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                                                                   EXHIBIT 10.14

[LOGO OF COMERICA]

                        SECURITY AGREEMENT (ALL ASSETS)

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As of MAY 6, 1997, for value received, the undersigned ("Debtor") grants to 
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COMERICA BANK-CALIFORNIA, ("Bank") a California banking corporation, a 
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continuing security interest in the Collateral (as defined below) to secure 
payment when due, whether by stated maturity, demand, acceleration or otherwise,
of all existing and future indebtedness ("Indebtedness") to the Bank of TAITRON 
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COMPONENTS INCORPORATED ("Borrower") and/or Debtor. Indebtedness includes 
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without limit any and all obligations or liabilities of the Borrower and/or 
Debtor to the Bank, whether absolute or contingent, direct or indirect, 
voluntary or involuntary, liquidated or unliquidated, joint or several, known or
unknown; any and all obligations or liabilities for which the Borrower and/or
Debtor would otherwise be liable to the Bank were it not for the invalidity or
unenforceability of them by reason of any bankruptcy, insolvency or other law,
or for any other reason; any and all amendments, modifications, renewals and/or
extensions of any of the above; all costs incurred by Bank in establishing,
determining, continuing, or defending the validity or priority of its security
interest, or in pursuing its rights and remedies under this Agreement or under
any other agreement between Bank and Borrower and/or Debtor or in connection
with any proceeding involving Bank as a result of any financial accommodation to
Borrower and/or Debtor; and all other costs of collecting indebtedness,
including without limit attorney fees. Debtor agrees to pay Bank all such costs
incurred by the Bank, immediately upon demand and until paid all costs shall
bear interest at the highest per annum rate applicable to any of the
indebtedness, but not in excess of the maximum rate permitted by law. Any
reference in this Agreement to attorney fees shall be deemed a reference to
reasonable fees, costs, and expenses of both in-house and outside counsel and
paralegals, whether or not a suit or action is instituted, and to court costs if
a suit or action is instituted, and whether attorney fees or court costs are
incurred at the trial court level, on appeal, in a bankruptcy, administrative or
probate proceeding or otherwise.

1. collateral shall mean all the following property Debtor now or later owns or 
has an interest in, wherever located:

TO EXCLUDE ANY TYPE OR SPECIFIC ITEM OF PROPERTY FROM COLLATERAL, BANK AND 
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DEBTOR MUST INITIAL THE LINES IMMEDIATELY FOLLOWING THAT TYPE OR SPECIFIC ITEM
OF PROPERTY.

All Accounts Receivable (For purposes of this Agreement "Accounts Receivable" 
consists of all accounts, general intangibles, chattel paper, deposit accounts, 
documents and instruments).  
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                              Bank Officer's initials        Debtor's Initials

All Inventory.                   All Equipment and Fixtures.
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               Bank     Debtor's                             Bank     Debtor's
             Officer's  Initials                           Officer's  Initials
              Initials                                      Initials

Specific Items listed below and/or on attached Schedule A, if any, is/are also 
included in Collateral.

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All goods, instruments, documents, policies and certificates of insurance, 
deposits, money or other property (except real property which is not a fixture) 
which are now or later in possession of Bank, or as to which Bank now or later 
controls possession by documents or otherwise.

All additions, attachments, accessions, parts, replacements, substitutions, 
renewals, interest, dividends, distributions, rights of any kind (including but 
not limited to stock splits, stock rights, voting and preferential rights), 
products, or proceeds of or pertaining to the above including, without limit, 
cash or other property which were proceeds and are recovered by a bankruptcy 
trustee or otherwise as a preferential transfer by Debtor.

2. Warranties, Covenants and Agreements.  Debtor warrants, convenants and agrees
as follows:

2.1 Debtor shall furnish to Bank, in form and at intervals as Bank may request, 
any information Bank may reasonably request and allow Bank to examine, inspect, 
and copy any of Debtor's books and records.  Debtor shall, at the request of 
Bank, mark its records and the Collateral to clearly indicate the security 
interest of Bank under this Agreement.

2.2 At the time any Collateral becomes, or is represented to be, subject to a 
security interest in favor of Bank, Debtor shall be deemed to have warranted 
that (a) Debtor is the lawful owner of the Collateral and has the right and 
authority to subject it to a security interest granted to Bank; (b) none of the 
Collateral is subject to any security interest other than that in favor of Bank 
and there are no financing statements on file, other than in favor of Bank; and 
(c) Debtor acquired its rights in the Collateral in the ordinary course of its 
business.

2.3 Debtor will keep the Collateral free at all times from all claims, liens, 
security interests and encumbrances other than those in favor of Bank.  Debtor 
will not, without the prior written consent of Bank, sell, transfer or lease, or
permit to be sold, transferred or leased, any or all of the Collateral, except 
for inventory in the ordinary course of its business and will not return any 
inventory to its supplier.  Bank or its representatives may at all reasonable 
times inspect the Collateral and may enter upon all premises where the 
Collateral is kept or might be located.

2.4 Debtor will do all acts and will execute all writings requested by Bank to 
establish, maintain and continue a perfected and first security interest of Bank
in the Collateral.  Debtor agrees that Bank has no obligation to acquire or 
perfect any lien on or security interest in any asset(s), whether really or 
personally, to secure payment of the indebtedness, and Debtor is not relying 
upon assets in which the Bank may have a lien or security interest for payment 
of the indebtedness.

2.5 Debtor will pay within the time that they can be paid without interest or 
penalty all taxes, assessments and similar charges which at any time are or may
become a lien, charge, or encumbrance upon any Collateral, except to the extent 
contested in good faith and bonded in a manner satisfactory to Bank.  If Debtor 
fails to pay any of these taxes, assessments, or other charges in the time 
provided above, Bank has the option (but not the obligation) to do so and Debtor
agrees to repay all amounts so expended by Bank immediately upon demand, 
together with interest at the highest lawful default rate which could be charged
by Bank to Debtor on any indebtedness.

2.6 Debtor will keep the Collateral in good condition and will protect it from 
loss, damage, or deterioration from any cause.  Debtor has and will maintain at 
all times (a) with respect to the Collateral, insurance under an "all risk" 
policy against fire and other risks customarily insured against, and (b) public 
liability insurance and other insurance as may be required by law or reasonably 
required by Bank, all of which insurance shall be in amount, form and content, 
and written by companies as may be satisfactory to Bank, containing a lender's 
loss payable endorsement acceptable to Bank. Debtor will deliver to Bank
immediately upon demand evidence satisfactory to Bank that the required
insurance has been procured. If Debtor fails to maintain satisfactory insurance,
Bank has the option (but not the obligation) to do so and Debtor agrees to repay
all amounts so expended by Bank immediately upon demand, together with interest
at the highest lawful default rate which could be charged by Bank to Debtor on
any indebtedness.

2.7 If Debtor's Accounts Receivable are pledged as Collateral under this 
Agreement, on each occasion on which Debtor evidences to Bank the account 
balances on and the nature and extent of the Accounts Receivable, Debtor shall 
be deemed to have warranted that except as otherwise indicated (a) each of those
Accounts Receivable is valid and enforceable without performance by Debtor of 
any act; (b) each of those account balances are in fact owing, (c) there are no 
setoffs, recoupments, credits, contra accounts, counterclaims or defenses 
against any of those Accounts Receivable, (d) as to any Accounts Receivable 
represented by a note, trade acceptance, draft or other instrument or by any 
chattel paper or document, the same have been endorsed and/or delivered by 
Debtor to Bank, (e) Debtor has

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not received with respect to any Account Receivable, any notice of the death of
the related account debtor, nor of the dissolution, liquidation, termination of
existence, insolvency, business failure, appointment of a receiver for,
assignment for the benefit of creditors by, or filing of a petition in
bankruptcy by or against, the account debtor, and (f) as to each Account
Receivable, the account debtor is not an affiliate of Debtor, the United States
of America or any department, agency or instrumentality of it, or a citizen or
resident of any jurisdiction outside of the United States. Debtor will do all
acts and will execute all writings requested by Bank to perform, enforce
performance of, and collect all Accounts Receivable. Debtor shall neither make
nor permit any modification, compromise or substitution for any Account
Receivable without the prior written consent of Bank. Debtor shall, at Bank's
request, arrange for verification of Accounts Receivable directly with account
debtors or by other methods acceptable to Bank.

2.8 Debtor at all times shall be in strict compliance with all applicable laws, 
including without limit any laws, ordinances, directives, orders, statutes, or 
regulations an object of which is to regulate or improve health, safety, or the 
environment ("Environmental Laws").

2.9 If marketable securities are pledged as Collateral under this Agreement and 
if at any time the outstanding principal balance of the indebtedness exceeds N/A
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of the value of the Collateral, as such value is determined from time to time by
Bank (herein called the "Margin Requirement"), Debtor shall immediately pay or
cause to be paid to Bank an amount sufficient to reduce the indebtedness such
that the remaining principal outstanding thereunder is equal to or less than the
Margin Requirement. Bank shall apply payments made under this paragraph in
payment of the indebtedness in such order and manner of application as Bank in
its sole discretion elects. In the alternative, Debtor may provide or cause to
be provided to Bank additional collateral in the form of cash or other property
acceptable to Bank and with a value, as determined by Bank, that when added to
the Collateral will constitute compliance with the Margin Requirement.

2.10 If Bank, acting in its sole discretion, redelivers Collateral to Debtor or 
Debtor's designee for the purpose of (a) the ultimate sale or exchange thereof;
or (b) presentation, collection, renewal, or registration of transfer thereof;
or (c) loading, unloading, storing, shipping, transshipping, manufacturing,
processing or otherwise dealing with it preliminary to sale or exchange; such
redelivery shall be in trust for the benefit of Bank and shall not constitute a
release of Bank's security interest in it or in the proceeds or products of it
unless Bank specifically so agrees in writing. If Debtor requests any such
redelivery, Debtor will deliver with such request a duly executed financing
statement in form and substance satisfactory to Bank. Any proceeds of Collateral
coming into Debtor's possession as a result of any such redelivery shall be held
in trust for Bank and immediately delivered to Bank for application on the
indebtedness. Bank may (in its sole discretion) deliver any or all of the
Collateral to Debtor, and such delivery by Bank shall discharge Bank from all
liability or responsibility for such Collateral. Bank, at its option, may
require delivery of any Collateral to Bank at any time with such endorsements or
assignments of the Collateral as Bank may request.

2.11 At any time and without notice, Bank may (a) cause any or all of the 
Collateral to be transferred to its name or to the name of its nominees; (b) 
receive or collect by legal proceedings or otherwise all dividends, interest, 
principal payments and other sums and all other distributions at any time 
payable or receivable on account of the Collateral, and hold the same as 
Collateral, or apply the same to the indebtedness, the manner and distribution 
of the application to be in the sole discretion of Bank; (c) enter into any 
extension, subordination, reorganization, deposit, merger or consolidation 
agreement or any other agreement relating to or affecting the Collateral, and 
deposit or surrender control of the Collateral, and accept other property in 
exchange for the Collateral and hold or apply the property or money so received 
pursuant to this Agreement.

2.12 Bank may assign any of the indebtedness and deliver any or all of the 
Collateral to its assignee, who then shall have with respect to Collateral so 
delivered all the rights and powers of Bank under this Agreement, and after that
Bank shall be fully discharged from all liability and responsibility with 
respect to Collateral so delivered.

2.13 Debtor delivers this Agreement bases solely on Debtor's independent 
investigation of (or decision not to investigate) the financial condition of 
Borrower and is not relying on any information furnished by Bank.  Debtor 
assumes full responsibility for obtaining any further information concerning the
Borrower's financial condition, the status of the indebtedness or any other 
matter which the undersigned may deem necessary or appropriate now or later.  
Debtor waives any duty on the part of Bank, and agrees that Debtor is not 
relying upon nor expecting Bank to disclose to Debtor any fact now or later 
known by Bank, whether relating to the operations or condition of Borrower, the 
existence, liabilities or financial condition of any guarantor of the 
indebtedness, the occurrence of any default with respect to the indebtedness, or
otherwise, notwithstanding any effect such fact may have upon Debtor's risk or 
Debtor's rights against Borrower, Debtor knowingly accepts the full range of 
risk encompassed in this Agreement, which risk includes without limit the 
possibility that Borrower may incur indebtedness to Bank after the financial 
condition of Borrower, or Borrower's ability to pay debts as they mature, has 
deteriorated.

2.14 Debtor shall defend, indemnify and hold harmless Bank, its employees,
agents, shareholders, officers, and directors from and against any and all
claims, damages, fines, expenses, liabilities or causes of action of whatever
kind, including without limit consultant fees, legal expenses, and reasonable
attorneys' fees, suffered by any of them as a direct or indirect result of any
actual or asserted violation of any law, including without limit Environmental
Laws, or of any remediation relating to any property required by any law,
including without limit Environmental Laws.

3. Collection of Proceeds.

3.1 Debtor agrees to collect and enforce payment of all Collateral until Bank 
shall direct Debtor to the contrary.  Immediately upon notice to Debtor by Bank 
and at all times after that, Debtor agrees to fully and promptly cooperate and 
assist Bank in the collection and enforcement of all Collateral and to hold in 
trust for Bank all payments received in connection with Collateral and from the 
sale, lease or other disposition of any Collateral, all rights by way of 
suretyship or guaranty and all rights in the nature of a lien or security 
interest which Debtor now or later has regarding Collateral.  Immediately upon 
and after such notice, Debtor agrees to (a) endorse to Bank and immediately 
deliver to Bank all payments received on Collateral or from the sale, lease or 
other disposition of any Collateral or arising from any other rights or 
interests of Debtor in the Collateral, in the form received by Debtor without
commingling with any other funds, and (b) immediately deliver to Bank all
property in Debtor's possession or later coming into Debtor's possession through
enforcement of Debtor's rights or interests in the Collateral.  Debtor 
irrevocably authorizes Bank or any Bank employee or agent to endorse the name of
Debtor upon any checks or other items which are received in payment for any 
Collateral, and to do any and all things necessary in order to reduce these 
items to money.  Bank shall have no duty as to the collection or protection of 
Collateral or the proceeds of it, nor as to the preservation of any related 
rights, beyond the use of reasonable care in the custody and preservation of 
Collateral in the possession of Bank. Debtor agrees to take all steps necessary
to preserve rights against prior parties with respect to the Collateral.

3.2 If Accounts Receivable are pledged as Collateral under this Agreement,
Debtor agrees that immediately upon Bank's request (whether or not any Event of
Default exists), Debtor shall at its sole expense establish and maintain: (a) an
United States Post Office lock box (the "Lock Box"), to which Bank shall have
exclusive access, Debtor expressly authorizes Bank, from time to time to remove
contents from the Lock Box, for disposition in accordance with this Agreement.
Debtor agrees to notify all account debtors and other parties obligated to
Debtor that all payments made to Debtor (other than payments by electronic funds
transfer) shall be remitted, for the credit of Debtor, to the Lock Box, and
Debtor shall include a like statement on all invoices; and (b) a non-interest
bearing deposit account with Bank in the name of Bank for the benefit of Debtor
(the "Cash Collateral Account") as security for payment of the indebtedness to
which Bank shall have exclusive access. Debtor agrees to notify all account
debtors and other parties obligated to Debtor that all payments made to Debtor
by electronic funds transfer shall be remitted, for the credit of Debtor, to the
Cash Collateral Account, and Debtor, at Bank's request, shall include a like
statement on all invoices. Debtor shall execute all documents and authorizations
necessary to establish and maintain the Lock Box and the Cash Collateral
Account.

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3.3 All items of amounts which are remitted to the Lock Box or otherwise 
delivered by or for the benefit of Debtor to Bank on account of partial or full 
payment of, or with respect to, any Collateral shall, at Bank's option, (i) be 
applied to the payment of the Indebtedness, whether then due or not, in such 
order of application as Bank may determine in its sole discretion, or, (ii) 
shall be deposited to the Cash Collateral Account. Debtor agrees that Bank shall
not be liable for any loss or damage which Debtor may suffer as a result of 
Bank's processing of items or its exercise of any other rights or remedies under
this Agreement, including without limitation indirect, special or consequential 
damages, loss or revenues or profits, or any claim,, demand or action by any 
third party arising out of or in connection with the processing of items or the 
exercise of any other rights or remedies under this Agreement. Debtor agrees to 
indemnify and hold Bank harmless from and against all such third party claims, 
demands or actions, including without limitation attorney fees.

4. Defaults, Enforcement and Application of Proceeds.

4.1 Upon the occurrence of any of the following events (each an "Event of 
Default"), Debtor shall be in default under this Agreement:

(a) Any failure to pay the Indebtedness when due, or such portion of it as may 
be due, by acceleration or otherwise; or

(b) Any failure or neglect to comply with, or breach of, any term of this 
Agreement, or any other agreement or commitment between Borrower, Debtor, or any
guarantor of any of the Indebtedness ("guarantor") and Bank; or

(c) Any warranty, representation, financial statement, or other information 
made, given or furnished to Bank by or on behalf of Borrower, Debtor, or any 
guarantor shall be, or shall prove to have been, false or materially misleading 
when made, given, or furnished; or

(d) Any loss, theft, substantial damage or destruction to or of any Collateral, 
or the issuance or filing of any attachment, levy, garnishment or the
commencement of any proceeding in connection with any Collateral or of any other
judicial process of, upon or in respect of Borrower, Debtor, any guarantor, or
any Collateral; or

(e) Sale or other disposition by Borrower, Debtor, or any guarantor of any 
substantial portion of its assets or property or voluntary suspension of the 
transaction of business by Borrower, Debtor, or any guarantor, or death, 
dissolution, termination of existence, merger, consolidation, insolvency, 
business failure, or assignment for the benefit of creditors of or by Borrower, 
Debtor, or any guarantor; or commencement of any proceedings under any state or 
federal bankruptcy or insolvency laws or laws for the relief of debtors by or 
against Borrower, Debtor, or any guarantor; or the appointment of a receiver, 
trustee, court appointee, sequestrator or otherwise, for all or any part of the 
property of Borrower, Debtor, or any guarantor; or

(f) Bank deems the margin of Collateral insufficient or itself insecure, in good
faith believing that the prospect of payment of the indebtedness or performance 
of this Agreement is impaired or shall fear deterioration, removal, or waste of 
Collateral.

4.2 Upon the occurrence of any Event of Default, Bank may at its discretion and 
without prior notice to Debtor declare any or all of the Indebtedness to be 
immediately due and payable, and shall have and may exercise any one or more of
the following rights and remedies:

(a) exercise all the rights and remedies upon default, in foreclosure and 
otherwise, available to secured parties under the provisions of the Uniform 
Commercial Code and other applicable law;

(b) Institute legal proceedings to foreclose upon the lien and security interest
granted by this Agreement, to recover judgment for all amounts then due and
owing as indebtedness, and to collect the same out of any Collateral or the
proceeds of any sale of it;

(c) Institute legal proceedings for the sale, under the judgment or decree of 
any court of competent jurisdiction, of any or all Collateral; and/or

(d) personally or by agents, attorneys, or appointment of a receiver, enter upon
any premises where Collateral may then be located, and take possession of all or
any of it and/or render it unusable; and without being responsible for loss or
damage to such Collateral, hold, operate, sell, lease, or dispose of all or any
Collateral at places and times and on terms and conditions as Bank may deem fit,
without any previous demand or advertisement; and except as provided in this
Agreement, all notice of sale, lease or other disposition, and advertisement,
and other notice or demand, any right or equity of redemption, and any
obligation of a prospective purchaser or lessee to inquire as to the power and
authority of Bank to sell, lease, or otherwise dispose of the Collateral or as
to the application by Bank of the proceeds of sale or otherwise, which would
otherwise be required by, or available to Debtor under, applicable are expressly
waived by Debtor to the fullest extent permitted.

At any sale pursuant to this Section 4.2, whether under the power of sale, by 
virtue of judicial proceedings or otherwise, it shall not be necessary for Bank 
or a public officer under order of a court to have present physical or 
constructive possession of Collateral to be sold. The recitals contained in any 
conveyances and receipts made and given by Bank or the public officer to any 
purchaser at any sale made pursuant to this Agreement shall, to the extent 
permitted by applicable law, conclusively establish the truth and accuracy of 
the matters stated (including, without limit, as to the amounts of the principal
of and interest on the indebtedness, the accrual and nonpayment of it and 
advertisement and conduct of the sale); and all prerequisites to the sale shall 
be presumed to have been satisfied and performed. Upon any sale of any 
Collateral, the receipt of the officer making the sale under judicial 
proceedings or of Bank shall be sufficient discharge to the purchaser for the 
purchase money, and the purchaser shall not be obligated to see to the 
application of the money. Any sale of any Collateral under this Agreement shall 
be a perpetual bar against Debtor with respect to that Collateral.

4.3 Debtor shall have at the request of Bank, notify the account debtors or 
obligors of Bank's security interest in Accounts Receivable and direct payment 
of it to Bank. Bank may, itself, upon the occurrence of any Event of Default so 
notify and direct any account debtor or obligor.

4.4 The proceeds of any sale or other disposition of Collateral authorized by 
this Agreement shall be applied by Bank first upon all expenses authorized by 
the Uniform Commercial Code and all reasonable attorney fees and legal expenses 
incurred by Bank; the balance of the proceeds of the sale or other disposition 
shall be applied in the payment of the indebtedness, first to interest, then to 
principal, then to remaining indebtedness and the surplus, if any, shall be paid
over to Debtor or to such other person(s) as may be entitled to it under 
applicable law. Debtor shall remain liable for any deficiency, which it shall 
pay to Bank immediately upon demand.

4.5 Nothing in this Agreement is intended, nor shall it be construed, to 
preclude Bank from pursuing any other remedy provided by law for the collection 
of the indebtedness or for the recovery of any other sum to which Bank may be 
entitled for the breach of this Agreement by Debtor. Nothing in this Agreement 
shall reduce or release in any way any rights or security interests of Bank 
contained in any existing agreement between Borrower, Debtor, or any guarantor 
and Bank.

4.6 No waiver of default or consent to any act by Debtor shall be effective 
unless in writing and signed by an authorized officer of Bank. No waiver of any 
default or forbearance on the part of Bank in enforcing any of its rights under 
this Agreement shall operate as a waiver of any other default or of the same 
default on a future occasion or of any rights.

4.7 Debtor irrevocably appoints Bank or any agent of Bank (which appointment is 
coupled with an interest) the true and lawful attorney of Debtor (with full 
power of substitution) in the name, place and stead of, and at the expense of, 
Debtor:

(a) to demand, receive, sue for, and give receipts or acquittances for any
moneys due or to become due on any Account Receivable and to endorse any item
representing any payment on or proceeds of the Collateral;

(b) to execute and file in the name of and on behalf of Debtor all financing 
statements or other filings deemed necessary or desirable by Bank to evidence, 
perfect, or continue the security interests granted in this Agreement; and 

                                      3.
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(c) to do and perform any act on behalf of Debtor permitted or required under 
this Agreement.

4.8 Upon the occurrence of an Event of Default, Debtor also agrees, upon request
of Bank, to assemble the Collateral and make it available to Bank at any place 
designated by Bank which is reasonably convenient to Bank and Debtor.

5. Miscellaneous.

5.1 Until Bank is advised in writing by Debtor to the contrary, all notices, 
requests and demands required under this Agreement or by law shall be given to, 
or made upon, Debtor at the address indicated in Section 5.15 below.

5.2 Debtor will give Bank not less than 90 days prior written notice of all
contemplated changes in Debtor's name, chief executive office location, and/or
location of any Collateral, but the giving of this notice shall not cure any
Event of Default caused by this change.

5.3 Bank assumes no duty of performance or other responsibility under any 
contracts contained within the Collateral.

5.4 Bank has the right to sell, assign, transfer, negotiate or grant 
participations or any interest in, any or all of the indebtedness and any 
related obligations, including without limit this Agreement.  In connection with
the above, but without limiting its ability to make other disclosures to the 
full extent allowable, Bank may disclose all documents and information which 
Bank now or later has relating to Debtor, the indebtedness or this Agreement, 
however obtained.  The undersigned agree(s) that the Bank may provide 
information relating to this Security Agreement or to the undersigned to the 
Bank's parent, affiliates, subsidiaries and service providers.

5.5 In addition to Bank's other rights, any indebtedness owing from Bank to 
Debtor can be set off and applied by Bank on any indebtedness at any time(s) 
either before or after maturity or demand without notice to anyone.

5.6 Debtor waives any right to require the Bank to: (a) proceed against any 
person of property; (b) give notice of the terms, time and place of any public 
or private sale of personal property security held from Borrower or any other 
person, or otherwise comply with the provisions of Section 9-504 of the
California or other applicable Uniform Commercial Code; or (c) pursue any other
remedy in the Bank's power. Debtor waives notice of acceptance of this Agreement
and presentment, demand, protest, notice of protest, dishonor, notice of
dishonor, notice of default, notice of intent to accelerate or demand payment of
any indebtedness, any and all other notices to which the undersigned might
otherwise be entitled, and diligence in collecting any indebtedness, and
agree(s) that the Bank may, once or any number of times, modify the terms of any
indebtedness, compromise, extend, increase, accelerate, renew or forbear to
enforce payment of any or all indebtedness, or permit Borrower to incur
additional indebtedness, all without notice to Debtor and without affecting in
any manner the unconditional obligation of Debtor under this Agreement. Debtor
unconditionally and irrevocably waives each and every defense and setoff of any
nature which, under principles of guaranty or otherwise, would operate to impair
or diminish in any way the obligation of Debtor under this Agreement, and
acknowledges that such waiver is by this reference incorporated into each
security agreement, collateral assignment, pledge and/or other document from
Debtor now or later securing the indebtedness, and acknowledges that as of the
date of this Agreement no such defense or setoff exists.

5.7 Debtor waives any and all rights (whether by subrogation, indemnity, 
reimbursement, or otherwise) to recover from Borrower any amounts paid by Debtor
pursuant to this Agreement.

5.8 In the event that applicable law shall obligate Bank to give prior notice to
Debtor of any action to be taken under this Agreement, Debtor agrees that a 
written notice given to it at least five days before the date of the act shall 
be reasonable notice of the act and, specifically, reasonable notification of 
the time and place of any public sale or of the time after which any private 
sale, lease, or other disposition is to be made, unless a shorter notice period 
is reasonable under the circumstances.  A notice shall be deemed to be given 
under this Agreement when delivered to Debtor or when placed in an envelope 
addressed to Debtor and deposited, with postage prepaid, in a post office or 
official depository under the exclusive care and custody of the United States 
Postal Service.  The mailing shall be by overnight courier, certified, or first 
class mail.

5.9 Notwithstanding any prior revocation, termination, surrender, or discharge 
of this Agreement in whole or in part, the effectiveness of this Agreement shall
automatically continue or be reinstated in the event that any payment received 
or credit given by Bank in respect of the indebtedness is returned, disgorged, 
or rescinded under any applicable law, including, without limitation, bankruptcy
or insolvency laws, in which case this Agreement, shall be enforceable against 
Debtor as if the returned, disgorged, or rescinded payment or credit had not 
been received or given by Bank, and whether or not Bank relied upon this payment
or credit or changed its position as a consequence of it in the event of 
continuation or reinstatement of this Agreement, Debtor agrees upon demand by 
Bank to execute and deliver to Bank those documents which Bank determines are 
appropriate to further evidence (in the public records or otherwise) this 
continuation or reinstatement, although the failure of Debtor to do so shall not
affect in any way the reinstatement or continuation.

5.10 This Agreement and all the rights and remedies of Bank under this Agreement
shall inure to the benefit of Bank's successors and assigns and to any other 
holder who derives from Bank title to or an interest in the Indebtedness or any 
portion of it, and shall bind Debtor and the heirs, legal representatives, 
successors, and assigns of Debtor.  Nothing in this Section 5.10 is deemed a 
consent by Bank to any assignment by Debtor.

5.11 If there is more than one Debtor, all undertakings, warranties and 
convenants made by Debtor and all rights, powers and authorities given to or 
conferred upon Bank are made or given jointly and severaly.

5.12 Except as otherwise provided in this Agreement, all terms in this Agreement
have the meanings assigned to them in Division 9 (or, absent definition in
Division 9, in any other Division) of the Uniform Commercial Code, as of the
date of this Agreement. "Uniform Commercial Code" means the California Uniform
Commerical Code, as amended.

5.13 No single or partial exercise, or delay in the exercise, of any right or 
power under this Agreement, shall preclude other or further exercise of the 
rights and powers under this Agreement.  The unenforceability of any provision 
of this Agreement shall not affect the enforceability of the remainder of this 
Agreement.  This Agreement constitutes the entire agreement of Debtor and Bank 
with respect to the subject matter of this Agreement.  No amendment or
modification of this Agreement shall be effective unless the same shall be in
writing and signed by Debtor and an authorized officer of Bank. This Agreement
shall in all respects be governed by and construed in accordance with the laws
of the State of California without regard to conflict of laws principles.

5.14 To the extent that any of the indebtedness is payable upon demand, nothing 
contained in this Agreement shall modify the terms and conditions of that 
indebtedness nor shall anything contained in this Agreement prevent Bank from 
making demand, without notice and with or without reason, for immediate payment 
of any or all of that indebtedness at any time(s), whether or not an Event of 
Default has occurred.

5.15 Debtor's chief executive office is located and shall be maintained at

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If Collateral is located at other than the chief executive office, such 
Collateral is located and shall be maintained at
                                                --------------------------------

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Collateral shall be maintained only at the locations identified in this Section 
5.15.

5.16 A carbon, photographic or other reproduction of this Agreement shall be 
sufficient as a financing statement under the Uniform Commercial Code and may be
filed by Bank in any filing office.

5.17 This Agreement shall be terminated only by the filing of a termination 
statement in accordance with the applicable provisions of the Uniform Commercial
Code, but the obligations contained in Section 2.1a of this Agreement shall 
survive termination.

                                      4.
<PAGE>
 
6. DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A 
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED, EACH PARTY, AFTER CONSULTING (OR 
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY 
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY 
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.

7. Special Provisions Applicable to this Agreement. ("None" if left blank)










DEBTOR: TAITRON COMPONENTS INCORPORATED

/s/ illegible
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BY:

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BY:

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BY:

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BY:

                                      5.