<PAGE>

                            DESTRON FEARING CORPORATION
                                 WARRANT AGREEMENT


THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS.  THIS WARRANT MAY NOT BE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.

     This Warrant Agreement (this "Agreement") is entered into as of March 15,
1999 by and between Destron Fearing Corporation, a Delaware corporation (the
"Company"), and Data Sales Co., Inc., a Minnesota corporation, or its assignees
(the "Holder").

                                      RECITALS

     WHEREAS, the Company has agreed to grant to Holder warrants to purchase
shares of Company Common Stock in exchange and in consideration of certain
financing.

     NOW, THEREFORE, BE IT RESOLVED, the parties agree hereto as follows:

1.   DESCRIPTION; EXECUTION.

          (a)  The Company agrees to issue to the Holder and the Holder agrees
               to accept the Warrant Certificate evidencing the right to
               purchase up to two hundred seventy-five thousand (275,000) shares
               (the "Warrant Shares") of the Company's $0.01 per share par value
               common stock ("Common Stock") at the "Exercise Price" (as defined
               below).  The Warrant Certificate shall be substantially in the
               form annexed hereto as Exhibit A.

          (b)  This Agreement shall be executed on behalf of the Company by its
               President.  Upon delivery of this Warrant to the Holder, this
               Agreement shall be binding upon the Company, and the Holder shall
               be entitled to all the benefits set forth herein.

2.   TERM OF WARRANT.

     The Warrant shall become exercisable at any time after the date hereof, and
remain exercisable, subject to the conditions set forth in Section 3, until the
close of business on March 15, 2004 (the "Expiration Date").

3.   EXERCISE OF WARRANT.

          (a)  Subject to subsection 3(b) below, at any time until the
               Expiration Date, the Holder shall have the right to purchase from
               the Company (and the Company shall promptly issue to the Holder)
               up to two hundred seventy-five thousand (275,000) fully-paid and
               nonassessable shares of Company Common Stock at the Exercise
               Price (as defined below), by surrendering
<PAGE>


               the appropriate Warrant Certificate and the Subscription Form
               attached hereto to the Company at its executive offices and
               paying the aggregate Exercise Price for the shares to be
               purchased, in cash or by check or shares of Company Common Stock.

          (b)  The Warrant may be exercised in whole and in part but not in
               increments of less than 100 shares.  In case of a partial
               exercise, the Warrant Certificate shall be surrendered and a new
               Warrant Certificate of the same tenor and for the purchase of the
               number of shares not purchased upon such partial exercise shall
               be issued by the Company to the Holder hereof.  The Warrants
               shall be deemed to have been exercised immediately prior to the
               close of business on the date of their surrender for exercise as
               provided above, and the person or entity entitled to receive the
               shares of Common Stock issuable upon the exercise shall be
               treated for all purposes as the holder of such shares of record
               as of the close of business on such date.  Prior to any such
               exercise, neither the Holder nor any person entitled to receive
               shares issuable upon exercise shall be, or have any of the rights
               of, a shareholder of the Company.  Except as provided in Section
               5.1, no adjustment shall be made for dividends or other
               stockholder rights for which the record date is prior to the date
               of exercise.  As soon as practicable on or after such date, the
               Company shall issue in the name of, and deliver to the person or
               persons entitled to receive, a certificate or certificates for
               the full number of shares of Common Stock issuable upon such
               exercise.

4.   EXERCISE PRICE.  The initial exercise price for each share of Common Stock
     issuable pursuant to the Warrant shall be One and 00/100 Dollars ($1.00)
     per Warrant Share, adjusted as provided below (the "Exercise Price").  The
     Exercise Price may be paid, at the election of the Holder, in cash,
     cashier's check and/or by delivering shares of Common Stock having a
     "Current Fair Market Value" (as defined below) equal to the Exercise Price,
     including shares which would be deliverable upon exercise of the Warrants
     (a "cashless exercise").  The Holder may elect to effectuate a cashless
     exercise by delivering to the Company a written notice of its exercise,
     stating the number of Warrants to be exercised and that the Exercise Price
     shall be paid by cancelling Warrants representing the right to purchase a
     number of Warrant Shares having a value equal to such Exercise Price.  The
     value of such cancelled Warrants shall be the Current Fair Market Value of
     the Company Common Stock on the date such notice is first sent or given
     less the Exercise Price therefor.

5.   EXERCISE PRICE ADJUSTMENTS FOR CERTAIN SPLITS AND COMBINATIONS.  The
     Exercise Price of the Warrants shall be subject to adjustment from time to
     time as follows.

          (a)  In the event the Company should at any time or from time to time
               after the date of this Warrant Agreement ("Grant Date") fix a
               record date for the effectuation of a split or subdivision of the
               outstanding shares of Common Stock or a dividend or other
               distribution payable in additional shares of Common Stock or
               other securities or rights convertible into, or entitling

                                        2
<PAGE>

               the holder thereof to receive directly or indirectly, additional
               shares of Common Stock (hereinafter referred to as "Common Stock
               Equivalents") without payment of any consideration by such holder
               for the additional shares of Common Stock or the Common Stock
               Equivalents (including the additional shares of Common Stock
               issuable upon exercise or exercise thereof), then, as of such
               record date (or the date of such dividend distribution, split or
               subdivision, if no record date is fixed), the Exercise Price of
               the Warrants shall be proportionately decreased and the number of
               shares of Common Stock issuable on exercise of each share of such
               series shall be increased in proportion to such increase of the
               aggregate of shares of Common Stock outstanding and those
               issuable with respect to such Common Stock Equivalents.

          (b)  If the number of shares of Common Stock outstanding at any time
               after the Grant Date is decreased by a combination of the
               outstanding shares of Common Stock, then, following the record
               date of such combination, the Exercise Price for the Warrants
               shall be proportionately increased and the number of shares of
               Common Stock issuable on exercise of each share of such series
               shall be decreased in proportion to such decrease in outstanding
               shares.

     5.2  OTHER DISTRIBUTIONS.  In the event this Company shall declare a
          distribution payable in securities of other persons, evidences of
          indebtedness issued by the Company or other persons, assets (excluding
          cash dividends) or options or rights not referred to in subsection
          5.1(a), then, in each such case for the purpose of this Section 5.2,
          the Holders of the Warrants shall be entitled to a proportionate share
          of any such distribution as though they were the holders of the number
          of shares of Common Stock of the Company into which their shares of
          Warrants are convertible as of the record date fixed for the
          determination of the holders of Common Stock of the Company entitled
          to receive such distribution.

     5.3  RECAPITALIZATIONS.  If at any time or from time to time there shall be
          a recapitalization of the Common Stock (other than a subdivision,
          combination or merger or sale of assets transaction provided for
          elsewhere in this Section 5), provision shall be made so that the
          Holders of the Warrants shall thereafter be entitled to receive upon
          exercise of the Warrants the number of shares of stock or other
          securities or property of the Company or otherwise, to which a holder
          of Common Stock deliverable upon exercise would have been entitled on
          such recapitalization.  In any such case, appropriate adjustment shall
          be made in the application of the provisions of this Section 5 with
          respect to the rights of the Holders of the Warrants after the
          recapitalization to the end that the provisions of this Section 5
          (including adjustment of the Exercise Price then in effect and the
          number of shares purchasable upon exercise of the Warrants) shall be
          applicable after that event as nearly equivalent as may be
          practicable.

     5.4  NO IMPAIRMENT.  This Company will not, by amendment of its Certificate
          of Incorporation or through any reorganization, recapitalization,
          transfer or assets,

                                      3
<PAGE>

          consolidation, merger, dissolution, issue or sale of securities or
          any other voluntary action, avoid or seek to avoid the observance or
          performance of any of the terms to be observed or performed hereunder
          by this Company, but it will at all times in good faith assist in
          the carrying out of all the provisions of this Section 5 and in the
          taking of all such action as may be necessary or appropriate in
          order to protect the exercise rights of the Holders of the Warrants
          against impairment.

     5.5  CERTIFICATE AS TO ADJUSTMENTS.  Upon the occurrence of each adjustment
          or readjustment of the Exercise Price of Warrants pursuant to this
          Section 5, the Company, at its expense, shall promptly compute such
          adjustment or readjustment in accordance with the terms hereof and
          prepare and furnish to each Holder of Warrants a certificate setting
          forth such adjustment or readjustment and showing in detail the facts
          upon which such adjustment or readjustment is based.  This Company
          shall, upon the written request at any time of any Holder of Warrants,
          furnish or cause to be furnished to such Holder a like certificate
          setting forth (a) such adjustment and readjustment, (b) the Exercise
          Price for such warrants at the time in effect, and (c) the number of
          shares of Common Stock and the amount, if any, of other property which
          at the time would be received upon the exercise of the then
          outstanding Warrants.

     5.6  NOTICES OF RECORD DATE.  In the event of any taking by this Company of
          a record of the Holder of any class of securities for the purpose of
          determining the holders thereof who are entitled to receive any
          dividend (other than a cash dividend) or other distribution, any right
          to subscribe for, purchase or otherwise acquire any shares of stock of
          any class or any other securities or property, or to receive any other
          right, this Company shall mail to each Holder of Warrants, at least
          twenty (20) days prior to the date specified therein, a notice
          specifying the date on which any such record is to be taken for the
          purpose of such dividend, distribution or right, and the amount and
          character of such dividend, distribution or right.

     5.7  RESERVATION OF STOCK ISSUABLE UPON EXERCISE.  This Company shall at
          all times reserve and keep available out of its authorized but
          unissued shares of Common Stock, solely for the purpose of effecting
          the exercise of the Warrants, such number of its shares of Common
          Stock as shall from time to time be sufficient to effect the exercise
          of all outstanding Warrants to purchase all shares of Common Stock
          underlying the Warrants; and if at any time the number of authorized
          but unissued shares of Common Stock shall not be sufficient to effect
          the exercise of all outstanding Warrants to purchase all shares of
          Common Stock underlying the Warrants, in addition to such other
          remedies as shall be available to the Holder of such Warrants, this
          Company will take such corporate action as may, in the opinion of its
          counsel, be necessary to increase its authorized but unissued shares
          of Common Stock to such number of shares as shall be sufficient for
          such purposes, including, without limitation, engaging in its best
          efforts to obtain the requisite shareholder approval of any necessary
          amendment to its Certificate of Incorporation.

                                          4
<PAGE>

     5.8  NOTICES.  Any notice required by the provisions of this Section 5 to
          be given to the Holders of Warrants shall be given as provided in
          Section 9.1.

6.   REGISTRATION RIGHTS.

     6.1  DEFINITIONS.

          (a)  "Commission" shall mean the Securities and Exchange Commission or
               any other federal agency at the time administering the Securities
               Act of 1933, as amended (the "Securities Act").

          (b)  "Registrable Securities" shall mean (x) shares of Common Stock
               issuable upon exercise of the Warrants and (y) any Common Stock
               issued as a dividend or other distribution with respect to or in
               exchange for or in replacement of the shares referenced in (x)
               above; provided, however, that Registrable Securities shall not
               include any shares of Common Stock which have previously been
               registered or which have been sold to the public.

          (c)  The terms "register," "registered" and "registration" shall refer
               to a registration effected by preparing and filing with the
               Commission a registration statement in compliance with the
               Securities Act and applicable rules and regulations thereunder,
               and the declaration or ordering of the effectiveness of such
               registration statement by the Commission.

          (d)  "Registration Expenses" shall mean all expenses incurred in
               effecting any registration pursuant to this Agreement, including,
               without limitation, all registration, qualification, and filing
               fees, printing expenses, escrow fees, fees and disbursements of
               counsel for the Company, blue sky fees and expenses of any
               regular or special audits incident to or required by any such
               registration, but shall not include selling expenses and fees and
               disbursements of counsel for the Holder.

          (e)  "Rule 144" shall mean Rule 144 as promulgated by the Commission
               under the Securities Act, as such Rule may be amended from time
               to time, or any similar successor rule that may be promulgated by
               the Commission.

          (f)  "Rule 145" shall mean Rule 145 as promulgated by the Commission
               under the Securities Act, as such Rule may be amended from time
               to time, or any similar successor rule that may be promulgated by
               the Commission.

     6.2  "PIGGYBACK" REGISTRATION.  During the period beginning with the Grant
          Date and ending 5:00 p.m., Central Time, on March 15, 2004, if the
          Company shall determine to register any of its shares of Common Stock
          in a firm commitment public offering for its own account, other than a
          registration relating solely to a Rule 145 transaction on Form S-4 or
          any successor registration statement, a registration on Form S-8 or
          any successor registration statement, or a registration on any
          registration form that does not permit secondary sales, the Company
          will:

                                         5
<PAGE>

          (a)  promptly give to Holder written notice thereof;

          (b)  use its best efforts to include in such registration (and any
               related qualification under the blue sky laws or other
               compliance), except as set forth in Sections 6.4 and 6.5 below,
               and in any underwriting involved therein, all the Registrable
               Securities specified in a written request or requests, made by
               Holder within twenty (20) days after the written notice from the
               Company described in clause 6.2(a) above is given, which written
               request may specify all or a part of Holder's Registrable
               Securities; and

          (c)  pay all Registration Expenses, other than the selling expenses of
               Holder's Registrable Securities.

     6.3  DEMAND REGISTRATION.

          (a)  In the event that the Company has not registered the Registrable
               Securities on or before March 15, 2001, then for the period from
               March 15, 2001 until 5:00 p.m., Central Time, on March 15, 2004,
               the Holder shall be entitled to one demand registration of the
               Registrable Securities on the following terms and conditions:

               (i)  The Company shall have received a written request of the
                    Holders requesting registration of all Registrable
                    Securities (a "Demand"); and

               (ii) Such demand registration rights may not be exercised (A)
                    after the Company has initiated any previous demand
                    registration or (B) in any particular jurisdiction in which
                    the Company would be required to execute a general consent
                    to service of process in effecting such registration.

     Within twenty (20) days after delivery of such written notice, the Company
     shall file with the Commission the registration including all Registrable
     Securities.

     6.4  UNDERWRITING.  If the registration of which the Company gives notice
          is for a registered public offering involving an underwriting, the
          Company shall so advise the Holder as a part of the written notice.
          In such event, the right of the Holder to registration pursuant to
          this Section 6 shall be conditioned upon Holder's participation in
          such underwriting and the inclusion of the Holder's Registrable
          Securities in the underwriting to the extent provided herein.  The
          Holder shall (together with the Company) enter into an underwriting
          agreement in customary form with the representative of the underwriter
          or underwriters selected by the Company.

     6.5  EXCLUSION OF REGISTRABLE SECURITIES.  Notwithstanding any other
          provisions of this Section 6, if the representative of the
          underwriters advises the Company in writing that marketing factors
          require a limitation on the number of shares to be

                                    6
<PAGE>

          underwritten, the representative may (subject to the limitations set
          forth below) exclude all Registrable Securities from, or limit the
          number of Registrable Securities to be included in, the registration
          and underwriting.  The Company shall so advise the Holder, and the
          number of shares that are entitled to be included in the registration
          and underwriting shall be allocated first to the Company for
          securities being sold for its own account and thereafter to the
          Holder, pro rata with any other holders of Common Stock having
          registration rights.  If a Holder does not agree to the terms of any
          such underwriting, such Holder shall be excluded therefrom by
          written notice from the Company or the underwriter.  Any Registrable
          Securities or other securities excluded or withdrawn from such
          underwriting shall be withdrawn from such registration.

          If shares of the Holder are so withdrawn from the registration or if
          the number of shares of Registrable Securities of the Holder to be
          included in such registration was previously reduced as a result of
          marketing factors, in any subsequent registration in which the Holder
          is permitted to participate under this Section 6, the Company shall
          then offer to the Holder the right to include additional securities in
          the registration in an aggregate amount equal to the number of shares
          so withdrawn, with such shares to be allocated among the persons
          requesting additional inclusion pro rata amongst those persons
          requesting inclusion.

     6.6  REGISTRATION PROCEDURES.  In the case of each registration effected by
          the Company pursuant to Section 6, the Company will keep Holder
          advised in writing as to the initiation of each registration and as to
          the completion thereof, at its expense, and the Company will use its
          best efforts to:

          (a)  Keep such registration effective for a period of one hundred
               twenty (120) days or until the Holder has completed the
               distribution described in the registration statement relating
               thereto, whichever first occurs; provided, however, that (x) such
               120-day period shall be extended for a period of time equal to
               the period the Holder refrains from selling any securities
               included in such registration at the request of an underwriter of
               Common Stock (or other securities) of the Company; and (y) in the
               case of any registration of Registrable Securities on Form S-3
               which are intended to be offered on a continuous or delayed
               basis, such 120-day period shall be extended, if necessary, to
               keep the registration statement effective until all such
               Registrable Securities are sold, but only if Rule 415 under the
               Securities Act, or any successor rule under the Securities Act,
               permits an offering on a continuous or delayed basis, and
               provided further that applicable rules under the Securities Act
               governing the obligation to file a post-effective amendment
               permit, in lieu of filing a post-effective amendment that (I)
               includes any prospectus required by Section 10(a)(3) of the
               Securities Act or (II) reflects facts or events representing a
               material or fundamental change in the information set forth in
               the registration statement, the incorporation by reference of
               information required to be included in (I) and (II) above to be
               contained in periodic reports filed

                                          7
<PAGE>

               pursuant to Section 13 or 15(d) of the Securities Exchange
               Act of 1934 in the registration statement;

          (b)  Prepare and file with the Commission such amendments and
               supplements to such registration statement and the prospectus
               used in connection with such registration statement as may be
               necessary to comply with the provisions of the Securities Act
               with respect to the disposition of all securities covered by such
               registration statement;

          (c)  Furnish such number of prospectuses and other documents incident
               thereto, including any amendment of or supplement to the
               prospectus, as the Holder from time to time may reasonably
               request;

          (d)  Notify the Holder at any time when a prospectus relating thereto
               is required to be delivered under the Securities Act of the
               happening of any event as a result of which the prospectus
               included in such registration statement, as then in effect,
               includes an untrue statement of a material fact or omits to state
               a material fact required to be stated therein or necessary to
               make the statements therein not misleading or incomplete in the
               light of the circumstances then existing, and at the request of
               Holder, prepare and furnish to the Holder a reasonable number of
               copies of a supplement to or an amendment of such prospectus as
               may be necessary so that, as thereafter delivered to the
               purchasers of such shares, such prospectus shall not include an
               untrue statement of a material fact or omit to state a material
               fact required to be stated therein or necessary to make the
               statements therein not misleading or incomplete in the light of
               the circumstances then existing;

          (e)  Cause all such Registrable Securities registered pursuant
               hereunder to be listed on each securities exchange on which
               similar securities issued by the Company are then listed;

          (f)  Provide a transfer agent and registrar for all Registrable
               Securities registered pursuant to such registration statement and
               a CUSIP number for all such Registrable Securities, in each case
               not later than the effective date of such registration; and

          (g)  Otherwise use its best efforts to comply with all applicable
               rules and regulations of the Commission, and make available to
               its security holders, as soon as reasonably practicable, an
               earnings statement covering the period of at least twelve months,
               but not more than eighteen months, beginning with the first month
               after the effective date of the Registration Statement, which
               earnings statement shall satisfy the provisions of Section 11(a)
               of the Securities Act.

                                            8
<PAGE>

7.   FRACTIONAL SHARES; ISSUANCE OF SHARES; LEGENDS.

     7.1  FRACTIONAL SHARES.  The Company shall not be required to issue
          fractional shares of Company Common Stock on the exercise of a
          Warrant.  If any fraction of a share of Common Stock would, except for
          the provisions of this Section 7, be issuable on the exercise of a
          Warrant (or specified portion thereof), the Company shall in lieu
          thereof pay an amount in cash equal to the then Current Fair Market
          Value, multiplied by such fraction.  For purposes of this Agreement,
          the term "Current Fair Market Value" shall mean (i) if the Common
          Stock is traded in the over-the-counter market and not quoted on The
          Nasdaq SmallCap Market or The Nasdaq National Market or on any
          national securities exchange, the average of the per share closing bid
          prices of the Common Stock on the 10 consecutive trading days
          immediately preceding the date in question, as reported by Nasdaq or
          an equivalent generally accepted reporting service, or (ii) if the
          Common Stock is quoted on The Nasdaq SmallCap Market or The Nasdaq
          National Market or on a national securities exchange, the average for
          the 10 consecutive trading days immediately preceding the date in
          question of the daily per share closing prices of the Common Stock as
          quoted on The Nasdaq SmallCap Market or The Nasdaq National Market or
          on the principal stock exchange on which it is listed, as the case may
          be, or (iii) if the Common Stock is not publicly traded or quoted on
          The Nasdaq SmallCap Market or The Nasdaq National Market, the fair
          market value as determined by the Board of Directors of the Company
          based on (with appropriate adjustments) the most recent purchases of
          the Company's Common Stock and/or other relevant factors, including
          the Company's income and assets or evaluation reports received by the
          Company.

     7.2  ISSUANCE OF SHARES.  All shares of Common Stock issued upon exercise
          of a Warrant will be duly authorized, validly issued, fully paid and
          nonassessable.

     7.3  LEGENDS.  If the Common Stock to be issued upon exercise of this
          Warrant has not been registered under the Securities Act of 1933, as
          amended, then the stock certificates representing such shares of
          Common Stock shall bear a legend substantially in the following form:

          THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE
          STATE SECURITIES LAWS AND ARE RESTRICTED SECURITIES.  SUCH SECURITIES
          MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
          AN EXEMPTION THEREFROM UNDER THE ACT AND STATE SECURITIES LAWS.

8.   TRANSFERABILITY.  The Warrant or the Shares of Company Common Stock
     underlying the Warrant may be transferred and the Company shall be required
     to register any transfer on the books of the Company; provided, however,
     the Company may request an opinion of

                                        9
<PAGE>

     counsel satisfactory to it prior to such transfer that registration under
     the Securities Act and applicable state securities laws is not required
     in connection with the transaction resulting in such transfer.  Each new
     Warrant or Company Common Stock certificate issued upon any transfer as
     above provided shall bear an appropriate investment legend, except that
     such Warrant or Company Common Stock certificate shall not bear such
     restrictive legend if the opinion of counsel referred to above is to
     further effect that such legend is not required in order to establish
     compliance with the provisions of the Securities Act or if such
     transfer is made in accordance with the provisions of Rule 144(k)
     promulgated under the Securities Act.  The Warrant may also be
     transferred by will or by devise and by the laws of descent.

9.   MISCELLANEOUS.

     9.1  NOTICES.  All notices, requests, demands and other communications
          required or permitted to be given hereunder shall be deemed to have
          been duly given if in writing and delivered personally, given by
          prepaid telegram, or mailed first class, postage prepaid, registered
          or certified mail, return receipt requested, to the following
          addresses:

          If to the Company:       Destron Fearing Corporation
                                   490 Villaume Avenue
                                   South St. Paul, Minnesota  55075
                                   Attention:  President

          With a copy to:          Winthrop & Weinstine, P.A.
                                   3000 Dain Rauscher Plaza
                                   60 South Sixth Street
                                   Minneapolis, Minnesota  55402
                                   Attention:  Michele D. Vaillancourt, Esq.

          If to the Holder:        Data Sales Co., Inc.
                                   3450 West Burnsville Parkway
                                   Burnsville, MN  55337
                                   Attention:  President

          With a copy to:          Gregory VanGompel, Esq.
                                   Data Sales Co., Inc.
                                   3450 West Burnsville Parkway
                                   Burnsville, MN  55337

     Any party may change the address to which such communications are to be
directed to it by giving written notice to the other party pursuant to the
terms of this Section.  Except as otherwise provided in this Warrant, all
notices shall be deemed to be given when delivered in person, or if placed in
the mail as aforesaid, then two (2) days thereafter.

                                       10
<PAGE>

     9.2  MODIFICATIONS.  The parties may, by mutual consent, amend, modify,
          supplement and waive any right under this Warrant in any manner agreed
          by them in writing at any time.

     9.3  ENTIRE AGREEMENT.  This Agreement, and any documents, instruments or
          agreements specifically referred to herein, set forth the entire
          agreement and understanding of the parties with respect to the
          transactions contemplated hereby and supersede all prior agreements,
          arrangements and understandings relating to the subject matter hereof.

     9.4  HEADINGS.  The section and paragraph headings contained in this
          Agreement are for convenient reference only, and shall not in any way
          affect the meaning or interpretation hereof.

     9.5  GOVERNING LAW; ARBITRATION.  This Agreement shall be governed by and
          construed in accordance with the laws of the State of Minnesota,
          without any regard to the choice of law provisions thereof.  Any
          dispute arising under this Agreement shall be resolved by binding
          arbitration under the rules of commercial arbitration of the American
          Arbitration Association in Ramsey County, Minnesota.

     9.6  SEVERABILITY.  If any provision of this Agreement shall be held to be
          invalid, illegal or unenforceable, it shall be deemed severable from
          the remaining provisions of this Agreement, which shall remain in full
          force and effect.

     9.7  WAIVER.  No waiver of any provision of this Agreement or any breach
          thereof shall be deemed or shall constitute a waiver of any other
          provision hereof (whether or not similar) or any other breach
          hereunder nor shall such waiver constitute a continuing waiver.
          Either party may waive performance of any provision of this Agreement,
          the non-performance of which would otherwise constitute a breach of
          this Agreement, including, but not limited to, the non-performance of
          any condition precedent to such party's performance, without affecting
          the enforceability of this Agreement or the provisions contained
          herein.

     9.8  HEIRS, SUCCESSORS AND ASSIGNS.  The terms and conditions of this
          Agreement shall inure to the benefit of and be binding upon the
          respective heirs, successors and assigns of the parties hereto.
          Holders may transfer and assign the Warrants only as provided in
          Section 8, and any assignment in violation of the foregoing shall be
          void.



             (The remainder of this page was left blank intentionally.)

                                          11
<PAGE>

     9.9  ATTORNEYS' FEES.  If any legal action is instituted to enforce or
          interpret the terms of this Agreement, the prevailing party in such
          action shall be entitled to actual attorneys' fees in addition to any
          other relief to which the party is entitled.

     IN WITNESS WHEREOF, the parties have executed this instrument as of the
date first written above.

                                   Destron Fearing Corporation,
                                   a Delaware corporation


                                   By:  /s/  Randolph K. Geissler
                                        ------------------------------------
                                        Randolph K. Geissler, President and
                                        Chief Executive Officer

                                   "HOLDER"

                                   Data Sales Co., Inc.,
                                   a Minnesota corporation


                                   By:  /s/ R. C. Breckner
                                        ------------------------------------
                                        Ronald Breckner

                                   Its: President
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                                        Title Typed or Printed



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