SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC  20549

                             Form 10-KSB

   X      ANNUAL REPORT UNDER  SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the fiscal year ended December 31, 2002

                                  or

          TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the transition period from         to

                      Commission File No. 0-3936

                      ORBIT INTERNATIONAL CORP.
            (Name of small business issuer in its charter)

       DELAWARE                                           11-1826363
(State or other jurisdiction of                                  (I.R.S.
Employer
 incorporation or organization)                                 Identification
No.)

80 CABOT COURT, HAUPPAUGE, NEW YORK                         11788
(Address of principal executive offices)                              (Zip Code)

Issuer's telephone number, including area code: (631) 435-8300

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $.10 par value per share
(Title of class)


Indicate by check mark whether the Registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required
to file such reports), and (2) been subject to such filing requirements for
the past 90 days.

               Yes    X                      No ______

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form
10-KSB.       X

Issuer's revenues for its fiscal year ended December 31, 2002: $16,695,000

Aggregate market value of Registrant's voting and non-voting common equity
held by non-affiliates (based on shares held and
the closing price quoted on the Nasdaq SmallCap on March 14, 2003): $9,116,839

Number of shares of common stock outstanding as of March 14, 2003: 2,120,195

Documents incorporated by reference: The Registrant's definitive proxy
statement to be filed pursuant to Regulation 14A
promulgated under the Securities Exchange Act of 1934 in connection with the
Registrant's 2003 Annual Meeting of
Stockholders.
                                PART I


ITEM 1.   DESCRIPTION OF BUSINESS

GENERAL

     Orbit International Corp. (the "Company" or "Orbit") was incorporated
under the laws
of the State of New York on April 4, 1957 as Orbit Instrument Corp.  In
December 1986, the
state of incorporation was changed from New York to Delaware and in July 1991,
the name was
changed to Orbit International Corp.  The Company conducts its operations
through its Orbit
Instrument Division and its wholly-owned subsidiary, Behlman Electronics, Inc.
Through its
Orbit Instrument Division, which includes its wholly-owned subsidiary, Orbit
Instrument of
California, Inc., the Company is engaged in the design, manufacture and sale
of customized
electronic components and subsystems.  Behlman Electronics, Inc. is engaged in
the design and
manufacture of distortion free commercial power units, power conversion
devices and electronic
devices for measurement and display.

     In August 1996, the Board of Directors of the Company adopted a plan to
sell and/or
liquidate its remaining United States and Canadian apparel operations.  In
connection with a
license agreement entered into in May 1999 with an unaffiliated third party,
the Company is
collecting a minimum royalty of $140,000 payable in sixteen equal quarterly
installments for the
use of its "East/West" trademark (its principal label) in the United States
and Canada.  The
operations of the East/West division are limited to servicing such license.

     In March 1996, as part of its plan to dispose of its apparel operations,
the Company
entered into an amended agreement with the sellers of a discontinued apparel
division whereby
the purchase price of the assets was reduced from $15,000,000 to $8,850,000
leaving
$1,850,000 remaining to be paid at the time of the Amendment.  The remaining
$660,000 is
being paid in quarterly installments of $33,000 through December 2004.  In
addition, the sellers
received warrants to purchase Orbit common shares in which the Company
guaranteed a
minimum profit of $375,000 on the sale of such shares. In July 2001, the
warrants were
exercised on a cashless basis in accordance with their terms and 83,332 shares
of common stock
were issued.

     In March 1997, the Company commenced bankruptcy proceedings against two
of its
apparel subsidiaries located in Canada.  Orbit appointed a receiver and
manager who liquidated
all of the assets of these subsidiaries.  The proceeds of such sales were used
to pay down the
outstanding obligations to the secured lender of the two subsidiaries.  The
Company received
Final Orders of Discharge for the proceedings on the two subsidiaries in
October 2000 and
November 2000, respectively.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

     The Company currently operates in two industry segments. Its Orbit
Instrument Division
is engaged in the design and manufacture of electronic components and
subsystems (the
"Electronics Segment").  Its Behlman subsidiary is engaged in the design and
manufacture of
commercial power units (the "Power Units Segment").

The following sets forth certain selected historical financial information
relating to the
Company's business segments:
<TABLE>
<CAPTION>

                      December 31,
                              2002      2001



<S>                   <C>          <C>

Net sales:


Electronics            $10,677,000 $  8,737,000
Power Units
Domestic                  5,652,000       366,000    5,111,000
Foreign                   6,018,000       897,000

Total Power Units                      6,008,000



Operating income
(loss) (1):


Electronics              2,021,000      939,000
Power Units                              (20,000)
                      19,000



Assets:


Electronics               4,342,000      5,582,000
Power Units           4,494,000      4,019,000

</TABLE>
_______________
(1) Exclusive of  corporate overhead expenses, interest expense and investment
income which are not allocated to the
business segments.

Additional financial information relating to the business segments in which
Orbit conducts its
operations is set forth in Note 12 to the Consolidated Financial Statements
appearing elsewhere
in this report.



DESCRIPTION OF BUSINESS

  GENERAL

     Orbit's Electronics Segment, which is operated through its Orbit
Instrument Division,
designs, manufactures and sells customized panels, components, and
"subsystems" for contract
program requirements to prime contractors, governmental procurement agencies
and research
and development ("R&D") laboratories.  The Company primarily designs and
manufactures in
support of specific military programs.  More recently, the Company has focused
on providing
commercial, non-military "ruggedized hardware"(hardware designed to meet severe
environmental conditions) for prime contractor programs at cost competitive
prices.  Products
include a variety of custom designed "plasma based telephonic
intercommunication panels" for
secure voice airborne and shipboard program requirements, "full-mil
keyboards", "trackballs"
and "data entry display devices".  The Electronics Segment's products, which
in all cases are
designed for customer requirements on a firm fixed price contract basis, have
been successfully
incorporated on surveillance aircraft programs, including E-2C, Joint
Surveillance Target Attack
Radar Systems (J/STARS), Lookdown Surveillance Aircraft (AWACS) and P-3 (anti-
submarine
warfare) requirements, and shipboard programs, including AEGIS (Guided Missile
Cruisers and
Destroyers), DDG'S (Guided Missile Destroyers), BFTT (Battle Force Tactical
Training),
LSD'S (Amphibious Warfare Ships) and LHA'S (Amphibious Warfare Ships)
applications, as
well as a variety of land based guidance control programs.

     Orbit's Power Units Segment is operated through its Behlman subsidiary
and is in the
business of manufacturing and selling power supplies, AC power sources
(equipment that
produces power that is the same as what would be received from a public
utility), "frequency
converters" (equipment that converts local power to equivalent foreign power),
"uninterruptable
power supplies ("UPS")" (devices that allow a computer to operate while
utility power is lost),
associated analytical equipment and other electronic equipment.  The military
division of
Behlman designs and manufactures "power conversion devices" (equipment that
produces power
that is the same as what would be received from a public utility) and
electronic products for
measurement and display.

PRODUCTS

Electronics Segment

     Intercommunication Panels

     The Orbit Instrument Division has designed and developed various types of
shipboard
Communication Terminals. Orbit also upgraded these panels with a state of the
art displays and
touch screens. These communication Terminals support existing shipboard secure
and non
secure voice communication switches. In addition, the Orbit Instrument
Division has also
upgraded the communications Terminals with "telco-based capability. The
upgraded
communication terminals are installed on combat information centers of various
US Naval
ships.

     Displays

     The Orbit Instrument Division's family of graphic terminals enables the
operator to
monitor and control radar systems for shipboard and airborne applications.
These terminals are
used throughout a ship or surveillance plane as adjuncts to larger console
displays. Some of the
Orbit designed/developed Displays are used as data entry and as such include
embedded Pentium
based Single Board Computers and touch screens.  The modular design of the
terminals
facilitates applications for surface ship, submarine, aircraft and land based
requirements. Orbit
designed/  developed Displays implement Flat panel plasma, Electroluminescent

     The Orbit Instrument Division developed a family of 18.1" and 20.1" color
LCD display
panels for military and rugged commercial opportunities.  The displays are
manufactured using
Super Fine TFT (thin film transistor) active matrix technology.  The displays
are backlit with
Cold Cathode Fluorescent Tubes (CCFT), and is driven by an integral inverter.
The Company
has adapted this technology for high brightness and full-color imaging
requirements.  The
Company is positioning this technology for naval ships, FAA tower controller
applications and
trading floor opportunities.

     The Orbit Instrument Division also has designed and manufactures a
variety of flat
technology display based "computer controlled action entry panels (CCAEPS)",
which provide a
console operator with multiple displays of computer generated data.

     Keyboards, and Pointing Devices

     The Orbit Instrument Division has designed a number of custom backlit
keyboards to
meet full military specifications.  These keyboards have been designed for
shipboard, airborne,
sub-surface and land based program requirements as well as for the Federal
Aviation
Administration. The keyboards include various microprocessor based serial
interfaces, such as
RS-232, RS-422, PS/2, USB and SUN type interfaces. Depending on the
requirement, some of
the backlit keyboards are night vision goggle compatible and designed for NVIS
Green A or
Green B night vision requirements.

     Orbit designed/developed Pointing devices are Trackballs and Force
sticks. Orbit
manufactures various militarized Trackballs in various sizes for Airborne,
shipboard, Army and
FAA requirements. The Trackballs and the Force stick include various
microprocessor based
serial interfaces such as RS-232, RS-422, PS/2, USB and SUN type interfaces.

     Operator Control Trays

     The Orbit Instrument Division designs and manufactures a variety of
"operator control
trays" that help organize and process data created by interactive
communications systems,
making such data more manageable for operator consumption.  These trays are
presently used to
support patrol and surveillance airborne aircraft programs, "standard
shipboard display console
requirements" and shore land based defense systems applications. The operator
trays are
integrated with Orbit designed/developed keyboards, flat panel technology
based computer
controlled action entry panels, switch panels and pointing devices.

     Command Display Units (CDU'S)

     The Orbit Instrument Division is currently under order for command
display panels that are
being utilized for vehicular, shipboard and sheltered platform requirements.
The display panels are
flat panel technology based and include a Pentium based single board computer.
Orbit
designed/developed several models of the CDU to be used by US Navy, US Army
and Marines,
Korean and Canadian armies.


Power Units Segment

     Power Sources

     Behlman's "AC power sources" are used in the production of various types
of equipment
such as ballasts for fluorescent lighting, "CRT terminals", hair dryers,
hospital beds, vacuum cleaner
motors, compressors, circuit breakers, paint spray equipment, vending machines
and major
household appliances and are used in test labs to meet European Community
required testing,
aircraft testing and simulators.  Other uses include powering equipment for
oil and gas exploration.

     Behlman's frequency converters are used to convert local power frequency
(e.g., 60HZ in
the United States) to local frequencies elsewhere (e.g., 50 HZ in Europe) and
are used in the testing
of commercial and military aircraft (400HZ).

     Behlman's UPS products are used for backup power when local power is
lost.  Behlman only
competes in the "ruggedized and industrial market" as opposed to the
commercial "UPS market".


     Behlman's military and custom power supply division designs and
manufactures power
supplies that use commercial off the shelf (COTS) power modules to meet the
customers
environmental specifications.  This technique requires less engineering and
produces a more reliable
product at a lower cost to the customer.

     Behlman also performs reverse engineering of analog systems for the
United States
Government or United States Government contractors to enable them to have a
new contractor with
high quality capabilities at a competitive price.

     Behlman is recognized by the Source Development Department of the NAVICP
and has
been given the opportunity to compete against prime contractors.  Behlman has
a current order for
power sources and positioning assemblies for the F18 FLIR system as a result
of such competition
program.

     Behlman's railroad signaling power supply has been sold to railway
passenger lines and
subway systems in the Northeastern and Southwestern United States.  The
railroad industry buys
frequency converters and inverters.  Behlman has set up a representative
organization and strategic
advertising campaign along with training programs for representatives and has
been meeting with
different railroad organizations for the purpose of promoting its products and
gaining an
understanding of the needs of the industry.

     Behlman's Power Passport P1350 is a low cost basic instrument for use in
the import/export
and aerospace markets.  The P series has fewer features but is priced below
Behlman's BL series.
Another version, the P1351, is an intermediary version between the P1350 and
the BL1350 in terms
of cost and function. The P1352 is a computer controlled version of the P1351.

     Behlman's Custom Division has received orders for COTS power supplies for
use in AEGIS
destroyers and for Forward Looking Infrared Radar ("FLIR") systems on the
F/18-A.  The Custom
Division has developed a line of COTS power supplies for other military
applications and has sols
these units for use on military and commercial aircraft.

     Behlman's inverters which convert system battery power to AC are being
used in utility
substations and electric, gas and water transmission systems.  Units have also
been sold for cranes
that load and unload ships.

     Behlman also operates as a qualified repair depot for many United States
Air Force and Navy
programs.

PROPOSED PRODUCTS

Electronics Segment

     Orbit designed/developed the next generation Remote Control Unit - RCU
to be used as
an entry panel by pilots as part of the transponder system. The RCU will used
by all US armed
forces, Navy, Marines, Army and Air Force on both fixed wing aircrafts and
helicopters.

      The Orbit Instrument Division has a current order for the design and
development of
prototype C41 workstations that will be used to support the Advanced
Amphibious Assault
Vehicle Program (AAAV).  The keyboard/trackball workstation, designed for the
U.S. Marine
Corp., will have to meet severe military specification requirements including
nuclear, chemical
and biological compliance.

     The Orbit Instrument Division has completed the design and pre-production
orders for
several digital interrogators for full military requirements.  One Digital
Data Entry Device
Terminal (DDEDT) configuration will display real time data to the operator for
interrogation for
Naval shipboard program requirements.

     The Orbit Instrument Division has completed the design and pre-production
orders for
Electroluminescent


Power Units Segment

     Belman has developed a new computer controlled front end for its AC power
supplies.  The
unit will be used with its switching AC power supplies.

     Behlman has been developing high power AC sources to replace its PA-Plus
series.  Orders
have been received from customers utilizing the unit for fuel cells.

     Behlman's Custom Division is continually reconfiguring its custom COTS
power supplies
from its standard line to meet customer needs in both the military and
commercial sector.

     The products and programs described above are presently being developed
by the Company.
However, there can be no assurance that such development efforts will result
in any marketable
products nor result in any meaningful sales.

SALES AND MARKETING

     Products of the Electronics Segment are marketed by Orbit Instrument
Division's sales
personnel and management.  Military products of the Power Units Segment are
marketed by
Behlman's program managers and other management personnel.  Commercial
products of the Power
Units Segment are sold by regional sales managers, manufacturer's
representatives and non-
exclusive distributors.

COMPETITION

     Many of our competitors are well established, have reputations for
success in the
development and sale of their products and services and have significantly
greater financial,
marketing, distribution, personnel and other resources than us, thereby
permitting them to implement
extensive advertising and promotional campaigns, both in general and in
response to efforts by
additional competitors to enter into new markets and introduce new products
and services.

     The electronics industry is characterized by frequent introduction of new
products and
services, and is subject to changing consumer preferences and industry trends,
which may adversely
affect our ability to plan for future design, development and marketing of our
products and services.
The markets for electronic products, components and related services are also
characterized by
rapidly changing technology and evolving industry standards, often resulting
in product
obsolescence or short product life cycles.  We are constantly required to
expend more funds for
research and development of new technologies.

     The Electronics Segment's competitive position within the electronics
industry is, in
management's view, predicated upon the Orbit Instrument Division's
manufacturing techniques, its
ability to design and manufacture products which will meet the specific needs
of its customers and
its long-standing successful relationship with its major customers.  (See "
     Competition in the markets for the Power Units Segment's commercial and
military products
depends on such factors as price, product reliability and performance,
engineering and production.
In particular, due primarily to budgetary restraints and program cutbacks,
competition in Behlman's
United States Government markets has been increasingly severe and price has
become the major
overriding factor in contract and subcontract awards. To the Company's
knowledge, some of
Behlman's regular competitors include companies with substantially greater
capital resources and
larger engineering, administrative, sales and production staffs than Behlman.


SOURCES AND AVAILABILITY OF RAW MATERIALS

     The Company uses multiple sources for its procurement of raw materials
and is not
dependent on any suppliers for such procurement.  The Company continuously
updates its delivery
schedules and evaluates availability of components so that they are received
on a "just-in-time
schedule".  Occasionally, in the production of certain military units, the
Company will be faced with
procuring certain components that are either obsolete or difficult to procure.
 However, the
Company has access to worldwide brokers using the Internet to assure component
availability.
Nevertheless, there can be no assurance that such components will be
available, and even if so, at
reasonable prices.

MAJOR CUSTOMERS

     Lockheed Martin Corp., Raytheon Company and various agencies of the
United States
Government accounted for approximately 34%, 23% and 12%, respectively, of
consolidated net
sales of the Company for the year ended December 31, 2002.  The loss of any of
these customers
would have a material adverse effect on the net sales and earnings of the
Company.  The Company
does not have any significant long-term contracts with any of the
above-mentioned customers.

     The major customers of the Electronics Segment are Lockheed Martin Corp.,
various
agencies of the United States Government and Raytheon Company, accounting for
approximately
52%, 16% and 15%, respectively, of the net sales of such segment for the year
ended December 31,
2002.  The loss of any of these customers would have a material adverse effect
on the net sales and
earnings of the Electronics Segment.

     The major customer of the Power Units Segment is Raytheon Company,
accounting for
approximately 37% of the net sales of such segment for the year ended December
31, 2002.  The
loss of this customer would have a material adverse effect on the net sales
and earnings of the Power
Units Segment.

     Since a significant amount of all of the products which the Company
manufactures are used
in military applications, any substantial reduction in overall military
spending by the United States
Government could have a materially adverse effect on the Company's sales and
earnings.

BACKLOG

     As of December 31, 2002 and 2001 the Company's backlog was as follows:

<TABLE>
<CAPTION>

             2002             2001
<S>          <C>              <C>

Electronics  $ 8,000,000      $10,000,000


Power Units  5,000,000           2,000,000


Total        $13,000,000      $12,000,000
</TABLE>

     Of the backlog at December 31, 2002, approximately $300,000 represents
backlog under
contracts which will not be shipped during 2003.

     A significant amount of the Company's contracts are subject to
termination at the
convenience of the United States Government.  The backlog is not influenced by
seasonality.

SPECIAL FEATURES OF UNITED STATES GOVERNMENT CONTRACTS

     Orders under United States Government prime contracts or subcontracts are
customarily
subject to termination at the convenience of the United States Government, in
which event the
contractor is normally entitled to reimbursement for allowable costs and a
reasonable allowance for
profits, unless the termination of a contract was due to a default on the part
of the contractor.  No
material terminations of contracts of either the Electronics Segment or the
Power Units Segment
at the convenience of the United States Government occurred during the years
ended December 31,
2001 and 2000.

     A significant portion of the Company's revenues are subject to audit
under the Vinson-
Trammel Act of 1934 and other federal statutes since they are derived from
sales under United
States Government contracts.  The Company believes that adjustments to such
revenues, if any, will
not have a material effect on the Company's financial position.

RESEARCH AND DEVELOPMENT

     The Company incurred approximately $882,000, and $746,000 of research and
development
expenses during the years ended December 31, 2002 and 2001, respectively.

PATENTS

     The Company does not own any patents which it believes are of material
significance to its
operations.




EMPLOYEES

     As of March 14, 2003, the Company employed 97 persons, all but one on a
full-time basis.
Of these, the Electronics Segment employed 51 people, consisting of 9 in
engineering and drafting,
5 in sales and marketing, 9 in direct and corporate administration and the
balance in production. The
Power Units Segment employed 46 people, consisting of 11 in engineering and
drafting, 6 in sales,
3 in direct and corporate administration and the balance in production.

RISK FACTORS

This report and other reports filed by us contain certain forward-looking
statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Actual
results could differ
materially from those projected in the forward-looking statements as a result
of certain uncertainties
set forth below and elsewhere in this report, as well as additional risks and
uncertainties of which
we are currently unaware.  See Item 6. "Management's Discussion and Analysis
of Financial
Condition and Results of Operations

WE ARE HEAVILY DEPENDENT UPON THE CONTINUANCE OF MILITARY SPENDING.

     A significant amount of all the products we manufacture are used in
military applications.
The attacks of September 11, 2001 and subsequent world events have led the
U.S. Government to
increase the level of military spending necessary for domestic and overseas
security.  We are heavily
dependent upon military spending, particularly on the Department of the Navy,
as a source of
revenues and income.  Accordingly, any substantial future reductions in
overall military spending
by the U.S. Government could have a material adverse effect on our sales and
earnings.

WE ARE HAVING DIFFICULTIES IN PROCURING CONTRACTS BECAUSE OF A REDUCTION IN
THE LEVEL OF
INDUSTRY-WIDE FUNDING AND PRICING PRESSURES.

     We continue to pursue many business opportunities, including programs in
which we have
previously participated but, due to industry-wide funding and pricing
pressures, we have
encountered delays in the awards of these contracts.   We continue to seek new
contracts which
require incurring up-front design, engineering, prototype and pre-production
costs.  While we are
attempting to negotiate contract awards for reimbursement of product
development, there is no
assurance that sufficient monies will be set aside by our customers, including
the U.S. Government,
for such effort.  In addition, even if the U.S. Government agrees to reimburse
development costs,
there is still a significant risk of cost overrun which may not be
reimbursable.  Furthermore, once
we have completed the design and pre-production stage, there is no assurance
that funding will be
provided for future production.

     A significant amount of our contracts are subject to termination at the
convenience of the
U.S. Government.  Orders under U.S. Government prime contracts or subcontracts
are customarily
subject to termination at the convenience of the U.S. Government, in which
event the contractor is
normally entitled to reimbursement for  allowable costs and a reasonable
allowance for profits,
unless the termination of a contract was due to a default on the part of the
contractor.


WE ARE DEPENDENT ON CERTAIN OF OUR CUSTOMERS AND WE DO NOT HAVE ANY LONG-TERM
CONTRACTS
WITH THESE CUSTOMERS.

     Lockheed Martin Corp, Raytheon Company and various agencies of the U.S.
Government
accounted for approximately 34%, 23% and 12%, respectively, of our
consolidated net sales for the
year ended December 31, 2002.  Lockheed Martin Corp., various agencies of the
U.S. Government
and Raytheon Company accounted for approximately 52%, 16% and 15%,
respectively, of the net
sales of our Electronics Segment for the year ended December 31, 2002.
Raytheon Company
accounted for approximately 38% of the net sales of our Power Units Segment
for the year ended
December 31, 2002.  We do not have any significant long-term contracts with
any of the above-
mentioned customers.  The loss of any of these customers would have a material
adverse effect on
our net sales and earnings.    Due to major consolidations in the defense
industry, it has become
more difficult to avoid dependence on certain customers for revenue and
income.

WE ARE DEPENDENT UPON OUR SENIOR EXECUTIVE OFFICERS AND KEY PERSONNEL FOR THE
OPERATION OF
OUR BUSINESS.

     We are dependent for the operation of our business on the experience,
technology
knowledge, abilities and continued services of our officers, Dennis Sunshine,
President and Chief
Executive Officer, Bruce Reissman, Executive Vice President and Chief
Operating Officer and
Mitchell Binder, Vice President-Finance and Chief Financial Officer.  The loss
of services of any of
such persons would be expected to have a material adverse effect upon our
business and/or our
prospects.  Our future success is dependent upon, among other things, the
successful recruitment
and retention of key personnel including executive officers, for sales,
marketing, finance and
operations.  We face significant competition for skilled and technical talent.
 No assurance can be
made that we will be successful in attracting and retaining such personnel.
If we are unable to retain
existing key employees or hire new employees upon acceptable terms when
necessary, our business
could potentially be adversely effected.


ITEM 2.  DESCRIPTION OF PROPERTIES

     The Company owned its plant and executive offices, located at 80 Cabot
Court, Hauppauge,
New York, which consists of 60,000 square feet (of which approximately 50,000
square feet are
available for manufacturing operations) in a two-story, sprinklered, brick
building which was
completed in October 1982 and expanded in 1985.  In March 2001, the Company
completed a sale
leaseback transaction whereby it sold its land and building for $3,000,000 and
entered into a twelve
year net lease with the buyer of the property.  The lease provides for an
annual payment of $360,000
with 10% increases in the fourth, seventh and tenth years of the lease. The
lease expires in February
2013, but may be extended by the Company at its option through 2025.  During
the extension
period, the lease provides for an annual rent of $527,076 with 10% increases
in the fourth, seventh
and tenth years of the extended lease.

     Behlman leases 1,700 square feet in Ventura, California which are used
for sales. The lease
provides for monthly payments of $1,507.00 through December 2003 and $1,557.00
through
December 2004.


ITEM 3.  LEGAL PROCEEDINGS

     There are no material pending legal proceedings against the Company,
other than routine
litigation incidental to the Company's business.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

                               PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

     As of March 14, 2003, the Company had 449 shareholders of record. The
Company's
stock is traded on the Nasdaq SmallCap Market (Nasdaq symbol: ORBT).

     The quarterly closing prices for the period January 1, 2001 through
December 31, 2002,
as reported by Nasdaq, were as follows.
<TABLE>
<S>                                 <C>

                                    CLOSE
</TABLE>
<TABLE>
<S>                                 <C>        <C>

                                    HIGH       LOW


2001:

  First Quarter:                                   $0.55
                                    $1.75


                                                 1.13
  Second Quarter:                   1.99

                                       2.10
  Third Quarter:                               1.37

                                             3.05  1.65
  Fourth Quarter:



2002:

  First Quarter:                           $4.27    $2.65


  Second Quarter:                   5.40       3.95


  Third Quarter:                    4.85       2.85

                                                 2.12
  Fourth Quarter:                   4.55



</TABLE>



The Company has not declared any dividends during the
aforesaid periods.



ITEM 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

     Statements in this Item 6 "Management's Discussion and Analysis of
Financial Condition
and Results of Operations" and elsewhere in this document are certain
statements which are not
historical or current fact and constitute "forward-looking statements" within
the meaning of such
term in Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act
of 1934. Such forward-looking statements involve known and unknown risks,
uncertainties and
other factors that could cause the actual financial or operating results of
the Company to be
materially different from the historical results or from any future results
expressed or implied by such
forward-looking statements. Such forward looking statements are based on our
best estimates of
future results, performance or achievements, based on current conditions and
the most recent results
of the Company.  In addition to statements which explicitly describe such
risks and uncertainties,
readers are urged to consider statements labeled with the terms "may", "will",
"potential",
"opportunity", "believes", "belief", "expects", "intends", "estimates",
"anticipates" or "plans" to be
uncertain and forward-looking. The forward-looking statements contained herein
are also subject
generally to other risks and uncertainties that are described from time to
time in the Company's
reports and registration statements filed with the Securities and Exchange
Commission.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of the Company's financial condition and the
results of its operations
are based on the Company's financial statements and the data used to prepare
them.  The
Company's financial statements have been prepared based on accounting
principles generally
accepted in the United States of America.  On an on-going basis, we
re-evaluate our judgments and
estimates including those related to inventory valuation, the valuation
allowance on the Company's
deferred tax asset and goodwill impairment.  These estimates and judgments are
based on historical
experience and various other assumptions that are believed to be reasonable
under current business
conditions and circumstances.  Actual results may differ from these estimates
under different
assumptions or conditions.  The Company believes the following critical
accounting policies affect
more significant judgments and estimates in the preparation of the
consolidated financial statements.

Inventories

Inventory is valued at the lower of cost (first in, first out basis) or
market.  Inventory items are
reviewed regularly for excess and obsolete inventory based on an estimated
forecast of product
demand.  Demand for the Company's products can be forecasted based on current
backlog,
customer options to reorder under existing contracts, the need to retrofit
older units and parts
needed for general repairs.  Although the Company makes every effort to insure
the accuracy of its
forecasts of future product demand, any significant unanticipated changes in
demand or
technological developments could have an impact on the level of obsolete
material in its inventory
and operating results could be affected, accordingly.

Deferred tax asset

At December 31, 2002, the Company had an alternative minimum tax credit of
approximately
$564,000 with no limitation on the carry-forward period and net operating loss
carry-forwards of
approximately $25,600,000 that expire through 2021.  The Company places a
valuation allowance
to reduce its deferred tax asset when it is more likely than not that a
portion of the amount may not
be realized.  The Company estimates its valuation allowance based on an
estimated forecast of its
future profitability.  Any significant changes in future profitability
resulting from variations in future
revenues or expenses could affect the valuation allowance on its deferred tax
asset and operating
results could be affected, accordingly.

Impairment of Goodwill

The Company has significant intangible assets related to goodwill and other
acquired intangibles.
In determining the recoverability of goodwill and other intangibles,
assumptions must be made
regarding estimated future cash flows and other factors to determine the fair
value of the assets.  If
these estimates or their related assumptions change in the future, the company
may be required to
record impairment charges for those assets not previously recorded.  Effective
January 1, 2001, the
Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill
and Other
Intangible assets".  Under the provisions of SFAS 142, the cost of certain
intangibles are no longer
subject to amortization.  These costs will be reviewed for potential
impairment in 2002 and will be
reviewed on an annual basis thereafter.

RESULTS OF OPERATIONS:

Year Ended December 31, 2002 v. Year Ended December 31, 2001

     The Company currently operates in two industry segments.  Its Orbit
Instrument Division
is engaged in the design and manufacture of electronic components and
subsystems (the
"Electronics Segment").  Its Behlman subsidiary is engaged in the design and
manufacture of
commercial power units (the "Power Units Segment").

     Consolidated net sales for the year ended December 31, 2002 increased by
13.2% to
$16,695,000 from $14,745,000 for the prior year principally due to a 22.2%
increase in sales
recorded from the Electronics Segment.  Sales from its Power Units Segment
increased by 0.2%.

     Gross profit, as a percentage of net sales, for the year ended December
31, 2002
increased to 40.8% from 37.2% for the prior year. The increase in gross
profit, as a percentage
of sales, was due to an increase in gross profit realized by both the
Electronics and Power Units
Segments.  The increase in gross profit realized by the Electronics Segment
was principally due
to an increase in sales and the increase in gross profit realized by the Power
Units Segment was
principally due to a change in product mix.

     Selling, general and administrative expenses for the year ended December
31, 2002
increased to $5,666,000 from $5,254,000, or 7.8%, from the year ended December
31, 2001
principally due  to higher selling costs incurred by both the Electronics and
Power Units
Segments and to higher corporate administrative costs principally due to fees
paid for investment
banking and investor relations services.   Selling, general and administrative
expenses, as a
percentage of sales, for the year ended December 31, 2002 decreased to 33.9%
from 35.6% for
the prior year principally due to increased sales during the current year.

     Interest expense for the year ended December 31, 2002 decreased to
$74,000 from
$212,000 for the year ended December 31, 2001 principally due to the
refinancing of the
Company's credit facility in the first quarter of 2001, a decrease in the
amounts borrowed during
the current year and due to lower interest rates.

     Investment and other income for the year ended December 31, 2002
decreased to
$143,000 from $200,000 for the prior year principally due to a decrease in
funds available for
investment and due to lower interest rates.

     Income before income tax was $1,215,000 for the year ended December 31,
2002,
compared to $214,000 for the year ended December 31, 2001.  The increase in
income was
principally due to the increase in sales from the Company's Electronics Segment.

     During the first quarter of 2001, the Company completed the
sale-leaseback of its
operating facility.  For tax purposes, the Company will be able to offset the
capital gain realized
on the sale of the facility with its net operating loss carryforward.  As a
result of the transaction
and pursuant to Statement of Financial Standards No. 109 "Accounting for
Income Taxes", the
Company adjusted its valuation allowance against its deferred tax asset
thereby taking a charge
of $400,000 to income for the year ended December 31, 2001.

     As a result of the foregoing, net income for the year ended December 31,
2002 was
$1,215,000 compared to a net loss of $186,000 for the year ended December 31,
2001.


Liquidity, Capital Resources and Inflation

     Working capital increased to $6,987,000 at December 31, 2002 compared to
$6,038,000
at December 31, 2001.  The ratio of current assets to current liabilities
increased to 2.9 to 1 at
December 31, 2002 from 2.5 to 1 at December 31, 2001.

     Net cash provided by operations for the year ended December 31, 2002 was
$1,649,000,
primarily attributable to the net income for the period, a decrease in
accounts receivable and
inventories and an increase in accrued expenses that was partially offset by a
decrease in
accounts payable and customer advances. Net cash flows used in operations for
the year ended
December 31, 2001 was $1,046,000, primarily attributable to the net loss for
the period, the
increase in inventories and other assets and the decrease in customer
advances, accounts
payable, accrued expenses and liabilities and reserves for discontinued
operations that was
partially offset by the non-cash flow effects of depreciation and amortization
and the reduction in
the deferred tax asset.

     Cash flows used in investing activities for the year ended December 31,
2002 was
$20,000, primarily attributable to the purchases of property, plant and
equipment.  Cash flows
provided by investing activities for the year ended December 31, 2001 was
$2,741,000, primarily
attributable to the proceeds from the Company's operating facility.

     Cash flows used in financing activities for the year ended December 31,
2002 was
$352,000, primarily attributable to the repayments of long term debt and notes
payable.  Cash
flows used in financing activities for the year ended December 31, 2001 was
$2,052,000,
primarily attributable to the repayments of long term debt that was partially
offset by the
proceeds from debt from the new credit facility.

     All operations of the discontinued apparel companies have been
terminated.   All losses,
and obligations of these apparel operations have been provided for, and
accordingly, the
Company does not anticipate using any significant portion of its resources
towards these
discontinued apparel operations.

  In January 2001, the Company closed on a new $1,000,000 credit facility with
an asset based
lender secured by accounts receivable, inventory and machinery and equipment
of the Company.
In October 2001, the credit facility was increased to $1,500,000.  The
agreement continued until
February 2003 at which time the Company entered into a new $2,000,000 credit
facility with a
commercial lender secured by accounts receivable, inventory and machinery and
equipment.  The
new agreement will continue from year to year thereafter unless sooner
terminated for an event of
default including compliance with certain financial covenants.  Loans under
the recently terminated
facility did bear interest at the prime rate of the Chase Manhattan Bank plus
1.75% per annum.
Loans under the new facility will bear interest equal to the sum of 2.75% plus
the one-month
London Inter-bank Offer rate ("LIBOR").  In March 2001, the Company completed
a sale-leaseback
of its New York operating facility whereby it received proceeds of $3,000,000
and entered into a
net operating lease with an initial term expiring in 2013.  See "Item 2.
Description of Properties."
The proceeds of the loan and the sale-leaseback were used to pay off the
outstanding balance under
its existing credit facility and the remainder of the proceeds were used for
working capital.

  The Company's contractual obligations and commitments are summarized as
follows:

                    Less than    1-3            4-5         After 5

Obligation          Total          1 Year            Years    Years  Years

Long-term debt        $1,088,000     $ 956,000        $132,000            0
         0

Capital lease
    obligations                    52,000                 11,000       31,000
      $10,000        0

Operating leases         4,457,000      419,000    1,228,000 865,000
$1,945,000

Other long-term
    obligations                 555,000               555,000     0
0      0

Total contractual
    obligations            $6,152,000          $1,941,000     $1,391,000
$875,000       $1,945,000

     The Company's existing capital resources, including its bank credit
facilities, and its cash
flow from operations are expected to be adequate to cover the Company's cash
requirements for
the foreseeable future.

     Inflation has not materially impacted the operations of the Company.

Certain Material Trends

  The Company's Electronics Segment and the Custom Division of its Power Units
Segment are
heavily dependent on military spending.  The events of September 11, 2001 have
put a tremendous
emphasis on defense and homeland security spending and the Company has seen
improvement in
bookings and revenue levels in 2001 and 2002.  The Company has realized a
significant increase to
the backlog of the Custom Division of its Power Unit Segment and shipments of
these orders
commenced in the third quarter and are expected to continue into 2003.
However, the Company
has experienced a slowdown in its commercial division of its Power Units
Segment due to a
reduction in capital spending as a result of current economic conditions.

  Despite the increase in military spending, the Company still faces a
challenging environment. The
government is emphasizing the engineering of new and improved weaponry and it
continues to be
our challenge to work with each of our prime contractors so that we can
participate on these new
programs.  In addition, these new contracts which require incurring up-front
design, engineering,
prototype and pre-production costs.  While the Company attempts to negotiate
contract awards for
reimbursement of product development, there is no assurance that sufficient
monies will be set aside
by its customers, including the United States Government, for such effort.  In
addition, even if the
United States Government agrees to reimburse development costs, there is still
a significant risk of
cost overrun that may not be reimbursable.  Furthermore, once the Company has
completed the
design and pre-production stage, there is no assurance that funding will be
provided for future
production.  In such event, even if the Company is reimbursed its development
costs it will not
generate any significant profits.

  The Company is heavily dependent upon military spending, particularly the
Department of the
Navy, as a source of revenues and income.  The U.S. Navy fleet has been
significantly reduced in
the past several years thereby impacting the procurement of equipment.  Any
further reductions in
the level of military spending by the United States Government and/or further
reductions to the U.S.
fleet could have a negative impact on the Company's future revenues and
earnings.  In addition, due
to major consolidations in the defense industry, it has become more difficult
to avoid dependence
on certain customers for revenue and income.  Behlman's line of commercial
products gives the
Company some diversity and the Orbit Instrument Division is beginning to
introduce certain of its
products into commercial and foreign markets as well as to other Departments
of Defense.


Quantitative and Qualitative Disclosures About Market Risks

     The Company is exposed to market risk related to changes in interest
rates.  Most of the
Company's debt is at a variable rate of interest and is not hedged by any
derivative instruments.
That debt which is subject to a variable rate of interest amounted to
approximately $766,000 at
December 31, 2002.  If market interest rates increase by five percent from
levels at December
31, 2002, the effect on the Company's results of operations would be
approximately $38,000.

ITEM 7.   FINANCIAL STATEMENTS

     The information required under this Item appears in a separate section
following Item 14
of this report.


ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

                               PART III

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT.

          Incorporated by reference to the Company's definitive proxy
statement to be filed
pursuant to regulation 14A promulgated under the Securities Exchange Act of
1934 in
connection with the Company's 2003 Annual Meeting of Stockholders.

ITEM 10.  EXECUTIVE COMPENSATION

          Incorporated by reference to the Company's definitive proxy
statement to be filed
pursuant to regulation 14A promulgated under the Securities Exchange Act of
1934 in
connection with the Company's 2003 Annual Meeting of Stockholders.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS

          Incorporated by reference to the Company's definitive proxy
statement to be filed
pursuant to regulation 14A promulgated under the Securities Exchange Act of
1934 in
connection with the Company's 2003 Annual Meeting of Stockholders.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          Incorporated by reference to the Company's definitive proxy
statement to be filed
pursuant to regulation 14A promulgated under the Securities Exchange Act of
1934 in
connection with the Company's 2003 Annual Meeting of Stockholders.



ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

               (a)  The following documents are filed as part of this Annual
Report on
Form 10-KSB for the fiscal year ended December 31, 2002.

          1and 2.   Financial Statements and Schedule:

               The index to the financial statements and schedule is
incorporated by
reference to the index to financial statements which follows Item 13 of this
Annual Report on
Form 10-KSB.

          3.  Exhibits:

Exhibit No.    Description of Exhibit

  3 (a)        Certification of Incorporation, as amended.  Incorporated by
reference to Exhibit
          3(a) to Registrant's Annual Report on Form 10-K for the fiscal year
ended June
          30, 1991.

  3 (b)        By-Laws, as amended.  Incorporated by reference to Exhibit 3(b)
to Registrant's
          Annual Report on Form 10-K for the fiscal year ended June 30, 1988.

  4 (a)*       Orbit International Corp. 2003 Stock Incentive Plan.

  10 (a)       Amended and Restated Employment Agreement, dated as of February
15,
          1999, between Registrant and Mitchell Binder.  Incorporated by
reference to Exhibit
          10(a) to Registrant's Annual Report on Form 10-K for the fiscal year
ended
          December 31, 1998.

  10 (b)       Amended and Restated Employment Agreement, dated as of February
15,
          1999, between Registrant and Bruce Reissman.  Incorporated by
reference to Exhibit
          10(b) to Registrant's Annual Report on Form 10-K for the fiscal year
ended
          December 31, 1998.

  10 (c)       Amended and Restated Employment Agreement, dated as of February
15,
          1999 between Registrant and Dennis Sunshine.  Incorporated by
reference to Exhibit
          10(c) to Registrant's Annual Report on Form 10-K for the fiscal year
ended
          December 31, 1998.

  10 (d)       Form of Indemnification Agreement between the Company and each
of its
          Directors dated as of September 10, 2001.

  10 (e)  Asset Purchase Agreement, dated as of January 11, 1996, by and among
          Astrosystems, Inc., and BEI Electronics, Inc., Orbit International
Corp. and
          Cabot Court, Inc. Incorporated by reference to the Registrant's
Current Report
          on Form 8-K dated February 7, 1996

  10 (f)       Amendment dated as of March 1, 2000 to the Agreement dated March
          28, 1996 among Kenneth Freedman, Frederick Meyers, The Panda Group,
Inc.
          and Orbit International Corp.  Incorporated by reference to Exhibit
4(b) to
          Registrant's Annual Report on Form 10-KSB for the fiscal year ended
December
          31, 2000.

  10 (g)       Financing Agreement dated January 8, 2001 between the Company and
          Rosenthal & Rosenthal, Inc. including exhibits and schedules
thereto.
          Incorporated by reference to Exhibit 4(b) to Registrant's Annual
Report on Form
          10-KSB for the fiscal year ended December 31, 2000.

  10 (h)       Financing Agreement dated January 8, 2001 between Behlman
          Electronics, Inc. and Rosenthal & Rosenthal, Inc. including exhibits
and
          schedules thereto.  Incorporated by reference to Exhibit 4(b) to
Registrant's
          Annual Report on Form 10-KSB for the fiscal year ended December 31,
2000.

  10 (i)       Purchase and Sale Agreement between the Company and 80 Cabot
Realty LLC
          dated February 26, 2001.  Incorporated by reference to Exhibit 4(b) to
          Registrant's Annual Report on Form 10-KSB for the fiscal year ended
December
          31, 2000.

  10(j)        Lease Agreement between the Company and 80 Cabot Realty LLC dated
          February 26, 2001.  Incorporated by reference to Exhibit 4(b) to
Registrant's
          Annual Report on Form 10-KSB for the fiscal year ended December 31,
2000.

  10(k)*  Loan and Security Agreement dated as of January 28, 2003 between the
          Company and Merrill Lynch Business Financial Services Inc. including
exhibits
          and other attachments thereto.


  21      Subsidiaries of Registrant.  Incorporated by reference to Exhibit 21
to the
          Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31,
          1996.

  23*          Consent of Goldstein Golub Kessler LLP.

  99 (a)* Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section
          906 of the Sarbanes-Oxley Act of 2002 made by Dennis Sunshine, Chief
          Executive Officer.

  99 (b)* Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section
          906 of the Sarbanes-Oxley Act of 2002 made by Mitchell Binder, Chief
Financial
          Officer


(b)  Reports on Form 8-K:
     None.
                         __________
     * Filed herewith.

                                                       Exhibit 4 (a)



ITEM 14.  CONTROLS AND PROCEDURES

          Within the 90 days prior to the filing of this report, the Company's
management,
including the Company's Chief Executive and Chief Financial Officer, evaluated
the effectiveness
of the design of the Company's disclosure controls and procedures, as defined
in Rules 13a-
14(c) under the Securities and Exchange Act of 1934.  Based on the evaluation,
the Chief
Executive Officer and the Chief Financial Officer concluded that the Company's
disclosure
controls and procedures are effective.
          There have been no significant changes (including corrective actions
with regard
to significant deficiencies and material weaknesses) in the Company's internal
controls or in
other factors that could significantly affect these controls subsequent to the
date of
Management's evaluation.




ORBIT INTERNATIONAL CORP.
 AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2002


                             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES


                           INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


INDEPENDENT AUDITOR'S REPORT                                  F-1


CONSOLIDATED FINANCIAL STATEMENTS:

   Balance Sheet as of December 31, 2002 and 2001             F-2
   Statement of Operations for the Years Ended December 31, 2002 and 2001   F-3
   Statement of Stockholders' Equity for the Years Ended December 31, 2002 and
2001   F-4
   Statement of Cash Flows for the Years Ended December 31, 2002 and 2001   F-5
   Notes to Consolidated Financial Statements              F-6 - F-16



INDEPENDENT AUDITOR'S REPORT




To the Stockholders and Board of Directors
Orbit International Corp.


We have audited the accompanying consolidated balance sheets of Orbit
International Corp. and
Subsidiaries as of December 31, 2002 and 2001, and the related consolidated
statements of
operations, stockholders' equity, and cash flows for the years then ended.
These financial statements
are the responsibility of the Company's management.  Our responsibility is to
express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United
States of America.  Those standards require that we plan and perform the audit
to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial
statements.  An audit also includes assessing the accounting principles used
and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material
respects, the financial position of Orbit International Corp. and Subsidiaries
as of December 31, 2002
and 2001 and the results of their operations and their cash flows for the
years then ended in conformity
with accounting principles generally accepted in the United States of America.





GOLDSTEIN GOLUB KESSLER LLP
New York, New York

February 28, 2003



ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES

                                             CONSOLIDATED BALANCE SHEET


   DECEMBER 31,                                    2002      2001
ASSETS

Current Assets:
  Cash and cash equivalents $   2,022,000
  $     745,000
  Investments in marketable securities          3,000
  3,000
  Accounts receivable, less allowance for doubtful accounts of $165,000
1,355,000
  2,088,000
  Inventories                               7,109,000
  7,213,000
  Other current assets                        154,000
  80,000
  Deferred tax assets                          75,000
  75,000
  TOTAL CURRENT ASSETS                             10,718,00010,204,000
Property and Equipment, at cost, less accumulated
 depreciation and amortization                218,000
  220,000
Excess of Cost over the Fair Value of Assets Acquired      868,000
    868,000

Other Assets                                  853,000
  757,000
Deferred Tax Assets                           275,000
  275,000
  TOTAL ASSETS                            $12,932,000      $12,324,000

                                  LIABILITIES AND STOCKHOLDERS' EQUITY

                                                  Current Liabilities:
  Current portion of long-term obligations$        201,000
  $     243,000
  Accounts payable                          1,048,000
  1,335,000
  Notes payable                               766,000
  938,000
  Accrued expenses                          1,029,000
  814,000
  Accounts payable, accrued expenses and reserves applicable
   to discontinued operations                 555,000
  594,000
  Customer advances                            47,000
  157,000
  Deferred income                              85,000
  85,000
  TOTAL CURRENT LIABILITIES                 3,731,000        4,166,000
Deferred Income                               769,000
  854,000
Long-term Obligations                         173,000
  264,000
  TOTAL LIABILITIES                         4,673,000        5,284,000
Commitments and Contingencies
                                                 Stockholders' Equity:
  Common stock - $.10 par value               313,000
  312,000
  Additional paid-in capital               24,168,000
  24,165,000
  Accumulated deficit                     (6,372,000)
   (7,587,000)
                                           18,109,000       16,890,000
  Treasury stock, at cost                 (9,850,000)
  (9,850,000)
  STOCKHOLDERS' EQUITY                      8,259,000        7,040,000
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 12,932,000   $12,324,000



ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES

                                   CONSOLIDATED STATEMENT OF OPERATIONS


YEAR ENDED DECEMBER 31,
   2002
   2001

Net sales                                 $16,695,000
  $14,745,000

Cost of sales                               9,883,000
  9,265,000
Gross profit                                6,812,000
  5,480,000


Selling, general and administrative expenses5,666,000
  5,254,000

Interest expense                               74,000
  212,000

Investment and other income, net            (143,000)
  (200,000)
Total expenses                              5,597,000
  5,266,000


Income before income tax provision          1,215,000
  214,000

Income tax provision                                0
  400,000
Net income (loss)                          $1,215,000
  $    (186,000)

Net income (loss) per common share:

Net income (loss)
  Basic                                           $.58
$(0.09)
  Diluted                                         $.53         $(0.09)




ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY



Years ended December 31, 2002 and 2001

                           COMMON STOCK
                         25,000,000 SHARES
                            AUTHORIZED   ADDITIONAL
                         SHARES            PAID-IN  ACCUMULATED  TREASURY STOCK
 ISSUED  AMOUNT    CAPITALDEFICIT SHARES    AMOUNT    TOTAL

Balance at December 31,
20003,040,000$304,000$24,165,000$(7,401,000)(1,014,000)$(9,850,000)$7,218,000

Exercise of warrants     83,000    8,000-          -
    -
8,000

Net loss               -         -      -          (186,000)  -
   -
(186,000)
Balance at December 31,
20013,123,000312,00024,165,000(7,587,000)(1,014,000)(9,850,000)7,040,000

Exercise of options       3,000    1,000

4,000

Net income
     1,215,000
1,215,000
Balance at December 31, 20023,126,000       $ 313,000
24,168,000(6,372,000)(1,014,000)(9,850,000)8,259,000






ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES

                                  CONSOLIDATED STATEMENT OF CASH FLOWS


YEAR ENDED DECEMBER 31,
2002                                                              2001


Cash flows from operating activities:
  Net income (loss)             $  1,215,000
    $   (186,000)
  Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
    Depreciation and amortization                73,000
    125,000
    Amortization of goodwill                          0
    96,000
    Deferred income                            (85,000)
    (85,000)
    Deferred tax provision
    400,000
    Write-off of bank financing costs
    103,000
    Changes in operating assets and liabilities:
      Decrease in accounts receivable           733,000
    49,000
      Decrease (increase) in inventories        104,000
    (559,000)
      (Increase) decrease in other current assets(74,000)
    24,000
      Increase in other assets                 (96,000)
    (141,000)
      Decrease in accounts payable            (287,000)
    (151,000)
      Increase (decrease) in accrued expenses   215,000
    (44,000)
      Decrease in customer advances           (110,000)
    (513,000)
      Decrease in accounts payable, accrued expenses and reserves
       applicable to discontinued operations   (39,000)
    (164,000)
   NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   1,649,000(1,046,000)

                                 Cash flows from investing activities:
  Sales of property, plant and equipment
   2,783,000
  Purchase of property, plant and equipment                (20,000)
    (42,000)
   NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES    (20,000)2,741,000

                                 Cash flows from financing activities:
  Repayments of long-term debt               (184,000)
   (2,998,000)
  Proceeds from notes payable
   1,000,000
  Repayments of notes payable                (172,000)
    (62,000)
  Proceeds from exercise of options              4,000
   8,000
   NET CASH USED IN FINANCING ACTIVITIES     (352,000)     (2,052,000)

Net increase (decrease) in cash and cash equivalents1,277,000
   (357,000)

Cash and cash equivalents at beginning of year 745,000
   1,102,000
Cash and cash equivalents at end of year  $ 2,022,000
   $    745,000

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the year for interest$   137,000
   $    149,000

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITY:
  Property, plant and equipment acquired through capital lease             $
51,000


<TABLE>
<S>              <C>
  1.ORGANIZATION The consolidated financial statements include
AND BUSINESS:    the accounts of Orbit
                 International Corp. and its wholly owned
                 subsidiaries (collectively, the
                 "Company").  All significant intercompany
                 transactions have been eliminated
                 in consolidation.

                 The Company has two reportable segments: (a) the
                 Orbit Instrument
                 Ddivision (Electronics Segment) is engaged in
                 the design, manufacture and
                 sale of customized electronic components and
                 subsystems, and (b) the
                 Behlman Electronics, Inc. subsidiary (Power
                 Units Segment) is engaged in the
                 design and manufacture of distortion-free
                 commercial power units, power
                 conversion devices and electronic devices for
                 measurement and display.


ORBIT            The Company considers all highly liquid
INTERNATIONAL    investments with a maturity of three
CORP. AND SUBSIDIARIESmonths or less when purchased to be cash equivalents.
  2.SUMMARY OF   The Company maintains cash in deposit accounts
SIGNIFICANT      which, at times, exceed
ACCOUNTING       federally insured limits.  The Company has not
POLICIES:        experienced any losses on
                 these accounts.

                 Accounts receivable are reported at their
                 outstanding unpaid principal
                 balances reduced by an allowance for doubtful
                 accounts.  The Company
                 estimates doubtful accounts based on historical
                 bad debts, factors related
                 to specific customers' ability to pay, and
                 current economic trends.  The
                 Company writes off accounts receivable against
                 the allowance when a
                 balance is determined to be uncollectible.

                 Inventories are priced at the lower of cost
                 (first-in, first-out basis) or
                 market.

                 Property and equipment is recorded at cost.
                 Depreciation and amortization
                 of the respective assets are computed using the
                 straight-line method over their
                 estimated useful lives ranging from 5 to 40
                 years.  Leasehold improvements
                 are amortized using the straight-line method
                 over the remaining term of the
                 lease or the estimated useful life of the
                 improvement, whichever is less.

                 The Company's investment in available-for-sale
                 securities is stated at fair
                 value with the unrealized gains and losses, net
                 of tax, reported in other
                 comprehensive income.  Realized gains and losses
                 and declines in value
                 judged to be other-than-temporary on
                 available-for-sales securities are
                 included in investment income.  The cost of
                 securities sold is based on the
                 specific-identification method.  Interest and
                 dividends on such securities
                 are included in investment income.

                 Substantially all of the Company's revenue is
                 recognized from the sale of
                 tangible products.  The Company records sales
                 upon delivery of the units
                 under its manufacturing contracts.

                 The Company's freight and delivery costs are
                 included in selling, general
                 and administrative expenses.

                 The preparation of the consolidated financial
                 statements in conformity with accounting
                 principles generally accepted in the United
                 States of America requires management to make
                 estimates and assumptions that affect the
                 consolidated financial statements and
                 accompanying notes.  Actual results could differ
                 from those estimates.

                 When impairment indicators are present, the
                 Company reviews the carrying value of its
                 long-lived assets in determining the ultimate
                 recoverability of their unamortized values using
                 future undiscounted cash flow analyses.

                 Effective January 1, 2002, Orbit adopted
                 Statement of Financial Accounting Standards
                 ("SFAS") No. 142, Goodwill and Other Intangible
                 Assets.  SFAS No. 142 requires that an
                 intangible asset with a finite life be amortized
                 over its useful life and that goodwill and other
                 intangible assets with indefinite lives not be
                 amortized but evaluated for impairment.  The
                 Company concluded, as of March 31, 2002, that
                 there was no impairment to goodwill and,
                 pursuant to SFAS No. 142, goodwill is no longer
                 being amortized.

                 Excess of cost over the fair value of net assets
                 acquired was amortized in 2001 on a
                 straight-line basis over 15 years.

                 Management does not believe that any recently
                 issued, but not yet effective, accounting
                 standards if currently adopted would have a
                 material effect on the accompanying consolidated
                 financial statements.

                 The Company measures employee stock-based
                 compensation cost using Accounting Principles
                 Board ("APB") Opinion No. 25 as is permitted by
                 Statement of Financial Accounting Standards
                 ("SFAS") No. 123, Accounting for Stock-Based Compensation.

                 Pro forma information regarding net income
                 (loss) and net loss per share is required by
                 SFAS No. 123 and has been determined as if the
                 Company had accounted for its stock options
                 granted using the fair value method of SFAS No.
                 123.  The fair value for these options was
                 estimated at the date of grant using the
                 Black-Scholes option pricing model with the
                 following weighted-average assumptions for the
                 years ended December 31, 2002 and 2001:
                 risk-free interest rates of 4.9% and 4.7% to
                 5.2% and 6.0%, respectively; no dividend yield;
                 volatility factors of the expected market price
                 of the Company's common stock of 144% and 160%
                 and 100.2%, respectively, and a weighted-average
                 expected life of the options of 9.0  and 9.0 years.
                 The Black-Scholes option valuation model was
                 developed for use in estimating the fair value
                 of traded options which have no vesting
                 restrictions and are fully transferable.  In
                 addition, option valuation models require the
                 input of highly subjective assumptions including
                 the expected stock price volatility.  Because
                 the Company's employee stock options have
                 characteristics significantly different from
                 those of traded options, and because changes in
                 the subjective input assumptions can materially
                 affect the fair value estimate, in management's
                 opinion, the existing models do not provide a
                 reliable single measure of the fair value of its
                 employee stock options.

                 For purposes of pro forma disclosures, the
                 estimated fair value of the options is amortized
                 to expense over the options' vesting period.
                 The Company's pro forma information is as follows:
                 December 31,
                               2002                           2001

                 Net income (loss)
                 Deduct: Total stock-based employee
                  compensation expense determined
                  under fair value based method for
                  all awards, net of related tax effect
                            3,000                      277,000

                 Net income (loss)
                 The fair value of the Company's long-term
                 obligations is estimated based on the current
                 rates offered to the Company for debt of similar
                 terms and maturities.  Using this method, the
                 Company's fair value of long-term obligations
                 was not significantly different than the stated
                 value at December 31, 2002 and 2001.

                 Research and development costs are expensed when
                 incurred.  The Company expensed approximately
                 $882,000 and $746,000 for research and
                 development during the years ended December 31,
                 2002 and 2001, respectively.  Such expenses are
                 included in selling, general and administrative expenses.







  3.            Inventories consist of the following:
INVENTORIES:

</TABLE>
       December 31,20022001

                Raw materials $    3,665,000           $3,559,000
                Work-in-progress              3,020,0003,133,000
                 Finished goods                 424,000521,000
                                             $7,109,000$7,213,000

<TABLE>
<S>              <C>
  4.PROPERTY AND Property and equipment consists of:
EQUIPMENT:
                 December 31, 20022001
</TABLE>
                 Leasehold improvements
     $4,000
                Machinery and equipment                1,175,000
$1,114,000
                Furniture and fixtures                          628,000
     622,000
                                                                 1,807,000

                                   1,736,000
                 Accumulated depreciation and
                 amortization                         1,589,000    1,516,000
                                           $  218,000     $   220,000


<TABLE>
<S>              <C>
  5.EXCESS OF    Effective January 1, 2002, Orbit adopted
COST OVER THE    Statement of Financial Accounting
FAIR VALUE OF    Standards ("SFAS") No. 142, Goodwill and Other
ASSETS           Intangible Assets.  SFAS
ACQUIRED:        142 requires that an intangible asset with a
                 finite life be amortized over its
                 useful life and that goodwill and other
                 intangible assets with indefinite lives
                 not be amortized but evaluated for impairment.
                 The Company concluded, as
                 of March 31, 2002, that there was no impairment
                 to goodwill and, pursuant
                 to SFAS 142, goodwill is no longer being amortized.
</TABLE>

                The following pro-forma information reconciles net income
(loss) reported
                for the years ended December 31, 2002 and 2001 to adjusted net
income
                (loss) reflecting the adoption of  SFAS 142:

                                             Year Ended
                                             December 31,
                                        2002                         2001
               Reported net income (loss)          $1,215,000
$(186,000)
               Addback:  Goodwill amortization          -                96,000
               Adjusted net income (loss)         $1,215,000       $
(90,000)

               Basic income (loss) per share:
                   Reported net income (loss)          $.58
$(.09)
                    Addback:  Goodwill amortization
                 .05

                    Adjusted net income (loss)         $.58
$(.04)

               Diluted income (loss) per share:
                   Reported net income (loss)          $.53

$(.09)
                    Addback:  Goodwill amortization        -                 .05
                    Adjusted net income (loss)         $.53

$(.04)


<TABLE>
<S>              <C>
     6.DEBT:     In March 2001, the Company entered into a
                 sale-leaseback of its operating
                 facility whereby it received proceeds of
                 $3,000,000 and entered into an
                 operating lease with an initial term expiring in
                 2013.  The lease may be
                 extended by the Company at its option through
                 February 2025.  The
                 Company used the proceeds from the sale to pay
                 off the amount outstanding
                 under its existing mortgage with the remainder
                 used for working capital.

                 In January 2001, the Company entered into an
                 agreement with an asset-based
                 lender that provided a $1,000,000 loan,
                 collateralized by the Company's
                 accounts receivable and inventory, at an
                 interest rate of prime plus 1.75%.
                 The Company used the proceeds to pay off all
                 amounts outstanding under its
                 existing term loans and a portion of the amount
                 outstanding under its existing
                 mortgage.  Pursuant to the terms of the
                 agreement, the Company must
                 comply with, among other matters, certain
                 financial covenants which include
                 minimum levels of working capital and tangible
                 net worth, as defined.  At
                 December 31, 2002 and 2001, the Company had
                 outstanding balances of
                  $ 766,000 and $938,000, respectively.

</TABLE>
                    The Company's long-term debt obligations are as follows:

                 December 31,                       20022001

                 Promissory note payable to the sellers of a
                 discontinued apparel division through December
                 2004$264,000                                    $396,000

                 Note due to the estate of the former principal
                 officer,noninterest-bearing interest at prime (4.25%
                 at December 31, 2002), payable in monthly
                 installments through 2001.59,000                 110,000

                 Capitalized lease obligation collateralized by certain
                 computer software, interest at 10%, payable in
                 monthly installments of $1,804 through 2001
1,000

                                       Capitalized lease obligation
collateralized by certain
                                       machinery, interest at 8.6%, payable in
monthly
                  installments of $870 through 2007
51,000

                                        374,000         $507,000

                Less current portion             201,000
                243,000
                                                $173,000
                $264,000
                <TABLE>
<S>              <C>
                 Principal payments due on the Company's
                 long-term debt are as follows:

</TABLE>
      Year ending December 31,
                       20032$201,000
                       20043143,000
                       200510,000
                       200610,000
                       200710,000
                         $374,000



<TABLE>
<S>             <C>
7.STOCK-BASED   The Company has stock option plans which provide
      COMPENSATION        PLANS:for the granting of
                nonqualified or incentive stock options to
                officers, key employees and
                nonemployee directors.  The plans authorize the
                granting to officers and key
                employees options to acquire up to 700,000 common
                shares.  Additionally, the
                plans authorize the granting to nonemployee
                directors of the Company options
                to acquire up to 50,000 common shares.  Each plan
                grants options at the
                market value of the Company's stock on the date
                of such grant.  All options
                are exercisable at times as determined by the
                board of directors, not to exceed
                10 years from the date of grant.

</TABLE>







                The following table summarized activity in stock options:

                December 31,                2002          2001

                                            Weighted-
                Weighted-
                                             average
                average
                                            Exercise
                Exercise
                                      Options Price  Options
                Price

                Outstanding at beginning
                 of year            693,000   $2.89544,000       $3.33

                Granted          2,000    $4.70    158,000       $1.49

                Forfeited                     (9,000)            $2.43

                Exercised    3,000       $1.19
                                           Outstanding at end
 of year    692,000
$
..90          693,000                                                 $2.89

                Exercisable at end of year641,000         467,000

                Weighted-average fair
                 value of options granted
                 during the year              $4.59              $1.50

                The following table summarizes information about stock options
                outstanding and exercisable at December 31, 2002:



                               Options Outstanding    Options Exercisable

                                    Weighted-
                                             AverageWeighted-
                Weighted-
                                            RemainingAverage
                Average
                   Range of          NumberContractualExerciseNumber
                                    Exercise
                Exercise Prices    OutstandingLife    PriceExercisable
                                       Price

                $.94 - $1.67148,000    8.00   $1.49 148,000$1.49
                $1.97 - $2.43125,000   5.00   $2.20 125,000$2.20
                $1.52 - $3.75393,000   4.00   $3.49 343,000$3.56
                $4.68 - $7.3226,000    6.00   $5.3425,000$5.37
                $.94 - $7.32692,000    5.00   $2.90 641,000$2.89
                                   At December 31, 2002, 38,000 shares of
common stock were reserved for
                                   future issuance of stock options.




<TABLE>
<S>              <C>
  8. EMPLOYEE    A profit-sharing and incentive-savings plan
BENEFIT PLANS:   provides benefits to certain
                 employees who meet specified minimum service and
                 age requirements. The
                 plans provide for contributions by the Company
                 equal to one-half of employee
                 contributions (but not more than 2% of eligible
                 compensation) and the
                 Company may make additional contributions out of
                 current or accumulated
                 net earnings at the sole discretion of the
                 Company's board of directors.

                 The Company contributed approximately $143,000
                 and $135,000 to the plan
                 during the years ended December 31, 2002 and
                 2001, respectively.



  9.INCOME       For the year ended December 31, 2002, the
TAXES:           Company utilized a net operating
                 loss carryover, and accordingly, recorded no
                 provision for income taxes.

                 For the year ended December 31, 2001, the
                 Company recorded no net income
                 tax provision.  At December 31, 2002, the
                 Company has an alternative
                 minimum tax credit of approximately $564,000
                 with no limitation on the
                 carryforward period and net operating loss
                 carryforwards of approximately
                 $25,600,000 which expire through 20210.

                 During the year ended December 31, 20010, the
                 Company used a net
                 operating loss carryforward to offset the
                 capital gain realized on the sale of
                 its facility (Ssee Note 11).  At December 31,
                 2001 the Company adjusted
                 itsthe valuation allowance against its deferred
                 tax asset, thereby resulting in
                 an income tax provision of $400,000 for the year
                 ended December 31, 2001.
                 The adjustment resulted in a reduction of the
                 deferred tax asset toof
                 $350,000, of which $75,000 is classified as current.
</TABLE>

                 The reconciliation of income tax computed at the U.S. federal
statutory tax
                 rates to income tax expense is as follows:



                 Tax at U.S. statutory rates       34.0%34.0%
                 Increase in valuation allowance     153.0
                 Utilization of net operating loss carryforward  (34.0)%
                                                   0%187.0%


                Deferred tax assets are comprised of the following:

                December 31,                        20022001

                                                          Deferred tax assets:
                  Alternative minimum tax credit carryforward$       564,000$

                564,000



                Net operating loss and capital loss carryforwards
                 (including pre-acquisition net operating loss
                 carryforwards)                8,700,0009,306,000

                Temporary differences in bases of assets and
                  Liabilities:
                      Accounts receivable and inventory803,000673,000
                      Goodwill                   796,000960,000
                      Deferred revenue           290,000319,000
                      Accrued expenses           126,000107,000
                      Property and equipment       9,000(354,000)
                                               2,024,0001,705,000

                    Total deferred tax assets11,288,00011,575,000

     Valuation allowances(10,938,000)
     (11,225,000)
                Net deferred tax assets $        350,000$
                350,000


<TABLE>
<S>              <C>
  10.            Sales to significant customers accounted for
SIGNIFICANT      approximately  69% ( 34%, 23%
CUSTOMERS        and 12%) and 54% (18%, 18% and 18%) of the
AND              Company's consolidated net
CONCENTRATIO     sales for the years ended December 31, 2002 and
NS OF CREDIT     2001, respectively.
RISK:
                 Significant customers of the Company's
                 Electronics Segment accounted for
                 approximately 83% (52%, 1627% and 1518%) and 71%
                 (31%, 13% and
                 27%) of the Electronics Segment's net sales for
                 the years ended December 31,
                 2002 and 2001, respectively.

                 A significant customer of the Company's Power
                 Units Segment accounted
                 for approximately 37% of the Power Units
                 Segment's net sales for the year
                 ended December 31, 2002.  Another significant
                 customer of the Company's
                 Power Units Segment accounted for approximately
                 26% of the Power
                 Units Segment's net sales for the year ended
                 December 31, 2001.

                 Certain significant customers of the Company
                 sell the Company's products
                 to the U.S. government. Accordingly, a
                 substantial portion of the net sales
                 is subject to audit by agencies of the U.S.
                 government. In the opinion of
                 management, adjustments to such net sales, if
                 any, will not have a material
                 effect on the Company's financial position or
                 results of operations.


                 Financial instruments which potentially subject
                 the Company to
                 concentrations of credit risk consist
                 principally of cash and trade
                 receivables from its customers. The Company
                 performs credit evaluations
                 on its customers and collateral is generally not
                 required. Credit losses are
                 provided for in the consolidated financial
                 statements during the period in
                 which an impairment has been determined.  At
                 times, cash at financial
                 institutions may be in excess of FDIC insurance limits.



11.LEASING       In March 2001, the Company entered into a
ARRANGEMENT      sale-leaseback of its operating
S:               facility whereby it received proceeds of
                 $3,000,000 and entered into an
                 operating lease with an initial term expiring in
                 2013.  The lease may be
                 extended by the Company at its option through
                 February 2025.  The
                 Company recorded a deferred gain of $1,025,000,
                 which is being recognized
                 over the term of the lease.  Additional
                 oOperating leases are for a sales office,
                 certain equipment and vehicles and are subject
                 to annual increases based on
                 changes in the Consumer Price Index and
                 increases in real estate taxes and
                 certain operating expenses.

                 Future minimum lease payments as of December 31,
                 2002 under operating
                 lease agreements that have initial or remaining
                 noncancelable lease terms in
                 excess of one year are as follows:

</TABLE>
      Year ending December 31,

                      2003$419,000
                      2004421,000
                      2005411,000
                      2006396,000
                      2007429,000
                   Thereafter2,381,000
                Total future minimum lease payments$ 4,457,000

                 Rent expense for operating leases was approximately $381,000
and
                 $246,000 for the years ended December 31, 2002 and 2001,
respectively.
                 Lease commitments attributed to the discontinued operations
amounted to
                 approximately $          .

<TABLE>
<S>              <C>
12.COMMITMENTS   The Company has employment agreements with its
AND              three executive officers
CONTINGENCIE     which may be terminated by the Company with not
S:               less than three years' prior
                 notice and with two other principal officers,
                 for aggregate annual
                 compensation of $1,183,000.  In the event of a
                 change in control of the
                 Company, the executive officers have the right
                 to elect a lump sum payment
                 representing future compensation due them over
                 the remaining years of their
                 agreements.  In addition, the five officers are
                 entitled to bonuses based on a
                 percentage of earnings before taxes, as defined.
                  Total bonus compensation
                 expense was approximately $94,000 and $37,000
                 for the years ended
                 December 31, 2002 and 2001, respectively.

                 The Company is a party to lawsuits arising
                 primarily in the ordinary course
                 of  business.  Management is of the opinion that
                 the ultimate outcome of
                 these matters would not have a material adverse
                 impact on the financial
                 position of the Company or the results of its operations.




13. BUSINESS     The Company operates through two business
SEGMENTS:        segments.  Its Electronics
                 Segment, through the Orbit Instrument Division,
                 is engaged in the design,
                 manufacture and sale of customized electronic
                 components and subsystems.
                 Its Power Units Segment, through the Behlman
                 Electronics, Inc. subsidiary,
                 is engaged in the design, manufacture and sale
                 of distortion -free commercial
                 power units, power conversion devices and
                 electronic devices for
                 measurement and display.

                 The Company's reportable segments are business
                 units that offer different
                 products.  The Company's reportable segments are
                 each managed separately
                 as they manufacture and distribute distinct
                 products with different production
                 processes.

</TABLE>
               The following is the Company's business segment
information as of and for
                         the years ended December 31, 2002 and 2001:

                December 31,                       20022001

                Net sales:
                  Electronics    $10,677,000           $  8,737,000

                Power Units:
                  Domestic                    5,652,0005,111,000
                  Foreign                       366,000897,000
                Total Power Units             6,018,0006,008,000
                                                       Total net sales
$16,695,000$14,745,000

                Income (loss) from operations:
                  Electronics        $2,021,000        $     939,000
                  Power Units                    19,000(20,000)
                  General corporate expenses not allocated   (821,000)(472,000)
                  Depreciation and amortization(73,000)(125,000)
                  Amortization of goodwill            0(96,000)
                  Interest expense             (74,000)(212,000)
                  Investment and other income, net143,000200,000
                                                         Income from operations
                   before income taxes      $ 1,215,000$     214,000

                Assets:
                  Electronics        $4,342,000        $  5,582,000
                  Power Units                 4,494,0004,019,000
                General corporate assets not allocated  4,096,0002,723,000
                Total assets                $12,932,000$12,324,000


<TABLE>
<S>              <C>
14.INCOME (LOSS) The following table sets forth the computation
PER  COMMON SHARE:of basic and diluted income
                 (loss) per common share:

                 December 31,20022001

</TABLE>
       Denominator:
                   Denominator for basic income (loss) per
                   share - weighted-average common shares    2,110,0002,068,000

                Effect of dilutive securities:
                  Employee and director stock options179,000(a)
                  Warrants                            0(a)
                                                       Dilutive potential
common shares   179,000(a)

                Denominator for diluted income (loss)
                 per share - weighted-average common
                 shares and assumed conversions2,289,0002,068,000

                 The numerator for basic and diluted income (loss) per share
for the years
                 ended December 31, 2002 and 2001 is the net income (loss) for
each year.

                 (a)     There is no effect of common stock equivalents as
such effect would
                   be antidilutive.


<TABLE>
<S>              <C>
15.SUBSEQUENT    In February 2003, the Company entered into a new
EVENTS:          $2,000,000 credit facility
                 with a commercial lender secured by accounts
                 receivable, inventory and machinery and
                 equipment.  The new agreement will continue from
                 year to year thereafter unless sooner terminated
                 for an event of default including compliance
                 with financial covenants.  Loans under the
                 facility will bear interest equal to the sum of
                 2.75% plus the one-month London Inter-bank Offer
                 rate ("LIBOR"), 1.382% at December 31, 2002.  No
                 amounts have been borrowed under the credit facility.


</TABLE>







                              SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly
authorized.

                                   ORBIT INTERNATIONAL CORP.


Dated: March 28, 2003                   By: /s/ Dennis Sunshine
                                      Dennis Sunshine, President and Chief
                                      Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the
dates indicated.

<TABLE>
<S>                      <C>                    <C>

SIGNATURE                TITLE                  DATE


 /s/ Dennis Sunshine     President, Chief Executive Officer and DirectorMarch
28, 2003
Dennis Sunshine          (Principal Executive Officer)



 /s/ Mitchell Binder              Vice          March 28, 2003
Mitchell Binder          President-Finance, ChiefFinancial Officer and
Director(Principal Financial Officer)




 /s/ Bruce Reissman      Executive Vice President,Chief Operating March 28, 2003
Bruce Reissman           Officer and
                         Director



 /s/ Harlan Sylvan              Treasurer       March 28, 2003
Harlan Sylvan                 and Controller


 /s/ MarkTublisky        Secretary              March 28, 2003
Mark Tublisky


 /s/ John Molloy         Director               March 28, 2003
John Molloy


 /s/ Bernard Karcinell   Director               March 28, 2003
Bernard Karcinell


 /s/ Denis Feldman       Director               March 28, 2003
Denis Feldman
</TABLE>





                            CERTIFICATION

I, Dennis Sunshine, certify that:

  1.   I have reviewed this annual report on Form 10-KSB of Orbit
International Corp.

  2.   Based on my knowledge, this quarterly report does not contain any
untrue statement
       of a material fact or omit to state a material fact necessary to make
the statements
       made, in light of the circumstances under which such statements were
made, not
       misleading with respect to the period covered by this quarterly report;

  3.   Based on my knowledge, the financial statements, and other financial
information
       included in this quarterly report, fairly present in all material
respects the financial
       condition, results of operations and cash flows of the registrant as
of, and for, the
       periods presented in this quarterly report;

  4.   The registrant's other certifying officers and I are responsible for
establishing and
       maintaining disclosure controls and procedures (as defined in Exchange
Act Rules
       13a-14 and 15d-14) for the registrant and have:

       (a)     Designed such disclosure controls and procedures to ensure that
material
          information relating to the registrant, including its consolidated
subsidiaries, is
          made known to us by others within those entities,  particularly
during the period in
          which this quarterly report is being prepared;

       (b)     Evaluated the effectiveness of the registrant's disclosure
controls and procedures
          as of a date within 90 days prior to the filing date of this
quarterly report (the
          "Evaluation Date"); and

       (c)     Presented in this quarterly report our conclusions about the
effectiveness of the
          disclosure controls and procedures based on our evaluation as of the
Evaluation
          Date;

  5.   The registrant's other certifying officers and I have disclosed, based
on our most
       recent evaluation, to the registrant's auditors and the audit committee
of registrant's
       board of directors (or persons performing the equivalent functions):

       (a)     All significant deficiencies in the design or operation of
internal controls which
          could adversely affect the registrant's ability to record, process,
summarize and
          report financial data and have identified for the registrant's
auditors any material
          weaknesses in internal controls; and

       (b)     Any fraud, whether or not material, that involves management or
other employees
          who have a significant role in the registrant's internal controls; and

  6.   The registrant's other certifying officers and I have indicated in this
quarterly report
       whether there were significant changes in internal controls or in other
factors that
       could significantly affect internal controls subsequent to the date of
our most recent
       evaluation, including any corrective actions with regard to significant
deficiencies and
       material weaknesses.


  Date:   March 28, 2003                       _/s/_Dennis Sunshine__
                                        Dennis Sunshine
                                   Chief Executive Officer






                            CERTIFICATION

I, Mitchell Binder, certify that:

  1. I have reviewed this annual report on Form 10-KSB of Orbit International
Corp.

  2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a
     material fact or omit to state a material fact necessary to make the
statements made, in
     light of the circumstances under which such statements were made, not
misleading with
     respect to the period covered by this quarterly report;

  3. Based on my knowledge, the financial statements, and other financial
information included
     in this quarterly report, fairly present in all material respects the
financial condition, results
     of operations and cash flows of the registrant as of, and for, the
periods presented in this
     quarterly report;

  4. The registrant's other certifying officers and I are responsible for
establishing and
     maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-14
     and 15d-14) for the registrant and have:

       a. Designed such disclosure controls and procedures to ensure that
material
          information relating to the registrant, including its consolidated
subsidiaries, is
          made known to us by others within those entities,  particularly
during the period in
          which this quarterly report is being prepared;

       b. Evaluated the effectiveness of the registrant's disclosure controls
and procedures
          as of a date within 90 days prior to the filing date of this
quarterly report (the
          "Evaluation Date"); and

       c. Presented in this quarterly report our conclusions about the
effectiveness of the
          disclosure controls and procedures based on our evaluation as of the
Evaluation
          Date;

  5. The registrant's other certifying officers and I have disclosed, based on
our most recent
     evaluation, to the registrant's auditors and the audit committee of
registrant's board of
     directors (or persons performing the equivalent functions):

       a. All significant deficiencies in the design or operation of internal
controls which
          could adversely affect the registrant's ability to record, process,
summarize and
          report financial data and have identified for the registrant's
auditors any material
          weaknesses in internal controls; and

       b. Any fraud, whether or not material, that involves management or
other employees
          who have a significant role in the registrant's internal controls; and

  6. The registrant's other certifying officers and I have indicated in this
quarterly report
     whether there were significant changes in internal controls or in other
factors that could
     significantly affect internal controls subsequent to the date of our most
recent evaluation,
     including any corrective actions with regard to significant deficiencies
and material
     weaknesses.


  Date:   March 28, 2003                       /s/ Mitchell Binder
                                   Mitchell Binder
       Chief Financial Officer


                            EXHIBIT INDEX

Exhibit No.    Description of Exhibit

    4 (a)      Orbit International Corp. 2003 Stock Incentive Plan.

   10(k)       Loan and Security Agreement dated as of January 28, 2003
          between the Company and Merrill Lynch Business Financial Services
          Inc. including exhibits and other attachments thereto.

  23      Consent of Goldstein Golub Kessler LLP.

  99 (a)       Certification pursuant to 18 U.S.C. Section 1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 made by
          Dennis Sunshine, Chief Executive Officer.

  99 (b)       Certification pursuant to 18 U.S.C. Section 1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 made by
          Mitchell Binder, Chief Financial Officer


                                                       Exhibit 4
(a)

    ORBIT INTERNATIONAL CORP. 2003 EMPLOYEE STOCK INCENTIVE PLAN
 (Approved and adopted by the Board of Directors on March 10, 2003)

                        STATEMENT OF PURPOSE

     The Orbit International Corp. 2003 Employee Stock Incentive Plan is
intended to afford an incentive to employees, corporate officers and other key
persons employed or retained by ORBIT INTERNATIONAL CORP. and its Subsidiaries
and affiliates to acquire a proprietary interest in the Company and to enable
the
Company and its Subsidiaries and affiliates to attract and retain such
persons.

                         DEFINITIONS

For purposes of the Plan, the following terms are defined as set forth below:

a. "10% Holder"  shall mean any person who, for purposes of Section 422 of the
Code owns more than 10% of the total combined voting power of all classes of
stock of the employer corporation or of any Subsidiary.

b. "Award" means a Stock Option, Stock Appreciation Right or Restricted Stock.

c. "Board" means the Board of Directors of the Company.

d. "Change of Control" has the meaning set forth in Section 4.3.1.

e. "Code" means the Internal Revenue Code of 1986, as amended from time to time,
and any successor thereto.

f. "Committee" means the Committee referred to in Section 3.1.

g. "Common Stock" means common stock, par value $.10 per share, of the
Company.

h. "Company" means Orbit International Corp., a Delaware corporation.

i. "Covered Employee" means a participant designated prior to the grant of
Restricted Stock by the Committee who is or may be a "covered employee" within
the meaning of Section 162(m)(3) of the Code in the year in which Restricted
Stock is expected to be taxable to such participant.

j. "Eligible Persons" means the Eligible persons referred to in Section 2 of the
Plan.

k. "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time
to time, and any successor thereto.

l. "Fair Market Value" means, as of any given date, (i) if the Common Stock is
listed or admitted to trade on a national securities exchange, the closing price
of the Common Stock on the Composite Tape, as published in The Wall Street
Journal, of the principal national securities exchange on which the Common Stock
is so listed or admitted to trade, on such date, or, if there is no trading of
the Common Stock on such date, then the closing price of the Common Stock as
quoted on such Composite Tape on the next preceding date on which there was
trading in such shares; (ii) if the Common Stock is not listed or admitted to
trade on a national securities exchange but is listed and quoted on The Nasdaq
Stock Market ("Nasdaq"), the last sale price for the Common Stock on such date
as reported by Nasdaq, or, if there is no reported trading of the Common Stock
on such date, then the last sale price for the Common Stock on the next
preceding
date on which there was trading in the Common Stock; (iii) if the Common Stock
is not listed or admitted to trade on a national securities exchange and is not
listed and quoted on Nasdaq, the mean between the closing bid and asked price
for
the Common Stock on such date, as furnished by the National Association of
Securities Dealers, Inc. ("NASD") Over-The-Counter Bulletin Board (the "OTCBB")
or its successor the Bulletin Board Exchange("BBX"); (iv) if the Common Stock is
not listed or admitted to trade on a national securities exchange, not listed
and
quoted on Nasdaq and closing bid and asked prices are not furnished by the
OTCBB,
the mean between the closing bid and asked price for the Common Stock on such
date, as furnished by the Pink Sheets, LLC ("Pink Sheets") or similar
organization; and (v) if the stock is not listed or admitted to trade on a
national securities exchange, not listed and quoted on Nasdaq and if bid and
asked prices for the Common Stock are not furnished by the OTCBB, Pink Sheets or
a similar organization, the value established in good faith by the Committee.

m. "Incentive Stock Option" means any Stock Option designated as, and intended
to qualify as, an "incentive stock option" within the meaning of Section 422 of
the Code.

n. "Non-Qualified Stock Option" means any Stock Option that is not an Incentive
Stock Option.

o. "Performance Goals" means the performance goals established by the Committee
in connection with the grant of Restricted Stock.

p. "Plan" means the Orbit International Corp. 2003 Employee Stock Incentive
Plan,
as set forth herein and as hereinafter amended from time to time.

q. "Qualified Performance-Based Award" means an Award of Restricted Stock
designated as such by the Committee at the time of grant, based upon a
determination that (i) the recipient is or may be a "covered employee" within
the
meaning of Section 162(m)(3) of the Code in the year in which the Company would
expect to be able to claim a tax deduction with respect to such Restricted Stock
and (ii) the Committee wishes such Award to qualify for the Section 162(m)
Exemption.

r. "Restricted Stock" means an Award granted under Section 6.

s. "Section 162(m) Exemption" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C) of the Code.

t. "Stock Appreciation Right" means an Award granted under Section 5.

u. "Stock Option" means an Award granted under Section 4.

v.  "Subsidiary" shall have the meaning given to the term "Subsidiary
corporation" in Section 424(f) of the Code.

w. "Termination of Employment" means the termination of the participant's
employment with the Company and any of its Subsidiaries. A participant employed
by a Subsidiary shall also be deemed to incur a Termination of Employment if the
Subsidiary ceases to be such a Subsidiary, and the participant does not
immediately thereafter become an employee of the Company or another Subsidiary.
Temporary absences from employment because of illness, vacation or leave of
absence and transfers among the Company and its Subsidiaries shall not be
considered Terminations of Employment. If so determined by the Committee, a
participant shall be deemed not to have incurred a Termination of Employment if
the participant enters into a contract with the Company or a Subsidiary
providing
for the rendering by the participant of consulting services to the Company or
such Subsidiary on terms approved by the Committee; however, Termination of
Employment of the participant shall occur when such contract ceases to be in
effect.

     In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.

                        STATEMENT OF THE PLAN

1.   SHARES SUBJECT TO THE PLAN.

     Subject to the provisions of Section 7, the maximum number of shares of
shares which may be issued under the Plan shall be three hundred fifty thousand
(350,000) shares of Common Stock, par value $.10 per share, of the Company (the
"Shares"). The Company shall at all times while the Plan is in effect reserve
such number of shares of Common Stock as will be sufficient to satisfy the
requirements of outstanding Awards granted under the Plan. The Shares subject to
the Plan shall be either authorized and unissued shares or treasury shares of
Common Stock. If any Award is forfeited, or if any Stock Option (and related
Stock Appreciation Right, if any) terminates, expires or lapses  for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, or if any Stock Appreciation Right is exercised
for cash, the unpurchased Shares subject to such Awards shall again be available
for distribution under the Plan.  No more than 30% of the shares of Common Stock
available for grant under the Plan as of the first day of any calendar year in
which the Plan is in effect shall be utilized in that fiscal year for the grant
of Awards in the form of Restricted Stock.

2.   ELIGIBILITY.

     Awards may be granted only to employees, salaried officers and other key
persons employed or retained by the Company or its Subsidiaries ("Eligible
Persons"). As used in this Plan, the term "Subsidiaries" shall include
Subsidiaries of a Subsidiary. Directors who are not salaried officers or
employees of the Company or its Subsidiaries or who are members of the Committee
shall not be eligible for Awards under this Plan.



3.   ADMINISTRATION OF THE PLAN.

     3.1. The Plan shall be administered either by either the full Board of
Directors or by a committee (either the full Board or the committee is referred
to hereinafter as the "Committee") composed of at least two non-employee
directors, each of whom shall be a disinterested person, as defined by Rule 16b-
3(c)(2)(i) under the Exchange Act, which Committee shall be appointed by and
serve at the pleasure of the Board. Within the limits of the express provisions
of the Plan, the Committee shall have the authority to determine, in its
absolute
discretion, (i) the individuals to whom, and the time or times at which Awards
shall be granted, (ii) whether and to what extent Incentive Stock Options, Non-
Qualified Stock Options, Stock Appreciation Rights and Restricted Stock or any
combination thereof are to be granted hereunder, (iii) the number of Shares to
be covered by each Award granted hereunder, (iv) subject to Sections 4.7 and
6.3(G), the terms and conditions of any Award granted hereunder including, but
not limited to, the option price, any vesting condition, restriction or
limitation (which may be related to the performance of the participant, the
Company or any Subsidiary), and any vesting, acceleration, forfeiture or waiver
regarding any Award and the shares of Common Stock relating thereto, (v) modify,
amend or adjust the terms and conditions of any Award, at any time or from time
to time, including but not limited to, Performance Goals; provided, however,
that
the Committee may not adjust upwards the amount payable with respect to
Qualified
Performance-Based Awards or waive or alter the Performance Goals associated
therewith or cause such Restricted Stock to vest earlier than permitted by
Section 6.3(G); (vi) to what extent and under what circumstances Common Stock
and
other amounts payable with respect to an Award shall be deferred; and (vii)
under
what circumstances an Award may be settled in cash or Common Stock under
Sections
6.3(B) and 10.2.  In making such determinations, the Committee may take into
account such factors as the Committee, in its absolute discretion, shall deem
relevant. Subject to the express provisions of the Plan, the Committee shall
also
have the authority to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to it, to determine the terms and provisions of the
respective option instruments or agreements (which need not be identical) and to
make all other determinations and take all other actions necessary or advisable
for the administration of the Plan. The Committee's determinations on the
matters
referred to in this Section 3.1 shall be conclusive. Any determination by a
majority of the members of the Committee shall be deemed to have been made by
the
whole Committee.

     3.2.      Each member of the Committee shall be indemnified and held
harmless
by the Company against any cost or expense (including counsel fees) reasonably
incurred by him or her, or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to
act
in connection with the Plan unless arising out of such member's own fraud or bad
faith, to the extent permitted by applicable law. Such indemnification shall be
in addition to any rights of indemnification the members may have as directors
or otherwise under the By-laws of the Company, any agreement or vote of
stockholders or disinterested directors or otherwise.

4.   STOCK OPTIONS.

     Stock Options may be granted alone or in addition to other Awards.  Stock
Options granted hereunder may be either Incentive Stock Options or Non-Qualified
Stock Options.  Any Stock Option granted hereunder shall be in such form as the
Committee may from time to time approve. Stock Options granted under the Plan
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions as the Committee shall deem desirable:

     4.1. Stock Option Exercise Price.     Except for Incentive Stock Options,
the exercise price of each Stock Option granted under the Plan shall be
determined by the Committee in its absolute discretion, but in no event shall
such price be less than the par value of the Shares subject to the Stock Option.
The exercise price for Incentive Stock Options shall not be less than 100% of
the
Fair Market Value per share of the Common Stock at the time the Stock Option is
granted, nor less than 110% of such Fair Market Value in the case of an
Incentive
Stock Option granted to an individual who, at the time the option is granted, is
a 10% Holder. The Fair Market Value of the Shares shall be determined in good
faith by the Committee, with the approval of the Board, in accordance with the
Plan and applicable law.

     4.2.      Maximum Stock Option Grant.    With respect to Stock Options
which
are intended to qualify as Incentive Stock Options, the aggregate Fair Market
Value (determined as of the time the Stock Option is granted) of the Common
Stock
with respect to which Incentive Stock Options granted to any participant
(whether
under this Plan or under any other stock option plan of the Company or its
Subsidiaries) become exercisable for the first time in any calendar year may not
exceed $100,000. The number of Shares for which any participant, in any calendar
year, may be granted Stock Options under the Plan not treated as Incentive Stock
Options shall be limited to not more than 100,000.  Notwithstanding the
forgoing,
nothing contained in the Plan shall be construed to prohibit the grant of Stock
Options under the Plan to an Eligible Person by reason of his or her holding
Stock Options to purchase shares of Common Stock or any other securities of the
Company granted otherwise than under the Plan.

     4.3.      Exercise of Stock Options.

     4.3.1.    Subject to the provisions in this Section 4.3 and in Section
9, Stock Options may be exercised in whole or in part.  The Committee, in its
absolute discretion, shall determine the time or times at which any Stock Option
granted under the Plan may be exercised; provided, however, that each Stock
Option:

          (A)  shall be exercisable by a participant only if such participant
was an Eligible Person (and in the case of an Incentive Stock Option, was an
employee or salaried officer of the Company or any of its Subsidiaries) at all
times beginning from the date of the grant of the Incentive Stock Option to a
date not more than three months (except as otherwise provided in Section 8)
before exercise of such Stock Option;

          (B)  may not be exercised prior to the expiration of at least one
year from the date of grant except in the case of the death or disability of the
participant or otherwise with the approval of the Committee or the Board of
Directors or, if the option agreement evidencing such Stock Option so provides,
upon a "Change of Control" as defined below.

          (C)  shall expire no later than the expiration of ten years (five
years in the case of an Incentive Stock Option granted to a 10% Holder) from the
date of its grant; and

          (D)  shall not be exercisable by a participant until such
participant executes and delivers a written representation to the effect that he
or she is acquiring the Common Stock for investment and not with the intent of
distributing the same (unless such Common Stock shall be appropriately
registered
under the Securities Act of 1933, as amended, or exempt from registration
thereunder).

     A "Change of Control" as used in this Section 4.3 shall mean any of the
following:

          (i)  any consolidation, merger or sale of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company's stock would be converted into cash, securities or other
property; or

          (ii) the stockholders of the Company approve an agreement for the
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company;
or

          (iii)     any approval by the stockholders of the Company of any
plan or
proposal for  the liquidation or dissolution of the Company; or

          (iv) the acquisition of beneficial ownership (within the meaning of
Rule  13d-3 under the Exchange Act of an aggregate of 25% or more of the voting
power of the Company's outstanding voting securities by any single person or
group (as such term is used in Rule 13d-5 under the Exchange Act), unless such
acquisition was approved by the Board of Directors prior to the consummation
thereof); or

          (v)  the appointment of a trustee in a Chapter 11 bankruptcy
proceeding involving the Company or the conversion of such a proceeding into a
case under Chapter 7.

As a condition of the grant of a Stock Option, the Committee, in its absolute
discretion, may require an Eligible Person to enter into an employment agreement
with the Company or any Subsidiary or affiliate of the Company covering a period
of at least one year following the grant, and if the grant specifically
requires,
compliance with all terms and conditions of any such employment agreement shall
be a condition to the exercise by the participant of his or her Stock Option
(provided, however, that such compliance may be waived by the Committee in its
absolute discretion).

     4.3.2.    Stock Options granted under the Plan shall be exercised by the
delivery by the holder thereof to the Company at its principal offices (to the
attention of the Secretary) of written notice of the number of Shares with
respect to which the Stock Option is being exercised, accompanied by payment in
full of the Stock Option exercise price of such Shares. The exercise price shall
be payable in cash by a certified or bank check or such other instrument as the
Company may accept; provided, however, that in lieu of payment in cash, a
participant may, with the approval of the Company's Board and on the
recommendation of the Committee, pay for all or part of the Shares to be
purchased upon exercise of his or her Stock Option by:

          (A)  tendering to the Company shares of the Company's Common Stock
owned by such participant and having a Fair Market Value (as determined pursuant
to Section 4.1) equal to the exercise price (or the balance thereof) applicable
to such participant's Stock Option; or

          (B)  make available any exercise and sell (or cashless exercise)
program which the Company has established with a broker-dealer.

     4.3.3.    The holder of an option shall have none of the rights of a
          stockholder with respect to the Shares covered by his or her option
          until such Shares shall be issued to him or her upon the exercise of
          his or her option.

     4.4.      Termination of Service.  In the event that the service of an
individual to whom a Stock Option has been granted under the Plan shall
terminate
(otherwise than by reason of his or her death or total disability, or for
cause),
such option may be exercised (if and to the extent that such individual was
entitled to do so at the date of termination of his or her service) at any time
within three months after such termination and in no event after the expiration
of the term of the option. No option granted under the Plan may be exercised by
a participant following termination of such participant's employment for cause.
"Termination for cause" shall mean dismissal for dishonesty, conviction or
confession of a crime punishable by law (except minor violations), fraud,
misconduct or disclosure of confidential information. If the service of an
individual to whom a Stock Option has been granted under the Plan shall be
suspended pending an investigation of whether or not the individual shall be
terminated for cause, all of the individuals rights under any option granted
hereunder likewise shall be suspended during the period of investigation.

     4.5.      Death or Total Disability of a Stock Option Holder.  In the
event of
the death or total disability of an individual to whom a Stock Option has been
granted under the Plan (i) while serving as an Eligible Person; or (ii) within
three months after the termination of such service, otherwise than for cause,
such option may be exercised (if and to the extent that the deceased individual
was entitled to do so at the date of his or her death or total disability) by a
legatee or legatees of such participant under such individual's last will and
testament or by his or her personal representatives or distributees, at any time
within twelve months after his or her death or total disability, but in no event
after the expiration of the term of the option.

     As used in this Plan, the term "total disability" refers to a mental or
physical impairment of the individual which has lasted or is expected to last
for
a continuous period of twelve months or more and which causes the individual to
be unable, in the opinion of the Company and two (if more than one is required
by the Company in its sole discretion) independent physicians, to perform his or
her duties for the Company and to be engaged in any substantial gainful
activity.
Total disability shall be deemed to have occurred on the first day after the
Company and the two (if more than one is required by the Company in its sole
discretion) independent physicians have furnished their opinion of total
disability to the Committee.


     4.6. Non-transferability of Stock Options. A Stock Option shall not be
transferable otherwise than by will or the laws of descent and distribution and
is exercisable during the lifetime of the employee only by him or his guardian
or legal representative. Notwithstanding the foregoing, the Committee shall have
discretionary authority to grant Stock Options which will be transferable to
members of a participant's immediate family, including trusts for the benefit of
such family members and partnerships in which such family members are the only
partners. A transferred option would be subject to all of the same terms and
conditions as if such option had not been transferred. Upon any attempt to
transfer a Stock Option granted under this Plan otherwise than as permitted
hereunder, or upon the levy of attachment or similar process upon such option,
such option shall automatically become null and void and of no further force and
effect.

     4.7. Evidence of Stock Option Grant.  Each option granted pursuant to the
Plan shall be evidenced by an agreement (the "Option Agreement") which shall
clearly identify the status of the Stock Options granted thereunder (i.e,
whether
an Incentive Stock Option or Non-Qualified Stock Option).  The Option Agreement
shall comply in all respects with the terms and conditions of the Plan and may
contain such additional provisions, including, without limitation, restrictions
upon the exercise of the option, as the Committee shall deem advisable.

     4.8. Deferral of Stock Option Shares. The Committee may from time to time
establish procedures pursuant to which a participant may elect to defer, until
a time or times later than the exercise of a Stock Option, receipt of all or a
portion of the shares of Common Stock subject to such Stock Option and/or to
receive cash at such later time or times in lieu of such deferred shares, all on
such terms and conditions as the Committee shall determine. If any such
deferrals
are permitted, then notwithstanding Sections 4.3.1 and  4.3.2. above, a
participant who elects such deferral shall not have any rights as a stockholder
with respect to such deferred shares unless and until shares are actually
delivered to the participant with respect thereto, except to the extent
otherwise
determined by the Committee.

5.   STOCK APPRECIATION RIGHTS

     5.1. Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
     A Stock Appreciation Right may be exercised by a participant in accordance
with Section 5.2 by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the participant shall be entitled to receive an amount
determined in the manner prescribed in Section 5.2. Stock Options which have
been
so surrendered shall no longer be exercisable to the extent the related Stock
Appreciation Rights have been exercised.

     5.2  Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms
and conditions as shall be determined by the Committee, including the
following:

          (A) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 4 and this Section 5.

          (B) Upon the exercise of a Stock Appreciation Right, a participant
shall be entitled to receive an amount in cash, shares of Common Stock or both,
in value equal to the excess of the Fair Market Value of one share of Common
Stock over the option price per share specified in the related Stock Option
multiplied by the number of shares in respect of which the Stock Appreciation
Right shall have been exercised, with the Committee having the right to
determine
the form of payment.

          (C) Stock Appreciation Rights shall be transferable only to permitted
transferees of the underlying Stock Option in accordance with Section 4.6.
          (D) Upon the exercise of a Stock Appreciation Right, the Stock
          Option or part
thereof to which such Stock Appreciation Right is related shall be deemed to
have
been exercised for the purpose of the limitation set forth in Section 1 on the
number of shares of Common Stock to be issued under the Plan, but only to the
extent of the number of shares covered by the Stock Appreciation Right at the
time of exercise based on the value of the Stock Appreciation Right at such
time.

6.    RESTRICTED STOCK

     6.1. Administration. Shares of Restricted Stock may be awarded either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the Eligible Persons to whom and the time or times at which grants of
Restricted Stock will be awarded, the number of shares to be awarded to any
Eligible Person, the conditions for vesting, the time or times within which such
Awards may be subject to forfeiture and any other terms and conditions of the
Awards, in addition to those contained in Section 6.3.
     6.2. Awards and Certificates. Shares of Restricted Stock shall be
     evidenced in such
manner as the Committee may deem appropriate, including book-entry registration
or issuance of one or more stock certificates. Any certificate issued in respect
of shares of Restricted Stock shall be registered in the name of such Eligible
Person and shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Award, substantially in the following
form:

          "The transferability of this certificate and the shares of stock
          represented hereby are subject to the terms and conditions
          (including forfeiture) of the Orbit International Corp. 2003 Stock
          Incentive Plan and a Restricted Stock Agreement. Copies of such Plan
          and Agreement are on file at the offices of Orbit International
          Corp., 80 Cabot Court, Hauppauge, New York 11788."

The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the participant shall
have
delivered a stock power, endorsed in blank, relating to the Common Stock covered
by such Award.
     6.3. Terms and Conditions. Shares of Restricted Stock shall be subject to
          the following
terms and conditions:

          (A) The Committee may, prior to or at the time of grant, designate
an Award of Restricted Stock as a Qualified Performance-Based Award, in which
event it shall condition the grant or vesting, as applicable, of such Restricted
Stock upon the attainment of Performance Goals. If the Committee does not
designate an Award of Restricted Stock as a Qualified Performance-Based Award,
it may also condition the grant or vesting thereof upon the attainment of
Performance Goals. Regardless of whether an Award of Restricted Stock is a
Qualified Performance-Based Award, the Committee may also condition the grant or
vesting thereof upon the continued service of the participant. The conditions
for
grant or vesting and the other provisions of Restricted Stock Awards (including
without limitation any applicable Performance Goals) need not be the same with
respect to each recipient. The Committee may at any time, in its sole
discretion,
accelerate or waive, in whole or in part, any of the foregoing restrictions;
provided, however, that in the case of Restricted Stock that is a Qualified
Performance-Based Award, the applicable Performance Goals have been satisfied.

                  (B) Subject to the provisions of the Plan and the Restricted
Stock Agreement referred to in Section 6.3(F), during the period, if any, set by
the Committee, commencing with the date of such Award for which such
participant's continued service is required (the "Restriction Period"), and
until
the later of (i) the expiration of the Restriction Period and (ii) the date the
applicable Performance Goals (if any) are satisfied, the participant shall not
be permitted to sell, assign, transfer, pledge or otherwise encumber shares of
Restricted Stock; provided, however, that the foregoing shall not prevent a
participant from pledging Restricted Stock as security for a loan, the sole
purpose of which is to provide funds to pay the option price for Stock
Options.

                  (C) Except as provided in this Section 6.3(C) and Sections
6.3(A) and 6.3(B) and the Restricted Stock Agreement, the participant shall
have,
with respect to the shares of Restricted Stock, all of the rights of a
stockholder of the Company holding the class or series of Common Stock that is
the subject of the Restricted Stock, including, if applicable, the right to vote
the shares and the right to receive any dividends. If so determined by the
Committee in the applicable Restricted Stock Agreement, (i) cash dividends on
the
class or series of Common Stock that is the subject of the Restricted Stock
Award
shall be automatically deferred and reinvested in additional Restricted Stock,
held subject to the vesting of the underlying Restricted Stock, or held subject
to meeting Performance Goals applicable only to dividends; and (ii) dividends
payable in Common Stock shall be paid in the form of Restricted Stock of the
same
class as the Common Stock with which such dividend was paid, held subject to the
vesting of the underlying Restricted Stock, or held subject to meeting
Performance Goals applicable only to dividends.
          (D) Except to the extent otherwise provided in the applicable
          Restricted Stock
Agreement or Sections 6.3(A), 6.3(B), 6.3(E) or 8.1(D), upon a participant's
Termination of Employment for any reason during the Restriction Period or before
the applicable Performance Goals are satisfied, all shares still subject to
restriction shall be forfeited by the participant.
          (E) Except to the extent otherwise provided in Section 8.1(D), in
          the event that a
participant retires or such participant's employment is involuntarily
terminated,
the Committee shall have the discretion to waive, in whole or in part, any or
all
remaining restrictions (other than, in the case of Restricted Stock with respect
to which a participant is a Covered Employee, satisfaction of the applicable
Performance Goals unless the Participant's employment is terminated by reason of
death or Disability) with respect to any or all of such participant's shares of
Restricted Stock.

          (F) If and when any applicable Performance Goals are satisfied and
the Restriction Period expires without a prior forfeiture of the Restricted
Stock, unlegended certificates for such shares shall be delivered to the
participant upon surrender of the legended certificates.

                (G) Each Award shall be confirmed by, and be subject to, the
terms of a Restricted Stock Agreement.

                 (H) Notwithstanding the foregoing, but subject to the
provisions of Section 8 hereof, no Award in the form of Restricted Stock, the
vesting of which is conditioned only upon the continued service of the
participant, shall vest earlier than the first, second and third anniversaries
of the date of grant thereof, on each of which dates a maximum of one-third of
the shares of Common Stock subject to the Award may vest, and no award in the
form of Restricted Stock, the vesting of which is conditioned upon the
attainment
of a specified Performance Goal or Goals, shall vest earlier than the first
anniversary of the date of grant thereof.

7.   ADJUSTMENTS UPON CHANGE IN CAPITALIZATION.

     In the event of changes in the outstanding shares of Common Stock of the
Company by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
separations, reorganizations or liquidations, the number and class of shares
available under the Plan, the number and class of Shares or the amount of cash
or other assets or securities available upon the exercise of any Award granted
hereunder and the number of Shares to be issued pursuant to an Award shall be
correspondingly adjusted, to the end that the participant's proportionate
interest in the Company, any successor thereto or in the cash, assets or other
securities into which Shares are converted or exchanged shall be maintained to
the same extent, as near as may be practicable, as immediately before the
occurrence of any such event. All references in this Plan to "Common Stock" from
and after the occurrence of such event shall be deemed for all purposes of this
Plan to refer to such other class of shares or securities issuable upon the
exercise or payment of Awards granted pursuant hereto.

8.   MATERIAL TRANSACTION, LIQUIDATION OR DISSOLUTION OF THE COMPANY.

     8.1. In the event of a reorganization, merger or consolidation in which
the Company is not the surviving corporation, or a sale of all or substantially
all of the assets of the Company to another person or entity (each a "Material
Transaction"), unless otherwise provided in the Option Agreement, the Committee
shall:

          (A)  provide for the assumption of outstanding Awards, or the
substitution of outstanding Awards for new Awards, for equity securities of the
surviving, successor or purchasing corporation, or a parent or Subsidiary
thereof, with appropriate adjustments as to the number, kind and prices of
Shares
subject to such Awards, as determined in good faith by the Board in its sole
discretion, or

          (B)  provide that the vesting of each outstanding Stock Option and
Stock Appreciation Right shall automatically be accelerated so that 100% of the
unvested Shares covered by such Award shall be fully vested upon the
consummation
of the Material Transaction, and

               (i)  provide notice to Participants that all outstanding
                    Stock Options must be exercised on or before a specified
                    date (which date shall be at least five days from the
                    date of notice), after which the Stock Options and Stock
                    Appreciation Rights shall terminate; or

               (ii)      terminate each outstanding Stock Option and Stock
                    Appreciation Right in its entirety and exchange such
                    Award for a payment of cash, securities and/or property
                    equal to the Fair Market Value of the Common Stock into
                    which such Award convertible, less the exercise price
                    for such Award.

          (C)  provide that the restrictions and deferral limitations
applicable to any Restricted Stock shall lapse, and such Restricted Stock shall
become free of all restrictions and become fully vested and transferable, and

          (D)  the Committee may also make additional adjustments and/or
settlements of outstanding Awards as it deems appropriate and consistent with
the
Plan's purposes.

     8.2.      In the event of the dissolution or liquidation the Company,
whether
voluntary or otherwise, that is not a Material Transaction, all outstanding
unexercised Stock Options and Stock Appreciation Rights must be exercised, if at
all, within the ninety day period commencing on the date specified in Section
8.3
below. All such Awards which become exercisable during the ninety day period
commencing on the date specified in Section 8.3 below, shall terminate at the
end
of such ninety day period to the extent not exercised prior thereto.

     8.3. The date specified in this Section 8.3 is the date of the earliest
to occur of the following events:

          (i)  the entry, in a court having jurisdiction, of an order that the
Company be liquidated or dissolved;

          (ii)      adoption by the stockholders of the Company of a resolution
resolving that the Company be liquidated or dissolved voluntarily; or

          (iii)     adoption by the stockholders of the Company of a
resolution to the effect that the Company cannot, by reason of its liabilities,
continue its business and that it is advisable to liquidate or dissolve the
Company.  Notwithstanding anything herein to the contrary, in no event may any
option granted hereunder be exercised after the expiration of the term of such
option.

9.   FURTHER CONDITIONS.

     Each Award granted under the Plan shall be subject to the requirement that
if at any time the Committee shall determine, in its absolute discretion, that
it is necessary or desirable as a condition of, or in connection with the grant
and/or issuance of Award or the exercise thereof, to effect or obtain, as the
case may be:

           (i)      the listing, registration or qualification of the Shares
subject to such Award upon any securities exchange or under any state or federal
law;

          (ii)      the consent or approval of any governmental body;

          (iii)     any investment representation or agreement by the
individual desiring to be issued or to exercise an Award granted under the Plan;
or

          (iv)      an opinion of counsel for the Company,

then, no Award may be issued or exercised, as the case may be, in whole or in
part unless such listing, registration, qualification, consent, approval,
investment or representation agreement or opinion shall have been effected or
obtained, as the case may be, free of any condition not acceptable to the Board
or the Committee.

10.  EXCHANGE AND BUYOUT OF AWARDS.

     10.1.     The Committee may, at any time or from time to time, authorize
the
Company, with the consent of the respective participants, to issue new Awards in
exchange for the surrender and cancellation of any or all outstanding Awards.

     10.2.     The Committee may, at any time or from time to time, authorize
the
Company to buy from a participant an Award previously granted with payment in
cash, Shares (including Restricted Stock) or other consideration, based on such
terms and conditions as the Committee and the participant may agree.

11.  TERMINATION, MODIFICATION AND AMENDMENT.

     11.1      The Plan (but not Awards previously granted under the Plan) shall
terminate on, and no Awards shall be granted after, the tenth anniversary of its
adoption by the Board; provided that the Board may at any time terminate the
Plan
prior thereto upon the adoption of a resolution of the Board.

     11.2 The Board shall have complete power and authority to modify or amend
the Plan in whole or in part and from time to time in such respects as it shall
deem advisable; provided, however, that the Board shall not, without the
approval
of the votes represented by a majority of the outstanding Common Stock of the
Company present or represented and entitled to vote at a meeting of stockholders
duly held in accordance with the applicable laws of the Company's jurisdiction
of incorporation or by the written consent of stockholders owning stock
representing a majority of the votes of the Company's outstanding stock entitled
to vote:

           (i)      increase the number of Shares available for the grant of
Awards
under Section 1 of the Plan  (except as provided in Section 7);

          (ii)      extend the term of the Plan or the period during which
Awards
may be granted or exercised;

          (iii)     reduce the Stock Option price, in the case of Incentive
Stock Options below 100% (110% in the case of an Incentive Stock Option granted
to a 10% Holder) of the Fair Market Value of the Shares issuable upon exercise
of Stock Options at the time of the granting thereof, other than to change the
manner of determining the Fair Market Value thereof;

          (iv)      alter the maximum number of Shares available for the grant
of
Awards in the form of Incentive Stock Options and Restricted Stock;

          (v)  materially increase the benefits accruing to participants under
the Plan;

          (vi)      modify the requirements as to eligibility for
participation in
               the Plan;

          (vii)     modify the nature of the Awards which may be granted
               under the Plan;

          (viii)    with respect to Stock Options which are Incentive Stock
Options, amend the Plan in any respect which would cause such Stock Options to
no longer qualify for Incentive Stock Option treatment pursuant to the Code; and

          (ix)  alter the provisions set forth in Section 6.3(H) with respect
to minimum vesting schedules relating to Awards in the form of Restricted
Stock.

No termination or amendment of the Plan shall, without the consent of the
individual participant, shall adversely affect the rights of such participant
under an Award theretofore granted to him or her.

12.  TAXES.

     The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with any
Awards granted under the Plan.  The Company may further require notification
from
the participants upon any disposition of Common Stock acquired pursuant to the
Awards granted hereunder.

13.  EFFECTIVENESS OF THE PLAN.

     The Plan shall become effective immediately upon its approval and adoption
by the Board, subject to approval by a majority of the votes of the outstanding
shares of capital stock of the stockholders of the Company cast at any duly
called annual or special meeting of the Company's stockholders held within one
year from the date of Board adoption and approval.

14.  DESIGNATION OF BENEFICIARY BY PARTICIPANT.

     A participant may designate one or more beneficiaries to receive any rights
and payments to which such participant may be entitled in respect of any option
granted under the Plan in the event of such participant's death.  Such
designation shall be on a written form acceptable to and filed with the
Committee.  The Committee shall have the right to review and approve beneficiary
designations.  A participant may change the participant's beneficiary(ies) from
time to time in the same manner as the original designation, unless such
participant has made an irrevocable designation.  Any designation of beneficiary
under the Plan (to the extent it is valid and enforceable under applicable law)
shall be controlling over any other disposition, testamentary or otherwise, as
determined by the Committee.  If no designated beneficiary survives the
participant and is living on the date on which any right or amount becomes
payable to such participant's beneficiary(ies), such payment will be made to the
legal representatives of the participant's estate, and the term "beneficiary" as
used in the Plan shall be deemed to include such person or persons.  If there is
any question as to the legal right of any beneficiary to receive a distribution
under the Plan, the Committee may determine that the amount in question be paid
to the legal representatives of the estate of the participant, in which event
the
Company, the Committee, the Board and the Committee and the members thereof will
have no further liability to any person or entity with respect to such amount.

15.  CERTIFICATES.

     All Shares delivered under this Plan will be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements promulgated
under such laws or any stock exchange or automated quotation system upon which
the Shares may be listed or quoted and each stock certificate evidencing such
Shares and other certificates shall have the appropriately legend.

16.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.

     16.1.      The issuance of Awards under the Plan will not be effective
unless such issuance is made in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of
issuance/grant and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver stock certificates for Shares under this Plan
prior to:

          (i)  obtaining any approvals from governmental agencies that the
     Committee determines are necessary or advisable; and/or

          (ii) completion of any registration or other qualification of such
     Shares under any state or federal law or ruling of any governmental body
     that the Committee determines to be necessary or advisable.

     16.2.       The Company will be under no obligation to register the Shares
under the Securities Act of 1933, as amended, or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws,
stock exchange or automated quotation system, and the Company will have no
liability for any inability or failure to do so.

17.  NO OBLIGATION TO EMPLOY.

     The Plan shall not constitute a contract of employment and nothing in this
Plan shall confer or be deemed to confer on any participant any right to
continue
in the employ of, or to continue any other relationship with, the Company or any
Subsidiary or affiliate of the Company or limit in any way the right of the
Company or any Subsidiary or affiliate of the Company to terminate the
participant's employment or other relationship at any time, with or without
cause.

18.  NON-EXCLUSIVITY OF THE PLAN.

     Neither the adoption of the Plan by the Board, the submission of the Plan
to the shareholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board or the
Committee to adopt such additional compensation arrangements as the Board may
deem desirable, including, without limitation, the granting of Stock Options
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

19.  MISCELLANEOUS PROVISIONS.


     19.1.     No employee or other person shall have any claim or right to be
granted an option
under the Plan under any contract, agreement or otherwise.  Determinations
made by the
Committee under the Plan need not be uniform and may be made selectively among
Eligible
Persons under the Plan, whether or not such Eligible Persons are similarly
situated.

     19.2 No Shares, other Company securities or property, other securities or
property,
or other forms of payment shall be issued hereunder with respect to any option
granted under
the Plan unless counsel for the Company shall be satisfied that such issuance
will be in
compliance with applicable federal, state, local and foreign legal, securities
exchange and
other applicable requirements.

     19.3.     It is the intent of the Company that the Plan comply in all
respects with Rule
16b-3 under the Exchange Act, that any ambiguities or inconsistencies in
construction of the
Plan be interpreted to give effect to such intention and that if any provision
of the Plan
is found not to be in compliance with Rule 16b-3, such provision shall be
deemed null and
void to the extent required to permit the Plan to comply with Rule 16b-3.

     19.4.     The appropriate officers of the Company shall cause to be filed
any reports,
returns or other information regarding the grant of Stock Options hereunder or
any Shares
issued pursuant hereto as may be required by Section 13 or 15(d) of the
Exchange Act (or any
successor provision) or any other applicable statute, rule or regulation.

     19.5.     The validity, construction, interpretation, administration and
effect of the
Plan, and of its rules and regulations, and rights relating to the Plan and
Awards granted
under the Plan and any agreements in connection therewith, shall be governed
by the
substantive laws, but not the choice of law rules, of the State of New York.






                                                       Exhibit 10 (k)

MERRILL LYNCH                           WCMA LOAN AND SECURITY AGREEMENT

WCMA LOAN AND SECURITY AGREEMENT NO. 885-07587 ("Loan Agreement") dated as of
January 28,
2003, between ORBIT INTERNATIONAL CORP., a corporation organized and existing
under the laws of the
State of Delaware having its principal office at 80 Cabot Court, Hauppauge, NY
11788 ("Customer"), and
MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., a corporation organized and
existing under the
laws of the State of Delaware having its principal office at 222 North LaSalle
Street, Chicago, IL 60601 ("MLBFS").

Pursuant to that certain WORKING CAPITAL MANAGEMENT ACCOUNT AGREEMENT NO. 885-
07587
and the accompanying Program Description (as the same may be, or have been,
amended, modified or supplemented,
the WCMA Agreement') between Customer and MLBFS' affiliate, MERRILL LYNCH,
PIERCE, FENNER &
SMITH INCORPORATED ("MLPF&S"), Customer opened, or shall prior to the
Activation Date open, a Working
Capital Management Account pursuant to the WCMA Service" and the WCMA Program"
described in the WCMA
Agreement and any documents incorporated therein. The WCMA Agreement is by
this reference incorporated as a
part hereof, In conjunction therewith and as part of the WCMA Program,
Customer has requested that MLBFS
provide, and subject to the terms and conditions herein set forth MLBFS has
agreed to provide, a commercial line
of credit for Customer.

Accordingly, and in consideration of the premises and of the mutual covenants
                      of the parties hereto, Customer
                    and MLBFS hereby agree as follows:

                          ARTICLE 1. DEFINITIONS

1.1 SPECIFIC TERMS. In addition to terms defined elsewhere in this Loan
Agreement, when used herein the following
terms shall have the following meanings:

"Activation Date" shall mean the date upon which MLBFS shall cause the WCMA
Line of Credit to be fully activated
under MLPF&S' computer system as part of the WCMA Program.

"Bankruptcy Event" shall mean any of the following: (i) a proceeding under any
bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, liquidation, winding up or
receivership law or statute shall be
commenced, filed or consented to by any Credit Party; or (ii) any such
proceeding shall be filed against any Credit
Party and shall not be dismissed or withdrawn within sixty (60) days after
filing; or (iii) any Credit Party shall make
a general assignment for the benefit of creditors; or (iv) any Credit Party
shall generally fail to pay or admit in writing
its inability to pay its debts as they become due; or (v) any Credit Party
shall be adjudicated a bankrupt or insolvent;
or (vi) any Credit Party shall take advantage of any other law or procedure
for the relief of debtors or shall take any
action for the purpose of or with a view towards effecting any of the
foregoing; or (vii) a receiver, trustee, custodian,
fiscal agent or similar official for any Credit Party or for any substantial
part of any of their respective property or
assets shall be sought by such Credit Party or appointed.

"Business Day" shall mean any day other than a Saturday, Sunday, federal
holiday or other day on which the New
York Stock Exchange is regularly closed.

"Business Guarantor" shall mean every Guarantor that is not a natural person.

"Certificate of Compliance" shall mean, as applicable, that duly executed
certificate, substantially the same form as
Exhibit B attached hereto to the extent such certificate shall be applicable,
of the president, chief financial officer or
chief executive officer of Customer, certifying as to the matters set forth in
such certificate.

"Collateral" shall mean the WCMA Account, all Accounts, Chattel Paper,
Contract Rights, Inventory, Equipment,
Fixtures, General Intangibles, Deposit Accounts, Documents, Instruments,
Investment Property and Financial Assets
of Customer, howsoever arising, whether now owned or existing or hereafter
acquired or arising, and wherever
located; together with all parts thereof (including spare parts), all
accessories and accessions thereto, all books and
form of Accounts and records (including computer records) directly related
thereto, all proceeds thereof (including,
without limitation, proceeds in the insurance proceeds), and the additional
collateral described in Section 3.6 (b)
hereof.

"Commitment Expiration Date" shall mean February 27, 2003.

"Credit Party" and "Credit Parties" shall mean, individually or collectively,
the Customer, all Guarantors and all
Pledgors.

"Default' shall mean either an "Event of Default" as defined in Section 3.5
hereof, or an event which with the giving
of notice, passage of time, or both, would constitute such an Event of Default.

"Default Rate" shall mean an annual interest rate equal to the lesser of: (i)
two percentage points over the Interest
Rate; or (ii) the highest interest rate allowed by applicable law.

"Event of Loss" shall mean the occurrence whereby any tangible Collateral is
damaged beyond repair, lost, totally
destroyed or confiscated.

"Excess Interest" shall mean any amount or rate of interest (including the
Default Rate and, to the extent that they
may be deemed to constitute interest, any prepayment fees, late charges and
other fees and charges) payable, charged
or received in connection with any of the Loan Documents which exceeds the
maximum amount or rate of interest
permitted under applicable law.





"GAAP" shall mean the generally accepted accounting principles in effect in
the United States of America from
time to time.

"General Funding Conditions" shall mean each of the following conditions to
any WCMA Loan by MLBFS
hereunder: (i) Customer shall have validly subscribed to and continued to
maintain the WCMA Account with
MLPF&S, and the WCMA Account shall then be reflected as an active "commercial"
WCMA Account (i.e., one with
line of credit capabilities) on MLPF&S'WCMA computer system; (ii) no Default
or Event of Default shall have
occurred and be continuing or would result from the making of any WCMA Loan
hereunder by MLBFS; (iii) there
shall not have occurred and be continuing any material adverse change in the
business or financial condition of any
Credit Party; (iv) all representations and warranties of all of the Credit
Parties herein or in any of the Loan
Documents shall then be true and correct in all material respects; (v) MLBFS
shall have received this Loan
Agreement and all of the other Loan Documents duly executed and filed or
recorded where applicable, all of which
shall be in form and substance satisfactory to MLBFS; (vi) MLBFS shall have
received evidence satisfactory to it
as to the ownership of the Collateral and the perfection and priority of
MLBFS' liens and security interests thereon,
as well as the ownership of and the perfection and priority of MLBFS' liens
and security interests on any other
collateral for the Obligations furnished pursuant to any of the Loan
Documents; (vii) MLBFS shall have received
evidence satisfactory to it of the insurance required hereby or by any of the
Loan Documents; and (viii) any additional
conditions specified in the VCMA Line of Credit Approval" letter executed by
MLBFS with respect to the
transactions contemplated hereby shall have been met to the satisfaction of
MLBFS.

"Guarantor" shall mean each Person obligated under a guaranty, endorsement or
other undertaking by which such
Person guarantees or assumes responsibility in any capacity for the payment or
performance of any of the Obligations.

"Initial Maturity Date" shall mean the first date upon which the WCMA Line of
Credit will expire (subject to renewal
in accordance with the terms hereto; to wit: January 31, 2004.

"Individual Guarantor" shall mean each Guarantor who is a natural person.

"Interest Due Date" shall mean the first Business Day of each calendar month
during the term hereof.

"Interest Rate" shall mean a variable per annum rate of interest equal to the
sum of 2.75% plus the One-Month
LIBOR. "One-Month LIBOR" shall mean, as of the date of any determination, the
interest rate then most recently
published in the "Money Rates" section of The Wall Street Journal as the
one-month London Interbank Offered Rate.
The Interest Rate will change as of the date of publication in The Wall Street
Journal of a One-Month LIBOR that
is different from that published on the preceding Business Day, if more than
one rate is published, then the highest
of such rates. In the event that The Wall Street Journal shall, for any
reason, fall or cease to publish the One-Month
LIBOR, MLBFS will choose a reasonably comparable index or source to use as the
basis for the Interest Rate.

"Line Fee" shall mean a fee of $15,000.00 payable periodically by Customer to
MLBFS in accordance with the
provisions of Section 2.2 hereof.

"Loan Documents" shall mean this Loan Agreement, any indenture, any guaranty
of any of the Obligations and all
other security and other instruments, assignments, certificates,
certifications and agreements of any kind relating to
any of the Obligations, whether obtained, authorized, authenticated, executed,
sent or received concurrently with
or subsequent to this Loan Agreement, or which evidence the creation, guaranty
or collateralization of any of the
Obligations or the granting or perfection of liens or security interests upon
any Collateral or any other collateral for
the Obligations, including any modifications, amendments or restatements of
the foregoing.

"Location of Tangible Collateral" shall mean the address of Customer set forth
at the beginning of this Loan
Agreement, together with any other address or addresses set forth on an
exhibit hereto as being a Location of
Tangible Collateral.

"Maturity Date" shall mean the date of expiration of the WCMA Line of Credit.

"Maximum WCMA Line of Credit" shall mean, as of any date of determination
thereof, an amount Equal to the lesser
of. (A) $2,000,000.00, or (B) 80% of Customer's Accounts and Chattel Paper, as
shown on its regular books and
records (excluding Accounts over 90 days old, Accounts directly or indirectly
DUE FROM ANY PERSON OR ENTITY NOT
DOMICILED IN THE UNITED STATES , ACCOUNTS ARISING OUT OF BONDED JOBS,
RETAINAGE OR FROM ANY SHAREHOLDER,
OFFICER OR EMPLOYEE OF CUSTOMER OR ANY AFFILIATED ENTITY), AND 50% OF RAW
MATERIAL CUSTOMER'S INVENTORY AS
SHOWN ON ITS REGULAR BOOKS AND RECORDS UP TO A MAXIMUM OF $750,000.00.

"OBLIGATIONS" SHALL MEAN ALL LIABILITIES, INDEBTEDNESS AND OTHER OBLIGATIONS
OF CUSTOMER TO MLBFS,
HOWSOEVER CREATED, ARISING OR EVIDENCED, WHETHER NOW EXISTING OR HEREAFTER
ARISING, WHETHER DIRECT OR
INDIRECT, ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE, PRIMARY OR SECONDARY
OR JOINT OR SEVERAL, AND, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, SHALL INCLUDE PRINCIPAL, ACCRUED
INTEREST (INCLUDING WITHOUT LIMITATION
INTEREST ACCRUING AFTER THE FILING OF ANY PETITION IN BANKRUPTCY), ALL
ADVANCES MADE BY OR ON BEHALF OF MLBFS
UNDER THE LOAN DOCUMENTS, COLLECTION AND OTHER COSTS AND EXPENSES INCURRED BY
OR ON BEHALF OF MLBFS,
WHETHER INCURRED BEFORE OR AFTER JUDGMENT AND ALL PRESENT AND FUTURE
LIABILITIES, INDEBTEDNESS AND OBLIGATIONS
OF CUSTOMER UNDER THIS LOAN AGREEMENT.

"PERMITTED LIENS" SHALL MEAN WITH RESPECT TO THE COLLATERAL: (i) LIENS FOR
CURRENT TAXES NOT YET DUE AND
PAYABLE, OTHER NON-CONSENSUAL LIENS ARISING IN THE ORDINARY COURSE OF BUSINESS
FOR SUMS NOT DUE, AND, IF
MLBFS' RIGHTS TO AND INTEREST IN THE COLLATERAL ARE NOT MATERIALLY AND
ADVERSELY AFFECTED THEREBY, ANY SUCH
LIENS FOR TAXES OR OTHER NON-CONSENSUAL LIENS ARISING IN THE ORDINARY COURSE
OF BUSINESS BEING CONTESTED IN GOOD
FAITH BY APPROPRIATE PROCEEDINGS; (II) LIENS IN FAVOR OF MLBFS; (III) LIENS
WHICH WILL BE DISCHARGED WITH THE
PROCEEDS OF THE INITIAL WCMA LOAN; AND (IV) ANY OTHER LIENS EXPRESSLY
PERMITTED IN WRITING BY MLBFS.

"PERSON" SHALL MEAN ANY NATURAL PERSON AND ANY CORPORATION, PARTNERSHIP
(GENERAL, LIMITED OR OTHERWISE),
LIMITED LIABILITY COMPANY, TRUST, ASSOCIATION, JOINT VENTURE, GOVERNMENTAL
BODY OR AGENCY OR OTHER ENTITY
HAVING LEGAL STATUS OF ANY KIND.


"Pledgor" shall mean each Person who at any time provides collateral, or
otherwise now or hereinafter agrees to
grant MLBFS a security interest in any assets as security for Customers
Obligations.

"Renewal Year" shall mean and refer to the 12-month period immediately
following the Initial Maturity Date and
each 12-month period thereafter.

"WCMA Account" shall mean and refer to the Working Capital Management Account
of Customer with MLPF&S
identified as Account No. 885-07587 and any successor Working Capital
Management Account of Customer with
MLPF&S.

"WCMA Line of Credit" shall mean a line of credit funded by MLBFS through the
WCMA Account.

"WCMA Loan" shall mean each advance made by MLBFS pursuant to this Loan
Agreement.

"WCMA Loan Balance" shall mean an amount equal to the aggregate unpaid
principal amount of all WCMA
Loans.

"UCC" shall mean the Uniform Commercial Code of Illinois as in effect in
Illinois from time to time.

1.2 OTHER TERMS. Except as otherwise defined herein: (i) all terms used in
this Loan Agreement which are defined
in the UCC shall have the meanings set forth in the UCC, and (ii) capitalized
terms used herein which are defined in
the WCMA Agreement (including, without limitation, "Money Accounts", "Minimum
Money Accounts Balance",
and "WCMA Directed Reserve Program") shall have the meanings set forth in the
WCMA Agreement, and (iii)
accounting terms not defined herein shall have the meaning ascribed to them in
GAAP.

1.3 UCC FILING. Customer hereby authorizes MLBFS to file a record or records
(as defined or otherwise specified
under the UCC), including, without limitation, financing statements, in all
jurisdictions and with all filing offices as
MLBFS may determine, in its sole discretion, are necessary or advisable to
perfect the security interest granted to
MLBFS herein. Such financing statements may describe the Collateral in the
same manner as described herein or may
contain an indication or description of collateral that describes such
property in any other manner as MLBFS may
determine, in its sole discretion, is necessary, advisable or prudent to
ensure the perfection of the security interest
in the Collateral granted to the MLBFS herein.

                        ARTICLE II. THE WCMA LINE OF CREDIT

2.1 WCMA PROMISSORY NOTE. FOR VALUE RECEIVED, Customer hereby promises to pay
to the order
of MLBFS, at the times and in the manner set forth in this Loan Agreement, or
in such other manner and at such
place as MLBFS may hereafter designate in writing, the following: (a) on the
Maturity Date, or if earlier, on the date
of termination of the WCMA Line of Credit, the WCMA Loan Balance; (b) interest
at the Interest Rate (or, if
applicable, at the Default Rate) on the outstanding WCMA Loan Balance, from
and including the date on which the
initial WCMA Loan is made until the date of payment of all WCMA Loans in full;
and (c) on demand, all other sums
payable pursuant to this Loan Agreement, including, but not limited to, the
periodic Line Fee. Except as otherwise
expressly set forth herein, Customer hereby waives presentment, demand for
payment, protest and notice of protest,
notice of dishonor, notice of acceleration, notice of intent to accelerate and
all other notices and formalities in
connection with this WCMA Promissory Note and this Loan Agreement.

2.2 WCMA LOANS

(a) ACTIVATION DATE. Provided that: (i) the Commitment Expiration Date shall
not then have occurred, and (ii)
Customer shall have subscribed to the WCMA Program and its subscription to the
WCMA Program shall then be
in effect, the Activation Date shall occur on or promptly after the date,
following the acceptance of this Loan
Agreement by MLBFS at its office in Chicago, Illinois, upon which each of the
General Funding Conditions shall
have been met or satisfied to the reasonable satisfaction of MLBFS. No
activation by MLBFS of the WCMA Line
of Credit for a nominal amount shall be deemed evidence of the satisfaction of
any of the conditions herein set forth,
or a waiver of any of the terms or conditions hereof. Customer hereby
authorizes MLBFS to pay out of and charge
to Customer's WCMA Account on the Activation Date any and all amounts
necessary to fully pay off any bank or
other financial institution having a lien upon any of the Collateral other
than a Permitted Lien.

(b) WCMA LOANS. Subject to the terms and conditions hereof, during the period
from and after the Activation Date
to the first to occur of the Maturity Date or the date of termination of the
WCMA Line of Credit pursuant to the
terms hereof, and in addition to WCMA Loans automatically made to pay accrued
interest, as hereafter provided:
(i) MLBFS will make WCMA Loans to Customer in such amounts as Customer may
from time to time request in
accordance with the terms hereof, up to an aggregate outstanding amount not to
exceed the Maximum WCMA Line
of Credit, and (ii) Customer may repay any WCMA Loans in whole or in part at
any time, and request a re-borrowing
of amounts repaid on a revolving basis. Customer may request such WCMA Loans
by use of WCMA Checks, FTS,
Visa charges, wire transfers, or such other means of access to the WCMA Line
of Credit as may be permitted by
MLBFS from time to time; it being understood that so long as the WCMA Line of
Credit shall be in effect, any
charge or debit to the WCMA Account which but for the WCMA Line of Credit
would under the terms of the
WCMA Agreement result in an overdraft, shall be deemed a request by Customer
for a WCMA Loan.

(c) CONDITIONS OF WCMA LOANS. Notwithstanding the foregoing, MLBFS shall not
be obligated to make any
WCMA Loan, and may without notice refuse to honor any such request by
Customer, if at the time of receipt by
MLBFS of Customers request: (i) the making of such WCMA Loan would cause the
Maximum WCMA Line of
Credit to be exceeded; or (ii) the Maturity Date shall have occurred, or the
WCMA Line of Credit shall have
otherwise been terminated in accordance with the terms hereof; or (iii)
Customer's subscription to the WCMA
Program shall have been terminated; or (iv) an event shall have occurred and
be continuing which shall have caused
any of the General Funding Conditions to not then be met or satisfied to the
reasonable satisfaction of MLBFS. The
making by MLBFS of any WCMA Loan at a time when any one or more of said
conditions shall not have been met
shall not in any event be construed as a waiver of said condition or
conditions or of any Default, and shall not prevent
MLBFS at any time thereafter while any condition shall not have been met from
refusing to honor any request by
Customer for a WCMA Loan.

I   I
(d) LIMITATION OF LIABILITY. MLBFS shall not be responsible, and shall have no
liability to Customer or any other
party, for any delay or failure of MLBFS to honor any request of Customer for
a WCMA Loan or any other act or
omission of MLBFS, MLPF&S or any of their affiliates due to or resulting from
any system failure, error or delay
in posting or other clerical error, loss of power, fire, Act of God or other
cause beyond the reasonable control of
MLBFS, MLPF&S or any of their affiliates unless directly arising out of the
willful wrongful act or active gross
negligence of MLBFS. In no event shall MLBFS be liable to Customer or any
other party for any incidental or
consequential damages arising from any act or omission by MLBFS, MLPF&S or any
of their affiliates in connection
with the WCMA Line of Credit or this Loan Agreement.

(e) INTEREST. (i) An amount equal to accrued interest on the daily WCMA Loan
Balance shall be payable by Customer
monthly on each Interest Due Date, commencing with the first Interest Due Date
after the Activation Date. Unless
otherwise hereafter directed in writing by MLBFS on or after the first to
occur of the Maturity Date or the date of
termination of the WCMA Line of Credit pursuant to the terms hereof, such
interest will be automatically charged
to the WCMA Account on the applicable Interest Due Date, and, to the extent
not paid with free credit balances or
the proceeds of sales of any Money Accounts then in the WCMA Account, as
hereafter provided, paid by a WCMA
Loan and added to the WCMA Loan Balance. All interest shall be computed for
the actual number of days elapsed
on the basis of a year consisting of 360 days.

(ii) Upon the occurrence and during the continuance of any Default, but
without limiting the rights and remedies
otherwise available to MLBFS hereunder or waiving such Default, the interest
payable by Customer hereunder shall
at the option of MLBFS accrue and be payable at the Default Rate. The Default
Rate, once implemented, shall
continue to apply to the Obligations under this Loan Agreement and be payable
by Customer until the date MLBFS
gives written notice that such Default has been cured to the satisfaction of
MLBFS.

(iii) Notwithstanding any provision to the contrary in any of the Loan
Documents, no provision of any of the Loan
Documents shall require the payment or permit the collection of Excess
Interest. If any Excess Interest is provided
for, or is adjudicated as being provided for, in any of the Loan Documents,
then: (A) Customer shall not be obligated
to pay any Excess Interest; and (B) any Excess Interest that MLBFS may have
received hereunder or under any of
the Loan Documents shall, at the option of MLBFS, be either applied as a
credit against the then unpaid WCMA
Loan Balance or refunded to the payor thereof.

(f) PAYMENTS. All payments required or permitted to be made pursuant to this
Loan Agreement shall be made in
lawful money of the United States. Unless otherwise directed by MLBFS,
payments on account of the WCMA Loan
Balance may be made by the delivery of checks (other than WCMA Checks), or by
means of FTS or wire transfer
of funds (other than funds from the WCMA Line of Credit) to MLPF&S for credit
to Customer's WCMA Account.
Notwithstanding anything in the WCMA Agreement to the contrary, Customer
hereby irrevocably authorizes and
directs MLPF&S to apply available free credit balances in the WCMA Account to
the repayment of the WCMA Loan
Balance prior to application for any other purpose. Payments to MLBFS from
funds in the WCMA Account shall
be deemed to be made' by Customer upon the same basis and schedule as funds
are made available for investment
in the Money Accounts in accordance with the terms of the WCMA Agreement. All
funds received by MLBFS from
MLPF&S pursuant to the aforesaid authorization shall be applied by MLBFS to
repayment of the WCMA Loan
Balance. The acceptance by or on behalf of MLBFS of a check or other payment
for a lesser amount than shall be
due from Customer, regardless of any endorsement or statement thereon or
transmitted therewith, shall not be
deemed an accord and satisfaction or anything other than a payment on account,
and MLBFS or anyone acting on
behalf of MLBFS may accept such check or other payment without prejudice to
the rights of MLBFS to recover the
balance actually due or to pursue any other remedy under this Loan Agreement
or applicable law for such balance.
All checks accepted by or on behalf of MLOFS in connection with the WCMA Line
of Credit are subject to final
collection.

(g) IRREVOCABLE INSTRUCTIONS TO MLPF&S. In order to minimize the WCMA Loan
Balance, Customer hereby
irrevocably authorizes and directs MLPF&S, effective on the Activation Date
and continuing thereafter so long as
this Loan Agreement shall be in effect: (i) to immediately and prior to
application for any other purpose pay to
MLBFS to the extent of any WCMA Loan Balance or other amounts payable by
Customer hereunder all available
free credit balances from time to time in the WCMA Account; and (ii) if such
available free credit balances are
insufficient to pay the WCMA Loan Balance and such other amounts, and there
are in the WCMA Account at any
time any investments in Money Accounts (other than any investments
constituting any Minimum Money Accounts
Balance under the WCMA Directed Reserve Program), to immediately liquidate
such investments and pay to MLBFS
to the extent of any WCMA Loan Balance and such other amounts the available
proceeds from the liquidation of any
such Money Accounts.

(h) LATE CHARGE. Any payment or deposit required to be made by Customer
pursuant to the Loan Documents not
paid or made within ten (10) days of the applicable due date shall be subject
to a late charge in an amount equal to
the lesser of: (a) 5% of the overdue amount, or (b) the maximum amount
permitted by applicable law. Such late
charge shall be payable on demand, or, without demand, may in the sole
discretion of MLBFS be paid by a
Subsequent WCMA Loan and added to the WCMA Loan Balance in the same manner as
provided herein for accrued
interest with respect to the WCMA Line of Credit.

(i) STATEMENTS. MLPF&S will include in each monthly statement it issues under
the WCMA Program information
with respect to WCMA Loans and the WCMA Loan Balance. Any questions that
Customer may have with respect
to such information should be directed to MLBFS; and any questions with
respect to any other matter in such
statements or about or affecting the WCMA Program should be directed to MLPF&S.

(j) USE OF WCMA LOAN PROCEEDS. The proceeds of each WCMA Loan initiated by
Customer shall be used by
Customer solely for working capital in the ordinary course of its business,
or, with the prior written consent of
MLBFS, for other lawful business purposes of Customer not prohibited hereby.
CUSTOMER AGREES THAT UNDER NO
CIRCUMSTANCES WILL THE PROCEEDS OF ANY WCMA LOAN BE USED: (i) FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES
OF ANY PERSON WHATSOEVER, OR (II) TO PURCHASE, CARRY OR TRADE IN SECURITIES,
OR REPAY DEBT INCURRED TO PURCHASE,
CARRY OR TRADE IN SECURITIES, WHETHER IN OR IN CONNECTION WITH THE WCMA
ACCOUNT, ANOTHER ACCOUNT OF
CUSTOMER WITH MLPF&S OR AN ACCOUNT OF CUSTOMER AT ANY OTHER BROKER OR DEALER
IN SECURITIES, OR (III) UNLESS
OTHERWISE CONSENTED TO IN WRITING BY MLBFS, TO PAY ANY AMOUNT TO MERRILL LYNCH
AND CO., INC. OR ANY OF
ITS SUBSIDIARIES, OTHER THAN MERRILL LYNCH BANK USA, MERRILL LYNCH BANK &
TRUST CO. OR ANY SUBSIDIARY OF
EITHER OF THEM (INCLUDING MLBFS AND MERRILL LYNCH CREDIT CORPORATION).

(k) RENEWAL AT OPTION OF MLBFS; RIGHT OF CUSTOMER TO TERMINATE. MLBFS may at
any time, in its sole
discretion and at its sole option, renew the WCMA Line of Credit for one or
more Renewal Years; it being
understood, however, that no such renewal shall be effective unless set forth
in a writing executed by a duly
authorized representative of MLBFS and delivered to Customer. Unless any such
renewal is accompanied by a
proposed change in the terms of the WCMA Line of Credit (other than the
extension of the Maturity Date), no such
renewal shall require Customers approval. Customer shall, however, have the
right to terminate the WCMA Line
of Credit at any time upon written notice to MLBFS. Concurrently with any such
termination, Customer shall pay
to MLBFS the entire WCMA Loan Balance and all other Obligations.

(1) Line Fees. (i) In consideration of the extension of the WCMA Line of
Credit by MLBFS to Customer during the
period from the Activation Date to the Initial Maturity Date, Customer has
paid or shall pay the Line Fee to MLBFS.
If the Line Fee has not heretofore been paid by Customer, Customer hereby
authorizes MLBFS, at its option, to
either cause the Line Fee to be paid on the Activation Date with a WCMA Loan,
or invoice Customer for such Line
Fee (in which event Customer shall pay said fee within 5 Business Days after
receipt of such invoice). No delay in
the Activation Date, howsoever caused, shall entitle Customer to any rebate or
reduction in the Line Fee or to any
extension of the Initial Maturity Date.

(ii) Customer shall pay to MLBFS an additional Line Fee for each Renewal Year.
In connection therewith, Customer
hereby authorizes MLBFS, at its option, to either cause each such additional
Line Fee to be paid with a WCMA Loan
on or at any time after the first Business Day of such Renewal Year or
invoiced to Customer at such time (in which
event Customer shall pay such Line Fee within 5 Business Days after receipt of
such invoice). Each Line Fee shall
be deemed fully earned by MLBFS on the date payable by Customer, and no
termination of the WCMA Line of
Credit, howsoever caused, shall entitle Customer to any rebate or refund of
any portion of such Line Fee; provided,
however, that if Customer shall terminate the WCMA Line of Credit not later
than 5 Business Days after the receipt
by Customer of notice from MLBFS of a renewal of the WCMA Line of Credit,
Customer shall be entitled to a
refund of any Line Fee charged by MLBFS for the ensuing Renewal Year.

                         ARTICLE ILL. GENERAL PROVISIONS

3.1 REPRESENTATIONS AND WARRANTIES

Customer represents and warrants to MLBFS that:

(a) ORGANIZATION AND EXISTENCE. Customer is a corporation, duly organized and
validly existing in good standing
under the laws of the State of Delaware and is qualified to do business and in
good standing in each other state where
the nature of its business or the property owned by it make such qualification
necessary; and, where applicable, each
Business Guarantor is duly organized, validly existing and in good standing
under the laws of the state of its
formation and is qualified to do business and in good standing in each other
state where the nature of its business
or the property owned by it make such qualification necessary.

(b) EXECUTION, DELIVERY AND PERFORMANCE. Each Credit Party has the requisite
power and authority to enter into
and perform the Loan Documents. The Customer holds all necessary permits,
licenses, certificates of occupancy and
other governmental authorizations and approvals required in order to own and
operate the Customers business. The
execution, delivery and performance by Customer of this Loan Agreement and by
each of the other Credit Parties
of such of the other Loan Documents to which it is a party: (i) have been duly
authorized by all requisite action, (ii)
do not and will not violate or conflict with any law, order or other
governmental requirement, or any of the
agreements, instruments or documents which formed or govern any of the Credit
Parties, and (iii) do not and will
not breach or violate any of the provisions of, and will not result in a
default by any of the Credit Parties under, any
other agreement, instrument or document to which it is a party or is subject.

(c) NOTICES AND APPROVALS. Except as may have been given or obtained, no
notice to or consent or approval of any
governmental body or authority or other third party whatsoever (including,
without limitation, any other creditor)
is required in connection with the execution, delivery or performance by any
Credit Party of such of this Loan
Agreement and the Loan Documents to which it is a party.

(d) ENFORCEABILITY. The Loan Documents to which any Credit Party is a party
are the respective legal, valid and
binding obligations of such Credit Party, enforceable against it or them, as
the case may be, in accordance with their
respective terms, except as enforceability may be limited by bankruptcy and
other similar laws affecting the rights
of creditors generally or by general principles of equity.

(e) COLLATERAL. Except for priorities afforded to any Permitted Liens: (i)
Customer has good and marketable title to
the Collateral, (ii) none of the Collateral is subject to any lien,
encumbrance or security interest, and (iii) upon the
filing of all Uniform Commercial Code financing statements authenticated or
otherwise authorized by Customer with
respect to the Collateral in the appropriate jurisdiction(s) and/or the
completion of any other action required by
applicable law to perfect its liens and security interests, MLBFS will have
valid and perfected first liens and security
interests upon all of the Collateral.

(f) FINANCIAL STATEMENTS. Except as expressly set forth in Customer's or any
Business Guarantors financial
statements, all financial statements of Customer and each Business Guarantor
furnished to MLBFS have been
prepared in conformity with generally accepted accounting principles,
consistently applied, are true and correct in
all material respects, and fairly present the financial condition of it as at
such dates and the results of its operations
for the periods then ended (subject, in the case of interim unaudited
financial statements, to normal year-end
adjustments); and since the most recent date covered by such financial
statements, there has been no material adverse
change in any such financial condition or operation. All financial statements
furnished to MLBFS of any Guarantor
other than a Business Guarantor are true and correct in all material respects
and fairly represent such Guarantor's
financial condition as of the date of such financial statements, and since the
most recent date of such financial
statements, there has been no material adverse change in such financial
condition.

(g) LITIGATION; COMPLIANCE WITH ALL LAWS. No litigation, arbitration,
administrative or governmental proceedings
are pending or, to the knowledge of Customer, threatened against any Credit
Party, which would, if adversely
determined, materially and adversely affect (i) such Credit Party's interest
in the Collateral or the liens and security
interests of MLBFS hereunder or under any of the Loan Documents, or (ii) the
financial condition of any Credit Party
or its

continued operations. Each Credit Party is in compliance in all material
respects with all laws, regulations,
requirements and approvals applicable to such Credit Party.

(h) Tax Returns. All federal, state and local tax returns, reports and
statements required to be filed by any Credit
Party have been filed with the appropriate governmental agencies and all taxes
due and payable by any Credit Party
have been timely paid (except to the extent that any such failure to file or
pay will not materially and adversely affect
(i) either the liens and security interests of MLBFS hereunder or under any of
the Loan Documents, (ii) the financial
condition of any Credit Party, or (iii) its continued operations).

(i) Collateral Location. All of the tangible Collateral is located at a
Location of Tangible Collateral.

(j) No Default. No "Default' or "Event of Default" (each as defined in this
Loan Agreement or any of the other Loan
Documents) has occurred and is continuing.

(k) No Outside Broker. Except for employees of MLBFS, MLPF&S or one of their
affiliates, Customer has not in
connection with the transactions contemplated hereby directly or indirectly
engaged or dealt with, and was not
introduced or referred to MLBFS by, any broker or other loan arranger.

Each of the foregoing representations and warranties: (i) has been and will be
relied upon as an inducement to
MLI3FS to provide the WCMA Line of Credit, and (ii) is continuing and shall be
deemed remade by Customer
concurrently with each request for a WCMA Loan.

3.2 FINANCIAL AND OTHER INFORMATION

(a) Customer shall furnish or cause to be furnished to MLBFS during the term
of this Loan Agreement all of the
following:

(i) A/R Agings. Within 15 days after the close of each fiscal month of
Customer, a copy of the Accounts Receivable
Aging of Customer as of the end of such fiscal month;

(ii) Backlog Reports. Within 45 days after the close of each fiscal quarter of
Customer, a copy of the Sales Backlog
Report of Customer as of the end of such fiscal quarter;

(III) SEC REPORTS. Customer shall furnish or cause to be furnished to MLBFS
not later than 10 days after the date
of filing with the Securities and Exchange Commission ("SEC"), a copy of each
10-K, 10-Q and other report required
to be filed with the SEC during the term hereof by Customer;

(iv) Certificate of Compliance. Within 45 days after the close of each fiscal
quarter of Customer, a Certificate of
Compliance, duly executed by an authorized officer of Customer, in the form of
Exhibit B attached hereto, or such
other form as reasonably required by MLBFS from time to time; and

(v) OTHER INFORMATION. Such other information as MLBFS may from time to time
reasonably request relating to
Customer, any Credit Party or the Collateral.

(vi) GENERAL AGREEMENTS WITH RESPECT TO FINANCIAL INFORMATION. Customer agrees
that except as otherwise
specified herein or otherwise agreed to in writing by MLBFS: (i) all annual
financial statements required to be
furnished by Customer to MLBFS hereunder will be prepared by either the
current independent accountants for
Customer or other independent accountants reasonably acceptable to MLBFS, and
(ii) all other financial information
required to be furnished by Customer to MLBFS hereunder will be certified as
correct in all material respects by the
party who has prepared such information, and, in the case of internally
prepared information with respect to
Customer or any Business Guarantor, certified as correct by their respective
chief financial officer.

3.3 OTHER COVENANTS

Customer further covenants and agrees during the term of this Loan Agreement
that:

(a) FINANCIAL RECORDS; INSPECTION. Each Credit Party (other than any
Individual Guarantor) will: (i) maintain at its
principal place of business complete and accurate books and records, and
maintain all of its financial records in a
manner consistent with the financial statements heretofore furnished to MLBFS,
or prepared on such other basis as
may be approved in writing by MLBFS; and (ii) permit MLBFS or its duly
authorized representatives, upon
reasonable notice and at reasonable times, to inspect its properties (both
real and personal), operations, books and
records.

(b) Taxes. Each Credit Party will pay when due all of its respective taxes,
assessments and other governmental
charges, howsoever designated, and all other liabilities and obligations,
except to the extent that any such failure to
file or pay will not materially and adversely affect either the liens and
security interests of MLBFS hereunder or under
any of the Loan Documents, the financial condition of any Credit Party or its
continued operations.

(c) COMPLIANCE WITH LAWS AND AGREEMENTS. No Credit Party will violate (i) any
law, regulation or other
governmental requirement, any judgment or order of any court or governmental
agency or authority; (ii) any
agreement, instrument or document which is material to its operations or to
the operation or use of any Collateral,
in each case as contemplated by the Loan Documents; or (iii) any agreement,
instrument or document to which it
is a party or by which it is bound, if any such violation will materially and
adversely affect either the liens and security
interests of MLBFS hereunder or under any of the Loan Documents, the financial
condition of any Credit Party, or
its continued operations.

(d) NO USE OF MERRILL LYNCH NAME. No Credit Party will directly or indirectly
publish, disclose or otherwise use
in any advertising or promotional material, or press release or interview, the
name, logo or any trademark of MLBFS,
MLPF&S, Merrill Lynch and Co., Incorporated or any of their affiliates.

 (e) NOTIFICATION BY CUSTOMER. Customer shall provide MLBFS with prompt
written notification of: (i) any Default;
(ii) any material adverse change in the business, financial condition or
operations of any Credit Party; (iii) any
information which indicates that any financial statements of any Credit Party
fail in any material respect to present
fairly the financial condition and results of operations purported to be
presented in such statements; (iv) any
threatened or pending litigation involving any Credit Party; (v) any casualty
loss, attachment, lien, judicial process,
encumbrance or claim affecting or involving $25,000 or more of any Collateral;
and (vi) any change in Customers
outside accountants. Each notification by Customer pursuant hereto shall
specify the event or information causing
such notification, and, to the extent applicable, shall specify the steps
being taken to rectify or remedy such event or
information.

(f) ENTITY ORGANIZATION. Each Credit Party which is an entity will (i) remain
(A) validly existing and in good
standing in the state of its organization and (B) qualified to do business and
in good standing in each other state
where the nature of its business or the property owned by it make such
qualification necessary, and (ii) maintain all
governmental permits, licenses and authorizations. Customer shall give MLBFS
not less than 30 days prior written
notice of any change in name (including any fictitious name) or chief
executive office, place of business, or as
applicable, the principal residence of any Credit Party.

(g) MERGER, CHANGE IN BUSINESS. Except upon the prior written consent of MLBFS
Customer shall not cause or
permit any Credit Party to: (i) be a party to any merger or consolidation
with, or purchase or otherwise acquire all
or substantially all of the assets of, or any material stock, partnership,
joint venture or other equity interest in, any
Person, or sell, transfer or lease all or any substantial part of its assets
(ii) engage in any material business
substantially different from its business in effect as of the date of
application by Customer for credit from MLBFS
or cease operating any such material business; or (iii) cause or permit any
other Person to assume or succeed to any
material business or operations of such Credit Party.

(h) TOTAL DEBT TO EBITDA. Customers "Total Debt to EBITDA Ratio" defined and
calculated as set forth in
Exhibit B attached hereto, shall not at any time exceed 2.5 to 1.

(i) FIXED CHARGE COVERAGE. Customer's "Fixed Charge Coverage Ratio" defined
and calculated as set forth in
Exhibit B attached hereto, shall at all times exceed 1.5 to 1.

(j) NO LOANS/GUARANTEES TO ANY PARTY. Except upon the prior written consent of
MLBFS, Customer shall not
directly or indirectly lend any moneys to, or guaranty the debt of, any person
or entity.

(k) NO NEW PRODUCTS, SERVICES OR VENTURES. Except upon the prior written
consent of MLBFS, Customer shall
not directly or indirectly initiate, create, or acquire any additional or new
product lines, services, business ventures,
companies or divisions.

(l) NO CHANGE IN MANAGEMENT. Customer will maintain experienced and competent
professional senior
management, including Dennis Sunshine, Bruce Reissman and Mitchell Binder.

(m) STEP-UP MINIMUM TANGIBLE NET WORTH. As of December 31, 2002 Customers plus
Business Guarantors'
"tangible net worth" defined and calculated as set forth in Exhibit B attached
hereto, shall exceed $6,400,000.00.
After December 31, 2002 and as of the close of each fiscal year of Customer
and its Business Guarantors thereafter,
Customer's plus Business Guarantors' "tangible net worth" shall be not less
than $500,000.00 higher than the tangible
net worth of Customer and its Business Guarantors required hereunder as of the
close of the immediately preceding
fiscal year of Customer and its Business Guarantors (so that as of December
31, 2003, such tangible net worth shall
be not less than $6,900,000.00, as of December 31, 2004, such tangible net
worth shall be not less than
$7,400,000.00, etc.).

3.4 COLLATERAL

(a) PLEDGE OF COLLATERAL. To secure payment and performance of the
Obligations, Customer hereby pledges, assigns,
transfers and sets over to MLBFS, and grants to MLBFS first liens and security
interests in and upon all of the
Collateral, subject only to priorities afforded to Permitted Liens.

(b) LIENS. Except upon the prior written consent of MLBFS, Customer shall not
create or permit to exist any lien,
encumbrance or security interest upon or with respect to any Collateral now
owned or hereafter acquired other than
Permitted Liens.

(c) PERFORMANCE OF OBLIGATIONS. Customer shall perform all of its obligations
owing on account of or with respect
to the Collateral; it being understood that nothing herein, and no action or
inaction by MLBFS under this Loan
Agreement or otherwise, shall be deemed an assumption by MLBFS of any of
Customer's said obligations.

(d) SALES AND COLLECTIONS. Customer shall not sell, transfer or otherwise
dispose of any Collateral, except that so
long as no Event of Default shall have occurred and be continuing, Customer
may in the ordinary course of its
business: (i) sell any Inventory normally held by Customer for sale, (ii) use
or consume any materials and supplies
normally held by Customer for use or consumption, and (iii) collect all of its
Accounts.

(e) ACCOUNT SCHEDULES. Upon the request of MLBFS, which may be made from time
to time, Customer shall deliver
to MLBFS, in addition to the other information required hereunder, a schedule
identifying, for each Account and all
Chattel Paper subject to MLBFS' security interests hereunder, each account
debtor by name and address and amount,
invoice or contract number and date of each invoice or contract. Customer
shall furnish to MLBFS such additional
information with respect to the Collateral, and amounts received by Customer
as proceeds of any of the Collateral,
as MLBFS may from time to time reasonably request.

(f) ALTERATIONS AND MAINTENANCE. Except upon the prior written consent of
MLBFS, Customer shall not make or
permit any material alterations to any tangible Collateral which might
materially reduce or impair its market value
or utility. Customer shall at all times (i) keep the tangible Collateral in
good condition and repair, reasonable wear
and tear excepted, (ii) protect the Collateral against loss, damage or
destruction and (iii) pay or cause to be paid all
obligations arising from the repair and maintenance of such Collateral, as
well as all obligations with respect to any
Location of Tangible Collateral (e.g., all



obligations under any lease, mortgage or bailment agreement), except for any
such obligations being contested by
Customer in good faith by appropriate proceedings.

(g) LOCATION. Except for movements required in the ordinary course of
Customer's business, Customer shall give
MLBFS 30 days' prior written notice of the placing at or movement of any
tangible Collateral to any location other
than a Location of Tangible Collateral. In no event shall Customer cause or
permit any material tangible Collateral
to be removed from the United States without the express prior written consent
of MLBFS. Customer will keep its
books and records at its principal office address specified in the first
paragraph of this Loan Agreement. Customer
will not change the address where books and records are kept, or change its
name or taxpayer identification number.
Customer will place a legend acceptable to MLBFS on all Chattel Paper that is
Collateral in the possession or control
of Customer from time to time indicating that MLBFS has a security interest
therein.

(h) INSURANCE. Customer shall insure all of the tangible Collateral under a
policy or policies of physical damage
insurance for the full replacement value thereof against such perils as MLBFS
shall reasonably require and also
providing that losses will be payable to MLBFS as its interests may appear
pursuant to a lender's or mortgagee's long
form loss payable endorsement and containing such other provisions as may be
reasonably required by MLBFS.
Customer shall further provide and maintain a policy or policies of commercial
general liability insurance naming
MLBFS as an additional party insured. Customer and each Business Guarantor
shall maintain such other insurance
as may be required by law or is customarily maintained by companies in a
similar business or otherwise reasonably
required by MLBFS. All such insurance policies shall provide that MLBFS will
receive not less than 10 days prior
written notice of any cancellation, and shall otherwise be in form and amount
and with an insurer or insurers
reasonably acceptable to MLBFS. Customer shall furnish MLBFS with a copy or
certificate of each such policy or
policies and, prior to any expiration or cancellation, each renewal or
replacement thereof.

(i) EVENT OF LOSS. Customer shall at its expense promptly repair all
repairable damage to any tangible Collateral. In
the event that there is an Event of Loss and the affected Collateral had a
value prior to such Event of Loss of
$25,000.00 or more, then, on or before the first to occur of (i) 90 days after
the occurrence of such Event of Loss,
or (ii) 10 Business Days after the date on which either Customer or MLBFS
shall receive any proceeds of insurance
on account of such Event of Loss, or any underwriter of insurance on such
Collateral shall advise either Customer
or MLBFS that it disclaims liability in respect of such Event of Loss,
Customer shall, at Customer's option, either
replace the Collateral subject to such Event of Loss with comparable
Collateral free of all liens other than Permitted
Liens (in which event Customer shall be entitled to utilize the proceeds of
insurance on account of such Event of Loss
for such purpose, and may retain any excess proceeds of such insurance), or
permanently prepay the Obligations by
an amount equal to the actual cash value of such Collateral as determined by
either the insurance company's payment
(plus any applicable deductible) or, in absence of insurance company payment,
as reasonably determined by MLBFS;
it being further understood that any such permanent prepayment shall cause an
immediate permanent reduction in
the Maximum WCMA Line of Credit in the amount of such prepayment and shall not
reduce the amount of any
future reductions in the Maximum WCMA Line of Credit that may be required
hereunder. Notwithstanding the
foregoing, if at the time of occurrence of such Event of Loss or any time
thereafter prior to replacement or line
reduction, as aforesaid, an Event of Default shall have occurred and be
continuing hereunder, then MLBFS may at
its sole option, exercisable at any time while such Event of Default shall be
continuing, require Customer to either
replace such Collateral or prepay the Obligations and reduce the Maximum WCMA
Line of Credit, as aforesaid.

(j) NOTICE OF CERTAIN EVENTS. Customer shall give MLBFS immediate notice of
any attachment, lien, judicial process,
encumbrance or claim affecting or involving $25,000.00 or more of the
Collateral.

(k) INDEMNIFICATION. Customer shall indemnify, defend and save MLBFS harmless
from and against any and all
claims, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
of any nature whatsoever which may be asserted against or incurred by MLBFS
arising out of or in any manner
occasioned by (i) the ownership, collection, possession, use or operation of
any Collateral, or (ii) any failure by
Customer to perform any of its obligations hereunder; excluding, however, from
said indemnity any such claims,
liabilities, etc. arising directly out of the willful wrongful act or active
gross negligence of MLBFS. This indemnity
shall survive the expiration or termination of this Loan Agreement as to all
matters arising or accruing prior to such
expiration or termination.

3.5 EVENTS OF DEFAULT

The occurrence of any of the following events shall constitute an "Event of
Default' under this Loan Agreement:

(a) EXCEEDING THE MAXIMUM WCMA LINE OF CREDIT. If the WCMA Loan Balance shall
at any time exceed the
Maximum WCMA Line of Credit and Customer shall fail to deposit sufficient
funds into the WCMA Account to
reduce the WCMA Loan Balance below the Maximum WCMA Line of Credit within five
(5) Business Days after
written notice thereof shall have been given by MLBFS to Customer.

(b) OTHER FAILURE TO PAY, Customer shall fail to pay to MLBIFS or deposit into
the WCMA Account when due any
other amount owing or required to be paid or deposited by Customer under this
Loan Agreement or any of the Loan
Documents, or shall fail to pay when due any other Obligations, and any such
failure shall continue for more than
five (5) Business Days after written notice thereof shall have been given by
MLBFS to Customer.

(c) FAILURE TO PERFORM. Any Credit Party shall default in the performance or
observance of any covenant or
agreement on its part to be performed or observed under any of the Loan
Documents (not constituting an Event of
Default under any other clause of this Section), and such default shall
continue unremedied for ten (10) Business
Days (i) after written notice thereof shall have been given by MLBFS to
Customer, or (ii) from Customer's receipt
of any notice or knowledge of such default from any other source.

(d) BREACH OF WARRANTY. Any representation or warranty made by any Credit
Party contained in this Loan
Agreement or any of the Loan Documents shall at any time prove to have been
incorrect in any material respect when
made.











(e) DEFAULT UNDER OTHER ML AGREEMENT. A default or event of default by any
Credit Party shall occur under the
terms of any other agreement, instrument or document with or intended for the
benefit of MLBFS, MLPF&S or any
of their affiliates, and any required notice shall have been given and
required passage of time shall have elapsed, or
the WCMA Agreement shall be terminated for any reason.

(F) BANKRUPTCY EVENT. Any Bankruptcy Event shall occur.

(g) MATERIAL IMPAIRMENT. Any event shall occur which shall reasonably cause
MLBFS to in good faith believe that
the prospect of full payment or performance by the Credit Parties of any of
their respective liabilities or obligations
under any of the Loan Documents has been materially impaired, The existence of
such a material impairment shall
be determined in a manner consistent with the intent of Section 1-208 of the
UCC.

(h) DEFAULT UNDER OTHER AGREEMENTS. Any event shall occur which results in any
default of any material agreement
involving any Credit Party or any agreement evidencing any indebtedness of any
Credit Party of $100,000.00 or
more.

(i) Collateral Impairment. The loss, theft or destruction of any Collateral,
the occurrence of any material deterioration
or impairment of any Collateral or any material decline or depreciation in the
value or market price thereof (whether
actual or reasonably anticipated), which causes any Collateral, in the sole
opinion of MLBFS to become
unsatisfactory as to value or character; or any levy, attachment, seizure or
confiscation of the Collateral which is not
released within ten (10) Business Days.

(J) CONTESTED OBLIGATION. (i) Any of the Loan Documents shall for any reason
cease to be, or are asserted by any
Credit Party not to be a legal, valid and binding obligations of any Credit
Party, enforceable in accordance with their
terms; or (ii) the validity, perfection or priority of MLBFS' first lien and
security interest on any of the Collateral is
contested by any Person; or (iii) any Credit Party shall or shall attempt to
repudiate, revoke, contest or dispute, in
whole or in part, such Credit Party's obligations under any Loan Document.

(k) JUDGMENTS. A judgment shall be entered against any Credit Party in excess
of $25,000 and the judgment is not
paid in full and discharged, or stayed and bonded to the satisfaction of MLBFS.

(l) CHANGE IN CONTROL/CHANGE IN MANAGEMENT. (i) Any direct or indirect sale,
conveyance, assignment or other
transfer of or grant of a security interest in any ownership interest of any
Credit Party which results, or if any rights
related thereto were exercised would result, in any change in the identity of
the individuals or entities in control of
any Credit Party; or (ii) the owner(s) of the controlling equity interest of
any Credit Party on the date hereof shall
cease to own and control such Credit Party; or (iii) the Person (or a
replacement who is satisfactory to MLBFS in
its sole discretion) who is the chief executive officer or holds such similar
position, or any senior manager of such
Credit Party on the date hereof shall for any reason cease to be the chief
executive officer or senior manager of such
Credit Party.

(m) WITHDRAWAL, DEATH, ETC. The incapacity, death, withdrawal, dissolution, or
the filing for dissolution of: (i) any
Credit Party; or (ii) any controlling shareholder, partner, or member of any
Credit Party.

3.6 REMEDIES

(a) REMEDIES UPON DEFAULT. Upon the occurrence and during the continuance of
any Event of Default, MLBFS may
at its sole option do any one or more or all of the following, at such time
and in such order as MLBFS may in its sole
discretion choose:

(i) TERMINATION. MLBFS may without notice terminate the WCMA Line of Credit
and all obligations to extend any
credit to or for the benefit of Customer (it being understood, however, that
upon the occurrence of any Bankruptcy
Event all such obligations shall automatically terminate without any action on
the part of MLBFS).

(ii) ACCELERATION. MLBFS may declare the principal of and interest on the WCMA
Loan Balance, and all other
Obligations to be forthwith due and payable, whereupon all such amounts shall
be immediately due and payable,
without presentment, demand for payment, protest and notice of protest, notice
of dishonor, notice of acceleration,
notice of intent to accelerate or other notice or formality of any kind, all
of which are hereby expressly waived;
provided, however, that upon the occurrence of any Bankruptcy Event all such
principal, interest and other
Obligations shall automatically become due and payable without any action on
the part of MLBFS.

(iii) EXERCISE OTHER RIGHTS. MLBFS may exercise any or all of the remedies of
a secured party under applicable law
and in equity, including, but not limited to, the UCC, and any or all of its
other rights and remedies under the Loan
Documents.

(iv) POSSESSION. MLBFS may require Customer to make the Collateral and the
records pertaining to the Collateral
available to MLBFS at a place designated by MLBFS which is reasonably
convenient to Customer, or may take
possession of the Collateral and the records pertaining to the Collateral
without the use of any judicial process and
without any prior notice to Customer

(v) Sale. MLBFS may sell any or all of the Collateral at public or private
sale upon such terms and conditions as
MLBFS may reasonably deem proper, whether for cash, on credit, or for future
delivery, in bulk or in lots. MLBFS
may purchase any Collateral at any such sale free of Customers right of
redemption, if any, which Customer expressly
waives to the extent not prohibited by applicable law. The net proceeds of any
such public or private sale and all
other amounts actually collected or received by MLBFS pursuant hereto, after
deducting all costs and expenses
incurred at any time in the collection of the Obligations and in the
protection, collection and sale of the Collateral,
will be applied to the payment of the Obligations, with any remaining proceeds
paid to Customer or whoever else
may be entitled thereto, and with Customer and each Guarantor remaining
jointly and severally liable for any amount
remaining unpaid after such application.



(vi) DELIVERY OF CASH, CHECKS, ETC. MLBFS may require Customer to forthwith
upon receipt, transmit and deliver
to MLBFS in the form received, all cash, checks, drafts and other instruments
for the payment of money (properly
endorsed, where required, so that such items may be collected by MLBFS which
may be received by Customer at
any time in full or partial payment of any Collateral, and require that
Customer not commingle any such items which
may be so received by Customer with any other of its funds or property but
instead hold them separate and apart and
in trust for MLBFS until delivery is made to MLBFS.

(vii) NOTIFICATION OF ACCOUNT DEBTORS. MLBFS may notify any account debtor
that its Account or Chattel Paper
has been assigned to MLBFS and direct such account debtor to make payment
directly to MLBFS of all amounts
due or becoming due with respect to such Account or Chattel Paper; and MLBFS
may enforce payment and collect,
by legal proceedings or otherwise, such Account or Chattel Paper.

(viii) CONTROL OF COLLATERAL. MLBFS may otherwise take control in any lawful
manner of any cash or non-cash items
of payment or proceeds of Collateral and of any rejected, returned, stopped in
transit or repossessed goods included
in the Collateral and endorse Customer's name on any item of payment on or
proceeds of the Collateral.

(b) SET-OFF. MLBFS shall have the further right upon the occurrence and during
the continuance of an Event of
Default to set-off, appropriate and apply toward payment of any of the
Obligations, in such order of application as
MLBFS may from time to time and at any time elect, any cash, credit, deposits,
accounts, financial assets, investment
property, securities and any other property of Customer which is in transit to
or in the possession, custody or control
of MLBFS. MLPF&S or any agent, bailee, or affiliate of MLBFS or MLPF&S.
Customer hereby collaterally assigns
and grants to MLBFS. a continuing security interest in all such property as
Collateral and as additional security for
the Obligations. Upon the occurrence and during the continuance of an Event of
Default, MLBFS shall have all rights
in such property available to collateral assignees and secured parties under
all applicable laws, including, without
limitation, the UCC.

(c) POWER OF ATTORNEY. Effective upon the occurrence and during the
continuance of an Event of Default, Customer
hereby irrevocably appoints MLBFS as its attomey-in-fact, with full power of
substitution, in its place and stead and
in its name or in the name of MLBFS to from time to time in MLBFS sole
discretion take any action and to execute
any instrument which MLBFS may deem necessary or advisable to accomplish the
purposes of this Loan Agreement
and the other Loan Documents, including, but not limited to, to receive,
endorse and collect all checks, drafts and
other instruments for the payment of money made payable to Customer included
in the Collateral. The powers of
attorney granted to MLBFS in this Loan Agreement are coupled with an interest
and are irrevocable until the
Obligations have been indefeasibly paid in full and fully satisfied and all
obligations of MLBFS under this Loan
Agreement have been terminated

(d) REMEDIES ARE SEVERABLE AND CUMULATIVE. All rights and remedies of MLBFS
herein are severable and
cumulative and in addition to all other rights and remedies available in the
Loan Documents, at law or in equity, and
any one or more of such rights and remedies may be exercised simultaneously or
successively.

(e) NO MARSHALLING. MLBFS shall be under no duty or obligation to (i)
preserve, protect or marshall the Collateral;
(ii) preserve or protect the rights of any Credit Party or any other Person
claiming an interest in the Collateral; (iii)
realize upon the Collateral in any particular order or manner, (iv) seek
repayment of any Obligations from any
particular source; (v) proceed or not proceed against any Credit Party
pursuant to any guaranty or security agreement
or against any Credit Party under the Loan Documents, with or without also
realizing on the Collateral; (vi) permit
any substitution or exchange of all or any part of the Collateral; or (vii)
release any part of the Collateral from the
Loan Agreement or any of the other Loan Documents, whether or not such
substitution or release would leave
MLBFS adequately secured.

(f) NOTICES. To the fullest extent permitted by applicable law, Customer
hereby irrevocably waives and releases
MLBFS of and from any and all liabilities and penalties for failure of MLBFS
to comply with any statutory or other
requirement imposed upon MLBFS relating to notices of sale, holding of sale or
reporting of any sale, and Customer
waives all rights of redemption or reinstatement from any such sale. Any
notices required under applicable law shall
be reasonably and properly given to Customer if given by any of the methods
provided herein at least 5 Business
Days prior to taking action. MLBFS shall have the right to postpone or adjourn
any sale or other disposition of
Collateral at any time without giving notice of any such postponed or
adjourned date. In the event MLBFS seeks
to take possession of any or all of the Collateral by court process, Customer
further irrevocably waives to the fullest
extent permitted by law any bonds and any surety or security relating thereto
required by any statute, court rule or
otherwise as an incident to such possession, and any demand for possession
prior to the commencement of any suit
or action.

3.7 MISCELLANEOUS

(a) NON-WAIVER. No failure or delay on the part of MLBFS in exercising any
right, power or remedy pursuant to
this Loan Agreement or any of the other Loan Documents shall operate as a
waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or
further exercise thereof, or the exercise of
any other right, power or remedy. Neither any waiver of any provision of any
of the Loan Documents, nor any
consent to any departure by Customer therefrom, shall be effective unless the
same shall be in writing and signed by
MLBFS Any waiver of any provision of this Loan Agreement or any of the other
Loan Documents and any consent
to any departure by Customer from the terms of this Loan Agreement or any of
the other Loan Documents shall be
effective only in the specific instance and for the specific purpose for which
given. Except as otherwise expressly
provided herein, no notice to or demand on Customer shall in any case entitle
Customer to any other or further notice
or demand in similar or other circumstances.

(b) DISCLOSURE. Customer hereby irrevocably authorizes MLBFS and each of its
affiliates, including without limitation
MLPF&S, to at any time (whether or not an Event of Default shall have
occurred) obtain from and disclose to each
other any and all financial and other information about Customer. In
connection with said authorization, the parties
recognize that in order to provide a WCMA Line of Credit certain information
about Customer is required to be
made available on a computer network accessible by certain affiliates of MLBFS
including MLPF&S. Customer
further irrevocably authorizes MLBFS to contact,

I



investigate, inquire and obtain consumer reports, references and other
information on Customer from consumer
reporting agencies and other credit reporting services, former or current
creditors, and other persons and sources
(including, without limitation, any Affiliate of MLBFS) and to provide to any
references, consumer reporting
agencies, credit reporting services, creditors and other persons and sources
(including, without limitation, affiliates
of MLBFS) all financial, credit and other information obtained by MLBFS
relating to the Customer.

(c) COMMUNICATIONS. Delivery of an agreement, instrument or other document
may, at the discretion of MLBFS,
be by electronic transmission. Except as required by law or otherwise provided
herein or in a writing executed by
the party to be bound, all notices demands, requests, accountings, listings,
statements, advices; or other
communications to be given under the Loan Documents shall be in writing and
shall be served either personally, by
deposit with a reputable overnight courier with charges prepaid, or by deposit
in the United States mail by certified
mail, return receipt required. Notices may be addressed to Customer as set
forth at its address shown in the preamble
hereto, or to any office to which billing or account statements are sent; to
MLBFS at its address shown in the
preamble hereto, or at such other address designated in writing by MLBFS. Any
such communication shall be
deemed to have been given upon, in the case of personal delivery the date of
delivery, one Business Day after deposit
with an overnight courier, two (2) Business Days after deposit in the United
States by certified mail (return receipt
required), or receipt of electronic transmission (which shall be presumed to
be three hours after the time of
transmission unless an error message is received by the sender), except that
any notice of change of address shall not
be effective until actually received.

(d) FEES, EXPENSES AND TAXES. Customer shall pay or reimburse MLBFS for: (i)
all UCC, real property or other
filing, recording, and search fees and expenses incurred by MLBFS in
connection with the verification, perfection
or preservation of MLBFS' rights hereunder or in any Collateral or any other
collateral for the Obligations; (ii) any
and all stamp, transfer, mortgage, intangible, document, filing, recording and
other taxes and fees payable or
determined to be payable in connection with the borrowings hereunder or the
execution, delivery, filing and/or
recording of the Loan Documents and any other instruments or documents
provided for herein or delivered or to be
delivered hereunder or in connection herewith; and (iii) all fees and
out-of-pocket expenses (including, attorneys' fees
and legal expenses) incurred by MLBFS in connection with the preparation,
execution, administration, collection,
enforcement, protection, waiver or amendment of this Loan Agreement, the other
Loan Documents and such other
instruments or documents, and the rights and remedies of MLBFS thereunder and
all other matters in connection
therewith. Customer hereby authorizes MLBFS, at its option, to either cause
any and all such fees, expenses and
taxes to be paid with a WCMA Loan, or invoice Customer therefore (in which
event Customer shall pay all such fees,
expenses and taxes within 5 Business Days after receipt of such invoice). The
obligations of Customer under this
paragraph shall survive the expiration or termination of this Loan Agreement
and the discharge of the other
Obligations.

(e) RIGHT TO PERFORM OBLIGATIONS. If Customer shall fail to do any act or
thing which it has covenanted to do under
any of the Loan Documents or any representation or warranty on the part of
Customer contained in the Loan
Documents shall be breached, MLBFS may, in its sole discretion, after 5
Business Days written notice is sent to
Customer (or such lesser notice, including no notice, as is reasonable under
the circumstances), do the same or cause
it to be done or remedy any such breach, and may expend its funds for such
purpose. Any and all reasonable amounts
so expended by MLBFS shall be repayable to MLBFS by Customer upon demand, with
interest at the Interest Rate
during the period from and including the date funds are so expended by MLBFS
to the date of repayment, and all
such amounts shall be additional Obligations. The payment or performance by
MLBFS of any of Customer's
obligations hereunder shall not relieve Customer of said obligations or of the
consequences of having failed to pay
or perform the same, and shall not waive or be deemed a cure of any Default.

(f) FURTHER ASSURANCES. Customer agrees to do such further acts and things and
to execute and deliver to MLBFS
such additional agreements, instruments and documents as MLBFS may reasonably
require or deem advisable to
effectuate the purposes of the Loan Documents, to confirm the WCMA Loan
Balance, or to establish, perfect and
maintain MLBFS' security interests and liens upon the Collateral, including,
but not limited to: (i) executing financing
statements or amendments thereto when and as reasonably requested by MLBFS;
and (ii) if in the reasonable
judgment of MLBFS it is required by local law, causing the owners and/or
mortgagees of the real property on which
any Collateral may be located to execute and deliver to MLBFS waivers or
subordinations reasonably satisfactory
to MLBFS with respect to any rights in such Collateral.

(g) BINDING EFFECT. This Loan Agreement and the Loan Documents shall be
binding upon, and shall inure to the
benefit of MLBFS, Customer and their respective successors and assigns. MLBFS
reserves the right, at any time
while the Obligations remain outstanding, to sell, assign, syndicate or
otherwise transfer or dispose of any or all of
MLBFS' rights and interests under the Loan Documents. MLBFS also reserves the
right at any time to pool the
WCMA Loan with one or more other loans originated by MLBFS or any other
Person, and to securitize or offer
interests in such pool on whatever terms and conditions MLBFS shall determine.
Customer consents to MLBFS
releasing financial and other information regarding Credit Parties, the
Collateral and the WCMA Loan in connection
with any such sale, pooling, securitization or other offering. Customer shall
not assign any of its rights or delegate
any of its obligations under this Loan Agreement or any of the Loan Documents
without the prior written consent
of MLBFS. Unless otherwise expressly agreed to in a writing signed by MLBFS,
no such consent shall in any event
relieve Customer of any of its obligations under this Loan Agreement or the
Loan Documents.

(h) INTERPRETATION; CONSTRUCTION. (i) Captions and section and paragraph
headings in this Loan Agreement are
inserted only as a matter of convenience, and shall not affect the
interpretation hereof; (ii) no provision of this Loan
Agreement shall be construed against a particular Person or in favor of
another Person merely because of which
Person (or its representative) drafted or supplied the wording for such
provision; and (iii) where the context requires:
(a) use of the singular or plural incorporates the other, and (b) pronouns and
modifiers in the masculine, feminine
or neuter gender shall be deemed to refer to or include the other genders.

(i) GOVERNING LAW. This Loan Agreement, and, unless otherwise expressly
provided therein, each of the Loan
Documents, shall be governed in all respects by the laws of the State of
Illinois, not including its conflict of law
provisions.

(j) SEVERABILITY OF PROVISIONS. Whenever possible, each provision of this Loan
Agreement and the other Loan
Documents shall be interpreted in such manner as to be effective and valid
under applicable law. Any provision of
this Loan Agreement or any of the Loan Documents which is prohibited or

-



unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of this Loan
Agreement and the Loan Documents
or affecting the validity or enforceability of such provision in any other
jurisdiction.

(k) TERM. This Loan Agreement shall become effective on the date accepted by
IVILBFS at its office in Chicago,
Illinois, and, subject to the terms hereof, shall continue in effect so long
thereafter as the WCIVIA Line of Credit
shall be in effect or there shall be any Obligations outstanding. Customer
hereby waives notice of acceptance of this
Loan Agreement by IVILBFS.

(l) EXHIBITS. The exhibits to this Loan Agreement are hereby incorporated and
made a part hereof and are an
integral part of this LOAN AGREEMENT

(M) COUNTERPARTS. This Loan Agreement may be executed in one or more
counterparts which, when taken together,
constitute one and the same agreement.

(n) JURISDICTION; WAIVER. CUSTOMER ACKNOWLEDGES THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS
IN PARTIAL CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN ITS SOLE DISCRETION,
TO ENFORCE THIS LOAN AGREEMENT
AND ALL OF THE LOAN DOCUMENTS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER
JURISDICTION WHERE CUSTOMER OR
ANY COLLATERAL MAY BE LOCATED. CUSTOMER IRREVOCABLY SUBMITS ITSELF TO
JURISDICTION IN THE STATE OF ILLINOIS AND
VENUE IN ANY STATE OR FEDERAL COURT IN THE COUNTY OF COOK FOR SUCH PURPOSES,
AND CUSTOMER WAIVES ANY AND
ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF ANY
SUCH FORUM, AND ANY AND ALL RIGHTS
TO REMOVE SUCH ACTION FROM STATE TO FEDERAL COURT. CUSTOMER FURTHER WAIVES ANY
RIGHTS TO COMMENCE ANY
ACTION AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF COOK AND
STATE OF ILLINOIS. CUSTOMER
AGREES THAT ALL SUCH SERVICE OF PROCESS SHALL BE MADE BY MAIL OR MESSENGER
DIRECTED TO IT IN THE SAME MANNER
AS PROVIDED FOR NOTICES TO CUSTOMER IN THIS LOAN AGREEMENT AND THAT SERVICE SO
MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED TO
CUSTOMER OR CUSTOMER'S AGENT, NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT
OF MLBFS TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF MILBFS TO
BRING ANY ACTION OR
PROCEEDING AGAINST CUSTOMER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION. CUSTOMER WAIVES, TO THE
EXTENT PERMITTED BY LAW, ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER,
BE REQUIRED OF MLBFS. CUSTOMER FURTHER WAIVES THE RIGHT TO BRING ANY
NON-COMPULSORY COUNTERCLAIMS.

(o) JURY WAIVER. MLBFS AND CUSTOMER HEREBY EACH EXPRESSLY WAIVE ANY AND ALL
RIGHTS TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES
AGAINST THE OTHER PARTY WITH RESPECT
TO ANY MATTER RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE
WCMA LINE OF CREDIT, THE
OBLIGATIONS, THIS LOAN AGREEMENT, ANY OF THE LOAN DOCUMENTS AND/OR ANY OF THE
TRANSACTIONS WHICH ARE THE
SUBJECT MATTER OF THIS LOAN AGREEMENT.

(p) INTEGRATION. THIS LOAN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS,
CONSTITUTES THE ENTIRE
UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE SUBJECT
MATTER HEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN
AGREEMENTS OR PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF
THE PARTIES. WITHOUT LIMITING THE FOREGOING, CUSTOMER ACKNOWLEDGES THAT: (1)
NO PROMISE OR COMMITMENT HAS
BEEN MADE TO IT BY MLBFS, MLPF&S OR ANY OF THEIR RESPECTIVE EMPLOYEES, AGENTS
OR REPRESENTATIVES TO
EXTEND THE AVAILABILITY OF THE WCMA LINE OF CREDIT OR THE MATURITY DATE, OR TO
INCREASE THE MAXIMUM
WCMA LINE OF CREDIT, OR TO MAKE ANY WCMA LOAN ON ANY TERMS OTHER THAN AS
EXPRESSLY SET FORTH HEREIN
OR TO OTHERWISE EXTEND ANY OTHER CREDIT TO CUSTOMER OR ANY OTHER PARTY; (II)
NO PURPORTED EXTENSION OF THE
MATURITY DATE, INCREASE IN THE MAXIMUM WCMA LINE OF CREDIT OR OTHER EXTENSION
OR AGREEMENT TO EXTEND
CREDIT SHALL BE VALID OR BINDING UNLESS EXPRESSLY SET FORTH IN A WRITTEN
INSTRUMENT SIGNED BY MLBFS; AND (III)
THIS LOAN AGREEMENT SUPERSEDES AND REPLACES ANY AND ALL PROPOSALS, LETTERS OF
INTENT AND APPROVAL AND
COMMITMENT LETTERS FROM MLBFS TO CUSTOMER, NONE OF WHICH SHALL BE CONSIDERED A
LOAN DOCUMENT. NO
AMENDMENT OR MODIFICATION OF ANY OF THE LOAN DOCUMENTS TO WHICH CUSTOMER IS A
PARTY SHALL BE EFFECTIVE
UNLESS IN A WRITING SIGNED BY BOTH MLBFS AND CUSTOMER.

(q) SURVIVAL. All representations, warranties, agreements and covenants
contained in the Loan Documents shall
survive the signing and delivery of the Loan Documents, and all of the waivers
made and indemnification obligations
undertaken by Customer shall survive the termination, discharge or
cancellation of the Loan Documents.

(r) CUSTOMER'S ACKNOWLEDGMENTS. The Customer acknowledges that the Customer:
(i) has had ample opportunity
to consult with counsel and such other parties as deemed advisable prior to
signing and delivering this Loan
Agreement and the other Loan Documents; (ii) understands the provisions of
this Loan Agreement and the other
Loan Documents, including all waivers contained therein; and (iii) signs and
delivers this Loan Agreement and the
other Loan Documents freely and voluntarily, without duress or coercion.

This Loan Agreement and the other Loan Documents are executed under seal and
are intended to take effect as
sealed instruments.

IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and
year first above written.


ORBIT INTERNATIONAL CORP.

By:_________________________________________________________________________
         Signature (1)      Signature (2)


____________________________________________________________________________
          Printed Name      Printed Name


____________________________________________________________________________
          Title             Title


Accepted at Chicago, Illinois:
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.


By:___________________________________________________________


                                 EXHIBIT A

ATTACHED TO AND HEREBY MADE A PART OF WCMA LOAN AND SECURITY AGREEMENT NO.
885-07587 BETWEEN MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. AND ORBIT
INTERNATIONAL CORP.



Additional Locations of Tangible Collateral:

MERRILL LYNCH                                   SECRETARY'S CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES TO MERRILL LYNCH BUSINESS FINANCIAL SERVICES
INC. that the
undersigned is the duly appointed and acting
Secretary (or Assistant Secretary) of ORBIT INTERNATIONAL CORP., a corporation
duly organized, validly
existing and in good standing under the laws of
the State of Delaware; and that the following is a true, accurate and compared
transcript of resolutions duly,
validly and lawfully adopted on the ______                       day
of_____________________                                          , 2003 by the
Board of Directors of said Corporation acting in accordance with the laws of
the state of incorporation and the
charter and by-laws of said Corporation:

"RESOLVED, that this Corporation is authorized and empowered, now and from
time to time hereafter, to borrow
and/or obtain credit from, and/or enter into other financial arrangements
with, MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC. ("MLBFS"), and in connection therewith to grant to
MLBFS liens and security
interests on any or all property belonging to this Corporation; all such
transactions to be on such terms and conditions
as may be mutually agreed from time to time between this Corporation and
MLBFS; and

"FURTHER RESOLVED, that the President, any Vice President, Treasurer,
Secretary or other officer of this
Corporation, or any one or more of them, be and each of them hereby is
authorized and empowered to: (a) execute
and deliver to MLBFS on behalf of this Corporation any and all loan
agreements, promissory notes, security
agreements, pledge agreements, financing statements, mortgages, deeds of
trust, leases and/or all other agreements,
instruments and documents required by MLBFS in connection therewith, and any
present or future extensions,
amendments, supplements, modifications and restatements thereof, all in such
form as any such officer shall approve,
as conclusively evidenced by his or her signature thereon, and (b) do and
perform all such acts and things deemed
by any such officer to be necessary or advisable to carry out and perform the
undertakings and agreements of this
Corporation in connection therewith; and any and all prior acts of each of
said officers in these premises are hereby
ratified and confirmed in all respects; and

"FURTHER RESOLVED, that MLBFS is authorized to rely upon the foregoing
resolutions until it receives written
notice of any change or revocation from an authorized officer of this
Corporation, which change or revocation shall
not in any event affect the obligations of this Corporation with respect to
any transaction conditionally agreed or
committed to by MLBFS or having its inception prior to the receipt of such
notice by MLBFS."

THE UNDERSIGNED FURTHER CERTIFIES that: (a) the foregoing resolutions have not
been rescinded, modified or repealed
in any manner, are not in conflict with any agreement of said Corporation and
are in full force and effect as of the
date of this Certificate, and (b) the following individuals are now the duly
elected and acting officers of said
Corporation and THE SIGNATURES SET FORTH BELOW ARE THE TRUE SIGNATURES OF SOLD
OFFICERS:

     President:__________________________________________________________


     Vice President:______________________________________________________


     Treasurer:__________________________________________________________


     Secretary:__________________________________________________________


     ____________: _____________________________________________________
     Additional Title

IN WITNESS WHEREOF, the undersigned has executed this Certificate and has
affixed the seal of said
Corporation hereto, pursuant to due authorization, all as of this ____ day of
_____________, 2003.

(Corporate Seal)

                    ______________________________________________________
                                 Secretary


               Printed Name:____________________________________________________



MERRILL LYNCH                                UNCONDITIONAL GUARANTY

FOR VALUE RECEIVED, and in order to induce MERRILL LYNCH BUSINESS FINANCIAL
SERVICES
INC. ("MLBFS") to advance moneys or extend or continue to extend credit or
lease property to or for the benefit
of, or modify its credit relationship with, or enter into any other financial
accommodations with ORBIT
INTERNATIONAL CORP., a corporation organized and existing under the laws of
the State of Delaware (with
any successor in interest, including, without limitation, any successor by
merger or by operation of law, herein
collectively referred to as "Customer") under: (a) that certain WCMA LOAN AND
SECURITY AGREEMENT
NO. 885-07587 between MLBFS and Customer (the "Loan Agreement), (b) any "Loan
Documents", as that term
is defined in the Loan Agreement, and (c) all present and future amendments,
restatements, supplements and other
evidences of any extensions, increases, renewals, modifications and other
changes of or to the Loan Agreement or
any Loan Documents (collectively, the "Guaranteed Documents"), and for other
good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, THE UNDERSIGNED,
BEHLMAN ELECTRONICS,
INC., a corporation organized and existing under the laws of the State of
Delaware ("Guarantor"), HEREBY
UNCONDITIONALLY GUARANTEES TO MLBFS: (i) the prompt and full payment when due,
by acceleration or otherwise,
of all sums now or any time hereafter due from Customer to MLBFS under the
Guaranteed Documents, (ii) the
prompt, full and faithful performance and discharge by Customer of each and
every other covenant and warranty of
Customer set forth in the Guaranteed Documents, and (iii) the prompt and full
payment and performance of all other
indebtedness, liabilities and obligations of Customer to MLBFS, howsoever
created or evidenced, and whether now
existing or hereafter arising (collectively, the "Obligations"). Guarantor
further agrees to pay all reasonable costs and
expenses (including, but not limited to, court costs and reasonable attorneys'
fees) paid or incurred by MLBFS in
endeavoring to collect or enforce performance of any of the Obligations, or in
enforcing this Guaranty. Guarantor
acknowledges that MLBFS is relying on the execution and delivery of this
Guaranty in advancing moneys to or
extending or continuing to extend credit to or for the benefit of Customer.

This Guaranty is absolute, unconditional and continuing and shall remain in
effect until all of the Obligations shall
have been fully and indefeasibly paid, performed and discharged. Upon the
occurrence and during the continuance
of any default or Event of Default under any of the Guaranteed Documents, any
or all of the indebtedness hereby
guaranteed then existing shall, at the option of MILKS, become immediately due
and payable from Guarantor (it
being understood, however, that upon the occurrence of any "Bankruptcy Event",
as defined in the Loan Agreement,
all such indebtedness shall automatically become due and payable without
action on the part of MLBFS).
Notwithstanding the occurrence of any such event, this Guaranty shall continue
and remain in full force and effect.
To the extent MLBFS receives payment with respect to the Obligations, and all
or any part of such payment is
subsequently invalidated, declared to be fraudulent or preferential, set
aside, required to be repaid by MLBFS or is
repaid by MLBFS pursuant to a settlement agreement, to a trustee, receiver or
any other person or entity, whether
under any Bankruptcy law or otherwise (a "Returned Payment"), this Guaranty
shall continue to be effective or shall
be reinstated, as the case may be, to the extent of such payment or repayment
by MLBFS, and the indebtedness or
part thereof intended to be satisfied by such Returned Payment shall be
revived and continued in full force and effect
as if said Returned Payment had not been made.

The liability of Guarantor hereunder shall in no event be affected or impaired
by any of the following, any of which
may be done or omitted by MLBFS from time to time, without notice to or the
consent of Guarantor: (a) any
renewals, amendments, restatements, modifications or supplements of or to any
of the Guaranteed Documents, or
any extensions, forbearances, compromises or releases of any of the
Obligations or any of MLBFS' rights under any
of the Guaranteed Documents; (b) any acceptance by MLBFS of any collateral or
security for, or other guarantees
of, any of the Obligations; (c) any failure, neglect or omission on the part
of MLBFS to realize upon or protect any
of the Obligations, or any collateral or security therefor, or to exercise any
lien upon or right of appropriation of any
moneys, credits or property of Customer or any other guarantor, possessed by
or under the control of MLBFS or
any of its affiliates, toward the liquidation or reduction of the Obligations;
(d) any invalidity, irregularity or
unenforceability of all or any part of the Obligations, of any collateral
security for the Obligations, or the Guaranteed
Documents; (e) any application of payments or credits by MLBFS; (f) the
granting of credit from time to time by
MLBFS to Customer in excess of the amount set forth in the Guaranteed
Documents; or (g) any other act of
commission or omission of any kind or at any time upon the part of MLBFS or
any of its affiliates or any of their
respective employees or agents with respect to any matter whatsoever. MLBFS
shall not be required at any time,
as a condition of Guarantor's obligations hereunder, to resort to payment from
Customer or other persons or entities
whatsoever, or any of their properties or estates, or resort to any collateral
or pursue or exhaust any other rights or
remedies whatsoever.

No release or discharge in whole or in part of any other guarantor of the
Obligations shall release or discharge
Guarantor unless and until all of the Obligations shall have been indefeasibly
fully paid and discharged. Guarantor
expressly waives presentment, protest, demand, notice of dishonor or default,
notice of acceptance of this Guaranty,
notice of advancement of funds under the Guaranteed Documents and all other
notices and formalities to which
Customer or Guarantor might be entitled, by statute or otherwise, and, so long
as there are any Obligations or
MLBFS is committed to extend credit to Customer, waives any right to revoke or
terminate this Guaranty without
the express written consent of MLBFS.

So long as there are any Obligations, Guarantor shall not have any claim,
remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification, or participation in
any claim, right, or remedy of MLBFS
against Customer or any security which MLBFS now has or hereafter acquires,
whether or not such claim, right or
remedy arises in equity, under contract, by statute, under common law, or
otherwise.

MLBFS is hereby irrevocably authorized by Guarantor at any time during the
continuance of an Event of Default
under the Loan Agreement or any other of the Guaranteed Documents or in
respect of any of the Obligations, in its
sole discretion and without demand or notice of any kind, to appropriate,
hold, set off and apply toward the payment
of any amount due hereunder, in such order of application as MLBFS may elect,
all cash, credits, deposits, accounts,
financial assets, investment property, securities and any other property of
Guarantor which is in transit to or in the
possession, custody or control of MLBFS or Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("MILPF&S"),
or any of their respective agents, bailees or affiliates. Guarantor hereby
collaterally assigns and grants to MLBFS a
continuing security interest in all such property as additional security for
the Obligations. Upon the occurrence and
during the continuance of an Event of Default, MLBFS shall have all rights in
such property available to collateral
assignees and secured parties under all applicable laws, including, without
limitation, the Uniform Commercial Code.





















Guarantor agrees to furnish to MLBFS such financial information concerning
Guarantor as may be required by any
of the Guaranteed Documents or as MLBFS may otherwise from time to time
reasonably request. Guarantor further
hereby irrevocably authorizes MLBFS and each of its affiliates, including
without limitation MLPF&S, to at any time
(whether or not an Event of Default shall have occurred) obtain from and
disclose to each other any and all financial
and other information about Guarantor.

No delay on the part of MLBFS in the exercise of any right or remedy under any
of the Guaranteed Documents, this
Guaranty or any other agreement shall operate as a waiver thereof, and,
without limiting the foregoing, no delay in
the enforcement of any security interest, and no single or partial exercise by
MLBFS of any right or remedy shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. This Guaranty may be
executed in any number of counterparts, each of which counterparts, once they
are executed and delivered, shall be
deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same
Guaranty. This Guaranty shall be binding upon Guarantor and its successors and
assigns, and shall inure to the benefit
of MLBFS and its successors and assigns. If there are more than one guarantor
of the Obligations, all of the
obligations and agreements of Guarantor are joint and several with such other
guarantors.

This Guaranty shall be governed by the laws of the State of Illinois. WITHOUT
LIMITING THE RIGHT OF
MLBFS TO ENFORCE THIS GUARANTY IN ANY JURISDICTION AND VENUE PERMITTED BY
APPLICABLE LAW: (I) GUARANTOR AGREES THAT THIS GUARANTY MAY AT THE OPTION OF
MLBFS BE ENFORCED BY MLBFS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER
JURISDICTION WHERE GUARANTOR, CUSTOMER OR ANY COLLATERAL FOR THE
OBLIGATIONS OF CUSTOMER MAY BE LOCATED, (II) GUARANTOR IRREVOCABLY SUBMITS
ITSELF TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR
FEDERAL
COURT IN THE COUNTY OF COOK FOR SUCH PURPOSES, AND (III) GUARANTOR WAIVES ANY
AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF
ANY SUCH FORUM AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM STATE TO
FEDERAL COURT. GUARANTOR FURTHER WAIVES ANY RIGHTS TO COMMENCE ANY ACTION
AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF COOK AND STATE OF
ILLINOIS. MLBFS AND GUARANTOR HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER OF THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER
RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS GUARANTY AND/OR
ANY OF THE TRANSACTIONS WHICH ARE THE SUBJECT MATTER OF THIS GUARANTY.
GUARANTOR FURTHER WAIVES THE RIGHT TO BRING ANY NON-COMPULSORY
COUNTERCLAIMS. Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid
under such law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Guaranty. No modification or waiver
of any of the provisions of this Guaranty shall be effective unless in writing
and signed by both Guarantor and an
officer of MLBFS. Each signatory on behalf of Guarantor warrants that he or
she has authority to sign on behalf of
Guarantor, and by so signing, to bind Guarantor hereunder.

Dated as of January 28, 2003.

BEHLMAN ELECTRONICS, INC.


By:________________________________________________________
     SIGNATURE (1)                                              SIGNATURE (2)


___________________________________________________________________
     Printed Name                              Printed Name


__________________________________________________________________
     Title                                                 Title


Address of Guarantor:
            80 Cabot Court
            Hauppauge, NY 11788





MERRILL LYNCH                                   SECRETARY'S CERTIFICATE

                         (Guaranty by Corporation)

THE UNDERSIGNED HEREBY CERTIFIES TO MERRILL LYNCH BUSINESS FINANCIAL SERVICES
INC. that the
undersigned is the duly appointed and acting Secretary (or Assistant
Secretary) of BEHLMAN ELECTRONICS,
INC., a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware;
and that the following is a true, accurate and compared transcript of
resolutions duly, validly and lawfully adopted
on the _____day of _______ , 2003 by the Board of Directors of said
Corporation acting in accordance with the laws
of the state of incorporation and the charter and by-laws of said Corporation:

"RESOLVED, that it is advisable and in the best interests and to the benefit
of this Corporation to guaranty the
obligations of ORBIT INTERNATIONAL CORP. ("Customer") to MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC. ("MLBFS"); and

"FURTHER RESOLVED, that the President, any Vice President, Treasurer,
Secretary or other officer of this
Corporation, or any one or more of them, be and each of then hereby is
authorized and empowered for and on behalf
of this Corporation to: (a) execute and deliver to MLBFS: (i) an Unconditional
Guaranty of the obligations of
Customer, (ii) any other agreements, instruments and documents required by
MLBFS in connection therewith,
including, without limitation, any agreements, instruments and documents
evidencing liens or security interests on
any of the property of this Corporation as collateral for said Unconditional
Guaranty and/or the obligations of
Customer to MLBFS, and (ii!) any present or future amendments to any of the
foregoing; all in such form as such
officer shall approve, as evidenced by his signature thereon; and (b) to do
and perform all such acts and things
deemed by any such officer to be necessary or advisable to carry out and
perform the undertakings and agreements
of this Corporation set forth therein; and all prior acts of each of said
officers in these premises are hereby ratified
and confirmed; and

"FURTHER RESOLVED, that MLBFS is authorized to rely upon the foregoing
resolutions until it receives written
notice of any change or revocation from an authorized officer of this
Corporation, which change or revocation shall
not in any event affect the obligations of this Corporation with respect to
any transaction conditionally agreed or
committed to by MLBFS or having its inception prior to the receipt of such
notice by MLBFS."

THE UNDERSIGNED FURTHER CERTIFIES that: (a) the foregoing resolutions have not
been rescinded, modified or repealed
in any manner, are not in conflict with any agreement of said Corporation and
are in full force and effect as of the
date of this Certificate, and (b) the following individuals are now the duly
elected and acting officers of said
Corporation and THE SIGNATURES SET FORTH BELOW ARE THE TRUE SIGNATURES OF SAID
OFFICERS:


President:__________________________________________________________


     Vice President:______________________________________________________


     Treasurer:__________________________________________________________


     Secretary:__________________________________________________________


     ____________: _____________________________________________________
     Additional Title

IN WITNESS WHEREOF, the undersigned has executed this Certificate and has
affixed the seal of said
Corporation hereto, pursuant to due authorization, all as of this ____ day of
_____________, 2003.

(Corporate Seal)

                    ______________________________________________________
                                 Secretary


               Printed Name:____________________________________________________



MERRILL LYNCH                                   UNCONDITIONAL GUARANTY

FOR VALUE RECEIVED, and in order to induce MERRILL LYNCH BUSINESS FINANCIAL
SERVICES
INC. MLBFS to advance moneys or extend or continue to extend credit or lease
property to or for the benefit of,
or modify its credit relationship with, or enter into any other financial
accommodations with ORBIT
INTERNATIONAL CORP., a corporation organized and existing under the laws of
the State of Delaware (with
any successor in interest, including, without limitation, any successor by
merger or by operation of law, herein
collectively referred to as "Customer") under: (a) that certain WCMA LOAN AND
SECURITY AGREEMENT
NO. 885-07587 between MLBFS and Customer (the "Loan Agreement"), (b) any "Loan
Documents", as that term
is defined in the Loan Agreement, and (c) all present and future amendments,
restatements, supplements and other
evidences of any extensions, increases, renewals, modifications and other
changes of or to the Loan Agreement or
any Loan Documents (collectively, the "Guaranteed Documents"), and for other
good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, THE UNDERSIGNED,
ORBIT INSTRUMENT OF
CALIFORNIA, INC., a corporation organized and existing under the laws of the
State of California ("Guarantor'),
HEREBY UNCONDITIONALLY GUARANTEES TO MLBFS (i) the prompt and full payment
when due, by acceleration or
otherwise, of all sums now or any time hereafter due from Customer to MLBFS
under the Guaranteed Documents,
(ii) the prompt, full and faithful performance and discharge by Customer of
each and every other covenant and
warranty of Customer set forth in the Guaranteed Documents, and (!ii) the
prompt and full payment and performance
of all other indebtedness, liabilities and obligations of Customer to MLBFS
howsoever created or evidenced, and
whether now existing or hereafter arising (collectively, the "Obligations").
Guarantor further agrees to pay all
reasonable costs and expenses (including, but not limited to, court costs and
reasonable attorneys' fees) paid or
incurred by MLBFS in endeavoring to collect or enforce performance of any of
the Obligations, or in enforcing this
Guaranty. Guarantor acknowledges that MLBFS is relying on the execution and
delivery of this Guaranty in
advancing moneys to or extending or continuing to extend credit to or for the
benefit of Customer.

This Guaranty is absolute, unconditional and continuing and shall remain in
effect until all of the Obligations shall
have been fully and indefeasibly paid, performed and discharged. Upon the
occurrence and during the continuance
of any default or Event of Default under any of the Guaranteed Documents, any
or all of the indebtedness hereby
guaranteed then existing shall, at the option of MLBFS become immediately due
and payable from Guarantor (it
being understood, however, that upon the occurrence of any "Bankruptcy Event",
as defined in the Loan Agreement,
all such indebtedness shall automatically become due and payable without
action on the part of MLBFS
Notwithstanding the occurrence of any such event, this Guaranty shall continue
and remain in full force and effect.
To the extent MLBFS receives payment with respect to the Obligations, and all
or any part of such payment is
subsequently invalidated, declared to be fraudulent or preferential, set
aside, required to be repaid by MLBFS or is
repaid by MLBFS pursuant to a settlement agreement, to a trustee, receiver or
any other person or entity, whether
under any Bankruptcy law or otherwise (a "Returned Payment"), this Guaranty
shall continue to be effective or shall
be reinstated, as the case may be, to the extent of such payment or repayment
by MLBFS and the indebtedness or
part thereof intended to be satisfied by such Returned Payment shall be
revived and continued in full force and effect
as if said Returned Payment had not been made.

The liability of Guarantor hereunder shall in no event be affected or impaired
by any of the following, any of which
may be done or omitted by MLBFS from time to time, without notice to or the
consent of Guarantor: (a) any
renewals, amendments, restatements, modifications or supplements of or to any
of the Guaranteed Documents, or
any extensions, forbearances, compromises or releases of any of the
Obligations or any of MLBFS rights under any
of the Guaranteed Documents; (b) any acceptance by MLBFS of any collateral or
security for, or other guarantees
of, any of the Obligations; (c) any failure, neglect or omission on the pad of
MLBFS to realize upon or protect any
of the Obligations, or any collateral or security therefor, or to exercise any
lien upon or right of appropriation of any
moneys, credits or property of Customer or any other guarantor, possessed by
or under the control of MLBFS or
any of its affiliates, toward the liquidation or reduction of the Obligations;
(d) any invalidity, irregularity or
unenforceability of all or any part of the Obligations, of any collateral
security for the Obligations, or the Guaranteed
Documents; (e) any application of payments or credits by MLBFS; (f) the
granting of credit from time to time by
MLBFS to Customer in excess of the amount set forth in the Guaranteed
Documents; or (g) any other act of
commission or omission of any kind or at any time upon the pad of MLBFS or any
of its affiliates or any of their
respective employees or agents with respect to any matter whatsoever. MLBFS
shall not be required at any time,
as a condition of Guarantor's obligations hereunder, to resort to payment from
Customer or other persons or entities
whatsoever, or any of their properties or estates, or resort to any collateral
or pursue or exhaust any other rights or
remedies whatsoever.

No release or discharge in whole or in part of any other guarantor of the
Obligations shall release or discharge
Guarantor unless and until all of the Obligations shall have been indefeasibly
fully paid and discharged. Guarantor
expressly waives presentment, protest, demand, notice of dishonor or default,
notice of acceptance of this Guaranty,
notice of advancement of funds under the Guaranteed Documents and all other
notices and formalities to which
Customer or Guarantor might be entitled, by statute or otherwise, and, so long
as there are any Obligations or
MLBFS is committed to extend credit to Customer, waives any right to revoke or
terminate this Guaranty without
the express written consent of MLBFS

So long as there are any Obligations, Guarantor shall not have any claim,
remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification, or participation in
any claim, right, or remedy of MLBFS
against Customer or any security which MLBFS now has or hereafter acquires,
whether or not such claim, right or
remedy arises in equity, under contract, by statute, under common law, or
otherwise.

MLBFS is hereby irrevocably authorized by Guarantor at any time during the
continuance of an Event of Default
under the Loan Agreement or any other of the Guaranteed Documents or in
respect of any of the Obligations, in its
sole discretion and without demand or notice of any kind, to appropriate,
hold, set off and apply toward the payment
of any amount due hereunder, in such order of application as MLBFS may elect,
all cash, credits, deposits, accounts,
financial assets, investment property, securities and any other property of
Guarantor which is in transit to or in the
possession, custody or control of MLBFS or Merrill Lynch, Pierce, Fenner &
Smith incorporated ("MLPF&S"), or
any of their respective agents, bailees or affiliates. Guarantor hereby
collaterally assigns and grants to MLBFS a
continuing security interest in all such property as additional security for
the Obligations. Upon the occurrence and
during the continuance of an Event of Default, MLBFS shall have all rights in
such property available to collateral
assignees and secured parties under all applicable laws, including, without
limitation, the Uniform Commercial Code.





Guarantor agrees to furnish to MLBFS such financial information concerning
Guarantor as may be required by any
of the Guaranteed Documents or as MLBFS may otherwise from time to time
reasonably request. Guarantor further
hereby irrevocably authorizes MLBFS and each of its affiliates, including
without limitation MLPFS, to at any time
(whether or not an Event of Default shall have occurred) obtain from and
disclose to each other any and all financial
and other information about Guarantor.

No delay on the part of MLBFS in the exercise of any right or remedy under any
of the Guaranteed Documents, this
Guaranty or any other agreement shall operate as a waiver thereof, and,
without limiting the foregoing, no delay in
the enforcement of any security interest, and no single or partial exercise by
MLBFS of any right or remedy shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. This Guaranty may be
executed in any number of counterparts, each of which counterparts, once they
are executed and delivered, shall be
deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same
Guaranty. This Guaranty shall be binding upon Guarantor and its successors and
assigns, and shall inure to the benefit
of MLBFS and its successors and assigns. If there are more than one guarantor
of the Obligations, all of the
obligations and agreements of Guarantor are joint and several with such other
guarantors.

This Guaranty shall be governed by the laws of the State of Illinois. WITHOUT
LIMITING THE RIGHT OF
MLBFS TO ENFORCE THIS GUARANTY IN ANY JURISDICTION AND VENUE PERMITTED BY
APPLICABLE LAW: (I) GUARANTOR AGREES THAT THIS GUARANTY MAY AT THE OPTION OF
MLBFS BE ENFORCED BY MLBFS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER
JURISDICTION WHERE GUARANTOR, CUSTOMER OR ANY COLLATERAL FOR THE
OBLIGATIONS OF CUSTOMER MAY BE LOCATED, (II) GUARANTOR IRREVOCABLY SUBMITS
ITSELF TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR
FEDERAL
COURT IN THE COUNTY OF COOK FOR SUCH PURPOSES, AND (III) GUARANTOR WAIVES ANY
AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF
ANY SUCH FORUM AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM STATE TO
FEDERAL COURT. GUARANTOR FURTHER WAIVES ANY RIGHTS TO COMMENCE ANY ACTION
AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF COOK AND STATE OF
ILLINOIS. MLBFS AND GUARANTOR HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER OF THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER
RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS GUARANTY AND/OR
ANY OF THE TRANSACTIONS WHICH ARE THE SUBJECT MATTER OF THIS GUARANTY.
GUARANTOR FURTHER WAIVES THE RIGHT TO BRING ANY NON-COMPULSORY
COUNTERCLAIMS. Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid
under such law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Guaranty, No modification or waiver
of any of the provisions of this Guaranty shall be effective unless in writing
and signed by both Guarantor and an
officer of MLBFS. Each signatory on behalf of Guarantor warrants that he or
she has authority to sign on behalf of
Guarantor, and by so signing, to bind Guarantor hereunder.

Dated as of January 28, 2003.

ORBIT INSTRUMENT OF CALIFORNIA, INC.

By:________________________________________________________
     SIGNATURE (1)                                              SIGNATURE (2)


___________________________________________________________________
     Printed Name                              Printed Name


__________________________________________________________________
     Title                                                 Title


Address of Guarantor:
            80 Cabot Court
            Hauppauge, NY 11788


MERRILL LYNCH                                   SECRETARY'S CERTIFICATE

                         (Guaranty by Corporation)

THE UNDERSIGNED HEREBY CERTIFIES TO MERRILL LYNCH BUSINESS FINANCIAL SERVICES
INC. that the
undersigned is the duly appointed and acting Secretary (or Assistant
Secretary) of ORBIT INSTRUMENT OF
CALIFORNIA, INC., a corporation duly organized, validly existing and in good
standing under the laws of the
State of California and that the following is a true, accurate and compared
transcript of resolutions duly, validly and
lawfully adopted on the ______day of _________ , 2003 by the Board of
Directors of said Corporation acting in
accordance with the laws of the state of incorporation and the charter and
by-laws of said Corporation:

"RESOLVED, that it is advisable and in the best interests and to the benefit
of this Corporation to guaranty the
obligations of ORBIT INTERNATIONAL CORP. ("Customer") to MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC. ("MLBFS"); and

"FURTHER RESOLVED, that the President, any Vice President, Treasurer,
Secretary or other officer of this
Corporation, or any one or more of them, be and each of them hereby is
authorized and empowered for and on behalf
of this Corporation to: (a) execute and deliver to MLBFS: (i) an Unconditional
Guaranty of the obligations of
Customer, (ii) any other agreements, instruments and documents required by
MLBFS in connection therewith,
including, without limitation, any agreements, instruments and documents
evidencing liens or security interests on
any of the property of this Corporation as collateral for said Unconditional
Guaranty and/or the obligations of
Customer to MLBFS, and (iii) any present or future amendments to any of the
foregoing; all in such form as such
officer shall approve, as evidenced by his signature thereon; and (b) to do
and perform all such acts and things
deemed by any such officer to be necessary or advisable to carry out and
perform the undertakings and agreements
of this Corporation set forth therein; and all prior acts of each of said
officers in these premises are hereby ratified
and confirmed; and

"FURTHER RESOLVED, that MLBFS is authorized to rely upon the foregoing
resolutions until it receives written
notice of any change or revocation from an authorized officer of this
Corporation, which change or revocation shall
not in any event affect the obligations of this Corporation with respect to
any transaction conditionally agreed or
committed to by MLBFS or having its inception prior to the receipt of such
notice by MLBFS."

THE UNDERSIGNED FURTHER CERTIFIES that: (a) the foregoing resolutions have not
been rescinded, modified or repealed
in any manner, are not in conflict with any agreement of said Corporation and
are in full force and effect as of the
date of this Certificate, and (b) the following individuals are now the duly
elected and acting officers of said
Corporation and THE SIGNATURES SET FORTH BELOW ARE THE TRUE SIGNATURES OF SAID
OFFICERS:


President:__________________________________________________________


     Vice President:______________________________________________________


     Treasurer:__________________________________________________________


     Secretary:__________________________________________________________


     ____________: _____________________________________________________
     Additional Title

IN WITNESS WHEREOF, the undersigned has executed this Certificate and has
affixed the seal of said
Corporation hereto, pursuant to due authorization, all as of this ____ day of
_____________, 2003.

(Corporate Seal)

                    ______________________________________________________
                                 Secretary


               Printed Name:____________________________________________________




MERRILL LYNCH                                      SECURITY AGREEMENT

SECURITY AGREEMENT ("Agreement") dated as of January 28, 2003, between ORBIT
INSTRUMENT OF
CALIFORNIA, INC., a corporation organized and existing under the laws of the
State of California having its
principal office at 80 Cabot Court, Hauppauge, NY 11788 ("Grantor"), and
MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC., a corporation organized and existing under the laws
of the State of Delaware
having its principal office at 222 North LaSalle Street, Chicago, IL 60601
("MLBFS").

In order to induce MLBFS to extend or continue to extend credit to ORBIT
INTERNATIONAL CORP.
("Customer") under the Loan Agreement (as defined below) or otherwise, and for
other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Grantor hereby agrees with MLBFS as
follows:

1. DEFINITIONS

(a) SPECIFIC TERMS. In addition to terms defined elsewhere in this Agreement,
when used herein the following terms
shall have the following meanings:

(i) "Account Debtor" shall mean any party who is or may become obligated with
respect to an Account or Chattel
Paper.

(ii) "Bankruptcy Event" shall mean any of the following: (A) a proceeding
under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt or receivership law or statute
shall be filed or consented to by Grantor
or Customer; or (B) any such proceeding shall be filed against Grantor or
Customer and shall not be dismissed or
withdrawn within sixty (60) days after filing; or (C) Grantor or Customer
shall make a general assignment for the
benefit of creditors; or (D) Grantor or Customer shall generally fail to pay
or admit in writing its inability to pay its
debts as they become due; or (E) Grantor or Customer shall be adjudicated a
bankrupt or insolvent.

(iii) "Business Day" shall mean any day other than a Saturday, Sunday, federal
holiday or other day on which the New
York Stock Exchange is regularly closed.

(iv) "Collateral" shall mean all Accounts, Chattel Paper, Contract Rights,
Inventory, Equipment, Fixtures, General
Intangibles, Deposit Accounts, Documents, Instruments, Financial Assets and
Investment Property of Grantor,
howsoever arising, whether now owned or existing or hereafter acquired or
arising, and wherever located; together
with all parts thereof (including spare parts), all accessories and accessions
thereto, all books and records (including
computer records) directly related thereto, all proceeds thereof (including,
without limitation, proceeds in the form
of Accounts and insurance proceeds), and the additional collateral described
in Section 7 (b) hereof.

(v) "Default shall mean an "Event of Default", as defined in Section 6 hereof,
or any event which with the giving of
notice, passage of time, or both,
would constitute such an Event of Default,

(vi) "Loan Agreement" shall mean that certain WCMA LOAN AND SECURITY AGREEMENT
NO, 885-07587
between MLBFS and Customer, together with all agreements, instruments and
documents executed pursuant thereto,
as any or all of the same may from time to time be or have been amended,
restated, extended or supplemented.

(vii) "Location of Tangible Collateral" shall mean the address of Grantor set
forth at the beginning of this Agreement,
together with any other address or addresses set forth on any exhibit hereto
as being a Location of Tangible
Collateral.

(viii) "Obligations" shall mean all liabilities, indebtedness and other
obligations of Customer or Grantor to MLBFS,
howsoever created, arising or evidenced, whether now existing or hereafter
arising, whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary or joint or
several, and, without limiting the
foregoing, shall include interest accruing after the filing of any petition in
bankruptcy, and all present and future
liabilities, indebtedness and obligations of Customer under the Loan Agreement
and the agreements, instruments and
documents executed pursuant thereto, and of Grantor under this Agreement.

(ix) "Permitted Liens" shall mean with respect to the Collateral: (A) liens
for current taxes not delinquent, other non-
consensual liens arising in the ordinary course of business for sums not due,
and, if MLBFS' rights to and interest
in the Collateral are not materially and adversely affected thereby, any such
liens for taxes or other non-consensual
liens arising in the ordinary course of business being contested in good faith
by appropriate proceedings; (B) liens
in favor of MLBFS;

(b) OTHER TERMS. Except as otherwise defined herein, all terms used in this
Agreement which are defined in the
Uniform Commercial Code of Illinois ("UCC") shall have the meanings set forth
in the UCC.

2.COLLATERAL

(a) PLEDGE OF COLLATERAL. To secure payment and performance of the
Obligations, Grantor hereby pledges, assigns,
transfers and sets over to MLBFS, and grants to MLBFS a first lien and
security interest in and upon all of the
Collateral, subject only to Permitted Liens.

(b) LIENS. Except upon the prior written consent of MLBFS, Grantor shall not
create or permit to exist any lien,
encumbrance or security interest upon or with respect to any Collateral now
owned or hereafter acquired other than
Permitted Liens.

(c) PERFORMANCE OF OBLIGATIONS. Grantor shall perform all of its obligations
owing on account of or with respect
to the Collateral; it being understood that nothing herein, and no action or
inaction by MLBSF, under this Agreement
or otherwise, shall be deemed an assumption by MLBSF, of any of Grantor's said
obligations.

(d) NOTICE OF CERTAIN EVENTS. Grantor shall give MLBSF, immediate notice of
any attachment, lien, judicial process,
encumbrance or claim affecting or involving $25,000.00 or more of the
Collateral.

(e) INDEMNIFICATION Grantor shall indemnify, defend and save MLBSF, harmless
from and against any and all claims,
losses, costs, expenses (including, without limitation, reasonable attorneys'
fees and expenses), demands, liabilities,
penalties, fines and forfeitures of any nature whatsoever which may be
asserted against or incurred by MLBSF,
arising out of or in any manner occasioned by (i) the ownership, use,
operation, condition or maintenance of any
Collateral, or (ii) any failure by Grantor to perform any of its obligations
hereunder; excluding, however, from said
indemnity any such claims, losses, etc. arising out of the willful wrongful
act or active gross negligence of MLBSF,
This indemnity shall survive the expiration or termination of this Agreement
as to all matters arising or accruing prior
to such expiration or termination.

(f) INSURANCE. Grantor shall insure all of the tangible Collateral with an
insurer or insurers reasonably acceptable to
MLBSF, under a policy or policies of physical damage insurance reasonably
acceptable to MLBSF, providing that
(i) losses will be payable to MLBSF, as its interests may appear pursuant to a
Lender's Loss Payable endorsement,
and (ii) MLBSF, will receive not less than 10 days prior written notice of any
cancellation; and containing such other
provisions as may be reasonably required by MLBSF, Grantor shall maintain such
other insurance as may be required
by law or otherwise reasonably required by MLBSF, Grantor shall furnish MLBSF,
with a copy or certificate of each
such policy or policies and, prior to any expiration or cancellation, each
renewal or replacement thereof.

(g) EVENT OF LOSS. Grantor shall at its expense promptly repair all repairable
damage to any tangible Collateral. In
the event that any tangible Collateral is damaged beyond repair, lost, totally
destroyed or confiscated (an "Event of
Loss") and such Collateral had a value prior to such Event of Loss of
$25,000.00 or more, then, on or before the
first to occur of (i) 90 days after the occurrence of such Event of Loss, or
(ii) 10 Business Days after the date on
which either Grantor or MLBSF, shall receive any proceeds of insurance on
account of such Event of Loss, or any
underwriter of insurance on such tangible Collateral shall advise either
Grantor or MLBSF, that it disclaims liability
in respect of such Event of Loss, Grantor shall, at Grantor's option, either
replace the Collateral subject to such Event
of Loss with comparable Collateral free of all liens other than Permitted
Liens (in which event Grantor shall be
entitled to utilize the proceeds of insurance on account of such Event of Loss
for such purpose, and may retain any
excess proceeds of such insurance), or pay to MLBSF, on account of the
Obligations an amount equal to the actual
cash value of such Collateral as determined by either the applicable insurance
company's payment (plus any applicable
deductible) or, in absence of insurance company payment, as reasonably
determined by MLBSF, Notwithstanding
the foregoing, if at the time of occurrence of such Event of Loss or any time
thereafter prior to replacement or
payment, as aforesaid, an Event of Default shall have occurred and be
continuing hereunder, then MLBSF, may at
its sole option, exercisable at any time while such Event of Default shall be
continuing, require Grantor to either
replace such Collateral or make a payment on account of the Obligations, as
aforesaid.

(h) SALES AND COLLECTIONS. So long as no Event of Default shall have occurred
and be continuing, Grantor may in
the ordinary course of its business: (i) sell any Inventory normally held by
Grantor for sale, (ii) use or consume any
materials and supplies normally held by Grantor for use or consumption, and
(iii) collect all of its Accounts. Grantor
shall take such action with respect to protection of its Inventory and the
other Collateral and the collection of its
Accounts as MLBSF, may from time to time reasonably request.

(i) ACCOUNT SCHEDULES. Upon the request of MLBSF, made now or at any time or
times hereafter, Grantor shall
deliver to MLBSF, in addition to the other information required hereunder, a
schedule identifying, for each Account
and all Chattel Paper subject to MLBSF, security interests hereunder, each
Account Debtor by name and address
and amount, invoice number and date of each invoice. Grantor shall furnish to
MLBSF, such additional information
with respect to the Collateral, and amounts received by Grantor as proceeds of
any of the Collateral, as MLBFS may
from time to time reasonably request.

(j) LOCATION. Except for movements in the ordinary course of its business,
Grantor shall give MLBSF, 30 days' prior
written notice of the placing at or movement of any tangible Collateral to any
location other than a Location of
Tangible Collateral. In no event shall Grantor cause or permit any tangible
Collateral to be removed from the United
States without the express prior written consent of MLBSF,

(k) ALTERATIONS AND MAINTENANCE. Except upon the prior written consent of
MLBSF, Grantor shall not make or
permit any material alterations to any tangible Collateral which might
materially reduce or impair its market value
or utility. Grantor shall at all times keep the tangible Collateral in good
condition and repair and shall pay or cause
to be paid all obligations arising from the repair and maintenance of such
Collateral, as well as all obligations with
respect to each Location of Tangible Collateral, except for any such
obligations being contested by Grantor in good
faith by appropriate proceedings.

3. REPRESENTATIONS AND WARRANTIES

Grantor represents and warrants to MLBSF, that:

(a) ORGANIZATION. Grantor is a corporation duly organized and validly existing
in good standing under the laws of
the State of ERROR! NO DOCUMENT VARIABLE SUPPLIED., and is qualified to do
business and in good standing in each
other state where the nature of its business or the property owned by it make
such qualification necessary.

(b) EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery and
performance by Grantor of this Agreement
have been duly authorized by all requisite across, do not and will not violate
or conflict with any law or other
governmental requirement, or any of the agreements, instruments or documents
which formed or governed Grantor,
and do not and will not breach or violate any of the provisions of, and will
not result in a default by Grantor under,
any other agreement, instrument or document to which it is a party or by which
it or its properties are bound.


(c) NOTICE OR CONSENT. Except as may have been given or obtained, no notice to
or consent or approval of any
governmental body or authority or other third party whatsoever (including,
without limitation, any other creditor)
is required in connection with the execution, delivery or performance by
Grantor of this Agreement.

(d) VALID AND BINDING. This Agreement is the legal, valid and binding
obligation of Grantor, enforceable against
it in accordance with its terms, except as enforceability may be limited by
bankruptcy and other similar laws affecting
the rights of creditors generally or by general principles of equity.

(e) FINANCIAL STATEMENTS. Except as expressly set forth in Grantor's financial
statements, all financial statements of
Grantor furnished to MLBFS have been prepared in conformity with generally
accepted accounting principles,
consistently applied, are true and correct, and fairly present the financial
condition of it as at such dates and the
results of its operations for the periods then ended; and since the most
recent date covered by such financial
statements, there has been no material adverse change in any such financial
condition or operation.

(f) LITIGATION, ETC. No litigation, arbitration, administrative or
governmental proceedings are pending or threatened
against Grantor, which would, if adversely determined, materially and
adversely affect the financial condition or
continued operations of Grantor, or the liens and security interests of MLBFS
hereunder.

(g) TAXES. All federal, state and local tax returns, reports and statements
required to be filed by Grantor have been
filed with the appropriate governmental agencies and all taxes due and payable
by Grantor have been timely paid
(except to the extent that any such failure to file or pay will not materially
and adversely affect either the liens and
security interests of MLBFS hereunder or the financial condition or continued
operations of Grantor).

(h) COLLATERAL. Grantor has good and marketable title to the Collateral, and,
except for any Permitted Liens: (i) none
of the Collateral is subject to any lien, encumbrance or security interest,
and (ii) upon the filing of all Uniform
Commercial Code financing statements executed by Grantor with respect to the
Collateral or a copy of this
Agreement in the appropriate jurisdiction(s) and/or the completion of any
other action required by applicable law
to perfect is lien and security interests, MLBFS will have valid and perfected
first liens and security interests upon
all of the Collateral.

Each of the foregoing representations and warranties has been and will be
relied upon as an inducement to MLBFS
to advance funds or extend or continue to extend credit to Customer, and is
continuing and shall be deemed remade
by Grantor concurrently with each such advance or extension of credit by MLBFS
to Customer.

4. FINANCIAL AND OTHER INFORMATION

Grantor covenants and agrees that Grantor will furnish or cause to be
furnished to MLBFS during the term of this
Agreement such financial and other information as may be required by the Loan
Agreement or any other document
evidencing the Obligations or as MLBFS may from time to time reasonably
request relating to Grantor or the
Collateral.

5. OTHER COVENANTS

Grantor further agrees during the term of this Agreement that:

(a) FINANCIAL RECORDS; INSPECTION. Grantor will: (i) maintain complete and
accurate books and records at its
principal place of business, and maintain all of its financial records in a
manner consistent with the financial statements
heretofore furnished to MLBFS, or prepared on such other basis as may be
approved in writing by MLBFS; and (ii)
permit MLBFS or its duly authorized representatives, upon reasonable notice
and at reasonable times, to inspect its
properties (both real and personal), operations, books and records.

(b) TAXES. Grantor will pay when due all taxes, assessments and other
governmental charges, howsoever designated,
and all other liabilities and obligations, except to the extent that any such
failure to pay will not materially and
adversely affect either the liens and security interests of MLBFS hereunder,
or the financial condition or continued
operations of Grantor.

(c) COMPLIANCE WITH LAWS AND AGREEMENTS. Grantor will not violate any law,
regulation or other governmental
requirement, any judgment or order of any court or governmental agency or
authority, or any agreement, instrument
or document to which it is a party or by which it is bound, if any such
violation will materially and adversely affect
either the liens and security interests of MLBFS hereunder, or the financial
condition or continued operations of
Grantor.

(d) NOTIFICATION BY GRANTOR. Grantor shall provide MLBFS with prompt written
notification of., (i) any Default;
(ii) any materially adverse change in the business, financial condition or
operations of Customer or Grantor; and (iii)
any information which indicates that any financial statements of Customer or
Grantor fail in any material respect to
present fairly the financial condition and results of operations purported to
be presented in such statements. Each
notification by Grantor pursuant hereto shall specify the event or information
causing such notification, and, to the
extent applicable, shall specify the steps being taken to rectify or remedy
such event or information.

(e) NOTICE OF CHANGE Grantor shall give MLBFS not less than 30 days prior
written notice of any change in the name
(including any fictitious name) or principal place of business of Grantor.

(f) CONTINUITY. Except upon the prior written consent of MLBFS, which consent
will not be unreasonably withheld:
(i) Grantor shall not be a party to any merger or consolidation with, or
purchase or otherwise acquire all or
substantially all of the assets of, or any material stock, partnership, joint
venture or other equity interest in, any
person or entity, or sell, transfer or lease all or any substantial pad of its
assets, if any such action would result in
either: (A) a material change in the principal business, ownership or control
of Grantor, or (B) a material adverse
change in the financial condition or operations of Grantor; (ii) Grantor shall
preserve its existence and good standing
in the jurisdiction(s) of establishment and operation; (iii) Grantor shall not
engage in any material













business substantially different from its business in effect as of the date of
application by Customer for credit from
MLBFS, or cease operating any such material business; (iv) Grantor shall not
cause or permit any other person or
entity to assume or succeed to any material business or operations of Grantor;
and (iv) Grantor shall not cause or
permit any material change in its controlling ownership.

6. EVENTS OF DEFAULT

The occurrence of any of the following events shall constitute an "Event of
Default" under this Agreement:

(a) EVENT OF DEFAULT UNDER ANY LOAN AGREEMENT. An Event of Default shall occur
under the terms of the Loan
Agreement.

(b) Failure to Perform. Grantor shall default in the performance or observance
of any covenant or agreement on its
part to be performed or observed under this Agreement (not constituting an
Event of Default under any other clause
of this Section), and such default shall continue unremedied for 10 Business
Days after written notice thereof shall
have been given by MLBFS to Grantor.

(c) BREACH OF WARRANTY. Any representation or warranty made by Grantor
contained in this Agreement shall at any
time prove to have been incorrect in any material respect when made.

(d) DEFAULT UNDER OTHER AGREEMENT. A default or Event of Default by Grantor
shall occur under the terms of any
other agreement, instrument or document with or intended for the benefit of
MLBFS, Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPF&S") or any of their affiliates, and any required
notice shall have been given and
required passage of time shall have elapsed.

(e) SEIZURE OR ABUSE OF COLLATERAL. The Collateral, or any material part
thereof, shall be or become subject to any
levy, attachment, seizure or confiscation which is not released within 10
Business Days.

(f) BANKRUPTCY EVENT. Any Bankruptcy Event shall occur.

(g) MATERIAL IMPAIRMENT. Any event shall occur which shall reasonably cause
MLBFS to in good faith believe that
the prospect of payment or performance by Grantor has been materially
impaired. The existence of such a material
impairment shall be determined in a manner consistent with the intent of
Section 1-208 of the UCC,

(h) ACCELERATION OF DEBT TO OTHER CREDITORS. Any event shall occur which
results in the acceleration of the maturity
of any indebtedness of $100,000.00 or more of Grantor to another creditor
under any indenture, agreement,
undertaking, or otherwise.

7. REMEDIES

(a) REMEDIES UPON DEFAULT Upon the occurrence and during the continuance of
any Event of Default, MLBFS may
at its sole option do any one or more or all of the following, at such time
and in such order as MLBFS may in its sole
discretion choose:

(i) ACCELERATION. MLBFS may declare all Obligations to be forthwith due and
payable, whereupon all such amounts
shall be immediately due and payable, without presentment, demand for payment,
protest and notice of protest, notice
of dishonor, notice of acceleration, notice of intent to accelerate or other
notice or formality of any kind, all of which
are hereby expressly waived; provided, however, that upon the occurrence of
any Bankruptcy Event all Obligations
shall automatically become due and payable without any action on the part of
MLBFS.

(ii) EXERCISE RIGHTS OF SECURED PARTY. MLBFS may exercise any or all of the
remedies of a secured party under
applicable law, including, but not limited to, the UCC, and any or all of its
other rights and remedies under this
Agreement.

(iii) POSSESSION. MLBFS may require Grantor to make the Collateral and the
records pertaining to the Collateral
available to MLBFS at a place designated by MLBFS which is reasonably
convenient to Grantor, or may take
possession of the Collateral and the records pertaining to the Collateral
without the use of any judicial process and
without any prior notice to Grantor.

(iv) SALE. MLBFS may sell any or all of the Collateral at public or private
sale upon such terms and conditions as
MLBFS may reasonably deem proper, and MLBFS may purchase any Collateral at any
such public sale; and the net
proceeds of any such public or private sale and all other amounts actually
collected or received by MLBFS pursuant
hereto, after deducting all costs and expenses incurred at any time in the
collection of the Obligations and in the
protection, collection and sale of the Collateral, will be applied to the
payment of the Obligations, with any remaining
proceeds paid to Grantor or whoever else may be entitled thereto, and with
Customer and each guarantor of
Customer's obligations remaining jointly and severally liable for any amount
remaining unpaid after such application.

(v) DELIVERY OF CASH, CHECKS, ETC. MLBFS may require Grantor to forthwith upon
receipt, transmit and deliver
to MLBFS in the form received, all cash, checks, drafts and other instruments
for the payment of money (properly
endorsed, where required, so that such items may be collected by MLBFS) which
may be received by Grantor at any
time in full or partial payment of any Collateral, and require that Grantor
not commingle any such items which may
be so received by Grantor with any other of its funds or property but instead
hold them separate and apart and in trust
for MLBFS until delivery is made to MLBFS.

(vi) NOTIFICATION OF ACCOUNT DEBTORS. MLBFS may notify any Account Debtor that
its Account or Chattel Paper
has been assigned to MLBFS and direct such Account Debtor to make payment
directly to MLBFS of all amounts
due or becoming due with respect to such Account or Chattel Paper; and MLBFS
may enforce payment and collect,
by legal proceedings or otherwise, such Account or Chattel Paper.





(vii) CONTROL OF COLLATERAL. MLBFS may otherwise take control in any lawful
manner of any cash or non-cash items
of payment or proceeds of Collateral and of any rejected, returned, stopped in
transit or repossessed goods included
in the Collateral and endorse Grantor name on any item of payment on or
proceeds of the Collateral, and, in
connection therewith, MLBFS may notify the postal authorities to change the
address for delivery of mail addressed
to Grantor to such address as MLBFS may designate.

(b) SET-OFF. MLBFS shall have the further right upon the occurrence and during
the continuance of an Event of
Default to set-off, appropriate and apply toward payment of any of the
Obligations, in such order of application as
MLBFS may from time to time and at any time elect, any cash, credits,
deposits, accounts, financial assets,
investment property, securities and any other property of Grantor which is in
transit to or in the possession, custody
or control of MLBFS, MLBF&S or any agent, bailee, or affiliate of MLBFS or
MLPF&S. Grantor hereby collaterally
assigns and grants to MLBFS a security interest in all such property as
additional Collateral.

(c) POWER OF ATTORNEY. Effective upon the occurrence and during the
continuance of an Event of Default, Grantor
hereby irrevocably appoints MLBFS as its attorney-in-fact, with full power of
substitution, in its place and stead and
in its name or in the name of MLBFS to from time to time in MLBFS' sole
discretion take any action and to execute
any instrument which MLBFS may deem necessary or advisable to accomplish the
purposes of this Agreement,
including, but not limited to, to receive, endorse and collect all checks,
drafts and other instruments for the payment
of money made payable to Grantor included in the Collateral.

(d) REMEDIES ARE SEVERABLE AND CUMULATIVE. All rights and remedies of MLBFS
herein are severable and
cumulative and in addition to all other rights and remedies available at law
or in equity, and any one or more of such
rights and remedies may be exercised simultaneously or successively. Any
notice required under this Agreement or
under applicable law shall be deemed reasonably and properly given to Grantor
if given at the address and by any
of the methods of giving notice set forth in this Agreement at least 5
Business Days before taking any action specified
in such notice.

(e) NOTICES. To the fullest extent permitted by applicable law, Grantor hereby
irrevocably waives and releases
MLBFS of and from any and all liabilities and penalties for failure of MLBFS
to comply with any statutory or other
requirement imposed upon MLBFS relating to notices of sale, holding of sale or
reporting of any sale, and Grantor
waives all rights of redemption or reinstatement from any such sale. MLBFS
shall have the right to postpone or
adjourn any sale or other disposition of Collateral at any time without giving
notice of any such postponed or
adjourned date. In the event MLBFS seeks to take possession of any or all of
the Collateral by court process, Grantor
further irrevocably waives to the fullest extent permitted by law any bonds
and any surety or security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession, and any demand for possession
prior to the commencement of any suit or action.

8. MISCELLANEOUS

(a) NON-WAIVER. No failure or delay on the part of MLBFS in exercising any
right, power or remedy pursuant to
this Agreement shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy
shall preclude any other or further exercise thereof, or the exercise of any
other right, power or remedy. Neither any
waiver of any provision of this Agreement, nor any consent to any departure by
Grantor therefrom, shall be effective
unless the same shall be in writing and signed by MLBFS Any waiver of any
provision of this Agreement and any
consent to any departure by Grantor from the terms of this Agreement shall be
effective only in the specific instance
and for the specific purpose for which given. Except as otherwise expressly
provided herein, no notice to or demand
on Grantor shall in any case entitle Grantor to any other or further notice or
demand in similar or other
circumstances.

(b) COMMUNICATIONS. All notices and other communications required or permitted
hereunder shall be in writing, and
shall be either delivered personally, mailed by postage prepaid certified mail
or sent by express overnight courier or
by facsimile. Such notices and communications shall be deemed to be given on
the date of personal delivery, facsimile
transmission or actual delivery of certified mail, or one Business Day after
delivery to an express overnight courier.
Unless otherwise specified in a notice sent or delivered in accordance with
the terms hereof, notices and other
communications in writing shall be given to the parties hereto at their
respective addresses set forth at the beginning
of this Agreement, and, in the case of facsimile transmission, to the parties
at their respective regular facsimile
telephone number.

(c) COSTS, EXPENSES AND TAXES. Grantor shall pay or reimburse MLBFS upon
demand for: (i) all Uniform
Commercial Code filing and search fees and expenses incurred by MLBFS in
connection with the verification,
perfection or preservation of MLBFS rights hereunder or in the Collateral;
(ii) any and all stamp, transfer and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery and/or recording of
this Agreement; and (iii) all reasonable fees and out-of-pocket expenses
(including, but not limited to, reasonable fees
and expenses of outside counsel) incurred by MLBFS in connection with the
enforcement of this Agreement or the
protection of MLBFS' rights hereunder, excluding, however, salaries and
expenses of MLBFS' employees. The
obligations of Grantor under this paragraph shall survive the expiration or
termination of this Agreement and the
discharge of the other Obligations.

(d) RIGHT TO PERFORM OBLIGATIONS. If Grantor shall fail to do any act or thing
which it has covenanted to do under
this Agreement or any representation or warranty on the part of Grantor
contained in this Agreement shall be
breached, MLBFS may, in its sole discretion, after 5 Business Days written
notice is sent to Grantor (or such lesser
notice, including no notice, as is reasonable under the circumstances), do the
same or cause it to be done or remedy
any such breach, and may expend its funds for such purpose. Any and all
reasonable amounts so expended by
MLBFS shall be repayable to MLBFS by Grantor upon demand, with interest at the
highest "Interest Rate" under
the Loan Agreement or any document incorporated into in the Loan Agreement, or
the highest interest rate permitted
by law, whichever is less, during the period from and including the date funds
are so expended by MLBFS to the date
of repayment, and any such amounts due and owing MLBFS shall be additional
Obligations. The payment or
performance by MLBFS of any of Grantors obligations hereunder shall not
relieve Grantor of said obligations or of
the consequences of having failed to pay or perform the same, and shall not
waive or be deemed a cure of any
Default.



(e) FURTHER ASSURANCES. Grantor agrees to do such further acts and things and
to execute and deliver to MLBFS
such additional agreements, instruments and documents as MLBFS may reasonably
require or deem advisable to
effectuate the purposes of this Agreement, or to establish, perfect and
maintain MLBFS' security interests and liens
upon the Collateral, including, but not limited to: (i) executing financing
statements or amendments thereto when
and as reasonably requested by MLBFS; and (ii) if in the reasonable judgment
of MLBFS it is required by local law,
causing the owners and/or mortgagees of the real property on which any
Collateral may be located to execute and
deliver to MLBFS waivers or subordinations reasonably satisfactory to MLBFS
with respect to any rights in such
Collateral.

(f) BINDING EFFECT. This Agreement shall be binding upon Grantor and its
successors and assigns, and shall inure to
the benefit of MLBFS and its successors and assigns.

(g) HEADINGS. Captions and section and paragraph headings in this Agreement
are inserted only as a matter of
convenience, and shall not affect the interpretation hereof.

(h) GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of Illinois.

(i) SEVERABILITY OF PROVISIONS. Whenever possible, each provision of this
Agreement shall be interpreted in such
manner as to be effective and valid under applicable law. Any provision of
this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

(j) TERM. This Agreement shall become effective upon acceptance by MLBFS, and,
subject to the terms hereof, shall
continue in effect so long thereafter as either MLBFS shall be committed to
advance funds or extend credit to
Customer or there shall be any Obligations outstanding.

(k) COUNTERPARTS. This Agreement may be executed in one or more counterparts
which, when taken together,
constitute one and the same agreement.

(l) JURISDICTION; WAIVER. GRANTOR ACKNOWLEDGES THAT THIS AGREEMENT IS BEING
ACCEPTED BY MLBFS IN PARTIAL CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN ITS
SOLE DISCRETION, TO ENFORCE THIS AGREEMENT IN EITHER THE STATE OF ILLINOIS OR
IN ANY OTHER JURISDICTION WHERE GRANTOR OR ANY COLLATERAL FOR THE
OBLIGATIONS MAY BE LOCATED. GRANTOR IRREVOCABLY SUBMITS ITSELF TO
JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT
IN THE COUNTY OF COOK FOR SUCH PURPOSES, AND GRANTOR WAIVES ANY AND ALL
RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF ANY SUCH
FORUM, AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM STATE TO FEDERAL
COURT. GRANTOR FURTHER WAIVES ANY RIGHTS TO COMMENCE ANY ACTION AGAINST
MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF COOK AND STATE OF ILLINOIS.
MLBFS AND GRANTOR HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER RELATING TO,
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN AGREEMENT, THIS
AGREEMENT AND/OR ANY OF THE TRANSACTIONS WHICH ARE THE SUBJECT MATTER OF
THE LOAN AGREEMENT OR THIS AGREEMENT. GRANTOR FURTHER WAIVES THE RIGHT TO
BRING ANY NON-COMPULSORY COUNTERCLAIMS.

(m) INTEGRATION. THIS WRITTEN AGREEMENT CONSTITUTES THE ENTIRE UNDERSTANDING AND
REPRESENTS THE FULL AND FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO
THE SUBJECT MATTER HEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR
WRITTEN AGREEMENTS OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE
PARTIES. NO AMENDMENT OR MODIFICATION OF THIS AGREEMENT SHALL BE EFFECTIVE
UNLESS IN A WRITING SIGNED BY BOTH MLBFS AND GRANTOR.

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.

ORBIT INSTRUMENT OF CALIFORNIA, INC.

By:________________________________________________________
     SIGNATURE (1)                                              SIGNATURE (2)


___________________________________________________________________
     Printed Name                              Printed Name


__________________________________________________________________
     Title                                                 Title



Accepted at Chicago, Illinois:

MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC.

By:_______________________________________________



                              EXHIBIT A

ATTACHED TO AND HEREBY MADE A PART OF SECURITY AGREEMENT NO. 885-
07587 BETWEEN MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. AND
ORBIT INSTRUMENT OF CALIFORNIA, INC.



Locations of Tangible Collateral:

MERRILL LYNCH                                      SECURITY
AGREEMENT

SECURITY AGREEMENT ("Agreement") dated as of January 28, 2003, between BEHLMAN
ELECTRONICS, INC., a corporation organized and existing under the laws of the
State of
Delaware having its principal office at 80 Cabot Court, Hauppauge, NY 11788
("Grantor"), and
MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., a corporation organized and
existing under the laws of the State of Delaware having its principal office
at 222 North LaSalle
Street, Chicago, IL 60601 MLBFS.

In order to induce MLBFS. to extend or continue to extend credit to ORBIT
INTERNATIONAL
CORP. ("Customer"), under the Loan Agreement (as defined below) or otherwise,
and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged,
Grantor hereby agrees with MLBFS. as follows:

1. DEFINITIONS

(a) SPECIFIC TERMS. In addition to terms defined elsewhere in this Agreement,
when used herein the
following terms shall have the following meanings:

(i) "Account Debtor" shall mean any party who is or may become obligated with
respect to an
Account or Chattel Paper.

(ii) "Bankruptcy Event" shall mean any of the following: (A) a proceeding
under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt or receivership
law or statute shall
be filed or consented to by Grantor or Customer; or (B) any such proceeding
shall be filed against
Grantor or Customer and shall not be dismissed or withdrawn within sixty (60)
days after filing; or
(C) Grantor or Customer shall make a general assignment for the benefit of
creditors; or (D)
Grantor or Customer shall generally fail to pay or admit in writing its
inability to pay its debts as
they become due; or (E) Grantor or Customer shall be adjudicated a bankrupt or
insolvent.

(iii) "Business Day" shall mean any day other than a Saturday, Sunday, federal
holiday or other day
on which the New York Stock Exchange is regularly closed.

(iv) "Collateral" shall mean all Accounts, Chattel Paper, Contract Rights,
Inventory, Equipment,
Fixtures, General Intangibles, Deposit Accounts, Documents, Instruments,
Financial Assets and
Investment Property of Grantor, howsoever arising, whether now owned or
existing or hereafter
acquired or arising, and wherever located; together with all parts thereof
(including spare parts), all
accessories and accessions thereto, all books and records (including computer
records) directly
related thereto, all proceeds thereof (including, without limitation, proceeds
in the form of Accounts
and insurance proceeds), and the additional collateral described in Section 7
(b) hereof.

(v) "Default" shall mean an "Event of Default", as defined in Section 6
hereof, or any event which
with the giving of notice, passage of time, or both, would constitute such an
Event of Default.

(vi) "Loan Agreement" shall mean that certain WCMA LOAN AND SECURITY AGREEMENT
NO. 885-07587 between Customer and MLBFS. as the same may from time to time be
or have been
amended, restated, extended or supplemented.

(vii) "Location of Tangible Collateral" shall mean the address of Grantor set
forth at the beginning
of this Agreement, together with any other address or addresses set forth on
any exhibit hereto as
being a Location of Tangible Collateral.

(viii) "Obligations" shall mean all liabilities, indebtedness and other
obligations of Customer or
Grantor to MLBFS. howsoever created, arising or evidenced, whether now
existing or hereafter
arising, whether direct or indirect, absolute or contingent, due or to become
due, primary or
secondary or joint or several, and, without limiting the foregoing, shall
include interest accruing after
the filing of any petition in bankruptcy, and all present and future
liabilities, indebtedness and
obligations of Customer under the Loan Agreement and the agreements,
instruments and documents
executed pursuant thereto, and of Grantor under this Agreement.

(ix) "Permitted Liens" shall mean with respect to the Collateral: (A) liens
for current taxes not
delinquent, other non-consensual liens arising in the ordinary course of
business for sums not due,
and, if MLBFS. rights to and interest in the Collateral are not materially and
adversely affected
thereby, any such liens for taxes or other non-consensual liens arising in the
ordinary course of
business being contested in good faith by appropriate proceedings; (B) liens
in favor of MLBFS. and
(C) any other liens expressly permitted in writing by MLBFS.

(b) OTHER TERMS. Except as otherwise defined herein, all terms used in this
Agreement which are
defined in the Uniform Commercial Code of Illinois ("UCC") shall have the
meanings set forth in
the UCC.

2.COLLATERAL

(a) PLEDGE OF COLLATERAL. To secure payment and performance of the
Obligations, Grantor hereby
pledges, assigns, transfers and sets over to MLBFS. and grants to MLBFS. a
first lien and security
interest in and upon all of the Collateral, subject only to Permitted Liens.

(b) Liens. Except upon the prior written consent of MLBFS. Grantor shall not
create or permit to
exist any lien, encumbrance or security interest upon or with respect to any
Collateral now owned
or hereafter acquired other than Permitted Liens.

(c) PERFORMANCE OF OBLIGATIONS, Grantor shall perform all of its obligations
owing on account of
or with respect to the Collateral; it being understood that nothing herein,
and no action or inaction
by MLBFS, under this Agreement or otherwise, shall be deemed an assumption by
MLBFS, of any
of Grantors said obligations.

(d) NOTICE OF CERTAIN EVENTS. Grantor shall give ALBUMS immediate notice of
any attachment,
lien, judicial process, encumbrance or claim affecting or involving $25,000.00
or more of the
Collateral.

(e) INDEMNIFICATION. Grantor shall indemnify, defend and save MLBFS, harmless
from and against
any and all claims, losses, costs, expenses (including, without limitation,
reasonable attorneys' fees
and expenses), demands, liabilities, penalties, fines and forfeitures of any
nature whatsoever which
may be asserted against or incurred by MLBFS, arising out of or in any manner
occasioned by (i)
the ownership, use, operation, condition or maintenance of any Collateral, or
(ii) any failure by
Grantor to perform any of its obligations hereunder; excluding, however, from
said indemnity any
such claims, losses, etc. arising out of the willful wrongful act or active
gross negligence of MLBFS,
This indemnity shall survive the expiration or termination of this Agreement
as to all matters arising
or accruing prior to such expiration or termination.

(f) INSURANCE. Grantor shall insure all of the tangible Collateral with an
insurer or insurers
reasonably acceptable to MLBFS, under a policy or policies of physical damage
insurance
reasonably acceptable to MLBFS, providing that (i) losses will be payable to
MLBFS, as its interests
may appear pursuant to a Lenders Loss Payable endorsement, and (ii) MLBFS,
will receive not less
than 10 days prior written notice of any cancellation; and containing such
other provisions as may
be reasonably required by ALBUMS Grantor shall maintain such other insurance
as may be required
by law or otherwise reasonably required by MLBFS, Grantor shall furnish MLBFS
with a copy or
certificate of each such policy or policies and, prior to any expiration or
cancellation, each renewal
or replacement thereof.

(g) EVENT OF LOSS. Grantor shall at its expense promptly repair all repairable
damage to any tangible
Collateral. In the event that any tangible Collateral is damaged beyond
repair, lost, totally destroyed
or confiscated (an "Event of Loss") and such Collateral had a value prior to
such Event of Loss of
$25,000.00 or more, then, on or before the first to occur of (i) 90 days after
the occurrence of such
Event of Loss, or (ii) 10 Business Days after the date on which either Grantor
or MLBFS, shall
receive any proceeds of insurance on account of such Event of Loss, or any
underwriter of insurance
on such tangible Collateral shall advise either Grantor or MLBFS, that it
disclaims liability in respect
of such Event of Loss, Grantor shall, at Grantors option, either replace the
Collateral subject to such
Event of Loss with comparable Collateral free of all liens other than
Permitted Liens (in which event
Grantor shall be entitled to utilize the proceeds of insurance on account of
such Event of Loss for
such purpose, and may retain any excess proceeds of such insurance), or pay to
MLBFS, on account
of the Obligations an amount equal to the actual cash value of such Collateral
as determined by
either the applicable insurance company's payment (plus any applicable
deductible) or, in absence
of insurance company payment, as reasonably determined by MLBFS,
Notwithstanding the
foregoing, if at the time of occurrence of such Event of Loss or any time
thereafter prior to
replacement or payment, as aforesaid, an Event of Default shall have occurred
and be continuing
hereunder, then MLBFS, may at its sole option, exercisable at any time while
such Event of Default
shall be continuing, require Grantor to either replace such Collateral or make
a payment on account
of the Obligations, as aforesaid.

(h) SALES AND COLLECTIONS. So long as no Event of Default shall have occurred
and be continuing,
Grantor may in the ordinary course of its business: (i) sell any Inventory
normally held by Grantor
for sale, (ii) use or consume any materials and supplies normally held by
Grantor for use or
consumption, and (iii) collect all of its Accounts. Grantor shall take such
action with respect to
protection of its Inventory and the other Collateral and the collection of its
Accounts as MLBFS,
may from time to time reasonably request.

(i) ACCOUNT SCHEDULES. Upon the request of MLBFS, made now or at any time or
times hereafter,
Grantor shall deliver to MLBFS, in addition to the other information required
hereunder, a schedule
identifying, for each Account and all Chattel Paper subject to MLBFS' security
interests hereunder,
each Account Debtor by name and address and amount, invoice number and date of
each invoice.
Grantor shall furnish to MLBFS, such additional information with respect to
the Collateral, and
amounts received by Grantor as proceeds of any of the Collateral, as MLBFS,
may from time to
time reasonably request.

(j) LOCATION. Except for movements in the ordinary course of its business,
Grantor shall give
MLBFS, 30 days' prior written notice of the placing at or movement of any
tangible Collateral to
any location other than a Location of Tangible Collateral. In no event shall
Grantor cause or permit
any tangible Collateral to be removed from the United States without the
express prior written
consent of MLBFS.

(k) ALTERATIONS AND MAINTENANCE. Except upon the prior written consent of
MLBFS, Grantor shall
not make or permit any material alterations to any tangible Collateral which
might materially reduce
or impair its market value or utility. Grantor shall at all times keep the
tangible Collateral in good
condition and repair and shall pay or cause to be paid all obligations arising
from the repair and
maintenance of such Collateral, as well as all obligations with respect to
each Location of Tangible
Collateral, except for any such obligations being contested by Grantor in good
faith by appropriate
proceedings.

3. REPRESENTATIONS AND WARRANTIES

Grantor represents and warrants to MLBFS, that:

(a) GRANTOR. Grantor is a corporation, duly organized and validly existing in
good standing under
the laws of the State of Delaware and is qualified to do business and in good
standing in each other
state where the nature of its business or the property owned by it make such
qualification necessary.

(b) EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery and
performance by Grantor
of this Agreement have been duly authorized by all requisite action, do not
and will not violate or
conflict with any law or other governmental requirement, or any of the
agreements, instruments or
documents which formed or governed Grantor, and do not and will not breach or
violate any of the
provisions of, and will not result in a default by Grantor under, any other
agreement, instrument or
document to which it is a party or by which it or its properties are bound.

(c) NOTICE OR CONSENT. Except as may have been given or obtained, no notice to
or consent or
approval of any governmental body or authority or other third party whatsoever
(including, without
limitation, any other creditor) is required in connection with the execution,
delivery or performance
by Grantor of this Agreement.

(d) VALID AND BINDING. This Agreement is the legal, valid and binding
obligation of Grantor,
enforceable against it in accordance with its terms, except as enforceability
may be limited by
bankruptcy and other similar laws affecting the rights of creditors generally
or by general principles
of equity.

(e) FINANCIAL STATEMENTS. Except as expressly set forth in Grantor's financial
statements, all
financial statements of Grantor furnished to MLBFS have been prepared in
conformity with
generally accepted accounting principles, consistently applied, are true and
correct, and fairly present
the financial condition of it as at such dates and the results of its
operations for the periods then
ended; and since the most recent date covered by such financial statements,
there has been no
material adverse change in any such financial condition or operation.

(f) LITIGATION, ETC. No litigation, arbitration, administrative or
governmental proceedings are
pending or threatened against Grantor, which would, if adversely determined,
materially and
adversely affect the financial condition or continued operations of Grantor,
or the liens and security
interests of MLBFS hereunder.

(g) TAXES. All federal, state and local tax returns, reports and statements
required to be filed by
Grantor have been filed with the appropriate governmental agencies and all
taxes due and payable
by Grantor have been timely paid (except to the extent that any such failure
to file or pay will not
materially and adversely affect either the liens and security interests of
MLBFS hereunder or the
financial condition or continued operations of Grantor).

(h) Collateral. Grantor has good and marketable title to the Collateral, and,
except for any Permitted
Liens: (i) none of the Collateral is subject to any lien, encumbrance or
security interest, and (ii) upon
the filing of all Uniform Commercial Code financing statements executed by
Grantor with respect
to the Collateral or a copy of this Agreement in the appropriate
jurisdiction(s) and/or the completion
of any other action required by applicable law to perfect is lien and security
interests, MLBFS will
have valid and perfected first liens and security interests upon all of the
Collateral.

Each of the foregoing representations and warranties has been and will be
relied upon as an
inducement to MLBFS to advance funds or extend or continue to extend credit to
Customer, and
is continuing and shall be deemed remade by Grantor concurrently with each
such advance or
extension of credit by MLBFS to Customer.

4. FINANCIAL AND OTHER INFORMATION

Grantor covenants and agrees that Grantor will furnish or cause to be
furnished to MLBFS during
the term of this Agreement such financial and other information as may be
required by the Loan
Agreement or any other document evidencing the Obligations or as MLBFS may
from time to time
reasonably request relating to Grantor or the Collateral.

5. OTHER COVENANTS

Grantor further agrees during the term of this Agreement that:

(a) FINANCIAL RECORDS; INSPECTION. Grantor will: (i) maintain complete and
accurate books and
records at its principal place of business, and maintain all of its financial
records in a manner
consistent with the financial statements heretofore furnished to MLBFS, or
prepared on such other
basis as may be approved in writing by MLBFS; and (ii) permit MLBFS or its
duly authorized
representatives, upon reasonable notice and at reasonable times, to inspect
its properties (both real
and personal), operations, books and records.

(b) TAXES. Grantor will pay when due all taxes, assessments and other
governmental charges,
howsoever designated, and all other liabilities and obligations, except to the
extent that any such
failure to pay will not materially and adversely affect either the liens and
security interests of MLBFS
hereunder, or the financial condition or continued operations of Grantor.

(c) COMPLIANCE WITH LAWS AND AGREEMENTS. Grantor will not violate any law,
regulation or other
governmental requirement, any judgment or order of any court or governmental
agency or authority,
or any agreement, instrument or document to which it is a party or by which it
is bound, if any such
violation will materially and adversely affect either the liens and security
interests of MLBFS
hereunder, or the financial condition or continued operations of Grantor.

(d) NOTIFICATION BY GRANTOR. Grantor shall provide MLBFS with prompt written
notification of:
(i) any Default; (ii) any materially adverse change in the business, financial
condition or operations
of Grantor; and (iii) any information which indicates that any financial
statements of Grantor fail in
any material respect to present fairly the financial condition and results of
operations purported to
be presented in such statements. Each notification by Grantor pursuant hereto
shall specify the event
or information causing such notification, and, to the extent applicable, shall
specify the steps being
taken to rectify or remedy such event or information.

(e) NOTICE OF CHANGE. Grantor shall give MLBFS not less than 30 days prior
written notice of any
change in the name (including any fictitious name) or principal place of
business of Grantor.

(f) CONTINUITY. Except upon the prior written consent of MLBFS, which consent
will not be
unreasonably withheld: (i) Grantor shall not be a party to any merger or
consolidation with, or
purchase or otherwise acquire all or substantially all of the assets of, or
any material stock,
partnership, joint venture or other equity interest in, any person or entity,
or sell, transfer or lease
all or any substantial part of its assets, if any such action would result in
either: (A) a material
change in the principal business, ownership or control of Grantor, or (B) a
material adverse change
in the financial condition or operations of Grantor; (ii) Grantor shall
preserve its existence and good
standing in the jurisdiction(s) of establishment and operation; (iii) Grantor
shall not engage in any
material













business substantially different from its business in effect as of the date of
application by Customer
for credit from MLBFS, or cease operating any such material business; (iv)
Grantor shall not cause
or permit any other person or entity to assume or succeed to any material
business or operations of
Grantor; and (iv) Grantor shall not cause or permit any material change in its
controlling ownership.

6. EVENTS OF DEFAULT

The occurrence of any of the following events shall constitute an "Event of
Default" under this
Agreement:

(a) DEFAULT UNDER LOAN AGREEMENT. An Event of Default shall occur under the
terms of the Loan
Agreement.

(b) FAILURE TO PERFORM. Grantor shall default in the performance or observance
of any covenant or
agreement on its part to be performed or observed under this Agreement (not
constituting an Event
of Default under any other clause of this Section), and such default shall
continue unremedied for
10 Business Days after written notice thereof shall have been given by MLBFS
to Grantor.

(c) BREACH OF WARRANTY. Any representation or warranty made by Grantor
contained in this
Agreement shall at any time prove to have been incorrect in any material
respect when made.

(d) DEFAULT UNDER OTHER AGREEMENT. A default or Event of Default by Grantor
shall occur under
the terms of any other agreement, instrument or document with or intended for
the benefit of
MLBFS, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") or any of
their affiliates,
and any required notice shall have been given and required passage of time
shall have elapsed.

(e) SEIZURE OR ABUSE OF COLLATERAL. The Collateral, or any material part
thereof, shall be or become
subject to any levy, attachment, seizure or confiscation which is not released
within 10 Business
Days.

(f) BANKRUPTCY EVENT. Any Bankruptcy Event shall occur.

(g) MATERIAL IMPAIRMENT. Any event shall occur which shall reasonably cause
MLBFS to in good
faith believe that the prospect of payment or performance by Grantor has been
materially impaired.
The existence of such a material impairment shall be determined in a manner
consistent with the
intent of Section 1-208 of the UCC.

(h) ACCELERATION OF DEBT TO OTHER CREDITORS. Any event shall occur which
results in the
acceleration of the maturity of any indebtedness of $100,000.00 or more of
Grantor to another
creditor under any indenture, agreement, undertaking, or otherwise.

7. REMEDIES

(a) REMEDIES UPON DEFAULT Upon the occurrence and during the continuance of
any Event of
Default, MLBFS may at its sole option do any one or more or all of the
following, at such time and
in such order as MLBFS may in its sole discretion choose:

(i) ACCELERATION. MLBFS may declare all Obligations to be forthwith due and
payable, whereupon
all such amounts shall be immediately due and payable, without presentment,
demand for payment,
protest and notice of protest, notice of dishonor, notice of acceleration,
notice of intent to accelerate
or other notice or formality of any kind, all of which are hereby expressly
waived; provided,
however, that upon the occurrence of any Bankruptcy Event all Obligations
shall automatically
become due and payable without any action on the part of MLBFS.

(ii) EXERCISE RIGHTS OF SECURED PARTY. MLBFS may exercise any or all of the
remedies of a secured
party under applicable law, including, but not limited to, the UCC, and any or
all of its other rights
and remedies under this Agreement.

(iii) POSSESSION. MLBFS may require Grantor to make the Collateral and the
records pertaining to
the Collateral available to MLBFS at a place designated by MLBFS which is
reasonably convenient
to Grantor, or may take possession of the Collateral and the records
pertaining to the Collateral
without the use of any judicial process and without any prior notice to Grantor.

(iv) SALE. MLBFS may sell any or all of the Collateral at public or private
sale upon such terms and
conditions as MLBFS may reasonably deem proper, and MLBFS may purchase any
Collateral at any
such public sale; and the net proceeds of any such public or private sale and
all other amounts
actually collected or received by MLBFS pursuant hereto, after deducting all
costs and expenses
incurred at any time in the collection of the Obligations and in the
protection, collection and sale of
the Collateral, will be applied to the payment of the Obligations, with any
remaining proceeds paid
to Grantor or whoever else may be entitled thereto, and with Customer and each
guarantor of
Customer's obligations remaining jointly and severally liable for any amount
remaining unpaid after
such application.

(v) DELIVERY OF CASH, CHECKS, ETC. MLBFS may require Grantor to forthwith upon
receipt,
transmit and deliver to MLBFS in the form received, all cash, checks, drafts
and other instruments
for the payment of money (properly endorsed, where required, so that such
items may be collected
by MLBFS) which may be received by Grantor at any time in full or partial
payment of any
Collateral, and require that Grantor not commingle any such items which may be
so received by
Grantor with any other of its funds or property but instead hold them separate
and apart and in trust
for MLBFS until delivery is made to MLBFS.

(vi) NOTIFICATION OF ACCOUNT DEBTORS. MLBFS may notify any Account Debtor that
its Account
or Chattel Paper has been assigned to MLBFS and direct such Account Debtor to
make payment
directly to MLBFS of all amounts due or becoming due with respect to such
Account or Chattel
Paper; and MLBFS may enforce payment and collect, by legal proceedings or
otherwise, such
Account or Chattel Paper,






(vii) CONTROL OF COLLATERAL. MLBFS may otherwise take control in any lawful
manner of any cash
or non-cash items of payment or proceeds of Collateral and of any rejected,
returned, stopped in
transit or repossessed goods included in the Collateral and endorse Grantor
name on any item of
payment on or proceeds of the Collateral, and, in connection therewith, MLBFS
may notify the
postal authorities to change the address for delivery of mail addressed to
Grantor to such address
as MLBFS may designate.

(b) SET-OFF. MLBFS shall have the further right upon the occurrence and during
the continuance
of an Event of Default to set-off, appropriate and apply toward payment of any
of the Obligations,
in such order of application as MLBFS may from time to time and at any time
elect, any cash,
credits, deposits, accounts, financial assets, investment property, securities
and any other property
of Grantor which is in transit to or in the possession, custody or control of
MLBFS MLPF&S or
any agent, bailee, or affiliate of MLBFS or MLPF&S Grantor hereby collaterally
assigns and grants
to MLBFS a security interest in all such property as additional Collateral.

(c) POWER OF ATTORNEY. Effective upon the occurrence and during the
continuance of an Event of
Default, Grantor hereby irrevocably appoints MLBFS as its attorney-in-fact,
with full power of
substitution, in its place and stead and in its name or in the name of MLBFS
to from time to time
in MLBFS' sole discretion take any action and to execute any instrument which
MLBFS may deem
necessary or advisable to accomplish the purposes of this Agreement,
including, but not limited to,
to receive, endorse and collect all checks, drafts and other instruments for
the payment of money
made payable to Grantor included in the Collateral.

(d) REMEDIES ARE SEVERABLE AND CUMULATIVE. All rights and remedies of MLBFS
herein are
severable and cumulative and in addition to all other rights and remedies
available at law or in
equity, and any one or more of such rights and remedies may be exercised
simultaneously or
successively. Any notice required under this Agreement or under applicable law
shall be deemed
reasonably and properly given to Grantor if given at the address and by any of
the methods of giving
notice set forth in this Agreement at least 5 Business Days before taking any
action specified in such
notice.

(a) NOTICES. To the fullest extent permitted by applicable law, Grantor hereby
irrevocably waives
and releases MLBFS of and from any and all liabilities and penalties for
failure of MLBFS to comply
with any statutory or other requirement imposed upon MLBFS relating to notices
of sale, holding
of sale or reporting of any sale, and Grantor waives all rights of redemption
or reinstatement from
any such sale. MLBFS shall have the right to postpone or adjourn any sale or
other disposition of
Collateral at any time without giving notice of any such postponed or
adjourned date. In the event
MLBFS seeks to take possession of any or all of the Collateral by court
process, Grantor further
irrevocably waives to the fullest extent permitted by law any bonds and any
surety or security
relating thereto required by any statute, court rule or otherwise as an
incident to such possession,
and any demand for possession prior to the commencement of any suit or action.

8. MISCELLANEOUS

(a) NON-WAIVER. No failure or delay on the pad of MLBFS in exercising any
right, power or remedy
pursuant to this Agreement shall operate as a waiver thereof, and no single or
partial exercise of any
such right, power or remedy shall preclude any other or further exercise
thereof, or the exercise of
any other right, power or remedy. Neither any waiver of any provision of this
Agreement, nor any
consent to any departure by Grantor therefrom, shall be effective unless the
same shall be in writing
and signed by MLBFS Any waiver of any provision of this Agreement and any
consent to any
departure by Grantor from the terms of this Agreement shall be effective only
in the specific instance
and for the specific purpose for which given. Except as otherwise expressly
provided herein, no
notice to or demand on Grantor shall in any case entitle Grantor to any other
or further notice or
demand in similar or other circumstances.

(b) COMMUNICATIONS. All notices and other communications required or permitted
hereunder shall
be in writing, and shall be either delivered personally, mailed by postage
prepaid certified mail or
sent by express overnight courier or by facsimile. Such notices and
communications shall be deemed
to be given on the date of personal delivery, facsimile transmission or actual
delivery of certified
mail, or one Business Day after delivery to an express overnight courier.
Unless otherwise specified
in a notice sent or delivered in accordance with the terms hereof, notices and
other communications
in writing shall be given to the parties hereto at their respective addresses
set forth at the beginning
of this Agreement, and, in the case of facsimile transmission, to the parties
at their respective regular
facsimile telephone number.

(c) COSTS, EXPENSES AND TAXES. Grantor shall pay or reimburse MLBFS upon
demand for: (i) all
Uniform Commercial Code filing and search fees and expenses incurred by MLBFS
in connection
with the verification, perfection or preservation of MLBFS rights hereunder or
in the Collateral; (ii)
any and all stamp, transfer and other taxes and fees payable or determined to
be payable in
connection with the execution, delivery and/or recording of this Agreement;
and i all reasonable fees
and out-of-pocket expenses (including, but not limited to, reasonable fees and
expenses of outside
counsel) incurred by MLBFS in connection with the enforcement of this
Agreement or the
protection of MLBFS rights hereunder, excluding, however, salaries and
expenses of MLBFS
employees. The obligations of Grantor under this paragraph shall survive the
expiration or
termination of this Agreement and the discharge of the other Obligations.

(d) RIGHT TO PERFORM OBLIGATIONS. If Grantor shall fail to do any act or thing
which it has
covenanted to do under this Agreement or any representation or warranty on the
part of Grantor
contained in this Agreement shall be breached, MLBFS may, in its sole
discretion, after 5 Business
Days written notice is sent to Grantor (or such lesser notice, including no
notice, as is reasonable
under the circumstances), do the same or cause it to be done or remedy any
such breach, and may
expend its funds for such purpose. Any and all reasonable amounts so expended
by MLBFS shall
be repayable to MLBFS by Grantor upon demand, with interest at the highest
"Interest Rate" under
the Loan Agreement, or under any document incorporated by reference into the
Loan Agreement,
or the highest interest rate permitted by law, whichever is less, during the
period from and including
the date funds are so expended by MLBFS to the date of repayment, and any such
amounts due and
owing MLBFS shall be additional Obligations. The payment or performance by
MLBFS of any of
Grantor's obligations hereunder shall not relieve Grantor of said obligations
or of the consequences
of having failed to pay or perform the same, and shall not waive or be deemed
a cure of any Default.

(e) FURTHER ASSURANCES. Grantor agrees to do such further acts and things and
to execute and
deliver to MLBFS such additional agreements, instruments and documents as
MLBFS may
reasonably require or deem advisable to effectuate the purposes of this
Agreement , or to establish,
perfect and maintain MLBFS' security interests and liens upon the Collateral,
including, but not
limited to: (i) executing financing statements or amendments thereto when and
as reasonably
requested by MLBFS; and (ii) if in the reasonable judgment of MLBFS it is
required by local law,
causing the owners and/or mortgagees of the real property on which any
Collateral may be located
to execute and deliver to MLBFS waivers or subordinations reasonably
satisfactory to MLBFS with
respect to any rights in such Collateral.

(f) BINDING EFFECT. This Agreement shall be binding upon Grantor and its
successors and assigns,
and shall inure to the benefit of MLBFS and its successors and assigns.

(g) HEADINGS. Captions and section and paragraph headings in this Agreement
are inserted only as
a matter of convenience, and shall not affect the interpretation hereof.

(h) GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of
Illinois.

(i) SEVERABILITY OF PROVISIONS. Whenever possible, each provision of this
Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision
in any other jurisdiction.

(j) TERM. This Agreement shall become effective upon acceptance by MLBFS, and,
subject to the
terms hereof, shall continue in effect so long thereafter as either MLBFS
shall be committed to
advance funds or extend credit to Customer or there shall be any Obligations
outstanding.

(k) COUNTERPARTS. This Agreement may be executed in one or more counterparts
which, when taken
together, constitute one and the same agreement.

(l) JURISDICTION; WAIVER. GRANTOR ACKNOWLEDGES THAT THIS AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL CONSIDERATION OF MLBFS' RIGHT
AND OPTION, IN ITS SOLE DISCRETION, TO ENFORCE THIS AGREEMENT IN
EITHER THE STATE OF ILLINOIS OR IN ANY OTHER JURISDICTION WHERE
GRANTOR OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE LOCATED.
GRANTOR IRREVOCABLY SUBMITS ITSELF TO JURISDICTION IN THE STATE OF
ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT IN THE COUNTY OF
COOK FOR SUCH PURPOSES, AND GRANTOR WAIVES ANY AND ALL RIGHTS TO
CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF ANY
SUCH FORUM, AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM
STATE TO FEDERAL COURT. GRANTOR FURTHER WAIVES ANY RIGHTS TO
COMMENCE ANY ACTION AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN
THE COUNTY OF COOK AND STATE OF ILLINOIS. MLBFS AND GRANTOR
HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER
RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN
AGREEMENT, THIS AGREEMENT AND/OR ANY OF THE TRANSACTIONS WHICH
ARE THE SUBJECT MATTER OF THE LOAN AGREEMENT OR THIS AGREEMENT.
GRANTOR FURTHER WAIVES THE RIGHT TO BRING ANY NON-COMPULSORY
COUNTERCLAIMS.

(m) INTEGRATION. THIS WRITTEN AGREEMENT CONSTITUTES THE ENTIRE
UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF,
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN
AGREEMENTS OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS OF THE PARTIES. NO AMENDMENT OR MODIFICATION OF THIS
AGREEMENT SHALL BE EFFECTIVE UNLESS IN A WRITING SIGNED BY BOTH
MLBFS AND GRANTOR.

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above
written.

BEHLMAN ELECTRONICS, INC.

By:________________________________________________________
     SIGNATURE (1)                                              SIGNATURE (2)


___________________________________________________________________
     Printed Name                              Printed Name


__________________________________________________________________
     Title                                                 Title















Accepted at Chicago, Illinois:

MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC.

By:______________________________










                              EXHIBIT A

ATTACHED TO AND HEREBY MADE A PART OF SECURITY AGREEMENT NO. 885-
07587 BETWEEN MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. AND
BEHLMAN ELECTRONICS, INC.

Locations of Tangible Collateral:

4532 Telephone Road
Suite 103
Ventura, CA 93003






MERRILL LYNCH                         LANDLORD'S SUBORDINATION
AGREEMENT

The undersigned LANDLORD is the record owner and lessor to ORBIT INTERNATIONAL
CORP.
(''Tenant') of the real property commonly known as 80 Cabot Court, Hauppauge,
NY 11788 (the
"Premises").

Landlord has been advised that MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
("MLBFS") has or is about to lend moneys to, extend or continue to extend
credit to or for the
benefit of, or enter into another financial accommodation with, Tenant, or for
the benefit of a third
party based upon the credit and/or collateral of Tenant, and in connection
therewith that Tenant has
granted or is about to grant to MLBFS a security interest in, among other
collateral, the following
property of Tenant; to wit:

     all accounts receivable, equipment, inventory, removable trade fixtures
and other tangible
     and intangible personal property now or hereafter owned by Tenant
("MLBFS' Collateral").

Among other conditions thereof, MLBFS has required that Landlord execute and
deliver this
Agreement.

Accordingly, and for valuable consideration, the receipt and sufficiency of
which is hereby
acknowledged, Landlord hereby agrees as follows:

1. Landlord hereby subordinates for the benefit of MLBFS, and with respect to
all present and future
obligations of or secured by Tenant to MLBFS, any right or interest in MLBFS'
Collateral which,
but for this Agreement, would or might be prior to the security interests of
MLBFS, as aforesaid;
and Landlord agrees so long as Tenant shall be obligated to MLBFS, it will
not, without the prior
consent of MLBFS, exercise any right under local law to levy or distrain upon
any of MLBFS'
Collateral.

2. Landlord further agrees that in the event that MLBFS shall at any time seek
to take possession
of or remove all or any part of MLBFS' Collateral from the Premises, Landlord
will not hinder the
same or interfere or object thereto, and Landlord hereby consents to MLBFS'
entry upon the
Premises for such purposes; provided, however, that: (i) any such removal
shall be made during
reasonable business hours; (ii) MLBFS shall not, without the prior written
consent of Landlord,
conduct any public or auction sale on the Premises; and (iii) MLBFS shall
promptly at its expense
repair any damage to the Premises directly caused by any such removal by MLBFS
or its agents of
MLBFS' Collateral from the Premises.

This Agreement shall be binding upon and shall inure to the benefit of
Landlord and it
successors, assigns, heirs and/or personal
representatives, as applicable, and MLBFS and its successors and assigns.

Dated as of January 28, 2003.

LANDLORD:

By:________________________________________________________
     SIGNATURE (1)                                              SIGNATURE (2)


___________________________________________________________________
     Printed Name                              Printed Name


__________________________________________________________________
     Title                                                 Title
,
  I

MERRILL LYNCH                         LANDLORD'S SUBORDINATION
AGREEMENT

The undersigned LANDLORD is the record owner and lessor to ORBIT INSTRUMENT OF
CALIFORNIA, INC. ("Teriant") of the real property commonly known as 80 Cabot
Court,
Hauppauge, NY 11788 (the "Premises").

Landlord has been advised that MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
("MLBFS") has or is about to lend moneys to, extend or continue to extend
credit to or for the
benefit of, or enter into another financial accommodation with, Tenant, or for
the benefit of a third
party based upon the credit and/or collateral of Tenant, and in connection
therewith that Tenant has
granted or is about to grant to MLBFS a security interest in, among other
collateral, the following
property of Tenant; to wit:

     all accounts receivable, equipment, inventory, removable trade fixtures
and other tangible
     and intangible personal property now or hereafter owned by Tenant
("MLBFS' Collateral").

Among other conditions thereof, MLBFS has required that Landlord execute and
deliver this
Agreement.

Accordingly, and for valuable consideration, the receipt and sufficiency of
which is hereby
acknowledged, Landlord hereby agrees as follows:

1. Landlord hereby subordinates for the benefit of MLBFS, and with respect to
all present and future
obligations of or secured by Tenant to MLBFS, any right or interest in MLBFS'
Collateral which,
but for this Agreement, would or might be prior to the security interests of
MILKS, as aforesaid;
and Landlord agrees so long as Tenant shall be obligated to MLBFS, it will
not, without the prior
consent of MLBFS, exercise any right under local law to levy or distrain upon
any of MLBFS'
Collateral.

2. Landlord further agrees that in the event that MLBFS shall at any time seek
to take possession
of or remove all or any part of MLBFS' Collateral from the Premises, Landlord
will not hinder the
same or interfere or object thereto, and Landlord hereby consents to MLBFS'
entry upon the
Premises for such purposes; provided, however, that: (i) any such removal
shall be made during
reasonable business hours; (ii) MLBFS shall not, without the prior written
consent of Landlord,
conduct any public or auction sale on the Premises; and (iii) MLBFS shall
promptly at its expense
repair any damage to the Premises directly caused by any such removal by MLBFS
or its agents of
MLBFS' Collateral from the Premises.

This Agreement shall be binding upon and shall inure to the benefit of
Landlord and it
successors, assigns, heirs and/or personal representatives, as
applicable, and MLBFS and its successors and assigns.

Dated as of January 28, 2003.

LANDLORD:

By:________________________________________________________
     SIGNATURE (1)                                              SIGNATURE (2)


___________________________________________________________________
     Printed Name                              Printed Name


__________________________________________________________________
     Title                                                 Title




MERRILL LYNCH                      COLLATERAL REMOVAL
AGREEMENT

The undersigned LANDLORD is the record owner and lessor to BEHLMAN
ELECTRONICS, INC.
(''Tenant') of the real property commonly known as 4532 Telephone Road, Suite
105, Ventura, CA
93003 (the "Premises").

Landlord has been advised that MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
("MLBFS") has or is about to lend moneys to, extend or continue to extend
credit to or for the
benefit of, or enter into another financial accommodation with, Tenant, or for
the benefit of a third
party based upon the credit and/or collateral of Tenant, and in connection
therewith that Tenant has
granted or is about to grant to MLBFS a security interest in, among other
collateral, the following
property of Tenant; to wit:

     all accounts receivable, equipment, inventory, removable trade fixtures
and other tangible
     and intangible personal property now or hereafter owned by Tenant
("MLBFS' Collateral").

Among other conditions thereof, MLBFS has required that Landlord execute and
deliver this
Agreement.

Accordingly, and for valuable consideration, the receipt and sufficiency of
which is hereby
acknowledged, Landlord hereby agrees that in the event that MLBFS shall at any
time seek to take
possession of or remove all or any part of MLBFS' Collateral from the
Premises, Landlord will not
hinder the same or interfere or object thereto, and Landlord hereby consents
to MLBFS' entry upon
the Premises for such purposes; provided, however, that: (i) any such removal
shall be made during
reasonable business hours; (ii) MLBFS shall not, without the prior written
consent of Landlord,
conduct any public or auction sale on the Premises; and (iii) MLBFS shall
promptly at its expense
repair any damage to the Premises directly caused by any such removal by MLBFS
or its agents of
MLBFS' Collateral from the Premises.

This Agreement shall be binding upon and shall inure to the benefit of
Landlord and it successors,
assigns, heirs and/or personal representatives, as applicable, and MLBFS and
its successors and
assigns.

Dated as of January 28, 2003.

LANDLORD:

By:________________________________________________________
     SIGNATURE (1)                                              SIGNATURE (2)


___________________________________________________________________
     Printed Name                              Printed Name


__________________________________________________________________
     Title                                                 Title


MERRILL LYNCH                         LANDLORD'S SUBORDINATION
AGREEMENT

The undersigned LANDLORD is the record owner and lessor to BEHLMAN
ELECTRONICS, INC.
("Tenant") of the real property commonly known as 80 Cabot Court, Hauppauge,
NY 11788 (the
"Premises").

Landlord has been advised that MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
("MLBFS") has or is about to lend moneys to, extend or continue to extend
credit to or for the
benefit of, or enter into another financial accommodation with, Tenant, or for
the benefit of a third
party based upon the credit and/or collateral of Tenant, and in connection
therewith that Tenant has
granted or is about to grant to MLBFS a security interest in, among other
collateral, the following
property of Tenant; to wit:

     all accounts receivable, equipment, inventory, removable trade fixtures
and other tangible
     and intangible personal property now or hereafter owned by Tenant
("MLBFS' Collateral").

Among other conditions thereof, MLBFS has required that Landlord execute and
deliver this
Agreement.

Accordingly, and for valuable consideration, the receipt and sufficiency of
which is hereby
acknowledged, Landlord hereby agrees as follows:

1. Landlord hereby subordinates for the benefit of MLBFS, and with respect to
all present and future
obligations of or secured by Tenant to MLBFS, any right or interest in MLBFS'
Collateral which,
but for this Agreement, would or might be prior to the security interests of
MLBFS, as aforesaid;
and Landlord agrees so long as Tenant shall be obligated to MLBFS, it will
not, without the prior
consent of MLBFS, exercise any right under local law to levy or distrain upon
any of MLBFS~
Collateral.

2. Landlord further agrees that in the event that MLBFS shall at any time seek
to take possession
of or remove all or any part of MLBFS' Collateral from the Premises, Landlord
will not hinder the
same or interfere or object thereto, and Landlord hereby consents to MLBFS'
entry upon the
Premises for such purposes; provided, however, that: (i) any such removal
shall be made during
reasonable business hours; (ii) MLBFS shall not, without the prior written
consent of Landlord,
conduct any public or auction sale on the Premises; and (iii) MLBFS shall
promptly at its expense
repair any damage to the Premises directly caused by any such removal by MLBFS
or its agents of
MLBFS' Collateral from the Premises.

This Agreement shall be binding upon and shall inure to the benefit of
Landlord and it
successors, assigns, heirs and/or personal representatives, as

applicable, and MLBFS and its successors and assigns.
Dated as of January 28, 2003.

LANDLORD: ___________________________________________________________________


By: _________________________________________________________________________
     (Signature 1)        (Signature 2)


_____________________________________________________________________________
___________
     (Printed Name)       (Printed Name)


_____________________________________________________________________________
___________
     (Title)              (Title)






PLEASE FURNISH THIS FORM TO YOUR INSURANCE AGENT, OR FILL IN YOUR
AGENTS NAME, ADDRESS AND PHONE NUMBER, SIGN AND RETURN THE FORM,
AND WE WILL DIRECTLY REQUEST THE REQUIRED CERTIFICATE OF
INSURANCE,

CUSTOMER'S INSURANCE AGENT:
(Name, address & phone #)

     ______________________________

     ______________________________
_
     ______________________________

     ______________________________

     ______________________________


In connection with one or more credit facilities from MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC. ("MLBFS") to or for the benefit of ORBIT
INTERNATIONAL CORP. ("Customer"), you are hereby authorized and directed by
Customer to provide and maintain the following policies of insurance for the
benefit of MLBFS
at the expense of Customer, and to FURNISH TO MLBFS A CERTIFICATE OF EACH
POLICY of insurance
and, not later than 10 days prior to expiration, a certificate of EACH RENEWAL
POLICY, as follows:

PROPERTY DAMAGE INSURANCE

(a) PROPERTY DAMAGE INSURANCE with all risk clauses on the contents located at
80 Cabot Court,
Hauppauge, NY 11788 and all Additional Locations of Tangible Collateral (the
"Business
Personal Property").

(b) MLBFS should be named as Loss Payee on the Business Personal Property and
the policy
must include a LENDER'S LOSS PAYABLE ENDORSEMENT in favor of MLBFS.

(c) MLBFS must receive NOT LESS THAN 30 DAYS PRIOR WRITTEN NOTICE OF ANY
CANCELLATION or
material modification.

Each certificate should be mailed to MLBFS as follows:

     MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
     222 NORTH LASALLE STREET, 17TH FLOOR
     CHICAGO, IL 60601


Very truly yours,

ORBIT INTERNATIONAL CORP.


By:
_____________________________________________________________________________
__
     Signature (1)          Signature (2)

_____________________________________________________________________________
_____
     Printed Name           Printed Name

_____________________________________________________________________________
_____
     Title                  Title




    Private Client Group
    Merrill Lynch Business
    Financial Services Inc.
    222 North LaSalle Street
    17th Floor
    Chicago, Illinois 60601
    (312) 499-3121
    FAX: (312) 201-0210
MERRILL LYNCH


                                   January 28, 2003

Mr. Mitchell Binder
Orbit International Corp.
80 Cabot Court
Hauppauge, NY 11788

                                                             Re: WCMA LINE OF
CREDIT APPROVAL

Dear Mr. Binder,

As I believe you know, we have approved the request of Orbit International
Corp. ("Customer") for
a WCMA Line of Credit upon the terms and conditions set forth in the enclosed
documents ("Loan
Documents").

For your information, the following are some of the principal terms of the
approval:

     MAXIMUM WCMA LINE OF CREDIT: An amount Equal to the lesser of. (A)
$2,000,000.00,
     or (B) 80% of Customer's Accounts and Chattel Paper, as shown on its
regular books and
     records (excluding Accounts over 90 days old, Accounts directly or
indirectly due from any
     person or entity not domiciled in the United States , Accounts arising
out of bonded jobs,
     retainage or from any shareholder, officer or employee of Customer or any
affiliated entity),
     and 50% of raw  material Customer's Inventory as shown on its regular
books and records
     up to a maximum of $750,000.

     WCMA INTEREST RATE: Variable at a per annum rate equal to the sum of
2.75% plus the
     one-month LIBOR (as published in The Wall Street Journal, based upon
actual days elapsed
     over a 360-day year.

     INITIAL EXPIRATION DATE: January 31, 2004 (subject to renewal annually
thereafter).

     ANNUAL WCMA LINE FEE: $15,000.00.

Please refer to the Loan Documents for a complete statement of the terms.

In addition to conditions set forth in the Loan Documents, our approval is
subject to:

(a) The payment by Customer of an amount equal to the greater of the cost of
all Uniform
Commercial Code filing and search fees and expenses incurred by MLBFS in
connection with the
verification, perfection or preservation of MLBFS' rights thereunder or
$175.00 (the "Search
Deposit') to cover the cost of all Uniform Commercial Code filing and search
fees and expenses
(including tax searches) incurred by MLBFS in connection with the
verification, perfection or
preservation of MLBFS' rights thereunder. To the extent the Search Deposit has
not been received
by MLBFS, Customer hereby authorizes MLBFS, at its option, to either cause the
Search Deposit
or any remaining outstanding balance thereof to be paid on the Activation Date
with a WCMA
Loan, or invoice Customer for such Line Fee (in which event Customer shall pay
said fee within 5
Business Days after receipt of such invoice).

(b) The valid subscription and continued maintenance by Customer of a Working
Capital
Management Account with Merrill Lynch, Pierce, Fenner and Smith Incorporated
for use in
connection with the WCMA Line of Credit, which subscription and maintenance
shall be evidenced
on Merrill Lynch's computer system.

(c) Our receipt of all of the Loan Documents together with any additional
documents contemplated
thereby or otherwise reasonably required by us, all of which shall be duly
executed and, if applicable,
recorded, and all of which shall be in form and substance satisfactory to us.

(d) Acceptance by us in writing of the executed Loan Documents at our office
in Chicago after
review and a final determination by us of the consistency of the Loan
Documents with our original
internal credit approval. (Without limiting the foregoing, it should be
understood that prior to such
acceptance we are not bound by any clerical or other errors in or omissions
from the Loan
Documents.)

(e) Our continuing satisfaction with the financial condition of Customer and
each guarantor of
Customer's obligations to us.

(f) There not occurring any event which under the terms of the Loan Documents
would constitute
a Default.

(g) Evidence satisfactory to us of the perfection and priority of any liens
required by us in the Loan
Documents.

(h) Our receipt of a Certificate of Insurance satisfactory to us evidencing a
policy or policies of
physical damage insurance on the tangible collateral described in the Loan
Documents, AND
PROVIDING THAT LOSSES SHALL BE PAYABLE TO US AS OUR INTERESTS MAY APPEAR
PURSUANT TO A
LENDER'S LOSS PAYABLE ENDORSEMENT, AND THAT WE SHALL RECEIVE NOT LESS THAN 10
DAYS PRIOR
NOTICE OF ANY CANCELLATION OR MATERIAL AMENDMENT.

(i) Our receipt and satisfaction with a payoff letter from Rosenthal &
Rosenthal, Inc. setting forth:
(i) a payoff balance as of a specified date; (ii) a per them interest charge;
(iii) wire transfer
instructions; and (iv) a statement that upon receipt of the payoff amount said
bank will terminate all
of its liens and security interests on Customer's assets, and remit stamped
copies of UCC termination
Statements and/or other appropriate evidence of such termination to us. A form
of payoff letter is
enclosed.

IN ADDITION TO THE FOREGOING, OUR APPROVAL IS SUBJECT TO OUR RECEIPT (WHERE
APPLICABLE) AND
SATISFACTION WITH THE FOLLOWING:

(1) FINANCIAL REFERENCE FROM ROSENTHAL & ROSENTHAL, INC.

(2) TRADE REFERENCE FROM KORRY ELECTRONICS, INC.;

(3) CUSTOMER REFERENCE FROM LOCKHEED MARTIN CORP.;

(4) INVENTORY REPORT DATED DECEMBER 31, 2002 WITH BREAKOUT OF RAW MATERIALS,
WORK-IN-
PROGRESS AND FINISHED GOODS;

(5) VISIT BY MLBFS REPRESENTATIVE PRIOR TO FUNDING;

(6) MLBFS WILL REQUIRE PRE-FUNDING COLLATERAL AUDIT BY AUDITOR ACCEPTABLE TO
MLBFS; THE
COST OF THE SUBJECT AUDIT WILL BE THE SOLE RESPONSIBILITY OF THE CUSTOMER;

(7) A BREAKOUT OF STOCK OWNERSHIP GREATER THAN 5%; AND

(8) A CERTIFICATE OF GOOD STANDING FROM THE SECRETARY OF STATE, DELAWARE FOR
THE ORBIT
INTERNATIONAL CORP.

Our approval will remain open subject to said conditions until February 26,
2003, after which time
it shall be void.

Note that the Loan Documents require an initial WCMA Line Fee of $15,000.00.
This fee will be
charged to Customer's WCMA Account after the Loan Documents have been executed
and returned
to us. Note further that under the terms of the Loan Documents Customer is
responsible for UCC
filing and search fees and expenses and any taxes in connection with the Loan
Documents and/or
such filing.

In addition to such Line Fee the Loan Documents require Customer to pay or
reimburse MLBFS
for the cost of all Uniform Commercial Code filing and search fees and
expenses incurred by
MLBFS in connection with the verification, perfection or


preservation of MLBFS' rights thereunder. To which extent, an initial money
deposit of $175.00
is hereby requested. Upon receipt of this deposit, MLBFS will conduct or have
conducted lien, tax,
litigation and other related searches of the proposed borrower and any
business entity providing
collateral. This deposit will be applied to Search Deposit, as hereinafter
described.

To assist you in completing the Loan Documents, we have affixed a "Sign Here"
sticker to each
page requiring a signature, and have penciled an "x" in front of each
signature line.

In order to minimize signature requirements, we normally seek only one copy of
each of the Loan
Documents. After the WCMA Line of Credit has been activated, we will return a
fully executed
duplicate copy for your records.

Although we will endeavor to make the WCMA Line of Credit available as soon as
feasible after
the conditions of our approval have been met, there may be system delays of up
to several days until
actual availability. Accordingly, we suggest that you contact us prior to your
initial use of the
WCMA line.

If you have any questions about our approval or the structure or terms of the
facility, please call
Steven Anderson at 312/499-3177. If you have any questions about the Loan
Documents, please
call me at (312) 499-3121.

Very truly yours,

MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC.

By: _________________________________________
     Tanya Y. Igess
     Documentation Manager

cc:                                                               Mr. Wayne J
Dedrick
  Steven Anderson


JANUARY 28, 2003

To: ROSENTHAL & ROSENTHAL, INC.

ATTENTION: __________________________________


PHONE NUMBER: _____________________________


Ladies and Gentlemen:

You are hereby authorized and directed to furnish to MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC., 222 NORTH LASALLE STREET, 17TH FLOOR, CHICAGO, IL 60601
("MLBFS"):

1. A payoff letter in the form attached hereto setting forth the amounts
necessary to pay off all
loans and obligations of the undersigned to you and the other information set
forth on said form;
and

2. Such information about the undersigned's loans and obligations, credit
history and the
relationship between you and the undersigned as may be requested by MLBFS.

If and when all of the undersigned's said loans and obligations have been
fully paid and satisfied,
please forward LICC and/or other applicable lien terminations directly to MLBFS.

Very truly yours,

ORBIT INTERNATIONAL CORP.


By: ___________________________________________________


Title: __________________________________________________





                     ROSENTHAL & ROSENTHAL, INC.
                            PAYOFF LETTER



                                Date: _________________

Merrill Lynch Business Financial Services Inc.
222 North LaSalle Street, 17th Floor
Chicago, IL 60601

Ladies and Gentlemen:

In accordance with the request of ORBIT INTERNATIONAL CORP. ("Customer"), the
following are the amounts necessary to fully pay off all loans and other
obligations of Customer
to ROSENTHAL & ROSENTHAL, INC.:

Loan No(s): _________________________________________________________

Balance of Principal & Interest as of __________, 2003: $_______________

Per Diem Interest: $________________

Funds to pay off said loan(s) should be wire transferred to:

ROSENTHAL & ROSENTHAL, INC.

     Bank's Address:_________________________________________

     ______________________________________________________


     Routing #:______________________________________________


     Account Name:__________________________________________


     Account #:______________________________________________


     Attention:_______________________________________________


     Phone #:________________________________________________

Upon our receipt of the above-referenced wire transfer, all security
interests, mortgages, deeds
of trust and other liens or
encumbrances that we may have with respect to property of Customer and/or
___________________            (collectively the "Loan Parties") will
immediately
terminate and cease to be effective. We shall not at any time after the date
hereof take or
authorize any action to be taken which would continue or amend such security
interests which
are to be so terminated and released.

We further agree that upon your request, we will execute and deliver to you
such statements or
other instruments or documents or take such action or actions from time to
time as may be
necessary and required in order to enable you to effectuate the terminations
and releases of all
security interests, mortgages, deeds of trust and other liens or encumbrances
that we may have
with respect to property of Customer or any Loan Party.

Very truly yours,

ROSENTHAL & ROSENTHAL, INC.


By:___________________________________________


Title:__________________________________________
     (Must be signed by an Officer)



MERRILL LYNCH                                    COMPLIANCE
CERTIFICATE

To:
  Merrill Lynch Business Financial Services Inc. ("MLBFS")
  222 North LaSalle Street
  17th Floor
  Chicago, IL 60601

The undersigned, on behalf of ORBIT INTERNATIONAL CORP. ("Customer"), hereby
certifies to MLBFS that: (i) he/she is an officer authorized to execute and
deliver this certificate
on behalf of Customer, and is familiar with the business and financial
condition of the Customer;
(ii) the financial statements delivered with this Certificate fairly present
in all material respects
the results of operations and financial condition of Customer; and (iii) to
the best of my
knowledge and belief, after reasonable investigation, each of the following
statements is true and
correct as of the date hereof: (a) no Event of Default, or event which with
the giving of notice,
passage of time, or both, would constitute and Event of Default, has occurred
or is continuing,
(b) no material adverse change in the financial condition of Customer has
occurred or is
continuing, and (c) the attached annexations, which are hereby incorporated
herein by reference,
are accurate, true and correct, and do not fail to state any material fact
known (or should have
been known) to Customer which would, but for the lapse of time, make any such
statement or
calculation false in any respect.

DATE:____________________________


ORBIT INTERNATIONAL CORP.


By:________________________________________________________________
     SIGNATURE (1)          SIGNATURE (2)


___________________________________________________________________
     Printed Name                                              Printed Name


___________________________________________________________________
     Title                  Title


                   INSTRUCTIONS: IN ACCORDANCE WITH THE TERMS OF THE LOAN
AGREEMENT (TO WHICH THIS ORIGINAL FORM OF
                   COMPLIANCE CERTIFICATE IS ATTACHED AS EXHIBIT B), THIS
COMPLIANCE CERTIFICATE AND THE ATTACHED
                   ANNEXATIONS MUST BE COMPLETED BY YOU WITHIN 45 DAYS
AFTER THE CLOSE OF EACH FISCAL QUARTER. MLBFS
                   EXPECTS YOU TO MAKE COPIES OF THIS ORIGINAL FORM OF
COMPLIANCE CERTIFICATE AND SEND THEM TO MLBFS WITHOUT
                   NOTIFICATION OR REMINDER. ADDITIONAL COPIES WILL BE
PROVIDED TO YOU UPON REQUEST.
I

                  FIXED CHARGE COVERAGE RATIO ANNEX
       TO COMPLIANCE CERTIFICATE (EXHIBIT B TO LOAN AGREEMENT)

Customers "Fixed Charge Coverage Ratio" shall at all times exceed 1.5 to 1.
For purposes
hereof, "Fixed Charge Coverage Ratio" shall mean the ratio of: (a) income
before interest
(including payments in the nature of interest under capital leases), taxes,
depreciation,
amortization, and other non-cash charges, minus any internally financed
capital expenditures, to
(b) the sum of the aggregate principal and interest paid or accrued, the
aggregate rental under
capital leases paid or accrued, any dividends and other distributions paid or
payable to
shareholders, and taxes paid in cash; all as determined on a trailing 12-month
basis as set forth in
Customer's regular quarter financial statements prepared in accordance with
GAAP.

As of__________________(insert quarter-end date):

Net after-tax income
             $________________
taxes (+)          $________________
interest (+)       $________________
depreciation (+)      $________________
amortization (+)      $________________
other non-cash charges (+)
             $________________
Internally financed capital expenditures (-)
             $________________

(a) Total EBITDA (=)
$__________________
 principal and interest $___________
 rents under capital leases (+)
 $________________
 div./distr. to owners (+)
$________________
 taxes paid in cash (+) $___________
(b) Total fixed charges (=)
$__________________

Fixed Charge Coverage Ratio (a/b) _________to 1.


                              In Compliance? Yes No




                   TOTAL DEBT TO EBITDA RATIO ANNEX
       TO COMPLIANCE CERTIFICATE (EXHIBIT B TO LOAN AGREEMENT)

Customer's "Total Debt to EBITDA Ratio" shall not at any time exceed 2.5 to 1.
For purposes
hereof, "Total Debt to EBITDA Ratio" shall mean the ratio of (a) all debt for
borrowed money
including all outstanding and unused availability under any revolving credit
facility, and including
debt to MLBFS, to (b) income before interest (including payments in the nature
of interest under
capital leases), taxes, depreciation, amortization, and other non-cash
charges; all as determined
on a trailing 12-month basis as set forth in Customer's regular quarter
financial statements
prepared in accordance with GAAP.

As of ______________(insert quarter-end date):

(a) total debt for borrowed money
  $______________

  Net after-tax income $______________
  TAXES (+)         $______________
  INTEREST (+)      $______________
  DEPRECIATION (+)       $______________
  AMORTIZATION (+)       $______________
  other non-cash charges (+)
$______________
(b) EBITDA (=)
  $_____________


Total Debt to EBITDA Ratio (a/b)________ to 1.

                              In Compliance? Yes No




                   BORROWING BASE CALCULATION ANNEX
    TO BORROWING BASE CERTIFICATE (EXHIBIT B-1 TO LOAN AGREEMENT)

As set forth in the Loan Agreement, the "Maximum WCMA Line of Credit" shall
mean, as of
any date of determination thereof, an amount Equal to the lesser of-. (A)
$2,000,000.00, or (B)
80% of Customer's Accounts and Chattel Paper, as shown on its regular books
and records
(excluding Accounts over 90 days old, Accounts directly or indirectly due from
any person or
entity not domiciled in the United States , Accounts arising out of bonded
jobs, retainage or
from any shareholder, officer or employee of Customer or any affiliated
entity), and 50% of raw
material Customer's Inventory as shown on its regular books and records up to
a maximum of
$750,000.00.

As of _________________(insert quarter-end date):


ACCOUNTS RECEIVABLE
     1 .Beginning Gross Accounts Receivable       $____________
     2.Add: New Sales         $____________
     3.Less: Collections (payments received)      $(___________)
     4.Less: Adjustments      $(___________)
     5.Ending Gross Accounts Receivable      $____________
     6.Less: Exclusions from A/R Borrowing Base:  $____________
     7.Accounts over 90 days old   $____________
     8.Accounts due from a shareholder, officer or employee of
        Customer, Business Guarantor(s) or any affiliate(s)
      $____________
     9.Accounts directly or indirectly due from any person or entity not
        domiciled in the United States
$____________
     10. Accounts arising out of bonded jobs, retainage
                                   $____________
     11. Other (as defined by MLBFS)             $____________
     12. TOTAL EXCLUDED A/R         $(___________)
     13. Eligible Accounts Receivable
$____________
     14. Advance rate on Accounts Receivable                                80%
     15. AVAILABILITY ON ACCOUNTS RECEIVABLE
$____________

INVENTORY
  1 . Ending Inventory
$____________
  2. Less: Exclusions from Inventory Borrowing Base:
  3. Other (as defined by MLBFS)    $_____________
  4. TOTAL EXCLUDED INVENTORY       $(___________)
  5. Eligible Inventory
$____________
  6. Advance Rate on Inventory             50%
  7. AVAILABILITY ON INVENTORY
$____________

TOTAL COLLATERAL BORROWING BASE AVAILABLE
$____________



                                                  Exhibit 23

INDEPENDENT AUDITOR'S CONSENT

To the Board of Directors
Orbit International Corp. and Subsidiaries


We hereby consent to the incorporation by reference in Registration Number
333-25979 on Form
S-8 of our report dated February 28, 2003, on the consolidated balance sheet
of Orbit International
Corp. and Subsidiaries as of December 31, 2002 and 2001 and the related
consolidated statements
of operations, stockholders' equity and cash flows for the years then ended,
which appear in the
December 31, 2002 annual report on Form 10-KSB of Orbit International Corp.



GOLDSTEIN GOLUB KESSLER LLP
New York, New York

March 28, 2003



                                                  Exhibit 99 (a)

                      CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, Dennis Sunshine, Chief Executive Officer of Orbit International Corp.,
certify,
pursuant to 18 U.S.C. section 1350, as enacted by section 906 of the
Sarbanes-Oxley Act of 2002, that:
     (1)  the Annual Report on Form 10-KSB for the year ended December 31,
2002 (the
"Annual Report") which this statement accompanies fully complies with the
requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     (2)  information contained in the Periodic Report fairly presents, in all
material
respects, the financial condition and results of operations of Orbit
International Corp.
Dated: March 28, 2003
                                 /s/ Dennis Sunshine
                                 Dennis Sunshine
                                 Chief Executive Officer

                                                  Exhibit 99 (b)

                      CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     I, Mitchell Binder, Chief Financial Officer of Orbit International Corp.,
certify, pursuant
to 18 U.S.C. section 1350, as enacted by section 906 of the Sarbanes-Oxley Act
of 2002, that:
     (1)  the Annual Report on Form 10-KSB for the year ended December 31,
2002 (the
"Periodic Report") which this statement accompanies fully complies with the
requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     (2)  information contained in the Periodic Report fairly presents, in all
material
respects, the financial condition and results of operations of Orbit
International Corp.
Dated: March 28, 2003
                                 /s/ Mitchell Binder
                                 Mitchell Binder
                                   Chief Financial Officer