**Exhibit
      10.107**





**Compensation
      and Change of Control Agreement**





This
      Compensation and Change of Control Agreement (this “Agreement”) dated as of this
      18 th day of
      December, 2007, is entered into between Digital Angel Corporation (the
“Company”) and Thomas J. Hoyer (the “Executive).





BACKGROUND





A. The
      Company desires to employ Executive as its Vice President, Chief Financial
      Officer, and Treasurer, and Executive desires to accept such employment with
      the
      Company.





B. The
      Company desires to provide to Executive certain compensation, stock option
      grants, and benefits in connection with his employment, and the Company further
      desires to provide Executive with certain additional compensation in the event
      of a change of control event at the Company. The Company and Executive, by
      this
      Agreement, desire to set forth the details of such compensation
      arrangements.





AGREEMENT





1. Compensation
      and Benefits .
      The
      compensation and benefits payable and provided to Executive for services
      rendered shall include the following:





1.1 Base
      salary of $265,000 per year, payable bi-weekly in accordance with the Company’s
      normal payroll practices.





1.2 Car
      allowance of $10,000 per year, payable bi-weekly in accordance with the
      Company’s normal payroll practices.





1.3 Target
      annual bonus of 60% of base salary based upon plan metrics, the Company’s
      performance, and individual contribution. Bonus will have a cap equal to 120%
      of
      base salary.





1.4 Grant
      of
      stock options for 250,000 shares of Company stock with a strike price equal
      to
      market closing price as of the date that Executive begins working for the
      Company. The stock options will vest ratably over the next five years and will
      be subject to the terms of the Company’s stock option plan.





1.5 Executive
      will be eligible to participate in the Company’s 401(k) plan, health insurance,
      disability and life insurance, and any other welfare benefit plan, program,
      or
      fringe benefit of employment made available to similarly situated employees
      that
      may be in effect from time to time.





2. Change
      of Control Benefit .








2.1 In
      the
      event of a Change of Control event (defined below), Company will pay to
      Executive the Change of Control Payment set forth in this Agreement. The Change
      of Control Payment is payable only upon a Change of Control and a termination
      of
      Executive’s Employment within three (3) months following such Change of Control
      (whether through voluntary resignation or involuntary termination).





2.2 The
      Change of Control Payment is equal to the sum of: (a) 200% of Executive’s base
      salary in effect at the time of the Change of Control, plus (b) 200% of
      Executive’s target bonus (or average annual bonus of the most recent three (3)
      years if this is larger). In addition, in the event of a Change of Control,
      all
      unvested stock options will be immediately vested. Except as provided in Section
      3 of this Agreement, the Change of Control Payment will be paid in one lump
      sum
      within fifteen (15) business days following the date on which the Release
      Agreement required pursuant to Section 4 of this Agreement becomes
      irrevocable.





2.3 For
      purposes of this Agreement, “Change of Control” means the occurrence of any of
      the following events, each of which shall be determined independently of the
      others:




2.3.1 a
      transaction or series of transactions (other than an offering of stock to the
      general public through a registration statement filed with the Securities and
      Exchange Commission) whereby any “person” or related “group” of “persons” (as
      such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other
      than the Company, any of its Affiliates, any trustee or other fiduciary holding
      securities under an employee benefit plan of the Company or any Affiliate,
      or
      any “person” that, prior to such transaction, directly or indirectly controls,
      is controlled by, or is under common control with, the Company) becomes a
“beneficial owner” (as such term is used in Rule 13d-3 promulgated under the
      Exchange Act) of fify percent (50%) or more of the stock of the Company entitled
      to vote in the election of directors; or




2.3.2 the
      Company (whether directly or indirectly involving one or more intermediaries)
      completes a (1) merger, consolidation, reorganization, or business combination,
      or (2) sale or other disposition of all or substantially all of its assets
      in
      any single transaction or series of related transactions, or (3) the acquisition
      of assets or stock of another entity, in each case excepting any
      transaction:




2.3.2.1 which
      results
      in the Company’s voting securities outstanding immediately before the
      transaction continuing to represent (either by remaining outstanding or by
      being
      converted into voting securities of the Company or the person that, as a result
      of the transaction, controls, directly or indirectly, the Company or owns,
      directly or indirectly, all or substantially all of the Company’s assets or
      otherwise succeeds to the business of the







Company
      (the Company or such person, the “Successor Entity”)) directly or indirectly, at
      least a majority of the combined voting power of the Successor Entity’s
      outstanding voting securities immediately after the transaction, and




2.3.2.2 after
      which, no Person or group beneficially owns voting securities representing
      50%
      or more of the combined voting power of the Successor Entity; provided, however,
      that no Person or group shall be treated for purposes of this provision as
      beneficially owning 50% or more of the combined voting power of the Successor
      Entity solely as a result of the voting power held in the Company prior to
      the
      consummation of the transaction.




2.3.3 Notwithstanding
      the foregoing, if, immediately after the occurrence of any event enumerated
      above, the Continuing Directors control the majority of the Board of Directors
      of the Company (or, in the case of any merger or combination in which the
      Company is not the surviving entity, continue to constitute a majority of the
      board of directors of such successor entity), such event shall not constitute
      a
      Change of Control for purposes of this Agreement until such time as (a) the
      Continuing Directors no longer constitute a majority of the Board of Directors
      of the Company (or the successor entity, if applicable), or (b) the Board of
      Directors replaces the Chief Executive Officer of the Company (or the successor
      entity, if applicable) that was in place prior to the occurrence of the
      applicable change of control event. “Continuing Directors” for this purpose
      means the members of the Board of Directors of the Company on the date of this
      Agreement, provided that any person becoming a member of the Board of Directors
      of the Company subsequent to such date whose nomination for election was
      supported by a majority of the directors who at the time of the election or
      nomination for election comprised the Continuing Directors shall be considered
      to be a Continuing Director.




2.3.4 For
      the
      avoidance of doubt, a Change of Control shall not mean any merger,
      consolidation, reorganization, business combination, sale, or acquisition
      transaction between the Company and Applied Digital Solutions, Inc., whether
      directly or through controlled intermediaries, regardless of how
      structured.




3. Timing
      of Payment .





Notwithstanding
      any other provision in this Agreement, if any amount payable under this
      Agreement is subject to Section 409(A) of the Internal Revenue Code of 1986,
      as
      amended (the “Code”), then the payment of such amount shall be restructured or
      delayed, as necessary, in a manner that preserves as far as practically possible
      the form and timing of the benefit and ensures the amount is paid in compliance
      with Code Section


409(A).
      Any delayed payments shall be aggregated and, pending distribution, held in
      a
      trust or other similar fund if such treatment shall be determined to be
      permissible under applicable law and, in any event, shall be paid in a lump
      sum
      as of the first day of the first permissible month of distribution. Provided,
      however, that the Company does not by operation of this requirement assume
      responsibility for compliance with Code Section 409(A). The Executive is
      responsible for any additional tax, interest, or penalties under Code Section
      409(A) arising out of payment under this Agreement.





4. Release
      Agreement .





In
      order
      to receive the Change of Control Payment, Executive shall execute a release
      of
      any known or unknown claims that he may have against the Company. The release
      shall be in a form reasonably requested by the Company. In accordance with
      law,
      Executive shall be given a prescribed period of time to consider whether to
      sign
      the Release Agreement and may revoke the Release Agreement during the stipulated
      period following delivery of the signed Release Agreement.





5. Cap
      on
      Payments .





5.1 General
      Rules .
      The
      Code may place significant tax burdens on Executive and the Company if the
      total
      payments made to Executive due to a Change of Control exceed prescribed limits.
      In order to avoid this excise tax and the related adverse tax consequences
      for
      the Company, by signing this Agreement Executive agrees that the Change of
      Control Payment will not exceed an amount equal to the Executive’s
      Cap.





5.2 Special
      Definitions .
      For
      purposes of this Section 5, the following specialized terms will have the
      following meanings:





5.2.1 *“Base
      Period Income”* is an
      amount equal to Executive’s “annualized includable compensation” for the “base
      period” as defined in Sections 280G(d)(1) and (2) of the Code and the
      regulations adopted thereunder. Generally, Executive’s “annualized includable
      compensation” is the average of Executive’s annual taxable income from the
      Company for the “base period,” which is the five calendar years prior to the
      year in which the Change of Control occurs. These concepts are complicated
      and
      technical and all of the rules set forth in the applicable regulations apply
      for
      purposes of this Agreement.





5.2.2 *“Cap”
      or “280G Cap”* shall
      mean an amount equal to 2.99 times Executive’s “Base Period Income” This is the
      maximum amount which Executive may receive without becoming subject to the
      excise tax imposed by Section 4999 of the Code or which Company may pay without
      loss of deduction under Section 280G of the Code.





5.2.3 *“* *Basic
      Payments”* include
      any “payments in the nature of compensation” (as defined in Section 280G of the
      Code and the





regulations
      adopted thereunder), made pursuant to this Agreement or otherwise, to or for
      Executive’s benefit, the receipt of which is contingent on a Change of Control
      and to which Section 280G of the Code applies.





5.3 Calculating
      the Cap .
      If the
      Company believes that these rules will result in a reduction of the payments
      to
      which Executive is entitled under this Agreement, it will so notify Executive
      as
      soon as possible. The Company will then, at its expense, retain a “Consultant”
(which shall be a law firm, a certified public accounting firm, and/or a firm
      of
      recognized executive compensation consultants) to provide a determination
      concerning whether the Basic Payments exceed the limit discussed above (the
      “Determination”). The Company will select the Consultant. At a minimum, the
      Determination required by this Section must set forth the amount of Executive’s
      Base Period Income, the value of the Basic Payments, and the amount and present
      value of any excess parachute payments. If the Determination states that there
      would be an excess parachute payment, Executive’s payments under this Agreement
      will be reduced to the extent necessary to eliminate the excess. If the
      Consultant selected to provide the Determination so requests, a firm of
      recognized executive compensation consultants selected by the Company (which
      may, but is not required to be, the Consultant) shall provide an opinion, upon
      which such Consultant may rely, as to the reasonableness of any item of
      compensation as reasonable compensation for services rendered before or after
      the Change of Control. If the Company believes that Executive’s Basic Payments
      will exceed the limitations of this Section, it will nonetheless make payments
      to Executive, at the times provided above, in the maximum amount that it
      believes may be paid without exceeding such limitations. The balance, if any,
      will then be paid after the opinions called for above have been received. If
      the
      amount paid to Executive by the Company is ultimately determined, pursuant
      to
      the Determination or by the Internal Revenue Service, to have exceeded the
      limitation of this Section, Executive shall repay the excess promptly on demand
      of the Company. If it is ultimately determined, pursuant to the Determination
      or
      by the Internal Revenue Service, that a greater payment should have been made
      to
      Executive, the Company shall pay Executive the amount of the deficiency,
      together with interest thereon from the date such amount should have been paid
      to the date of such payment, so that Executive will have received or be entitled
      to receive the maximum amount to which Executive is entitled under this
      Agreement. As a general rule, the Determination shall be binding upon Executive
      and the Company. Section 280G and the excise tax rules of Section 4999, however,
      are compex and uncertain and, as a result, the Internal Revenue Service may
      disagree with the Consultant’s conclusions. If the Internal Revenue Service
      determines that the Cap is actually lower than calculated by the Consultant,
      the
      Cap will be recalculated by the Consultant. Any payment over that revised Cap
      will then be repaid by Executive to the Company. If the Internal Revenue Service
      determines that the actual Cap exceeds the amount calculated by the Consultant,
      the Company shall pay Executive any shortage.





5.4 Effect
      of Repeal or Inapplicability .
      In the
      event that the provisions of Section 280G and 4999 of the Code are repealed
      without succession, this Section shall be of no further force or effect.
      Moreover, if the provisions of Sections 280G and 4999





of
      the
      Code do not apply to impose the excise tax to payments under this Agreement,
      then the provisions of this Section shall not apply.





6. Additional
      Provisions .





6.1 This
      Agreement shall be binding upon the parties, their successors and assigns.





6.2 No
      provision of this Agreement may be modified, waived, or discharged unless such
      is agreed to in writing and signed by both parties. No waiver by either party
      of
      any provision or condition shall be deemed a waiver at the same or any prior
      or
      subsequent time of any similar or dissimilar provision or condition.





6.3 This
      Agreement may only be amended by a written agreement executed by the parties.
      No
      amendment that will result in a violation of Section 409A of the Code, or any
      other provision of applicable law, may be made to this Agreement and any such
      amendment shall be void.





6.4 Any
      payments provided for hereunder shall be subject to applicable withholding
      requirements under federal, state, or local law, and standard payroll
      deductions.





6.5 Nothing
      in this Agreement shall be construed as an offer or commitment by the Company
      to
      continue to employ Executive for any period of time. Executive acknowledges
      and
      agrees that his employment with the Company shall be on the basis of “at will”
employment relationship.





6.6 This
      Agreement shall be construed in accordance with and governed by the laws of
      the
      State of Florida. Venue for any cause of action arising under this Agreement
      shall be in Palm Beach County, Florida, USA.




This
      Agreement is signed as of the date set forth above.





DIGITAL
      ANGEL CORPORATION








/s/
              Kevin N. McGrath
            
            /s/
              Thomas J. HoyerBy:   
                Kevin N. McGrath
            
            Thomas
                J. HoyerTitle:
                President and CEO