RESTATED SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the “ Agreement ”),   is entered into and made effective as of April 20, 2007, by and between TECH LABORATORIES, INC., a New Jersey corporation with its principal place of business located at 1818 North Farewell Avenue Milwaukee, Wisconsin 53202 (the “ Parent ”), and the each subsidiary of the Parent listed on Schedule I attached hereto (each a “ Subsidiary ,” and collectively and together with the Parent, the “ Company ”), in favor of the BUYER(S) (the “ Secured Party ”) listed on Schedule I attached to the Securities Purchase Agreement (the “ Securities Purchase Agreement ”) dated the date hereof between the Company and the Secured Party.

WHEREAS, the Parent entered into a Security Agreement dated May ___, 2004 in connection with the issuance and sale of Five Hundred Thousand Dollars ($500,000) of five percent (5%) secured convertible debentures (the “ May 2004 Debentures ”) to the Secured Party (the “ Security Agreement ”);

WHEREAS , the Parent desires to restate the terms of the Security Agreement and supplement such terms as provided herein and replace such Security Agreement with this Restated Security Agreement in order to provide the Secured Party a security interest, as provided for herein, for the May 2004 Debentures and the Convertible Debentures, as defined below;

WHEREAS the Parent shall issue and sell to the Secured Party, as provided in the Securities Purchase Agreement, and the Secured Party shall purchase, up to One Million Four Hundred Thousand Dollars ($1,400,000) of secured convertible debentures (the “ Convertible Debentures ”), which shall be convertible into shares of the Parent’s common stock, par value $0.001, in the respective amounts set forth opposite each Buyer(s) name on Schedule I attached to the Securities Purchase Agreement;

WHEREAS, to induce the Secured Party to enter into the transaction contemplated by the Securities Purchase Agreement, the Convertible Debentures, the Investor Registration Rights Agreement of even date herewith between the Parent and the Secured Party (the “ Investor Registration Rights Agreement ”), and the Irrevocable Transfer Agent Instructions among the Parent, the Secured Party, the Parent’s transfer agent, and David Gonzalez, Esq. (the “ Transfer Agent Instructions ”) (collectively referred to as the “ Transaction Documents ”), each Company hereby grants to the Secured Party a security interest in and to the pledged property of each Company identified on Exhibit A hereto (collectively referred to as the “ Pledged Property ”) to secure all of the Obligations (as defined below).

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, and for other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.1.   Recitals .

The above recitals are true and correct and are incorporated herein, in their entirety, by this reference.

Section 1.2.   Interpretations .

Nothing herein expressed or implied is intended or shall be construed to confer upon any person other than the Secured Party any right, remedy or claim under or by reason hereof.

Section 1.3.   Obligations Secured .

The security interest created hereby in the Pledged Property constitutes continuing collateral security for all of the obligations of the Parent now existing or hereinafter incurred to the Buyers, whether oral or written and whether arising before, on or after the date hereof including, without limitation following obligations (collectively, the “ Obligations ”):

(a)   for so long as the Convertible Debentures are outstanding, the payment by the Parent, as and when due and payable (by scheduled maturity, acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, the Convertible Debentures and the other Transaction Documents; and

(b)   for so long as the Convertible Debentures are outstanding, the due performance and observance by the Parent of all of its other obligations from time to time existing in respect of any of the Transaction Documents, including without limitation, the Parent’s obligations with respect to any conversion or redemption rights of the Secured Party under the Convertible Debentures.

Section 2.1.   Pledged Property .

(a)   As collateral security for all of the Obligations, the Company hereby pledges to the Secured Party, and creates in the Secured Party for its benefit, a continuing security interest in and to all of the Pledged Property whether now owned or hereafter acquired.

(b)   Simultaneously with the execution and delivery of this Agreement, the Company shall make, execute, acknowledge, file, record and deliver to the Secured Party any documents reasonably requested by the Secured Party to perfect its security interest in the Pledged Property. Simultaneously with the execution and delivery of this Agreement, the Company shall make, execute, acknowledge and deliver to the Secured Party such documents and instruments, including, without limitation, financing statements, certificates, affidavits and forms as may, in the Secured Party’s reasonable judgment, be necessary to effectuate, complete or perfect, or to continue and preserve, the security interest of the Secured Party in the Pledged Property, and the Secured Party shall hold such documents and instruments as secured party, subject to the terms and conditions contained herein.

(c)   Account Control Agreement; Blocked Accounts . As of the date hereof, the Parent and its Subsidiaries shall have established or designated all of the deposit accounts they maintain for the purpose of collecting the Accounts, cash revenues, cash receipts, receivables and/or through which payments or other proceeds in respect of receivables from any source or activity may flow as blocked accounts pursuant to the Account Control Agreement dated the date hereof by the Company, the Secured Party and the bank at which such account is maintained (the “ Blocked Account Bank ”) (the “ Blocked Accounts ”). From the date hereof until the Obligations have been fully paid and satisfied or the Convertible Debentures have been fully converted, the Parent and each other Company shall cause to be transferred to the Concentration Account at the end of each Business Day the available balances of the Concentration Account (the “ Blocked Account ”), net of disbursements paid in the ordinary course of business during each Business Day. The Secured Party directs and provides the Secured Party such control over the Blocked Accounts under the Account Control Agreement until the earlier of the Event of Default being cured or repayment of the Obligations. Upon an Event of Default the Secured Party shall direct such Blocked Account Bank, upon notification by the Secured Party of an Event of Default as defined herein, to transfer such funds deposited into the Blocked Accounts either to any account maintained by the Secured Party at such Blocked Account Bank or by wire transfer to appropriate account(s) the Secured Party directs. Upon an Event of Default all funds deposited in such Blocked Accounts shall immediately become the property of the Secured Party and the parties hereto shall obtain the agreement by such Blocked Account Bank to waive any offset rights against the funds so deposited.

Section 2.2.   Event of Default

An “ Event of Default ” shall be deemed to have occurred under this Agreement upon an Event of Default under and as defined in the Convertible Debentures.

Section 3.1.   Secured Party Appointed Attorney-In-Fact .

Upon the occurrence and during the continuance of an Event of Default: (a) the Company hereby appoints the Secured Party as its attorney-in-fact, with full authority in the place and stead of the Company and in the name of the Company or otherwise, from time to time in the Secured Party’s discretion to take any action and to execute any instrument which the Secured Party may reasonably deem necessary to accomplish the purposes of this Agreement, including, without limitation, to receive and collect all instruments made payable to the Company representing any payments in respect of the Pledged Property or any part thereof and to give full discharge for the same; (b) the Secured Party may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Pledged Property as and when the Secured Party may determine, and (c) to facilitate collection, the Secured Party may notify account debtors and obligors on any Pledged Property to make payments directly to the Secured Party.

Section 3.2.   Secured Party May Perform .

If the Company fails to perform any agreement contained herein, the Secured Party, at its option, may itself perform, or cause performance of, such agreement, and the expenses of the Secured Party incurred in connection therewith shall be included in the Obligations secured hereby and payable by the Company under Section 8.3.

Section 4.1.   Authorization; Enforceability .

Each of the parties hereto represents and warrants that it has taken all action necessary to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby; and upon execution and delivery, this Agreement shall constitute a valid and binding obligation of the respective party, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights or by the principles governing the availability of equitable remedies.

Section 4.2.   Ownership of Pledged Property .

The Company represents and warrants that it is the legal and beneficial owner of the Pledged Property free and clear of any lien, security interest, option or other charge or encumbrance (each, a “Lien”) except for the security interest created by this Agreement and other Permitted Liens. For purposes of this Agreement, “Permitted Liens” means: (1) the security interest created by this Agreement, (2) existing Liens disclosed by the Company to the Secured Party; (3) inchoate Liens for taxes, assessments or governmental charges or levies not yet due, as to which the grace period, if any, related thereto has not yet expired, or being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (4) Liens of carriers, materialmen, warehousemen, mechanics and landlords and other similar Liens which secure amounts which are not yet overdue by more than 60 days or which are being contested in good faith by appropriate proceedings; (5) licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Company; (6) Liens securing capitalized lease obligations and purchase money indebtedness incurred solely for the purpose of financing an acquisition or lease; (7) easements, rights-of-way, restrictions, encroachments, municipal zoning ordinances and other similar charges or encumbrances, and minor title deficiencies, in each case not securing debt and not materially interfering with the conduct of the business of the Company and not materially detracting from the value of the property subject thereto; (8) Liens arising out of the existence of judgments or awards which judgments or awards do not constitute an Event of Default; (9) Liens incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance, pension liabilities and social security benefits and Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business, statutory obligations, surety bonds, performance bonds and other obligations of a like nature (other than appeal bonds) incurred in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money); (10) Liens in favor of a banking institution arising by operation of law encumbering deposits (including the right of set-off) and contractual set-off rights held by such banking institution and which are within the general parameters customary in the banking industry and only burdening deposit accounts or other funds maintained with a creditor depository institution; (11) usual and customary set-off rights in leases and other contracts; and (12) escrows in connection with acquisitions and dispositions.

Section 4.3.   Name Change . The Company and each Subsidiary have only effectuated changes their respective corporate names as designated in Schedule 4.3 herein.

Section 4.4.   Bank Accounts . Schedule 4.4 sets forth a complete list of the bank accounts currently established by the Parent and each Subsidiary.

Section 4.5.   The Accounts . The Parent and each Subsidiary represents and warrants that its Accounts will be bona fide and existing obligations of its respective customers, arising out of the sale of goods by the Parent or the Subsidiaries in the ordinary course of business.

Section 5.1   Method of Realizing Upon the Pledged Property: Other Remedies .

If any Event of Default shall have occurred and be continuing:

(a)   The Secured Party may exercise in respect of the Pledged Property, in addition to any other rights and remedies provided for herein or otherwise available to it, all of the rights and remedies of a secured party upon default under the Uniform Commercial Code (whether or not the Uniform Commercial Code applies to the affected Pledged Property), and also may (i) take absolute control of the Pledged Property, including, without limitation, transfer into the Secured Party's name or into the name of its nominee or nominees (to the extent the Secured Party has not theretofore done so) and thereafter receive, for the benefit of the Secured Party, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require the Company to assemble all or part of the Pledged Property as directed by the Secured Party and make it available to the Secured Party at a place or places to be designated by the Secured Party that is reasonably convenient to both parties, and the Secured Party may enter into and occupy any premises owned or leased by the Company where the Pledged Property or any part thereof is located or assembled for a reasonable period in order to effectuate the Secured Party's rights and remedies hereunder or under law, without obligation to the Company in respect of such occupation, and (iii) without notice except as specified below and without any obligation to prepare or process the Pledged Property for sale, (A) sell the Pledged Property or any part thereof in one or more parcels at public or private sale, at any of the Secured Party's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Secured Party may deem commercially reasonable and/or (B) lease, license or dispose of the Pledged Property or any part thereof upon such terms as the Secured Party may deem commercially reasonable. The Company agrees that, to the extent notice of sale or any other disposition of the Pledged Property shall be required by law, at least ten (10) days' notice to the Company of the time and place of any public sale or the time after which any private sale or other disposition of the Pledged Property is to be made shall constitute reasonable notification. The Secured Party shall not be obligated to make any sale or other disposition of any Pledged Property regardless of notice of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The Company hereby waives any claims against the Secured Party arising by reason of the fact that the price at which the Pledged Property may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Secured Party accepts the first offer received and does not offer such Pledged Property to more than one offeree, and waives all rights that the Company may have to require that all or any part of such Pledged Property be marshaled upon any sale (public or private) thereof. The Company hereby acknowledges that (i) any such sale of the Pledged Property by the Secured Party may be made without warranty, (ii) the Secured Party may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness of any such sale of Pledged Property.

(b)   Upon an Event of Default all funds deposited in such Blocked Accounts shall immediately become the property of the Buyer. The Secured Party shall direct such Blocked Account Bank, to transfer such funds so deposited into the Blocked Accounts, either to any account maintained by the Secured Party at said Blocked Account Bank or by wire transfer to appropriate account(s) the Secured Party directs and providing the Secured Party such control over the Blocked Accounts until the earlier of the Event of Default being cured or repayment of the Obligations.

(c)   Any cash held by the Secured Party as Pledged Property and all cash proceeds received by the Secured Party in respect of any sale of or collection from, or other realization upon, all or any part of the Pledged Property shall be applied (after payment of any amounts payable to the Secured Party pursuant to Section 8.3 hereof) by the Secured Party against, all or any part of the Obligations in such order as the Secured Party shall elect, consistent with the provisions of the Securities Purchase Agreement. Any surplus of such cash or cash proceeds held by the Secured Party and remaining after the indefeasible payment in full in cash of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

(d)   In the event that the proceeds of any such sale, col