Document:

Exhibit 10.2

    
      

    

     

    Exhibit
      10.2

    

    APPLIED
      DIGITAL SOLUTIONS, INC.

     

    REGISTRATION
      AGREEMENT

     

    THIS
      REGISTRATION AGREEMENT (this “Agreement”)
      is
      made as of June 10, 2005 between Applied Digital Solutions, Inc., a
      Missouri corporation, (the
      “Company”),
      and
      Perceptis, L.P., a Delaware limited partnership (the “Stockholder”).

     

    The
      parties to this Agreement are parties to a Share Purchase Agreement of even
      date
      herewith (the “Purchase
      Agreement”).
      In
      order to induce the Stockholder to enter into the Purchase Agreement, the
      Company has agreed to provide the registration rights set forth in this
      Agreement. The execution and delivery of this Agreement is a condition to the
      Closing under the Purchase Agreement. Unless otherwise provided in this
      Agreement, capitalized terms used herein shall have the meanings set forth
      in
Section
      9
      hereof.

     

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

     

      1.
      Required
      Registration.

     

      (a)
      Filing
      of Registration Statement.
      The
      Company shall prepare and file with the Securities and Exchange Commission
      a
      registration statement under the Securities Act on Form S-1, or, if
      available, Form S-2 or S-3, pursuant to Rule 415 under the Securities
      Act
      registering all Registrable Securities (the “Required
      Registration”)
      and
      shall use its reasonable efforts to have such Required Registration declared
      effective under the Securities Act no later than 30 days after the first to
      occur of the Election Date and the VeriChip Exchange Date; provided,
      however,
      that
      the Company shall cause such Required Registration to be declared effective
      under the Securities Act no later than the Effective Date. “Effective
      Date”
      means
      the date which is 90 days after the first to occur of the Election Date and
      the
      VeriChip Exchange Date. 

     

      (b)
      Effective
      Period; Draw-downs.
      After
      the Effective Date, the Company shall cause such Required Registration to remain
      effective for a period ending on the earlier of (i) the second anniversary
      of the effectiveness of the Required Registration, (ii) the date on which all
      Registrable Securities have been sold pursuant to the Required Registration,
      (iii) the date as of which there are no longer any Registrable Securities
      in existence and (iv) the date which is one calendar quarter after the
      date
      on which all such Registrable Securities are eligible to be sold pursuant to
      Rule 144 (the “Effective
      Period”).
      So
      long as such Required Registration is effective as required herein and in
      compliance with the Securities Act and usable for resale of Registrable
      Securities, the holders of Registrable Securities shall be entitled to demand
      any number of draw-downs (including underwritten draw-downs, provided that
      the
      aggregate offering value of the Registrable Securities requested to be included
      in such underwritten draw-down must equal at least $750,000) from such Required
      Registration and, in connection with any such draw-down, the Company shall
      take
      all customary and reasonable actions that the Company would take in connection
      with an underwritten registration (including, without limitation, all actions
      referred to in Section
      4
      necessary to effectuate such sale in the manner determined by the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    holders
      of at least a majority of the Registrable Securities to be included in such
      underwritten draw-down) as any holder reasonably requests. Notwithstanding
      anything to the contrary herein, the Company shall not include any other
      securities in such underwritten draw-downs.

     

      (c)
      Selection
      of Underwriter.
      The
      holders of at least a majority of Registrable Securities shall have the right
      to
      retain and select an investment banker and manager to administer any
      underwritten draw-downs in connection with the Required Registration, subject
      to
      the Company’s approval which shall not be unreasonably withheld or
      delayed.

     

      (d)
      Required
      Registration Expenses.
      As
      further provided in Section
      5
      below,
      all Registration Expenses incurred in connection with the Required Registration
      (whether incurred by the Company or the holders of Registrable Securities)
      shall
      be borne by the Company (including, without limitation, all fees and expenses
      of
      investment bankers and underwriters).

     

      2.
      Piggyback
      Registrations.

     

      (a)
      Right
      to Piggyback.
      Whenever on or after the first to occur of the Election Date and the VeriChip
      Exchange Date the Company proposes to register any of its securities under
      the
      Securities Act in an underwritten offering (other than pursuant to a Required
      Registration or a registration on Form S-8 or any successor form or any Excluded
      Registration) and the registration form to be used may be used for the
      registration of Registrable Securities (a “Piggyback
      Registration”),
      the
      Company shall give prompt written notice (in the case of any exercise of demand
      registration rights, in any event within three business days after its receipt
      of the demand notice) to all holders of Registrable Securities of its intention
      to effect such a registration and, subject to the terms of Sections
      2(c)
      and
2(d)
      hereof,
      shall include in such registration (and in all related registrations or
      qualifications under blue sky laws or in compliance with other registration
      requirements and in any related underwriting) all Registrable Securities with
      respect to which the Company has received written requests for inclusion therein
      within 20 days after the receipt of the Company’s notice.

     

      (b)
      Piggyback
      Expenses.
      The
      Registration Expenses of the holders of Registrable Securities shall be paid
      by
      the Company in all Piggyback Registrations.

     

      (c)
      Priority
      on Primary Registrations.
      If a
      Piggyback Registration is an underwritten primary registration on behalf of
      the
      Company, and the managing underwriters advise the Company in writing that in
      their opinion the number of securities requested to be included in such
      registration exceeds the number of securities which can be sold in such offering
      without adversely affecting the offering, the Company shall include in such
      registration (i) first, the securities the Company proposes to sell, (ii)
      second, the Registrable Securities requested to be included in such
      registration, pro rata among the holders of such Registrable Securities on
      the
      basis of the number of shares requested to be included therein by each such
      holder, and (iii) third, other securities requested to be included in
      such
      registration.

     

      (d)
      Priority
      on Secondary Registrations.
      If a
      Piggyback Registration is an underwritten secondary registration on behalf
      of
      holders of the Company’s securities, and the managing underwriters advise the
      Company in writing that in their opinion the number of

     

    
      
        
        

      

      
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    securities
      requested to be included in such registration exceeds the number which can
      be
      sold in such offering without adversely affecting the offering, the Company
      shall include in such registration (i) first, the securities requested to be
      included therein by the holders requesting such registration and the Registrable
      Securities requested to be included in such registration, pro rata among the
      holders of such securities on the basis of the number of securities so requested
      to be included therein by each such holder, and (ii) second, other securities
      requested to be included in such registration.

     

      3.
      Black
      Out Periods.
      If, at
      any time during which a prospectus for a Required Registration is required
      to be
      delivered in connection with the sale of any Registrable Securities, the Company
      reasonably determines in good faith and upon the advice of its outside legal
      counsel that a development has occurred or a condition exists as a result of
      which the prospectus contains a material misstatement or omission, or that
      a
      material transaction in which the Company is engaged or proposes to engage
      would
      require an amendment to the prospectus or registration statement, a supplement
      to the applicable registration statement and related prospectus, or a filing
      under the Exchange Act or other public disclosure of material information and
      the disclosure of such transaction would be materially premature or materially
      injurious to the consummation of the transaction, the Company will promptly
      so
      notify in writing the holders of the Registrable Securities included in the
      Required Registration. Upon receipt of such notification, such holders and
      their
      affiliates will immediately suspend all offers and sales of Registrable
      Securities pursuant to such registration statement. In such event, the Company
      will amend or supplement the applicable registration statement and related
      prospectus or make such filings or public disclosures as promptly as practicable
      consistent with the restrictions set forth in this Section 3
      and will
      use its best efforts to take such other steps as may be required to permit
      sales
      of the Registrable Securities thereunder by the holders of Registrable
      Securities whose Registrable Securities are included in the Required
      Registration and its affiliates in accordance with applicable federal and state
      securities laws as promptly as practicable. The Company will promptly notify
      the
      holders of Registrable Securities whose Registrable Securities are included
      in
      the Required Registration after it has determined in good faith that such sales
      have become permissible in such manner and will promptly deliver copies of
      the
      prospectus (as so amended or supplemented, if applicable) to the holders of
      Registrable Securities whose Registrable Securities are included in the Required
      Registration. Notwithstanding the foregoing, under no circumstances other than
      a
      Required Suspension will the Company be entitled to exercise its right to
      suspend offers and sales of any Registrable Securities pursuant to the Required
      Registration as provided in this Section
      3
      (x) for more one time or for a period of greater than five trading days
      during the 60 trading days immediately following the effectiveness of the
      Required Registration, (y) more than twice in the 180 trading days
      immediately subsequent to the 60 trading days immediately following the
      effectiveness of the Required Registration or for a period of greater than
      60
      total trading days during such 180-trading day period, or (z) more than
      twice or for a period greater than 60 trading days in any twelve-month period
      beginning after the 60 trading days immediately subsequent to the effectiveness
      of the Required Registration. In the case of any Required Suspension, the
      Company will use its reasonable efforts to avoid or overcome or satisfy the
      legal requirement and lift the resulting suspension of offers and sales pursuant
      to the Required Registration as soon as practicable. For purposes of this
Section
      3,
      “Required
      Suspension”
      means
      any suspension of offers and sales of Registrable Securities pursuant to the
      Required Registration which the Company is legally required to impose, which
      imposition it is not reasonably practicable for the Company to avoid or overcome
      through an

     

    
      
        
        

      

      
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    amendment
      to the prospectus or registration statement, a supplement to the applicable
      registration statement and related prospectus, or a filing under the Exchange
      Act or other public disclosure of material information; provided
      that, in
      circumstances in which it is not reasonably practicable for the Company to
      avoid
      or overcome such imposition resulting in the existence of a Required Suspension,
      the Company shall use its best efforts to avoid or overcome such
      imposition.

     

      4.
      Registration
      Procedures.
      With
      respect to the Required Registrations and whenever the holders of Registrable
      Securities have requested that any Registrable Securities be registered pursuant
      to this Agreement, the Company shall take all necessary actions to effect the
      registration and the sale of such Registrable Securities in accordance with
      the
      intended method of disposition thereof, and pursuant thereto the Company shall
      as expeditiously as possible:

     

      (a)
      prepare
      and file with the Securities and Exchange Commission a registration statement,
      and all amendments and supplements thereto and related prospectuses as may
      be
      necessary to comply with applicable securities laws, with respect to such
      Registrable Securities and use its best efforts to cause such registration
      statement to become effective (provided
      that
      before filing a registration statement or prospectus or any amendments or
      supplements thereto, the Company shall furnish to the counsel selected by the
      holders of at least a majority of the Registrable Securities covered by such
      registration statement copies of all such documents proposed to be filed, which
      documents shall be subject to the review and reasonable comment of such
      counsel); 

     

      (b)
      promptly
      notify in writing each holder of Registrable Securities of the effectiveness
      of
      each registration statement filed hereunder and prepare and file with the
      Securities and Exchange Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective throughout the Effective
      Period and comply with the provisions of the Securities Act with respect to
      the
      disposition of all securities covered by such registration statement during
      such
      period in accordance with the intended methods of disposition by the sellers
      thereof set forth in such registration statement; 

     

      (c)
      furnish
      to each seller of Registrable Securities such number of copies of such
      registration statement, each amendment and supplement thereto, the prospectus
      included in such registration statement (including each preliminary prospectus)
      and such other documents as such seller may reasonably request in order to
      facilitate the disposition of the Registrable Securities owned by such seller;
      

     

      (d)
      use
      its reasonable efforts to register or qualify such Registrable Securities under
      such other securities or blue sky laws of such jurisdictions as any seller
      reasonably requests and do any and all other acts and things which may be
      reasonably necessary or advisable to enable such seller to consummate the
      disposition in such jurisdictions of the Registrable Securities owned by such
      seller (provided
      that the
      Company shall not be required to (i) qualify generally to do business in any
      jurisdiction where it would not otherwise be required to qualify but for this
      subsection, (ii) subject itself to taxation in any such jurisdiction or
      (iii) consent to general service of process in any such jurisdiction);
      

     

    
      
        
        

      

      
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      (e)
      promptly
      notify in writing each seller of such Registrable Securities, at any time when
      a
      prospectus relating thereto is required to be delivered under the Securities
      Act, of the happening of any event as a result of which the prospectus included
      in such registration statement contains an untrue statement of a material fact
      or omits any fact necessary to make the statements therein not misleading,
      and,
      at the request of any such seller, the Company shall prepare and provide to
      such
      seller a reasonable number of copies of a supplement or amendment to such
      prospectus so that, as thereafter delivered to the purchasers of such
      Registrable Securities, such prospectus shall not contain an untrue statement
      of
      a material fact or omit to state any fact necessary to make the statements
      therein not misleading; 

     

      (f)
      use
      its best efforts to cause all such Registrable Securities to be listed on each
      securities exchange on which similar securities issued by the Company are then
      listed and, if not so listed, to be listed on the NASD automated quotation
      system and, if listed on the NASD automated quotation system, use its best
      efforts to secure designation of all such Registrable Securities covered by
      such
      registration statement as a NASDAQ “national market system security” within the
      meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or, failing
      that, to secure NASDAQ authorization for such Registrable Securities and,
      without limiting the generality of the foregoing, to arrange for at least two
      market makers to register as such with respect to such Registrable Securities
      with the NASD; 

     

      (g)
      provide
      a
      transfer agent and registrar for all such Registrable Securities not later
      than
      the effective date of such registration statement; 

     

      (h)
      make
      available for inspection by any seller of Registrable Securities, any
      underwriter participating in any disposition pursuant to such registration
      statement and any attorney, accountant or other agent retained by any such
      seller or underwriter, all financial and other records, pertinent corporate
      documents and properties of the Company, and cause the Company’s officers,
      directors, employees and independent accountants to supply all information
      reasonably requested by any such seller, underwriter, attorney, accountant
      or
      agent in connection with such registration statement;

     

      (i)
      otherwise
      comply with all applicable rules and regulations of the Securities and Exchange
      Commission, and in each case in which any holder of Registrable Securities,
      in
      its sole, good faith judgment, which is not inconsistent with the advice of
      its
      counsel, is or might be deemed to be an underwriter make available to its
      security holders, as soon as reasonably practicable, an earnings statement
      covering the period of at least twelve months beginning with the first day
      of
      the Company’s first full calendar quarter after the effective date of the
      registration statement, which earnings statement shall satisfy the provisions
      of
      Section 11(a) of the Securities Act and Rule 158 thereunder;

     

      (j)
      permit
      any holder of Registrable Securities which holder, in its sole, good faith
      judgment, is or might be deemed to be an underwriter or a controlling person
      of
      the Company to participate in the preparation of such registration or comparable
      statement and to require the insertion therein of material or information
      related to such holder or to underwriters or control persons generally which
      is
      customarily found in a registration statement, furnished to the Company in
      writing, which in the reasonable judgment of such holder and its counsel should
      be included (subject to the Company’s reasonable approval of such
      material);

     

    
      
        
        

      

      
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      (k)
      in
      the event of the issuance of any stop order suspending the effectiveness of
      a
      registration statement, or of any order suspending or preventing the use of
      any
      related prospectus or suspending the qualification of any common stock included
      in such registration statement for sale in any jurisdiction, the Company shall
      use its best efforts promptly to obtain the withdrawal of such
      order;

     

      (l)
      cause
      such Registrable Securities covered by such registration statement to be
      registered with or approved by such other governmental agencies or authorities
      as may be necessary to enable the sellers thereof to consummate the disposition
      of such Registrable Securities;

     

      (m)
      in
      the case of an underwritten public offering in connection with any such
      registration, obtain a cold comfort letter from the Company’s independent
      registered public accounting firm in customary form and covering such matters
      of
      the type customarily covered by cold comfort letters; and

     

      (n)
      provide
      a
      legal opinion of the Company’s outside counsel, dated the effective date of such
      registration statement (and dated the date of the closing under the underwriting
      agreement in connection with any underwritten public offering in connection
      with
      such registration), with respect to the registration statement, each amendment
      and supplement thereto, the prospectus included therein (including the
      preliminary prospectus) and such other documents relating thereto in customary
      form and covering such matters of the type customarily covered by legal opinions
      of such nature.

     

      5.
      Registration
      Expenses.

     

      (a)
      All
      expenses incident to the Company’s performance of or compliance with this
      Agreement, including without limitation all registration, qualification and
      filing fees, fees and expenses of compliance with securities or blue sky laws,
      printing expenses, messenger and delivery expenses, fees and disbursements
      of
      custodians, and fees and disbursements of counsel for the Company and fees
      and
      disbursements of counsel(to the extent provided in Section
      5(b))
      for any
      holder of Registrable Securities and all independent certified public
      accountants, investment-bankers and underwriters (excluding discounts and
      commissions, but including fees and expenses in connection with any block trade
      executed in connection with underwritten draw-downs) and other Persons retained
      by the Company (all such expenses being herein called “Registration
      Expenses”),
      shall
      be borne by the Company in all registrations. The Company also shall, in any
      event, pay its internal expenses (including, without limitation, all salaries
      and expenses of its officers and employees performing legal or accounting
      duties), the expense of any annual audit or quarterly review, the expense of
      any
      liability insurance and the expenses and fees for listing the securities to
      be
      registered on each securities exchange on which similar securities issued by
      the
      Company are then listed or on the NASD automated quotation
      system.

     

      (b)
      In
      connection with each Required Registration and each Piggyback Registration,
      the
      Company shall reimburse the holders of Registrable Securities included in such
      registration for the reasonable fees and disbursements of one counsel chosen
      by
      the holders of at least a majority of the Registrable Securities included in
      such registration.

     

    
      
        
        

      

      
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      (c)
      To
      the extent any expenses relating to a registration hereunder are not required
      to
      be paid by the Company, each holder of securities included (or requested to
      be
      included) in any registration hereunder shall pay those expenses allocable
      to
      the registration (or proposed registration) of such holder’s securities so
      included (or requested to be included), and any Registration Expenses not so
      allocable shall be borne by all sellers of securities requested to be included
      in such registration in proportion to the number of securities requested to
      be
      so registered.

     

      6.
      Indemnification.

     

      (a)
      The
      Company agrees to indemnify and hold harmless, to the fullest extent permitted
      by law, each holder of Registrable Securities, its officers, directors, members,
      partners, employees, affiliates and agents and each Person who controls such
      holder (within the meaning of the Securities Act or the Securities Exchange
      Act)
      against all losses, claims, actions, damages, liabilities and expenses caused
      by
      (i) any untrue or alleged untrue statement of material fact contained
      in
      any registration statement, prospectus or preliminary prospectus or any
      amendment thereof or supplement thereto or any omission or alleged omission
      of a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading, or (ii) any violation or alleged violation by
      the
      Company of the Securities Act or any other similar federal or state securities
      laws or any rule or regulation promulgated thereunder applicable to the Company
      and relating to action or inaction required of the Company in connection with
      any such registration, qualification or compliance, and to pay to each holder
      of
      Registrable Securities, its officers and directors and each Person who controls
      such holder (within the meaning of the Securities Act or the Securities Exchange
      Act), as incurred, any legal and any other expenses reasonably incurred in
      connection with defending any such claim, loss, damage, liability or action
      (including any investigation or preparation of filings in connection with
      defending against any such claim, loss, damage, liability or action after
      brought, incurred or otherwise asserted against any such holder or Person),
      except insofar as the same are caused by or contained in any information
      furnished in writing to the Company by such holder expressly for use therein
      or
      by such holder’s failure to deliver a copy of the registration statement or
      prospectus or any amendments or supplements thereto after the Company has
      furnished such holder with a sufficient number of copies of the same. In
      connection with an underwritten offering, the Company shall indemnify such
      underwriters, their officers and directors and each Person who controls such
      underwriters (within the meaning of the Securities Act or the Securities
      Exchange Act) to the same extent as provided above with respect to the
      indemnification of the holders of Registrable Securities.

     

      (b)
      In
      connection with any registration statement in which a holder of Registrable
      Securities is participating, each such holder shall furnish to the Company
      in
      writing such information and affidavits as the Company reasonably requests
      for
      use in connection with any such registration statement or prospectus and, to
      the
      extent permitted by law, shall indemnify the Company, its directors and officers
      and each Person who controls the Company (within the meaning of the Securities
      Act or the Securities Exchange Act) against any losses, claims, damages,
      liabilities and expenses resulting from any untrue or alleged untrue statement
      of material fact contained in the registration statement, prospectus or
      preliminary prospectus or any amendment thereof or supplement thereto or any
      omission or alleged omission of a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading, but only to the extent
      that such untrue statement or omission is contained in any information or
      affidavit

     

    
      
        
        

      

      
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    so
      furnished in writing by such holder expressly for use therein; provided
      that the
      obligation to indemnify shall be individual and ratable, not joint and several,
      for each holder and shall be limited to the amount of proceeds received by
      such
      holder from the sale of Registrable Securities pursuant to such registration
      statement (net of underwriting discounts and commissions).

     

      (c)
      Any
      Person entitled to indemnification hereunder shall (i) give prompt written
      notice to the indemnifying party of any claim with respect to which it seeks
      indemnification (provided
      that the
      failure to give prompt notice shall not impair any Person’s right to
      indemnification hereunder to the extent such failure has not prejudiced the
      indemnifying party) and (ii) unless in such indemnified party’s reasonable
      judgment a conflict of interest between such indemnified and indemnifying
      parties may exist with respect to such claim, permit such indemnifying party
      to
      assume the defense of such claim with counsel reasonably satisfactory to the
      indemnified party. If such defense is assumed, the indemnifying party shall
      not
      be subject to any liability for any settlement made by the indemnified party
      without its consent (but such consent shall not be unreasonably withheld).
      An
      indemnifying party who is not entitled to, or elects not to, assume the defense
      of a claim shall not be obligated to pay the fees and expenses of more than
      one
      counsel for all parties indemnified by such indemnifying party with respect
      to
      such claim, unless in the reasonable judgment of any indemnified party a
      conflict of interest may exist between such indemnified party and any other
      of
      such indemnified parties with respect to such claim. In such instance, the
      conflicting indemnified parties shall have a right to retain one separate
      counsel, chosen by the holders of at least a majority of the Registrable
      Securities included in the registration by such conflicting parties, at the
      expense of the indemnifying party. No indemnifying party, in the defense of
      such
      claim or litigation, shall, except with the consent of each indemnified party,
      consent to the entry of any judgment or enter into any settlement which does
      not
      include as an unconditional term thereof the giving by the claimant or plaintiff
      to such indemnified party of a release from all liability in respect to such
      claim or litigation.

     

      (d)
      Each
      party hereto agrees that if for any reason the indemnification provisions
      contemplated by Sections
      6(a)
      or
6(b)
      are
      unavailable to or insufficient to hold harmless an indemnified party in respect
      of any losses, claims, damages, liabilities or expenses (or actions in respect
      thereof) referred to therein, then each indemnifying party shall contribute
      to
      the amount paid or payable by such indemnified party as a result of such losses,
      claims, damages, liabilities or expenses (or actions in respect thereof) in
      such
      proportion as is appropriate to reflect the relative fault of the indemnifying
      party and the indemnified party as well as any other relevant equitable
      considerations. The relative fault of such indemnifying party and indemnified
      party shall be determined by reference to, among other things, whether the
      untrue or alleged untrue statement of a material fact or omission or alleged
      omission to state a material fact relates to information supplied by such
      indemnifying party or indemnified party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      statement or omission. The parties hereto agree that it would not be just and
      equitable if contribution pursuant to this Section
      6(d)
      were
      determined by pro rata allocation (even if the holders or any underwriters
      or
      all of them were treated as one entity for such purpose) or by any other method
      of allocation which does not take account of the equitable considerations
      referred to in this Section
      6(d).
      The
      amount paid or payable by an indemnified party as a result of the losses,
      claims, damages, liabilities or expenses (or actions in respect thereof)
      referred to above shall be deemed to include any legal or other fees or
      expenses

     

    
      
        
        

      

      
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    reasonably
      incurred by such indemnified party in connection with investigating or, except
      as provided in Section
      6(c),
      defending any such action or claim. No Person guilty of fraudulent
      misrepresentation (within the meaning of Section
      11(f)
      of the
      Securities Act) shall be entitled to contribution from any Person who was not
      guilty of such fraudulent misrepresentation. The sellers’ obligations in this
Section
      6(d)
      to
      contribute shall be individual and ratable in proportion to the amount of
      securities registered by them and not joint and several and shall be limited
      to
      an amount equal to the proceeds actually received by such seller from the sale
      of Registrable Securities effected pursuant to such registration (net of
      underwriting discounts and commissions).

     

      (e)
      The
      indemnification and contribution provided for under this Agreement shall remain
      in full force and effect regardless of any investigation made by or on behalf
      of
      the indemnified party or officer, director, member, partner, employee,
      affiliate, agent or controlling Person of such indemnified party and shall
      survive the transfer of securities and termination of this Agreement and shall
      expire upon the expiration of the statutes of limitations with respect to any
      matter covered hereby (or such later time as all claims then outstanding are
      fully and finally resolved). The Company also agrees to make such provisions,
      as
      are reasonably requested by any indemnified party, for contribution to such
      party in the event the Company’s indemnification is unavailable for any
      reason.

     

      7.
      Current
      Public Information. The
      Company shall file all reports required to be filed by it under the Securities
      Act and the Securities Exchange Act and the rules and regulations adopted by
      the
      Securities and Exchange Commission thereunder and shall take such further action
      as any holder or holders of Registrable Securities may reasonably request,
      all
      to the extent required to enable such holders to sell Registrable Securities
      pursuant to (i) Rule 144 adopted by the Securities and Exchange Commission
      under
      the Securities Act (as such rule may be amended from time to time) or any
      similar rule or regulation hereafter adopted by the Securities and Exchange
      Commission or (ii) a registration statement on Form S-2 or S-3 or any similar
      registration form hereafter adopted by the Securities and Exchange Commission.
      Upon request, the Company shall deliver to any holder of Registrable Securities
      a written statement as to whether it has complied with such requirements. The
      Company shall at all times use its best efforts to cause the Common Stock to
      be
      listed on one or more of the New York Stock Exchange, the American Stock
      Exchange, the NASDAQ National Market System or the NASDAQ SmallCap
      market.

     

      8.
      Filings
      with the SEC.
      The
      Company has made all filings with the SEC (the “SEC
      Documents”)
      that
      it has been required to make within the past three years under the Securities
      Act and the Securities Exchange Act. Each of such filings has complied with
      the
      Securities Act and the Securities Exchange Act in all material respects. None
      of
      such filings, as of their respective dates, contained any untrue statement
      of a
      material fact or omitted to state a material fact necessary in order to make
      the
      statements made therein, in light of the circumstances under which they were
      made, not misleading.

     

      9.
      Definitions.

     

    “Common
      Stock”
      means
      the Company’s Common Stock, and any capital stock of any class of the Company
      hereafter authorized which is not limited to a fixed sum or
      percentage

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    of
      par or
      stated value in respect to the rights of the holders thereof to participate
      in
      dividends or in the distribution of assets upon any liquidation, dissolution
      or
      winding up of the Company.

     

    “Excluded
      Registration”
      means
      any underwritten secondary registration on behalf of holders of the Company’s
      securities pursuant to a registration agreement in effect as of the date of
      this
      Agreement which precludes the registration of the Registrable Securities in
      such
      registration or, if any such registration agreement does not preclude such
      registration but gives a party or parties to such agreement the right to
      determine whether the Registrable Securities shall be included in such
      registration, then any such registration in which such party or parties refuse
      to permit the inclusion of Registrable Securities.

     

    “Person”
      means
      an individual, a partnership, a corporation, a limited liability company, an
      association, a joint stock company, a trust, a joint venture, an unincorporated
      organization and a governmental entity or any department, agency or political
      subdivision thereof.

     

    “Registrable
      Securities”
      means
      (i) the ADSX Shares issued pursuant to the Purchase Agreement and (ii) any
      other
      Common Stock issued or issuable with respect to the securities referred to
      in
      clause (i) above by way of a stock dividend or stock split or in connection
      with
      a combination of shares, recapitalization, merger, consolidation or other
      reorganization. As to any particular Registrable Securities, such securities
      shall cease to be Registrable Securities when they have been distributed to
      the
      public pursuant to a offering registered under the Securities Act or sold to
      the
      public through a broker, dealer or market maker in compliance with Rule 144
      under the Securities Act (or any similar rule then in force) or repurchased
      by
      the Company or any Subsidiary. For purposes of this Agreement, a Person shall
      be
      deemed to be a holder of Registrable Securities, and the Registrable Securities
      shall be deemed to be in existence, whenever such Person has the right to
      acquire directly or indirectly such Registrable Securities (upon exchange of
      securities or otherwise, but disregarding any restrictions or limitations upon
      the exercise of such right), whether or not such acquisition has actually been
      effected, and such Person shall be entitled to exercise the rights of a holder
      of Registrable Securities hereunder.

     

    “Securities
      Act”
      means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated from time to time thereunder.

     

    “Securities
      Exchange Act”
      means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated from time to time thereunder.

     

    Unless
      otherwise stated, other capitalized terms contained herein have the meanings
      set
      forth in the Purchase Agreement.

     

      10.
      Miscellaneous.

     

      (a)
      No
      Inconsistent Agreements.
      The
      Company represents and warrants that it is not a party to or subject to any
      agreement that is inconsistent with or violates the rights granted to the
      holders of Registrable Securities in this Agreement, and the Company shall
      not
      hereafter enter into any agreement with respect to its securities that is
      inconsistent with or violates the rights granted to the holders of Registrable
      Securities in this Agreement.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

      (b)
      Adjustments
      Affecting Registrable Securities.
      The
      Company shall not take any action, and shall use commercially reasonable efforts
      not to permit any change to occur, with respect to its securities which would
      adversely affect the ability of the holders of Registrable Securities to include
      such Registrable Securities in a registration undertaken pursuant to this
      Agreement.

     

      (c)
      Remedies.
      Any
      Person having rights under any provision of this Agreement shall be entitled
      to
      enforce such rights specifically (without posting a bond or other security),
      to
      recover damages caused by reason of any breach of any provision of this
      Agreement and to exercise all other rights granted by law. The parties hereto
      agree and acknowledge that money damages would not be an adequate remedy for
      any
      breach of the provisions of this Agreement and that, in addition to any other
      rights and remedies existing in its favor, any party shall be entitled to
      specific performance and/or other injunctive relief from any court of law or
      equity of competent jurisdiction (without posting any bond or other security)
      in
      order to enforce or prevent violation of the provisions of this Agreement.
      

     

      (d)
      Amendments
      and Waivers.
      Except
      as otherwise provided herein, the provisions of this Agreement may be amended
      or
      waived only upon the prior written consent of the Company and holders of at
      least a majority of the Registrable Securities. The failure of any party to
      enforce any of the provisions of this Agreement shall in no way be construed
      as
      a waiver of such provisions and shall not affect the right of such party
      thereafter to enforce each and every provision of this Agreement in accordance
      with its terms.

     

      (e)
      Successors
      and Assigns.
      All
      covenants and agreements in this Agreement by or on behalf of any of the parties
      hereto shall bind and inure to the benefit of the respective successors and
      assigns of the parties hereto whether so expressed or not. In addition, whether
      or not any express assignment has been made, the provisions of this Agreement
      which are for the benefit of purchasers or holders of Registrable Securities
      are
      also for the benefit of, and enforceable by, any subsequent holder of
      Registrable Securities.

     

      (f)
      Severability.
      Whenever possible, each provision of this Agreement shall be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement is held to be prohibited by or invalid, illegal or
      unenforceable under applicable law, such provision shall be ineffective only
      to
      the extent of such prohibition, invalidity, illegality or unenforceability
      without invalidating the remainder of this Agreement.

     

      (g)
      Counterparts.
      This
      Agreement may be executed simultaneously in two or more counterparts (including
      by means of facsimile), any one of which need not contain the signatures of
      more
      than one party, but all such counterparts taken together shall constitute one
      and the same Agreement.

     

      (h)
      Descriptive
      Headings.
      The
      descriptive headings of this Agreement are inserted for convenience only and
      do
      not constitute a part of this Agreement.

     

      (i)
      Governing
      Law.
      All
      matters relating to the interpretation, construction, validity and enforcement
      of this Agreement shall be governed by and construed in accordance with the
      domestic laws of the State of Delaware without giving effect to any choice
      or
      conflict of

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    law
      provision or rule (whether of the State of Delaware or any other jurisdiction)
      that would cause the application of laws of any jurisdiction other than the
      State of Delaware.

     

      (j)
      Notices.
      All
      notices, demands or other communications to be given or delivered under or
      by
      reason of the provisions of this Agreement shall be in writing and shall be
      deemed to have been given when delivered personally to the recipient, sent
      to
      the recipient by reputable overnight courier service (charges prepaid) or mailed
      to the recipient by certified or registered mail, return receipt requested
      and
      postage prepaid. Such notices, demands and other communications shall be sent
      to
      the Company or to the Stockholder at the address indicated
      below:

     

    
      	
              Notices
                to the Company:

               

              c/o
                Applied Digital Solutions, Inc.

              1690
                South Congress Avenue

              Suite
                200

              Delray
                Beach, Florida 33445

              Attn: 
                Michael
                Krawitz

               

            	
              with
                a copy to:

               

              Holland
                & Knight LLP

              701
                Brickell Avenue, Suite 3000

              Miami,
                Florida 33131

              Attn: 
                Harvey
                Goldman

            
	
              Notices
                to the Stockholder:

               

              Perceptis,
                L.P.

              c/o
                SE Capital, LLC

              One
                North Wacker Drive, Suite 4330

              Chicago,
                Illinois 60606

              Attn:   
                Jeffrey
                Kvam

                         
                Brad
                Bernstein

            	
              with
                a copy to:

               

              Kirkland
                & Ellis LLP

              200
                East Randolph Drive

              Chicago,
                Illinois 60601

              Attn: 
                Margaret
                A. Gibson, P.C.

                        
                Brian C. Van Klompenberg

            

    

    or
      to
      such other address or to the attention of such other Person as the recipient
      party has specified by prior written notice to the sending party.

     

      (k)
      Rights
      Cumulative; Waiver.
      The
      rights and remedies of holders of Registrable Securities and the Company under
      this Agreement shall be cumulative and not exclusive of any rights or remedies
      which either would otherwise have hereunder or at law or in equity or by
      statute, and no failure or delay by either party in exercising any right or
      remedy shall impair any such right or remedy or operate as a waiver of such
      right or remedy, nor shall any single or partial exercise of any power or right
      preclude such party’s other or further exercise or the exercise of any other
      power or right. The waiver by any party hereto of a breach of any provision
      of
      this Agreement shall not operate or be construed as a waiver of any preceding
      or
      succeeding breach and no failure by either party to exercise any right or
      privilege hereunder shall be deemed a waiver of such party’s rights or
      privileges hereunder or shall be deemed a waiver of such party’s rights to
      exercise the same at any subsequent time or times hereunder.

     

      (l)
      No
      Strict Construction.
      The
      parties hereto have participated jointly in the negotiation and drafting of
      this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the parties
      hereto,

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    and
      no
      presumption or burden of proof shall arise favoring or disfavoring any party
      by
      virtue of the authorship of any of the provisions of this
      Agreement.

     

      (m)
      Mutual
      Waiver of Jury Trial.
      As a
      specifically bargained inducement for each of the parties to enter into this
      Agreement (with each party having had opportunity to consult counsel), each
      party hereto expressly and irrevocably waives the right to trial by jury in
      any
      lawsuit or legal proceeding relating to or arising in any way from this
      Agreement or the transactions contemplated herein, and any lawsuit or legal
      proceeding relating to or arising in any way to this Agreement or the
      transactions contemplated herein shall be tried in a court of competent
      jurisdiction by a judge sitting without a jury.

     

    *    *    *    *

     

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

        
        

      

    

    

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

     

    APPLIED
      DIGITAL SOLUTIONS, INC. 

    

    By:
      /s/ Scott Silverman      

    Name: Scott
      Silverman      

    Its:
      CEO                              

     

    PERCEPTIS,
      L.P.

    InterAir
      GP, Inc.

    General
      Partner

    

    
      By:
        /s/ C. Bryan Daniels     

      Name:
        C. Bryan Daniels     

      Its:
        PresidentExhibit 10.3

    
      
        

      

      Exhibit
        10.3

      VERICHIP
        CORPORATION

       

      REGISTRATION
        AGREEMENT

       

      THIS
        REGISTRATION AGREEMENT (this “Agreement”)
        is
        made as of June 10, 2005 between VeriChip Corporation, a Delaware
        corporation (the “Company”),
        and
        Perceptis, L.P., a Delaware limited partnership (the “Stockholder”).

       

      The
        parties to this Agreement are parties to a Share Purchase Agreement of even
        date
        herewith (the “Purchase
        Agreement”).
        In
        order to induce the Stockholder to enter into the Purchase Agreement, the
        Company has agreed to provide the registration rights set forth in this
        Agreement. The execution and delivery of this Agreement is a condition to
        the
        Closing under the Purchase Agreement. Unless otherwise provided in this
        Agreement, capitalized terms used herein shall have the meanings set forth
        in
Section
        9
        hereof.

       

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

       

      1.
        Required Registration.

       

      (a)
        Filing of Registration Statement.
        In the
        event the Company consummates an initial public offering on Form S-1, the
        Company shall include in the Form S-1 Registration Statement filed
        with the
        SEC for its initial public offering provisions regarding the registration
        under
        the Securities Act pursuant to Rule 415 under the Securities Act of all
        Registrable Securities (the “IPO
        Shelf Registration”);
        provided
        that if
        the managing underwriter(s) of the Company’s initial public offering advise the
        Company in writing that the registration of the Registrable Securities on
        a Form
        S-1 shelf registration statement on the date the Company consummates its
        IPO
        would adversely affect the initial public offering, then as promptly as
        practicable after the consummation of the Company’s initial public offering the
        Company shall prepare and file with the Securities and Exchange Commission
        a
        registration statement under the Securities Act on Form S-1 pursuant
        to
        Rule 415 under the Securities Act registering all Registrable Securities
        (including the IPO Shelf Registration, if applicable, the “Required
        Registration”)
        and
        shall cause such Required Registration to be declared effective under the
        Securities Act on the Effective Date. “Effective
        Date”
        means
        the date of the Company’s initial public offering, in the case of the IPO Shelf
        Registration, and otherwise the earlier of the date the Lock-Up Period ends
        (if
        there is one) and the date which is 90 days after the Company’s initial public
        offering.

       

      (b)
        Effective Period; Draw-downs.
        After
        the Effective Date, the Company shall cause such Required Registration to
        remain
        effective for a period ending on the earlier of (i) the second anniversary
        of the effectiveness of the Required Registration, (ii) the date on which
        all
        Registrable Securities have been sold pursuant to the Required Registration,
        (iii) the date as of which there are no longer any Registrable Securities
        in existence and (iv) the date which is one calendar quarter after
        the date
        on which all such Registrable Securities are eligible to be sold pursuant
        to
        Rule 144 (the “Effective
        Period”).
        So
        long as such Required Registration is effective as required herein and in
        compliance with the Securities Act and usable for resale of

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Registrable
        Securities, the holders of Registrable Securities shall be entitled to demand
        any number of draw-downs (including underwritten draw-downs, provided that
        the
        aggregate offering value of the Registrable Securities requested to be included
        in such underwritten draw-down must equal at least $750,000) from such Required
        Registration and, in connection with any such draw-down, the Company shall
        take
        all customary and reasonable actions that the Company would take in connection
        with an underwritten registration (including, without limitation, all actions
        referred to in Section
        3
        necessary to effectuate such sale in the manner determined by the holders
        of at
        least a majority of the Registrable Securities to be included in such
        underwritten draw-down) as any holder reasonably requests. Notwithstanding
        anything to the contrary herein, the Company shall not include any other
        securities in such underwritten draw-downs.

       

        (c)
        Selection
        of Underwriter.
        The
        holders of at least a majority of Registrable Securities shall have the right
        to
        retain and select an investment banker and manager to administer any
        underwritten draw-downs in connection with the Required Registration, subject
        to
        the Company’s approval which shall not be unreasonably withheld or
        delayed.

       

        (d)
        Required
        Registration Expenses.
        As
        further provided in Section
        5
        below,
        all Registration Expenses incurred in connection with the Required Registration
        (whether incurred by the Company or the holders of Registrable Securities)
        shall
        be borne by the Company (including, without limitation, all fees and expenses
        of
        investment bankers and underwriters).

       

        2.
        Piggyback
        Registrations.

       

        (a)
        Right
        to Piggyback.
        Whenever on or after the VeriChip Exchange Date the Company proposes to register
        any of its securities under the Securities Act in an underwritten offering
        (other than pursuant to a Required Registration or a registration on Form
        S-8 or
        any successor form or any Excluded Registration) and the registration form
        to be
        used may be used for the registration of Registrable Securities (a “Piggyback
        Registration”),
        the
        Company shall give prompt written notice (in the case of any exercise of
        demand
        registration rights, in any event within three business days after its receipt
        of the demand notice) to all holders of Registrable Securities of its intention
        to effect such a registration and, subject to the terms of Sections
        2(c)
        and
2(d)
        hereof,
        shall include in such registration (and in all related registrations or
        qualifications under blue sky laws or in compliance with other registration
        requirements and in any related underwriting) all Registrable Securities
        with
        respect to which the Company has received written requests for inclusion
        therein
        within 20 days after the receipt of the Company’s notice.

       

        (b)Piggyback
        Expenses.
        The
        Registration Expenses of the holders of Registrable Securities shall be paid
        by
        the Company in all Piggyback Registrations.

       

        (c)Priority
        on Primary Registrations.
        If a
        Piggyback Registration is an underwritten primary registration on behalf
        of the
        Company, and the managing underwriters advise the Company in writing that
        in
        their opinion the number of securities requested to be included in such
        registration exceeds the number of securities which can be sold in such offering
        without adversely affecting the offering, the Company shall include in such
        registration (i) first, the securities the Company proposes to sell, (ii)
        second, the Registrable Securities requested to be included in such
        registration, pro rata among the holders of such Registrable Securities on
        the

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      basis
        of
        the number of shares requested to be included therein by each such holder,
        and
        (iii) third, other securities requested to be included in such
        registration.

       

        (d)Priority
        on Secondary Registrations.
        If a
        Piggyback Registration is an underwritten secondary registration on behalf
        of
        holders of the Company’s securities, and the managing underwriters advise the
        Company in writing that in their opinion the number of securities requested
        to
        be included in such registration exceeds the number which can be sold in
        such
        offering without adversely affecting the offering, the Company shall include
        in
        such registration (i) first, the securities requested to be included therein
        by
        the holders requesting such registration and the Registrable Securities
        requested to be included in such registration, pro rata among the holders
        of
        such securities on the basis of the number of securities so requested to
        be
        included therein by each such holder, and (ii) second, other securities
        requested to be included in such registration.

       

        3.
        Black
        Out Periods.
        If, at
        any time during which a prospectus for a Required Registration is required
        to be
        delivered in connection with the sale of any Registrable Securities, the
        Company
        reasonably determines in good faith and upon the advice of its outside legal
        counsel that a development has occurred or a condition exists as a result
        of
        which the prospectus contains a material misstatement or omission, or that
        a
        material transaction in which the Company is engaged or proposes to engage
        would
        require an amendment to the prospectus or registration statement, a supplement
        to the applicable registration statement and related prospectus, or a filing
        under the Exchange Act or other public disclosure of material information
        and
        the disclosure of such transaction would be materially premature or materially
        injurious to the consummation of the transaction, the Company will promptly
        so
        notify in writing the holders of the Registrable Securities included in the
        Required Registration. Upon receipt of such notification, such holders and
        their
        affiliates will immediately suspend all offers and sales of Registrable
        Securities pursuant to such registration statement. In such event, the Company
        will amend or supplement the applicable registration statement and related
        prospectus or make such filings or public disclosures as promptly as practicable
        consistent with the restrictions set forth in this Section 3
        and will
        use its best efforts to take such other steps as may be required to permit
        sales
        of the Registrable Securities thereunder by the holders of Registrable
        Securities whose Registrable Securities are included in the Required
        Registration and its affiliates in accordance with applicable federal and
        state
        securities laws as promptly as practicable. The Company will promptly notify
        the
        holders of Registrable Securities whose Registrable Securities are included
        in
        the Required Registration after it has determined in good faith that such
        sales
        have become permissible in such manner and will promptly deliver copies of
        the
        prospectus (as so amended or supplemented, if applicable) to the holders
        of
        Registrable Securities whose Registrable Securities are included in the Required
        Registration. Notwithstanding the foregoing, under no circumstances other
        than a
        Required Suspension will the Company be entitled to exercise its right to
        suspend offers and sales of any Registrable Securities pursuant to the Required
        Registration as provided in this Section
        3
        (x) for more one time or for a period of greater than five trading
        days
        during the 60 trading days immediately following the effectiveness of the
        Required Registration, (y) more than twice in the 180 trading days
        immediately subsequent to the 60 trading days immediately following the
        effectiveness of the Required Registration or for a period of greater than
        60
        total trading days during such 180-trading day period, or (z) more
        than
        twice or for a period greater than 60 trading days in any twelve-month period
        beginning after the 60 trading days immediately subsequent to the effectiveness
        of the Required Registration. In the

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      case
        of
        any Required Suspension, the Company will use its reasonable efforts to avoid
        or
        overcome or satisfy the legal requirement and lift the resulting suspension
        of
        offers and sales pursuant to the Required Registration as soon as practicable.
        For purposes of this Section
        3,
        “Required
        Suspension”
        means
        any suspension of offers and sales of Registrable Securities pursuant to
        the
        Required Registration which the Company is legally required to impose, which
        imposition it is not reasonably practicable for the Company to avoid or overcome
        through an amendment to the prospectus or registration statement, a supplement
        to the applicable registration statement and related prospectus, or a filing
        under the Exchange Act or other public disclosure of material information;
        provided
        that, in
        circumstances in which it is not reasonably practicable for the Company to
        avoid
        or overcome such imposition resulting in the existence of a Required Suspension,
        the Company shall use its best efforts to avoid or overcome such
        imposition.

       

        4.
        Registration
        Procedures.
        With
        respect to the Required Registrations and whenever the holders of Registrable
        Securities have requested that any Registrable Securities be registered pursuant
        to this Agreement, the Company shall take all necessary actions to effect
        the
        registration and the sale of such Registrable Securities in accordance with
        the
        intended method of disposition thereof, and pursuant thereto the Company
        shall
        as expeditiously as possible:

       

        (a)
        prepare
        and file with the Securities and Exchange Commission a registration statement,
        and all amendments and supplements thereto and related prospectuses as may
        be
        necessary to comply with applicable securities laws, with respect to such
        Registrable Securities and use its best efforts to cause such registration
        statement to become effective (provided
        that
        before filing a registration statement or prospectus or any amendments or
        supplements thereto, the Company shall furnish to the counsel selected by
        the
        holders of at least a majority of the Registrable Securities covered by such
        registration statement copies of all such documents proposed to be filed,
        which
        documents shall be subject to the review and reasonable comment of such
        counsel); 

       

        (b)
        promptly
        notify in writing each holder of Registrable Securities of the effectiveness
        of
        each registration statement filed hereunder and prepare and file with the
        Securities and Exchange Commission such amendments and supplements to such
        registration statement and the prospectus used in connection therewith as
        may be
        necessary to keep such registration statement effective throughout the Effective
        Period and comply with the provisions of the Securities Act with respect
        to the
        disposition of all securities covered by such registration statement during
        such
        period in accordance with the intended methods of disposition by the sellers
        thereof set forth in such registration statement; 

       

        (c)
        furnish
        to each seller of Registrable Securities such number of copies of such
        registration statement, each amendment and supplement thereto, the prospectus
        included in such registration statement (including each preliminary prospectus)
        and such other documents as such seller may reasonably request in order to
        facilitate the disposition of the Registrable Securities owned by such seller;
        

       

        (d)
        use
        its reasonable efforts to register or qualify such Registrable Securities
        under
        such other securities or blue sky laws of such jurisdictions as any seller
        reasonably requests and do any and all other acts and things which may be
        reasonably necessary or

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      advisable
        to enable such seller to consummate the disposition in such jurisdictions
        of the
        Registrable Securities owned by such seller (provided
        that the
        Company shall not be required to (i) qualify generally to do business in
        any
        jurisdiction where it would not otherwise be required to qualify but for
        this
        subsection, (ii) subject itself to taxation in any such jurisdiction or
        (iii) consent to general service of process in any such jurisdiction);
        

       

        (e)
        promptly
        notify in writing each seller of such Registrable Securities, at any time
        when a
        prospectus relating thereto is required to be delivered under the Securities
        Act, of the happening of any event as a result of which the prospectus included
        in such registration statement contains an untrue statement of a material
        fact
        or omits any fact necessary to make the statements therein not misleading,
        and,
        at the request of any such seller, the Company shall prepare and provide
        to such
        seller a reasonable number of copies of a supplement or amendment to such
        prospectus so that, as thereafter delivered to the purchasers of such
        Registrable Securities, such prospectus shall not contain an untrue statement
        of
        a material fact or omit to state any fact necessary to make the statements
        therein not misleading; 

       

        (f)
        use
        its best efforts to cause all such Registrable Securities to be listed on
        each
        securities exchange on which similar securities issued by the Company are
        then
        listed and, if not so listed, to be listed on the NASD automated quotation
        system and, if listed on the NASD automated quotation system, use its best
        efforts to secure designation of all such Registrable Securities covered
        by such
        registration statement as a NASDAQ “national market system security” within the
        meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or, failing
        that, to secure NASDAQ authorization for such Registrable Securities and,
        without limiting the generality of the foregoing, to arrange for at least
        two
        market makers to register as such with respect to such Registrable Securities
        with the NASD; 

       

        (g)
        provide
        a
        transfer agent and registrar for all such Registrable Securities not later
        than
        the effective date of such registration statement; 

       

        (h)
        enter
        into such customary agreements (including underwriting agreements in customary
        form) and (provided that the Company need not assume material obligations
        in
        connection therewith) take all such other reasonable actions as the holders
        of
        at least a majority of the Registrable Securities being sold or the
        underwriters, if any, reasonably request in order to expedite or facilitate
        the
        disposition of such Registrable Securities (including, without limitation,
        preparing for and participating in such number of “road shows” as the
        underwriters managing such offering may reasonably request);

       

        (i)
        make
        available for inspection by any seller of Registrable Securities, any
        underwriter participating in any disposition pursuant to such registration
        statement and any attorney, accountant or other agent retained by any such
        seller or underwriter, all financial and other records, pertinent corporate
        documents and properties of the Company, and cause the Company’s officers,
        directors, employees and independent accountants to supply all information
        reasonably requested by any such seller, underwriter, attorney, accountant
        or
        agent in connection with such registration statement;

       

        (j)
        otherwise
        comply with all applicable rules and regulations of the Securities and Exchange
        Commission, and in each case in which any holder of
        Registrable

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      Securities,
        in its sole, good faith judgment, which is not inconsistent with the advice
        of
        its counsel, is or might be deemed to be an underwriter make available to
        its
        security holders, as soon as reasonably practicable, an earnings statement
        covering the period of at least twelve months beginning with the first day
        of
        the Company’s first full calendar quarter after the effective date of the
        registration statement, which earnings statement shall satisfy the provisions
        of
        Section 11(a) of the Securities Act and Rule 158 thereunder;

       

        (k)
        permit
        any holder of Registrable Securities which holder, in its sole, good faith
        judgment, is or might be deemed to be an underwriter or a controlling person
        of
        the Company to participate in the preparation of such registration or comparable
        statement and to require the insertion therein of material or information
        related to such holder or to underwriters or control persons generally which
        is
        customarily found in a registration statement, furnished to the Company in
        writing, which in the reasonable judgment of such holder and its counsel
        should
        be included (subject to the Company’s reasonable approval of such
        material);

       

        (l)
        in
        the event of the issuance of any stop order suspending the effectiveness
        of a
        registration statement, or of any order suspending or preventing the use
        of any
        related prospectus or suspending the qualification of any common stock included
        in such registration statement for sale in any jurisdiction, the Company
        shall
        use its best efforts promptly to obtain the withdrawal of such
        order;

       

        (m)
        cause
        such Registrable Securities covered by such registration statement to be
        registered with or approved by such other governmental agencies or authorities
        as may be necessary to enable the sellers thereof to consummate the disposition
        of such Registrable Securities;

       

        (n)
        in
        the case of an underwritten public offering in connection with any such
        registration, obtain a cold comfort letter from the Company’s independent
        registered public accounting firm in customary form and covering such matters
        of
        the type customarily covered by cold comfort letters; and

       

        (o)
        provide
        a
        legal opinion of the Company’s outside counsel, dated the effective date of such
        registration statement (and dated the date of the closing under the underwriting
        agreement in connection with any underwritten public offering in connection
        with
        such registration), with respect to the registration statement, each amendment
        and supplement thereto, the prospectus included therein (including the
        preliminary prospectus) and such other documents relating thereto in customary
        form and covering such matters of the type customarily covered by legal opinions
        of such nature.

       

        5.
        Registration
        Expenses.

       

        (a)
        All
        expenses incident to the Company’s performance of or compliance with this
        Agreement, including without limitation all registration, qualification and
        filing fees, fees and expenses of compliance with securities or blue sky
        laws,
        printing expenses, messenger and delivery expenses, fees and disbursements
        of
        custodians, and fees and disbursements of counsel for the Company and fees
        and
        disbursements of counsel(to the extent provided in Section
        5(b))
        for any
        holder of Registrable Securities and all independent certified
        public

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      accountants,
        investment-bankers and underwriters (excluding discounts and commissions,
        but
        including fees and expenses in connection with any block trade executed in
        connection with underwritten draw-downs) and other Persons retained by the
        Company (all such expenses being herein called “Registration
        Expenses”),
        shall
        be borne by the Company in all registrations. The Company also shall, in
        any
        event, pay its internal expenses (including, without limitation, all salaries
        and expenses of its officers and employees performing legal or accounting
        duties), the expense of any annual audit or quarterly review, the expense
        of any
        liability insurance and the expenses and fees for listing the securities
        to be
        registered on each securities exchange on which similar securities issued
        by the
        Company are then listed or on the NASD automated quotation
        system.

       

        (b)
        In
        connection with each Required Registration and each Piggyback Registration,
        the
        Company shall reimburse the holders of Registrable Securities included in
        such
        registration for the reasonable fees and disbursements of one counsel chosen
        by
        the holders of at least a majority of the Registrable Securities included
        in
        such registration.

       

        (c)
        To
        the extent any expenses relating to a registration hereunder are not required
        to
        be paid by the Company, each holder of securities included (or requested
        to be
        included) in any registration hereunder shall pay those expenses allocable
        to
        the registration (or proposed registration) of such holder’s securities so
        included (or requested to be included), and any Registration Expenses not
        so
        allocable shall be borne by all sellers of securities requested to be included
        in such registration in proportion to the number of securities requested
        to be
        so registered.

       

        6.
        Indemnification.

       

        (a)
        The
        Company agrees to indemnify and hold harmless, to the fullest extent permitted
        by law, each holder of Registrable Securities, its officers, directors, members,
        partners, employees, affiliates and agents and each Person who controls such
        holder (within the meaning of the Securities Act or the Securities Exchange
        Act)
        against all losses, claims, actions, damages, liabilities and expenses caused
        by
        (i) any untrue or alleged untrue statement of material fact contained
        in
        any registration statement, prospectus or preliminary prospectus or any
        amendment thereof or supplement thereto or any omission or alleged omission
        of a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading, or (ii) any violation or alleged violation
        by the
        Company of the Securities Act or any other similar federal or state securities
        laws or any rule or regulation promulgated thereunder applicable to the Company
        and relating to action or inaction required of the Company in connection
        with
        any such registration, qualification or compliance, and to pay to each holder
        of
        Registrable Securities, its officers and directors and each Person who controls
        such holder (within the meaning of the Securities Act or the Securities Exchange
        Act), as incurred, any legal and any other expenses reasonably incurred in
        connection with defending any such claim, loss, damage, liability or action
        (including any investigation or preparation of filings in connection with
        defending against any such claim, loss, damage, liability or action after
        brought, incurred or otherwise asserted against any such holder or Person),
        except insofar as the same are caused by or contained in any information
        furnished in writing to the Company by such holder expressly for use therein
        or
        by such holder’s failure to deliver a copy of the registration statement or
        prospectus or any amendments or supplements thereto after the Company has
        furnished such holder with a sufficient number of copies of
        the

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

      same.
        In
        connection with an underwritten offering, the Company shall indemnify such
        underwriters, their officers and directors and each Person who controls such
        underwriters (within the meaning of the Securities Act or the Securities
        Exchange Act) to the same extent as provided above with respect to the
        indemnification of the holders of Registrable Securities.

       

        (b)
        In
        connection with any registration statement in which a holder of Registrable
        Securities is participating, each such holder shall furnish to the Company
        in
        writing such information and affidavits as the Company reasonably requests
        for
        use in connection with any such registration statement or prospectus and,
        to the
        extent permitted by law, shall indemnify the Company, its directors and officers
        and each Person who controls the Company (within the meaning of the Securities
        Act or the Securities Exchange Act) against any losses, claims, damages,
        liabilities and expenses resulting from any untrue or alleged untrue statement
        of material fact contained in the registration statement, prospectus or
        preliminary prospectus or any amendment thereof or supplement thereto or
        any
        omission or alleged omission of a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading, but only to the
        extent
        that such untrue statement or omission is contained in any information or
        affidavit so furnished in writing by such holder expressly for use therein;
        provided
        that the
        obligation to indemnify shall be individual and ratable, not joint and several,
        for each holder and shall be limited to the amount of proceeds received by
        such
        holder from the sale of Registrable Securities pursuant to such registration
        statement (net of underwriting discounts and commissions).

       

        (c)
        Any
        Person entitled to indemnification hereunder shall (i) give prompt written
        notice to the indemnifying party of any claim with respect to which it seeks
        indemnification (provided
        that the
        failure to give prompt notice shall not impair any Person’s right to
        indemnification hereunder to the extent such failure has not prejudiced the
        indemnifying party) and (ii) unless in such indemnified party’s reasonable
        judgment a conflict of interest between such indemnified and indemnifying
        parties may exist with respect to such claim, permit such indemnifying party
        to
        assume the defense of such claim with counsel reasonably satisfactory to
        the
        indemnified party. If such defense is assumed, the indemnifying party shall
        not
        be subject to any liability for any settlement made by the indemnified party
        without its consent (but such consent shall not be unreasonably withheld).
        An
        indemnifying party who is not entitled to, or elects not to, assume the defense
        of a claim shall not be obligated to pay the fees and expenses of more than
        one
        counsel for all parties indemnified by such indemnifying party with respect
        to
        such claim, unless in the reasonable judgment of any indemnified party a
        conflict of interest may exist between such indemnified party and any other
        of
        such indemnified parties with respect to such claim. In such instance, the
        conflicting indemnified parties shall have a right to retain one separate
        counsel, chosen by the holders of at least a majority of the Registrable
        Securities included in the registration by such conflicting parties, at the
        expense of the indemnifying party. No indemnifying party, in the defense
        of such
        claim or litigation, shall, except with the consent of each indemnified party,
        consent to the entry of any judgment or enter into any settlement which does
        not
        include as an unconditional term thereof the giving by the claimant or plaintiff
        to such indemnified party of a release from all liability in respect to such
        claim or litigation.

       

        (d)
        Each
        party hereto agrees that if for any reason the indemnification provisions
        contemplated by Sections
        6(a)
        or
6(b)
        are
        unavailable to or insufficient to hold harmless an indemnified party in respect
        of any losses, claims, damages, liabilities or expenses

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      (or
        actions in respect thereof) referred to therein, then each indemnifying party
        shall contribute to the amount paid or payable by such indemnified party
        as a
        result of such losses, claims, damages, liabilities or expenses (or actions
        in
        respect thereof) in such proportion as is appropriate to reflect the relative
        fault of the indemnifying party and the indemnified party as well as any
        other
        relevant equitable considerations. The relative fault of such indemnifying
        party
        and indemnified party shall be determined by reference to, among other things,
        whether the untrue or alleged untrue statement of a material fact or omission
        or
        alleged omission to state a material fact relates to information supplied
        by
        such indemnifying party or indemnified party, and the parties’ relative intent,
        knowledge, access to information and opportunity to correct or prevent such
        statement or omission. The parties hereto agree that it would not be just
        and
        equitable if contribution pursuant to this Section
        6(d)
        were
        determined by pro rata allocation (even if the holders or any underwriters
        or
        all of them were treated as one entity for such purpose) or by any other
        method
        of allocation which does not take account of the equitable considerations
        referred to in this Section
        6(d).
        The
        amount paid or payable by an indemnified party as a result of the losses,
        claims, damages, liabilities or expenses (or actions in respect thereof)
        referred to above shall be deemed to include any legal or other fees or expenses
        reasonably incurred by such indemnified party in connection with investigating
        or, except as provided in Section
        6(c),
        defending any such action or claim. No Person guilty of fraudulent
        misrepresentation (within the meaning of Section
        11(f)
        of the
        Securities Act) shall be entitled to contribution from any Person who was
        not
        guilty of such fraudulent misrepresentation. The sellers’ obligations in this
Section
        6(d)
        to
        contribute shall be individual and ratable in proportion to the amount of
        securities registered by them and not joint and several and shall be limited
        to
        an amount equal to the proceeds actually received by such seller from the
        sale
        of Registrable Securities effected pursuant to such registration (net of
        underwriting discounts and commissions).

       

        (e)
        The
        indemnification and contribution provided for under this Agreement shall
        remain
        in full force and effect regardless of any investigation made by or on behalf
        of
        the indemnified party or officer, director, member, partner, employee,
        affiliate, agent or controlling Person of such indemnified party and shall
        survive the transfer of securities and termination of this Agreement and
        shall
        expire upon the expiration of the statutes of limitations with respect to
        any
        matter covered hereby (or such later time as all claims then outstanding
        are
        fully and finally resolved). The Company also agrees to make such provisions,
        as
        are reasonably requested by any indemnified party, for contribution to such
        party in the event the Company’s indemnification is unavailable for any
        reason.

       

        7.
        Current
        Public Information.
        At all
        times after the Company has filed a registration statement with the Securities
        and Exchange Commission pursuant to the requirements of either the Securities
        Act or the Securities Exchange Act, the Company shall file all reports required
        to be filed by it under the Securities Act and the Securities Exchange Act
        and
        the rules and regulations adopted by the Securities and Exchange Commission
        thereunder and shall take such further action as any holder or holders of
        Registrable Securities may reasonably request, all to the extent required
        to
        enable such holders to sell Registrable Securities pursuant to (i) Rule 144
        adopted by the Securities and Exchange Commission under the Securities Act
        (as
        such rule may be amended from time to time) or any similar rule or regulation
        hereafter adopted by the Securities and Exchange Commission or (ii) a
        registration statement on Form S-2 or S-3 or any similar registration form
        hereafter adopted by the Securities and Exchange Commission.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      Upon
        request, the Company shall deliver to any holder of Registrable Securities
        a
        written statement as to whether it has complied with such requirements. The
        Company shall at all times use its best efforts to cause the Common Stock
        to be
        listed on one or more of the New York Stock Exchange, the American Stock
        Exchange, the NASDAQ National Market System or the NASDAQ SmallCap
        market.

       

        8.
        [INTENTIONALLY
        OMITTED]

       

        9.
        Definitions.

       

      “Common
        Stock”
        means
        the Company’s Common Stock, and any capital stock of any class of the Company
        hereafter authorized which is not limited to a fixed sum or percentage of
        par or
        stated value in respect to the rights of the holders thereof to participate
        in
        dividends or in the distribution of assets upon any liquidation, dissolution
        or
        winding up of the Company.

       

      “Excluded
        Registration”
        means
        any underwritten secondary registration on behalf of holders of the Company’s
        securities pursuant to a registration agreement in effect as of the date
        of this
        Agreement which precludes the registration of the Registrable Securities
        in such
        registration or, if any such registration agreement does not preclude such
        registration but gives a party or parties to such agreement the right to
        determine whether the Registrable Securities shall be included in such
        registration, then any such registration in which such party or parties refuse
        to permit the inclusion of Registrable Securities.

       

      “Person”
        means
        an individual, a partnership, a corporation, a limited liability company,
        an
        association, a joint stock company, a trust, a joint venture, an unincorporated
        organization and a governmental entity or any department, agency or political
        subdivision thereof.

       

      “Registrable
        Securities”
        means
        (i) VeriChip Shares issued pursuant to the Purchase Agreement and (ii) any
        other
        Common Stock issued or issuable with respect to the securities referred to
        in
        clause (i) above by way of a stock dividend or stock split or in connection
        with
        a combination of shares, recapitalization, merger, consolidation or other
        reorganization. As to any particular Registrable Securities, such securities
        shall cease to be Registrable Securities when they have been distributed
        to the
        public pursuant to a offering registered under the Securities Act or sold
        to the
        public through a broker, dealer or market maker in compliance with Rule 144
        under the Securities Act (or any similar rule then in force) or repurchased
        by
        the Company or any Subsidiary. For purposes of this Agreement, a Person shall
        be
        deemed to be a holder of Registrable Securities, and the Registrable Securities
        shall be deemed to be in existence, whenever such Person has the right to
        acquire directly or indirectly such Registrable Securities (upon exchange
        of
        securities or otherwise, but disregarding any restrictions or limitations
        upon
        the exercise of such right), whether or not such acquisition has actually
        been
        effected, and such Person shall be entitled to exercise the rights of a holder
        of Registrable Securities hereunder.

       

      “Securities
        Act”
        means
        the Securities Act of 1933, as amended, and the rules and regulations
        promulgated from time to time thereunder.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      “Securities
        Exchange Act”
        means
        the Securities Exchange Act of 1934, as amended, and the rules and regulations
        promulgated from time to time thereunder.

       

      Unless
        otherwise stated, other capitalized terms contained herein have the meanings
        set
        forth in the Purchase Agreement.

       

        10.
        Miscellaneous.

       

        (a)
        No
        Inconsistent Agreements.
        The
        Company represents and warrants that it is not a party to or subject to any
        agreement that is inconsistent with or violates the rights granted to the
        holders of Registrable Securities in this Agreement, and the Company shall
        not
        hereafter enter into any agreement with respect to its securities that is
        inconsistent with or violates the rights granted to the holders of Registrable
        Securities in this Agreement.

       

        (b)
        Adjustments
        Affecting Registrable Securities.
        The
        Company shall not take any action, and shall use commercially reasonable
        efforts
        not to permit any change to occur, with respect to its securities which would
        adversely affect the ability of the holders of Registrable Securities to
        include
        such Registrable Securities in a registration undertaken pursuant to this
        Agreement.

       

        (c)
        Remedies.
        Any
        Person having rights under any provision of this Agreement shall be entitled
        to
        enforce such rights specifically (without posting a bond or other security),
        to
        recover damages caused by reason of any breach of any provision of this
        Agreement and to exercise all other rights granted by law. The parties hereto
        agree and acknowledge that money damages would not be an adequate remedy
        for any
        breach of the provisions of this Agreement and that, in addition to any other
        rights and remedies existing in its favor, any party shall be entitled to
        specific performance and/or other injunctive relief from any court of law
        or
        equity of competent jurisdiction (without posting any bond or other security)
        in
        order to enforce or prevent violation of the provisions of this Agreement.
        

       

        (d)
        Amendments
        and Waivers.
        Except
        as otherwise provided herein, the provisions of this Agreement may be amended
        or
        waived only upon the prior written consent of the Company and holders of
        at
        least a majority of the Registrable Securities. The failure of any party
        to
        enforce any of the provisions of this Agreement shall in no way be construed
        as
        a waiver of such provisions and shall not affect the right of such party
        thereafter to enforce each and every provision of this Agreement in accordance
        with its terms.

       

        (e)
        Successors
        and Assigns.
        All
        covenants and agreements in this Agreement by or on behalf of any of the
        parties
        hereto shall bind and inure to the benefit of the respective successors and
        assigns of the parties hereto whether so expressed or not. In addition, whether
        or not any express assignment has been made, the provisions of this Agreement
        which are for the benefit of purchasers or holders of Registrable Securities
        are
        also for the benefit of, and enforceable by, any subsequent holder of
        Registrable Securities.

       

        (f)
        Severability.
        Whenever possible, each provision of this Agreement shall be interpreted
        in such
        manner as to be effective and valid under applicable law, but if any provision
        of this Agreement is held to be prohibited by or invalid, illegal or
        unenforceable under

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      applicable
        law, such provision shall be ineffective only to the extent of such prohibition,
        invalidity, illegality or unenforceability without invalidating the remainder
        of
        this Agreement.

       

        (g)
        Counterparts.
        This
        Agreement may be executed simultaneously in two or more counterparts (including
        by means of facsimile), any one of which need not contain the signatures
        of more
        than one party, but all such counterparts taken together shall constitute
        one
        and the same Agreement.

       

        (h)
        Descriptive
        Headings.
        The
        descriptive headings of this Agreement are inserted for convenience only
        and do
        not constitute a part of this Agreement.

       

        (i)
        Governing
        Law.
        All
        matters relating to the interpretation, construction, validity and enforcement
        of this Agreement shall be governed by and construed in accordance with the
        domestic laws of the State of Delaware without giving effect to any choice
        or
        conflict of law provision or rule (whether of the State of Delaware or any
        other
        jurisdiction) that would cause the application of laws of any jurisdiction
        other
        than the State of Delaware.

       

        (j)
        Notices.
        All
        notices, demands or other communications to be given or delivered under or
        by
        reason of the provisions of this Agreement shall be in writing and shall
        be
        deemed to have been given when delivered personally to the recipient, sent
        to
        the recipient by reputable overnight courier service (charges prepaid) or
        mailed
        to the recipient by certified or registered mail, return receipt requested
        and
        postage prepaid. Such notices, demands and other communications shall be
        sent to
        the Company or to the Stockholder at the address indicated
        below:

       

      
        	
                Notices
                  to the Company:

                 

                c/o
                  Applied Digital Solutions, Inc.

                1690
                  South Congress Avenue

                Suite
                  200

                Delray
                  Beach, Florida 33445

                Attn: Michael
                  Krawitz

                 

              	
                with
                  a copy to:

                 

                Holland
                  & Knight LLP

                701
                  Brickell Avenue, Suite 3000

                Miami,
                  Florida 33131

                Attn:  
                  Harvey
                  Goldman

              
	
                Notices
                  to the Stockholder:

                 

                Perceptis,
                  L.P.

                c/o
                  SE Capital, LLC

                One
                  North Wacker Drive, Suite 4330

                Chicago,
                  Illinois 60606

                Attn: Jeffrey
                  Kvam

                 
                  Brad Bernstein

              	
                with
                  a copy to:

                 

                Kirkland
                  & Ellis LLP

                200
                  East Randolph Drive

                Chicago,
                  Illinois 60601

                Attn:  
                  Margaret
                  A. Gibson, P.C.

                           
                  Brian
                  C. Van Klompenberg

              

      

       

      or
        to
        such other address or to the attention of such other Person as the recipient
        party has specified by prior written notice to the sending party.

       

        (k)
        Rights
        Cumulative; Waiver.
        The
        rights and remedies of holders of Registrable Securities and the Company
        under
        this Agreement shall be cumulative and not exclusive of any rights or remedies
        which either would otherwise have hereunder or at law or in

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      equity
        or
        by statute, and no failure or delay by either party in exercising any right
        or
        remedy shall impair any such right or remedy or operate as a waiver of such
        right or remedy, nor shall any single or partial exercise of any power or
        right
        preclude such party’s other or further exercise or the exercise of any other
        power or right. The waiver by any party hereto of a breach of any provision
        of
        this Agreement shall not operate or be construed as a waiver of any preceding
        or
        succeeding breach and no failure by either party to exercise any right or
        privilege hereunder shall be deemed a waiver of such party’s rights or
        privileges hereunder or shall be deemed a waiver of such party’s rights to
        exercise the same at any subsequent time or times hereunder.

       

        (l)
        No
        Strict Construction.
        The
        parties hereto have participated jointly in the negotiation and drafting
        of this
        Agreement. In the event an ambiguity or question of intent or interpretation
        arises, this Agreement shall be construed as if drafted jointly by the parties
        hereto, and no presumption or burden of proof shall arise favoring or
        disfavoring any party by virtue of the authorship of any of the provisions
        of
        this Agreement.

       

        (m)
        Mutual
        Waiver of Jury Trial.
        As a
        specifically bargained inducement for each of the parties to enter into this
        Agreement (with each party having had opportunity to consult counsel), each
        party hereto expressly and irrevocably waives the right to trial by jury
        in any
        lawsuit or legal proceeding relating to or arising in any way from this
        Agreement or the transactions contemplated herein, and any lawsuit or legal
        proceeding relating to or arising in any way to this Agreement or the
        transactions contemplated herein shall be tried in a court of competent
        jurisdiction by a judge sitting without a jury.

       

      *    *    *    *

       

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

          
          

        

      

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

       

      VERICHIP
        CORPORATION

      

      By: 
        /s/
        Kevin McLaughlin

      Name: 
        Kevin
        McLaughlin

      Its: CEO

      

      PERCEPTIS,
        L.P.
InterAir GP, Inc.
General Partner

      

      By: /s/
        C.
        Bryan Daniels

      Name: C.
        Bryan
        Daniels

      Its: President

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