**Exhibit 10.2**

 

**EMPLOYMENTAGREEMENT**

 

 

THIS AGREEMENT (“Agreement”)  made and enteredinto as of this 1st day of April, 2002,  by and between  DIGITAL ANGEL CORPORATION, a Delawarecorporation (“Company”) and JAMES P. SANTELLI (“Executive”).

 

BACKGROUND

 

Executive has been and presently is employed by Company as its Vice President, Finance andChief Financial Officer. The parties have previously entered into a formalemployment  agreement  dated September 8, 2000 covering the termsand conditions of such employment.  Theparties desire to amend such agreement and to set forth in this document suchagreement, as hereby amended, in its entirety.

 

 

A.            The Executive hasaccepted the Board of Directors’ appointment as the Company’s Chief FinancialOfficer.

 

B.            The Company desiresto assure that Executive provides services to the Company as its employee andthat such employment arrangement have an initial term through March 31,  2005, and Executive desires to be employedby the Company, subject to the terms and conditions set forth in thisAgreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and therespective agreements of the Company and Executive set forth below, and forother good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the Company and Executive, intending to be legally bound,agree as follows:

 

1.             Employment.  The company hereby employs Executive, andExecutive accepts such employment and agrees to perform services for theCompany, for the period and upon the other terms and conditions set forth inthis Agreement.  The Executive shallserve in the employ of the Company as Chief Financial Officer and shall servein any other capacity in the employ of the Company and its subsidiaries towhich the Executive may from time to time be elected or appointed.

 

2.             Term ofEmployment.  Unless terminated at anearlier date in accordance with Section 9 of this Agreement, the term ofExecutive’s employment hereunder shall be for a period of three years, commencingupon the date hereof.  The term ofExecutive’s  employment under thisAgreement shall automatically  be  renewed for  successive  additional one year  terms on eachanniversary of the  commencement ofExecutive’s  employment under thisAgreement, beginning with the April 1, 2003 anniversary  date, each of which terms shall be added atthe end of the then  existing  term (taking  into  account any  prior extensions or failuresto extend),  unless  either party  notifies the other at least 60 days  prior to an anniversary  date of this  Agreement. Such notice, if given by either party and not withdrawn prior to the endof the applicable year, shall be deemed a termination of Executive’s employmentunder this Agreement.

 

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3.             Position andDuties.

 

(a)           Service withCompany.  During the term ofExecutive’s employment with the Company, Executive agrees to perform suchreasonable employment duties as the Board of Directors of the Company shallassign to him from time to time. Executive shall be an executive officer of the Company, Executive’stitle shall be Chief Financial Officer, and he shall assume and discharge theresponsibilities of such offices as set forth in the Company’s Bylaws or asotherwise determined by the Company’s Chief Executive Officer and/or Board ofDirectors.

 

(b)           Performance ofDuties; Performance Review. Executive agrees to serve the Company faithfully and to the best of hisability and to devote his full time, attention and efforts to the business andaffairs of the Company during his employment by the Company.  Executive hereby confirms that he is underno contractual commitments inconsistent with his obligations set forth in thisAgreement.  While he remains employed bythe Company, Executive may participate in other business activities, including,without limitation, reasonable charitable activities and personal investmentactivities, so long as such activities do not interfere with the performance ofhis obligations under this Agreement.

 

4.             Compensation.

 

(a)           Base Salary.  The Company agrees to pay the Executive forhis services hereunder a base salary (the “Base Salary”), which Base Salaryshall be paid in accordance with the Company’s normal payroll procedures andpolicies.  Effective on the date of thisAgreement, the Company shall pay to the Executive a Base Salary at the rate of$175,000 per annum, subject to any required deductions and withholdings.

 

(b)           Benefits.  During the term of Executive’s employmentwith the Company, Executive shall be entitled to participate in any of theCompany’s benefit and deferred compensation plans or programs as are from timeto time available to officers of the Company, including profit–sharing,medical, dental, and health plans, life and disability insurance plans andsupplemental retirement programs (provided, however, that the Executive’sbenefits may be modified or the Executive may be denied participation in anysuch plan or program because of a condition or restriction imposed by law orregulation or third–party insurer or other provider relating toparticipation of officers).  The Companyprovides no assurance as to the adoption or continuance of any particularemployee benefit plan or program, and, except as set forth below, Executive’sparticipation in any such plan or program shall be subject to the provisions,rules and regulations applicable thereto.

 

(c)           Other Perquisites.  The Executive shall be entitled to vacation,office, furniture, and an executive assistant in accordance with the pastpractices of the Company.  In addition, theCompany will pay or reimburse Executive for all reasonable and necessary 

 

 

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out–of–pocketexpenses incurred by him in the performance of his duties under this Agreement,subject to the Company’s normal policies for expense verification.

 

5.             ConfidentialInformation.  Except as permitted bythe Company’s Board of Directors, Executive shall not divulge, furnish or makeaccessible to anyone or use in any way (other than in the ordinary course ofthe business of the Company) any confidential or secret knowledge orinformation of the Company that Executive will acquire during the period of hisemployment by the Company, whether developed by himself or by others,concerning any (i) trade secrets, (ii) confidential or secretdesigns, processes, formulae, plans, devices or material (whether or notpatented or patentable) directly or indirectly useful in any aspect of thebusiness of the Company, (iii) customer or supplier lists of the Company,(iv) confidential or secret development or research work of the Company,or (v) other confidential information or secret aspects of the business ofthe Company.  Executive acknowledgesthat the above–described knowledge or information constitutes a uniqueand valuable asset of the Company and represents a substantial investment oftime and expense by the Company, and that any disclosure or other use of suchknowledge or information other than for the sole benefit of the Company wouldbe wrongful and would cause irreparable harm to the Company.  During the term of this Agreement, Executivewill refrain from any acts or omissions that would reduce the value of suchknowledge or information to the Company. The foregoing obligations of confidentiality shall not apply to any knowledgeor information that (x) is now or subsequently becomes generally publiclyknown in the form in which it was obtained from the Company, (y) isindependently made available to Executive in good faith by a third party whohas not violated a confidential relationship with the Company, or (z) isrequired to be disclosed by legal process, other than as a direct or indirectresult of the breach of this Agreement by Executive.

 

6.             Ventures.  If, during Executive’s employment, Executiveis engaged in or associated with the planning or implementing of any project,program or venture involving the Company and a third party or parties, allrights in such project, program or venture shall belong to the Company.  Except as approved by the Company’s Board ofDirectors, Executive shall not be entitled to any interest in such project,program or venture or to any commission, finder’s fee or other compensation inconnection therewith other than the compensation to be paid to Executive asprovided in this Agreement.  Executiveshall have no interest, direct or indirect, in any vendor or customer of theCompany, unless such interest has been disclosed to and approved by theCompany’s Board of Directors. Notwithstanding the foregoing, however, ownership by Executive, as apassive investment, of less than 3% of the outstanding shares of capital stockof any corporation listed on a national securities exchange or publicly tradedin the over–the counter market shall not constitute a breach of thisSection 6.

 

7.             NoncompetitionCovenant.

 

(a)           Agreement Not toCompete.  During the term ofExecutive’s employment by the Company and for a period of 12 consecutive monthsfrom the date of termination of such employment (whether such termination iswith or without cause, or whether such termination is occasioned by Executiveor the Company), Executive shall not, directly or indirectly, in any place inNorth America, engage in the business that the Company has engaged in at thetime of the termination of Executive’s employment or any part of such business,including the design, 

 

 

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development,manufacture, distribution, marketing, leasing or selling of animalidentification systems, in any manner or capacity, including, but not limitedto, as a proprietor, principal, agent, partner, officer, director, stockholder,employee, member of any association, consultant or otherwise.

 

(b)           Agreement Not toHire.  During the term ofExecutive’s employment by the Company and for a period of 12 consecutive monthsfrom the date of termination of such employment, Executive shall not, directlyor indirectly, hire, engage or solicit any person who is an employee of theCompany.

 

(c)           Limitation onCovenant.  The ownership byExecutive, as a passive investment, of less than 3% of the outstanding sharesof capital stock of any corporation listed on a national securities exchange orpublicly traded in the over–the–counter market shall not constitutea breach of this Section 7.

 

(d)           Acknowledgment.  Executive agrees that the restrictions andagreements contained in this Section 7 are reasonable and necessary toprotect the legitimate interests of the Company and that any violation of thisSection 7 will cause substantial and irreparable harm to the Company thatwould not be quantifiable and for which no adequate remedy would exist at lawand accordingly injunctive relief shall be available for any violation of thisSection 7.

 

(e)           Blue PencilDoctrine.  If the duration orgeographical extent of, or business activities covered by, this Section 7are in excess of what is valid and enforceable under applicable law, then suchprovision shall be construed to cover only that duration, geographical extentor activities that are valid and enforceable. Executive acknowledges the uncertainty of the law in this respect andexpressly stipulates that this Agreement be given the construction whichrenders its provisions valid and enforceable to the maximum extent (notexceeding its express terms) possible under applicable laws.

 

8.             Work Product;Assignment of Inventions.

 

(a)           Work Product.  Executive agrees that, during the term ofthis employment with the Company:

 

                    (i)        He will disclose promptly and fully to the Company all worksof authorship, inventions, discoveries, improvements, designs, processes,software, or any improvements, enhancements, or documentation of or to the samethat he makes, works on or conceives, individually or jointly with others inthe course of his employment by the Company or with the use of the Company’stime, materials or facilities, in any way related or pertaining to or connectedwith the present or anticipated business, development, work or research of theCompany or which result from or are suggested by any work he may do for theCompany and whether produced during normal business hours or on personal time(collectively the “Work Product”);

 

                   (ii)        All Work Product of the Executive shall be deemed to be “workmade for hire” within the meaning of 101 of the Copyright Act and all rights tocopyright shall be 

 

 

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vestedentirely in the Company. If for any reason the Work Product is deemed not to be“work made for hire” and its rights to copyright are thereby in doubt, thisAgreement shall constitute an irrevocable assignment by the Executive to theCompany of all right, title and interest in the copyright of all Work Productcreated under this Agreement. The parties intend that any and all copyright andother intellectual property rights in the Work Product, including withoutlimitation any and all rights of whatever kind and nature now or hereafter todistribute and reproduce such Work Product in any and all media throughout theworld, are the sole property of the Company. The Executive hereby agrees to assist the Company in any manner as shallbe reasonably requested by the Company to protect the Company’s interest insuch legal instruments or documents as the Company shall request in order forthe Company to register the Company’s worldwide copyright and/or the WorkProduct with the U.S. Copyright Office and to register and protect theCompany’s copyright or other intellectual property rights in the Work Productthroughout the world.  Likewise, theExecutive hereby agrees to assist the Company by executing such other documentsand instruments which the Company deems necessary to enable it to evidence,perfect and protect its rights, title and interest in and to the Work Product.

 

                  (iii)        Executive shall make and maintain adequate and currentwritten records and evidence of all Work Product, including drawings, workpapers, graphs, computer records and any other document which shall be andremain the property of the Company, and which shall be surrendered to theCompany upon request and upon the termination of the Executive’s employmentwith the Company, regardless of cause.

 

(b)           Assignmentof Inventions.  Executive agreesthat, during the term of this engagement with Company, Executive may make,develop or conceive of inventions, original works of authorship, developments,concepts, improvements or trade secrets, whether or not patentable orregistrable under copyright or similar laws, which Executive may solely orjointly conceive or develop to reduce to practice, or cause to be conceived ofdeveloped or reduced to practice in connection with the Company’s business,products, or research and development or the services provided by the Executivehereunder (collectively referred to as “Inventions”).  The term “Inventions” further includes any useful process, compositionof matter, software, machine, process, discovery, document or improvement whichrelates to the business activities which Company is or may become engaged.  Executive agrees that it will promptly makefull written disclosure to the Company, will hold in trust for the sole andexclusive right and benefit of the Company and its nominees, and hereby assignsto the Company, or its designee, in perpetuity, all of Executive’s right,title, and interest in and to any and all Inventions, including backgroundinformation necessary to practice such Inventions.

 

                    (i)        Patent and Copyright Registrations.  Company and its nominees shall have theright to use and apply for common law and statutory protections of suchInventions in any and all countries and jurisdictions.  Furthermore, Executive agrees to assist theCompany, or its designee, any copyrights, patents, mask work rights or otherintellectual property rights relating thereto in any and all countries andjurisdictions, including the disclosure to the Company of all pertinentinformation and data with respect thereto, the execution of all applications,specifications, oaths, assignments and all other instruments 

 

 

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whichthe Company shall deem necessary in order to apply for and obtain such rightsand in order to assign and convey to the Company, its successors, assigns andnominees the sole and exclusive right, title and interest in and to suchInventions, including all rights associated with works of authorship throughoutthe world, any copyrights, patents, mask work rights, trade secrets, or otherintellectual property rights relating thereto or analogous to those set forthherein.  Executive further agrees that itsobligation to execute or cause to be executed, when it is in its power to doso, any such instrument or papers shall continue after the termination of thisAgreement.  If the Company is unable,for any reason, to secure Executive’s signature to apply for or to pursue anyapplication for any United States or foreign patents or copyright registrationscovering Inventions or original works of authorship assigned to the Company asabove, then Executive hereby irrevocably designate and appoint the Company andits duly authorized officers and agents as Executive’s agent and attorney infact, to act for and in Executive’s behalf and stead to execute and file anysuch applications and to do all other lawfully permitted acts to further theprosecution and issuance of letters patent or copyright registrations thereonwith the same legal force and effect as if executed by Executive.  The foregoing rights shall also apply to anydivisions, continuations, renewals, reissues and extensions of the foregoing,as applicable, now existing or hereafter filed, issued or acquired.

 

                   (ii)        Inventions Retained and Licensed.  Executive has attached hereto, as ExhibitA, a list describing al inventions, original works of authorship,developments, improvements, and trade secrets which were made by Executiveprior to its engagement with the Company, which belong to Executive, whichrelate to the Company’s business, products or research and development, andwhich are not assigned to the Company hereunder (collectively referred to as“Prior Inventions”); or, if no such list is attached, Executive represents thatthere are no such Prior Inventions.  Ifin the course of Executive’s engagement with the Company, Executiveincorporates into any inventions, improvement, development, product, copyrightablematerial or trade secret any invention, improvement, development, concept,discovery or other proprietary information owned by Executive or in whichExecutive has an interest, the Company is hereby granted and shall have anonexclusive, royalty–free, irrevocable, perpetual, worldwide license tomake, have made, modify, use and sell such item as part of or in connectionwith such product, process or machine.

 

                  (iii)        Inventions Assigned to the United States.  Executive agrees to assign to the UnitedStates government all of Executive’s right, title, and interest in and to anyand all Inventions whenever such full title is required to be in the UnitedStates by a contract between the Company and the United States or any of itsagencies.

 

                  (iv)        Maintenance of Records.  Executive agrees to keep and maintain adequate and currentwritten records of all Inventions made by it (solely or jointly with others)during the term of its engagement with the Company.  The records will be in the form of notes, sketches, drawings, andany other format that may be specified by the Company.  The records will be available to and remainthe sole property of the Company at all times.

 

 

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9.             Terminationof Employment.

 

(a)           Groundsfor Termination.  Executive’s employmentshall terminate prior to the expiration of the initial term set forth inSection 2 or any extension thereof in the event that at any time:

 

                    (i)        Executive shall die;

 

                   (ii)        The Board of Directors of the Company shall determine that:

 

(x)            Executive has engaged in willful and material misconduct,including fraud or embezzlement, or conviction of a felony or a grossmisdemeanor, or has engaged in gross neglect of his duties as an officer oremployee of the Company; or

 

(y)           Executive has breached this Agreement in any materialrespect, which breach is not cured by Executive or is not capable of beingcured by Executive within 30 days after written notice of such breach isdelivered to Executive.

 

                  (iii)        The Board of Directors shall determine that Executive hasfailed, by reason of illness, incapacity or disability, to render services ofthe character contemplated by this Agreement for at least 180 days during any360–day period;

 

                  (iv)        The Board of Directors shall terminate Executive’s employmentother than pursuant to clause (ii) above, including delivery of a notice ofnonrenewal given by the Company pursuant to Section 2 of this Agreement;or Executive terminates his employment for “Good Reason.”  For purposes of this Agreement, “GoodReason” means a material breach of this Agreement by the Company not caused byExecutive (including, without limitation, a material reduction in Executive’sduties or responsibilities without Executive’s consent, or a materialdiminution in the compensation or benefits payable to Executive)  which breach has not been cured within 15days after written notice thereof by the Executive to the Company; or

 

                   (v)        The Executive shall terminate his employment other than forGood Reason.

 

(b)           Entitlementto Accrued Compensation.  If Executive’semployment by the Company is terminated by the Company pursuant to Section9(a)(ii) or by the Executive pursuant to Section 9(a)(v), Executive’s rights topay and benefits shall cease on the date his employment under this Agreementterminates, and he shall be paid all accrued Base Salary, any vested deferredcompensation (other than pension plan or profit–sharing plan benefits,which will be paid in accordance with the applicable plan), any benefits thendue under Section 4(b) of this Agreement, accrued vacation pay, and anyappropriate business expenses incurred by the Executive in connection with hisduties hereunder, all to the effective date of termination (collectively, the“Accrued Compensation”), but no other compensation or reimbursement of anykind.

 

 

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(c)           SalaryContinuation.  If Executive’semployment by the Company is terminated by the Company pursuant toSection 9(a)(i), Section 9(a)(iii), or Section 9(a)(iv), or by theExecutive for Good Reason pursuant to Section 9(a)(iv), the Company shall payto the Executive all Accrued Compensation to the effective date of termination,and the Company shall continue to pay to Executive his then effective BaseSalary (less any payments received by Executive from any disability incomeinsurance policy provided to him by the Company) and shall continue to provideall  benefits to Executive pursuant toSection 4(b) for the remaining term (including any extensions) of thisAgreement. No deduction shall be made by the Corporation under this Section forany compensation earned by the Executive from any other employment or for anyother monies otherwise received by the Executive subsequent to termination ofemployment hereunder

 

(d)           Release.  The payment of any amounts to Executiveunder Section 9(b) or Section 9(c) or otherwise after termination ofExecutive’s employment with the Company shall be conditioned upon the Companyreceiving a full and complete release from Executive of any current or futureclaims Executive may have against the Company, its officers and directors andother Company affiliates other than (i) with respect to the payment ofamounts specifically provided for herein, (ii) pursuant to rights ofindemnification under the Company’s Certificate of Incorporation or by–laws,or (iii) pursuant to the terms of any employee benefit plan of the Companyin which Executive is a participant.  Ifthe Company requires that Executive provide the release discussed in the priorsentence as a condition to making any payments hereunder, and if Executivedelivers such a release, then the Company shall also be required to give toExecutive a full and complete release of any current or future claims theCompany may have against Executive other than under Sections 5, 6, 7, 8and 9(e) of this Agreement.

 

(e)           Surrenderof Records and Property.  Upontermination of his employment with the Company, Executive shall deliverpromptly to the Company all records, manuals, books, blank forms, documents,letters, memoranda, notes, notebooks, reports, data, tables, calculations orcopies thereof that relate in any way to the business, products, practices ortechniques of the Company, and all other property, trade secrets andconfidential information of the Company, including, but not limited to, alldocuments that in whole or in part contain any trade secrets or confidentialinformation of the Company, which in any of these cases are in his possessionor under his control.

 

 

10.           Changeof Control.

 

 

 (a)Notwithstanding  any other  provision of this Agreement, should a Change of Control (as defined below) occur,Executive, at his sole option and discretion, may terminate his employmentunder this Agreement at any time within one year after such change ofcontrol  upon 15 days  notice. In the event of such termination, Company shall pay to Executive aseverance payment equal to the amount described in section 9(c) as the base  amount as defined in Section  280G(b)(3) of the Internal  Revenue Code of1986, as amended  (“Code”)  minus $1.00 which shall be payable  no later than one month  after the  effective date of the  Executive’stermination of employment. In addition, in the event of a Change of Control,all outstanding  

 

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stock options held by Executive  shall become fully exercisable (to theextent not already  exercisable).   For purposes of this Agreement, a “Changein Control” shall be deemed to have occurred if (a) any “person” or “group”(within the meaning of Sections 13 (d) and 14(d)(2) of the Exchange Act of 1934(the “1934 Act”), other than a trustee or other fiduciary holding securitiesunder an employee benefit plan of the Corporation is or becomes the “beneficialowner” (as defined in Rule 13d–3 under the 1934 Act), directly orindirectly, of more than 33–1/3 of the then outstanding voting stock ofthe Corporation; or (b) at any time during any period of three consecutiveyears, individuals who at the beginning of such period constituted the Board ofDirectors (and any new director whose election by the Board or whose nominationfor election by the Corporation’s stockholders was approved by a vote of atleast two–thirds of the directors then still in office who either weredirectors at the beginning of such period or whose election or nomination forelection was previously so approved) cease for any reason to constitute amajority thereof; or (c) the stockholders of the Corporation approve a mergeror consolidation of the Corporation with any other corporation, other than amerger or consolidation which would result in the voting securities of theCorporation outstanding immediately prior thereto continuing to represent(either by remaining outstanding or by being converted into voting securitiesof the surviving entity) at least 80% of the combined voting power of thevoting securities of the Corporation or such surviving entity outstandingimmediately after such merger or consolidation.

 

11.           Remedies.

 

(a)           Remedies.  Executive acknowledges that it would bedifficult to fully compensate the Company for damages resulting from any breachby him of the provisions of Sections 5, 6, 7, 8 and 9(e) of thisAgreement.  Accordingly, in the event ofany actual or threatened breach of such provisions, the Company shall (in additionto any other remedies it may have) be entitled to temporary and/or permanentinjunctive and other equitable relief to enforce such provisions, and suchrelief may be granted without the necessity or proving actual damages.

 

(b)           Arbitration.  Except for disputes arising underSections 5, 6, 7, 8 or 9(e) hereof, all disputes arising under thisAgreement shall be submitted to final and binding arbitration in Minneapolis,Minnesota.  The arbitrator shall be selectedand the arbitration shall be conducted pursuant to the then most recentEmployment Dispute Resolution Rules of the American ArbitrationAssociation.  The decision of thearbitrator shall be final and binding, and any court of competent jurisdictionmay enter judgment upon the award.  Allfees and expenses of the arbitrator shall be shared equally by Executive andthe Company.  The arbitrator shall havejurisdiction and authority to interpret and apply the provisions of thisAgreement and relevant federal, state and local laws insofar as necessary tothe determination of the dispute and to remedy any breaches of the Agreementand/or applicable laws, but shall not have jurisdiction or authority to awardpunitive damages or alter in any way the provisions of this Agreement.  The arbitrator shall have the authority toaward attorneys= fees and costs to the prevailing party.  The parties agree that this arbitrationprovision shall be in lieu of any claims procedure which may be required underfederal law.

 

 

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12.           Miscellaneous.

 

(a)           GoverningLaw.  All matters relating to theinterpretation, construction, validity and enforcement of this Agreement shallbe governed by the internal laws of the State of Minnesota without givingeffect to any choice or conflict of law provision or rule (whether of the Stateof Minnesota or any other jurisdiction) that would cause the application oflaws of any jurisdiction other than the State of Minnesota.

 

(b)           EntireAgreement.  This Agreement containsthe entire agreement of the parties relating to the subject matter hereof andsupersedes all prior agreements and understandings with respect to such subjectmatter, and the parties hereto have made no agreements, representations orwarranties relating to the subject matter of this Agreement which are not setforth herein.

 

(c)           Amendments.  No amendment or modification of thisAgreement shall be deemed effective unless made in writing and signed by theparties hereto.

 

(d)           NoWaiver.  No term or condition ofthis Agreement shall be deemed to have been waived, nor shall there be anyestoppel to enforce any provisions of this Agreement, except by a statement inwriting signed by the party against whom enforcement of the waiver or estoppelis sought.  Any written waiver shall notbe deemed a continuing waiver unless specifically stated, shall operate only asto the specific term or condition waived, and shall not constitute a waiver ofsuch term or condition for the future or as to any act other than thatspecifically waived.

 

(e)           OtherEmployment or Consulting Agreements. Executive represents and warrants that (i) Executive has terminated allother employment or consulting agreements he has previously entered into withDestron Fearing Corporation or any other entity and (ii) neither Executive norDestron Fearing has any obligations under such agreements following theirtermination.

 

(f)            Assignment.  This Agreement shall not be assignable, inwhole or in part, by either party without the written consent of the otherparty, except that the Company may, without the consent of Executive, assignits rights and obligations under this Agreement to any corporation, firm orother business entity with or into which the Company may merge or consolidate,or to which the Company may sell or transfer all or substantially all of itsassets, or of which 50% or more of the equity investment and of the votingcontrol is owned, directly or indirectly, by, or is under common ownershipwith, the Company.  After any suchassignment by the Company, the Company shall be discharged from all furtherliability hereunder, and such assignee shall thereafter be deemed to be theCompany for the purposes of all provisions of this Agreement, including thisSection.

 

(g)           Counterparts.  This Agreement may be executed in any numberof counterparts, and such counterparts executed and delivered, each as anoriginal, shall constitute but one and the same instrument.

 

(h)           Severability.  Subject to Section 7(f), to the extentany provision of this Agreement shall be invalid or unenforceable, it shall beconsidered deleted herefrom and the remainder of such provision and of thisAgreement shall be unaffected and shall continue in full force and effect.

 

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(i)            Captionsand Headings. The captions and paragraph headings used in this Agreementare for convenience of reference only and shall not affect the construction orinterpretation of this Agreement or any of the provisions hereof.

 

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IN WITNESS WHEREOF, Executive and the Companyhave executed this Agreement as of the date set forth in the first paragraph.

 
|   | **DIGITAL ANGEL CORPORATION** |
|--------|-------------------------------|
|   |                          |
|   | By                            |   |
|   |                          | Randolph  K. Geissler, CEO & President |
|   |                          |
|   |                          |
|   | James  P. Santelli            |
|        |                               |  |  |

 

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