Exhibit A


                            TMCI ELECTRONICS, INC.


                      CONVERTIBLE SUBORDINATED DEBENTURES


      THIS SECURITY AND THE SHARES OF COMMON STOCK  ISSUABLE UPON  CONVERSION OF
THIS  SECURITY HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS
AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES  LAWS.  NEITHER THIS
SECURITY,  THE SHARES OF COMMON STOCK ISSUABLE UPON  CONVERSION OF THIS SECURITY
NOR ANY  INTEREST OR  PARTICIPATION  HEREIN OR THEREIN MAY BE  REOFFERED,  SOLD,
ASSIGNED,  TRANSFERRED,  PLEDGED,  ENCUMBERED  OR  OTHERWISE  DISPOSED OF IN THE
ABSENCE OF SUCH  REGISTRATION OR UNLESS SUCH  TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

      THE HOLDER OF THIS SECURITY,  BY ITS ACCEPTANCE  HEREOF,  AGREES TO OFFER,
SELL OR  OTHERWISE  TRANSFER  SUCH  SECURITY,  ONLY  (A) TO THE  COMPANY  OR ANY
SUBSIDIARY THEREOF,  (B) TO AN "ACCREDITED  INVESTOR" WITHIN THE MEANING OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT AND IN A TRANSACTION  WHICH IS OTHERWISE  EXEMPT
FROM REGISTRATION UNDER THE ACT, (C) PURSUANT TO A REGISTRATION  STATEMENT WHICH
HAS BEEN  DECLARED  EFFECTIVE  UNDER  THE  SECURITIES  ACT,  (D) IN AN  OFFSHORE
TRANSACTION  IN ACCORDANCE  WITH RULE 904 OF  REGULATION S UNDER THE  SECURITIES
ACT,  OR (E)  PURSUANT  TO ANOTHER  AVAILABLE  EXEMPTION  FROM THE  REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT,  SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY
SUCH OFFER,  SALE OR TRANSFER PURSUANT TO CLAUSES (B), (D) OR (E) TO REQUIRE THE
DELIVERY  OF AN OPINION  OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING  CASES, A CERTIFICATE
OF  TRANSFER  IN THE  FORM  APPEARING  ON THE  OTHER  SIDE OF THIS  SECURITY  IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY.

                                    -1-                  

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                            TMCI ELECTRONICS, INC.

                 CONVERTIBLE SUBORDINATED DEBENTURES DUE 2001

      No.
      Principal Amount: $
      Issue Date: February 10, 1998
      Stated Maturity Date: February 10, 2001
      Interest Rate: 5.00% per annum

      TMCI ELECTRONICS,  INC., a Delaware corporation (the "Company"), for value
received,  hereby promises to pay to ________________ or registered assigns, the
Principal Amount specified above of ____________________________________________
Dollars at the Company's  corporate  office on February 10, 2001 in such coin or
currency  of the United  States of  America  as at the time of payment  shall be
legal tender for the payment of public and private debts.

      The  principal of this  Debenture  shall bear interest at the rate of five
percent (5%) per annum, accrued quarterly and paid annually or upon conversion.

      Reference is hereby made to the further  provisions of this  Debenture set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as if set forth at this place.

      IN WITNESS  WHEREOF,  the Company has duly  caused this  instrument  to be
executed  and has  caused a  facsimile  of its  corporate  seal to be  imprinted
hereon.

      Dated: February 10, 1998
                             TMCI ELECTRONICS, INC.


                                          By__________________________________
                               Name: Rolando Loera
                                          Title:   Chairman, President and Chief
                                                Executive Officer

ATTEST:

-----------------------------
Secretary

                                    -2-                    

<PAGE>



                            TMCI ELECTRONICS, INC.

                 CONVERTIBLE SUBORDINATED DEBENTURES DUE 2001


1.    The Debentures

      This  Debenture is one of a number of  debentures in the  denomination  of
$275,000 or an integral  multiple  thereof made by the Company in the  aggregate
principal amount of up to $5,500,000, and all maturing on February 10, 2001, and
otherwise having the same provisions. At the discretion of the Company, up to an
additional  sixteen  (16)  Debentures  may be  issued.  The  Debentures  and any
Debentures issued in exchange therefor as hereinafter provided are herein called
"Debentures."

2.    Interest

      The unpaid  principal  amount of this Debenture shall bear interest at the
rate of five percent (5%) per annum  calculated  on the basis of a 365 day year.
Such  interest  shall accrue  quarterly  on March 31, June 30,  September 30 and
December  31 of each year  until the  Debenture  is  converted  or paid in full.
Interest shall be payable in cash and due and payable upon conversion and, until
conversion,  on February 10 of each year  ("Anniversary  Date"). In the event of
conversion of the Debenture  prior to an  Anniversary  Date, the holder shall be
entitled to receive upon conversion  accrued but unpaid interest through the end
of the quarter immediately prior to the date of conversion.

3.    Execution, Delivery and Dating

      Debentures  bearing the manual or facsimile  signatures of individuals who
were at any time the proper  officers  of the  Company  shall bind the  Company,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the delivery of such Debentures or did not hold such offices at
the date of such  Debentures.  Each  Debenture  shall  be dated  the date of its
delivery.

4.    Method of Payment

      With  respect to the  Debentures,  the Company  will pay cash amounts by a
check  payable  in money of the  United  States of  America  that at the time of
payment is legal tender for payment of public and private debts.

5.    Transfer and Exchange

      (a) Upon surrender for registration of transfer of any Debenture, together
with a written instrument of transfer  satisfactory to the Company duly executed
by the Debentureholder or such

                                    -3-              

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Debentureholder's  attorney duly authorized in writing,  at the office or agency
of the Company,  the Company shall execute,  in the name of the true  designated
transferee(s),  one or more new  Debentures of any  authorized  denomination  or
denominations,  of a like  aggregate  Principal  Amount.  The Company  shall not
charge a service  fee for any  registration  or transfer  or  exchange,  but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other  governmental  charges that may be imposed in connection with the transfer
or exchange of the Debentures from the Debentureholder  requesting such transfer
or exchange  (other than any exchange of a temporary  Debenture for a definitive
Debenture not involving any change in ownership).

      At the  option  of the  Holder,  Debentures  may be  exchanged  for  other
Debentures of any authorized denomination or denominations,  of a like aggregate
Principal  Amount,  upon surrender of the  Debentures to be exchanged,  together
with a written instrument of transfer  satisfactory to the Company duly executed
by the  Debentureholder  or such  Debentureholder's  attorney duly authorized in
writing,  at such office or agency.  Whenever any  Debentures are so surrendered
for exchange,  the Company shall execute the Debentures  which the holder making
the exchange is entitled to receive.

      The Company  shall not be  required  to make  transfers  or  exchanges  of
Debentures selected for conversion.

      (b) If Debentures are issued upon the transfer, exchange or replacement of
Debentures subject to restrictions on transfer and bearing the legends set forth
herein  (collectively,  the  "Legend"),  or if a request  is made to remove  the
Legend on a Debenture,  the  Debentures so issued shall bear the Legend,  or the
Legend shall not be removed,  as the case may be,  unless (i) there is delivered
to the Company such  satisfactory  evidence,  which shall  include an opinion of
counsel, as may be reasonably  required by the Company,  that neither the Legend
nor the  restrictions  on transfer set forth therein are required to ensure that
transfers thereof may be made without  registration  under the Securities Act or
that such Debentures are not  "restricted"  within the meaning of Rule 144 under
the  Securities  Act. Upon (i) provision of such  satisfactory  evidence or (ii)
notification  to the Company of the  effectiveness  of a registration  statement
with respect to the  Debentures,  the Company shall  authenticate  and deliver a
Debenture that does not bear the Legend. If a Legend is removed from the face of
a Debenture  and the  Debenture  is  subsequently  held by an  affiliate  of the
Company, the Legend shall be reinstated.

6.    Replacement Debentures

      If (a) any mutilated  Debenture is surrendered to the Company,  or (b) the
Company receives evidence to its satisfaction of the destruction,  loss or theft
of any  Debenture,  and there is  delivered  to the  Company  such  security  or
indemnity as may be required to save the Company harmless,  then, in the absence
of notice to the Company that such  Debenture  has been  acquired by a bona fide
purchaser,  the Company  shall  execute and  deliver,  in exchange  for any such
mutilated Debenture or in lieu of any such destroyed,  lost or stolen Debenture,
a new  Debenture  of like  tenor and  Principal  Amount,  bearing  a number  not
contemporaneously outstanding.


                                    -4-                   

<PAGE>



      In case any such mutilated, destroyed, lost or stolen Debenture has become
or is about to become due and payable,  the Company in its sole  discretion may,
instead of issuing a new Debenture,  pay or purchase such Debenture, as the case
may be.

      Upon the issuance of any new Debentures  under this Section 6, the Company
may  require  the  payment  of a sum  sufficient  to  cover  any  tax  or  other
governmental  charge  that may be  imposed  in  relation  thereto  and any other
expenses in connection  therewith.  Every new Debenture  issued pursuant to this
Section 6 in lieu of any mutilated,  destroyed,  lost or stolen  Debenture shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed,  lost or stolen Debenture shall be at any time enforceable
by  anyone,   and  shall  be  entitled  to  all  benefits   hereof  equally  and
proportionately with any and all other Debentures duly issued hereunder.

      The  provisions of this Section 6 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the  replacement or
payment of mutilated, destroyed, lost or stolen Debentures.

7.    Debentures Not Redeemable

      The Debentures shall not be redeemable by the Company.

8.    Successor Company

      (a) When Company May Merge or Transfer  Assets.  So long as any Debentures
shall be outstanding,  the Company shall not consolidate  with or merge into any
other  corporation  or other person or convey,  transfer or lease its properties
and assets substantially as an entirety (a "Business Combination") to any person
(such successor corporation or person, as the case may be, shall in this Section
8 be referred to as the "Successor Company"), unless

            (1) the Successor  Company shall be organized and existing under the
            laws of the United States of America or any State or the District of
            Columbia, and shall expressly assume the due and punctual payment of
            the principal of and premium,  if any, and interest,  if any, on all
            the  Debentures  and  the  performance  of  every  covenant  of  the
            Debentures on the part of the Company to be performed or observed;

            (2) immediately after giving effect to such transaction, no Event of
            Default,  and no event that, after notice or lapse of time, or both,
            would  become  an Event  of  Default,  shall  have  happened  and be
            continuing.

      (b)  Successor  Company  Substituted.  Upon any  Business  Combination  in
accordance  with Section 8(a),  the  Successor  Company or person formed by such
consolidation  or into which the Company is merged or to which such  conveyance,
transfer or lease is made shall  succeed  to, and be  substituted  for,  and may
exercise every right and power and shall be required to perform every obligation
of, the Company under the  Debentures  with the same effect as if such Successor
Company

                                    -5-                 

<PAGE>



or person had been named as the Company herein,  and  thereafter,  except in the
case  of  a  lease,  the  predecessor  corporation  shall  be  relieved  of  all
obligations and covenants  under the Debentures.  The rights of the holders upon
conversion  of the  Debentures  following  the  Business  Combination  shall  be
proportionately  adjusted  to  take  into  account  the  terms  of the  Business
Combination  as  follows:  the  holders of the  Debentures  shall be entitled to
receive such  securities  of the Successor  Company or other  property that they
would have been entitled to receive had they  converted  their  Debentures  into
Common Stock on the effective date of the Business Combination.

9.    Denominations; Transfer; Exchange

      The Debentures are in registered form,  without coupons,  in denominations
of $275,000 of Principal Amount and integral multiples of $275,000. A Holder may
transfer or exchange  Debentures in accordance with Section 5 above. The Company
may require a Holder,  among other things, to furnish  appropriate  endorsements
and  transfer  documents  and to pay  any  taxes  and  fees  required  by law or
permitted hereunder.

10.   Persons Deemed Owners

      The Company shall treat the Holder of this  Debenture as the owner of this
Debenture for all purposes.

11.   Amendment; Waiver

      (a) With Consent of Holders. With the written consent of the Holders of at
least a majority in aggregate  Principal  Amount of the  Debentures  at the time
outstanding, the Company may amend the Debentures.  However, without the consent
of each Debentureholder  affected,  an amendment or supplement to the Debentures
may not:

            (1)   make any change to the Principal Amount of any Debentures;

            (2) reduce the rate of  interest  referred to in Section 2 or extend
the time for payment of interest on any Debenture;

            (3) reduce the Principal  Amount of or extend the Stated Maturity of
any Debenture;

            (4) reduce the amount of stock  issuable in respect of conversion of
any Debenture;

            (5) make any  Debenture  payable in money or  securities  other than
that stated in the Debenture;


                                    -6-                   

<PAGE>



            (6) impair the right to institute  suit for the  enforcement  of any
payment with respect to, or conversion of, the Debentures.

      After an amendment hereunder becomes effective,  the Company shall mail to
each Holder a notice briefly describing the amendment of the Company.

      (b)  Revocation  and Effect of  Consents,  Waivers and  Actions.  Until an
amendment or waiver becomes effective,  a consent to it or any other action by a
Holder of a Debenture  hereunder is a continuing consent by the Holder and every
subsequent  Holder of that  Debenture or portion of the Debenture that evidences
the same obligation as the consenting  Holder's  Debenture,  even if notation of
the consent,  waiver or action is not made on the Debenture.  However,  any such
Holder or subsequent Holder may revoke the consent,  waiver or action as to such
Holder's  Debenture  or portion of the  Debenture  if the Company  receives  the
notice of revocation  before the date the  amendment,  waiver or action  becomes
effective. After an amendment, waiver or action becomes effective, it shall bind
every Debentureholder except as provided in this Section 11.

12.   Special Provisions Applicable to Debentures

      (a) Conversion Privilege.  Each of the Debentures is convertible into such
number  of shares  of the  Company's  common  stock,  par value  $.001 per share
("Common Stock"), as is provided below.

      (b) Conversion Terms. Holders of the Debentures may convert the Debentures
in whole or in part in one-quarter or one-fifth increments at any time after the
earlier of the date the Registration  Statement is declared effective or six (6)
months  following  the initial  closing under the Offering  ("Initial  Closing")
provided that the holder notifies the Company with written notice via U.S. Mail,
courier,  or  confirmed  facsimile  transmission  of the  intention  to convert.
Provided that an event of default under Section 13 has not occurred, the Company
may call a mandatory  conversion at any time (i) after the third  anniversary of
the issuance of the  Debentures  or prior  thereto (ii) if the closing bid price
for the Common  Stock as  reported  by NASDAQ is $8.75 per share or higher for a
period of ten (10) consecutive  trading days and the Registration  Statement has
been declared effective by providing written notice of its intention to call for
conversion to the holders.

      (c) Conversion  Price.  Upon conversion of the Debentures,  the Conversion
Price  shall be the lesser of the  "Stated  Conversion  Price" or the  "Adjusted
Conversion  Price." The Stated  Conversion  Price shall be equal to the lower of
the Market  Price (as  hereinafter  defined) at the date of  issuance  under the
Offering or the closing bid price on the trading day  immediately  prior to such
issuance;  provided that the Stated Conversion Price shall not exceed $5.50. For
the purpose  hereof,  Market  Price shall mean,  as of a  particular  date,  the
average closing bid price of the Common Stock as reported by NASDAQ for the five
(5) trading days immediately  preceding such date. The Adjusted Conversion Price
shall be  calculated  as the  greater of (i) the  Applicable  Percentage  of the
Market Price on the date of the notice from the Debentureholder of its intention
to exercise the conversion  privilege;  or (ii) the "Minimum  Conversion Price".
For the purposes hereof, the term

                                    -7-                   
<PAGE>



Applicable  Percentage  shall mean eighty  percent  (80%)  during the first year
following  the initial  closing  under the  Offering  (the  "Initial  Closing"),
seventy-five  percent (75%) during the second year following the Initial Closing
and seventy  percent (70%) during the third year following the Initial  Closing,
and the term Minimum  Conversion  Price shall mean $3.00 per share.  The minimum
and maximum  number of shares of Common Stock per Debenture that would be issued
upon conversion would be 50,000 and 91,667 shares, respectively.  The Debentures
may be converted in whole or in one-quarter or one-fifth increments.

      (d)  Issuance of Shares.  Within five (5) business  days of the  Company's
receipt of a notice of intention to convert under  Paragraph (b) of this Section
12 or in the event of a mandatory  conversion under such paragraph,  the Company
shall  issue to the Holder  that  number of shares of Common  Stock equal to the
principal  amount of the Debenture being converted  divided by the lesser of the
Stated Conversion Price or the Adjusted Conversion Price (subject to the minimum
and maximum number of shares issuable upon conversion of a Debenture as provided
by Paragraph (c) of this Paragraph 12). No fractional shares shall be issued and
any fractional share shall be rounded up to a whole share.

            (i)   Debentures Subordinate to Senior Indebtedness.

                  The  Company   covenants  and  agrees,   and  each  Holder  of
Debentures,  by its acceptance thereof,  likewise covenants and agrees, that, to
the extent and in the manner  hereinafter  set forth in this subsection (e), the
indebtedness  represented  by the Debentures and the payment of the principal of
and interest on the Debentures are hereby expressly made subordinate and subject
in right of payment as provided in this subsection (e) to the prior indefeasible
payment and  satisfaction  in full in cash or, as  acceptable  to the holders of
Senior  Indebtedness,  in any other  manner,  of all existing and future  Senior
Indebtedness.

                  This subsection (e) shall constitute a continuing offer to all
Persons who, in reliance upon such provisions,  become holders of or continue to
hold Senior  Indebtedness;  and such  provisions are made for the benefit of the
holders of Senior Indebtedness; and such holders are made obligees hereunder and
they or each of them may enforce such provisions.

            (ii) Payment Over of Proceeds upon Dissolution, etc.

                  In the  event  of (A) any  insolvency  or  bankruptcy  case or
proceeding,  or any receivership,  liquidation,  reorganization or other similar
case or proceeding in  connection  therewith,  relative to the Company or to its
creditors,  as such, or to its assets, whether voluntary or involuntary,  or (B)
any  liquidation,  dissolution  or  other  winding-up  of the  Company,  whether
voluntary or involuntary and whether or not involving  insolvency or bankruptcy,
or (c) any  general  assignment  for  the  benefit  of  creditors  or any  other
marshaling of assets or liabilities of the Company, then and in any such event:


                                    -8-                    

<PAGE>



                  (1) the  holders of Senior  Indebtedness  shall be entitled to
      receive payment and  satisfaction in full in cash or, as acceptable to the
      holders of Senior Indebtedness, in any other manner, of all amounts due on
      or in  respect  of all  Senior  Indebtedness,  before  the  Holders of the
      Debentures  are entitled to receive or retain any payment or  distribution
      of any kind or character on account of principal of,  premium,  if any, or
      interest on the Debentures; and

                  (2) any  payment or  distribution  of assets of the Company of
      any kind or character, whether in cash, property or securities, by set-off
      or  otherwise,  to  which  the  Holders  would  be  entitled  but  for the
      provisions of this subsection (e) shall be paid by the liquidating trustee
      or agent or other Person  making such payment or  distribution,  whether a
      trustee in  bankruptcy,  a receiver or  liquidating  trustee or otherwise,
      directly to the holders of Senior Indebtedness or their  representative or
      representatives  or to the trustee or trustees  under any indenture  under
      which any instruments  evidencing any of such Senior Indebtedness may have
      been issued,  ratably  according to the aggregate amounts remaining unpaid
      on account of the Senior  Indebtedness held or represented by each, to the
      extent  necessary to make payment in full in cash or, as acceptable to the
      holders  of  Senior  Indebtedness,  in any  other  manner,  of all  Senior
      Indebtedness  remaining  unpaid,  after  giving  effect to any  concurrent
      payment or  distribution,  or provision  therefor,  to the holders of such
      Senior Indebtedness; and

                  (3)  in  the  event  that,   notwithstanding   the   foregoing
      provisions  of this clause (ii),  the Holder of any  Debenture  shall have
      received any payment or  distribution of assets of the Company of any kind
      or character, whether in cash, property or securities,  including, without
      limitation,  by way of set-off or  otherwise,  in respect of principal of,
      premium,  if  any,  and  interest  on the  Debentures  before  all  Senior
      Indebtedness  is paid and  satisfied  in full in cash or such  payment and
      satisfaction  thereof in cash is provided for, then and in such event such
      payment  or  distribution  upon  written  notice  to the  Holder  of  such
      Debenture  shall be held by the Holder of such  Debenture in trust for the
      benefit  of  the  holders  of  such  Senior   Indebtedness  and  shall  be
      immediately paid over or delivered forthwith to the liquidating trustee or
      agent or other  person  making  payment or  distribution  of assets of the
      Company  for  application  to  the  payment  of  all  Senior  Indebtedness
      remaining unpaid,  to the extent necessary to pay all Senior  Indebtedness
      in full in cash or, as acceptable  to the holders of Senior  Indebtedness,
      any other  manner,  after  giving  effect  to any  concurrent  payment  or
      distribution,  or  provision  therefor,  to or for the  holders  of Senior
      Indebtedness.

                   The  consolidation  of the Company with, or the merger of the
Company with or into,  another  Person or the  liquidation or dissolution of the
Company   following   the  transfer  of  all  its  assets  (as  an  entirety  or
substantially  as an entirety) to another  person upon the terms and  conditions
set forth in  Section 8 hereof  shall not be deemed a  dissolution,  winding-up,
liquidation,

                                    -9-                    

<PAGE>



reorganization,  assignment for the benefit of creditors or marshaling of assets
and  liabilities  of the Company for the purposes of this  subsection (e) if the
Person formed by such  consolidation  or the surviving  entity of such merger or
the  Person  which   acquires  by  transfer  such  assets  (as  an  entirety  or
substantially as an entirety) shall, as a part of such consolidation,  merger or
transfer, comply with the conditions set forth in such Section 8 hereof.

            (iii) Suspension of Payment when Senior Indebtedness in Default.

            (A) Unless clause (ii) of this  subsection  (e) shall be applicable,
      no payment or  distribution  of any assets or securities of the Company of
      any kind or character (including,  without limitation,  cash, property and
      any payment or distribution  which may be payable or deliverable by reason
      of the payment of any other Indebtedness of the Company being subordinated
      to the  payment of the  Debentures  by the  Company)  may be made by or on
      behalf of the Company including,  without limitation, by way of set-off or
      otherwise, for or on account of principal of, premium, if any, or interest
      on the  Debentures,  or for or on  account  of the  purchase,  redemption,
      defeasance or other acquisition of the Debentures,  and no holder or owner
      of any  Debentures  shall take or receive  from the  Company,  directly or
      indirectly  in any  manner,  payment in  respect of all or any  portion of
      Debentures  following the delivery by the representative of the holders of
      Senior  Indebtedness  (the  "Representative")  to the  Holders  of written
      notice of (i) the occurrence of a payment  default on Senior  Indebtedness
      or (ii) the  occurrence  of a  non-payment  event  of  default  on  Senior
      Indebtedness  which results in the  acceleration of the maturity of Senior
      Indebtedness  in accordance  with its terms,  and in any such event,  such
      prohibition shall continue until such payment default is cured,  waived in
      writing  or ceases to exist or such  acceleration  has been  rescinded  or
      otherwise cured.

            (B)  Unless  clause  (ii) of this  subsection  (e)  hereof  shall be
      applicable,  upon the  occurrence  of a  non-payment  event of  default on
      Senior  Indebtedness  which  does not  result  in or has not  resulted  in
      acceleration of the maturity of Senior Indebtedness in accordance with its
      terms,  no payment or  distribution  of any  assets or  securities  of the
      Company of any kind or character  (including,  without  limitation,  cash,
      property  and  any  payment  or  distribution  which  may  be  payable  or
      deliverable  by reason of the  payment  of any other  Indebtedness  of the
      Company  being  subordinated  to  the  payment  of the  Debentures  by the
      Company) shall be made by or on behalf of the Company, including,  without
      limitation,  by way of  set-off  or  otherwise,  for or on  account of any
      principal of, premium,  if any, or interest on the Debentures or for or on
      account of the purchase,  redemption,  defeasance or other  acquisition of
      Debentures, and no holder or owner of any Debentures shall take or receive
      from the Company, directly or indirectly in any manner, payment in respect
      of all or any portion of the Debentures, for a period (a "Payment Blockage
      Period")  commencing  on the date of  receipt  by the  Holders  of written
      notice from the  Representative of such non-payment event of default until
      (subject to any blockage of payments  that may then be in effect under the
      preceding  paragraph  (A)) the earliest to occur of the following  events:
      (x) more than 179 days  shall  have  elapsed  since the date of receipt of
      such written notice by the Holders, (y)

                                    -10-                   

<PAGE>



      such  non-payment  event of  default  shall  have been  cured or waived in
      writing or shall have  ceased to exist or such Senior  Indebtedness  shall
      have been paid in full in cash and the  Holders  have been so  notified by
      either the  Representative  or the  Company or (z) such  Payment  Blockage
      Period shall have been  terminated by written notice to the Company or the
      Holders  from  the  Representative.  Upon  the  termination  of a  Payment
      Blockage  Period,  the Company  shall  resume  making any and all required
      payments  in respect of the  Debentures,  including  any missed  payments.
      Notwithstanding  any  other  provisions  of this  Debenture,  no  event of
      default with respect to Senior Indebtedness (other than a payment default)
      which  existed or was  continuing on the date of the  commencement  of any
      Payment  Blockage Period initiated by the  Representative  shall be, or be
      made, the basis for the  commencement of a second Payment  Blockage Period
      initiated by the  Representative  unless such event of default  shall have
      been cured or waived for a period of not less than 90 consecutive days. In
      no event shall a Payment  Blockage  Period extend beyond 179 days from the
      date of the  receipt  by the  Holders of the  notice  referred  to in this
      clause (iii)(B) (the "Initial Blockage Period").  Any number of additional
      Payment  Blockage  Periods may be  commenced  during the Initial  Blockage
      Period; provided, however, that no such additional Payment Blockage Period
      shall extend beyond the Initial Blockage  Period.  After the expiration of
      the Initial Blockage  Period,  no Payment Blockage Period may be commenced
      under  this  clause  (iii)(B)  until at least  180  consecutive  days have
      elapsed from the last day of the Initial Blockage Period.

            (C) In the event that,  notwithstanding the foregoing, the Holder of
      any Debenture shall have received any payment  prohibited by the foregoing
      provisions of this clause (iii), then and in such event such payment shall
      be paid over and delivered forthwith to the Representative  initiating the
      Payment  Blockage  Period,  in trust for  distribution  to the  holders of
      Senior  Indebtedness  or, if no amounts  are then due in respect of senior
      Indebtedness, promptly returned to the Company, or otherwise as a court of
      competent jurisdiction shall direct.

            (iv)  Subrogation to Rights of Holders of Senior Indebtedness.

                  Upon  the  payment  in full of all  Senior  Indebtedness,  the
Holders of the  Debentures  shall be  subrogated to the rights of the holders of
such Senior Indebtedness to receive payments and distributions of cash, property
and  securities  applicable to the Senior  Indebtedness  until the principal of,
premium,  if any,  and  interest on the  Debentures  shall be paid in full.  For
purposes of such  subrogation,  no payments or  distributions  to the holders of
Senior  Indebtedness of any cash, property or securities to which the Holders of
the Debentures  would be entitled  except for the provisions of this  subsection
(e), and no payments  pursuant to the  provisions of this  subsection (e) to the
holders of Senior  Indebtedness by Holders of the Debentures shall, as among the
Company, its creditors other than holders of Senior Indebtedness and the Holders
of the  Debentures,  be deemed to be a payment or distribution by the Company to
or on account of the Senior Indebtedness.


                                    -11-                   

<PAGE>



                   If any payment or  distribution  to which the  Holders  would
otherwise have been entitled but for the provisions of this subsection (e) shall
have been  applied,  pursuant to the  provisions of this  subsection  (e) to the
payment of all amounts  payable  under the Senior  Indebtedness  of the Company,
then and in such case the Holders  shall be entitled to receive from the holders
of  such  Senior   Indebtedness   at  the  time   outstanding  any  payments  or
distributions  received by such holders of such Senior Indebtedness in excess of
the amount  sufficient  to  indefeasibly  pay all  amounts  payable  under or in
respect of such Senior Indebtedness in full in cash.

            (v)   Provisions Solely to Define Relative Rights.

                  The  provisions  of this  subsection  (e) are and are intended
solely for the purpose of  defining  the  relative  rights of the Holders of the
Debentures on the one hand and the holders of Senior  Indebtedness  on the other
hand.  Nothing contained in this subsection or elsewhere in this Debenture or in
the  Debentures  is intended to or shall (A) impair,  as among the Company,  its
creditors  other than  holders  of Senior  Indebtedness  and the  Holders of the
Debentures,  the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the  Debentures  the  Principal  of and interest on the
Debentures as and when the same shall become due and payable in accordance  with
their  terms,  or (B) affect the  relative  rights  against  the  Company of the
Holders of the Debentures and creditors of the Company other than the holders of
Senior  Indebtedness  or (C) prevent the Holder of any Debenture from exercising
all remedies otherwise permitted by applicable law upon a default or an event of
default  under  this  Debenture,  subject  to the  rights,  if any,  under  this
subsection  (e) of the holders of Senior  Indebtedness  (1) in any insolvency or
bankruptcy case or proceeding,  or any receivership,  liquidation,  arrangement,
reorganization or other similar case or proceeding in connection  therewith,  or
any  liquidation,  dissolution  or other  winding-up,  or any assignment for the
benefit of creditors or other  marshaling of assets and liabilities  referred to
in clause (ii)  hereof,  to receive,  pursuant  to and in  accordance  with such
clause,  cash, property and securities  otherwise payable or deliverable to such
Holder,  or (2) under the  conditions  specified  in clause (iii) to prevent any
payment  prohibited  by such  clause or enforce  their  rights  pursuant  clause
(iii)(c) hereof.

                  The  failure to make a payment on account of  principal  of or
interest on the  Debentures  by reason of any provision of this  subsection  (e)
shall not be construed as preventing  the occurrence of a default or an event of
default hereunder.

            (vi)  No Waiver of Subordination Provisions.

                  (A) No right of any  present  or future  holder of any  Senior
      Indebtedness to enforce subordination as herein provided shall at any time
      in any way be  prejudiced  or impaired by any act or failure to act on the
      part of the Company or by any act or failure to act, in good faith, by any
      such  holder,  or by any  non-compliance  by the  Company  with the terms,
      provisions  and covenants of this  Debenture,  regardless of any knowledge
      thereof any such holder may have or be otherwise charged with.


                                    -12-                  
<PAGE>



                  (B)  Without  limiting  the  generality  of clause (A) of this
      subsection  (e)(vi),  the holders of Senior  Indebtedness may, at any time
      and from time to time,  without the consent of or notice to the Holders of
      the Debentures,  without  incurring  responsibility  to the Holders of the
      Debentures and without impairing or releasing the  subordination  provided
      in this subsection (e) or the obligations  hereunder of the Holders of the
      Debentures  to the holders of Senior  Indebtedness,  do any one or more of
      the following:  (1) change the manner, place or terms of payment or extend
      the time of  payment  of, or renew or alter,  Senior  Indebtedness  or any
      instrument  evidencing  the  same (or any  agreement  under  which  Senior
      Indebtedness is outstanding; (2) sell, exchange, release or otherwise deal
      with  any  property  pledged,   mortgaged  or  otherwise  securing  Senior
      Indebtedness;  (3)  release  any  Person  liable  in any  manner  for  the
      collection or payment of Senior Indebtedness;  and (4) exercise or refrain
      from  exercising  any rights  against the  Company  and any other  Person;
      provided,  however,  that in no event shall any actions limit the right of
      the  Holders  of the  Debentures  to take any  action  to  accelerate  the
      maturity of the Debentures  pursuant to Section 13 hereof or to pursue any
      rights or remedies  hereunder  or under  applicable  laws if the taking of
      such action does not otherwise violate the terms of this Debenture.

            (vii) No Suspension of Remedies.

                  Nothing contained in this subsection (e) shall limit the right
of the Holders of Debentures  to take any action to  accelerate  the maturity of
the  Debentures  pursuant  to Section  13 or to pursue  any  rights or  remedies
hereunder or under  applicable  law,  subject to the rights,  if any, under this
subsection (e) of the holders, from time to time, of Senior Indebtedness.

      (f) Anti-dilution and Exchange Provisions.  In the event that prior to the
conversion of the  Debentures,  the Company issues (other than pursuant to stock
option or purchase  plans for the  benefit of the  Company's  employees)  Common
Stock for cash at a purchase  price or  convertible  securities  at a conversion
price or warrants at an exercise  price below the  conversion  price or exercise
price then in effect,  respectively (in either case, a "Reduced Price") relating
to  the   Debentures  or  the  Warrants   issued  in  the  Offering,   then  the
Debentureholders shall have the right to immediately convert their Debentures at
the Reduced  Price.  In the event that the Company shall issue (other than in an
underwritten public offering) convertible  securities prior to the conversion of
the Debentures,  holders of the Debentures shall have the right to purchase such
convertible securities using Debentures valued at the face value thereof.

13.   Default and Remedies

      (a) Events of Default. An Event of Default occurs if:

            (i) the Company is in breach of a representation  or warranty in the
Securities Purchase Agreement pursuant to which the Debentures were acquired;


                                    -13-                    
<PAGE>



            (ii) the  Company  defaults  in payment of the  Principal  Amount or
accrued interest, as the case may be, in respect of the Debentures when the same
becomes due and payable, and such default continues for a period of 30 days;

            (iii) the Company fails either to deliver  shares of Common Stock in
accordance  with the terms of the Debentures  when such Common Stock is required
to be delivered in accordance with the terms of a Debenture;

            (iv) the  Company  fails to  comply  with  any  material  covenants,
obligation or other agreement in of the Debentures,  subject to notice and lapse
of time;

            (v) the Company  defaults (A) in the payment of any principal on any
debt for borrowed money of the Company (excluding any non-recourse  debt), in an
aggregate principal amount in excess of five hundred thousand  ($500,000),  when
due at its final maturity after giving effect to any applicable grace period and
the holder  thereof shall have taken  affirmative  action to enforce the payment
hereof,  or (B) in the  performance  of any  term or  provision  of any debt for
borrowed money of the Company  (excluding any non-recourse debt) in an aggregate
principal amount in excess of five hundred  thousand  ($500,000) or that results
in such debt  becoming or being  declared  due and payable  prior to the date on
which it would otherwise become due and payable,  unless,  in the case of either
clause (A) or (B) above, (x) such acceleration or action to enforce payment,  as
the case  may be,  has  been  rescinded  or  annulled,  (y)  such  debt has been
discharged  or (z) a sum  sufficient  to  discharge  in full  such debt has been
deposited  in trust by or on behalf of the Company,  debt has been  deposited in
trust on or behalf of the Company,  in each case, within a period of thirty (30)
days after there has been given, by registered or certified mail, to the Company
by the Holders of at least 10% in principal amount of the Debentures,  a written
notice  specifying  such  default or defaults  and stating that such notice is a
"Notice of Default" hereunder; or

            (vi) the Company pursuant to or within the meaning of any Bankruptcy
Law:

                  (A)   commences a voluntary case or proceeding;

                  (B)   consents to the entry of an order for relief  against it
                        in an involuntary case or proceeding or the commencement
                        of any case against it;

                  (C)   consents to the  appointment of a Custodian of it or for
                        any substantial part of its property;

                  (D)  makes  a  general  assignment  for  the  benefit  of  its
creditors;

                  (E)   files a  petition  in  bankruptcy  or answer or  consent
                        seeking reorganization or relief; or


                                    -14-                   

<PAGE>



                  (F)   consents   to  the  filing  of  such   petition  or  the
                        appointment of or taking possession by a Custodian;

            (vii) a court of  competent  jurisdiction  enters an order or decree
under any Bankruptcy Law that:

                  (A)   is for relief against the Company in an involuntary case
                        or proceeding,  or adjudicates the Company  insolvent or
                        bankrupt;

                  (B)   appoints  a   Custodian   of  the  Company  or  for  any
                        substantial part of its property; or

                  (C) orders the winding up or liquidation of the Company;

            and the order or decree remains unstayed and in effect for 60 days.

      (b) Acceleration.  If an Event of Default occurs and is continuing, unless
the Principal  Amount of all the  Securities  shall have already  become due and
payable,  the Holders of at least 10% in the aggregate  principal  amount of the
Debentures  at the time  outstanding,  by notice to the  Company may declare the
Principal Amount and all accrued and unpaid interest on all Debentures to be due
and payable, whereupon such Principal Amount and all accrued and unpaid interest
on all the Debentures shall be due and payable immediately.

     Debentureholders may not enforce the Debentures except as provided herein.

14. Notices.  Any notice or  communication  shall be in writing and delivered in
person, by reputable  overnight  courier,  by facsimile or mailed by first-class
mail, postage prepaid, addressed as follows:

            if to the Company:

                  TMCI Electronics, Inc.
                  1875 Dobbin Drive
                  San Jose, CA  95133
                  Fax#: 408-254-1537
                  Attention:  Chief Executive Officer

            with a copy to:

                  Gould & Wilkie
                  One Chase Manhattan Plaza
                  58th Floor
                  New York, New York  10005

                                    -15-                   

<PAGE>



                  Fax#: 212-809-6890
                  Attention:  Frederick W. London, Esq.

      The Company by notice may designate  additional or different addresses for
subsequent  notices or  communications.  Any notice or communication  given to a
Debentureholder  shall be mailed by first-class mail to the  Debentureholder  at
the  Debentureholder's  address as it appears on the  registration  books of the
Company and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder  or any defect in
it shall not affect its sufficiency with respect to other Debentureholders. If a
notice or  communication  is mailed in the  manner  provided  above,  it is duly
given, whether or not received by the addressee.

15.   No Recourse Against Others

      A director,  officer,  employee or  stockholder,  as such,  of the Company
shall  not have any  liability  on any  obligations  of the  Company  under  the
Debentures  or for any claim  based on, in  respect  of or by any reason of such
obligations or their creation.  By accepting a Debenture,  each  Debentureholder
waives and releases all such  liability.  The waiver and release are part of the
consideration for the issue of the Debentures.

16.   Governing Law

      This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York without  regard to the  principles  of conflict of
laws. Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the  state and  federal  courts  sitting  in the City of New  York,  borough  of
Manhattan,  for the  adjudication  of any  dispute  hereunder  or in  connection
herewith or with any transaction  contemplated  hereby or discussed herein,  and
hereby  irrevocably  waives,  and  agrees  not to assert in any suit,  action or
proceeding,  any claim that it is not personally  subject to the jurisdiction of
any  such  court,  that  such  suit,  action  or  proceeding  is  brought  in an
inconvenient  forum or that the  venue of such  suit,  action or  proceeding  is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve  process in any manner  permitted by law.
If any  provision of this  Agreement  shall be invalid or  unenforceable  in any
jurisdiction,  such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or  enforceability  of any  provision  of this  Agreement  in any other
jurisdiction.



                                    -16-                   

<PAGE>



17.   Successors

      All agreements of the Company in the Debentures shall bind its successor.

18.   Severability

      In case any  provision  in the  Debentures  shall be  invalid,  illegal or
unenforceable,  the  validity,  legality  and  enforceability  of the  remaining
provisions shall not in any way be affected or impaired thereby.

19.   Definitions

      For the purposes of this Debenture, except as otherwise expressly provided
or unless the context  otherwise  requires,  the following  terms shall have the
meanings indicated:

      "Bankruptcy  Law" means  Title 11,  United  States  Code,  or any  similar
Federal or state law for the relief of debtors.

      "Board of Director" or "Board" means,  with respect to any matter,  either
the board of  directors  of the  Company  or any  committee  of such  board duly
authorized, with respect to such matter, to exercise the powers of such board.

      "Business Day" means each day of the year on which banking institutions in
the City of New York are not required or authorized to close.

      "Company"  means TMCI  Electronics,  Inc.  until a  successor  replaces it
pursuant to Section 8 hereof,  and thereafter,  shall mean such  successor.  The
foregoing  sentence shall  likewise  apply to any  subsequent  such successor or
successors.

      "Common  Stock"  means,  with  respect to any Person,  any and all shares,
interest or other  participations in, and other equivalents  (however designated
and  whether  voting or  nonvoting)  of, such  Person's  common  stock,  whether
outstanding  at the Issue Date or issued  after the Issue  Date,  and  includes,
without limitation, all series and classes of such common stock.

      "Custodian" means any receiver, trustee, assignee,  liquidator,  custodian
or similar official under any Bankruptcy Law.

      "Debentures"means the Convertible Subordinated Debentures due February 10,
2001, as amended or supplemented  from time to time in accordance with the terms
hereof and thereof.

      "Default"  means  any  event  that is or with the  passage  of time or the
giving of notice or both would be an Event of Default.


                                    -17-                   

<PAGE>



      "Holder" or "Debentureholder"  means a person in whose name a Debenture is
registered on the Company's books.

      "Indebtedness"  means (without  duplication),  with respect to any Person,
any indebtedness at any time  outstanding,  secured or unsecured,  contingent or
otherwise,  which is for  borrowed  money  (whether  or not the  recourse of the
lender  is to the  whole  of the  assets  of such  Person  or only to a  portion
thereof),  or evidenced by bonds,  notes,  debentures or similar  instruments or
representing  the  balance  deferred  and  unpaid of the  purchase  price of any
property (excluding,  without limitation,  any balances that constitute accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with U.S.  generally accepted  accounting  principles  ("GAAP"),  and shall also
include,  to the  extent  not  otherwise  included  (i)  any  capitalized  lease
Obligations,  (ii) Obligations secured by a lien to which the property or assets
owned or held by such  Person  is  subject,  whether  or not the  Obligation  or
Obligations secured thereby shall have been assumed (provided,  however, that if
such Obligation or Obligations  shall not have been assumed,  the amount of such
Indebtedness  shall be deemed to be the  lesser of the  principal  amount of the
Obligation  or the fair market value of the pledged  property or assets),  (iii)
guarantees  of items of other  Persons  which  would  be  included  within  this
definition  for such other Persons  (whether or not such items would appear upon
the balance sheet of the guarantor),  (iv) all Obligations for the reimbursement
of any obligor on any letter of credit,  banker's  acceptance or similar  credit
transaction (provided that, in the case of any such letters of credit, the items
for which  such  letters of credit  provide  credit  support  are those of other
Persons which would be included  within this definition for such other Persons),
and (v)  Obligations  of any such  Persons  under any  interest  rate  agreement
applicable  to any of the  foregoing  if and to the extent  such  interest  rate
agreement  Obligations  would appear as a liability upon a balance sheet of such
Person  prepared in  accordance  with GAAP.  The amount of  Indebtedness  of any
Person  at any  date  shall  be the  outstanding  balance  at  such  date of all
unconditional  Obligations  as described  above and,  with respect to contingent
Obligations, the maximum liability upon the occurrence of the contingency giving
rise to the Obligation,  provided (i) that the amount outstanding at any time of
any Indebtedness  issued with original issue discount is the principal amount of
such Indebtedness less the remaining  unamortized  portion of the original issue
discount of such Indebtedness at such time as determined in conformity with GAAP
and (ii) that Indebtedness  shall not include any liability for Federal,  state,
local or other taxes. Furthermore, guarantees of (or Obligations with respect to
letters  of credit  supporting)  Indebtedness  and liens  securing  Indebtedness
otherwise  included  in the  determination  of such  amount  shall  not  also be
included.

      "NASDAQ" means the National Association of Securities Dealers Automated 
Quotation System.

      "Obligations"   means   any   principal,    interest,   penalties,   fees,
indemnifications,  reimbursements,  damages and other liabilities  payable under
the documentation governing any Indebtedness.


                                    -18-                   

<PAGE>


      "Person" means any individual,  corporation,  partnership,  joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.

      "Principal"  or  "Principal  Amount" of a  Debenture  means the  principal
amount due at the Stated  Maturity of the  Debenture as set forth on the face of
the Debenture.

      "SEC" means the Securities and Exchange Commission.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Senior  Indebtedness"  means the  principal of and  premium,  if any, and
interest  (including,  without limitation,  interest accruing or that would have
accrued but for the filing of a bankruptcy,  reorganization  or other insolvency
proceeding  whether or not such interest  constitutes an allowable claim in such
proceeding) on, and any and all other fees,  expense  reimbursement  obligations
and other  amounts due pursuant to the terms of all  agreements,  documents  and
instruments providing for, creating, securing or evidencing or otherwise entered
into in  connection  with (a) all  Indebtedness  of the Company  owed to lenders
under or in respect of the  Company's  existing  credit  facility  or such other
facility  which it may have in the future,  (b) all  obligations  of the Company
with respect to any interest rate agreement,  (c) all obligations of the Company
to reimburse  any bank or other person in respect of amounts paid under  letters
of credit, acceptances or other similar instruments,  (d) all other Indebtedness
of the  Company  which  does not  provide  that it is to rank pari passu with or
subordinate  to  the  Debentures,  (e)  all  deferrals,   renewals,  extensions,
replacements,  refundings,  refinancings and  restructurings of, and amendments,
modifications and supplements to, any of the Senior Indebtedness described above
and (f) any trade payable arising from the purchase of goods or materials or for
services  obtained in the ordinary course of business or contingent  obligations
arising out of customary indemnification  agreements with respect to the sale of
assets or securities. Notwithstanding anything to the contrary in the foregoing,
Senior  Indebtedness  will not include (i) Indebtedness of the Company to any of
its Subsidiaries,  (ii) Indebtedness  represented by the Debentures or (iii) any
Indebtedness which by the express terms of the agreement or instrument creating,
evidencing or governing the same is junior or subordinate in right of payment to
any item of Senior Indebtedness.

      "Stated Maturity", when used with respect to any Debenture, means the date
specified  in such  Debenture  as the fixed date on which the  Principal of such
Debenture is due and payable.

      "Warrant" or "Warrants"  mean the detachable  Class B Warrants to purchase
one (1) share of the Company's Common Stock issued pursuant to the Offering.

      "Warrant  Agreement"  means the  Agreement  between  the  Company  and the
Warrant Agent relating to the Warrants.

                                    -19-