**Exhibit 10.38****REGISTRATION RIGHTS AGREEMENT**This Registration Rights Agreement (this “Agreement”) is made and entered into as of August31, 2007, by and between Digital Angel Corporation, a Delaware corporation (the “Company”), andKallina Corporation, a Delaware corporation (the “Purchaser”).This Agreement is made pursuant to the Security Agreement, dated as of the date hereof, by andbetween the Purchaser and the Company (as amended, modified or supplemented from time to time, the“Security Agreement”), and pursuant to the Note and the Warrants referred to therein.The Company and the Purchaser hereby agree as follows:1. **Definitions**. Capitalized terms used and not otherwise defined herein that are defined inthe Security Agreement shall have the meanings given such terms in the Security Agreement. As usedin this Agreement, the following terms shall have the following meanings:“*Commission*” means the Securities and Exchange Commission.“*Common Stock*” means shares of the Company’s common stock, par value $0.005 per share.“*Effectiveness Date*” means (i) with respect to the initial Registration Statement required tobe filed hereunder, a date no later than sixty (60) days following the Filing Date; provided,however, if the Registration Statement is subject to a full review by the Commission, a date nolater than one hundred twenty (120) days following the Filing Date and (ii) with respect to eachadditional Registration Statement required to be filed hereunder, a date no later than thirty (30)days following the applicable Filing Date.“*Effectiveness Period*” has the meaning set forth in Section 2(a).“*Exchange Act*” means the Securities Exchange Act of 1934, as amended, and any successorstatute.“*Filing Date*” means, with respect to (i) the Registration Statement required to be filedhereunder in respect of the shares of Common Stock issuable upon exercise of the Warrants issued asof the date hereof, the earlier of (i) the closing of the transaction contemplated by thatAgreement and Plan of Reorganization dated August 8, 2007, between ADSX, Digital Angel Corporation,and Digital Angel Acquisition Corp., or (ii) December 31, 2007, and (ii) the shares of Common Stockissuable upon exercise of any Warrant issued after the date hereof, the date which is sixty (60)days after the date of the issuance of such Warrant, and (iii) the shares of Common Stock issuableto the Holder as a result of adjustments to the Exercise Price made pursuant to the Warrant orotherwise
 
 

 
“*Holder*” or “*Holders*” means the Purchaser or any of its affiliates or transferees to theextent any of them hold Registrable Securities, other than those purchasing Registrable Securitiesin a market transaction.“*Indemnified Party*” has the meaning set forth in Section 6(c).“*Indemnifying Party*” has the meaning set forth in Section 6(c).“*Note*” has the meaning set forth in the Security Agreement.“*Proceeding*” means an action, claim, suit, investigation or proceeding (including, withoutlimitation, an investigation or partial proceeding, such as a deposition), whether commenced or tothe Company’s knowledge threatened.“*Prospectus*” means the prospectus included in the Registration Statement (including, withoutlimitation, a prospectus that includes any information previously omitted from a prospectus filedas part of an effective registration statement in reliance upon Rule 430A promulgated under theSecurities Act), as amended or supplemented by any prospectus supplement, with respect to the termsof the offering of any portion of the Registrable Securities covered by the Registration Statement,and all other amendments and supplements to the Prospectus, including post-effective amendments,and all material incorporated by reference or deemed to be incorporated by reference in suchProspectus.“*Registrable Securities*” means the shares of Common Stock issuable upon exercise of theWarrants.“*Registration Statement*” means each registration statement required to be filed hereunder,including the Prospectus therein, amendments and supplements to such registration statement orProspectus, including pre- and post-effective amendments, all exhibits thereto, and all materialincorporated by reference or deemed to be incorporated by reference in such registration statement.“*Rule 144*” means Rule 144 promulgated by the Commission pursuant to the Securities Act, assuch Rule may be amended from time to time, or any similar rule or regulation hereafter adopted bythe Commission having substantially the same effect as such Rule.“*Rule 415*” means Rule 415 promulgated by the Commission pursuant to the Securities Act, assuch Rule may be amended from time to time, or any similar rule or regulation hereafter adopted bythe Commission having substantially the same effect as such Rule.“*Securities Act*” means the Securities Act of 1933, as amended, and any successor statute.“*Security Agreement*” has the meaning given to such term in the Preamble hereto.“*Trading Market*” means any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market,the NASDAQ National Markets System, the American Stock Exchange or the New York Stock Exchange.
 
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“*Warrants*” means the Common Stock purchase warrants issued in connection with the SecurityAgreement, whether on the date hereof or thereafter.2. **Registration.**(a) On or prior to the Filing Date the Company shall prepare and file with theCommission a Registration Statement covering the Registrable Securities for a sellingstockholder resale offering to be made on a continuous basis pursuant to Rule 415. TheRegistration Statement shall be on Form S-3 (except if the Company is not then eligible toregister for resale the Registrable Securities on Form S-3, in which case such registrationshall be on another appropriate form in accordance herewith). The Company shall cause eachRegistration Statement to become effective and remain effective as provided herein. TheCompany shall use its reasonable commercial efforts to cause each Registration Statement tobe declared effective under the Securities Act as promptly as possible after the filingthereof, but in any event no later than the Effectiveness Date. The Company shall use itsreasonable commercial efforts to keep each Registration Statement continuously effectiveunder the Securities Act until the date which is the earlier date of when (i) allRegistrable Securities have been sold or (ii) all Registrable Securities covered by suchRegistration Statement may be sold immediately without registration under the Securities Actand without volume restrictions pursuant to Rule 144(k), as determined by the counsel to theCompany pursuant to a written opinion letter to such effect, addressed and acceptable to theCompany’s transfer agent and the affected Holders (the “Effectiveness Period”).(b) In no event will the Company be required (i) to pay a penalty for failure to causeeach Registration Statement to be declared effective or for failure to cause eachRegistration Statement to remain effective; and (ii) to pay liquidating damages inconnection with the Warrants(c) Within three business days of the Effectiveness Date, the Company shall cause itscounsel to issue a blanket opinion in the form attached hereto as Exhibit A, to the transferagent stating that the shares are subject to an effective registration statement and can bereissued free of restrictive legend upon notice of a sale by the Purchaser and confirmationby the Purchaser that it has complied with the prospectus delivery requirements, providedthat the Company has not advised the transfer agent orally or in writing that the opinionhas been withdrawn. Copies of the blanket opinion required by this Section 2(c) shall bedelivered to the Purchaser within the time frame set forth above.3. **Registration Procedures**. If and whenever the Company is required by the provisions hereofto effect the registration of any Registrable Securities under the Securities Act, the Companywill, as expeditiously as possible:(a) prepare and file with the Commission a Registration Statement with respect to suchRegistrable Securities, respond as promptly as possible to any comments received from theCommission, and use its reasonable commercial efforts to cause the Registration Statement tobecome and remain effective for the Effectiveness Period withrespect thereto, and promptly provide to the Purchaser copies of all filings andCommission letters of comment relating thereto;
 
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(b) prepare and file with the Commission such amendments and supplements to theRegistration Statement and the Prospectus used in connection therewith as may be necessaryto comply with the provisions of the Securities Act with respect to the disposition of allRegistrable Securities covered by such Registration Statement and to keep such RegistrationStatement effective until the expiration of the Effectiveness Period applicable to suchRegistration Statement;(c) furnish to the Purchaser such number of copies of the Registration Statement andthe Prospectus included therein (including each preliminary Prospectus) as the Purchaserreasonably may request to facilitate the public sale or disposition of the RegistrableSecurities covered by the Registration Statement;(d) use its reasonable commercial efforts to register or qualify the Purchaser’sRegistrable Securities covered by such Registration Statement under the securities or “bluesky” laws of such jurisdictions within the United States as the Purchaser may reasonablyrequest, provided, however, that the Company shall not for any such purpose be required toqualify generally to transact business as a foreign corporation in any jurisdiction where itis not so qualified or to consent to general service of process in any such jurisdiction;(e) list the Registrable Securities covered by such Registration Statement with anysecurities exchange on which the Common Stock of the Company is then listed;(f) promptly notify the Purchaser at any time when a Prospectus relating thereto isrequired to be delivered under the Securities Act, of the happening of any event of whichthe Company has knowledge as a result of which the Prospectus contained in such RegistrationStatement, as then in effect, includes an untrue statement of a material fact or omits tostate a material fact required to be stated therein or necessary to make the statementstherein not misleading in light of the circumstances then existing; and(g) make available for inspection by the Purchaser and any attorney, accountant orother agent retained by the Purchaser, all publicly available, non-confidential financialand other records, pertinent corporate documents and properties of the Company, and causethe Company’s officers, directors and employees to supply all publicly available,non-confidential information reasonably requested by the attorney, accountant or agent ofthe Purchaser.4. **Registration Expenses**. All expenses relating to the Company’s compliance with Sections 2and 3 hereof, including, without limitation, all registration and filing fees, printing expenses,fees and disbursements of counsel and independent public accountants for the Company, fees andexpenses (including reasonable counsel fees) incurred in connection with complying with statesecurities or “blue sky” laws, fees of the NASD, transfer taxes, fees of transfer agents andregistrars, fees of, and disbursements incurred by, one counsel for the Holders, are called“Registration Expenses”. All selling commissions applicable to the sale ofRegistrable Securities, including any fees and disbursements of any special counsel to theHolders beyond those included in Registration Expenses, are called “Selling Expenses.” The Companyshall only be responsible for all Registration Expenses.
 
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5. **Obligations of Each Holder**.In connection with the registration of Registrable Securities pursuant to a RegistrationStatement, each Holder shall:(a) timely furnish to the Company in writing such information regarding itself and theintended method of disposition of such Registrable Securities as the Company shall reasonablyrequest in order to effect the registration thereof;(b) in the event of an underwritten offering of such Registrable Securities in which suchHolder participates pursuant to Section 8(e) hereof, enter into a customary and reasonableunderwriting agreement and execute such other documents (including without limitation “lock-up” andindemnity agreements) as the Company and the managing underwriter for such offering may reasonablyrequest;(c) notify the Company promptly in the event that any information supplied by such Holder inwriting for inclusion in such Registration Statement or related prospectus is untrue or nor omit tostate a material fact required to be stated therein or necessary to make the statements therein, inlight of the circumstances in which they are made, not misleading; immediately discontinue any saleor other disposition of such Registrable Securities pursuant to such Registration Statement untilthe filing of an amendment or supplement to such prospectus as may be necessary so that suchprospectus does not contain an untrue statement of material fact nor omit to state a material factrequired to be stated therein or necessary to make the statements therein, in light of thecircumstances in which they are made, not misleading; and provide the Company with updates on suchinformation as may be appropriate to make such amendment or supplement effective for such purpose;(d) comply with the requirements in Section 8(d) of this Agreement.6. **Indemnification**.(a) In the event of a registration of any Registrable Securities under the SecuritiesAct pursuant to this Agreement, the Company will indemnify and hold harmless the Purchaser,and its officers, directors and each other person, if any, who controls the Purchaser withinthe meaning of the Securities Act, against any losses, claims, damages or liabilities, jointor several, to which the Purchaser, or such persons may become subject under the SecuritiesAct or otherwise, insofar as such losses, claims,
 
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damages or liabilities (or actions in respect thereof) arise out of or are based uponany untrue statement or alleged untrue statement of any material fact contained in anyRegistration Statement under which such Registrable Securities were registered under theSecurities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectuscontained therein, or any amendment or supplement thereof, or arise out of or are based uponthe omission or alleged omission to state therein a material fact required to be statedtherein or necessary to make the statements therein, in light of the circurmstances in whichthey were made, not misleading, and will reimburse the Purchaser, and each such person forany reasonable legal or other expenses incurred by them in connection with investigating ordefending any such loss, claim, damage, liability or action; provided,however, that the Company will not be liable in any such case if and to the extentthat any such loss, claim, damage or liability arises out of or is based upon (i) an untruestatement or alleged untrue statement or omission or alleged omission so made in conformitywith information furnished by or on behalf of the Purchaser or any such in writingspecifically for use in any such document, or (ii) a failure of such person to deliver orcause to be delivered the final Prospectus contained in the Registration Statement and madeavailable by the Company.(b) In the event of a registration of the Registrable Securities under the SecuritiesAct pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company,and its officers, directors and each other person, if any, who controls the Company withinthe meaning of the Securities Act, against all losses, claims, damages or liabilities, jointor several, to which the Company or such persons may become subject under the Securities Actor otherwise, insofar as such losses, claims, damages or liabilities (or actions in respectthereof) arise out of or are based upon any untrue statement or alleged untrue statement ofany material fact which was furnished in writing by the Purchaser to the Company expresslyfor use in (and such information is contained in) the Registration Statement under whichsuch Registrable Securities were registered under the Securities Act pursuant to thisAgreement, any preliminary Prospectus or final Prospectus contained therein, or anyamendment or supplement thereof, or arise out of or are based upon the omission or allegedomission to state therein a material fact required to be stated therein or necessary to makethe statements therein, in light of the circurmstances in which they were made, notmisleading, and will reimburse the Company and each such person for any reasonable legal orother expenses incurred by them in connection with investigating or defending any such loss,claim, damage, liability or action, provided, however, that the Purchaserwill be liable in any such case if and only to the extent that any such loss, claim, damageor liability arises out of or is based upon an untrue statement or alleged untrue statementor omission or alleged omission so made in conformity with information furnished in writingto the Company by or on behalf of the Purchaser specifically for use in any such document.Notwithstanding the provisions of this paragraph, the Purchaser shall not be required toindemnify any person or entity in excess of the amount of the aggregate net proceedsreceived by the Purchaser in respect of Registrable Securities in connection with any suchregistration under the Securities Act.
 
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(c) Promptly after receipt by a party entitled to claim indemnification hereunder (an“Indemnified Party”) of notice of the commencement of any action, suchIndemnified Party shall, if a claim for indemnification in respect thereof is to bemade against a party hereto obligated to indemnify such Indemnified Party (an “IndemnifyingParty”), notify the Indemnifying Party in writing thereof, but the omission so to notify theIndemnifying Party shall not relieve it from any liability which it may have to suchIndemnified Party other than under this Section 6(c) and shall only relieve it from anyliability which it may have to such Indemnified Party under this Section 6(c) if and to theextent the Indemnifying Party is prejudiced by such omission. In case any such action shallbe brought against any Indemnified Party and it shall notify the Indemnifying Party of thecommencement thereof, the Indemnifying Party shall be entitled to participate in and, to theextent it shall wish, to assume and undertake the defense thereof with counsel satisfactoryto such Indemnified Party, and, after notice from the Indemnifying Party to such IndemnifiedParty of its election so to assume and undertake the defense thereof, the Indemnifying Partyshall not be liable to such Indemnified Party under this Section 6(c) for any legal expensessubsequently incurred by such Indemnified Party in connection with the defense thereof; ifthe Indemnified Party retains its own counsel, then the Indemnified Party shall pay allfees, costs and expenses of such counsel, provided, however, that, if thedefendants in any such action include both the Indemnified Party and the Indemnifying Partyand the Indemnified Party shall have reasonably concluded that there may be reasonabledefenses available to it which are different from or additional to those available to theIndemnifying Party or if the interests of the Indemnified Party reasonably may be deemed toconflict with the interests of the Indemnifying Party, the Indemnified Party shall have theright to select one separate counsel and to assume such legal defenses and otherwise toparticipate in the defense of such action, with the reasonable expenses and fees of suchseparate counsel and other expenses related to such participation to be reimbursed by theIndemnifying Party as incurred.(d) In order to provide for just and equitable contribution in the event of jointliability under the Securities Act in any case in which either (i) the Purchaser, or anyofficer, director or controlling person of the Purchaser, makes a claim for indemnificationpursuant to this Section 6 but it is judicially determined (by the entry of a final judgmentor decree by a court of competent jurisdiction and the expiration of time to appeal or thedenial of the last right of appeal) that such indemnification may not be enforced in suchcase notwithstanding the fact that this Section 6 provides for indemnification in such case,or (ii) contribution under the Securities Act may be required on the part of the Purchaseror such officer, director or controlling person of the Purchaser in circumstances for whichindemnification is provided under this Section 6; then, and in each such case, the Companyand the Purchaser will contribute to the aggregate losses, claims, damages or liabilities towhich they may be subject (after contribution from others) in such proportion so that thePurchaser is responsible only for the portion represented by the percentage that the publicoffering price of its securities offered by the Registration Statement bears to the publicoffering price of all securities offered by such Registration Statement, provided,however, that, in any such case, (A) the Purchaser will not be required tocontribute any amount in excess of the public offering price of all such securities offeredby it pursuant to such Registration Statement; and (B) no person or entity guilty offraudulent misrepresentation (within the meaning of Section 10(f) of the Act) will beentitled to contribution from any person or entity who was not guilty of such fraudulentmisrepresentation.
 
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7. **Representations and Warranties**.(a) The Common Stock is registered pursuant to Section 12(b) or 12(g) of the ExchangeAct and, except with respect to certain matters which the Company has disclosed to thePurchaser on Schedule 7, the Company has timely filed all proxy statements, reports,schedules, forms, statements and other documents required to be filed by it under theExchange Act. The Company has filed (i) its Annual Report on Form 10-K for its fiscal yearended December 31, 2006 and (ii) its Quarterly Report on Form 10-Q for the fiscal quartersended March 31, 2007 and June 30, 2007 (collectively, the “SEC Reports”). Each SEC Reportwas, at the time of its filing, in substantial compliance with the requirements of itsrespective form and none of the SEC Reports, nor the financial statements (and the notesthereto) included in the SEC Reports, as of their respective filing dates, contained anyuntrue statement of a material fact or omitted to state a material fact required to bestated therein or necessary to make the statements therein, in light of the circumstancesunder which they were made, not misleading. The financial statements of the Companyincluded in the SEC Reports comply as to form in all material respects with applicableaccounting requirements and the published rules and regulations of the Commission or otherapplicable rules and regulations with respect thereto. Such financial statements have beenprepared in accordance with generally accepted accounting principles (“GAAP”) applied on aconsistent basis during the periods involved (except (i) as may be otherwise indicated insuch financial statements or the notes thereto or (ii) in the case of unaudited interimstatements, to the extent they may not include footnotes or may be condensed) and fairlypresent in all material respects the financial condition, the results of operations and thecash flows of the Company and its subsidiaries, on a consolidated basis, as of, and for, theperiods presented in each such SEC Report.(b) The Common Stock is listed or quoted, as applicable, for trading on the AmericanStock Exchange and satisfies all requirements for the continuation of such listing orquotation, as applicable, and the Company shall do all things necessary for the continuationof such listing or quotation, as applicable. The Company has not received any notice thatits Common Stock will be delisted from or no longer be quoted on, as applicable, theAmerican Stock Exchange (except for prior notices which have been fully remedied) or thatthe Common Stock does not meet all requirements for the continuation of such listing orquotation, as applicable.(c) Neither the Company, nor any of its affiliates, nor any person acting on its ortheir behalf, has directly or indirectly made any offers or sales of any security orsolicited any offers to buy any security under circumstances that would cause the offeringof the Securities pursuant to the Security Agreement to be integrated with prior offeringsby the Company for purposes of the Securities Act which would prevent the Company fromselling the Common Stock pursuant to Rule 506 under the Securities Act, or any applicableexchange-related stockholder approval provisions, nor will the Company or any of itsaffiliates or subsidiaries take any action or steps that would cause the offering of theSecurities to be integrated with other offerings.
 
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(d) The Warrants and the shares of Common Stock which the Purchaser may acquirepursuant to the Warrants are all restricted securities under the Securities Act as of thedate of this Agreement. The Company will not issue any stop transfer order or other orderimpeding the sale and delivery of any of the Registrable Securities at such time as suchRegistrable Securities are registered for public sale or an exemption from registration isavailable, except as required by federal or state securities laws.(e) The Company understands the nature of the Registrable Securities issuable uponexercise of the Warrant and recognizes that the issuance of such Registrable Securities mayhave a potential dilutive effect. The Company specifically acknowledges that its obligationto issue the Registrable Securities is binding upon the Company and enforceable regardlessof the dilution such issuance may have on the ownership interests of other shareholders ofthe Company.(f) Except for agreements made in the ordinary course of business, there is noagreement that has not been filed with the Commission as an exhibit to a registrationstatement or to a form required to be filed by the Company under the Exchange Act, thebreach of which could reasonably be expected to have a material and adverse effect on theCompany and its subsidiaries, or would prohibit or otherwise interfere with the ability ofthe Company to enter into and perform any of its obligations under this Agreement in anymaterial respect.(g) The Company will at all times have authorized and reserved a sufficient number of shares of Common Stock for the full exercise of the Warrants.(h) The Company shall provide written notice to each Holder of (i) the occurrence ofeach Discontinuation Event (as defined below) and (ii) the declaration of effectiveness bythe SEC of each Registration Statement required to be filed hereunder, in each case withinthree (3) business days of the date of each such occurrence and/or declaration.8. **Miscellaneous**.(a) **Remedies**. In the event of a breach by the Company or by a Holder, of any of theirrespective obligations under this Agreement, each Holder or the Company, as the case may be,in addition to being entitled to exercise all rights granted by law and under this Agreementwill be entitled to specific performance of its rights under this Agreement. The failure ofthe Company to cause each Registration Statement to become effective and to remain effectiveas provided herein shall not convey to the Holder(s) any rights to the recovery of monetaryand or liquidated damages.(b) **No Piggyback on Registrations**. Except as and to the extent specified in Schedule7(b) hereto, neither the Company nor any of its security holders (other than the Holders insuch capacity pursuant hereto) may include securities of the Company in any RegistrationStatement other than the Registrable Securities, and the Company shall not after the datehereof enter into any agreement providing any such right for inclusion of shares in theRegistration Statement to any of its security holders. Except as and to theextent specified in Schedule 7(b) hereto, the Company has not previously entered intoany agreement granting any registration rights with respect to any of its securities to anyperson or entity that have not been fully satisfied.
 
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(c) **Compliance**. Each Holder covenants and agrees that it will comply with theprospectus delivery requirements of the Securities Act as applicable to it in connectionwith sales of Registrable Securities pursuant to the Registration Statement.(d) **Discontinued Disposition**. Each Holder agrees by its acquisition of suchRegistrable Securities that, upon receipt of a notice from the Company of the occurrence ofa Discontinuation Event (as defined below), such Holder will forthwith discontinuedisposition of such Registrable Securities under the applicable Registration Statement untilsuch Holder’s receipt of the copies of the supplemented Prospectus and/or amendedRegistration Statement or until it is advised in writing (the “Advice”) by the Company thatthe use of the applicable Prospectus may be resumed, and, in either case, has receivedcopies of any additional or supplemental filings that are incorporated or deemed to beincorporated by reference in such Prospectus or Registration Statement. The Company mayprovide appropriate stop orders to enforce the provisions of this paragraph. For purposesof this Agreement, a “Discontinuation Event” shall mean (i) when the Commission notifies theCompany whether there will be a “review” of such Registration Statement and whenever theCommission comments in writing on such Registration Statement (the Company shall providetrue and complete copies thereof and all written responses thereto to each of the Holders);(ii) any request by the Commission or any other Federal or state governmental authority foramendments or supplements to such Registration Statement or Prospectus or for additionalinformation; (iii) the issuance by the Commission of any stop order suspending theeffectiveness of such Registration Statement covering any or all of the RegistrableSecurities or the initiation of any Proceedings for that purpose; (iv) the receipt by theCompany of any notification with respect to the suspension of the qualification or exemptionfrom qualification of any of the Registrable Securities for sale in any jurisdiction, or theinitiation or threatening of any Proceeding for such purpose; and/or (v) the occurrence ofany event or passage of time that makes the financial statements included in suchRegistration Statement ineligible for inclusion therein or any statement made in suchRegistration Statement or Prospectus or any document incorporated or deemed to beincorporated therein by reference untrue in any material respect or that requires anyrevisions to such Registration Statement, Prospectus or other documents so that, in the caseof such Registration Statement or Prospectus, as the case may be, it will not contain anyuntrue statement of a material fact or omit to state any material fact required to be statedtherein or necessary to make the statements therein, in light of the circumstances underwhich they were made, not misleading.(e) **Piggy-Back Registrations**. If at any time during the applicable EffectivenessPeriod there is not an effective Registration Statement covering all of the RegistrableSecurities required to be covered during such Effectiveness Period and the Company shalldetermine to prepare and file with the Commission a registration statement relating to anoffering for its own account or the account of others under the Securities Act of any of itsequity securities, other than on Form S-4 or Form S-8 (each as
 
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promulgated under the Securities Act) or their then equivalents relating to equitysecurities to be issued solely in connection with any acquisition of any entity or businessor equity securities issuable in connection with stock option or other employee benefitplans, then the Company shall send to each Holder written notice of such determination and,if within ten (10) days after receipt of such notice, any such Holder shall so request inwriting, the Company shall use its commecially reasonable efforts to include in suchregistration statement all or any part of such Registrable Securities such Holder requeststo be registered to the extent the Company may do so without violating registration rightsof others which exist as of the date of this Agreement, subject to customary underwritercutbacks applicable to all holders of registration rights and subject to obtaining anyrequired consent of any selling stockholder(s) to such inclusion under such registrationstatement.If, in connection with any underwritten public offering for the account of the Companyor for stockholders of the Company that have contractual rights to require the Company toregister shares of Common Stock, the managing underwriter(s) thereof shall impose alimitation on the number of shares of Common Stock which may be included in a registrationstatement because, in the judgment of such underwriter(s), marketing or other factorsdictate such limitation is necessary to facilitate such offering, then the Company shall beobligated to include in the registration statement only such limited portion of theRegistrable Securities with respect to which each Holder has requested inclusion hereunderas such underwriter(s) shall permit. Any exclusion of Registrable Securities shall be madepro rata among the Holders seeking to include Registrable Securities in a registrationstatement, in proportion to the number of Registrable Securities sought to be included bysuch Holders; provided, however, that the Company shall not exclude any RegistrableSecurities unless the Company has first excluded all outstanding securities, the holders ofwhich are not entitled to inclusion of such securities in the registration statement or arenot entitled to pro rata inclusion with the Registrable Securities; and provided, further,that, after giving effect to the immediately preceding proviso, any exclusion of RegistrableSecurities shall be made pro rata with holders of other securities having the right toinclude such securities in the registration statement.(f) **Amendments and Waivers**. The provisions of this Agreement, including the provisionsof this sentence, may not be amended, modified or supplemented, and waivers or consents todepartures from the provisions hereof may not be given, unless the same shall be in writingand signed by the Company and the Holders of the then outstanding Registrable Securities.Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof withrespect to a matter that relates exclusively to the rights of certain Holders and that doesnot directly or indirectly affect the rights of other Holders may be given by Holders of atleast a majority of the Registrable Securities to which such waiver or consent relates;provided, however, that the provisions of this sentence may not be amended,modified, or supplemented except in accordance with the provisions of the immediatelypreceding sentence.(g) **Notices**. Any notice or request hereunder may be given to the Company or thePurchaser at the respective addresses set forth below or as may hereafter be specified in anotice designated as a change of address under this Section 8(g). Any
 
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notice or request hereunder shall be given by registered or certified mail, returnreceipt requested, hand delivery, overnight mail, Federal Express or other nationalovernight next day carrier (collectively, “Courier”) or telecopy (confirmed by mail).Notices and requests shall be, in the case of those by hand delivery, deemed to have beengiven when delivered to any party to whom it is addressed, in the case of those by mail orovernight mail, deemed to have been given three (3) business days after the date whendeposited in the mail or with the overnight mail carrier, in the case of a Courier, the nextbusiness day following timely delivery of the package with the Courier, and, in the case ofa telecopy, when confirmed. The address for such notices and communications shall be asfollows:     *If to the Company:*  Digital Angel Corporation  1690 S. Congress Avenue  Suite 201  Delray Beach, FL 33445  Attention: Chief Financial Officer  Facsimile: 561-276-0977     *with a copies to:*  Digital Angel Corporation  1690 S. Congress Avenue  Suite 201  Delray Beach, FL 33445  Attention: Patricia Petersen, Vice President  and General Counsel  Facsimile: 561-276-0977     Holland & Knight LLP  701 Brickell Avenue, Suite 3000  Attention: Kara L. MacCullough  Facsimile: 305-789-7789   *If to a Purchaser:* To the address set forth under such Purchasername on the signature pages hereto.   *If to any other Person who is*  *then the registered Holder:* To the address of such Holder as itappears in the stock transfer books of the Companyor such other address as may be designated in writing hereafter in accordance with thisSection 8(g) by such Person.(h) **Successors and Assigns**. This Agreement shall inure to the benefit of and bebinding upon the successors and permitted assigns of each of the parties and shall inure tothe benefit of each Holder. The Company may not assign its rights or obligationshereunder without the prior written consent of each Holder. Each Holder may assigntheir respective rights hereunder in the manner and to the persons and entities as permittedunder the Warrants.
 
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(i) **Execution and Counterparts**. This Agreement may be executed in any number ofcounterparts, each of which when so executed shall be deemed to be an original and, all ofwhich taken together shall constitute one and the same agreement. In the event that anysignature is delivered by facsimile transmission, such signature shall create a validbinding obligation of the party executing (or on whose behalf such signature is executed)the same with the same force and effect as if such facsimile signature were the originalthereof.(j) **Governing Law, Jurisdiction and Waiver of Jury Trial**. THIS AGREEMENT SHALL BEGOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORKAPPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OFCONFLICTS OF LAW. The Company hereby consents and agrees that the state or federal courtslocated in the County of New York, State of New York shall have exclusion jurisdiction tohear and determine any Proceeding between the Company, on the one hand, and the Purchaser,on the other hand, pertaining to this Agreement or to any matter arising out of or relatedto this Agreement; provided, that the Purchaser and the Company acknowledge that anyappeals from those courts may have to be heard by a court located outside of the County ofNew York, State of New York, and furtherprovided, that nothing in thisAgreement shall be deemed or operate to preclude the Purchaser from bringing a Proceeding inany other jurisdiction to collect the obligations, to realize on the Collateral or any othersecurity for the obligations, or to enforce a judgment or other court order in favor of thePurchaser. The Company expressly submits and consents in advance to such jurisdiction inany Proceeding commenced in any such court, and the Company hereby waives any objectionwhich it may have based upon lack of personal jurisdiction, improper venue or forum nonconveniens. The Company hereby waives personal service of the summons, complaint andother process issued in any such Proceeding and agrees that service of such summons,complaint and other process may be made by registered or certified mail addressed to theCompany at the address set forth in Section 8(g) and that service so made shall be deemedcompleted upon the earlier of the Company’s actual receipt thereof or three (3) days afterdeposit in the U.S. mails, proper postage prepaid. The parties hereto desire that theirdisputes be resolved by a judge applying such applicable laws. Therefore, to achieve thebest combination of the benefits of the judicial system and of arbitration, the partieshereto waive all rights to trial by jury in any Proceeding brought to resolve any dispute,whether arising in contract, tort, or otherwise between the Purchaser and/or the Companyarising out of, connected with, related or incidental to the relationship establishedbetween then in connection with this Agreement. If either party hereto shall commence aProceeding to enforce any provisions of this Agreement, the Security Agreement or any otherAncillary Agreement, then the prevailing party in such Proceeding shall be reimbursed by theother party for its reasonable attorneys’ fees and other costs and expenses incurred withthe investigation, preparation and prosecution of such Proceeding.
 
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(k) **Cumulative Remedies**. The remedies provided herein are cumulative and not exclusiveof any remedies provided by law.(l) **Severability**. If any term, provision, covenant or restriction of this Agreement isheld by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, theremainder of the terms, provisions, covenants and restrictions set forth herein shall remainin full force and effect and shall in no way be affected, impaired or invalidated, and theparties hereto shall use their reasonable efforts to find and employ an alternative means toachieve the same or substantially the same result as that contemplated by such term,provision, covenant or restriction. It is hereby stipulated and declared to be the intentionof the parties that they would have executed the remaining terms, provisions, covenants andrestrictions without including any of such that may be hereafter declared invalid, illegal,void or unenforceable.(m) **Headings**. The headings in this Agreement are for convenience of reference only andshall not limit or otherwise affect the meaning hereof.**[Balance of page intentionally left blank;**