ownership interest in VeriChip would be
        less than 80 percent thereby precluding VeriChip from being included in the
        consolidated federal income tax returns prepared by Applied Digital as common
        parent for the taxable periods following the Deconsolidation Date;
 
 WHEREAS,
        VeriChip has, with the consent of Applied Digital, represented in various
        public
        statements that the Deconsolidation will not have a material adverse effect
        on
        its financial condition or results of operations; and
 
 NOW,
        THEREFORE, the Parties to this Agreement agree as follows:
 
 ARTICLE
        I
 DEFINITIONS
 
 1.1
        DEFINITIONS: As used in this Agreement, the following terms have the following
        meanings:
 
 "Code"
        means the Internal Revenue Code of 1986, as amended, or corresponding provisions
        of any subsequent federal tax laws.
 
 "Consolidated
        Group" means the "affiliated group" of corporations of which Applied Digital
        is
        the "common parent corporation", as such terms are defined in
 Code
        §1504(a)(1).
 
 "Consolidated
        Minimum Tax Credit(s)" means the consolidated minimum tax credit(s) computed
        in
        accordance with Code §§53, 1502, and 1503, and shown in a Consolidated Return
        with respect to those tax periods up to and including the
  1
  Deconsolidation
        Date.
 
 "Consolidated
        Return" means the consolidated federal income tax return of the Consolidated
        Group for each taxable year as filed or to be filed by Applied Digital on
        behalf
        of the Consolidated Group.
 
 "Consolidated
        Tax Liability" means, generally, the consolidated federal income tax liability
        computed in accordance with Treasury Regulation §1.1502-2 and shown on a
        Consolidated Return, taking into account all credits to which the Consolidated
        Group is entitled under the Code, but not taking into account any "consolidated
        alternative minimum tax liability" (as provided under Code §§55, 1502, and 1503)
        or any Consolidated Minimum Tax Credit.
 
 "Deconsolidation"
        means that event which causes Applied Digital to no longer have the requisite
        ownership interest in VeriChip so as to allow VeriChip to file as part of
        a
        Consolidated Group with Applied Digital.
 
 "Deconsolidation
        Date" means February 14, 2007, the date when Applied Digital and VeriChip
        no
        longer are members of the same Consolidated Group.
 
 “Other
        Tax” or “Other Taxes” means any and all taxes of any kind (together with any and
        all interest, penalties, additions to tax and additional amounts imposed
        with
        respect thereto) imposed by any governmental authority or taxing authority,
        including, but not limited to, federal, state, local, or foreign income,
        gross
        receipts, license, payroll, employment, excise, severance, stamp, occupation,
        premium, windfall profits, environmental (including taxes under Code §59A),
        customs duties, capital stock, franchise, profits, withholding, social security
        (or similar), unemployment, disability, real property, personal property,
        sales,
        use, transfer, registration, value added, alternative or add-on minimum,
        estimated, or other tax of any kind whatsoever, including any interest, penalty,
        or addition thereto, whether disputed or not and including any obligations
        to
        indemnify or otherwise assume or succeed to the tax liability of any other
        Person, other than any such item included in the definition of Tax.
 
 "Party"
        and "Parties" have that meaning ascribed to them in the Recitals.
 
 "Pre-Deconsolidation
        Date Period" means, chronologically, those tax years that end prior to the
        tax
        year in which the Deconsolidation Date occurs plus that period in time beginning
        on the first day of such year and ending on and including the Deconsolidation
        Date.
 
 "Post-Deconsolidation
        Date Period" means, chronologically, that period following the Deconsolidation
        Date.
  2
  “ Subsidiary”
        means any corporation or other entity with respect to which Applied Digital,
        on
        the one hand, or VeriChip, on the other, owns, directly or indirectly, at
        least
        50% of the common stock or other equity or profits interests or has the power,
        directly or indirectly, to elect a majority of the members of the board of
        directors or comparable governing body.
 
 "Taxes"
        or "Tax" means federal income taxes as provided in Code §11, alternative minimum
        tax as provided in Code §55, and any state taxes measured by net income
        (including state taxes measured by net income reflected in any Unitary Tax
        Returns filed by Applied Digital) and any interest or penalties thereon or
        additions to tax. The term Taxes or Tax, however, specifically excludes any
        tax
        imposed by any foreign government.
 
 "Unitary
        Tax Return" means a state income tax return which reflects the combined and/or
        consolidated reporting (either on a domestic or worldwide basis) of Applied
        Digital and its affiliates for a state which either (i) imposes an income
        tax on
        the apportioned and/or allocable share of the net income of Applied Digital
        and
        its United States affiliates that are engaged in a "unitary business", part
        of
        which is conducted in the state or (ii) imposes an income tax on the apportioned
        and/or allocable share of the net income of a taxpayer and its affiliates—both
        domestic and foreign--that are engaged in a unitary business.
 
 Other
        terms defined herein have the meanings given them.
 
 ARTICLE
        II
 TAX
        INDEMNIFICATION
 
 2.1
        VERICHIP'S TAX INDEMNIFICATION FOR THE PRE-DECONSOLIDATION DATE PERIOD: VeriChip
        shall be liable for, indemnify, and hold Applied Digital harmless for all
        Taxes
        (i) imposed on or incurred by VeriChip for the Pre-Deconsolidation Date Period
        and (ii) equitably apportioned to VeriChip by Applied Digital for all tax
        periods beginning before and ending after the Deconsolidation Date. Except
        as
        provided in Section 2.2(c), VeriChip, in turn, shall be entitled to receive
        all
        refunds of Taxes attributable to the Pre-Deconsolidation Date Period, if
        any,
        that are imposed or incurred by VeriChip or equitably apportioned to VeriChip
        from either the applicable tax authorities or Applied Digital (in the event
        such
        refund(s) have been made directly to Applied Digital).
 
 2.2
        VERICHIP'S 2006 TAX LIABILITY AND PAYMENT
 
 (a)
        VeriChip's liability for Taxes for the portion of the Pre-Deconsolidation
        Date
        Period attributable to the tax year in which the
  3
  Deconsolidation
        Date occurs shall be based on Applied Digital's preparation of the Consolidated
        Return for such taxable year and VeriChip's review thereof. Any discrepancies
        between Applied Digital's return position and VeriChip's subsequent review
        shall
        be resolved by consultation by each Party's respective tax officers and Applied
        Digital's ultimate determination shall be controlling as long as such
        determination does not have a material adverse effect on VeriChip's financial
        condition or results of operations.
 
 (b)
        The
        Parties agree that, in determining VeriChip's allocable share of the (i)
        Unitary
        and (ii) Consolidated Tax Liabilities for the tax year in which the
        Deconsolidation Date occurs, they shall follow a reasonable method agreed
        to by
        both Parties.
 
 (c)
        VeriChip shall pay Applied Digital its allocable share of the estimated Unitary
        and Consolidated Tax Liabilities for that portion of the tax year in which
        the
        Deconsolidation Date occurs that precedes the Deconsolidation Date within
        45
        days from the Deconsolidation Date. A "true-up" payment, should one be
        necessary, shall be made by VeriChip to Applied Digital or Applied Digital
        to
        VeriChip within 15 days after Applied Digital's subsequent determination
        of
        VeriChip's liability based on taxable income and tax credits reported as
        part of
        Applied Digital's Unitary and Consolidated Returns and VeriChip's separate
        state
        Tax returns for the taxable year in which the Deconsolidation Date occurs.
        If
        there is a refund of Taxes attributable to VeriChip for that portion of the
        tax
        year in which the Deconsolidation Date occurs that precedes the Deconsolidation
        Date, VeriChip shall retain such refund, or, if such refund is received by
        Applied Digital, Applied Digital shall pay the amount of such refund to VeriChip
        within 45 days of its receipt of such refund.
 
 (d)
        Applied Digital shall be liable for, indemnify, and hold VeriChip harmless
        for
        all Taxes attributable to the event of Deconsolidation, including all taxes
        with
        respect to any deferred intercompany transactions within the meaning of Treasury
        Regulation § 1.1502-13.
 
 (e)
        In
        connection with any Pre-Deconsolidation Date Period, neither Party to the
        Agreement will be required to compensate the other Party for any net operating
        losses incurred by that other Party that reduce the consolidated tax liability
        of the Consolidated Group or the taxable income of other members of the
        Consolidated Group. The same results shall apply for any Pre-Deconsolidation
        Date Period net operating losses that reduce the consolidated tax liability
        of
        the Consolidated Group or the taxable income of the other members of the
        Consolidated Group in connection with the use of such net operating loss
        as a
        result of an audit by the Internal Revenue Service, or by any state or local
        tax
        authority.
 
 2.3
        OTHER
        TAXES. VeriChip shall be liable for, indemnify, and hold Applied
  4
  Digital
        harmless for all Other Taxes imposed on or incurred by VeriChip or any of
        its
        Subsidiaries and Applied Digital shall be liable for, indemnify, and hold
        Veri
        Chip harmless for all Other Taxes imposed on or incurred by Applied Digital
        or
        any of its Subsidiaries (other than VeriChip, itself, or its Subsidiaries),
        whether arising before or after the Deconsolidation Date.
 
 ARTICLE
        III
 MINIMUM
        TAX CREDIT
 AND
        RELATED MATTERS ASSOCIATED WITH DECONSOLIDATION
 
 3.1
        CONSOLIDATED MINIMUM TAX CREDIT
 
 (a)
        As
        currently calculated by Applied Digital, no Consolidated Minimum Tax Credits
        have been allocated to VeriChip by Applied Digital based on Consolidated
        Returns
        filed through tax year ended December 31, 2005 under the methodology followed
        for the Pre-Deconsolidation Date Period and Applied Digital has not made
        any
        determination of VeriChip's allocable share of Consolidated Minimum Tax Credits
        for the 2006 tax year. In the event Consolidated Minimum Tax Credits are
        allocated to VeriChip, VeriChip shall be obligated to reimburse Applied Digital
        for the amount of such credits allocated to VeriChip upon the occurrence
        of the
        earlier of the following two events:
 
 (i)
        The
        date of VeriChip's filing of its federal income tax return for the tax year
        in
        the Post-Deconsolidation Date Period when VeriChip utilizes any reallocated
        Consolidated Minimum Tax Credits; or
 
 (ii)
        The
        date of Applied Digital's filing of its federal income tax return for the
        tax
        year in the Post-Deconsolidation Date Period when Applied Digital could have
        utilized such Consolidated Minimum Tax Credits but is precluded from doing
        so
        because of the reallocation to VeriChip.
 
 (b)
        For
        purposes of Section 3.1(a)(ii), no Consolidated Minimum Tax Credits will
        be
        considered usable by Applied Digital until Applied Digital could have first
        utilized all Consolidated Minimum Tax Credits remaining with Applied Digital
        after the reallocation. Any minimum tax credits generated by Applied Digital
        in
        the Post-Deconsolidation Date Period shall be disregarded in making this
        determination. For purposes of Section 3.1(a)(i), Consolidated Minimum Tax
        Credits will be considered as utilized by VeriChip before VeriChip first
        utilizes any minimum tax credits it has generated in the Post-Deconsolidation
        Date Period.
 
 (c)
        For
        purposes of Section 3.1(a), any payments to be made between VeriChip and
        Applied
        Digital may be made for more than one tax year of the Post-Deconsolidation
        Date
        Period until the reallocated Consolidated Minimum Tax Credit is used (or
        could
        have been used) in its entirety.
  5
  3.2
        CONSOLIDATED MINIMUM TAX CREDIT ALLOCATION ADJUSTMENTS: In the event the
        amount
        of the Consolidated Minimum Tax Credits allocated to VeriChip are adjusted
        resulting in a reduction of Consolidated Minimum Tax Credits previously utilized
        by VeriChip and a payment has been made by VeriChip to Applied Digital pursuant
        to the terms of Section 3.1, Applied Digital shall be obligated to pay VeriChip
        for any assessment made against it by the Internal Revenue Service attributable
        to such adjustment. Payment shall be made by Applied Digital to VeriChip
        on the
        day VeriChip pays the Internal Revenue Service for such assessment.
 
 ARTICLE
        IV
 AUDITS
        AND OTHER TAX PROCEEDINGS
 
 4.1
        GENERAL COOPERATION AND EXCHANGE OF INFORMATION
 
 (a)
        VeriChip shall provide, or cause to be provided, to Applied Digital copies
        of
        all correspondence received from any taxing authority by VeriChip in connection
        with the liability of the Parties for Taxes for the Pre-Deconsolidation Date
        Period. VeriChip shall also provide Applied Digital with access to or copies
        of
        any materials requested by Applied Digital which would assist Applied Digital
        in
        resolving any tax matters for the Consolidated Group for the Pre-Deconsolidation
        Date Period. Further, the Parties will provide each other with such cooperation
        and information as may reasonably be requested of each other in preparing
        or
        filing any return, amended return, or claim for refund, in determining liability
        or right of refund, or in conducting any audit or other proceeding, in respect
        of Taxes or Other Taxes imposed on the Parties or their respective affiliates
        including, by way of example, information relating to net operating losses,
        foreign tax credits, overall foreign losses, and excess loss
        accounts.
 
 (b)
        VeriChip on one hand, and Applied Digital and each other member of the
        Consolidated Group on the other hand, and their respective affiliates, will
        preserve and retain all returns, schedules, workpapers, and all material
        records
        or other documents relating to any such returns, claims, audits, or other
        proceedings until the expiration of the statutory period of limitations
        (including extensions) of the taxable periods to which such documents relate
        and
        until the final determination of any payments which may be required with
        respect
        to such periods under this Agreement and shall make such documents available
        at
        the then-current corporate headquarters of such Party to the other Party
        or any
        affiliate thereof, and their respective officers, employees, and agents,
        upon
        reasonable notice and at reasonable times, it being understood that such
        representative shall be entitled to make copies of any such books and records
        relating to Applied Digital or VeriChip as they shall deem
        necessary.
  6
  (c)
        Applied Digital on one hand and VeriChip on the other hand further agree
        to
        permit representatives of the other Party or any affiliate thereof to meet
        with
        employees of such Party on a mutually convenient basis in order to enable
        such
        representatives to obtain additional information and explanations of any
        documents provided pursuant to this Section 4.1. Applied Digital on one hand
        and
        VeriChip on the other hand shall make available to the representatives of
        the
        other Party or any affiliate thereof sufficient workspace and facilities
        to
        perform the activities described in this Section. Any information obtained
        pursuant to this Section 4.1 shall be kept confidential, except as may be
        otherwise necessary in connection with the filing of returns or claims for
        refund or in conducting any audit or other proceeding. Each Party shall provide
        the cooperation and information required by this Section 4.1 at its own
        expense.
 
 4.2
        AUDITS: In the event of an audit by the Internal Revenue Service, or by any
        state or local tax authority, of a return filed by Applied Digital for the
        Pre-Deconsolidation Date Period, Applied Digital shall give VeriChip timely
        and
        reasonable notice of audit proceedings and VeriChip will provide all necessary
        information and other assistance reasonably requested by Applied Digital
        with
        respect to issues concerning the activities of VeriChip. All communications
        with
        the Internal Revenue Service concerning such audit will be made by Applied
        Digital unless otherwise agreed between the Parties hereto.
 
 4.3
        MATERIAL ADVERSE IMPACT TO VERICHIP: Notwithstanding the provisions of Section
        4.2, the Parties agree that in no event shall Applied Digital file any amended
        tax return, claim for refund, or make any tax election affecting the
        Pre-Deconsolidation Date Period that would have any material adverse impact
        on
        VeriChip's financial condition or results of operations without first obtaining
        the written permission of VeriChip.
 
 ARTICLE
        V
 UNITARY
        TAX RETURNS
 FOR
        POST-DECONSOLIDATION DATE PERIOD FILINGS
 
 Applied
        Digital agrees to continue to file any Unitary Tax Returns and allocate Unitary
        tax liability for the Post-Deconsolidation Date Period in which the operations
        of VeriChip are reflected in a manner consistent with the methodology followed
        for the Pre-Deconsolidation Date Period.
 
 ARTICLE
        VI
 OTHER
        PROVISIONS
 
 6.1
        EFFECT OF THE AGREEMENT: The obligations of the Parties set forth under this
        Agreement shall be unconditional and absolute, and shall remain in effect
        without limitation as to time. Further, all prior tax sharing and allocation
  7
  agreements
        between Applied Digital and VeriChip, if any, shall terminate effective as
        of
        the Deconsolidation Date.
 
 6.2
        ASSIGNABILITY: The rights and obligations of the Parties under this Agreement
        may not be assigned by a Party without the prior written consent of the other
        Party to this Agreement.
 
 6.3
        GOVERNING LAW: This Agreement shall be governed by the laws of the state
        of
        Florida.
  8
  IN
        WITNESS WHEREOF, the Parties hereto have caused their names to be subscribed
        and
        executed by the respective authorized officers on the dates indicated, effective
        as of the date first written above.
 
 
 
 **APPLIED
                  DIGITAL SOLUTIONS, INC**.By:
              /s/
                  Michael E. KrawitzName:
              Michael
                  E. KrawitzTitle:
              Chief
                  Executive Officer andPresident
 
 
 **VERICHIP
                  CORPORATION**By:
              /s/
                  William J. CaragolName:
              William
                  J. CaragolTitle:
              Chief
                  Financial Officer, VicePresident
                  and Treasurer
 
 
 **ACT
                  Communications Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **ADS
                  Bay Area, Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
  9
  **ADSI
                  Telecomm Services, Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Advanced
                  Telecomm of Maryland, Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Advanced
                  Telecomm of Pittsburgh**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
  
 **Applied
                  Digital Solutions Financial Corp.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
  10
  **Arjang,
                  Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Blue
                  Star Electronics, Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Bostek,
                  Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Computer
                  Equity Corporation**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **CyberTech
                  Station, Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
  11
  **Elite
                  Computer Services, Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Government
                  Telecommunications, Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Intellesale,
                  Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Micro
                  Components International Incorporated**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Neirbod
                  Corp.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
  12
  **Pacific
                  Decision Sciences Corporation**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Perimeter
                  Acquisition Corp.**By:
              /s/
                  Kay E. LangsfordName:
              Kay 
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **Precision
                  Point Corporation**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
   **Thermo
                  Life Energy Corp.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
  13
  **U.S.
                  Kite & Key Corp.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
 
 **WYR,
                  Inc.**By:
              /s/
                  Kay E. LangsfordName:
              Kay
                E. LangsfordTitle:
              Vice
                Pres., Sec'y
 
  14