Document:

EXECUTION COPY

                                 ADSX AGREEMENT

                                 BY AND BETWEEN

                         APPLIED DIGITAL SOLUTIONS, INC.

                                       AND

                                  MCY.COM, INC.

                          DATED AS OF OCTOBER 19, 2000

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                                                                  EXECUTION COPY

                                 ADSX AGREEMENT
                                 --------------

         ADSX AGREEMENT dated as of October 19, 2000 (this "Agreement"),  by and
between Applied Digital  Solutions,  Inc., a Missouri  corporation  ("ADSX") and
MCY.com, Inc., a Delaware corporation ("MCY").

                                    RECITALS

         WHEREAS,  ADSX owns or has exclusive rights in "Net-Vu",  a proprietary
technology (the "ADSX Technology"); and

         WHEREAS,  MCY Music World, Inc, a Delaware corporation and wholly-owned
subsidiary  of MCY  ("Music")  wishes  to  obtain  from  ADSX  a  non-exclusive,
perpetual,  fully  paid,  license  for the use of the ADSX  Technology  and ADSX
wishes to grant such a license to Music,  on the same basis,  for such  purposes
only; and

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
legal  adequacy of which is hereby  acknowledged,  the parties  hereby  agree as
follows:

1.       Grant of ADSX License; Consideration, etc.

         (a) Grant of ADSX  License to MCY. For the  consideration  set forth in
Section 1(b) hereof,  ADSX hereby  grants to Music a  non-exclusive,  perpetual,
fully paid,  personal,  limited and transferable license (the "ADSX License") of
the ADSX Technology  pursuant to the terms and conditions of a license agreement
between Music and ADSX in the form of Exhibit A attached hereto.

         (b)  Consideration.  In  consideration  for the ADSX  grant of the ADSX
License,  MCY will: (i) have an obligation to pay to ADSX  $9,000,000 (the "Cash
Consideration");  and (ii) [615,976]  shares of MCY.com,  Inc. common stock (the
"MCY Shares).  The Cash Consideration and the MCY Shares shall be paid by MCY as
invoiced by ADSX.

         (c) Registration  Rights. MCY shall grant to ADSX certain  registration
rights  with  respect to the MCY Shares  under the  Securities  Act of 1933,  as
amended (the "Securities Act"),  pursuant to a registration  rights agreement by
and  between  ADSX and MCY in the form  attached  hereto as  Exhibit B (the "MCY
Registration Rights Agreement").

2.       Representations and Warranties.

         2.1 MCY hereby represents and warrants to ADSX as follows:

         (a)  Organization,  Good Standing and Power.  MCY is a corporation duly
incorporated,  validly existing and in good standing under the laws of the State
of Delaware and has the requisite  corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being  conducted.
MCY does not have any subsidiaries  except as set forth on Schedule 2.1(a).  MCY
and each  such  subsidiary  is duly  qualified  as a foreign

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corporation  to do business  and is in good  standing in every  jurisdiction  in
which the nature of the business  conducted  or property  owned by it makes such
qualification  necessary except for any jurisdiction (alone or in the aggregate)
in which the failure to be so  qualified  will not have a MCY  Material  Adverse
Effect. For the purposes of this Agreement,  "MCY Material Adverse Effect" means
any  adverse  effect on the  business,  operations,  properties,  prospects,  or
financial condition of MCY and its subsidiaries taken as a whole.

         (b)  Authorization;  Enforceability.  MCY has the  requisite  corporate
power and authority to enter into and perform this Agreement,  the ADSX License,
the MCY Registration  Rights Agreement and the Escrow and Payment  Agreement and
all other  agreements,  certificates,  instruments  and  documents  executed  in
connection  therewith  (collectively,  the "MCY  Transaction  Documents") and to
issue  the MCY  Shares  in  accordance  with the terms  hereof.  The  execution,
delivery  and  performance  of the  MCY  Transaction  Documents  by MCY  and the
consummation by it of the transactions contemplated hereby and thereby have been
duly and validly  authorized by all necessary  corporate action,  and no further
consent or  authorization  of MCY or its Board of Directors or  stockholders  as
required. The MCY Transaction Documents have been duly executed and delivered by
MCY.  Each of the MCY  Transaction  Documents  constitutes  a valid and  binding
obligation of MCY enforceable  against MCY in accordance with its terms,  except
as such  enforceability  may be limited by  applicable  bankruptcy,  insolvency,
reorganization,   moratorium,  liquidation,  conservatorship,   receivership  or
similar laws relating to, or affecting  generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.

         (c) Capitalization.  The authorized capital stock of MCY and the shares
thereof currently issued and outstanding as of September 29, 2000, are set forth
on Schedule 2.1(c) hereto.  All of the outstanding  shares of MCY's common stock
have been duly and validly authorized.

         (d) Issuance of Shares. The MCY Shares have been duly authorized by all
necessary  corporate  action and, when paid for or issued in accordance with the
terms  hereof  shall  be  validly  issued  and   outstanding,   fully  paid  and
nonassessable.

         (e) No Conflicts.  The execution,  delivery and  performance of the MCY
Transaction  Documents by MCY or Music, as the case may be, and the consummation
by MCY of the transactions  contemplated  hereby and thereby do not and will not
(i) violate any provision of MCY's Certificate of Incorporation or Bylaws,  (ii)
conflict  with,  or constitute a default (or an event which with notice or lapse
of time or both would become a default)  under,  or give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
mortgage,  deed of trust,  indenture,  note,  bond,  license,  lease  agreement,
instrument  or  obligation  to  which  MCY  is a  party  or by  which  it or its
properties  or assets  are  bound,  (iii)  create  or  impose a lien,  mortgage,
security interest,  charge or encumbrance of any nature on any property or asset
of MCY under any agreement or any commitment to which MCY is a party or by which
MCY is bound or by which any of its  respective  properties or assets are bound,
or (iv) result in a violation of any federal,  state,  local or foreign statute,
rule,  regulation,  order,  judgment  or  decree  (including  federal  and state
securities laws and regulations) applicable to MCY or any of its subsidiaries or
by which any  property or asset of MCY or any of its  subsidiaries  are bound or
affected,  except,  in all cases  other than  violations  pursuant to clause (i)
above, for such conflicts,

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defaults, terminations,  amendments, acceleration,  cancellations and violations
as would not,  individually  or in the  aggregate,  have a MCY Material  Adverse
Effect.  The  business of MCY and its  subsidiaries  is not being  conducted  in
violation of any laws,  ordinances or  regulations of any  governmental  entity,
except for possible  violations  which singularly or in the aggregate do not and
will not have a MCY Material Adverse Effect.  MCY is not required under federal,
state or local law, rule or regulation to obtain any consent,  authorization  or
order of, or make any filing or  registration  with,  any court or  governmental
agency in order for it to  execute,  deliver or perform  any of its  obligations
under the MCY  Transaction  Documents  in  accordance  with the terms  hereof or
thereof (other than any filings which may be required to be made by MCY with the
Commission or state securities  administrators  pursuant to the terms hereof and
any registration statement which may be filed pursuant hereto).

         (f) Commission Documents, Financial Statements. The common stock of MCY
is registered  pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange  Act").  True and complete  copies of the all reports,
schedules, forms, statements and other documents required to be filed by it with
the Commission  pursuant to the reporting  requirements  of the Exchange Act are
available on the Commission's  "electronic data gathering and retrieval" service
("EDGAR").

         (g) No Material Adverse Change.  Since September 30, 2000,  neither MCY
nor its  subsidiaries  has  experienced  or suffered  any MCY  Material  Adverse
Effect, other than a general decline in the stock price of MCY.com,  Inc. common
stock and that MCY continues to incur losses as a result of its operations.

         (h) No Undisclosed Liabilities.  Except as disclosed on Schedule 2.1(h)
hereto,   neither  MCY  nor  any  of  its   subsidiaries  has  any  liabilities,
obligations,  claims or losses (whether  liquidated or unliquidated,  secured or
unsecured, absolute, accrued, contingent or otherwise) other than those incurred
in the ordinary course of MCY's or its subsidiaries  respective businesses since
December 31, 1999 and which,  individually or in the aggregate,  do not or would
not have a MCY Material Adverse Effect on MCY or its subsidiaries.

         (i) Actions Pending.  There is no action,  suit, claim,  investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the  knowledge of MCY,  threatened  against MCY or any  subsidiary  which
questions  the validity of this  Agreement  or any of the other MCY  Transaction
Documents  or any of the  transactions  contemplated  hereby or  thereby  or any
action taken or to be taken pursuant  hereto or thereto.  Except as set forth in
the Commission Filings or on Schedule 2.1(i) hereto,  there is no action,  suit,
claim,  investigation,  arbitration,  alternate dispute resolution proceeding or
other  proceeding  pending or, to the knowledge of MCY,  threatened,  against or
involving  MCY, any subsidiary or any of their  respective  properties or assets
which is likely to have a MCY Material Adverse Effect.  There are no outstanding
orders,  judgments,  injunctions,  awards or decrees of any court, arbitrator or
governmental or regulatory body against MCY or any subsidiary or any officers or
directors of MCY or subsidiary in their capacities as such.

         (j) Compliance with Law. The business of MCY and its subsidiaries  have
been and is presently being conducted in accordance with all applicable federal,
state and local governmental laws, rules, regulations and ordinances,  except as
set  forth on  Schedule  2.1(j)

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hereto  or such  that,  individually  or in the  aggregate,  do not  cause a MCY
Material Adverse Effect.  MCY and each of its subsidiaries  have all franchises,
permits, licenses,  consents and other governmental or regulatory authorizations
and approvals  necessary for the conduct of its business as now being  conducted
by it unless the failure to possess such franchises, permits, licenses, consents
and other governmental or regulatory authorizations and approvals,  individually
or in the  aggregate,  could not  reasonably  be expected to have a MCY Material
Adverse Effect.

         (k) Certain Fees.  Except as set forth on Schedule  2.1(k)  hereto,  no
brokers,  finders or financial  advisory fees or commissions  will be payable by
MCY or any  subsidiary  with respect to the  transactions  contemplated  by this
Agreement.

         2.2  Representations and Warranties of ADSX. ADSX hereby represents and
warrants to MCY as follows:

         (a)  Organization,  Good Standing and Power. ADSX is a corporation duly
incorporated,  validly existing and in good standing under the laws of the State
of Missouri and has the requisite  corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being  conducted.
ADSX  does not have any  subsidiaries  except as set  forth on  Schedule  2.2(a)
hereto. ADSX and each such subsidiary is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which the nature
of the  business  conducted  or  property  owned by it makes such  qualification
necessary except for any  jurisdiction  (alone or in the aggregate) in which the
failure to be so qualified will not have an ADSX Material  Adverse  Effect.  For
the purposes of this Agreement, "ADSX Material Adverse Effect" means any adverse
effect  on  the  business,  operations,   properties,  prospects,  or  financial
condition of ADSX and subsidiaries taken as a whole.

         (b) Authorization;  Enforcement. ADSX has the requisite corporate power
and authority to enter into and perform this  Agreement,  the ADSX License,  the
ADSX Registration  Rights Agreement and the Escrow and Payment Agreement and all
other agreements, certificates, instruments and documents executed in connection
therewith  (collectively,  the "ADSX  Transaction  Documents").  The  execution,
delivery  and  performance  of the ADSX  Transaction  Documents  by ADSX and the
consummation by it of the transactions contemplated hereby and thereby have been
duly and validly  authorized by all necessary  corporate action,  and no further
consent or  authorization  of ADSX or its Board of Directors or  stockholders is
required.  The ADSX Transaction  Documents have been duly executed and delivered
by ADSX. Each of the ADSX Transaction  Documents constitutes a valid and binding
obligation of the ADSX  enforceable  against ADSX in accordance  with its terms,
except  as  such  enforceability  may  be  limited  by  applicable   bankruptcy,
insolvency,    reorganization,    moratorium,   liquidation,    conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor's  rights and remedies or by other equitable  principles of general
application.

         (c) No Conflicts.  The execution,  delivery and performance of the ADSX
Transaction  Documents by ADSX and the  consummation by ADSX of the transactions
contemplated hereby and thereby do not and will not (i) violate any provision of
the ADSX'  Certificate of  Incorporation  or its Bylaws,  (ii) conflict with, or
constitute  a default  (or an event  which with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of

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termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
mortgage,  deed of trust,  indenture,  note,  bond,  license,  lease  agreement,
instrument  or  obligation  to  which  ADSX is a  party  or by  which  it or its
properties  or assets  are  bound,  (iii)  create  or  impose a lien,  mortgage,
security interest,  charge or encumbrance of any nature on any property or asset
of ADSX under any  agreement  or any  commitment  to which ADSX is a party or by
which ADSX is bound or by which any of its  respective  properties or assets are
bound,  or (iv) result in a violation  of any federal,  state,  local or foreign
statute,  rule,  regulation,  order,  judgment or decree (including  federal and
state  securities  laws  and  regulations)  applicable  to  ADSX  or  any of its
subsidiaries  or by  which  any  property  or  asset  of  ADSX  or  any  of  its
subsidiaries are bound or affected,  except,  in all cases other than violations
pursuant  to clause  (i)  above,  for such  conflicts,  defaults,  terminations,
amendments,   acceleration,   cancellations   and   violations   as  would  not,
individually  or in the aggregate,  have an ADSX Material  Adverse  Effect.  The
business of ADSX and its subsidiaries is not being conducted in violation of any
laws,  ordinances or regulations of any governmental entity, except for possible
violations  which singularly or in the aggregate do not and will not have a ADSX
Material Adverse Effect. ADSX is not required under federal, state or local law,
rule or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute,  deliver or perform any of its obligations  under the ADSX  Transaction
Documents in accordance with the terms hereof or thereof (other than any filings
which may be required to be made by ADSX with the Commission or state securities
administrators pursuant to the terms hereof and any registration statement which
may be filed pursuant hereto).

         (d) No Material Adverse Change. Since September 30, 2000, other than as
reported  by ADSX in its  Quarterly  Report  on Form 10-Q for the  period  ended
September  30,  2000,  as  amended  filed  with  the  Commission,  ADSX  has not
experienced or suffered any ADSX Material Adverse Effect.

         (e) Actions Pending.  There is no action,  suit, claim,  investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the knowledge of ADSX,  threatened  against ADSX or any subsidiary  which
questions  the validity of this  Agreement or any of the other ADSX  Transaction
Documents  or any of the  transactions  contemplated  hereby or  thereby  or any
action taken or to be taken pursuant  hereto or thereto.  Except as set forth in
the Commission Filings or on Schedule 2.2(e) hereto,  there is no action,  suit,
claim,  investigation,  arbitration,  alternate dispute resolution proceeding or
other proceeding  pending or, to the knowledge of ADSX,  threatened,  against or
involving ADSX, any subsidiary or any of their  respective  properties or assets
which  is  likely  to  have  an  ADSX  Material  Adverse  Effect.  There  are no
outstanding  orders,  judgments,  injunctions,  awards or  decrees of any court,
arbitrator or  governmental or regulatory body against ADSX or any subsidiary or
any officers or directors of ADSX or subsidiary in their capacities as such.

         (f) Compliance with Law. The business of ADSX and the  subsidiaries has
been and is presently being conducted in accordance with all applicable federal,
state and local governmental laws, rules, regulations and ordinances,  except as
set  forth on  Schedule  2.2(f)  hereto  or such  that,  individually  or in the
aggregate,  do not cause an ADSX Material  Adverse Effect.  ADSX and each of its
subsidiaries  have  all  franchises,   permits,  licenses,  consents  and  other
governmental  or  regulatory  authorizations  and  approvals  necessary  for the
conduct of its  business  as now being  conducted  by it unless  the  failure to
possess such franchises,  permits,

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licenses,  consents and other  governmental  or  regulatory  authorizations  and
approvals, individually or in the aggregate, could not reasonably be expected to
have an ADSX Material Adverse Effect.

         (g) Certain Fees.  Except as set forth on Schedule  2.2(g)  hereto,  no
brokers,  finders or financial  advisory fees or commissions  will be payable by
ADSX or any subsidiary  with respect to the  transactions  contemplated  by this
Agreement.

         (h)  Acquisition  for  Investment.  ADSX is  purchasing  the MCY Shares
solely for its own account for the purpose of investment  and not with a view to
or for sale in  connection  with  distribution.  ADSX  does  not have a  present
intention  to sell the MCY  Shares,  nor a present  arrangement  (whether or not
legally  binding) or  intention to effect any  distribution  of MCY Shares to or
through  any  person  or  entity;   provided,   however,   that  by  making  the
representations  herein,  ADSX  does not  agree to hold the MCY  Shares  for any
minimum  or other  specific  term and  reserves  the right to dispose of the MCY
Shares  at any  time in  accordance  with  federal  and  state  securities  laws
applicable to such  disposition.  ADSX  acknowledges that it is able to bear the
financial risks associated with an investment in MCY Shares and that it has been
given  full  access  to such  records  of MCY and  the  subsidiaries  and to the
officers of MCY and the  subsidiaries as it has deemed  necessary or appropriate
to conduct its due diligence investigation.

         (i) Accredited Investor. ADSX is an "accredited investor" as defined in
Regulation D promulgated  under the  Securities  Act and has such  knowledge and
experience in financial and business  matters that ADSX is capable of evaluating
the merits and risks of ADSX' investment in MCY.

         (j)  Rule  144.  ADSX  understands  that  the MCY  Shares  must be held
indefinitely unless the MCY Shares are registered under the Securities Act or an
exemption from registration is available.  ADSX acknowledges that it is familiar
with  Rule 144 of the rules  and  regulations  of the  Commission,  as  amended,
promulgated  pursuant to the Securities Act ("Rule 144"), and that ADSX has been
advised that Rule 144 permits  resales only under  certain  circumstances.  ADSX
understands  that to the  extent  that Rule 144 is not  available,  ADSX will be
unable  to sell any of the MCY  Shares  without  either  registration  under the
Securities  Act or the  existence of another  exemption  from such  registration
requirement.

         (k)  No  Broker-Dealer   Affiliation.   ADSX  is  not  a  broker-dealer
registered  with the Commission or an affiliate (as such term is defined in Rule
144(a) promulgated under the Securities Act) of a broker-dealer  registered with
the Commission.

         (l) General. ADSX understands that the MCY Shares are being offered and
sold in reliance on a transactional exemption from the registration  requirement
of  federal  and state  securities  laws and MCY is  relying  upon the truth and
accuracy of the  representations,  warranties,  agreements,  acknowledgments and
understandings  of ADSX set forth herein in order to determine the applicability
of such exemptions and the  suitability of ADSX to acquire the MCY Shares.  ADSX
understands  that no United States  federal or state agency or any government or
governmental agency has passed upon or made any recommendation or endorsement of
the MCY Shares.

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         (m) Opportunities for Additional Information. ADSX acknowledges that it
has had the  opportunity to ask questions of and receive answers from, or obtain
additional  information  from,  the  executive  officers of MCY  concerning  the
technology,  financial  and  other  affairs  of MCY,  and to the  extent  deemed
necessary  in light of ADSX'  knowledge  of MCY's  affairs,  ADSX has asked such
questions and received answers to the full satisfaction of MCY, and ADSX desires
to invest in MCY.

         (n) No General Solicitation. ADSX acknowledges that the MCY Shares were
not  offered  to it by means of any form of general  or public  solicitation  or
general   advertising,   or  publicly   disseminated   advertisements  or  sales
literature,   including  (i)  any  advertisement,   article,   notice  or  other
communication  published  in any  newspaper,  magazine,  or  similar  media,  or
broadcast over  television or radio,  or (ii) any seminar or meeting to which it
was invited by any of the foregoing means of communications.

3.       Conditions

         3.1 Conditions Precedent to the Obligations of ADSX. The obligations of
ADSX  hereunder  to grant the ADSX  License are subject to the  satisfaction  or
waiver,  at the Release Date (as such term is hereinafter  defined),  of each of
the conditions set forth below.  These conditions are for ADSX' sole benefit and
may be waived by ADSX at any time in its sole  discretion.  For the  purposes of
this Agreement,  the term "Release Date" shall mean the date on which all of the
conditions set forth in this Section 3 have been fully satisfied.

         (a)  Accuracy  of   Representations   and   Warranties.   Each  of  the
representations  and  warranties  of MCY shall have been true and correct in all
material  respects as of the date hereof and shall be true and correct as of the
Release Date.

         (b)  Performance.  MCY shall have performed,  satisfied and complied in
all respects with all  covenants,  agreements  and  conditions  required by this
Agreement to be  performed,  satisfied or complied with by MCY as of the Release
Date.

         (c) No  Injunction.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

         (d) No Proceedings or Litigation.  No action, suit or proceeding before
any arbitrator or any governmental  authority shall have been commenced,  and no
investigation by any governmental authority shall have been threatened,  against
MCY or any subsidiary, or any of the officers, directors or affiliates of MCY or
any  subsidiary  seeking  to  restrain,   prevent  or  change  the  transactions
contemplated  by this  Agreement,  or seeking  damages in  connection  with such
transactions.

         (e)  ADSX  Agreement.  MCY  shall  have  executed  and  delivered  this
Agreement to ADSX.

         (f) MCY  Registration  Rights  Agreement.  MCY shall have  executed and
delivered the MCY Registration Rights Agreement to ADSX.

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<PAGE>

         (g)  Secretary's  Certificate.  MCY  shall  have  delivered  to  ADSX a
secretary's  certificate,  dated as of the Release Date,  as to (i)  resolutions
adopted by its the Board of Directors  approving the MCY  Transaction  Documents
and  the   transactions   contemplate   therewith,   (ii)  the   Certificate  of
Incorporation  of MCY as in effect as of the Release  Date,  (iii) the Bylaws of
MCY, as in effect as of the Release Date,  and (iv) the authority and incumbency
of the officers of MCY  executing  the MCY  Transaction  Documents and any other
documents required to be executed or delivered in connection therewith.

         3.2  Conditions  Precedent to the  Obligations  of MCY. The  obligation
hereunder  of MCY is subject  to the  satisfaction  or waiver,  at or before the
Release Date, of each of the  conditions set forth below.  These  conditions are
for  MCY's  sole  benefit  and may be  waived  by MCY at any  time  in its  sole
discretion.

         (a)  Accuracy  of   Representations   and   Warranties.   Each  of  the
representations  and  warranties of ADSX shall have been true and correct in all
material  respects as of the date hereof and shall be true and correct as of the
Release Date.

         (b) Performance.  ADSX shall have performed,  satisfied and complied in
all respects with all  covenants,  agreements  and  conditions  required by this
Agreement to be performed,  satisfied or complied with by ADSX as of the Release
Date.

         (c) No  Injunction.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

         (d) No Proceedings or Litigation.  No action, suit or proceeding before
any arbitrator or any governmental  authority shall have been commenced,  and no
investigation by any governmental authority shall have been threatened,  against
ADSX or any subsidiary, or any of the officers,  directors or affiliates of ADSX
or any  subsidiary  seeking to  restrain,  prevent  or change  the  transactions
contemplated  by this  Agreement,  or seeking  damages in  connection  with such
transactions.

         (e)  Secretary's  Certificate.  ADSX  shall  have  delivered  to  MCY a
secretary's  certificate,  dated as of the Release Date,  as to (i)  resolutions
adopted by its the Board of Directors  approving the ADSX Transaction  Documents
and  the   transactions   contemplated   therewith,   (ii)  the  Certificate  of
Incorporation  of ADSX as in effect as of the Release Date,  (iii) the Bylaws of
ADSX, as in effect as of the Release Date, and (iv) the authority and incumbency
of the officers of ADSX executing the ADSX  Transaction  Documents and any other
documents required to be executed or delivered in connection therewith.

4.       Indemnification.

         (a) Survival of Representations and Warranties. The representations and
warranties set forth in Section 2 shall survive until the second  anniversary of
the Release Date.

         (b)  Indemnification  by MCY. MCY agrees to indemnify and hold harmless
ADSX and its directors,  officers,  affiliates,  agents,  successors and assigns
from and against any and all

                                      -8-
<PAGE>

losses,  liabilities,  deficiencies,  costs,  damages and  expenses  (including,
without  limitation,  reasonable  attorney's  fees,  charges and  disbursements)
incurred  by  ADSX  as  a  result  of  any   inaccuracy  in  or  breach  of  the
representations, warranties or covenants made by MCY herein.

         (c) Indemnification by ADSX. ADSX agrees to indemnify and hold harmless
MCY and its directors, officers, affiliates, agents, successors and assigns from
and against any and all losses,  liabilities,  deficiencies,  costs, damages and
expenses (including, without limitation, reasonable attorney's fees, charges and
disbursements) incurred by MCY as a result of any inaccuracy in or breach of the
representations, warranties or covenants made by ADSX herein.

         (d)  Indemnification  Procedure.  Any party entitled to indemnification
under this Section 4 (an  "indemnified  party") will give written  notice to the
indemnifying  party of any matters  giving rise to a claim for  indemnification;
provided, that the failure of any party entitled to indemnification hereunder to
give notice as provided herein shall not relieve the  indemnifying  party of its
obligations  under  this  Section 4 except to the extent  that the  indemnifying
party is actually prejudiced by such failure to give notice. In case any action,
proceeding or claim is brought against an indemnified  party in respect of which
indemnification is sought hereunder, the indemnifying party shall be entitled to
participate in and, unless in the reasonable judgment of the indemnified party a
conflict  of  interest  between  it and the  indemnifying  party may exist  with
respect of such action,  proceeding or claim, to assume the defense thereof with
counsel reasonably  satisfactory to the indemnified party. In the event that the
indemnifying  party  advises an  indemnified  party that it will  contest such a
claim for  indemnification  hereunder,  or  fails,  within  thirty  (30) days of
receipt of any indemnification  notice to notify, in writing, such person of its
election to defend,  settle or  compromise,  at its sole cost and  expense,  any
action,  proceeding or claim (or  discontinues  its defense at any time after it
commences such defense),  then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying  party elects in writing to assume and does so assume
the defense of any such claim,  proceeding or action,  the  indemnified  party's
costs and expenses  arising out of the defense,  settlement or compromise of any
such action,  claim or  proceeding  shall be losses  subject to  indemnification
hereunder.  The indemnified  party shall  cooperate fully with the  indemnifying
party in connection  with any negotiation or defense of any such action or claim
by the  indemnifying  party  and shall  furnish  to the  indemnifying  party all
information  reasonably available to the indemnified party which relates to such
action or claim. The indemnifying  party shall keep the indemnified  party fully
apprised  at  all  times  as to the  status  of the  defense  or any  settlement
negotiations  with respect thereto.  If the indemnifying  party elects to defend
any such  action or claim,  then the  indemnified  party  shall be  entitled  to
participate  in such  defense  with  counsel  of its choice at its sole cost and
expense.  The  indemnifying  party shall not be liable for any settlement of any
action,  claim  or  proceeding  effected  without  its  prior  written  consent.
Notwithstanding  anything in this Section 4 to the  contrary,  the  indemnifying
party shall not, without the indemnified  party's prior written consent,  settle
or compromise  any claim or consent to entry of any judgment in respect  thereof
which imposes any future  obligation on the indemnified  party or which does not
include,  as an  unconditional  term thereof,  the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such claim.  The  indemnification  required  by this  Section 4 shall be made by
periodic  payments of the amount thereof during the course of  investigation  or
defense, as and when bills are received or expense, loss, damage or liability is
incurred,  so long as the indemnified  party  irrevocably  agrees to refund such
moneys if it is ultimately determined

                                      -9-
<PAGE>

by a court of  competent  jurisdiction  that  such  party  was not  entitled  to
indemnification.  The indemnity agreements contained herein shall be in addition
to (a) any cause of action or similar  rights of the  indemnified  party against
the indemnifying party or others, and (b) any liabilities the indemnifying party
may be subject to pursuant to the law.

5.       Miscellaneous.

         (a) Expenses.  All expenses  incurred in connection with this Agreement
shall be paid by the party incurring such expenses.

         (b) Assignment;  Pledge. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors (by merger,
consolidation or sale of all or  substantially  all of the assets of such party)
and  permitted  assigns.  This  Agreement  may not be assigned,  transferred  or
pledged by either party,  without the prior  written  consent of the other party
hereto.

         (c) Governing Law. This Agreement shall be governed by and construed in
accordance  with the laws of the State of New York applicable to agreements made
and to be performed in that state,  without  regard to any of its  principles of
conflicts  of laws or other laws which would  result in the  application  of the
laws of another jurisdiction.  This Agreement shall be construed and interpreted
without regard to any presumption against the party causing this Agreement to be
drafted.

         (d)  Jurisdiction;  Waiver of Jury Trial.  EACH OF THE  PARTIES  HERETO
UNCONDITIONALLY  AND IRREVOCABLY  CONSENTS TO THE EXCLUSIVE  JURISDICTION OF THE
COURTS OF THE  STATE OF NEW YORK  LOCATED  IN NEW YORK  COUNTY  AND THE  FEDERAL
DISTRICT  COURT FOR THE SOUTHERN  DISTRICT OF NEW YORK WITH RESPECT TO ANY SUIT,
ACTION  OR  PROCEEDING  ARISING  OUT OF OR  RELATING  TO THIS  AGREEMENT  OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
CONTEST  THE  VENUE OF SAID  COURTS OR  DISTRICT  OR TO CLAIM  THAT SAID  COURTS
CONSTITUTE AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO AGREES THAT SERVICE
OF ANY SUMMONS, COMPLAINT, NOTICE OR OTHER PROCESS RELATING TO SUCH SUIT, ACTION
OR OTHER PROCEEDING MAY BE EFFECTED IN THE MANNER PROVIDED IN SECTION 5(j). EACH
OF THE PARTIES  HERETO  UNCONDITIONALLY  AND  IRREVOCABLY  WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION,  SUIT OR  PROCEEDING  ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         (e) Entire  Agreement.  This Agreement and any exhibits and attachments
hereto, and the other agreements referred to herein, constitute the complete and
exclusive  understanding  and agreement  between the parties with respect to the
subject matter hereof,  superseding and replacing any and all prior  agreements,
communications,  and  understandings  (both  written  and oral)  regarding  such
subject matter  including,  without  limitation,  the MCY Agreement of even date
herewith by and between MCY and ADSX and the  agreements  contemplated  thereby,
all of

                                      -10-
<PAGE>

which  are  merged   herein.   There  are  no   representations,   promises   or
understandings regarding such subject matter, except to the extent expressly set
forth herein.

         (f)   Remedies   Cumulative;    Invalidity.   All   remedies,   rights,
undertakings,  obligations  and agreements  contained in this Agreement shall be
cumulative,  and none of them shall be in limitation of any other remedy, right,
undertaking,  obligation or agreement available to either of the parties hereto.
The  invalidity,  illegality  or  unenforceability  of  any  term  or  provision
contained in this Agreement (as determined by a court of competent jurisdiction)
shall not affect the validity,  legality or  enforceability of any other term or
provision  hereof.  It is the  intent  of the  parties  that this  Agreement  be
enforced to the fullest extent permitted by applicable law.

         (g)  Waiver.  No course of dealing or  omission or delay of the part of
any  party  hereto  in  asserting  or  exercising  any  rights  hereunder  shall
constitute  or  operation  as a  waiver  of any such  right.  No  waiver  of any
provision  hereof  shall be  effective,  unless in  writing  and signed by or on
behalf  of the  party to be  charged  therewith.  No  waiver  shall be  deemed a
continuing  waiver or waiver in  respect  of any other or  subsequent  breach or
default, unless expressly so stated in writing.

         (h) Amendment. This Agreement may not be modified,  amended, altered or
supplemented,  except by a written  agreement  executed  by each of the  parties
hereto.

         (i) Relationship of Parties.  Nothing  contained herein shall be deemed
to  constitute  a  partnership  between,  or a joint  venture  by or  employment
relationship  between or among the parties hereto. This Agreement is between two
independent  contracting  parties.  Nothing herein is intended nor shall it make
either party a fiduciary of the other party.

         (j) Notices. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the  provisions  of  this  Agreement  or in  connection  with  the  transactions
contemplated  hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (i) if personally  delivered,  on
the  Business  Day (as such term is  hereinafter  defined) of such  delivery (as
evidenced  by the  receipt of the  personal  delivery  service),  (ii) if mailed
certified or registered  mail return receipt  requested,  four (4) Business Days
after being  mailed,  (iii) if delivered by overnight  courier (with all charges
having been prepaid),  on the Business Day of such delivery (as evidenced by the
receipt of the overnight  courier  service of recognized  standing),  or (iv) if
delivered by  facsimile  transmission,  on the Business Day of such  delivery if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time,
on the next succeeding Business Day (as evidenced by the printed confirmation of
delivery  generated by the sending party's telecopier  machine).  If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed  address of which no notice was given (in  accordance  with
this Section 5(j)), or the refusal to accept same, the notice, demand,  consent,
request,  instruction  or other  communication  shall be deemed  received on the
second Business Day the notice is sent (as evidenced by a sworn affidavit of the
sender). For the purposes of this Agreement, the term "Business Day" means a day
other than a Saturday,  Sunday or day on which banking institutions in the State
of New York are authorized or obligated by law or executive order to close.  For
the purposes of this Agreement, if a day referenced herein is not a Business Day
or if a notice is given or delivered on a day which is not a Business  Day, such
day  shall be  deemed  to occur or

                                      -11-
<PAGE>

such notice shall be deemed to be given or delivered on the next  Business  Day.
All  such  notices,  demands,   consents,   requests,   instructions  and  other
communications  will be sent to the following  addresses or facsimile numbers as
applicable:

                  If to MCY or Music:

                  MCY.com, Inc.
                  1133 Avenue of the Americas, 28th Floor
                  New York, New York 10036
                  Telephone: 212-944-6444
                  Facsimile: 212-944-6943
                  Attention:        President

                  with copies to:

                  MCY Music World, Inc.
                  1133 Avenue of the Americas, 28th Floor
                  New York, New York 10036
                  Telephone: 212-944-6444
                  Facsimile: 212-944-6943
                  Attention: Mitchell Lampert, General Counsel

                  and to:

                  Parker Chapin LLP
                  The Chrysler Building,
                  405 Lexington Avenue
                  New York, New York 10174
                  Telephone:  212-704-6050
                  Facsimile:  212-704-6288

                  Attention: Martin Eric Weisberg, Esq.

                  If to ADSX:

                  Applied Digital Solutions, Inc.
                  400 Royal Palm Way, Suite 410
                  Palm Beach, Florida 33480
                  Telephone: 561-366-4800
                  Facsimile: 561-366-0002
                  Attention: David Beckett, General Counsel

                  with a copy to:

                  Bryan Cave LLP
                  245 Park Avenue
                  New York, New York  10167

                                      -12-
<PAGE>

                  Telephone: 212-692-1813
                  Facsimile: 212-692-1900
                  Attention:        Dennis McCusker, Esq.
                                    Robert A. Ansehl, Esq.

or to such other  address as any party may specify by notice  given to the other
party in accordance with this Section 5(j).

         (k) Counterparts.  This Agreement may be executed in counterparts, each
of which,  when taken together,  shall  constitute one and the same  instrument.
Section headings have been inserted herein for convenience of reference only and
shall  not  have  any  impact  on the  construction  or  interpretation  of this
Agreement.

         (l) Publicity; Joint Statements. Each of the parties hereto agrees that
it will not disclose, and will not include in any public announcement, the names
of the other party hereto without the consent of such party,  which consent will
not be  unreasonably  withheld or delayed or unless and until such disclosure is
required by law or  applicable  regulation,  and then only to the extent of such
requirement;  provided,  however,  that if ADSX makes a public announcement with
regarding  the  ADSX  License,  it will  not  disclose  the name of MCY or MCY's
business in such  announcement  and it will  provide MCY with a copy of prior to
the public announcement; provided, further, that ADSX will not disclose the name
of MCY or the MCY  License  in any such  announcement  until  the  Release  Date
without  MCY's  prior  written  consent.  Each of the parties  hereto  agrees to
cooperate  with the other  party to prepare and issue a joint  statement  to the
public  regarding  the  transactions  contemplated  herein  which will be issued
concurrently.  Each of the  parties  hereto  agree  to  cause  their  respective
chairmen and chief executive officers to meet with securities holders of MCY and
ADSX by no later than forty-five (45) days after the Release Date.

         (m) Further Assurances. From and after the date of this Agreement, upon
the request of a party hereto,  the other party shall  executed and deliver such
instrument,  documents  and other  writings as may be  reasonably  necessary  or
desirable  to  confirm  and carry out and to  effectuate  fully the  intent  and
purposes of this Agreement and the other Transaction Documents.

         (n)  Headings.   The  section   headings  in  this  Agreement  are  for
convenience only and shall not constitute a part of this Agreement for any other
purpose and shall not be deemed to limit or affect any of the provisions hereof.

             [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                                      -13-
<PAGE>

                  IN  WITNESS  WHEREOF,  each of MCY and ADSX has duly  executed
this Agreement as of the day and year first above written.

MCY.com, Inc.                                   Applied Digital Solutions, Inc.

By: /s/ Bernhard Fritsch                        By: /s/ Garrett A. Sullivan
   ------------------------                        ---------------------------
     Name: Bernhard Fritsch                        Name: Garrett A. Sullivan
     Title: Chairman and Chief Executive Officer   Title:  President

                                      -14-
<PAGE>

                        Exhibit A. ADSX License Agreement
                        ---------------------------------

                              (copy to be attached)

                  Exhibit B. MCY Registration Rights Agreement
                  --------------------------------------------

                              (copy to be attached)

                                      -15-EXECUTION COPY

                          ESCROW AND PAYMENT AGREEMENT
                          ----------------------------

         ESCROW  AND  PAYMENT  AGREEMENT  dated as of  October  19,  2000  (this
"Agreement"),  by and among  MCY.com,  Inc.,  a  Delaware  corporation  ("MCY"),
Applied Digital Solutions,  Inc., a Missouri  corporation  ("ADSX"),  and Parker
Chapin  LLP, a New York  limited  liability  partnership,  as escrow  agent (the
"Escrow Agent").

                                    RECITALS

         WHEREAS,   concurrently   with  the  execution  and  delivery  of  this
Agreement,  MCY and ADSX are entering  into the MCY  Agreement  dated as of even
date  herewith  (the "MCY  Agreement")  pursuant  to which (i) MCY has agreed to
cause the MCY License (as such term is defined in the MCY Agreement) and the MCY
Technology  (as such term is  defined  in the MCY  Agreement)  and (ii) ADSX has
agreed to cause the ADSX  Shares (as such term is defined in the MCY  Agreement)
to be deposited  into escrow with the Escrow Agent  pursuant to this  Agreement;
and

         WHEREAS, each of MCY and ADSX have agreed that the MCY License, the MCY
Technology,  the MCY  Shares and the ADS Shares  shall be held,  and  ultimately
released,  by the Escrow Agent,  in accordance with and subject to the terms and
provisions contained in this Agreement.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained, and for other good and valuable consideration,  the receipt and legal
sufficiency  of which is hereby  acknowledged,  the  parties  to this  Agreement
hereby  agree  as  follows:

         1. Definitions.  Capitalized terms used in this Agreement which are not
defined herein shall have the same meanings in this Agreement as are ascribed to
such terms in the MCY Agreement.

         2. Creation of Escrow.

                  (a) At the request of MCY and ADSX, the Escrow Agent agrees to
serve as the Escrow Agent hereunder pursuant to the terms and provisions of this
Agreement.

                  (b) Promptly  after the date hereof and in no event later than
October 25, 2000,  (i) MCY shall cause the MCY License,  the MCY  Technology and
(ii) ADSX  shall  cause the ADSX  Shares  (collectively,  the  "Escrow"),  to be
deposited  with the Escrow Agent  pursuant to the terms and  provisions  of this
Agreement.

         3.  Release of the  Escrow.  The Escrow  Agent shall  release  from the
escrow  account and disburse the Escrow,  as follows:
<PAGE>

         (a) Upon receipt of joint written  instructions  from MCY and ADSX that
the Release Date (as such term is hereinafter defined) has occurred,  the Escrow
Agent  shall  release  the ADSX  Shares to MCY and the MCY  License  and the MCY
Technology to ADSX. For the purposes of this Agreement,  the term "Release Date"
shall mean the date on which: (i) the conditions specified in Section 4.1(h) and
4.2(h)  of the MCY  Agreement  have  been  satisfied;  and (ii) MCY  shall  have
received from ADSX a copy of the  confirmation  from the Securities and Exchange
Commission ("Commission") specified in Section 4.2(e) of the MCY Agreement.

         (b) To a court of competent  jurisdiction  in accordance with Section 9
hereof.

         (c) As  instructed,  upon  receipt of a final  non-appealable  order or
judgment of a court of competent jurisdiction, directing the disbursement of all
or any portion of the Escrow.

         (d) As provided in Section 4 hereof.

         4. Early  Termination  of Escrow.  If the Escrow Agent has not received
the joint  written  instructions  contemplated  by  Section  3(b)  hereof by the
Registration  Right  Termination  date  (as  such  term  is  defined  in the MCY
Agreement),  upon receipt of a written notice from MCY (a copy of which shall be
furnished  to ADSX),  the Escrow  shall  terminate  and the Escrow  Agent  shall
furnish  the MCY License and the MCY  Technology  to MCY (ADSX  having no right,
title or interest  therein).  Upon delivery of such notice by MCY, ADSX shall be
obligated  to return the MCY Shares to MCY and MCY shall  return the ADSX Shares
to ADSX whereupon the MCY Receivable shall be deemed to have been paid in full.

         5. Written Instructions/Dispute; etc.

                  (a) To the  extent  all or any  portion of the Escrow is to be
delivered  to  ADSX  pursuant  to  Section  3(a),  ADSX  shall  deliver  written
instructions  to the Escrow Agent and to MCY  requesting  such  disbursement  in
accordance  with the  written  instructions.  If MCY does not  notify the Escrow
Agent  in  writing  within  five  (5)  days  of  its  receipt  of  such  written
instructions  that it  objects  to such  disbursement  in  accordance  with such
instructions  (a "Dispute"),  the Escrow Agent shall make such  disbursement  in
accordance with such instructions.

                  (b) To the  extent  all or any  portion of the Escrow is to be
delivered  to  MCY  pursuant  to  Section  3(a),   MCY  shall  deliver   written
instructions  to the Escrow Agent and to ADSX  requesting  such  disbursement in
accordance  with the  written  instructions.  If ADSX does not notify the Escrow
Agent in writing within five (5) days of its receipt of such written instruction
that there is a Dispute with respect to requested disbursement, the Escrow Agent
shall make such disbursement in accordance with such instructions.

                  (c) Notwithstanding anything to the contrary contained in this
Agreement,  in the event of a Dispute the portion of the Escrow  subject to such
Dispute  shall not be disbursed and shall remain in the escrow  account  pending
final  adjudication by a court of competent  jurisdiction  (from which no appeal
may be taken) or final settlement by ADSX and MCY with respect to such Dispute.

                                      -2-
<PAGE>

         6. Settlement of Disputes.  All  controversies  and matters in question
between any of the parties hereto arising out of or relating to any provision of
this Agreement (or of the MCY Agreement or the ADSX  Agreement,  as the case may
be,  as it  relates  to this  Agreement)  (including,  without  limitation,  any
Disputes) shall be decided as provided in Section 16 hereof.

         7. Termination of Escrow.  This Agreement shall  terminate,  except for
the provisions  contained in Sections 8, 10, 11, 12, 13 and 14 of this Agreement
which provisions shall survive any termination  hereof, upon the disbursement by
the Escrow Agent of any remaining  portion of the Escrow in accordance with this
Agreement.  Notwithstanding  anything to the contrary herein,  this term of this
Agreement  shall terminate by no later than sixty (60) days from the date hereof
unless extended by written consent of each of ADSX and MCY.

         8.  Further  Assurances.  Each of ADSX and MCY agree to do such further
acts and to  execute  and  deliver  such  statements,  assignments,  agreements,
instruments  and other  documents as the Escrow  Agent,  from time to time,  may
reasonably   request  in  connection  with  the   administration,   maintenance,
enforcement  of this Agreement in order (a) to better enable the Escrow Agent to
exercise  any such  right,  power,  privilege,  remedy  or  interest,  or (b) to
otherwise effectuate the purpose and the terms and provisions of this Agreement,
each in such form and  substance as may be  reasonably  acceptable to the Escrow
Agent.

         9. Conflicting Demands. Notwithstanding anything else set forth in this
Agreement,  if  conflicting  or adverse  claims or  demands  are made or notices
served  upon the  Escrow  Agent  with  respect to the Escrow or any action to be
taken by the Escrow Agent hereunder, each of ADSX and MCY agrees that the Escrow
Agent shall be  entitled  to refuse to comply with any request  relating to such
claim or demand and  withhold  and stop all or any  further  performance  of the
Escrow Agent's duties  hereunder.  In so doing, the Escrow Agent shall not be or
become liable for damages, losses, costs, expenses or interest to ADSX or MCY or
any other person for Escrow Agent's  failure to comply with such  conflicting or
adverse  demands.  The Escrow  Agent shall be entitled to continue to so refrain
and refuse to so act until such  conflicting  claims or demands  shall have been
finally determined by a court of competent  jurisdiction (by a final judgment or
determination  from which no appeal may be taken) or shall have been  settled by
agreement  of ADSX and MCY,  in which case the Escrow  Agent  shall be  notified
thereof by a written  notice  signed by ADSX and MCY.  The Escrow Agent may also
elect to  commence an  interpleader  or other  action in any court of  competent
jurisdiction for declaratory judgment or other similar relief for the purpose of
having the respective rights of the claimants adjudicated,  and may deposit with
such court the Escrow  held  hereunder;  and if the  Escrow  Agent so  commences
interpleader  action and deposits the Escrow, the Escrow Agent shall be relieved
and discharged from any further duties and obligations under this Agreement.

         10.  Expenses  of the Escrow  Agent.  ADSX and MCY shall each pay fifty
percent  (50%) of all  out-of-pocket  costs and expenses  incurred by the Escrow
Agent in connection with the performance of its services  hereunder,  including,
without   limitation,   all  waivers,   releases,   discharges,   satisfactions,
modifications  and amendments of this Agreement and the enforcement,  protection
and  adjudication  of the Escrow  Agent's  rights  hereunder by the Escrow Agent
(including,  without limitation,  the out-of-pocket  disbursements of the Escrow
Agent  itself (if the Escrow  Agent acts as its own  counsel)  and  expenses and
costs of attorneys it retains as legal counsel.

                                      -3-
<PAGE>

         11.  Reliance  on  Documents  and  Experts.  The Escrow  Agent shall be
entitled to rely upon any notice, consent,  certificate,  affidavit,  statement,
paper,  document,  writing  or  communication  reasonably  believed  by it to be
genuine and to have been signed,  sent or made by the proper  person or persons,
and upon opinions and advice of legal counsel  (including,  without  limitation,
itself or counsel for any party  hereto),  independent  public  accountants  and
other experts selected by the Escrow Agent.

         12. Status of the Escrow Agent; Waiver of Conflict. The Escrow Agent is
acting under this Agreement as a stakeholder  only. No term or provision of this
Agreement is intended to create,  nor shall any such term or provision be deemed
to have created, any joint venture,  partnership or attorney-client relationship
between or among the  Escrow  Agent and ADSX and MCY,  as the case may be.  This
Agreement  shall not be deemed to  prohibit  or in any way  restrict  the Escrow
Agent's  representation,  as legal  counsel,  of MCY who may be  advised  by the
Escrow  Agent  on any and all  matters  pertaining  to this  Agreement,  the MCY
Agreement,  the ADS Agreement or the transactions  contemplated  thereby. To the
extent MCY has been  represented  by the  Escrow  Agent,  MCY hereby  waives any
conflict of interest and irrevocably  authorizes and directs the Escrow Agent to
carry out the terms and provisions of this  Agreement  fairly as to all parties,
without regard to any such  representation  and  irrespective of the impact upon
MCY.  The  Escrow  Agent's  only  duties are those  expressly  set forth in this
Agreement, and each of ADSX and MCY authorizes the Escrow Agent to perform those
duties in  accordance  with its usual  practices in holding  funds of its own or
those of other escrows.  The Escrow Agent may exercise or otherwise  enforce any
of its rights, powers,  privileges,  remedies and interests under this Agreement
and  applicable  law or perform  any of its duties  under this  Agreement  by or
through its partners, employees, attorneys, agents or designees.

         13.  Exculpation.  The  Escrow  Agent  and  its  designees,  and  their
respective  directors,   officers,  members,  managers,   partners,   employees,
attorneys and agents and the  successors  and assigns of each of them (each,  an
"Exculpated  Person"),   shall  not  incur  any  liability  whatsoever  for  the
investment  or  disposition  of the Escrow or the taking of any other  action in
accordance with the terms and provisions of this  Agreement,  for any mistake or
error in judgment,  for compliance  with any applicable  law,  regulation or any
attachment,   order  or  other   directive  of  any  court  or  other  authority
(irrespective of any conflicting  term or provision of this  Agreement),  or for
any act or  omission  of any other  person  selected  with  reasonable  care and
engaged by the Escrow Agent in connection  with this  Agreement  (except such as
are  occasioned by the Exculpated  Person's own acts and omissions  amounting to
willful misconduct as finally  determined  pursuant to applicable law by a final
judgment of a court of competent jurisdiction from which no appeal may be taken)
and  each of the ADSX and MCY  hereby  waives  any and all  claims  and  actions
whatsoever  against the Exculpated Persons arising out of or related directly or
indirectly to any and all of the foregoing  acts,  omissions and  circumstances.
Furthermore,  the Exculpated  Persons shall not incur any liability  (other than
for such  Exculpated  Person's own acts and omissions  under this  Agreement and
amounting to willful misconduct as finally determined pursuant to applicable law
by a final  judgment of a court of competent  jurisdiction  from which no appeal
may be taken) for other acts and omissions arising out of or related directly or
indirectly  to this  Agreement  or the  performance  by the Escrow  Agent of its
services hereunder.

         14. Indemnification. ADSX and MCY shall jointly and severally indemnify
the Escrow Agent and its designees,  and their respective  directors,  officers,
members, managers,

                                      -4-
<PAGE>

partners, employees, attorneys and agents and the successors and assigns of each
of them (each, an "Indemnified  Person") and shall hold each Indemnified  Person
harmless from and against any and all claims,  liabilities,  damages, penalties,
losses,  costs and expenses  (including,  without  limitation,  reasonable fees,
disbursements  and expenses of attorneys and the reasonable fees,  disbursements
and  expenses  of other  experts)  that may be  imposed  upon,  incurred  by, or
asserted against any Indemnified Person,  arising out of or related to, directly
or  indirectly,  this  Agreement or the  performance  by the Escrow Agent of its
services  hereunder,  except such as are occasioned by the Indemnified  Person's
own acts and omissions  amounting to willful  misconduct  as finally  determined
pursuant  to  applicable  law  by a  final  judgment  of a  court  of  competent
jurisdiction from which no appeal may be taken.

         15. Resignation of Escrow Agent; Appointment of Successor Escrow Agent.
The Escrow Agent may, at any time, at its option,  elect to resign its duties as
Escrow Agent under this Agreement by providing written notice thereof to each of
ADSX and MCY. In such event,  the Escrow  Agent shall  transfer  the Escrow to a
successor  independent  escrow  agent to be appointed by (a) ADSX and MCY within
thirty (30) days following the receipt of notice of resignation  from the Escrow
Agent or (b) the  Escrow  Agent,  if ADSX and MCY  shall  have not  agreed  on a
successor  escrow  agent  within  the  aforesaid  thirty  (30)  day  period,  as
designated by the Escrow Agent in each case upon such  appointment  and delivery
of the Escrow to the successor  Escrow Agent, the Escrow Agent shall be released
of and from all liability under this Agreement;  provided, however, that each of
the  respective  obligations  of ADSX and MCY to pay expenses and to  indemnify,
reimburse, hold harmless and/or defend the Escrow Agent under Sections 10 and 14
hereof shall  continue in full force and effect with respect to any Escrow Agent
resigning  pursuant to this Section 15.

         16. Payment of MCY  Receivable.  Each of MCY and ADSX have entered into
and delivered the ADSX  Agreement (the "ADSX  Agreement")  pursuant to which MCY
has agreed to pay: (i) $9,000,000  (the "MCY  Receivable")  as invoiced by ADSX;
and (ii) to pay  [615,976]  shares  of  MCY.com,  Inc.  common  stock  (the "MCY
Shares") to ADSX in  consideration  of the ADSX  License.

                  (a) Payment from Sale Proceeds. At any time after MCY receives
net proceeds from the sale of the ADSX Shares  following the date that MCY shall
have  previously  received  $2,000,000 of net proceeds from the sale of the ADSX
Shares (each a "Payment Event"), MCY shall pay the amount of the net proceeds so
received to ADSX the  payment of which  shall be applied  against the payment of
the MCY  Receivable.  The amount due to ADSX in  respect of each  Payment  Event
shall be aggregated and paid to ADSX on a monthly basis at the end of each month
in which the Payment Event occurs, if any.

                  (b) If by  June  30,  2001,  MCY  has not  realized  at  least
$11,000,000  in net proceeds  from the sale of the ADSX Shares,  then ADSX shall
have the right,  at its  option,  to assist MCY in causing  the sale of the ADSX
Shares;  provided,  that ADSX shall have received the written  confirmation from
the Commission  contemplated in Section 3(a) of this Agreement.  If by September
30, 2001,  MCY has not paid the MCY Receivable in full, MCY shall either (i) pay
the outstanding balance of the MCY Receivable in cash or (ii) tender to ADSX the
remaining  ADSX Shares not previously  sold;  whereupon in each instance the MCY
Receivable  shall be  deemed  to be paid in full.  In  addition,  if MCY has not
received the net proceeds in the

                                      -5-
<PAGE>

aggregate amount of $11,000,000  from the sale of the ADSX Shares,  then each of
the MCY License and the ADSX License shall  terminate and be of no further force
and effect.

                  (c) In the event of any conflict between the terms of the ADSX
Agreement or any other documents contemplated thereby with respect to payment of
the MCY Receivable, the terms of this Section 16 shall control.

         17.   Notices.   All   notices,   demands,   certificates   and   other
communications  to be given or delivered or permitted  under or by reason of the
provisions  of this  Agreement  shall be in  writing  and  shall be deemed to be
delivered and received by the intended  recipient as follows:  (a) if personally
delivered,  on the Business Day of such delivery (as evidenced by the receipt of
the personal  delivery  service),  (b) if mailed  certified or  registered  mail
return  receipt  requested  (with all postage  prepaid),  four (4) Business Days
after the date set forth on the return  receipt,  (c) if  delivered by overnight
courier service of recognized standing, on the Business Day of such delivery (as
evidenced by the receipt of the overnight courier service),  or (d) if delivered
by facsimile transmission,  on the Business Day of such delivery if sent by 6:00
p.m. in the time zone of the recipient,  or if sent after that time, on the next
succeeding  Business Day (as evidenced by the printed  confirmation  of delivery
generated by the sending party's  telecopier  machine).  If any notice,  demand,
certificate  or other  communication  cannot be  delivered  because of a changed
address of which no notice was given (in  accordance  with this  Section 17), or
the  refusal  to  accept  same,  the  notice,   demand,   certificate  or  other
communication  shall be deemed  received on the  Business Day the notice is sent
(as  evidenced  by the  affidavit  of the sender).  All such  notices,  demands,
certificates and other communications will be sent to the following addresses or
facsimile numbers as applicable:

                  (i)      If to ADSX:

                           Applied Digital Solutions, Inc.
                           400 Royal Palm Way, Suite 410
                           Palm Beach, Florida 33480
                           Telephone: 561-366-4800
                           Fax:  (561) 366-0002
                           Attention:  David Beckett, General Counsel

                           with copies to:

                           Bryan Cave
                           245 Park Avenue
                           New York, New York 10167
                           Telephone: 212-692-1813
                           Fax:  212-692-1900
                           Attention: Dennis McClusker, Esq.
                                             Robert A. Ansehl, Esq.

                  (ii)     If to MCY:

                           c/o MCY Music World, Inc.
                           1133 Avenue of the Americas, 28th Floor

                                      -6-
<PAGE>

                           New York, New York 10036
                           Attention: President

                           with copies to:

                           MCY Music World, Inc.
                           1133 Avenue of the Americas, 28th Floor
                           New York, New York 10036
                           Telephone: 212-944-6444
                           Facsimile: 212-944-6943
                           Attention: Mitchell Lampert, General Counsel

                           and to:

                           Parker Chapin LLP
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, NY  10174

                           Attention:  Martin Eric Weisberg, Esq.
                           Fax:  (212) 704-6288

                  (iii)    If to the Escrow Agent:

                           Parker Chapin LLP
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, NY  10174
                           Attention:  Martin Eric Weisberg, Esq.
                           Fax:  (212) 704-6288

or to such other address or facsimile  number as any party may specify by notice
given to the other party in accordance with this Section 17. For the purposes of
this Agreement, "Business Day" shall mean a day other than a Saturday, Sunday or
day on which  banking  institutions  in the State of New York are  authorized or
obligated  by law or  executive  order  to  close.  For  the  purposes  of  this
Agreement,  if a day  referenced  herein is not a Business Day or if a notice is
given or  delivered  on a day  which is not a  Business  Day,  such day shall be
deemed to occur or such notice  shall be deemed to be given or  delivered on the
next  Business  Day.

         18. Governing Law; No Jury Trial; Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE,  WITHOUT REGARD
TO ANY OF ITS  PRINCIPLES  OF CONFLICTS OF LAWS OR OTHER LAWS WHICH WOULD RESULT
IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.  THIS AGREEMENT SHALL BE
CONSTRUED AND INTERPRETED  WITHOUT REGARD TO ANY  PRESUMPTION  AGAINST THE PARTY
CAUSING THIS AGREEMENT TO BE DRAFTED. EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND  IRREVOCABLY  WAIVES  THE  RIGHT TO A TRIAL BY JURY IN ANY  ACTION,  SUIT OR

                                      -7-
<PAGE>

PROCEEDING  ARISING  OUT OF OR RELATING TO THIS  AGREEMENT  OR THE  TRANSACTIONS
CONTEMPLATED  HEREBY.  EACH  OF  THE  PARTIES  UNCONDITIONALLY  AND  IRREVOCABLY
CONSENTS TO THE  EXCLUSIVE  JURISDICTION  OF THE COURTS OF THE STATE OF DELAWARE
AND THE FEDERAL  DISTRICT COURT FOR THE DISTRICT OF DELAWARE WITH RESPECT TO ANY
SUIT,  ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN ANY SUCH COURT, AND AGREES THAT
SERVICE OF ANY  SUMMONS,  COMPLAINT,  NOTICE OR OTHER  PROCESS  RELATING TO SUCH
SUIT,  ACTION OR OTHER  PROCEEDING  MAY BE  EFFECTED  IN THE MANNER  PROVIDED IN
SECTION 17 HEREOF.

         19.  Binding  Effect;  Amendment.  This  Agreement  and the  rights and
obligations  of the parties  hereto shall be binding upon and shall inure to the
benefit  of each of the  parties  hereto  and their  respective  successors  and
permitted  assigns.  This  Agreement may not be terminated,  modified,  amended,
altered,  supplemented or waived, except by a written agreement executed by each
of the parties hereto.

         20. Severability.  Should any clause, section or part of this Agreement
be held or declared to be void or illegal  for any  reason,  all other  clauses,
sections or parts of this Agreement  shall  nevertheless  continue in full force
and effect.

         21.  Assignability,  etc.  Except  for  the  provisions  relating  to a
successor  Escrow Agent,  neither the rights nor the obligations of any party to
this Agreement may be transferred or assigned.  Any purported assignment of this
Agreement  or any of the rights  and  obligations  hereunder  shall be ab initio
null,  void and of no force or effect.  Except as  provided  in this  Section 21
hereof,  this  Agreement  shall not  create  any right or cause of action in any
person other than the parties hereto.

         22.   Waivers;   Consents.   Any  waiver  or  consent   respecting  any
representation,  warranty, covenant or other term or provision of this Agreement
shall be effective  only in the specific  instance and for the specific  purpose
for which given and shall not be deemed,  regardless of frequency given, to be a
further or continuing waiver or consent.  The failure or delay of a party at any
time or times to require  performance of, or to exercise its rights with respect
to, any  representation,  warranty,  covenant or other term or provision of this
Agreement in no manner  (except as otherwise  expressly  provided  herein) shall
affect  its right at a later  time to  enforce  any such term or  provision.  No
notice to or demand on any party hereto in any case shall  entitle such party to
any  other  or  further  notice  or  demand  in  the  same,   similar  or  other
circumstances.

         23. Entire Agreement;  Conflict. This Agreement,  the MCY Agreement and
the ADSX Agreement  (together with the exhibits and schedules  attached  thereto
and the MCY Transaction  Documents and the ADSX Transaction  Documents delivered
pursuant thereto) contain the entire  understanding and agreement of the parties
with respect to

                                      -8-
<PAGE>

the  subject  matter  hereof and  thereof and they  supersede  all prior  and/or
contemporaneous  understandings  and agreements of any kind and nature  (whether
written  or oral)  between  the  parties  with  respect to such  subject  matter
including,  without  limitation,  the this  Agreement,  all of which are  merged
herein.  Should there be any conflict  between the terms and  provisions of this
Agreement and those of the MCY Agreement and the ADSX  Agreement,  the terms and
provisions of this Agreement shall govern and control.

         24. Headings.  The section headings contained in this Agreement are for
reference   purposes  only  and  shall  not  affect  in  any  way  the  meaning,
construction or interpretation of this Agreement.

         25.  Counterparts.  This  Agreement  may be executed in two (2) or more
counterparts  (including,  by facsimile  signature,  which shall  constitute  an
original  signature for purposes  hereof),  each of which when executed shall be
deemed to be an original, but all of which, when together,  shall constitute one
and the same document.

                           [INTENTIONALLY LEFT BLANK]

                                      -9-
<PAGE>

             IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.

                                  APPLIED DIGITAL SOLUTIONS, INC.

                                  By:/s/ David I. Beckett
                                     -------------------------------------------
                                     Name:   David I. Beckett
                                     Title:  General Counsel

                                  MCY.COM, INC.

                                  By:/s/ Bernhard Fritsch
                                     -------------------------------------------
                                     Name: Bernhard Fritsch
                                     Title: Chairman and Chief Executive Officer

                                  PARKER CHAPIN LLP, AS ESCROW AGENT

                                  By:/s/ Martin Eric Weisberg
                                     -------------------------------------------
                                     Name:   Martin Eric Weisberg
                                     Title: Partner

                                      -10-

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