Exhibit 10.5


THIS  SECURED  DEBENTURE,  AND  THE  SECURITIES  INTO  WHICH  IT IS  CONVERTIBLE
(COLLECTIVELY,  THE  "SECURITIES"),  HAVE NOT BEEN  REGISTERED  WITH THE  UNITED
STATES  SECURITIES AND EXCHANGE  COMMISSION OR THE SECURITIES  COMMISSION OF ANY
STATE.  THE  SECURITIES  ARE  BEING  OFFERED  PURSUANT  TO A  SAFE  HARBOR  FROM
REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT").  THE SECURITIES ARE  "RESTRICTED" AND MAY NOT BE OFFERED OR
SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT,  PURSUANT TO REGULATION
D OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION  REQUIREMENTS OF THE
ACT AND THE  COMPANY  WILL BE  PROVIDED  WITH  OPINION  OF COUNSEL OR OTHER SUCH
INFORMATION  AS IT MAY  REASONABLY  REQUIRE TO CONFIRM THAT SUCH  EXEMPTIONS ARE
AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE
EXCEPT IN COMPLIANCE WITH THE ACT.

                             POWER TECHNOLOGY, INC.

                              Amended and Restated

                        5% Secured Convertible Debenture

                             Due: November 19, 2006

No. CCP-3                                                               $514,657

         This  Amended  and  Restated   Secured   Convertible   Debenture   (the
"Debenture")  dated May 10, 2005 ("Closing Date") is issued by POWER TECHNOLOGY,
INC., a Nevada  corporation (the  "Company"),  to CORNELL CAPITAL  PARTNERS,  LP
(together with its permitted  successors and assigns,  the "Holder") pursuant to
exemptions from registration under the Securities Act of 1933, as amended.

         WHEREAS,  The parties desire that this Debenture  amend and replace the
secured  convertible  debenture  dated November 19, 2004 between the Company and
Cornell Capital Partners,  LP in the principal sum of Two Hundred Fifty Thousand
Dollars  ($250,000)  (the  "November  Debenture")  and the  secured  convertible
debenture  dated  August 27,  2004  between  the  Company  and  Cornell  Capital
Partners,  LP in the  principal  sum  of  Two  Hundred  Fifty  Thousand  Dollars
($250,000) (the "August Debenture"); and

         WHEREAS,  the  principal  amount of this  Debenture  shall  include the
entire outstanding  principal sum of the November Debenture of Two Hundred Fifty
Thousand  Dollars  ($250,000)  plus the  accrued  and  unpaid  interest  of Five
Thousand Eight Hundred Ninety  Dollars  ($5,890) on the November  Debenture from
November 19, 2004 through the date hereof and the entire  outstanding  principal

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sum of the August  Debenture of Two Hundred Fifty  Thousand  Dollars  ($250,000)
plus the accrued and unpaid interest of Eight Thousand Seven Hundred Sixty Seven
Dollars  ($8,767) on the August  Debenture from August 27, 2004 through the date
hereof.

                                   ARTICLE I.

         Section 1.01 PRINCIPAL AND INTEREST.  For value  received,  the Company
hereby  promises  to  pay to the  order  of the  Holder  on  November  19,  2006
("Maturity  Date"),  subject to Section 1.02 and Section 1.04 herein,  in lawful
money of the United  States of America and in  immediately  available  funds the
principal sum of Five Hundred Fourteen  Thousand Dollars Six Hundred Fifty Seven
($514,657),  together with interest on the unpaid principal of this Debenture at
the rate of five percent (5%) per year  (computed on the basis of a 365-day year
and the actual days elapsed) from the date of this Debenture until paid.

         Section  1.02  OPTIONAL  CONVERSION.  The  Holder is  entitled,  at its
option, to convert, and sell on the same day, at any time and from time to time,
until payment in full of this Debenture, all or any part of the principal amount
of the Debenture into shares (the  "Conversion  Shares") of the Company's common
stock, par value $0.001 per share ("Common Stock"),  at the price per share (the
"Conversion Price") equal to $0.036 (the "Conversion Price"),  provided, that in
no event shall the Holder be entitled to convert this  Debenture for a number of
shares of Common Stock in excess of that number of shares of Common Stock which,
upon  giving  effect to such  conversion,  would cause the  aggregate  number of
shares of Common Stock  beneficially  owned by the Holder and its  affiliates to
exceed  4.99% of the  outstanding  shares of the  Common  Stock  following  such
conversion  (which  provision may be waived by the Holder by written notice from
the Holder to the  Company,  which  notice  shall be effective 61 days after the
date of such notice).  No fraction of shares or scrip representing  fractions of
shares will be issued on conversion,  but the number of shares issuable shall be
rounded to the nearest whole share. To convert this Debenture, the Holder hereof
shall deliver written notice thereof,  substantially  in the form of Exhibit "A"
to this Debenture, with appropriate insertions (the "Conversion Notice"), to the
Company at its address as set forth herein.  The date upon which the  conversion
shall be effective  (the  "Conversion  Date") shall be deemed to be the date set
forth in the Conversion Notice.

         Section 1.03 RESERVATION OF COMMON STOCK. The Company shall reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the  conversion of this  Debenture,  such number of
shares of Common Stock as shall from time to time be  sufficient  to effect such
conversion, based upon the Conversion Price. If at any time the Company does not
have a sufficient number of Conversion Shares authorized and available, then the
Company shall call and hold a special meeting of its stockholders  within thirty
(30)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

         Section 1.04 MONTHLY REPAYMENT SCHEDULE. The Company shall make six (6)
scheduled payments  ("Scheduled  Payments") of principal,  plus accrued interest
and a Redemption Premium  ("Redemption  Premium") equal to fifteen percent (15%)
of the principal amount of each Scheduled  Payment.  The first Scheduled Payment
shall be due and  payable on October 1, 2005,  and shall  continue  on the first
business day of each succeeding calendar month thereafter for a total of six (6)
Scheduled  Payments.  The principal  amount of each  Scheduled  Payment shall be

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determined by dividing the outstanding  principal amount of this Debenture as of
the date such  Scheduled  Payment  is due by the  number of  Scheduled  Payments
remaining.  For example, if on October 1, 2005, the outstanding principal amount
is $500,000, then the Scheduled Payment due on October 1, 2005, would consist of
$83,333.33  of  principal,  plus a  Redemption  Premium of $12,500  and  accrued
interest  on  $500,000  at a rate of 5% per year from the date  hereof up to and
including September 30, 2005.

         Section 1.05 RIGHT OF REDEMPTION.  The Company at its option shall have
the right,  with three (3) business  days advance  written  notice,  to redeem a
portion or all amounts  outstanding  under this Debenture  prior to the Maturity
Date or any Scheduled  Payment due date. The  Redemption  Premium shall apply to
any such early redemptions. The Company shall pay a twenty percent (20%) premium
(in lieu of the Redemption  Premium),  on any Scheduled  Payment not made within
five (5) business  days of the date it is due and on any payments made after the
Maturity Date.

         In the event the  Company  exercises  a  redemption  of either all or a
portion the  Debenture,  the Holder shall  receive a warrant to purchase  50,000
shares of the Company's Common Stock for every One Hundred Thousand U.S. Dollars
(US$100,000)  redeemed,   pro  rata  (the  "Warrant").   The  Warrant  shall  be
exercisable on a "cash basis" and have an exercise price of $0.043.  The Warrant
shall have "piggy-back" and demand registration rights and shall survive for two
(2) years from the Closing Date.

         Section 1.06 REGISTRATION  RIGHTS. The Company is obligated to register
the  resale of the  Conversion  Shares  under  the  Securities  Act of 1933,  as
amended,  pursuant to the terms of a Registration Rights Agreement,  between the
Company  and the  Holder  dated  August 27,  2005,  as  amended  (the  "Investor
Registration Rights Agreement").

         Section 1.07 INTEREST PAYMENTS. The interest so payable will be paid at
the time of maturity, redemption, Scheduled Payment, or conversion to the person
in whose  name  this  Debenture  is  registered.  At the time such  interest  is
payable,  the  Company  shall pay the  interest  in cash (via wire  transfer  or
certified funds).  In the event of default,  as described in Article III Section
3.01 hereunder, the Holder may elect that the interest be paid in cash (via wire
transfer or certified funds) or in the form of Common Stock. If paid in the form
of Common Stock, the amount of stock to be issued will be calculated as follows:
the  value of the stock  shall be the  closing  bid  price on:  (i) the date the
interest  payment is due; or (ii) if the interest  payment is not made when due,
the date the interest payment is made. A number of shares of Common Stock with a
value equal to the amount of interest due shall be issued.  No fractional shares
will be issued;  therefore,  in the event that the value of the Common Stock per
share does not equal the total interest due, the Company will pay the balance in
cash.

         Section 1.08 PAYING AGENT AND  REGISTRAR.  Initially,  the Company will
act as paying  agent and  registrar.  The Company  may change any paying  agent,
registrar,  or  Company-registrar  by giving  the  Holder not less than ten (10)
business  days' written  notice of its election to do so,  specifying  the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.

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         Section 1.09 SECURED NATURE OF DEBENTURE.  This Debenture is secured by
all of the assets and property of the Company and its wholly  owned  subsidiary,
all as more particularly described in those two Security Agreements dated August
27, 2004 (collectively, the "Security Agreements").

                                  ARTICLE II.

         Section 2.01 AMENDMENTS AND WAIVER OF DEFAULT. The Debenture may not be
amended.  Notwithstanding  the above,  without the  consent of the  Holder,  the
Debenture may be amended to cure any ambiguity,  defect or inconsistency,  or to
provide for assumption of the Company obligations to the Holder.

                                  ARTICLE III.

         Section  3.01  EVENTS OF  DEFAULT.  An Event of  Default  is defined as
follows:  (a) failure by the Company to pay amounts due hereunder within fifteen
(15) days of the Scheduled Payment due date or Maturity Date; (b) failure by the
Company to comply with the terms of the Irrevocable  Transfer Agent Instructions
attached to the  Securities  Purchase  Agreement;  (c) failure by the  Company's
transfer agent to issue freely  tradeable Common Stock to the Holder within five
(5) business days of the Company's  receipt of the attached Notice of Conversion
from Holder;  (d) failure by the Company for ten (10) business days after notice
to it to comply with any of its other agreements in the Debenture; (e) events of
bankruptcy or insolvency;  (f) a breach by the Company of its obligations  under
the Securities Purchase Agreement or the Investor  Registration Rights Agreement
which is not cured by the Company within ten (10) business days after receipt of
written notice thereof.  Upon the occurrence of an Event of Default,  the Holder
may,  in its  sole  discretion,  accelerate  full  repayment  of all  Debentures
outstanding and accrued interest thereon or may, notwithstanding any limitations
contained in this Debenture and/or the Securities  Purchase Agreement August 27,
2004 between the Company and Cornell  Capital  Partners,  L.P. (the  "Securities
Purchase  Agreement"),  convert all Debentures  outstanding and accrued interest
thereon into shares of Common Stock pursuant to Section 1.02 herein.

         Section 3.02 FAILURE TO ISSUE  UNRESTRICTED  COMMON STOCK. As indicated
in Article III Section  3.01, a breach by the Company of its  obligations  under
the Investor  Registration Rights Agreement shall be deemed an Event of Default,
which if not cured within ten (10)  business  days,  shall entitle the Holder to
accelerate  full repayment of all Debentures  outstanding  and accrued  interest
thereon or,  notwithstanding any limitations  contained in this Debenture and/or
the Securities  Purchase  Agreement,  to convert all Debentures  outstanding and
accrued  interest  thereon into shares of Common Stock  pursuant to Section 1.02
herein.  The Company  acknowledges  that failure to honor a Notice of Conversion
shall cause irreparable harm to the Holder.

                                  ARTICLE IV.

         Section 4.01 RIGHTS AND TERMS OF CONVERSION.  This Debenture,  in whole
or in part, may be converted at any time following the Closing Date, at the sole
discretion  of the Holder,  into shares of Common  Stock at a price equal to the
Conversion Price as described in Section 1.02 above.

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<PAGE>

         Section  4.02  RE-ISSUANCE  OF  DEBENTURE.  When the  Holder  elects to
convert  a part  of the  Debenture  or the  Company  redeems  a  portion  of the
Debenture,  then the Company  shall  reissue a new Debenture in the same form as
this Debenture to reflect the new principal amount.

                                   ARTICLE V.

         Section  5.01  ANTI-DILUTION.   Adjustment  of  Conversion  Price.  The
Conversion Price shall be adjusted from time to time as follows:

                  (a)  Adjustment  of  Conversion  Price.  If and whenever on or
after the Closing Date of this  Debenture,  the Company  issues or sells,  or is
deemed to have  issued or sold,  any  shares of  Common  Stock  (other  than (i)
Excluded  Securities  (as defined  herein) and (ii) shares of Common Stock which
are issued or deemed to have been  issued by the Company in  connection  with an
Approved  Stock Plan (as defined  herein) or upon  exercise or conversion of the
Other Securities (as defined herein)) for a consideration  per share less than a
price  (the  "Applicable  Price")  equal  to  the  Conversion  Price  in  effect
immediately prior to such issuance or sale, then immediately after such issue or
sale the Conversion  Price then in effect shall be reduced to an amount equal to
such  consideration  per share,  provided that in no event shall the  Conversion
Price be reduced below $0.001.

                  (b) Effect on Conversion Price of Certain Events. For purposes
of determining the adjusted  Conversion  Price under Section 5.01(a) above,  the
following shall be applicable:

                           (i)  Issuance of Options.  If after the date  hereof,
the Company in any manner  grants any rights,  warrants or options to  subscribe
for or purchase  Common  Stock or  convertible  securities  ("Options")  and the
lowest price per share for which one share of Common Stock is issuable  upon the
exercise of any such Option or upon  conversion  or exchange of any  convertible
securities issuable upon exercise of any such Option is less than the Conversion
Price then in  effect,  then such  share of Common  Stock  shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For  purposes of this
Section  5.01(b)(i),  the  lowest  price per share for which one share of Common
Stock is issuable upon  exercise of such Options or upon  conversion or exchange
of such  convertible  securities shall be equal to the sum of the lowest amounts
of consideration  (if any) received or receivable by the Company with respect to
any one share of Common  Stock upon the  granting  or sale of the  Option,  upon
exercise of the Option or upon  conversion or exchange of any other  convertible
security  other than this  Debenture  issuable upon exercise of such Option.  No
further  adjustment  of the  Conversion  Price  shall be made  upon  the  actual
issuance  of such  Common  Stock  or of such  convertible  securities  upon  the
exercise of such  Options or upon the actual  issuance of such Common Stock upon
conversion or exchange of such convertible securities.

                           (ii)  Issuance  of  Convertible  Securities.  If  the
Company  in any  manner  issues or sells any  convertible  securities  after the
Closing  Date and the lowest price per share for which one share of Common Stock
is issuable upon the conversion or exchange  thereof is less than the Conversion
Price then in  effect,  then such  share of Common  Stock  shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the

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issuance or sale of such  convertible  securities for such price per share.  For
the purposes of this Section  5.01(b)(ii),  the lowest price per share for which
one share of Common Stock is issuable upon such  conversion or exchange shall be
equal to the sum of the lowest  amounts of  consideration  (if any)  received or
receivable  by the Company  with  respect to one share of Common  Stock upon the
issuance or sale of the convertible  security and upon conversion or exchange of
such convertible  security.  No further adjustment of the Conversion Price shall
be made upon the  actual  issuance  of such  Common  Stock  upon  conversion  or
exchange of such convertible  securities,  and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which adjustment
of the Conversion  Price had been or are to be made pursuant to other provisions
of this Section 5.01(b),  no further adjustment of the Conversion Price shall be
made by reason of such issue or sale.

                           (iii) Change in Option  Price or Rate of  Conversion.
If the purchase price provided for in any Options, the additional consideration,
if any,  payable  upon the issue,  conversion  or  exchange  of any  convertible
securities, or the rate at which any convertible securities are convertible into
or  exchangeable  for Common Stock changes at any time, the Conversion  Price in
effect at the time of such  change  shall be adjusted  to the  Conversion  Price
which  would have been in effect at such time had such  Options  or  convertible
securities provided for such changed purchase price, additional consideration or
changed  conversion  rate,  as the case may be, at the time  initially  granted,
issued or sold and the number of shares of Common Stock issuable upon conversion
of this  Debenture  shall be  correspondingly  readjusted.  For purposes of this
Section  5.01(b)(iii),  if the terms of any Option or convertible  security that
was  outstanding  as of the Closing  Date of this  Debenture  are changed in the
manner  described in the  immediately  preceding  sentence,  then such Option or
convertible  security  and the  Common  Stock  deemed  issuable  upon  exercise,
conversion  or  exchange  thereof  shall be deemed to have been issued as of the
date of such change.  No  adjustment  pursuant to this Section  5.01(b) shall be
made if such adjustment would result in an increase of the Conversion Price then
in effect.

                  (c) Effect on Conversion Price of Certain Events. For purposes
of determining the adjusted Conversion Price under Sections 5.01(a) and 5.01(b),
the following shall be applicable:

                           (i)  Calculation of  Consideration  Received.  If any
Common Stock, Options or convertible  securities are issued or sold or deemed to
have been issued or sold for cash, the consideration  received therefore will be
deemed to be the net amount  received  by the Company  therefore.  If any Common
Stock, Options or convertible  securities are issued or sold for a consideration
other than cash, the amount of such  consideration  received by the Company will
be the  fair  value  of such  consideration,  except  where  such  consideration
consists of  marketable  securities,  in which case the amount of  consideration
received by the Company will be the market price of such  securities on the date
of  receipt of such  securities.  If any Common  Stock,  Options or  convertible
securities  are issued to the owners of the  non-surviving  entity in connection
with any merger in which the  Company  is the  surviving  entity,  the amount of
consideration  therefore  will be deemed to be the fair value of such portion of
the net assets and business of the  non-surviving  entity as is  attributable to
such Common Stock,  Options or convertible  securities,  as the case may be. The

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fair value of any consideration other than cash or securities will be determined
jointly by the Company and the holders of the  Debenture  representing  at least
two-thirds  of the  shares of  Common  Stock  issuable  upon  conversion  of the
Debenture then outstanding. If such parties are unable to reach agreement within
ten (10)  days  after  the  occurrence  of an  event  requiring  valuation  (the
"Valuation  Event"),  the fair value of such  consideration  will be  determined
within five (5) Business Days after the tenth (10th) day following the Valuation
Event by an independent, reputable appraiser jointly selected by the Company and
the holders of the Debenture  representing at least  two-thirds of the shares of
Common Stock  issuable upon  conversion of the Debenture then  outstanding.  The
determination  of such appraiser shall be final and binding upon all parties and
the fees and expenses of such appraiser shall be borne by the Company.

                           (ii) Integrated  Transactions.  In case any Option is
issued in connection with the issue or sale of other  securities of the Company,
together   comprising   one   integrated   transaction   in  which  no  specific
consideration is allocated to such Options by the parties  thereto,  the Options
will be deemed to have been issued for a consideration of $0.01.

                           (iii) Treasury Shares. The number of shares of Common
Stock  outstanding at any given time does not include shares owned or held by or
for the account of the Company,  and the  disposition  of any shares so owned or
held will be considered an issue or sale of Common Stock.

                           (iv) Record  Date.  If the Company  takes a record of
the holders of Common Stock for the purpose of  entitling  them (1) to receive a
dividend  or  other  distribution   payable  in  Common  Stock,  Options  or  in
convertible securities or (2) to subscribe for or purchase Common Stock, Options
or convertible  securities,  then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold  upon  the  declaration  of such  dividend  or the  making  of  such  other
distribution  or the  date of the  granting  of such  right of  subscription  or
purchase, as the case may be.

                  (d)  Adjustment  of  Conversion   Price  upon  Subdivision  or
Combination  of  Common  Stock.  If the  Company  at any time  after the date of
issuance of this  Debenture  subdivides  (by any stock  split,  stock  dividend,
recapitalization  or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater  number of shares,  any  Conversion  Price in effect
immediately prior to such subdivision will be  proportionately  reduced.  If the
Company at any time after the date of issuance of this  Debenture  combines  (by
combination,  reverse  stock  split or  otherwise)  one or more  classes  of its
outstanding  shares  of  Common  Stock  into a smaller  number  of  shares,  any
Conversion  Price  in  effect  immediately  prior  to such  combination  will be
proportionately  increased.  Any  adjustment  under this Section  5.01(d)  shall
become  effective  at the  close of  business  on the date  the  subdivision  or
combination becomes effective.

                  (e)  Distribution  of Assets.  If the Company shall declare or
make any dividend or other  distribution of its assets (or rights to acquire its
assets)  to holders of Common  Stock,  by way of return of capital or  otherwise
(including,  without  limitation,  any  distribution  of  cash,  stock  or other
securities,   property   or   options   by  way  of  a   dividend,   spin   off,
reclassification,  corporate  rearrangement  or other  similar  transaction)  (a
"Distribution"), at any time after the issuance of this Debenture, then, in each
such  case any  Conversion  Price in  effect  immediately  prior to the close of

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business  on the record  date fixed for the  determination  of holders of Common
Stock entitled to receive the Distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by multiplying such
Conversion  Price by a fraction of which (A) the numerator  shall be the closing
bid price of the Common  Stock on the trading  day  immediately  preceding  such
record date minus the value of the  Distribution (as determined in good faith by
the Company's Board of Directors)  applicable to one share of Common Stock,  and
(B) the  denominator  shall be the closing bid price of the Common  Stock on the
trading day immediately preceding such record date; and

                  (f)  Certain   Events.   If  any  event  occurs  of  the  type
contemplated  by the provisions of this Section 5.01 but not expressly  provided
for by such provisions  (including,  without  limitation,  the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Company's Board of Directors will make an appropriate adjustment in the
Conversion  Price so as to protect the rights of the  holders of the  Debenture;
provided,  except  as set  forth in  Section  5.01(d),  that no such  adjustment
pursuant to this Section 5.01(f) will increase the Conversion Price as otherwise
determined pursuant to this Section 5.01.

                  (g) Notices.

                           (i) Immediately upon any adjustment of the Conversion
Price,  the  Company  will give  written  notice  thereof  to the holder of this
Debenture,  setting forth in reasonable detail, and certifying,  the calculation
of such adjustment.

                           (ii) The  Company  will  give  written  notice to the
holder of this  Debenture  at least ten (10) days prior to the date on which the
Company  closes its books or takes a record (A) with  respect to any dividend or
distribution   upon  the  Common  Stock,  (B)  with  respect  to  any  pro  rata
subscription  offer to holders of Common Stock or (C) for determining  rights to
vote  with  respect  to any  dissolution  or  liquidation,  provided  that  such
information  shall be made known to the public prior to or in  conjunction  with
such notice being provided to such holder.

                  (h) Definitions.

                           (i) "Approved Stock Plan" means any employee  benefit
plan which has been approved by the Board of Directors of the Company,  pursuant
to which the  Company's  securities  may be issued to any  employee,  officer or
director for services provided to the Company.

                           (ii)  "Excluded   Securities"  means,  provided  such
security is issued at a price which is greater  than or equal to the  arithmetic
average  of the  Closing  Bid  Prices  of the  Common  Stock  for the  ten  (10)
consecutive trading days immediately preceding the date of issuance,  any of the
following:  (a) any issuance by the Company of securities  in connection  with a
strategic partnership or a joint venture (the primary purpose of which is not to
raise  equity  capital),  (b) any  issuance  by the  Company  of  securities  as
consideration  for a merger or  consolidation  or the acquisition of a business,
product, license, or other assets of another person or entity and (c) options to
purchase shares of Common Stock,  provided (I) such options are issued after the

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date of this  Debenture to employees of the Company  within  thirty (30) days of
such employee's starting his employment with the Company,  and (II) the exercise
price of such options is not less than the closing bid price of the Common Stock
on the date of issuance of such option.

                           (iii) "Other  Securities" means (i) those options and
warrants of the Company issued prior to, and  outstanding  on, the Closing Date,
(ii) the  shares of Common  Stock  issuable  on  exercise  of such  options  and
warrants,  provided  such options and warrants are not amended after the Closing
Date and (iii) the  shares of Common  Stock  issuable  upon  conversion  of this
Debenture.

                           (i) Nothing in this  Section  5.01 shall be deemed to
authorize the issuance of any  securities by the Company in violation of Section
5.02.

         Section 5.02 Consent of Holder to Sell Capital Stock or Grant  Security
Interests.  Except for the Standby  Equity  Distribution  Agreement  dated as of
August 27, 2004 between the Company and Cornell Capital Partners, LP, so long as
any of the  principal  of or  interest  on this  Debenture  remains  unpaid  and
unconverted,  the Company  shall not,  without the prior  consent of the Holder,
issue or sell (i) any Common Stock or Preferred Stock without  consideration  or
for a  consideration  per  share  less  than its fair  market  value  determined
immediately  prior to its  issuance,  (ii)  issue or sell any  Preferred  Stock,
warrant, option, right, contract, call, or other security or instrument granting
the holder  thereof the right to acquire Common Stock without  consideration  or
for a  consideration  per share less than such Common  Stock's fair market value
determined  immediately  prior to its  issuance,  (iii) enter into any  security
instrument  granting the holder a security  interest in any of the assets of the
Company,  except that the Company may grant a security interest to a lender that
provides  purchase money financing for inventory and equipment and such security
interest  relates  solely to the inventory  and equipment so purchased,  or (iv)
file any registration statement on Form S-8.

                                  ARTICLE VI.

         Section 6.01 Notice.  Notices regarding this Debenture shall be sent to
the  parties  at the  following  addresses,  unless a party  notifies  the other
parties, in writing, of a change of address:

If to the Company, to:       Power Technology, Inc.
                             109 North Post Oak Lane, Suite 422
                             Houston, Texas 77024
                             Attention:  Bernard J. Walter
                             Telephone:  (713) 621-4310
                             Facsimile:  (713) 668-0622

With a copy to:              Stephen A. Zrenda, Jr., P.C.
                             100 N. Broadway, Suite 2440
                             Oklahoma City, OK 73102
                             Attention:  Stephen A. Zrenda, Jr.
                             Telephone:  (405) 235-2111
                             Facsimile:  (405) 235-2157


                                       9
<PAGE>

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

With a copy to:              Cornell Capital Partners, LP
                             101 Hudson Street - Suite 3700
                             Jersey City, NJ 07302
                             Attention:  Troy J. Rillo
                                         Senior Vice President
                             Telephone:  (201) 985-8300
                             Facsimile:  (201) 985-8266

Section 6.02 Governing Law. This Debenture  shall be deemed to be made under and
shall be  construed  in  accordance  with the  laws of the  State of New  Jersey
without giving effect to the principals of conflict of laws thereof. Each of the
parties consents to the  jurisdiction of the U.S.  District Court sitting in the
District  of the State of New  Jersey  or the  state  courts of the State of New
Jersey  sitting in Hudson  County,  New Jersey in  connection  with any  dispute
arising under this Debenture and hereby waives,  to the maximum extent permitted
by law, any objection,  including any objection based on forum non conveniens to
the bringing of any such proceeding in such jurisdictions.

Section 6.03  Severability.  The  invalidity  of any of the  provisions  of this
Debenture shall not invalidate or otherwise  affect any of the other  provisions
of this Debenture, which shall remain in full force and effect.

Section 6.04 Entire  Agreement and  Amendments.  This  Debenture  represents the
entire  agreement  between the parties hereto with respect to the subject matter
hereof and there are no  representations,  warranties or commitments,  except as
set forth herein. This Debenture may be amended only by an instrument in writing
executed by the parties hereto.

Section  6.05   Counterparts.   This  Debenture  may  be  executed  in  multiple
counterparts,  each of which  shall be an  original,  but all of which  shall be
deemed to constitute on instrument.

                   [REMAINDER OF PAGE INTENTIALLY LEFT BLANK]



                                       10
<PAGE>

 IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as
          executed this Debenture as of the date first written above.

                                              POWER TECHNOLOGY, INC.

                                              By:
                                                  ---------------------------
                                              Name:    Bernard J. Walter
                                              Title:   President



                                       11
<PAGE>

                                   EXHIBIT "A"


                              NOTICE OF CONVERSION

        (To be executed by the Holder in order to Convert the Debenture)


TO:

         The  undersigned  hereby  irrevocably  elects  to  convert  US$  of the
principal  amount of the above  Debenture  into Shares of Common  Stock of Power
Technology,  Inc.,  according  to  the  conditions  stated  therein,  as of  the
Conversion Date written below.

Conversion Date:                         _______________________________________

Applicable Conversion Price:             _______________________________________

Signature:                               _______________________________________

Name:                                    _______________________________________

Address:                                 _______________________________________

Amount to be converted:                  US$ ___________________________________

Amount of Debenture unconverted:         US$ ___________________________________

Conversion Price per share:              US$ ___________________________________

Number of shares of Common Stock to be
issued:                                  _______________________________________

Please issue the shares of Common Stock
in the following name and to the
following address:                       _______________________________________

Issue to:                                _______________________________________

Authorized Signature:                    _______________________________________

Name:                                    _______________________________________

Title:                                   _______________________________________

Phone Number:                            _______________________________________

Broker DTC Participant Code:             _______________________________________

Account Number:                          _______________________________________




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