Document:

EXHIBIT 10.34

                             TECH LABORATORIES INC.
                            PLACEMENT AGENT AGREEMENT

                                                       Dated as of: May 28, 2004

Newbridge Securities Corporation
1451 Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309

Ladies and Gentlemen:

         The undersigned,  Tech Laboratories Inc., a New Jersey corporation (the
"Company"),  hereby agrees with Newbridge Securities Corporation (the "Placement
Agent") and Cornell Capital  Partners,  LP, a Delaware Limited  Partnership (the
"Investor"), as follows:

      1. Offering.  The Company hereby engages the Placement Agent to act as its
exclusive  placement  agent in connection  with the Standby Equity  Distribution
Agreement dated the date hereof (the "Standby Equity  Distribution  Agreement"),
pursuant to which the Company shall issue and sell to the Investor, from time to
time, and the Investor  shall  purchase from the Company (the  "Offering") up to
Ten Million  U.S.  Dollars  ($10,000,000)  of the  Company's  common  stock (the
"Commitment  Amount"), no par value per share (the "Common Stock"), at price per
share equal to the Purchase Price, as that term is defined in the Standby Equity
Distribution Agreement.  The Placement Agent services shall consist of reviewing
the terms of the Standby Equity Distribution  Agreement and advising the Company
with respect to those terms.

         All  capitalized  terms used herein and not  otherwise  defined  herein
shall  have  the  same  meaning  ascribed  to  them  as in  the  Standby  Equity
Distribution Agreement. The Investor will be granted certain registration rights
with  respect  to the Common  Stock as more fully set forth in the  Registration
Rights Agreement between the Company and the Investor dated the date hereof (the
"Registration Rights Agreement").  The documents to be executed and delivered in
connection  with the  Offering,  including,  but not limited,  to the  Company's
latest  Quarterly  Report  on Form  10-QSB  as  filed  with  the  United  States
Securities  and  Exchange  Commission,   this  Agreement,   the  Standby  Equity
Distribution  Agreement,  the  Registration  Rights  Agreement,  and the  Escrow
Agreement  dated the date  hereof  (the  "Escrow  Agreement"),  are  referred to
sometimes  hereinafter  collectively as the "Offering  Materials." The Company's
Common Stock  purchased by the Investor  hereunder or to be issued in connection
with the conversion of any  debentures are sometimes  referred to hereinafter as
the  "Securities."  The  Placement  Agent  shall  not be  obligated  to sell any
Securities.

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      2. Compensation.

         A. Upon the execution of this Agreement, the Company shall issue to the
Placement  Agent or its  designee  shares of the  Company's  Common  Stock in an
amount  equal to Ten Thousand  U.S.  Dollars  (US$10,000)  divided by the volume
weighted  average price of the Company's  Common Stock,  as quoted by Bloomberg,
LP, on the date hereof (the  "Placement  Agent's  Shares").  The Placement Agent
shall be entitled to "piggy-back"  registration rights, which shall be triggered
upon  registration of any shares of Common Stock by the Investor with respect to
the Placement Agent's Shares pursuant to the Registration Rights Agreement dated
the date hereof.

      3. Representations, Warranties and Covenants of the Placement Agent.

         A. The Placement Agent represents, warrants and covenants as follows:

            (i) The Placement  Agent has the necessary  power to enter into this
Agreement and to consummate the transactions contemplated hereby.

            (ii) The  execution  and  delivery  by the  Placement  Agent of this
Agreement and the consummation of the transactions  contemplated herein will not
result in any  violation  of, or be in conflict  with,  or  constitute a default
under, any agreement or instrument to which the Placement Agent is a party or by
which the Placement Agent or its properties are bound, or any judgment,  decree,
order or, to the Placement Agent's  knowledge,  any statute,  rule or regulation
applicable to the Placement Agent. This Agreement when executed and delivered by
the Placement Agent, will constitute the legal, valid and binding obligations of
the Placement  Agent,  enforceable in accordance  with their  respective  terms,
except  to the  extent  that (a) the  enforceability  hereof or  thereof  may be
limited by bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles of equity,
or (c) the  indemnification  provisions  hereof or thereof  may be held to be in
violation of public policy.

            (iii) Upon receipt and  execution of this  Agreement,  the Placement
Agent will  promptly  forward  copies of this  Agreement  to the  Company or its
counsel and the Investor or its counsel.

            (iv) The Placement Agent will not intentionally take any action that
it reasonably believes would cause the Offering to violate the provisions of the
Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange Act
of 1934 (the "1934  Act"),  the  respective  rules and  regulations  promulgated
thereunder (the "Rules and  Regulations")  or applicable  "Blue Sky" laws of any
state or jurisdiction.

            (v) The Placement  Agent is a member of the National  Association of
Securities  Dealers,  Inc., and is a broker-dealer  registered as such under the
1934 Act and under the  securities  laws of the  states in which the  Securities
will be offered or sold by the  Placement  Agent  unless an  exemption  for such
state  registration is available to the Placement  Agent. The Placement Agent is
in  material  compliance  with  the  rules  and  regulations  applicable  to the
Placement Agent generally and applicable to the Placement Agent's  participation
in the Offering.

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      4. Representations and Warranties of the Company.

         A. The Company represents and warrants as follows:

            (i)  The  execution,  delivery  and  performance  of  each  of  this
Agreement,  the Standby Equity Distribution Agreement, the Escrow Agreement, and
the  Registration  Rights  Agreement  has  been  or will  be  duly  and  validly
authorized by the Company and is, or with respect to this Agreement, the Standby
Equity Distribution Agreement, the Escrow Agreement, and the Registration Rights
Agreement, will be a valid and binding agreement of the Company,  enforceable in
accordance  with  its  respective  terms,  except  to the  extent  that  (a) the
enforceability  hereof or  thereof  may be limited  by  bankruptcy,  insolvency,
reorganization,  moratorium  or  similar  laws from  time to time in effect  and
affecting the rights of creditors  generally,  (b) the enforceability  hereof or
thereof is subject to general  principles  of equity or (c) the  indemnification
provisions  hereof or thereof may be held to be in violation  of public  policy.
The Securities to be issued  pursuant to the  transactions  contemplated by this
Agreement  and  the  Standby  Equity  Distribution   Agreement  have  been  duly
authorized and, when issued and paid for in accordance with this Agreement,  the
Standby   Equity   Distribution   Agreement  and  the   certificates/instruments
representing  such  Securities,  will be valid and  binding  obligations  of the
Company,  enforceable in accordance with their respective  terms,  except to the
extent  that  (1) the  enforceability  thereof  may be  limited  by  bankruptcy,
insolvency,  reorganization,  moratorium  or  similar  laws from time to time in
effect  and   affecting  the  rights  of  creditors   generally,   and  (2)  the
enforceability thereof is subject to general principles of equity. All corporate
action  required  to be taken for the  authorization,  issuance  and sale of the
Securities has been duly and validly taken by the Company.

            (ii) The  Company  has a duly  authorized,  issued  and  outstanding
capitalization  as set  forth  herein  and in the  Standby  Equity  Distribution
Agreement.  The Company is not a party to or bound by any instrument,  agreement
or other  arrangement  providing  for it to issue  any  capital  stock,  rights,
warrants, options or other securities, except for this Agreement, the agreements
described herein and as described in the Standby Equity Distribution  Agreement,
dated the date  hereof  and the  agreements  described  therein.  All issued and
outstanding  securities of the Company,  have been duly  authorized  and validly
issued and are fully paid and non-assessable; the holders thereof have no rights
of rescission or preemptive  rights with respect  thereto and are not subject to
personal liability solely by reason of being security holders;  and none of such
securities  were issued in violation of the preemptive  rights of any holders of
any security of the Company.

            (iii)  The  Common  Stock  to be  issued  in  accordance  with  this
Agreement and the Standby Equity Distribution Agreement has been duly authorized
and, when issued and paid for in  accordance  with this  Agreement,  the Standby
Equity Distribution Agreement,  the  certificates/instruments  representing such
Common Stock will be validly issued, fully-paid and non-assessable;  the holders
thereof will not be subject to personal liability solely by reason of being such
holders;  such  Securities  are not and will not be  subject  to the  preemptive
rights of any holder of any security of the Company.

            (iv) The  Company  has good and  marketable  title  to, or valid and
enforceable  leasehold  estates  in,  all  items of real and  personal  property
necessary to conduct its business  (including,  without limitation,  any real or

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personal property stated in the Offering  Materials to be owned or leased by the
Company), free and clear of all liens, encumbrances,  claims, security interests
and defects of any material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.

            (v) There is no litigation or governmental proceeding pending or, to
the best of the  Company's  knowledge,  threatened  against,  or  involving  the
properties  or  business  of the  Company,  except as set forth in the  Offering
Materials.

            (vi) The Company has been duly organized and is validly  existing as
a corporation in good standing under the laws of the State of New Jersey. Except
as set forth in the  Offering  Materials,  the Company  does not own or control,
directly  or  indirectly,  an interest  in any other  corporation,  partnership,
trust,  joint venture or other business entity. The Company is duly qualified or
licensed and in good standing as a foreign  corporation in each  jurisdiction in
which the character of its operations  requires such  qualification or licensing
and where  failure to so qualify  would  have a material  adverse  effect on the
Company.  The Company has all requisite  corporate power and authority,  and all
material and necessary authorizations, approvals, orders, licenses, certificates
and  permits  of and from  all  governmental  regulatory  officials  and  bodies
(domestic  and foreign) to conduct its  businesses  (and  proposed  business) as
described in the Offering  Materials.  Any disclosures in the Offering Materials
concerning the effects of foreign,  federal,  state and local  regulation on the
Company's  businesses as currently  conducted and as contemplated are correct in
all material  respects and do not omit to state a material fact. The Company has
all  corporate  power and  authority to enter into this  Agreement,  the Standby
Equity Distribution Agreement, the Registration Rights Agreement, and the Escrow
Agreement,  to carry out the provisions and conditions  hereof and thereof,  and
all  consents,  authorizations,  approvals  and orders  required  in  connection
herewith and therewith have been obtained.  No consent,  authorization  or order
of, and no filing with, any court,  government  agency or other body is required
by the Company for the issuance of the  Securities  or execution and delivery of
the Offering  Materials except for applicable federal and state securities laws.
The Company,  since its inception,  has not incurred any liability arising under
or as a result of the  application of any of the provisions of the 1933 Act, the
1934 Act or the Rules and Regulations.

            (vii) There has been no material  adverse change in the condition or
prospects of the Company,  financial or  otherwise,  from the latest dates as of
which such condition or prospects,  respectively,  are set forth in the Offering
Materials,  and the  outstanding  debt,  the  property  and the  business of the
Company conform in all material  respects to the descriptions  thereof contained
in the Offering Materials.

            (viii) Except as set forth in the Offering Materials, the Company is
not in breach of, or in default  under,  any term or  provision  of any material
indenture,  mortgage,  deed  of  trust,  lease,  note,  loan or  Standby  Equity
Distribution  Agreement or any other material agreement or instrument evidencing
an obligation for borrowed money, or any other material  agreement or instrument
to which it is a party or by which it or any of its  properties  may be bound or
affected.  The Company is not in  violation  of any  provision of its charter or
by-laws or in violation of any franchise,  license, permit, judgment,  decree or
order, or in violation of any material statute, rule or regulation.  Neither the
execution  and delivery of the Offering  Materials  nor the issuance and sale or
delivery of the  Securities,  nor the  consummation  of any of the  transactions

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<PAGE>

contemplated  in the Offering  Materials nor the  compliance by the Company with
the terms and provisions hereof or thereof, has conflicted with or will conflict
with,  or has  resulted  in or will  result in a breach of, any of the terms and
provisions  of, or has  constituted or will  constitute a default under,  or has
resulted in or will result in the creation or imposition of any lien,  charge or
encumbrance  upon any property or assets of the Company or pursuant to the terms
of any indenture,  mortgage, deed of trust, note, loan or any other agreement or
instrument  evidencing an obligation for borrowed  money, or any other agreement
or  instrument to which the Company may be bound or to which any of the property
or assets of the Company is subject except (a) where such default,  lien, charge
or encumbrance  would not have a material  adverse effect on the Company and (b)
as  described  in the  Offering  Materials;  nor will such action  result in any
violation  of the  provisions  of the  charter or the by-laws of the Company or,
assuming  the  due  performance  by  the  Placement  Agent  of  its  obligations
hereunder,  any  material  statute or any  material  order,  rule or  regulation
applicable  to the  Company of any court or of any  foreign,  federal,  state or
other regulatory authority or other government body having jurisdiction over the
Company.

            (ix) Subsequent to the dates as of which information is given in the
Offering  Materials,  and except as may  otherwise be indicated or  contemplated
herein or therein and the securities offered pursuant to the Securities Purchase
Agreement  dated the date hereof,  the Company has not (a) issued any securities
or incurred any  liability or  obligation,  direct or  contingent,  for borrowed
money, or (b) entered into any transaction  other than in the ordinary course of
business, or (c) declared or paid any dividend or made any other distribution on
or in  respect  of its  capital  stock.  Except  as  described  in the  Offering
Materials, the Company has no outstanding obligations to any officer or director
of the Company.

            (x) There are no claims for  services in the nature of a finder's or
origination  fee with  respect  to the  sale of the  Common  Stock or any  other
arrangements, agreements or understandings that may affect the Placement Agent's
compensation,  as determined by the National  Association of Securities Dealers,
Inc.

            (xi) The Company owns or  possesses,  free and clear of all liens or
encumbrances  and rights  thereto or therein  by third  parties,  the  requisite
licenses  or other  rights to use all  trademarks,  service  marks,  copyrights,
service names, trade names, patents,  patent applications and licenses necessary
to conduct its business  (including,  without  limitation,  any such licenses or
rights  described in the  Offering  Materials as being owned or possessed by the
Company) and, except as set forth in the Offering  Materials,  there is no claim
or action by any person  pertaining  to, or  proceeding,  pending or threatened,
which  challenges  the  exclusive  rights of the  Company  with  respect  to any
trademarks,  service marks,  copyrights,  service names,  trade names,  patents,
patent applications and licenses used in the conduct of the Company's businesses
(including,  without  limitation,  any such licenses or rights  described in the
Offering  Materials as being owned or possessed by the Company) except any claim
or action  that would not have a material  adverse  effect on the  Company;  the
Company's  current  products,  services or processes do not infringe or will not
infringe on the patents currently held by any third party.

            (xii) Except as described in the Offering Materials,  the Company is
not under any obligation to pay royalties or fees of any kind  whatsoever to any
third party with respect to any trademarks,  service marks, copyrights,  service
names, trade names, patents, patent applications,  licenses or technology it has

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developed,  uses,  employs  or  intends  to use or  employ,  other than to their
respective licensors.

            (xiii)  Subject to the  performance  by the  Placement  Agent of its
obligations  hereunder the offer and sale of the Securities  complies,  and will
continue to comply,  in all material  respects with the requirements of Rule 506
of  Regulation D  promulgated  by the SEC pursuant to the 1933 Act and any other
applicable  federal and state laws,  rules,  regulations  and executive  orders.
Neither the Offering  Materials nor any amendment or supplement  thereto nor any
documents  prepared by the Company in connection  with the Offering will contain
any untrue  statement  of a  material  fact or omit to state any  material  fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the  circumstances  under  which they were made,  not  misleading.  All
statements of material  facts in the Offering  Materials are true and correct as
of the date of the Offering Materials.

            (xiv) All material  taxes which are due and payable from the Company
have been paid in full or adequate provision has been made for such taxes on the
books of the  Company,  except  for those  taxes  disputed  in good faith by the
Company

            (xv)  None  of the  Company  nor  any of  its  officers,  directors,
employees or agents, nor any other person acting on behalf of the Company,  has,
directly  or  indirectly,  given or agreed to give any  money,  gift or  similar
benefit (other than legal price  concessions to customers in the ordinary course
of  business)  to any  customer,  supplier,  employee  or agent of a customer or
supplier,  or official or employee of any governmental agency or instrumentality
of any government  (domestic or foreign) or any political party or candidate for
office  (domestic  or foreign) or other person who is or may be in a position to
help or hinder the business of the Company (or assist it in connection  with any
actual or  proposed  transaction)  which (A) might  subject  the  Company to any
damage  or  penalty  in  any  civil,  criminal  or  governmental  litigation  or
proceeding, or (B) if not given in the past, might have had a materially adverse
effect on the assets,  business or operations of the Company as reflected in any
of the financial statements  contained in the Offering Materials,  or (C) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company in the future.

      5. Representations, Warranties and Covenants of the Investor.

         A. The Investor represents, warrants and covenants as follows:

            (i)  The  Investor  has the  necessary  power  to  enter  into  this
Agreement and to consummate the transactions contemplated hereby.

            (ii) The  execution  and delivery by the Investor of this  Agreement
and the consummation of the transactions  contemplated herein will not result in
any violation of, or be in conflict  with,  or constitute a default  under,  any
agreement  or  instrument  to which  the  Investor  is a party  or by which  the
Investor or its properties are bound, or any judgment,  decree, order or, to the
Investor's  knowledge,  any  statute,  rule  or  regulation  applicable  to  the
Investor.  This  Agreement  when executed and  delivered by the  Investor,  will
constitute the legal, valid and binding obligations of the Investor, enforceable
in accordance  with their  respective  terms,  except to the extent that (a) the
enforceability  hereof or  thereof  may be limited  by  bankruptcy,  insolvency,

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reorganization,  moratorium  or  similar  laws from  time to time in effect  and
affecting the rights of creditors  generally,  (b) the enforceability  hereof or
thereof is subject to general  principles of equity, or (c) the  indemnification
provisions hereof or thereof may be held to be in violation of public policy.

            (iii) The Investor will promptly  forward  copies of any and all due
diligence questionnaires compiled by the Investor to the Placement Agent.

            (iv) The Investor is an  Accredited  Investor (as defined  under the
1933 Act).

            (v) The Investor is acquiring the  Securities for the Inventor's own
account as principal,  not as a nominee or agent, for investment  purposes only,
and not  with a view  to,  or for,  resale,  distribution  or  fractionalization
thereof  in  whole  or in part and no other  person  has a  direct  or  indirect
beneficial interest in such Securities.  Further, the Investor does not have any
contract,  undertaking,  agreement  or  arrangement  with  any  person  to sell,
transfer or grant  participations  to such person or to any third  person,  with
respect to any of the Securities.

            (vi) The Investor acknowledges the Investor's understanding that the
offering and sale of the  Securities is intended to be exempt from  registration
under the 1933 Act by virtue of Section 3(b) of the 1933 Act and the  provisions
of Regulation D promulgated thereunder ("Regulation D"). In furtherance thereof,
the Investor represents and warrants as follows:

         (a) The Investor has the financial ability to bear the economic risk of
the Investor's  investment,  has adequate means for providing for the Inventor's
current  needs and personal  contingencies  and has no need for  liquidity  with
respect to the Investor's investment in the Company; and

         (b) The Investor has such  knowledge  and  experience  in financial and
business  matters  as to be capable  of  evaluating  the merits and risks of the
prospective  investment.  The Inventor also represents it has not been organized
for the purpose of acquiring the Securities.

            (vii) The Investor has been given the  opportunity  for a reasonable
time prior to the date hereof to ask questions of, and receive answers from, the
Company  or its  representatives  concerning  the  terms and  conditions  of the
Offering,  and other matters  pertaining to this investment,  and has been given
the  opportunity  for a reasonable  time prior to the date hereof to obtain such
additional  information in connection with the Company in order for the Investor
to evaluate  the merits and risks of purchase of the  Securities,  to the extent
the Company  possesses such  information or can acquire it without  unreasonable
effort or expense.  The Investor is not relying on the Placement Agent or any of
its  affiliates  with  respect to the accuracy or  completeness  of the Offering
Materials or for any economic considerations involved in this investment.

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      6. Certain Covenants and Agreements of the Company.

      The Company covenants and agrees at its expense and without any expense to
the Placement Agent as follows:

         A. To advise  the  Placement  Agent and the  Investor  of any  material
adverse change in the Company's financial condition, prospects or business or of
any  development  materially  affecting  the  Company  or  rendering  untrue  or
misleading  any material  statement in the Offering  Materials  occurring at any
time as soon as the Company is either informed or becomes aware thereof.

         B. To use its commercially reasonable efforts to cause the Common Stock
issuable in connection  with this Agreement and the Standby Equity  Distribution
Agreement to be qualified or registered for sale on terms  consistent with those
stated in the  Registration  Rights  Agreement and under the securities  laws of
such  jurisdictions  as the Placement  Agent and the Investor  shall  reasonably
request. Qualification,  registration and exemption charges and fees shall be at
the sole cost and expense of the Company.

         C. Upon  written  request,  to provide  and  continue  to  provide  the
Placement  Agent and the Investor copies of all quarterly  financial  statements
and audited annual financial statements prepared by or on behalf of the Company,
other reports prepared by or on behalf of the Company for public  disclosure and
all documents delivered to the Company's stockholders.

         D. To deliver,  during the  registration  period of the Standby  Equity
Distribution  Agreement,  to the Investor upon the  Investor's  request,  within
forty five (45) days, a statement of its income for each such quarterly  period,
and its balance sheet and a statement of changes in  stockholders'  equity as of
the end of such quarterly  period,  all in reasonable  detail,  certified by its
principal  financial or accounting  officer;  (ii) within ninety (90) days after
the close of each fiscal year,  its balance sheet as of the close of such fiscal
year,   together  with  a  statement  of  income,  a  statement  of  changes  in
stockholders'  equity and a statement  of cash flow for such fiscal  year,  such
balance sheet, statement of income, statement of changes in stockholders' equity
and statement of cash flow to be in reasonable  detail and accompanied by a copy
of the  certificate  or  report  thereon  of  independent  auditors  if  audited
financial  statements are prepared;  and (iii) a copy of all documents,  reports
and information  furnished to its  stockholders at the time that such documents,
reports and information are furnished to its stockholders.

         E. To comply with the terms of the Offering Materials.

         F. To ensure that any transactions between or among the Company, or any
of its officers, directors and affiliates be on terms and conditions that are no
less  favorable  to the  Company,  than the terms and  conditions  that would be
available in an "arm's length" transaction with an independent third party.

      7. Indemnification and Limitation of Liability.

         A.  The  Company  hereby  agrees  that it will  indemnify  and hold the
Placement   Agent  and  each  officer,   director,   shareholder,   employee  or
representative of the Placement Agent and each person controlling, controlled by
or under common  control with the Placement  Agent within the meaning of Section

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15 of the  1933  Act or  Section  20 of the  1934  Act or the  SEC's  Rules  and
Regulations promulgated thereunder (the "Rules and Regulations"),  harmless from
and  against  any  and all  loss,  claim,  damage,  liability,  cost or  expense
whatsoever (including, but not limited to, any and all reasonable legal fees and
other  expenses and  disbursements  incurred in connection  with  investigating,
preparing to defend or defending any action,  suit or proceeding,  including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or in
appearing  or  preparing  for  appearance  as a witness in any  action,  suit or
proceeding,  including any inquiry, investigation or pretrial proceeding such as
a deposition)  to which the Placement  Agent or such  indemnified  person of the
Placement  Agent may become  subject under the 1933 Act, the 1934 Act, the Rules
and Regulations, or any other federal or state law or regulation,  common law or
otherwise,  arising  out of or based  upon (i) any untrue  statement  or alleged
untrue  statement  of a  material  fact  contained  in  (a)  Section  4 of  this
Agreement,  (b) the Offering Materials (except those written statements relating
to the Placement Agent given by the Placement Agent for inclusion therein),  (c)
any  application  or other  document  or written  communication  executed by the
Company or based upon written information  furnished by the Company filed in any
jurisdiction  in order to qualify  the Common  Stock under the  securities  laws
thereof,  or any state  securities  commission  or agency;  (ii) the omission or
alleged omission from documents  described in clauses (a), (b) or (c) above of a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading;  or (iii) the breach of any  representation,  warranty,
covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an  indemnified  person,  at any time or from time to
time, it will promptly  reimburse such indemnified  person for any loss,  claim,
damage,  liability,  cost  or  expense  actually  and  reasonably  paid  by  the
indemnified  person as to which the Company has indemnified such person pursuant
hereto.  Notwithstanding  the foregoing  provisions of this Paragraph  7(A), any
such payment or reimbursement by the Company of fees,  expenses or disbursements
incurred by an indemnified person in any proceeding in which a final judgment by
a court of competent  jurisdiction  (after all appeals or the expiration of time
to appeal) is entered  against the Placement  Agent or such  indemnified  person
based upon specific finding of fact that the Placement Agent or such indemnified
person's gross negligence or willful  misfeasance will be promptly repaid to the
Company.

            B. The Placement Agent hereby agrees that it will indemnify and hold
the Company and each officer, director, shareholder,  employee or representative
of the  Company,  and each person  controlling,  controlled  by or under  common
control  with the  Company  within the  meaning of Section 15 of the 1933 Act or
Section  20 of the 1934 Act or the  Rules  and  Regulations,  harmless  from and
against any and all loss, claim, damage,  liability,  cost or expense whatsoever
(including,  but not  limited  to, any and all  reasonable  legal fees and other
expenses and disbursements incurred in connection with investigating,  preparing
to defend or defending any action, suit or proceeding,  including any inquiry or
investigation,  commenced or threatened, or any claim whatsoever or in appearing
or preparing  for  appearance  as a witness in any action,  suit or  proceeding,
including  any  inquiry,   investigation  or  pretrial   proceeding  such  as  a
deposition) to which the Company or such  indemnified  person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and  Regulations,  or
any other federal or state law or regulation,  common law or otherwise,  arising
out of or based upon (i) the material  breach of any  representation,  warranty,
covenant or agreement made by the Placement Agent in this Agreement, or (ii) any
false or misleading information provided to the Company in writing by one of the
Placement Agent's indemnified persons specifically for inclusion in the Offering
Materials.

                                       9
<PAGE>

            C. The Investor  hereby  agrees that it will  indemnify and hold the
Placement   Agent  and  each  officer,   director,   shareholder,   employee  or
representative of the Placement Agent, and each person  controlling,  controlled
by or under  common  control  with the  Placement  Agent  within the  meaning of
Section  15 of the 1933 Act or  Section  20 of the  1934  Act or the  Rules  and
Regulations,  harmless  from  and  against  any and  all  loss,  claim,  damage,
liability,  cost or expense whatsoever  (including,  but not limited to, any and
all  reasonable  legal fees and other  expenses  and  disbursements  incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation,  commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action,  suit or  proceeding,  including  any inquiry,  investigation  or
pretrial  proceeding  such as a deposition) to which the Placement Agent or such
indemnified person of the Placement Agent may become subject under the 1933 Act,
the 1934 Act, the Rules and  Regulations,  or any other  federal or state law or
regulation,  common  law or  otherwise,  arising  out of or  based  upon (i) the
conduct of the Investor or its  officers,  employees or  representatives  in its
acting  as the  Investor  for the  Offering,  (ii) the  material  breach  of any
representation,  warranty,  covenant or  agreement  made by the  Investor in the
Offering Materials, or (iii) any false or misleading information provided to the
Placement Agent by one of the Investor's indemnified persons.

            D. The Placement Agent hereby agrees that it will indemnify and hold
the Investor and each officer, director, shareholder, employee or representative
of the  Investor,  and each person  controlling,  controlled  by or under common
control  with the  Investor  within the meaning of Section 15 of the 1933 Act or
Section  20 of the 1934 Act or the  Rules  and  Regulations,  harmless  from and
against any and all loss, claim, damage,  liability,  cost or expense whatsoever
(including,  but not  limited  to, any and all  reasonable  legal fees and other
expenses and disbursements incurred in connection with investigating,  preparing
to defend or defending any action, suit or proceeding,  including any inquiry or
investigation,  commenced or threatened, or any claim whatsoever or in appearing
or preparing  for  appearance  as a witness in any action,  suit or  proceeding,
including  any  inquiry,   investigation  or  pretrial   proceeding  such  as  a
deposition) to which the Investor or such indemnified person of the Investor may
become subject under the 1933 Act, the 1934 Act, the Rules and  Regulations,  or
any other federal or state law or regulation,  common law or otherwise,  arising
out of or based  upon  the  material  breach  of any  representation,  warranty,
covenant or agreement made by the Placement Agent in this Agreement.

            E.  Promptly  after  receipt  by an  indemnified  party of notice of
commencement  of any action covered by Section 7(A),  (B), (C) or (D), the party
to be indemnified shall,  within five (5) business days, notify the indemnifying
party of the commencement  thereof; the omission by one (1) indemnified party to
so notify the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other  indemnified  party that has given such notice
and shall not relieve the  indemnifying  party of any liability  outside of this
indemnification  if not  materially  prejudiced  thereby.  In the event that any
action is brought against the indemnified  party, the indemnifying party will be
entitled to participate  therein and, to the extent it may desire, to assume and
control  the  defense  thereof  with  counsel  chosen by it which is  reasonably
acceptable to the indemnified party. After notice from the indemnifying party to

                                       10
<PAGE>

such  indemnified  party of its election to so assume the defense  thereof,  the
indemnifying  party  will not be liable to such  indemnified  party  under  such
Section  7(A),  (B),  (C), or (D) for any legal or other  expenses  subsequently
incurred by such indemnified  party in connection with the defense thereof,  but
the  indemnified  party may, at its own expense,  participate in such defense by
counsel  chosen by it,  without,  however,  impairing the  indemnifying  party's
control  of  the  defense.   Subject  to  the  proviso  of  this   sentence  and
notwithstanding  any other  statement  to the  contrary  contained  herein,  the
indemnified  party or  parties  shall  have the right to choose its or their own
counsel  and  control  the  defense  of any  action,  all at the  expense of the
indemnifying  party  if (i) the  employment  of such  counsel  shall  have  been
authorized in writing by the  indemnifying  party in connection with the defense
of  such  action  at  the  expense  of  the  indemnifying  party,  or  (ii)  the
indemnifying  party shall not have employed counsel  reasonably  satisfactory to
such  indemnified  party to have charge of the  defense of such action  within a
reasonable  time  after  notice of  commencement  of the  action,  or (iii) such
indemnified  party or parties shall have reasonably  concluded that there may be
defenses available to it or them which are different from or additional to those
available  to one  or  all  of the  indemnifying  parties  (in  which  case  the
indemnifying  parties  shall not have the right to direct  the  defense  of such
action on behalf of the  indemnified  party or parties),  in any of which events
such  fees  and  expenses  of one  additional  counsel  shall  be  borne  by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially  similar or related
actions in the same jurisdiction  arising out of the same general allegations or
circumstance,  be liable for the  reasonable  fees and expenses of more than one
separate  firm of attorneys  at any time for all such  indemnified  parties.  No
settlement of any action or  proceeding  against an  indemnified  party shall be
made without the consent of the indemnifying party.

            F. In  order to  provide  for just  and  equitable  contribution  in
circumstances in which the indemnification  provided for in Section 7(A) or 7(B)
is due in accordance  with its terms but is for any reason held by a court to be
unavailable  on grounds of policy or  otherwise,  the Company and the  Placement
Agent shall contribute to the aggregate losses,  claims, damages and liabilities
(including  legal or other expenses  reasonably  incurred in connection with the
investigation  or defense of same) which the other may incur in such  proportion
so that the  Placement  Agent  shall be  responsible  for  such  percent  of the
aggregate of such losses,  claims,  damages and  liabilities  as shall equal the
percentage of the gross  proceeds  paid to the  Placement  Agent and the Company
shall be responsible for the balance;  provided,  however, that no person guilty
of fraudulent  misrepresentation within the meaning of Section 11(f) of the 1933
Act shall be entitled to contribution from any person who was not guilty of such
fraudulent  misrepresentation.  For  purposes of this Section  7(F),  any person
controlling,  controlled by or under common control with the Placement Agent, or
any partner,  director,  officer,  employee,  representative or any agent of any
thereof,  shall have the same rights to  contribution as the Placement Agent and
each person controlling,  controlled by or under common control with the Company
within  the  meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and each officer of the Company and each  director of the Company shall have the
same rights to contribution  as the Company.  Any party entitled to contribution
will,  promptly after receipt of notice of commencement  of any action,  suit or
proceeding  against such party in respect of which a claim for  contribution may
be made against the other party under this Section 7(D),  notify such party from

                                       11
<PAGE>

whom contribution may be sought,  but the omission to so notify such party shall
not relieve the party from whom  contribution  may be sought from any obligation
they may have hereunder or otherwise if the party from whom  contribution may be
sought is not materially prejudiced thereby.

            G. The  indemnity  and  contribution  agreements  contained  in this
Section 7 shall remain operative and in full force and effect  regardless of any
investigation  made by or on behalf of any indemnified person or any termination
of this Agreement.

            H. The Company  hereby waives,  to the fullest  extent  permitted by
law, any right to or claim of any  punitive,  exemplary,  incidental,  indirect,
special,  consequential or other damages (including, without limitation, loss of
profits)  against the Placement Agent and each officer,  director,  shareholder,
employee or representative  of the placement agent and each person  controlling,
controlled  by or under  common  control  with the  Placement  Agent  within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and Regulations arising out of any cause whatsoever (whether such cause be based
in  contract,   negligence,   strict   liability,   other  tort  or  otherwise).
Notwithstanding  anything  to  the  contrary  contained  herein,  the  aggregate
liability  of the  Placement  Agent  and each  officer,  director,  shareholder,
employee or representative  of the Placement Agent and each person  controlling,
controlled  by or under  common  control  with the  Placement  Agent  within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and  Regulations  shall not exceed the  compensation  received by the  Placement
Agent  pursuant to Section 2 hereof.  This  limitation of liability  shall apply
regardless of the cause of action,  whether contract,  tort (including,  without
limitation,  negligence)  or breach of statute or any other  legal or  equitable
obligation.

      8. Payment of Expenses.

      The Company  hereby agrees to bear all of the expenses in connection  with
the Offering, including, but not limited to the following: filing fees, printing
and duplicating costs, advertisements, postage and mailing expenses with respect
to the  transmission of Offering  Materials,  registrar and transfer agent fees,
escrow agent fees and expenses,  fees of the Company's  counsel and accountants,
issue and transfer taxes, if any.

      9. Conditions of Closing.

      The Closing  shall be held at the offices of the  Investor or its counsel.
The  obligations  of the  Placement  Agent  hereunder  shall be  subject  to the
continuing accuracy of the representations and warranties of the Company and the
Investor  herein  as of the  date  hereof  and as of the  Date of  Closing  (the
"Closing Date") with respect to the Company or the Investor, as the case may be,
as if it had been made on and as of such Closing Date; the accuracy on and as of
the Closing Date of the  statements of the officers of the Company made pursuant
to the provisions hereof; and the performance by the Company and the Investor on
and as of the Closing Date of its covenants and obligations hereunder and to the
following further conditions:

            A. Upon the effectiveness of a registration  statement  covering the
Standby  Equity  Distribution  Agreement,  the Investor and the Placement  Agent
shall  receive  the  opinion  of Counsel  to the  Company,  dated as of the date
thereof, which opinion shall be in form and substance reasonably satisfactory to
the Investor, their counsel and the Placement Agent.

            B. At or prior to the Closing,  the Investor and the Placement Agent
shall have been furnished such  documents,  certificates  and opinions as it may
reasonably  require for the purpose of enabling  them to review or pass upon the

                                       12
<PAGE>

matters referred to in this Agreement and the Offering Materials, or in order to
evidence   the   accuracy,   completeness   or   satisfaction   of  any  of  the
representations, warranties or conditions herein contained.

            C. At and  prior  to the  Closing,  (i)  there  shall  have  been no
material  adverse change nor development  involving a prospective  change in the
condition or prospects or the business  activities,  financial or otherwise,  of
the Company from the latest dates as of which such condition is set forth in the
Offering  Materials;  (ii)  there  shall  have been no  transaction,  not in the
ordinary course of business except the  transactions  pursuant to the Securities
Purchase  Agreement entered into by the Company on the date hereof which has not
been disclosed in the Offering  Materials or to the Placement  Agent in writing;
(iii) except as set forth in the Offering Materials, the Company shall not be in
default  under any  provision  of any  instrument  relating  to any  outstanding
indebtedness  for which a waiver or extension has not been  otherwise  received;
(iv) except as set forth in the Offering  Materials,  the Company shall not have
issued any securities (other than those to be issued as provided in the Offering
Materials)  or declared or paid any  dividend  or made any  distribution  of its
capital  stock of any  class and  there  shall  not have been any  change in the
indebtedness  (long or short term) or  liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material  amount of the
assets of the Company shall have been pledged or mortgaged,  except as indicated
in the Offering Materials;  and (v) no action, suit or proceeding,  at law or in
equity,  against the Company or affecting  any of its  properties  or businesses
shall be  pending  or  threatened  before  or by any court or  federal  or state
commission,  board or other administrative agency, domestic or foreign,  wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.

            D. If  requested at Closing the  Investor  and the  Placement  Agent
shall receive a certificate  of the Company  signed by an executive  officer and
chief financial officer,  dated as of the applicable Closing, to the effect that
the conditions set forth in subparagraph (C) above have been satisfied and that,
as of the applicable closing,  the representations and warranties of the Company
set forth herein are true and correct.

            E. The  Placement  Agent shall have no obligation to insure that (x)
any check,  note,  draft or other means of payment for the Common  Stock will be
honored,  paid or enforceable against the Investor in accordance with its terms,
or (y) subject to the performance of the Placement  Agent's  obligations and the
accuracy of the Placement Agent's representations and warranties hereunder,  (1)
the Offering is exempt from the registration requirements of the 1933 Act or any
applicable state "Blue Sky" law or (2) the Investor is an Accredited Investor.

      10. Termination.

      This  Agreement  shall be  co-terminus  with,  and terminate upon the same
terms and  conditions  as those set forth in, the  Standby  Equity  Distribution
Agreement.  The rights of the Investor and the  obligations of the Company under
the Registration Rights Agreement, and the rights of the Placement Agent and the
obligations  of the Company  shall  survive the  termination  of this  Agreement
unabridged.

                                       13
<PAGE>

      11. Miscellaneous.

            A. This  Agreement  may be executed  in any number of  counterparts,
each of which shall be deemed to be an  original,  but all which shall be deemed
to be one and the same instrument.

            B. Any notice  required or permitted to be given  hereunder shall be
given in writing  and shall be deemed  effective  when  deposited  in the United
States mail, postage prepaid, or when received if personally  delivered or faxed
(upon  confirmation  of receipt  received by the sending  party),  addressed  as
follows to such other address of which written notice is given to the others):

If to Placement Agent, to:          Newbridge Securities Corporation
                                    1451 Cypress Creek Road, Suite 204
                                    Fort Lauderdale, Florida 33309
                                    Attention: Doug Aguililla
                                    Telephone: (954) 334-3450
                                    Facsimile: (954) 229-9937

If to the Company, to:              Tech Laboratories Inc.
                                    955 Belmont Avenue
                                    North Haledon, New Jersey  07508
                                    Attention: Bernard Ciongoli, President
                                    Telephone: (973) 427-5333
                                    Facsimile: (973) 427-5444

With a copy to:                     Kirkpatrick & Lockhart LLP
                                    201 South Biscayne Boulevard - Suite 2000
                                    Miami, Florida  33131-2399
                                    Attention: Clayton E. Parker, Esq.
                                    Telephone: (305) 539-3300
                                    Facsimile: (305) 358-7095

If to the Investor:                 Cornell Capital Partners, LP
                                    101 Hudson Street - Suite 3700
                                    Jersey City, New Jersey  07302
                                    Attention: Mark A. Angelo
                                               Portfolio Manager
                                    Telephone: (201) 985-8300
                                    Facsimile: (201) 985-8266

With copies to:                     Butler Gonzalez LLP
                                    1416 Morris Avenue - Suite 207
                                    Union, New Jersey 07083
                                    Attention: David Gonzalez, Esq.
                                    Facsimile: (908) 810-0973

                                       14
<PAGE>

            C. This Agreement shall be governed by and construed in all respects
under the laws of the State of New Jersey,  without reference to its conflict of
laws rules or principles. Any suit, action, proceeding or litigation arising out
of or relating to this Agreement shall be brought and prosecuted in such federal
or state court or courts  located  within the State of New Jersey as provided by
law.  The  parties  hereby  irrevocably  and  unconditionally   consent  to  the
jurisdiction of each such court or courts located within the State of New Jersey
and to service of  process by  registered  or  certified  mail,  return  receipt
requested,  or by any other  manner  provided  by  applicable  law,  and  hereby
irrevocably and unconditionally  waive any right to claim that any suit, action,
proceeding  or litigation  so commenced  has been  commenced in an  inconvenient
forum.

            D. This Agreement and the other agreements referenced herein contain
the entire  understanding  between the parties hereto and may not be modified or
amended except by a writing duly signed by the party against whom enforcement of
the modification or amendment is sought.

            E. If any provision of this Agreement shall be held to be invalid or
unenforceable,  such invalidity or  unenforceability  shall not affect any other
provision of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

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

                                           COMPANY:
                                           TECH LABORATORIES INC.

                                           By:    /s/Bernard Ciongoli
                                              --------------------------------
                                           Name:  Bernard Ciongoli
                                           Title: President

                                           PLACEMENT AGENT:
                                           NEWBRIDGE SECURITIES CORPORATION

                                           By:    /s/Guy S. Amico
                                              --------------------------------
                                           Name:  Guy S. Amico
                                           Title: President

                                           INVESTOR:

                                           CORNELL CAPITAL PARTNERS, LP

                                           BY:    YORKVILLE ADVISORS, LLC
                                           ITS:   GENERAL PARTNER

                                           By:    /s/Mark Angelo
                                              --------------------------------
                                           Name:  Mark A. Angelo
                                           Title: Portfolio Manager

                                       16Exhibit 10.1

June 1, 2004

Via Telecopier (651) 445-0217
Digital Angel Corporation
490 Villaume Avenue
South St. Paul MN  55075
Attention: James Santelli

        Re:  Letter Agreement

Dear Mr. Santelli:

         Reference  is  hereby  made to (i)  that  certain  Securities  Purchase
Agreement  dated July 31, 2003 by and between  Digital  Angel  Corporation  (the
"Company") and Laurus Master Fund, Ltd.  ("Laurus") (as amended,  the "July 2003
Agreement"),  (ii) the other Transaction  Documents referred to in the July 2003
Agreement,  (as amended, the "Related July 2003 Documents"),  (iii) that certain
Security  Agreement  dated August 28, 2003 by and between the Company and Laurus
(as amended,  the "August 2003  Agreement")  and (iv) the  Ancillary  Agreements
referred to in the August 2003 Agreement,  (as amended, the "Related August 2003
Documents")  (the July 2003  Agreement,  the Related  July 2003  Documents,  the
August 2003  Agreement  and the Related  August 2003  Documents,  as each may be
amended,  restated,   modified  and/or  supplemented  from  time  to  time,  the
"Documents").  Capitalized  terms  used but not  defined  herein  shall have the
meanings ascribed them in the July 2003 Agreement and the August 2003 Agreement,
respectively.

         This letter sets forth below Laurus'  understanding  of the  agreements
reached with the Company and its parent  corporation,  Applied Digital Solutions
Inc.  ("ADSX"),  as to certain  amendments and agreements  reached regarding the
Documents and related issues. Notwithstanding anything to the contrary contained
in the Documents,  Laurus hereby agrees,  and by the Company's  signature below,
the Company  hereby  agrees,  and, by  signature  below,  solely with respect to
paragraphs 3 and 5 below, ADSX hereby agrees, in each case, as follows:

         1.       The Company  shall not have the  ability  prior to maturity to
                  optionally  prepay in cash any outstanding  principal  amounts
                  evidenced by the Note (as defined in the July 2003  Agreement)
                  (the  "July  2003  Note") or any  Minimum  Borrowing  Note (as
                  defined in the August 2003 Agreement).

         2.       Laurus  hereby  agrees,  so long as the  initial  registration
                  statement  filed in connection  with the August 2003 Agreement
                  and the  Related  August  2003  Documents  (the  "August  2003
                  Agreement  Registration  Statement")  becomes  effective on or
                  prior  to 60 days  after  the  date  hereof,  any and all fees
                  alleged to be incurred by the Company and due to Laurus  prior
                  to the date of  effectiveness  of the  August  2003  Agreement
                  Registration  Statement  as a  result  of the  failure  of the
                  Company to timely cause the registration  statements  referred
                  to in the Documents  (including  certain  registration  rights
                  agreements)   to  be  filed  or  become   effective  with  the
                  Securities and Exchange Commission prior to the dates required
                  by such Documents shall, in each case, be waived.

<PAGE>

3.       Within two (2) business days after the date hereof Laurus hereby agrees
         to convert (such conversion, the "Initial Conversion") a portion of the
         July 2003 Note equal to 150,000 shares of the Company's common stock at
         the fixed  conversion  price applicable to said Note and as promptly as
         practicable  following such conversion,  ADSX hereby agrees to purchase
         such  shares of the  Company's  common  stock from Laurus at a purchase
         price  equal to the  Volume  Weighted  Average  Price ("  VWAP") of the
         Company's  common  stock  for the three (3)  trading  days  immediately
         preceding the Initial Conversion.

4.       Laurus hereby agrees that its conversions of the outstanding  principal
         amount of the July 2003 Note,  any Minimum  Borrowing Note or any other
         outstanding  note or other  obligation  issued by the Company to Laurus
         will not  exceed  twenty-five  percent  (25%) of the  aggregate  dollar
         trading  volume of the  Company's  common stock for the thirty (30) day
         trading period  immediately  preceding a delivery by Laurus of a notice
         of conversion to the Company.

5.       Laurus hereby agrees that with respect to each  conversion by Laurus of
         an outstanding amount of the July 2003 Note or a Minimum Borrowing Note
         into the Company's common stock occurring after the Initial Conversion,
         the  Company  and ADSX  shall  have the right to  purchase  all of such
         common stock converted by Laurus at a price per share equal to the VWAP
         of  the  Company's   common  stock  for  the  three  (3)  trading  days
         immediately preceding such conversion, which right shall terminate (the
         "Termination Time") at the end of the third (3rd) business hour (with a
         "business  hour"  consisting  of any hour between 9 a.m. and 5 p.m. New
         York time)  following  provision  by Laurus to the  Company and ADSX of
         written or email  notification of such conversion (it being  understood
         that the Company and ADSX shall, at the time of any such  notification,
         determine  among  themselves  the manner in which such  purchase  right
         shall be  allocated  between the Company and ADSX).  Notice of any such
         conversion  shall be made in the manner  provided for in the Documents,
         but in  addition,  Laurus  agrees to telecopy  and email a copy of each
         such notice of conversion to:

           Mr. Kevin McGrath, kmcgrath@digitalangelcorp.com, 651-805-8001
           Mr. James P. Santelli, jsantelli@digitalangelcorp.com, 651-455-0217
           Mr. Philip Colton, pcolton@winthrop.com, 612-604-6929
           Mr. Scott   Silverman,   ssilverman@adsx.com, 561-805-8001
           Mr. Michael Krawitz, mkrawitz@adsx.com, 561-805-8001

         In the event that the Company  and/or ADSX has not  informed  Laurus in
         writing of its exercise of its right to purchase such converted  common
         stock of the Company prior to the respective  Termination  Time, Laurus
         shall be permitted to transfer the shares of the Company's common stock
         referred to in this paragraph 5 in any manner which it so chooses.

6.       Laurus  hereby agrees that it will not convert into common stock of the
         Company any amount  outstanding  under the August 2003 Agreement or the
         Related August 2003 Documents prior to the repayment in full (either in
         cash or by way of  conversion  into common stock of the Company) of all
         obligations  outstanding  under the July 2003 Agreement and the Related
         July 2003 Documents.

<PAGE>

This letter shall be governed by, and construed in accordance  with, the laws of
the State of New York.

                                        LAURUS MASTER FUND, LTD.

                                        By: /s/ David Grin
                                            ---------------------------------
                                            David Grin
                                            Director

Agreed and accepted on the date hereof:

DIGITAL ANGEL CORPORATION

By: /s/ James P. Santelli
    -----------------------------------------
    Name: James P. Santelli
    Its Chief Financial Officer

APPLIED DIGITAL SOLUTIONS INC.

By: /s/ Evan C. McKeown
    -----------------------------------------
    Name: Evan C. McKeown
    Title: Chief Financial Officer

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