SECURITY AGREEMENT


         THIS SECURITY AGREEMENT (the "Security  Agreement") is made and entered
into as of September 24, 1997,  between  ELXSI,  a California  corporation  (the
"Debtor"),  4209  Vineland  Road,  Orlando,  Florida  32811,  and Orange  County
Industrial  Development  Authority,  a public body  corporate  and politic and a
public  instrumentality  of the State of  Florida  (the  "Secured  Party")  with
offices at 200 E. Robinson Street, Suite 600, Orlando, Florida 32801.


                                    PREMISES:

         The Secured Party proposes to enter into a Loan  Agreement  dated as of
September 24, 1997 (the "Loan  Agreement")  with Debtor pursuant to the terms of
which the  Debtor  agrees to make loan  payments  (the "Loan  Payments")  to the
Secured Party equal to the principal  of,  premium,  if any, and interest on the
$2,500,000   Orange  County   Industrial   Development   Authority,   Industrial
Development  Revenue  Bonds  (ELXSI  Project),  Series 1997 (the  "Bonds" or the
"Obligations")  issued in  accordance  with Chapter 159, Part II, of the Florida
Statutes (the "Act").

         The Bonds are  being  issued to  provide  funds  which,  together  with
interest  earnings  thereon and certain other  amounts,  will be used to provide
funds to the Debtor in order (i) to  acquire,  construct,  install and equip the
Debtor's  new  facility to be  constructed  at 3600 Rio Vista  Avenue,  Orlando,
Florida,  for the manufacture of video inspection and  rehabilitation  equipment
for  wastewater  and  drainage   systems,   and  to  provide  funds  to  finance
improvements  at the  Debtor's  existing  facility  at 3501  Rio  Vista  Avenue,
Orlando, Florida (the "Project"); and (ii) to pay certain costs of issuance.

         The Bonds will be secured  under the Secured  Party's  Trust  Indenture
dated as of September 24, 1997 (the  "Indenture")  with Sun Trust Bank,  Central
Florida,  National  Association  as trustee (the  "Trustee").  The Bonds will be
payable  solely out of the Debtor's Loan Payments  under the Loan  Agreement and
other  monies  paid by the  Debtor  thereunder.  To  evidence  and to secure its
obligation to make Loan  Payments,  the Debtor will,  under the Loan  Agreement,
deliver a promissory note (the "Note") to the Secured Party,  which Note will be
assigned by the Secured Party to the Trustee.

         The  Debtor  will enter into a Mortgage  and  Security  Agreement  (the
"Mortgage") in addition to this Security  Agreement pursuant to which the Debtor
shall grant  solely to the  Secured  Party a lien and  security  interest in the
land,  buildings  and  fixtures  comprising  the  Project  as  security  for the
performance  and  observance  of  the  Borrower's  obligations  under  the  Loan
Agreement and ultimately the Bonds.

         The  Debtor  desires  to secure  the  payment  and  performance  of the
Obligations  by  granting  to the  Secured  Party  a  security  interest  in the
Collateral, as hereinafter defined.

                                      -1-
<PAGE>

    NOW, THEREFORE, the Debtor and the Secured Party agree as follows:

         1. Defined Terms. Unless otherwise defined herein, terms defined in the
Loan Agreement are used herein as therein defined, and the following terms shall
have the following  meanings (such meanings being equally applicable to both the
singular and plural forms of the terms defined):

         "Collateral"  shall have the meaning assigned to such term in Section 2
of this Security Agreement.

         "Equipment"  means  all  equipment  of  Debtor  of  every  description,
including, without limitation fixtures,  furniture,  vehicles, trucks, trailers,
vans, cars, and trade fixtures, together with any and all accessions,  parts and
equipment   attached   thereto  or  used  in  connection   therewith,   and  any
substitutions therefor and replacements thereof.

         "hereby," "herein,"  "hereof,"  "hereunder" and words of similar import
refer to this Security Agreement as a whole (including,  without limitation, any
schedules hereto) and not merely to the specific section, paragraph or clause in
which the respective word appears.

         "Proceeds"  shall mean  "proceeds,"  as such term is defined in the UCC
and, in any event, shall include,  without limitation,  (i) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable to Debtor from time to
time with  respect to any of the  Collateral,  (ii) any and all payments (in any
form  whatsoever)  made  or due  and  payable  to  Debtor  from  time to time in
connection  with  any  requisition,   confiscation,   condemnation,  seizure  or
forfeiture  of all or any  part  of the  Collateral  by any  governmental  body,
authority,  bureau or agency (or any person  acting under color of  governmental
authority),  and  (iii)  any and all  other  amounts  from  time to time paid or
payable under or in connection with any of the Collateral.

         "Secured  Obligations"  shall  mean (i) the  obligations  of the Debtor
under  the  Loan  Agreement  and the  Note,  and (ii)  all  other  indebtedness,
liabilities and obligations of Debtor to the Secured Party, whether now existing
or hereafter  incurred,  and as created  under,  arising out of or in connection
with the Loan  Agreement,  the  Note,  this  Security  Agreement  and any  other
agreement or instrument in favor of the Secured Party.

         "Security  Agreement" shall mean this Security  Agreement,  as the same
may from time to time be amended,  modified or  supplemented  and shall refer to
this  Security  Agreement  as in  effect  on the  date  such  reference  becomes
operative.

         "UCC" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of Florida;  provided,  however, in the event
that, by reason of mandatory  provisions  of law, any or all of the  attachment,
perfection  or  priority  of  the  Secured  Party's  security  interest  in  any
Collateral  is  governed  by the  Uniform  Commercial  Code  as in  effect  in a
jurisdiction  other than the State of  Florida,  the term  "UCC"  shall mean the
Uniform  Commercial Code as in effect in such other jurisdiction for purposes of
the provisions  hereof 

                                      -2-
<PAGE>

relating  to  such  attachment,  perfection  or  priority  and for  purposes  of
definitions related to such provisions.

         2. Grant of Security Interest.

         (a)  To  secure  the  prompt  and  complete  payment,  performance  and
observance of all of the Secured Obligations, and to induce the Secured Party to
issue the Bonds and to enter into the Loan  Agreement  and to make the loans and
other  extensions  of  credit  provided  for  therein  in  accordance  with  the
respective  terms thereof,  Debtor hereby grants to the Secured Party a security
interest  in all of  Debtor's  right,  title and  interest  in, to and under the
following whether now owned by or owing to, or hereafter  acquired by or arising
in favor of Debtor (including, without limitation, under any trade names, styles
or divisions  thereof),  and whether owned or consigned by, or leased to Debtor,
and regardless of where located,  (all of which being  hereinafter  collectively
referred to as the "Collateral"):

              (i) all Equipment of Debtor;

              (ii) to the extent not  otherwise  included,  all  Proceeds of the
         foregoing and all accessions to,  substitutions  and replacements  for,
         and rents, profits and products of, each of the foregoing.

         (b) In addition, to secure the prompt and complete payment, performance
and  observance  of the Secured  Obligations  and in order to induce the Secured
Party as  aforesaid,  Debtor  hereby  grants to the  Secured  Party,  a security
interest in all property of Debtor held by the Secured Party, including, without
limitation,  all  property  of  every  description,  now  or  hereafter  in  the
possession  or custody of or in transit to the  Secured  Party for any  purpose,
including safekeeping, collection or pledge, for the account of Debtor, or as to
which Debtor may have any right or power.

         3. Obligations  Secured.  The security  interest created hereby secures
payment and performance of all of the  Obligations and all other  obligations of
the  Debtor  to  the  Secured  Party,  as  well  as  all  amendments,  renewals,
extensions,  modifications  and changes in form thereof,  whether or not, either
now or  hereafter,  evidenced  by any note,  instrument  or other  writing  (the
"Secured Obligations").

         4. Representations and Warranties. To induce the Secured Party to enter
into this Security Agreement, the Debtor represents and warrants as follows:

              1. The  Debtor  has full  power and  authority  to enter  into and
perform this Security  Agreement;  this Security Agreement has been duly entered
into and delivered and constitutes a legal,  valid and binding obligation of the
Debtor enforceable in accordance with its terms except as the enforcement hereof
may  be  limited  by  bankruptcy,   insolvency,   reorganization,   arrangement,
moratorium  or other laws of general  application  relating to or affecting  the
enforcement of creditors' rights and by general equitable principles (regardless
of whether considered in a proceeding in equity or at law).

              2. The Debtor has good and marketable  title to the Collateral and
the Collateral is not subject to any liens,  encumbrances or security  interests
except as provided herein and in the Mortgage.

                                      -3-
<PAGE>

              3. The Debtor is keeping the Collateral at the locations listed on
Schedule A hereto.

              4. The  Debtor's  chief  executive  office  is at 3600  Rio  Vista
Avenue, Orlando,  Florida 32811. The Debtor also maintains an office at 3501 Rio
Vista Avenue, Orlando, Florida 32811.

              5. The Collateral will be used for commercial or business purposes
only.

         5. Covenants of the Debtor. The Debtor agrees that it shall:

              1. not  secrete or  abandon  any of the  Collateral  and shall not
remove any of the Collateral or the records concerning the Collateral from their
present  location  or change  the  location  of its  registered  office or chief
executive  office  without  prior  written  notice to the Secured Party given at
least  thirty  (30) days  prior to such  removal  or change and then only if the
Debtor assists the Secured Party in filing or recording any financing statements
or other notices deemed necessary by the Secured Party to maintain the continued
perfection of its security interest in the Collateral;

              2. promptly send notice to the Secured Party of any damage or loss
of any of the Collateral having a value of more than $25,000;

              3. allow the Secured Party full access to the  Collateral  and the
records pertaining thereto as provided in the Loan Agreement;

              4.  reimburse  the  Secured  Party upon  demand for all  expenses,
including without limitation,  reasonable  attorneys' fees and expenses incurred
by the Secured Party in connection with perfecting the security interest granted
herein or the satisfaction thereof;

              5. unless waived by the Secured  Party,  obtain and furnish to the
Secured  Party  a  landlord  waiver  and/or  mortgagee  waiver,  if  any  of the
Collateral is maintained in leased, rented or mortgaged facilities;

              6. keep the Collateral  insured against loss or damage by fire and
extended  coverage  naming  Secured  Party as mortgagee and loss payee under all
policies of insurance insuring the Collateral,  and shall assign and deliver the
policies and/or certificates  thereof (including without limitation any renewals
and/or  changes) to Secured  Party.  If the Debtor fails to obtain any insurance
required by this  subsection (f), it shall be lawful for Secured Party to effect
such  insurance,  and any amounts paid by Secured Party in respect thereof shall
become an addition to the Debtor's  Obligations  secured hereby.  Each insurance
policy issued with respect to the Collateral  shall provide that no termination,
cancellation,  expiration,  material modification or lapse of any such insurance
policy or policies shall occur without at least thirty (30) days advance written
notice to the  Debtor  and to the  Secured  Party.  In the event that any of the
aforesaid  policies procured by the Debtor shall fail to provide that all losses
thereunder  shall be payable to the Secured Party,  the Debtor hereby assigns to
said  Secured  Party  all of the  proceeds  of any and all of said  policies  as
security for the Secured Obligations and agrees to accept said proceeds in trust
for Secured Party, and to forthwith deliver the same to the Secured Party in the
exact  form  received  (with the  endorsement  of the Debtor  where  necessary),
provided,  however, that so long as no Event of Default or Potential Default has
occurred and is  continuing,  the Secured Party shall  promptly  remit  proceeds
received  by  it  to  the  Debtor.   Secured  Party  is  irrevocably   appointed
attorney-in-fact for the Debtor, with full power of substitution and revocation,
to compromise, settle or release any claims pertaining to or arising out of said
policies,  and to take  possession  of and endorse in the name of the Debtor any
check or other instrument for the payment of money  representing the proceeds of
said policies. The Debtor shall not effect any settlement, compromise or release
of any  insurance  claim  involving  a loss of $25,000 or more  without  Secured
Party's prior written consent;

                                      -4-
<PAGE>

              7. keep the Collateral  under  conditions which preserve the value
thereof and maintain the Collateral in good repair, making all necessary repairs
and  replacements,  and  whenever  in the  Secured  Party's  sole  judgment  the
Collateral  or any part thereof  shall  require any repairs or  replacements  in
order to maintain it in a first class and marketable condition or to preserve it
from  excessive  depreciation  or wear,  the Debtor will within thirty (30) days
after  having  been so  advised  by the  Secured  Party  make  such  repairs  or
replacements or cause the same to be made;

              8. not assign,  transfer,  dispose of,  sell,  encumber or grant a
security interest in the Collateral to any person or entity;

              9. not use or permit the  Collateral  to be used for any  unlawful
purpose or in  violation  of any federal,  state or  municipal  law,  statute or
ordinance or any rules, decrees, or regulations issued thereunder,  or for hire,
unless the consent of the Secured Party is first obtained; and

              10. not permit the Collateral to become a part of or to be affixed
to any real  property of any person or entity  (including,  without  limitation,
Debtor)  without  first making  arrangements  satisfactory  to Secured  Party to
protect its security interest.

         6. Duration of Security Interest. The Secured Party, and its successors
and assigns,  shall hold the security  interest created hereby upon the terms of
this Security Agreement,  and this Security Agreement shall continue,  until all
the  Secured  Obligations  have  been  paid in full or  performed  in full.  The
foregoing sentence notwithstanding, if any payment by the Debtor is rescinded or
must  otherwise  be restored  or  returned  by the Secured  Party for any reason
(including  without  limitation  (a) the invalidity or  unenforceability  of the
obligation   paid,  for  any  reason;   (b)  the  failure  or  insufficiency  of
consideration  for the  obligation  paid; or (c) the  insolvency,  bankruptcy or
reorganization  of the Debtor),  then this  Security  Agreement and the security
interests arising hereunder shall continue to be effective, or be reinstated, as
the case may be, as though such payment had not been made.

         7. Default. At the option of the Secured Party, the happening of any of
the following  events shall  constitute a default under this Security  Agreement
(an "Event of Default"):

              1. the  occurrence of any default under the Loan  Agreement or the
Indenture;

              2.  failure of the Debtor to keep or perform or observe  any term,
obligation or provision of this Security Agreement;

              3. the loss, theft, damage or destruction of the Collateral if not
covered by insurance, the encumbrance of the Collateral,  or any part thereof or
the making of a levy, seizure or attachment thereof or thereon; or

              4.  if  the  Collateral   should  become  the  subject  matter  of
litigation which would, in the reasonable  opinion of the Secured Party,  result
in  substantial  impairment  or loss of the security  intended to be provided by
this Security Agreement.

         8. Remedies.  Upon the occurrence of any Event of Default,  the Secured
Party may at its option  declare  any and all of the Secured  Obligations  to be
immediately due and payable;  and, in addition to exercising all other rights or
remedies  available under  applicable law, this Security  Agreement or any other
agreement  between  the  parties,  proceed  to  exercise  with  respect  

                                      -5-
<PAGE>

to the  Collateral  all  rights,  options and  remedies of a secured  party upon
default as provided  for under the Uniform  Commercial  Code.  The rights of the
Secured Party upon any Event of Default shall include,  without limitation,  the
following:

              1. The right to enter any  premises  where any  Collateral  may be
located for the purpose of taking possession or removing the same;

              2. The right to require the Debtor to assemble the  Collateral and
make them  available  to the Secured  Party at a place to be  designated  by the
Secured  Party  which is  reasonably  convenient  to the Debtor and the  Secured
Party;

              3. The right to sell the  Collateral  at public or private sale in
one or more lots.  The Secured Party may bid upon and purchase any or all of the
Collateral at any public sale thereof, and shall be entitled to apply the unpaid
portion of the Secured  Obligations as a credit against the purchase price.  The
Secured  Party may bid or become a purchaser  at any such sale,  if public.  The
Secured  Party shall be  entitled to apply the  proceeds of any such sale to the
satisfaction of the Secured  Obligations  and to expenses  incurred in realizing
upon the Collateral in accordance with the Uniform Commercial Code;

              4.  The  right  to  recover  the  reasonable  expenses  of  taking
possession of any of the part of Collateral  that may be reduced to  possession,
preparing  the  Collateral  for sale,  selling  the  Collateral,  and other like
expenses,  together with court costs and reasonable  attorneys' fees incurred in
realizing  upon the  Collateral  or enforcing  any  provision  of this  Security
Agreement;

              5. The  right to  retain  the  Collateral  and  become  the  owner
thereof, in accordance with the provisions of the Uniform Commercial Code;

              6. The right to proceed by appropriate  legal process at law or in
equity to enforce any  provision  of this  Security  Agreement  or in aid of the
execution of any power of sale, or for  foreclosure of the security  interest of
the  Secured  Party,  or for the sale of the  Collateral  under the  judgment or
decree of any court.

         9.  Cumulative  Remedies.  The rights and remedies of the Secured Party
shall be deemed to be cumulative,  and any exercise of any right or remedy shall
not be deemed to be an election of that right or remedy to the  exclusion of any
other right or remedy. Notwithstanding the foregoing, the Secured Party shall be
entitled to recover by the cumulative  exercise of all remedies no more than the
sum of (a) the Secured Obligations remaining outstanding at the time of exercise
of remedies,  plus (b) the reasonable costs, fees and expenses the Secured Party
is otherwise entitled to recover.

         10.  Filing  Fees.  The  Debtor  shall  pay all  costs  of  filing  any
financing, continuation or termination statement necessary to perfect or protect
or to maintain or terminate the perfection or protection of the Secured  Party's
security  interest  created by this  Security  Agreement;  or shall upon  demand
reimburse the Secured Party for such costs, and until  reimbursement  such costs
shall be a part of the Secured Obligations secured by this Security Agreement.

         11. Further  Assurance and  Acknowledgment.  The Debtor shall sign from
time to time such other documents and  instruments,  and take such other action,
as the Secured  Party may request to more fully create and maintain the security
interest in the  Collateral  intended to be created in this Security  Agreement,
and to perfect any such interest. The Debtor acknowledges 


                                      -6-
<PAGE>

that the Secured Party does not assume any of the Debtor's obligations or duties
under any agreement  containing  rights to payment which are Collateral and does
not assume the Debtor's obligations connected with the acquisition,  preparation
or holding (except to the extent required by the Uniform Commercial Code) of the
Collateral.  The Debtor hereby  authorizes  the Secured Party to file  financing
statements,  signed  only  by the  Secured  Party,  in all  places  where  it is
necessary or appropriate to perfect the Secured Party's security interest in the
Collateral.

         12. Other Provisions.

              1. Failure by the Secured Party to exercise any right shall not be
deemed a waiver of that right,  and any single or partial  exercise of any right
shall not  preclude  the  further  exercise  of that  right.  Every right of the
Secured  Party  shall  continue  in full  force and  effect  until such right is
specifically waived in a writing signed by the Secured Party.

              2. If any part,  term or provision of this  Security  Agreement is
held by any  court  to be  prohibited  by any law  applicable  to this  Security
Agreement,  the rights and  obligations  of the parties  shall be construed  and
enforced  with that part,  term or  provision  enforced to the  greatest  extent
allowed by law, or if it is totally unenforceable, as if this Security Agreement
did not contain that particular part, term or provision.

              3. The headings in this Security  Agreement have been included for
ease of reference  only,  and shall not be  considered  in the  construction  or
interpretation of this Security Agreement.

              4. This  Security  Agreement  shall  inure to the  benefit  of the
Secured Party,  its successors  and assigns,  and all  obligations of the Debtor
shall bind its successors and assigns.

              5. To the extent allowed under the Uniform  Commercial  Code, this
Security  Agreement  shall in all  respects  be  governed  by and  construed  in
accordance with the laws of the State of Florida.

              6. The security interest granted by this Security  Agreement shall
continue  to  be  effective  irrespective  of  any  retaking  of  possession  of
Collateral until all Secured Obligations have been paid or performed in full.

              7.  Any  requirement  of the  Uniform  Commercial  Code  or  other
applicable  law of  reasonable  notice  shall be met if such  notice is given at
least ten (10) Business Days before the time of sale, disposition or other event
or thing giving rise to the requirement of notice.

              8. All  notices  and other  communications  hereunder  shall be in
writing and shall be delivered by hand, sent by telex or telecopy,  or mailed by
certified  mail,  return  receipt  requested,   postage  prepaid,  addressed  as
indicated below:

                  (i)    If to the Debtor:

                           ELXSI
                           4209 Vineland Road
                           Orlando, Florida  32811
                           Attn: President


                                      -7-
<PAGE>

                  (ii)   If to the Secured Party:

                           Orange County Industrial Development Authority
                           c/o Economic Development
                              Commission of Mid-Florida, Inc.
                           200 Robinson Street, Suite 600
                           Orlando, Florida  32801


              The  address  of any party for any  purpose  may be changed at any
time and from time to time in the manner  provided for in this Section 12(h) and
shall be the most recent such address furnished in writing to the other party. A
notice  shall be deemed  to have  been  given  when  dispatched,  if by telex or
telecopy, addressed as aforesaid (or to such other designated address), or if by
mail on the third Business Day after it is enclosed in an envelope, addressed to
the  party  to be  notified  at such  address  stated  above  (or to such  other
designated address), properly stamped, sealed and deposited in the United States
mail.

              9. The Debtor and the Secured Party may at any time, and from time
to time,  change the address to which notice  shall be mailed by written  notice
setting forth the changed address.


                                      -8-
<PAGE>


         IN WITNESS  WHEREOF,  the Debtor and the Secured Party have caused this
instrument to be effective as of the date first above written.

                                     DEBTOR:


                                     ELXSI

                                     BY:
                                        ----------------------------------------
                                     TITLE:
                                           -------------------------------------


                                     SECURED PARTY:


                                     ORANGE COUNTY INDUSTRIAL DEVELOPMENT
                                     AUTHORITY

                                     BY:
                                        ----------------------------------------
                                     TITLE:
                                           -------------------------------------



                                      -9-
<PAGE>


                                   SCHEDULE A


                             LOCATIONS OF COLLATERAL



                              3600 Rio Vista Avenue
                             Orlando, Florida, 32811



                              3501 Rio Vista Avenue
                             Orlando, Florida, 32811












<PAGE>