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                                                                EXHIBIT 10.1



                          STOCK PURCHASE AGREEMENT

                                   BETWEEN

                       APPLIED DIGITAL SOLUTIONS, INC.

                                     AND

                          DIGITAL ANGEL CORPORATION




                             February 25, 2005



                          STOCK PURCHASE AGREEMENT


       This Stock Purchase Agreement is entered into as of February 25,
2005 (the "Closing Date"), by Applied Digital Solutions, Inc., a Missouri
           ------------
corporation (the "Purchaser" or "ADSX"), and its majority-owned subsidiary,
                  ---------      ----
Digital Angel Corporation, a Delaware corporation ("Seller" or "DOC").
                                                    ------      ---


                           PRELIMINARY STATEMENTS

        For strategic investment purposes, ADSX wishes to purchase from DOC
and DOC wishes to sell to ADSX, in a transaction exempt from the
registration requirements of the Securities Act of 1933, as amended,
newly-issued shares of the common stock of DOC in consideration for newly
issued shares of the common stock of ADSX (which ADSX will seek to register
for resale pursuant to the provisions of the Securities Act of 1933, as
amended), on the terms and subject to the conditions set forth in this
Agreement. ADSX currently owns approximately 54% of the outstanding DOC
Common Stock (as defined hereunder) and has consented to the transactions
contemplated herein.

                                  Agreement

        In consideration of the preliminary statements and the respective
mutual covenants, representations and warranties herein contained, the
parties hereto agree as set forth below.

                                  ARTICLE I

                                 Definitions

       In addition to terms defined elsewhere in this Agreement, the
following terms when used in this Agreement shall have the meanings
indicated below:

       "ADSX Common Stock" shall mean the common stock of ADSX, par value
        -----------------
$.01 per share.

       "ADSX VWAP" means, for any date, the daily volume weighted average
        ---------
price of the ADSX Common Stock for such date as reported by Bloomberg
Financial, L.P. (based on a Trading Day from 9:30 a.m. ET to 4:02 p.m.
Eastern Time) using the VAP (volume average price) function.

       "Agreement" shall mean this Stock Purchase Agreement together with
        ---------
all exhibits and schedules referred to herein.

       "Agreement Effective Date" shall mean the date of execution of this
        ------------------------
Agreement.

        "Commission" shall mean the Securities and Exchange Commission.
         ----------

       "DOC Common Stock" shall mean the common stock of DOC, par value
        ----------------
$.005 per share.

                                     2

       "DOC VWAP" means, for any date, the daily volume weighted average
        --------
price of the DOC Common Stock for such date as reported by Bloomberg
Financial, L.P. (based on a Trading Day from 9:30 a.m. ET to 4:02 p.m.
Eastern Time) using the VAP (volume average price) function.

       "Exchange Act" shall mean the Securities Exchange Act of 1934, as
        ------------
amended.

        "Person" shall mean any natural person, corporation, unincorporated
         ------
organization, partnership, association, joint stock company, joint venture,
trust or government, or any agency or political subdivision of any
government or any other entity.

        "SEC Reports" means all reports required to be filed by ADSX and DOC
         -----------
under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the one year preceding the date hereof.

       "Securities Act" shall mean the Securities Act of 1933, as amended.
        --------------

       "Trading Day" means a day on which the DOC Common Stock is traded on
        -----------
the American Stock Exchange and a day on which the ADSX Common Stock is
traded on the Nasdaq SmallCap Market, or if the ADSX Common Stock is not
listed on the Nasdaq SmallCap Market, a day on which the ADSX Common Stock
is traded in the over-the-counter market, as reported by the OTC Bulletin
Board or is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated.

                                 ARTICLE II

                    Purchase of Securities; Consideration

       2.1 Securities to be Purchased. On and subject to the terms and
           --------------------------
conditions set forth herein, on the Closing Date, DOC shall sell to ADSX,
and ADSX shall purchase from DOC, all of DOC's right, title and interest in
and to an aggregate of $3,500,000 worth of shares of DOC Common Stock at a
purchase price equaling the average of the VWAPs of the DOC Common Stock for
the ten Trading Days immediately preceding (and not including) the Closing
Date ("Per Share Purchase Price") (the "DOC Shares").
       ------------------------         ----------

       2.2 Consideration. The purchase price for the DOC Shares shall be
           -------------
$3,500,000 ("Purchase Price"), payable by ADSX on the Closing date (as
             --------------
defined hereunder) by delivery, in the aggregate, of the number of shares of
ADSX Common Stock equal in value to $3,500,000 (the "ADSX Exchange Shares").
                                                     --------------------

       2.3 Place of Closing; Closing Date. The closing of the purchase and
           ------------------------------
sale of the DOC Shares under this Agreement will take place at the offices
of the Purchaser or other location as may be mutually agreed by Purchaser
and Seller, and shall occur on the date hereof (the "Closing Date").
                                                     ------------

       2.4 Closing Price. The per share exchange price for the ADSX Exchange
           -------------
Shares issuable under this Agreement on the Closing Date shall equal the
average of the ADSX VWAP for the ten (10) Trading Days immediately preceding
(and not including) the Closing Date.


                                     3

       2.5 Deliveries of DOC Shares and ADSX Exchange Shares on the Closing
           ----------------------------------------------------------------
Date. Subject to the terms and conditions of this Agreement and including
----
but not limited to the closing requirements of Section 7.1, on the Closing
Date: (i) DOC will deliver to ADSX that number of restricted DOC Shares
being purchased as calculated in Section 2.1, and (ii) ADSX will, upon
receipt of the DOC Shares, deliver to DOC, that number of restricted ADSX
Exchange Shares being exchanged in consideration for the DOC Shares as
calculated in Section 2.2.

       2.6 Fractional Shares. DOC and ADSX shall receive a whole number of
           -----------------
shares of DOC Shares and ADSX Exchange Shares, respectively, and no
fractional shares of DOC Shares and ADSX Exchange Shares shall be issued. In
lieu of fractional shares, DOC and ADSX shall deliver to the other
respective party, cash or a company check in the amount of the fractional
shares(s) otherwise issuable to ADSX or DOC by the other party based on the
Closing Price or Fixed Price respectively. The parties hereto hereby direct
their transfer agents to issue and deliver to the other party the shares in
certificate form and agree to provide any and all legal opinions and
supporting documentation as may be required by their transfer agent to
effectuate such immediate issuance and delivery of the Shares.

                                 ARTICLE III

                    Representations and Warranties of DOC

       In order to induce ADSX to enter into this Agreement and to
consummate the transactions contemplated hereby, DOC makes the
representations and warranties set forth below to ADSX.

       3.1 Organization; Standing and Power. DOC is a corporation duly
           --------------------------------
incorporated, validly existing and in good standing under the laws of the
State of Delaware with the requisite corporate power and authority to own
and use its properties and assets and to carry on its business as currently
conducted.

       3.2 Authorization; Enforceability. The execution, delivery and
           -----------------------------
performance of this Agreement by DOC and the consummation by DOC of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action. This Agreement has been duly executed and delivered by
DOC, and constitutes the legal, valid and binding obligation of DOC,
enforceable in accordance with its terms, except to the extent that its
enforcement is limited by bankruptcy, insolvency, reorganization or other
laws relating to or affecting the enforcement of creditors' rights generally
and by general principles of equity.

       3.3 No Violation or Conflict. The execution, delivery and performance
           ------------------------
of this Agreement by DOC and the consummation by DOC of the transactions
contemplated hereby: (a) do not and will not violate or conflict with any
provision of law or regulation, or any writ, order, judgment or decree of
any court or governmental or regulatory authority, or any provision of DOC's
Certificate of Incorporation or Bylaws; and (b) do not and will not, with or
without the passage of time or the giving of notice, result in the breach
of, or constitute a default, cause the acceleration of performance, or
require any consent under, or result in the creation of any lien, charge or
encumbrance upon any property or assets of DOC pursuant to any material
instrument or agreement to which DOC is a party or by which DOC or its
properties may be bound or

                                     4

affected, other than instruments or agreements as to which consent shall
have been obtained at or prior to the Closing Date.

       3.4 Consent of Governmental Authorities. Other than in connection
           -----------------------------------
with the Securities Act, the Exchange Act and the rules of the American
Stock Exchange, no consent, approval or authorization of, or registration,
qualification or filing with any federal, state or local governmental or
regulatory authority is required to be made by DOC in connection with the
execution, delivery or performance by DOC of this Agreement or the
consummation by DOC of the transactions contemplated hereby.

       3.5 Validity of Securities. When issued in accordance with this
           ----------------------
Agreement, the DOC Shares shall be duly and validly authorized, legally
issued and outstanding, fully paid and non-assessable, shall not have been
issued in violation of the preemptive rights of any Person, and free and
clear of all liens and encumbrances.

        3.6 Absence of Material Adverse Changes; Disclosure of Material
            -----------------------------------------------------------
Non-Public Information; SEC Reports. Since the filing by DOC of its
-----------------------------------
Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 and
all current reports filed on Form 8-K since such date, with the Commission,
there have been no material adverse changes to the assets, liabilities,
business or condition (financial or otherwise) of DOC, and all disclosures
of material non-public information required pursuant to the Securities Act
and the Exchange Act have been made accordingly. As of their respective
dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

                                 ARTICLE IV

                   Representations and Warranties of ADSX

       In order to induce DOC to enter into this Agreement and to consummate
the transaction contemplated hereby, ADSX makes the representations and
warranties set forth below to DOC.

       4.1 Organization; Standing and Power. ADSX is a corporation duly
           --------------------------------
incorporated, validly existing and in good standing under the laws of the
State of Missouri with the requisite corporate power and authority to own
and use its properties and assets and to carry on its business as currently
conducted.

       4.2 Authorization; Enforceability. The execution, delivery and
           -----------------------------
performance of this Agreement by ADSX and the consummation by ADSX of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action. This Agreement has been duly executed and delivered by
ADSX, and constitutes the legal, valid and binding obligation of ADSX,
enforceable in accordance with its terms, except to the extent that its
enforcement is limited by bankruptcy, insolvency, reorganization or other
laws relating to or affecting the enforcement of creditors' rights generally
and by general principles of equity.

                                     5

       4.3 No Violation or Conflict. The execution, delivery and performance
           ------------------------
of this Agreement by ADSX and the consummation by ADSX of the transactions
contemplated hereby: (a) do not and will not violate or conflict with any
provision of law or regulation, or any writ, order, judgment or decree of
any court or governmental or regulatory authority, or any provision of
ADSX's Articles of Incorporation or Bylaws; and (b) do not and will not,
with or without the passage of time or the giving of notice, result in the
breach of, or constitute a default, cause the acceleration of performance,
or require any consent under, or result in the creation of any lien, charge
or encumbrance upon any property or assets of ADSX pursuant to any material
instrument or agreement to which ADSX is a party or by which ADSX or its
properties may be bound or affected, other than instruments or agreements as
to which consent shall have been obtained at or prior to the Closing Date.

       4.4 Consent of Governmental Authorities. Other than in connection
           -----------------------------------
with the Securities Act, the Exchange Act and the rules of the Nasdaq Stock
Market, no consent, approval or authorization of, or registration,
qualification or filing with any federal, state or local governmental or
regulatory authority is required to be made by ADSX in connection with the
execution, delivery or performance by ADSX of this Agreement or the
consummation by ADSX of the transactions contemplated hereby.

       4.5 Validity of Securities. When issued in accordance with this
           ----------------------
Agreement, the ADSX Exchange Shares shall be duly and validly authorized,
legally issued and outstanding, fully paid and non-assessable, shall not
have been issued in violation of the preemptive rights of any Person, and
free and clear of all liens and encumbrances.

        4.6 Absence of Material Adverse Changes; Disclosure of Material
            -----------------------------------------------------------
Non-Public Information; SEC Reports. Since the filing by ADSX of its
-----------------------------------
Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, and
all current reports on Form 8-K filed since such date, with the Commission,
there have been no material adverse changes to the assets, liabilities,
business or condition (financial or otherwise) of ADSX, and all disclosures
of material non-public information required pursuant to the Securities Act
and the Exchange Act have been made accordingly. As of their respective
dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

                                  ARTICLE V

                                  Covenants

       5.1 Use of Proceeds. DOC covenants and agrees that the ADSX Exchange
           ---------------
Shares shall be utilized to complete the proposed transaction with
DSD/Daploma on February ___, 2005. It is expressly understood that the
covenants of DOC contained in this Section 5.1 shall survive the Closing.

                                     6

       5.2 Confidentiality. Except as otherwise required in the performance
           ---------------
of obligations under this Agreement and except as otherwise required by law,
any nonpublic information received by a party or its advisors from the other
party shall be kept confidential and shall not be used or disclosed for any
purpose other than in furtherance of the transactions contemplated by this
Agreement. The obligation of confidentiality shall not extend to information
(a) which is or shall become generally available to the public other than as
a result of an unauthorized disclosure by a party to this Agreement or a
person to whom a party has provided such information, (b) which is or
becomes known by or available to a party to this Agreement on a
nonconfidential basis prior to its disclosure by one party to the other
pursuant to this Agreement, or (c) which is or becomes available to a party
on a nonconfidential basis from a source other than a party to this
Agreement. Upon termination of this Agreement, each party shall promptly
return any confidential information received from the other party and, upon
request, shall destroy any copies of such information in its possession. The
covenants of the parties contained in this Section 5.2 shall survive any
termination of this Agreement.

       5.3 Notification. Each party to this Agreement shall promptly notify
           ------------
the other parties in writing of the occurrence, or pending or threatened
occurrence, of any event that would constitute a breach or violation of this
Agreement by any party or that would cause any representation or warranty
made by the notifying party in this Agreement to be false or misleading in
any respect. Any such notification shall not limit or alter any of the
representations, warranties or covenants of the parties set forth in this
Agreement nor any rights or remedies a party may have with respect to a
breach of any representation, warranty or covenant.

        5.4 Further Assurances. The parties hereto shall deliver any and all
            ------------------
other instruments or documents required to be delivered pursuant to, or
necessary or proper in order to give effect to, all of the terms and
provisions of this Agreement including, without limitation, all necessary
stock powers and such other instruments of transfer as may be necessary or
desirable to transfer ownership of the DOC Shares or the ADSX Exchange
Shares and to consummate the transactions contemplated by this Agreement.

                                 ARTICLE VI

                            Additional Agreements

       6.1 Survival of the Representations and Warranties. The
           ----------------------------------------------
representations and warranties of ADSX and of DOC set forth in this
Agreement shall terminate immediately following the Closing Date (or any
alternative closing date).

       6.2 Investigation. The representations, warranties, covenants and
           -------------
agreements set forth in this Agreement shall not be affected or diminished
in any way by any investigation (or failure to investigate) at any time by
or on behalf of the party for whose benefit such representations,
warranties, covenants and agreements were made. All statements contained
herein or in any schedule, certificate, exhibit, list or other document
delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties for
purposes of this Agreement.

                                     7

       6.3 Arbitration. Any and all claims, disputes or matters in
           -----------
controversy arising under this Agreement which the parties are unable to
settle by mutual agreement shall be resolved by binding arbitration pursuant
to the Commercial Arbitration Rules of the American Arbitration Association
as in force at the time ("AAA").
                          ---

                  (a) A party which desires to submit a claim, dispute or
controversy to binding arbitration under this Section 6.3 shall so notify
the other parties, and if after 30 days from the date of such notice the
claim, dispute or controversy remains unsettled, any party may petition the
AAA for arbitration of the claim, dispute or controversy. Matters submitted
to arbitration shall be resolved in accordance with the decision of a panel
of three arbitrators selected by the AAA. The arbitrators shall be
experienced in the resolution of commercial disputes arising in the context
of negotiated acquisitions of businesses, and the place of arbitration shall
be either West Palm Beach or Delray Beach, Florida.

                  (b) The three arbitrators shall investigate the facts and
shall hold hearings at which the parties to this Agreement may present
evidence and arguments, be represented by counsel and conduct
cross-examination. In determining any question, matter or dispute before
them, the arbitrators shall apply the provisions of this Agreement and shall
not have the power to add to, modify or change any of the provisions of this
Agreement. The three arbitrators shall render a written decision upon the
matter presented to them by a majority vote within 90 days after the date on
which the hearings and presentation of evidence are concluded, unless a
longer period is provided under the rules of the AAA. The decision rendered
by the arbitrators shall be final and binding on, and unappealable by, the
parties. Judgment upon the decision rendered in such arbitration may be
entered by any court having jurisdiction thereof. No party to an arbitration
proceeding shall be considered in default hereunder during the pendency of
arbitration proceedings relating to a disputed default. If the three
arbitrators fail to render a timely decision, then, to the extent permitted
by law, any party shall have the right to institute an action or proceeding
in such court as shall be appropriate in the circumstances, and, upon the
institution of such action, the arbitration proceeding shall be terminated
and shall be of no further force and effect. The arbitrators shall determine
in what proportion the parties shall bear the fees and expenses of the
arbitrators, and each party shall otherwise bear its own fees and expenses,
including expenses of legal counsel and other advisors or consultants. It is
the intention of the parties that arbitration as described above be the sole
and exclusive means available to them for the resolution of claims, disputes
or matters in controversy arising under this Agreement, other than claims,
disputes and matters arising under those provisions referred to in the first
sentence of this Section 6.3, and only in the event that the arbitrators
fail to render a decision in accordance with the foregoing provisions shall
a party have the right to institute legal action with respect to such claim,
dispute or matter. Accordingly, it shall be a complete defense to any action
instituted by a party with respect to a claim, dispute or matter in
controversy under this Agreement that such claim, dispute or matter has not
first been submitted to arbitration in accordance with the foregoing
provisions.

                                     8

                                 ARTICLE VII

                        Closing; Conditions Precedent

       7.1 Closing. All proceedings to be taken and all documents to be
           -------
executed on the Closing Date shall be deemed to have been taken, delivered
and executed simultaneously, and no proceeding shall be deemed taken nor
documents deemed executed or delivered until all have been taken, delivered
and executed. On the Closing Date, DOC shall deliver to ADSX (i) the DOC
Shares in accordance with the procedure described in Section 2.4, free and
clear of any and all claims, liens, charges, security interests, pledges or
encumbrances of any nature whatsoever and together with all accrued benefits
and rights attaching thereto; (ii) certificate of the Secretary of State of
Delaware as of a recent date as to the good standing of DOC and its
Certificate of Incorporation; (iii) such other documents as may be
specified, or required to satisfy the conditions set forth, in Sections 7.2
and 7.3; and (iv) such other documents and instruments as ADSX may
reasonably request. On the Closing Date, ADSX shall deliver to DOC (i) the
ADSX Exchange Shares in accordance with the procedure described in Section
2.6, free and clear of any and all claims, liens, charges, security
interests, pledges or encumbrances of any nature whatsoever and together
with all accrued benefits and rights attaching thereto; (ii) certificate of
the Secretary of State of Missouri as of a recent date as to the good
standing of ADSX and its Articles of Incorporation, as amended; (ii) such
other documents as may be specified, or required to satisfy the conditions
set forth, in Sections 7.2 and 7.3; and (iii) such other documents and
instruments as DOC may reasonably request.

       7.2 Conditions Precedent to the Obligations of ADSX. All of the
           -----------------------------------------------
obligations of ADSX under this Agreement are subject to the satisfaction at
or prior to the Closing Date (or any alternative closing date) of each and
every one of the following conditions.

                  (a) Representations and Warranties True. Each of the
                      -----------------------------------
representations and warranties of DOC contained herein or in any certificate
or other document delivered pursuant to this Agreement or in connection with
the transaction contemplated hereby shall be true and correct in all
material respects (except for representations and warranties which are by
their terms qualified by materiality, which shall be true and correct in all
respects) as of the Closing Date with the same force and effect as though
made on and as of such date.

                  (b) Performance. DOC shall have performed and complied in
                      -----------
all material respects with all of the agreements, covenants and obligations
required under this Agreement to be performed or complied with by them on or
prior to the Closing Date.

                  (c) Consents. DOC shall have obtained all material
                      --------
authorizations, consents, waivers and approvals as may be required to
consummate the transaction contemplated by this Agreement.

                  (d) DOC Audit Committee and Board Approval. The Audit
                      --------------------------------------
Committee and the Board of Directors of DOC shall have approved the
execution, delivery and performance of this Agreement by DOC.

                  (e) Seller's Certificate. DOC shall have delivered to ADSX
                      --------------------
a certificate executed by DOC, dated the Closing Date, certifying in such
detail as ADSX may reasonably request, that the conditions specified in
Sections 7.2(a), (b), (c) and (d) above have been fulfilled and as to such
other matters as ADSX may reasonably request.

                                     9

       7.3 Conditions Precedent to the Obligations of DOC. All of the
           ----------------------------------------------
obligations of DOC under this Agreement are subject to the satisfaction at
or prior to the Closing Date (or any alternative closing date) of each and
every one of the following conditions.

                  (a) Representations and Warranties True. Each of the
                      -----------------------------------
representations and warranties of ADSX contained herein or in any
certificate or other document delivered pursuant to this Agreement or in
connection with the transaction contemplated hereby shall be true and
correct in all material respects (except for representations and warranties
which are by their terms qualified by materiality, which shall be true and
correct in all respects) as of the Closing Date with the same force and
effect as though made on and as of such date.

                  (b) Performance. ADSX shall have performed and complied in
                      -----------
all material respects with all of the agreements, covenants and obligations
required under this Agreement to be performed or complied with by it on or
prior to the Closing Date.

                  (c) Consents. ADSX shall have obtained all material
                      --------
authorizations, consents, waivers and approvals as may be required to
consummate the transaction contemplated by this Agreement.

                  (d) ADSX Audit Committee and Board Approval. The Audit
                      ---------------------------------------
Committee and the Board of Directors of ADSX shall have approved the
execution, delivery and performance of this Agreement by ADSX.

                  (e) Purchaser's Certificate. ADSX shall have delivered to
                      -----------------------
DOC a certificate executed by ADSX, dated the Closing Date, certifying in
such detail as DOC may reasonably request, that the conditions specified in
Sections 7.3(a), (b), (c) and (d) above have been fulfilled and as to such
other matters as DOC may reasonably request.



                                     10

                                ARTICLE VIII

                                Registration

         8.1 Registration of ADSX Exchange Shares. As soon as practicable
             ------------------------------------
after DOC has delivered the ADSX Exchange Shares to the DSD/Daploma
shareholders, ADSX shall prepare and file with the Commission the
Registration Statement covering the resale of the ADSX Exchange Shares for
an offering to be made under the Securities Act. The Registration Statement
shall be on Form S-1 (or Form S-3 if ADSX is then eligible to register for
resale the Securities on Form S-3). ADSX shall use its best efforts to cause
the Registration Statement to be declared effective under the Securities Act
as promptly as possible after the filing thereof, and shall use its best
efforts to keep such Registration Statement continuously effective under the
Securities Act until the date when all ADSX Exchange Shares covered by the
Registration Statement have been sold or may be sold without volume
restrictions pursuant to Rule 144(k) as determined by counsel to ADSX
pursuant to a written opinion letter to such effect, addressed and
acceptable to ADSX's transfer agent. ADSX shall notify DOC via facsimile or
e-mail, followed by regular U.S. Mail, of the effectiveness of the
Registration Statement immediately after ADSX receives notification of the
effectiveness of such Registration Statement from the Commission;

         8.2 DOC Registrable Shares' Registration Rights; Piggyback
             ------------------------------------------------------
Registration; Demand Registration.
---------------------------------

         (a) At any time and from time to time after the date of this
Agreement, whenever DOC proposes to file a registration statement, DOC shall
no less than fifteen (15) days prior to such filing give written notice to
ADSX of its intention to do so and, upon the written request of ADSX given
within ten (10) days after DOC provides such notice, shall use its good
faith efforts to cause all DOC Registrable Shares which DOC has been
requested by ADSX to register to be registered under the Securities Act to
the extent necessary to permit their sale or other disposition in accordance
with the intended methods of distribution specified in the request of ADSX.

         (b) At any time and from time to time after the date of this
Agreement, upon receipt of a written request from ADSX specifying the number
of DOC Registrable Shares that ADSX desires to register for public sale, DOC
promptly shall prepare and file with the Commission within 120 days of the
written request a registration statement under the Securities Act covering a
public offering of the DOC Registrable Shares and shall use all reasonable
efforts to cause the registration statement to become effective as soon as
is practicable. If permitted by the Securities Act, DOC shall use a Form S-3
registration statement (or any successor form) to register the DOC
Registrable Shares pursuant to this Section 8.2(b). If it is ineligible to
use a Form S-3 registration statement, DOC may use any other form of SEC
registration statement that it considers appropriate, as long as DOC is
eligible to use the form and the form does not impair in any way ADSX's
ability to publicly offer and sell any DOC Registrable Shares compared to
such ability if DOC were eligible to use Form S-3.


                                     11

                                 ARTICLE IX

                                 Termination

         9.1 Termination. This Agreement may be terminated as follows: (i)
             -----------
by mutual written consent of the parties at any time prior to an alternative
closing date (in lieu of the Closing Date); and (ii) ADSX or DOC may
terminate this Agreement by giving written notice to the other party at any
time prior to an alternative closing date (in lieu of the Closing Date) if
either ADSX or DOC has breached any representation, warranty or covenant
contained in this Agreement in any material respect.

         9.2 Effect of Termination. If ADSX or DOC terminates this Agreement
             ---------------------
pursuant to Section 9.1(ii), all rights and obligations of the parties
hereunder shall terminate without any liability of any party to the other
party.

                                  ARTICLE X

                                Miscellaneous

       10.1 Notices. Any notice, demand, claim or other communication under
            -------
this Agreement shall be in writing and shall be delivered personally or sent
by certified mail, return receipt requested, postage prepaid, or sent by
facsimile or prepaid overnight courier to the parties at the addresses set
forth below their names on the signature pages of this Agreement (or at such
other addresses as shall be specified by the parties by like notice). Such
notices, demands, claims and other communications shall be deemed given when
actually received or, (a) in the case of delivery by overnight service with
guaranteed next day delivery, the next day or the day designated for
delivery, (b) in the case of certified U.S. mail, five days after deposit in
the U.S. mail, or (c) in the case of facsimile, the date upon which the
transmitting party received confirmation of receipt by facsimile, telephone
or otherwise.

       10.2 Entire Agreement. This Agreement contains every obligation and
            ----------------
understanding between the parties relating to the subject matter hereof and
merges all prior discussions, negotiations and agreements, if any, between
them, and none of the parties shall be bound by any conditions, definitions,
understandings, warranties or representations other than as expressly
provided or referred to herein.

       10.3 Binding Effect. This Agreement shall be binding upon and inure
            --------------
to the benefit of the parties hereto and their respective successors, heirs,
personal representatives, legal representatives, and permitted assigns.

       10.4 Assignment. This Agreement may not be assigned by any party
            ----------
without the written consent of the other party.

       10.5 Waiver and Amendment. Any representation, warranty, covenant,
            --------------------
term or condition of this Agreement which may legally be waived, may be
waived, or the time of performance thereof extended, at any time by the
party hereto entitled to the benefit thereof, and any term, condition or
covenant hereof (including, without limitation, the period during which any
condition is to be satisfied or any obligation performed) may be amended by
the parties hereto at

                                     12

any time. Any such waiver, extension or amendment shall be evidenced by an
instrument in writing executed on behalf of the appropriate party by its
Chairman, President or any Vice President or other person, who has been
authorized by its Board of Directors to execute waivers, extensions or
amendments on its behalf. No waiver by any party hereto, whether express or
implied, of its rights under any provision of this Agreement shall
constitute a waiver of such party's rights under such provisions at any
other time or a waiver of such party's rights under any other provision of
this Agreement. No failure by any party hereto to take any action against
any breach of this Agreement or default by another party shall constitute a
waiver of the former party's right to enforce any provision of this
Agreement or to take action against such breach or default or any subsequent
breach or default by such other party.

       10.6 Severability. In the event that any one or more of the
            ------------
provisions contained in this Agreement shall be declared invalid, void or
unenforceable, the remainder of the provisions of this Agreement shall
remain in full force and effect, and such invalid, void or unenforceable
provision shall be interpreted as closely as possible to the manner in which
it was written.

       10.7 Expenses. Each party agrees to pay, without right of
            --------
reimbursement from the other party, the costs incurred by it incident to the
performance of its obligations under this Agreement and the consummation of
the transactions contemplated hereby, including, without limitation, costs
incident to the preparation of this Agreement, and the fees and
disbursements of counsel, accountants and consultants employed by such party
in connection herewith.

       10.8 Headings. The section and other headings contained in this
            --------
Agreement are for reference purposes only and shall not affect the meaning
or interpretation of any provisions of this Agreement.

       10.9 Counterparts. This Agreement may be executed in any number of
            ------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

       10.10 Time of Essence. Wherever time is specified for the doing or
             ---------------
performance of any act hereunder, time shall be considered of the essence.

       10.11 Litigation; Prevailing Party. If, notwithstanding the
             ----------------------------
provisions of Section 6.3 regarding arbitration hereunder, any litigation is
instituted with regard to this Agreement, the prevailing party shall be
entitled to receive from the non-prevailing party and the non-prevailing
party shall pay all reasonable fees and expenses of counsel for the
prevailing party.

       10.12 Injunctive Relief. It is possible that remedies at law may be
             -----------------
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific
performance or other equitable remedies in addition to all other remedies
provided hereunder or available to the parties hereto at law or in equity.

       10.13 Remedies Cumulative. No remedy made available by any of the
             -------------------
provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity.

                                     13

       10.14 Governing Law. This Agreement has been entered into and shall
             -------------
be construed and enforced in accordance with the laws of the State of
Florida without reference to the choice of law principles thereof.

       10.15 Jurisdiction and Venue. If, notwithstanding the provisions of
             ----------------------
Section 6.3 regarding arbitration hereunder, any litigation is instituted
with regard to this Agreement, this Agreement shall be subject to the
exclusive jurisdiction of the courts of Palm Beach County, Florida. The
parties to this Agreement agree that any breach of any term or condition of
this Agreement shall be deemed to be a breach occurring in the State of
Florida by virtue of a failure to perform an act required to be performed in
the State of Florida and irrevocably and expressly agree to submit to the
jurisdiction of the courts of the State of Florida for the purpose of
resolving any disputes among the parties relating to this Agreement or the
transactions contemplated hereby. The parties irrevocably waive, to the
fullest extent permitted by law, any objection which they may now or
hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement, or any judgment entered by any
court in respect hereof brought in Palm Beach County, Florida, and further
irrevocably waive any claim that any suit, action or proceeding brought in
Palm Beach County, Florida has been brought in an inconvenient forum.

       10.16 Participation of Parties. The parties hereto acknowledge that
             ------------------------
this Agreement and all matters contemplated herein, have been negotiated
among all parties hereto and their respective legal counsel and that all
such parties have participated in the drafting and preparation of this
Agreement from the commencement of negotiations at all times through the
execution hereof. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.

       10.17 Preliminary Statements. The parties hereto acknowledge that the
             ----------------------
preliminary statements contained herein shall be deemed part of this
Agreement and shall be binding upon the parties.


                       [signatures on following page]



                                     14

       IN WITNESS WHEREOF, the parties hereto have each executed and
delivered this Agreement as of the day and year first above written.

                                  APPLIED DIGITAL SOLUTIONS, INC.

                                  By: /s/ Scott R. Silverman
                                     ------------------------------------------
                                  Name: Scott R. Silverman
                                  Title: Chief Executive Officer

                                  Address for Notice:
                                  ------------------
                                  1690 South Congress Avenue, Suite 200
                                  Delray Beach, Florida 33445
                                  Attn: Scott R. Silverman, CEO
                                  Tel: (561) 805-8056
                                  Fax: (561) 805-8001


<TABLE>
<S>                               <C>                               <C>
With a copy to:                   Holland & Knight LLP      and     Applied Digital Solutions, Inc.
                                  701 Brickell Avenue               1690 South Congress Avenue
                                  Suite 3000                        Suite 200
                                  Miami, FL 33131                   Delray Beach, Florida 33445
                                  Attn: Harvey Goldman, Esq.        Attn: Michael Krawitz, Esq.
                                  Tel: (305)789-7506                Tel: (561) 805-8005
                                  Fax: (305)789-7799                Fax: (561) 805-8001
</TABLE>

                                  DIGITAL ANGEL CORPORATION

                                  By: /s/ Kevin N. McGrath
                                     ------------------------------------------
                                  Name: Kevin N. McGrath
                                  Title: Chief Executive Officer

                                  Address for Notice:
                                  ------------------
                                  490 Villaume Corporation
                                  South St. Paul, MN  55075
                                  Attn: Kevin N. McGrath
                                  Tel: (651) 455-1621
                                  Fax: (651) 455-0413


With a copy to:                   Winthrop & Weinstine
                                  Suite 3500
                                  225 South Sixth Street
                                  Minneapolis, MN  55402
                                  Attn: Philip Colton, Esq.
                                  Tel: (612) 604-6400
                                  Fax: (612) 604-6800


                                     15

                                  Schedules
                                  ---------



                               (as necessary)