Document:

Exhibit 10.4

                             POWER TECHNOLOGY, INC.
                            PLACEMENT AGENT AGREEMENT

                                                       Dated as of: May 10, 2005

Newbridge Securities Corporation
1451 Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309

Ladies and Gentlemen:

         The  undersigned,  Power  Technology,  Inc., a Nevada  corporation (the
"Company"),  hereby agrees with Newbridge Securities Corporation (the "Placement
Agent") and Cornell Capital  Partners,  LP, a Delaware Limited  Partnership (the
"Investor"), as follows:

         1. Offering.  The Company hereby engages the Placement  Agent to act as
its exclusive placement agent in connection with the Standby Equity Distribution
Agreement of even date herewith (the "Standby Equity  Distribution  Agreement"),
pursuant to which the Company shall issue and sell to the Investor, from time to
time, and the Investor  shall  purchase from the Company (the  "Offering") up to
Five Million Dollars ($5,000,000) of the Company's common stock (the "Commitment
Amount"),  par value $0.001 per share (the "Common  Stock"),  at price per share
equal to the  Purchase  Price,  as that term is  defined in the  Standby  Equity
Distribution Agreement.  The Placement Agent services shall consist of reviewing
the terms of the Standby Equity Distribution  Agreement and advising the Company
with respect to those terms.

         All  capitalized  terms used herein and not  otherwise  defined  herein
shall  have  the  same  meaning  ascribed  to  them  as in  the  Standby  Equity
Distribution Agreement. The Investor will be granted certain registration rights
with  respect  to the Common  Stock as more fully set forth in the  Registration
Rights Agreement between the Company and the Investor dated the date hereof (the
"Registration Rights Agreement").  The documents to be executed and delivered in
connection  with the  Offering,  including,  but not limited,  to the  Company's
latest  Quarterly  Report  on Form  10-QSB  as  filed  with  the  United  States
Securities  and  Exchange  Commission,   this  Agreement,   the  Standby  Equity
Distribution  Agreement,  the  Registration  Rights  Agreement,  and the  Escrow
Agreement  dated the date  hereof  (the  "Escrow  Agreement"),  are  referred to
sometimes  hereinafter  collectively as the "Offering  Materials." The Company's
Common Stock  purchased by the Investor  hereunder or to be issued in connection
with the conversion of any  debentures are sometimes  referred to hereinafter as
the  "Securities."  The  Placement  Agent  shall  not be  obligated  to sell any
Securities.

         2. Compensation.

             A. The Company shall issue to the Placement Agent 442,477 shares of
Common Stock (the  "Placement  Agent's  Shares").  The Placement  Agent shall be
entitled  to  "piggy-back"  registration  rights with  respect to the  Placement

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Agent's  Shares,  which shall be triggered  upon  registration  of any shares of
Common Stock by the Company pursuant to the Registration  Rights Agreement dated
the date hereof.

         3. Representations, Warranties and Covenants of the Placement Agent.

             A. The  Placement  Agent  represents,  warrants  and  covenants  as
follows:

                  (i) The Placement  Agent has the necessary power to enter into
this Agreement and to consummate the transactions contemplated hereby.

                  (ii) The execution and delivery by the Placement Agent of this
Agreement and the consummation of the transactions  contemplated herein will not
result in any  violation  of, or be in conflict  with,  or  constitute a default
under, any agreement or instrument to which the Placement Agent is a party or by
which the Placement Agent or its properties are bound, or any judgment,  decree,
order or, to the Placement Agent's  knowledge,  any statute,  rule or regulation
applicable to the Placement Agent. This Agreement when executed and delivered by
the Placement Agent, will constitute the legal, valid and binding obligations of
the Placement  Agent,  enforceable in accordance  with their  respective  terms,
except  to the  extent  that (a) the  enforceability  hereof or  thereof  may be
limited by bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles of equity,
or (c) the  indemnification  provisions  hereof or thereof  may be held to be in
violation of public policy.

                  (iii)  Upon  receipt  and  execution  of this  Agreement,  the
Placement Agent will promptly forward copies of this Agreement to the Company or
its counsel and the Investor or its counsel.

                  (iv)  The  Placement  Agent  will not  intentionally  take any
action  that it  reasonably  believes  would  cause the  Offering to violate the
provisions of the Securities Act of 1933, as amended (the "Securities Act"), the
Securities  Exchange Act of 1934 (the "Exchange  Act"), the respective rules and
regulations  promulgated  thereunder (the "Rules and Regulations") or applicable
"Blue Sky" laws of any state or jurisdiction.

                  (v)  The   Placement   Agent  is  a  member  of  the  National
Association of Securities  Dealers,  Inc., and is a broker-dealer  registered as
such under the Exchange Act and under the securities laws of the states in which
the  Securities  will be  offered  or  sold by the  Placement  Agent  unless  an
exemption for such state  registration is available to the Placement  Agent. The
Placement  Agent is in  material  compliance  with  the  rules  and  regulations
applicable to the  Placement  Agent  generally  and  applicable to the Placement
Agent's participation in the Offering.

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         4. Representations and Warranties of the Company.

             A. The Company represents and warrants as follows:

                  (i) The  execution,  delivery and  performance of each of this
Agreement,  the Standby Equity Distribution Agreement, the Escrow Agreement, and
the  Registration  Rights  Agreement  has  been  or will  be  duly  and  validly
authorized by the Company and is, or with respect to this Agreement, the Standby
Equity Distribution Agreement, the Escrow Agreement, and the Registration Rights
Agreement, will be a valid and binding agreement of the Company,  enforceable in
accordance  with  its  respective  terms,  except  to the  extent  that  (a) the
enforceability  hereof or  thereof  may be limited  by  bankruptcy,  insolvency,
reorganization,  moratorium  or  similar  laws from  time to time in effect  and
affecting the rights of creditors  generally,  (b) the enforceability  hereof or
thereof is subject to general  principles  of equity or (c) the  indemnification
provisions  hereof or thereof may be held to be in violation  of public  policy.
The Securities to be issued  pursuant to the  transactions  contemplated by this
Agreement  and  the  Standby  Equity  Distribution   Agreement  have  been  duly
authorized and, when issued and paid for in accordance with this Agreement,  the
Standby   Equity   Distribution   Agreement  and  the   certificates/instruments
representing  such  Securities,  will be valid and  binding  obligations  of the
Company,  enforceable in accordance with their respective  terms,  except to the
extent  that  (1) the  enforceability  thereof  may be  limited  by  bankruptcy,
insolvency,  reorganization,  moratorium  or  similar  laws from time to time in
effect  and   affecting  the  rights  of  creditors   generally,   and  (2)  the
enforceability thereof is subject to general principles of equity. All corporate
action  required  to be taken for the  authorization,  issuance  and sale of the
Securities has been duly and validly taken by the Company.

                  (ii) The Company has a duly authorized, issued and outstanding
capitalization  as set  forth  herein  and in the  Standby  Equity  Distribution
Agreement.  The Company is not a party to or bound by any instrument,  agreement
or other  arrangement  providing  for it to issue  any  capital  stock,  rights,
warrants, options or other securities, except for this Agreement, the agreements
described herein and as described in the Standby Equity  Distribution  Agreement
and the agreements described therein.  All issued and outstanding  securities of
the Company, have been duly authorized and validly issued and are fully paid and
non-assessable;  the holders  thereof have no rights of rescission or preemptive
rights with respect thereto and are not subject to personal  liability solely by
reason of being security  holders;  and none of such  securities  were issued in
violation  of the  preemptive  rights  of any  holders  of any  security  of the
Company.

                  (iii) The Common  Stock to be issued in  accordance  with this
Agreement and the Standby Equity Distribution Agreement has been duly authorized
and, when issued and paid for in accordance  with this Agreement and the Standby
Equity Distribution Agreement,  the  certificates/instruments  representing such
Common Stock will be validly issued, fully-paid and non-assessable;  the holders
thereof will not be subject to personal liability solely by reason of being such
holders;  such  Securities  are not and will not be  subject  to the  preemptive
rights of any holder of any security of the Company.

                  (iv) The  Company has good and  marketable  title to, or valid
and enforceable  leasehold  estates in, all items of real and personal  property
necessary to conduct its business  (including,  without limitation,  any real or
personal property stated in the Offering  Materials to be owned or leased by the

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Company), free and clear of all liens, encumbrances,  claims, security interests
and defects of any material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.

                  (v) There is no litigation or governmental  proceeding pending
or, to the best of the Company's knowledge, threatened against, or involving the
properties  or  business  of the  Company,  except as set forth in the  Offering
Materials.

                  (vi)  The  Company  has been  duly  organized  and is  validly
existing  as a  corporation  in good  standing  under  the laws of the  State of
Nevada. Except as set forth in the Offering Materials,  the Company does not own
or control,  directly  or  indirectly,  an  interest  in any other  corporation,
partnership,  trust, joint venture or other business entity. The Company is duly
qualified  or licensed  and in good  standing as a foreign  corporation  in each
jurisdiction   in  which  the   character  of  its   operations   requires  such
qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite corporate power and
authority,  and all material and necessary  authorizations,  approvals,  orders,
licenses,  certificates  and  permits  of and from all  governmental  regulatory
officials  and bodies  (domestic  and  foreign) to conduct its  businesses  (and
proposed  business) as described in the Offering  Materials.  Any disclosures in
the Offering  Materials  concerning the effects of foreign,  federal,  state and
local  regulation  on the  Company's  businesses  as currently  conducted and as
contemplated  are correct in all  material  respects  and do not omit to state a
material fact.  The Company has all corporate  power and authority to enter into
this Agreement,  the Standby Equity  Distribution  Agreement,  the  Registration
Rights  Agreement,  and the Escrow  Agreement,  to carry out the  provisions and
conditions hereof and thereof, and all consents,  authorizations,  approvals and
orders  required in connection  herewith and therewith  have been  obtained.  No
consent,  authorization  or order of, and no filing with, any court,  government
agency  or  other  body is  required  by the  Company  for the  issuance  of the
Securities  or  execution  and  delivery of the  Offering  Materials  except for
applicable federal and state securities laws. The Company,  since its inception,
has not incurred any liability  arising under or as a result of the  application
of any of the  provisions of the  Securities  Act, the Exchange Act or the Rules
and Regulations.

                  (vii)  There  has  been  no  material  adverse  change  in the
condition or prospects of the Company,  financial or otherwise,  from the latest
dates as of which such  condition or prospects,  respectively,  are set forth in
the Offering Materials,  and the outstanding debt, the property and the business
of the Company  conform in all  material  respects to the  descriptions  thereof
contained in the Offering Materials.

                  (viii)  Except as set  forth in the  Offering  Materials,  the
Company is not in breach of, or in default  under,  any term or provision of any
material indenture, mortgage, deed of trust, lease, note, loan or Standby Equity
Distribution  Agreement or any other material agreement or instrument evidencing
an obligation for borrowed money, or any other material  agreement or instrument
to which it is a party or by which it or any of its  properties  may be bound or
affected.  The Company is not in  violation  of any  provision of its charter or
by-laws or in violation of any franchise,  license, permit, judgment,  decree or
order, or in violation of any material statute, rule or regulation.  Neither the
execution  and delivery of the Offering  Materials  nor the issuance and sale or
delivery of the  Securities,  nor the  consummation  of any of the  transactions

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contemplated  in the Offering  Materials nor the  compliance by the Company with
the terms and provisions hereof or thereof, has conflicted with or will conflict
with,  or has  resulted  in or will  result in a breach of, any of the terms and
provisions  of, or has  constituted or will  constitute a default under,  or has
resulted in or will result in the creation or imposition of any lien,  charge or
encumbrance  upon any property or assets of the Company or pursuant to the terms
of any indenture,  mortgage, deed of trust, note, loan or any other agreement or
instrument  evidencing an obligation for borrowed  money, or any other agreement
or  instrument to which the Company may be bound or to which any of the property
or assets of the Company is subject except (a) where such default,  lien, charge
or encumbrance  would not have a material  adverse effect on the Company and (b)
as  described  in the  Offering  Materials;  nor will such action  result in any
violation  of the  provisions  of the  charter or the by-laws of the Company or,
assuming  the  due  performance  by  the  Placement  Agent  of  its  obligations
hereunder,  any  material  statute or any  material  order,  rule or  regulation
applicable  to the  Company of any court or of any  foreign,  federal,  state or
other regulatory authority or other government body having jurisdiction over the
Company.

                  (ix) Subsequent to the dates as of which  information is given
in  the  Offering  Materials,  and  except  as may  otherwise  be  indicated  or
contemplated  herein or  therein  and the  securities  offered  pursuant  to the
Standby  Equity  Distribution  Agreement and the Securities  Purchase  Agreement
between the  Investor and the Company  dated as of August 27, 2004,  the Company
has not (a) issued any  securities  or incurred  any  liability  or  obligation,
direct or contingent,  for borrowed  money,  or (b) entered into any transaction
other than in the  ordinary  course of  business,  or (c)  declared  or paid any
dividend or made any other  distribution  on or in respect of its capital stock.
Except as described in the Offering  Materials,  the Company has no  outstanding
obligations to any officer or director of the Company.

                  (x)  There  are no  claims  for  services  in the  nature of a
finder's or origination  fee with respect to the sale of the Common Stock or any
other  arrangements,  agreements or understandings that may affect the Placement
Agent's  compensation,  as determined by the National  Association of Securities
Dealers, Inc.

                  (xi)  Except as set forth in the SEC  Documents,  the  Company
owns or  possesses,  free and  clear of all  liens or  encumbrances  and  rights
thereto or therein by third parties,  the requisite  licenses or other rights to
use all  trademarks,  service marks,  copyrights,  service  names,  trade names,
patents,  patent  applications  and  licenses  necessary to conduct its business
(including,  without  limitation,  any such licenses or rights  described in the
Offering  Materials as being owned or possessed by the Company)  and,  except as
set forth in the Offering  Materials,  there is no claim or action by any person
pertaining  to, or  proceeding,  pending or  threatened,  which  challenges  the
exclusive  rights of the Company with respect to any trademarks,  service marks,
copyrights,  service  names,  trade  names,  patents,  patent  applications  and
licenses used in the conduct of the  Company's  businesses  (including,  without
limitation,  any such licenses or rights described in the Offering  Materials as
being owned or possessed  by the Company)  except any claim or action that would
not have a  material  adverse  effect  on the  Company;  the  Company's  current
products,  services or  processes  do not  infringe or will not  infringe on the
patents currently held by any third party.

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                  (xii)  Except as  described  in the  Offering  Materials,  the
Company  is not  under  any  obligation  to pay  royalties  or fees of any  kind
whatsoever  to any third party with respect to any  trademarks,  service  marks,
copyrights,  service names, trade names, patents, patent applications,  licenses
or technology it has developed, uses, employs or intends to use or employ, other
than to their respective licensors.

                  (xiii) Subject to the  performance  by the Placement  Agent of
its  obligations  hereunder the offer and sale of the Securities  complies,  and
will continue to comply,  in all material respects with the requirements of Rule
506 of Regulation D promulgated  by the SEC pursuant to the  Securities  Act and
any other applicable  federal and state laws,  rules,  regulations and executive
orders.  Neither the Offering  Materials nor any amendment or supplement thereto
nor any documents  prepared by the Company in connection  with the Offering will
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading.  All
statements of material  facts in the Offering  Materials are true and correct as
of the date of the Offering Materials.

                  (xiv) All  material  taxes which are due and payable  from the
Company  have been  paid in full or  adequate  provision  has been made for such
taxes on the books of the Company, except for those taxes disputed in good faith
by the Company

                  (xv) None of the Company nor any of its  officers,  directors,
employees or agents, nor any other person acting on behalf of the Company,  has,
directly  or  indirectly,  given or agreed to give any  money,  gift or  similar
benefit (other than legal price  concessions to customers in the ordinary course
of  business)  to any  customer,  supplier,  employee  or agent of a customer or
supplier,  or official or employee of any governmental agency or instrumentality
of any government  (domestic or foreign) or any political party or candidate for
office  (domestic  or foreign) or other person who is or may be in a position to
help or hinder the business of the Company (or assist it in connection  with any
actual or  proposed  transaction)  which (A) might  subject  the  Company to any
damage  or  penalty  in  any  civil,  criminal  or  governmental  litigation  or
proceeding, or (B) if not given in the past, might have had a materially adverse
effect on the assets,  business or operations of the Company as reflected in any
of the financial statements  contained in the Offering Materials,  or (C) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company in the future.

         5. Representations, Warranties and Covenants of the Investor.

             A. The Investor represents, warrants and covenants as follows:

                  (i) The  Investor has the  necessary  power to enter into this
Agreement and to consummate the transactions contemplated hereby.

                  (ii)  The  execution  and  delivery  by the  Investor  of this
Agreement and the consummation of the transactions  contemplated herein will not
result in any  violation  of, or be in conflict  with,  or  constitute a default
under,  any agreement or instrument to which the Investor is a party or by which
the Investor or its properties are bound, or any judgment,  decree, order or, to
the  Investor's  knowledge,  any statute,  rule or regulation  applicable to the
Investor.  This  Agreement  when executed and  delivered by the  Investor,  will

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constitute the legal, valid and binding obligations of the Investor, enforceable
in accordance  with their  respective  terms,  except to the extent that (a) the
enforceability  hereof or  thereof  may be limited  by  bankruptcy,  insolvency,
reorganization,  moratorium  or  similar  laws from  time to time in effect  and
affecting the rights of creditors  generally,  (b) the enforceability  hereof or
thereof is subject to general  principles of equity, or (c) the  indemnification
provisions hereof or thereof may be held to be in violation of public policy.

                  (iii) The Investor will promptly forward copies of any and all
due diligence questionnaires compiled by the Investor to the Placement Agent.

                  (iv) The Investor is an Accredited  Investor (as defined under
the Securities Act).

                  (v)  The  Investor  has  such   knowledge  and  experience  in
financial  and business  matters as to be capable of  evaluating  the merits and
risks of the prospective investment.

                  (vi)  The  Investor  has  been  given  the  opportunity  for a
reasonable  time  prior to the date  hereof to ask  questions  of,  and  receive
answers  from,  the  Company  or its  representatives  concerning  the terms and
conditions of the Offering, and other matters pertaining to this investment, and
has been given the opportunity for a reasonable time prior to the date hereof to
obtain such  additional  information in connection with the Company in order for
the Investor to evaluate the merits and risks of purchase of the Securities,  to
the extent the  Company  possesses  such  information  or can acquire it without
unreasonable  effort or expense.  The  Investor is not relying on the  Placement
Agent or any of its affiliates  with respect to the accuracy or  completeness of
the  Offering  Materials  or for any  economic  considerations  involved in this
investment.

         6. Certain Covenants and Agreements of the Company.

         The Company covenants and agrees at its expense and without any expense
to the Placement Agent as follows:

             A. To advise the  Placement  Agent and the Investor of any material
adverse change in the Company's financial condition, prospects or business or of
any  development  materially  affecting  the  Company  or  rendering  untrue  or
misleading  any material  statement in the Offering  Materials  occurring at any
time as soon as the Company is either informed or becomes aware thereof.

             B. To use its commercially  reasonable  efforts to cause the Common
Stock issuable in connection with the Standby Equity  Distribution  Agreement to
be qualified or registered for sale on terms consistent with those stated in the
Registration   Rights   Agreement  and  under  the   securities   laws  of  such
jurisdictions as the Placement Agent and the Investor shall reasonably  request.
Qualification,  registration and exemption charges and fees shall be at the sole
cost and expense of the Company.

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             C. Upon  written  request,  to provide and  continue to provide the
Placement  Agent and the Investor copies of all quarterly  financial  statements
and audited annual financial statements prepared by or on behalf of the Company,
other reports prepared by or on behalf of the Company for public  disclosure and
all documents delivered to the Company's stockholders.

             D. To deliver, during the registration period of the Standby Equity
Distribution  Agreement,  to the Investor upon the  Investor's  request,  within
forty five (45) days, a statement of its income for each such quarterly  period,
and its balance sheet and a statement of changes in  stockholders'  equity as of
the end of such quarterly  period,  all in reasonable  detail,  certified by its
principal  financial or accounting  officer;  (ii) within ninety (90) days after
the close of each fiscal year,  its balance sheet as of the close of such fiscal
year,   together  with  a  statement  of  income,  a  statement  of  changes  in
stockholders'  equity and a statement  of cash flow for such fiscal  year,  such
balance sheet, statement of income, statement of changes in stockholders' equity
and statement of cash flow to be in reasonable  detail and accompanied by a copy
of the  certificate  or  report  thereon  of  independent  auditors  if  audited
financial  statements are prepared;  and (iii) a copy of all documents,  reports
and information  furnished to its  stockholders at the time that such documents,
reports and information are furnished to its stockholders.

             E. To comply with the terms of the Offering Materials.

             F. To ensure that any transactions between or among the Company, or
any of its officers,  directors and affiliates be on terms and  conditions  that
are no less favorable to the Company,  than the terms and conditions  that would
be available in an "arm's length" transaction with an independent third party.

         7. Indemnification and Limitation of Liability.

             A. The Company  hereby  agrees that it will  indemnify and hold the
Placement   Agent  and  each  officer,   director,   shareholder,   employee  or
representative of the Placement Agent and each person controlling, controlled by
or under common  control with the Placement  Agent within the meaning of Section
15 of the  Securities  Act or Section 20 of the  Exchange Act or the SEC's Rules
and Regulations  promulgated thereunder (the "Rules and Regulations"),  harmless
from and against any and all loss,  claim,  damage,  liability,  cost or expense
whatsoever (including, but not limited to, any and all reasonable legal fees and
other  expenses and  disbursements  incurred in connection  with  investigating,
preparing to defend or defending any action,  suit or proceeding,  including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or in
appearing  or  preparing  for  appearance  as a witness in any  action,  suit or
proceeding,  including any inquiry, investigation or pretrial proceeding such as
a deposition)  to which the Placement  Agent or such  indemnified  person of the
Placement  Agent may become subject under the Securities  Act, the Exchange Act,
the Rules and  Regulations,  or any other  federal  or state law or  regulation,
common law or otherwise,  arising out of or based upon (i) any untrue  statement
or alleged  untrue  statement of a material  fact  contained in (a) Section 4 of
this  Agreement,  (b) the Offering  Materials  (except those written  statements
relating to the  Placement  Agent  given by the  Placement  Agent for  inclusion
therein),  (c) any  application  or  other  document  or  written  communication
executed  by the  Company or based upon  written  information  furnished  by the
Company filed in any jurisdiction in order to qualify the Common Stock under the
securities laws thereof, or any state securities  commission or agency; (ii) the
omission or alleged omission from documents described in clauses (a), (b) or (c)

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above of a material fact required to be stated  therein or necessary to make the
statements  therein not misleading;  or (iii) the breach of any  representation,
warranty,  covenant  or  agreement  made by the Company in this  Agreement.  The
Company further agrees that upon demand by an indemnified person, at any time or
from time to time, it will promptly  reimburse such  indemnified  person for any
loss, claim, damage,  liability, cost or expense actually and reasonably paid by
the  indemnified  person as to which the  Company  has  indemnified  such person
pursuant  hereto.  Notwithstanding  the foregoing  provisions of this  Paragraph
7(A),  any such  payment or  reimbursement  by the Company of fees,  expenses or
disbursements  incurred by an  indemnified  person in any  proceeding in which a
final  judgment by a court of competent  jurisdiction  (after all appeals or the
expiration  of time to appeal) is entered  against the  Placement  Agent or such
indemnified  person based upon specific finding of fact that the Placement Agent
or such  indemnified  person's gross  negligence or willful  misfeasance will be
promptly repaid to the Company.

             B. The  Placement  Agent hereby  agrees that it will  indemnify and
hold  the  Company  and  each  officer,  director,   shareholder,   employee  or
representative  of the Company,  and each person  controlling,  controlled by or
under common  control  with the Company  within the meaning of Section 15 of the
Securities  Act or Section 20 of the Exchange Act or the Rules and  Regulations,
harmless from and against any and all loss, claim,  damage,  liability,  cost or
expense whatsoever (including,  but not limited to, any and all reasonable legal
fees  and  other  expenses  and   disbursements   incurred  in  connection  with
investigating,  preparing to defend or defending any action, suit or proceeding,
including any inquiry or  investigation,  commenced or threatened,  or any claim
whatsoever  or in  appearing  or preparing  for  appearance  as a witness in any
action,  suit or proceeding,  including any inquiry,  investigation  or pretrial
proceeding such as a deposition) to which the Company or such indemnified person
of the Company may become  subject under the  Securities  Act, the Exchange Act,
the Rules and  Regulations,  or any other  federal  or state law or  regulation,
common law or otherwise, arising out of or based upon (i) the material breach of
any representation,  warranty, covenant or agreement made by the Placement Agent
in this Agreement,  or (ii) any false or misleading  information provided to the
Company  in  writing  by  one  of  the  Placement  Agent's  indemnified  persons
specifically for inclusion in the Offering Materials.

                                       9
<PAGE>

             C. The Investor  hereby agrees that it will  indemnify and hold the
Placement   Agent  and  each  officer,   director,   shareholder,   employee  or
representative of the Placement Agent, and each person  controlling,  controlled
by or under  common  control  with the  Placement  Agent  within the  meaning of
Section 15 of the  Securities Act or Section 20 of the Exchange Act or the Rules
and  Regulations,  harmless  from and against any and all loss,  claim,  damage,
liability,  cost or expense whatsoever  (including,  but not limited to, any and
all  reasonable  legal fees and other  expenses  and  disbursements  incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation,  commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action,  suit or  proceeding,  including  any inquiry,  investigation  or
pretrial  proceeding  such as a deposition) to which the Placement Agent or such
indemnified  person  of  the  Placement  Agent  may  become  subject  under  the
Securities  Act,  the  Exchange  Act,  the Rules and  Regulations,  or any other
federal or state law or regulation,  common law or otherwise,  arising out of or
based  upon (i) the  conduct  of the  Investor  or its  officers,  employees  or
representatives  in its  acting  as the  Investor  for the  Offering,  (ii)  the
material breach of any representation,  warranty,  covenant or agreement made by
the  Investor  in the  Offering  Materials,  or (iii)  any  false or  misleading
information provided to the Placement Agent by one of the Investor's indemnified
persons.

             D. The  Placement  Agent hereby  agrees that it will  indemnify and
hold  the  Investor  and  each  officer,  director,  shareholder,   employee  or
representative of the Investor,  and each person  controlling,  controlled by or
under common  control with the Investor  within the meaning of Section 15 of the
Securities  Act or Section 20 of the Exchange Act or the Rules and  Regulations,
harmless from and against any and all loss, claim,  damage,  liability,  cost or
expense whatsoever (including,  but not limited to, any and all reasonable legal
fees  and  other  expenses  and   disbursements   incurred  in  connection  with
investigating,  preparing to defend or defending any action, suit or proceeding,
including any inquiry or  investigation,  commenced or threatened,  or any claim
whatsoever  or in  appearing  or preparing  for  appearance  as a witness in any
action,  suit or proceeding,  including any inquiry,  investigation  or pretrial
proceeding  such as a  deposition)  to which the  Investor  or such  indemnified
person of the Investor may become subject under the Securities Act, the Exchange
Act, the Rules and Regulations, or any other federal or state law or regulation,
common law or otherwise, arising out of or based upon the material breach of any
representation,  warranty,  covenant or agreement made by the Placement Agent in
this Agreement.

             E.  Promptly  after  receipt by an  indemnified  party of notice of
commencement  of any action covered by Section 7(A),  (B), (C) or (D), the party
to be indemnified shall,  within five (5) business days, notify the indemnifying
party of the commencement  thereof; the omission by one (1) indemnified party to
so notify the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other  indemnified  party that has given such notice
and shall not relieve the  indemnifying  party of any liability  outside of this
indemnification  if not  materially  prejudiced  thereby.  In the event that any
action is brought against the indemnified  party, the indemnifying party will be
entitled to participate  therein and, to the extent it may desire, to assume and
control  the  defense  thereof  with  counsel  chosen by it which is  reasonably
acceptable to the indemnified party. After notice from the indemnifying party to
such  indemnified  party of its election to so assume the defense  thereof,  the
indemnifying  party  will not be liable to such  indemnified  party  under  such
Section  7(A),  (B),  (C), or (D) for any legal or other  expenses  subsequently
incurred by such indemnified  party in connection with the defense thereof,  but
the  indemnified  party may, at its own expense,  participate in such defense by
counsel  chosen by it,  without,  however,  impairing the  indemnifying  party's

                                       10
<PAGE>

control  of  the  defense.   Subject  to  the  proviso  of  this   sentence  and
notwithstanding  any other  statement  to the  contrary  contained  herein,  the
indemnified  party or  parties  shall  have the right to choose its or their own
counsel  and  control  the  defense  of any  action,  all at the  expense of the
indemnifying  party  if (i) the  employment  of such  counsel  shall  have  been
authorized in writing by the  indemnifying  party in connection with the defense
of  such  action  at  the  expense  of  the  indemnifying  party,  or  (ii)  the
indemnifying  party shall not have employed counsel  reasonably  satisfactory to
such  indemnified  party to have charge of the  defense of such action  within a
reasonable  time  after  notice of  commencement  of the  action,  or (iii) such
indemnified  party or parties shall have reasonably  concluded that there may be
defenses available to it or them which are different from or additional to those
available  to one  or  all  of the  indemnifying  parties  (in  which  case  the
indemnifying  parties  shall not have the right to direct  the  defense  of such
action on behalf of the  indemnified  party or parties),  in any of which events
such  fees  and  expenses  of one  additional  counsel  shall  be  borne  by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially  similar or related
actions in the same jurisdiction  arising out of the same general allegations or
circumstance,  be liable for the  reasonable  fees and expenses of more than one
separate  firm of attorneys  at any time for all such  indemnified  parties.  No
settlement of any action or  proceeding  against an  indemnified  party shall be
made without the consent of the indemnifying party.

             F. In order to  provide  for just  and  equitable  contribution  in
circumstances in which the indemnification  provided for in Section 7(A) or 7(B)
is due in accordance  with its terms but is for any reason held by a court to be
unavailable  on grounds of policy or  otherwise,  the Company and the  Placement
Agent shall contribute to the aggregate losses,  claims, damages and liabilities
(including  legal or other expenses  reasonably  incurred in connection with the
investigation  or defense of same) which the other may incur in such  proportion
so that the  Placement  Agent  shall be  responsible  for  such  percent  of the
aggregate of such losses,  claims,  damages and  liabilities  as shall equal the
percentage of the gross  proceeds  paid to the  Placement  Agent and the Company
shall be responsible for the balance;  provided,  however, that no person guilty
of  fraudulent  misrepresentation  within the  meaning  of Section  11(f) of the
Securities  Act shall be  entitled to  contribution  from any person who was not
guilty of such fraudulent misrepresentation.  For purposes of this Section 7(F),
any person controlling, controlled by or under common control with the Placement
Agent, or any partner, director, officer, employee,  representative or any agent
of any  thereof,  shall have the same rights to  contribution  as the  Placement
Agent and each person  controlling,  controlled by or under common  control with
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the  Exchange  Act and each  officer of the Company and each  director of the
Company  shall have the same rights to  contribution  as the Company.  Any party
entitled to contribution will,  promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for  contribution  may be made against the other party under this Section  7(D),
notify such party from whom  contribution may be sought,  but the omission to so
notify  such party shall not  relieve  the party from whom  contribution  may be
sought from any  obligation  they may have  hereunder  or otherwise if the party
from whom contribution may be sought is not materially prejudiced thereby.

                                       11
<PAGE>

             G. The  indemnity  and  contribution  agreements  contained in this
Section 7 shall remain operative and in full force and effect  regardless of any
investigation  made by or on behalf of any indemnified person or any termination
of this Agreement.

             H. The Company  hereby waives,  to the fullest extent  permitted by
law, any right to or claim of any  punitive,  exemplary,  incidental,  indirect,
special,  consequential or other damages (including, without limitation, loss of
profits)  against the Placement Agent and each officer,  director,  shareholder,
employee or representative  of the placement agent and each person  controlling,
controlled  by or under  common  control  with the  Placement  Agent  within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or
the Rules and  Regulations  arising out of any cause  whatsoever  (whether  such
cause  be  based  in  contract,  negligence,  strict  liability,  other  tort or
otherwise).  Notwithstanding  anything to the  contrary  contained  herein,  the
aggregate  liability  of  the  Placement  Agent  and  each  officer,   director,
shareholder,  employee or  representative of the Placement Agent and each person
controlling,  controlled  by or under common  control with the  Placement  Agent
within the  meaning of  Section  15 of the  Securities  Act or Section 20 of the
Exchange  Act or the Rules and  Regulations  shall not exceed  the  compensation
received by the Placement Agent pursuant to Section 2 hereof. This limitation of
liability shall apply regardless of the cause of action, whether contract,  tort
(including,  without  limitation,  negligence) or breach of statute or any other
legal or equitable obligation.

         8. Payment of Expenses.

         The Company  hereby  agrees to bear all of the  expenses in  connection
with the Offering,  including,  but not limited to the  following:  filing fees,
printing and duplicating  costs,  advertisements,  postage and mailing  expenses
with respect to the transmission of Offering  Materials,  registrar and transfer
agent fees,  escrow agent fees and expenses,  fees of the Company's  counsel and
accountants, issue and transfer taxes, if any.

         9. Conditions of Closing.

         The  Closing  shall  be  held at the  offices  of the  Investor  or its
counsel.  The  obligations of the Placement  Agent hereunder shall be subject to
the continuing accuracy of the representations and warranties of the Company and
the  Investor  herein as of the date  hereof and as of the Date of Closing  (the
"Closing Date") with respect to the Company or the Investor, as the case may be,
as if it had been made on and as of such Closing Date; the accuracy on and as of
the Closing Date of the  statements of the officers of the Company made pursuant
to the provisions hereof; and the performance by the Company and the Investor on
and as of the Closing Date of its covenants and obligations hereunder and to the
following further conditions:

             A. Upon the effectiveness of a registration  statement covering the
Standby  Equity  Distribution  Agreement,  the Investor and the Placement  Agent
shall  receive  the  opinion  of Counsel  to the  Company,  dated as of the date
thereof, which opinion shall be in form and substance reasonably satisfactory to
the Investor, their counsel and the Placement Agent.

             B. At or prior to the Closing, the Investor and the Placement Agent
shall have been furnished such  documents,  certificates  and opinions as it may
reasonably  require for the purpose of enabling  them to review or pass upon the

                                       12
<PAGE>

matters referred to in this Agreement and the Offering Materials, or in order to
evidence   the   accuracy,   completeness   or   satisfaction   of  any  of  the
representations, warranties or conditions herein contained.

             C. At and  prior to the  Closing,  (i)  there  shall  have  been no
material  adverse change nor development  involving a prospective  change in the
condition or prospects or the business  activities,  financial or otherwise,  of
the Company from the latest dates as of which such condition is set forth in the
Offering  Materials;  (ii)  there  shall  have been no  transaction,  not in the
ordinary course of business except the  transactions  pursuant to the Securities
Purchase  Agreement entered into by the Company on the date hereof which has not
been disclosed in the Offering  Materials or to the Placement  Agent in writing;
(iii) except as set forth in the Offering Materials, the Company shall not be in
default  under any  provision  of any  instrument  relating  to any  outstanding
indebtedness  for which a waiver or extension has not been  otherwise  received;
(iv) except as set forth in the Offering  Materials,  the Company shall not have
issued any securities (other than those to be issued as provided in the Offering
Materials)  or declared or paid any  dividend  or made any  distribution  of its
capital  stock of any  class and  there  shall  not have been any  change in the
indebtedness  (long or short term) or  liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material  amount of the
assets of the Company shall have been pledged or mortgaged,  except as indicated
in the Offering Materials;  and (v) no action, suit or proceeding,  at law or in
equity,  against the Company or affecting  any of its  properties  or businesses
shall be  pending  or  threatened  before  or by any court or  federal  or state
commission,  board or other administrative agency, domestic or foreign,  wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.

             D. If requested at Closing the  Investor  and the  Placement  Agent
shall receive a certificate  of the Company  signed by an executive  officer and
chief financial officer,  dated as of the applicable Closing, to the effect that
the conditions set forth in subparagraph (C) above have been satisfied and that,
as of the applicable closing,  the representations and warranties of the Company
set forth herein are true and correct.

             E. The Placement  Agent shall have no obligation to insure that (x)
any check,  note,  draft or other means of payment for the Common  Stock will be
honored,  paid or enforceable against the Investor in accordance with its terms,
(y) the Offering is exempt from the registration  requirements of the Securities
Act or any applicable  state "Blue Sky" law or (z) the Investor is an Accredited
Investor.

         10. Termination.

         This Agreement  shall be co-terminus  with, and terminate upon the same
terms and  conditions  as those set forth in, the  Standby  Equity  Distribution
Agreement.  The rights of the Investor and the  obligations of the Company under
the Registration Rights Agreement, and the rights of the Placement Agent and the
obligations  of the Company  shall  survive the  termination  of this  Agreement
unabridged.

                                       13
<PAGE>

         11. Miscellaneous.

             A. This  Agreement  may be executed in any number of  counterparts,
each of which shall be deemed to be an  original,  but all which shall be deemed
to be one and the same instrument.

             B. Any notice  required or permitted to be given hereunder shall be
given in writing  and shall be deemed  effective  when  deposited  in the United
States mail, postage prepaid, or when received if personally  delivered or faxed
(upon  confirmation  of receipt  received by the sending  party),  addressed  as
follows to such other address of which written notice is given to the others):

If to Placement Agent, to:       Newbridge Securities Corporation
                                 1451 Cypress Creek Road, Suite 204
                                 Fort Lauderdale, Florida 33309
                                 Attention:  Doug Aguililla
                                 Telephone:  (954) 334-3450
                                 Facsimile:  (954) 229-9937

If to the Company, to:           Power Technology, Inc.
                                 109 North Post Oak Lane, Suite 422
                                 Houston, Texas 77024
                                 Attention:  Bernard J. Walter
                                 Telephone:  (713) 621-4310
                                 Facsimile:  (713) 688-0622

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

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

                                       14
<PAGE>

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

             C.  This  Agreement  shall  be  governed  by and  construed  in all
respects  under the laws of the State of New Jersey,  without  reference  to its
conflict of laws rules or principles. Any suit, action, proceeding or litigation
arising  out of or relating to this  Agreement  shall be brought and  prosecuted
exclusively  in such federal or state court or courts  located in Hudson County,
New Jersey.  The parties hereby irrevocably and  unconditionally  consent to the
jurisdiction  and venue of the Superior  Court of New Jersey,  sitting in Hudson
County, New Jersey, and the United States District Court of New Jersey,  sitting
in Newark,  New Jersey,  and to service of process by  registered  or  certified
mail,  return receipt  requested,  or by any other manner provided by applicable
law, and hereby  irrevocably and  unconditionally  waive any right to claim that
any suit, action, proceeding or litigation so commenced has been commenced in an
inconvenient forum.

             D.  This  Agreement  and the  other  agreements  referenced  herein
contain  the entire  understanding  between  the  parties  hereto and may not be
modified or amended  except by a writing  duly signed by the party  against whom
enforcement of the modification or amendment is sought.

             E. If any provision of this  Agreement  shall be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date first written above.

                                             COMPANY:
                                             POWER TECHNOLOGY, INC.

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

                                             PLACEMENT AGENT:
                                             NEWBRIDGE SECURITIES CORPORATION

                                             By:
                                                 ----------------------------
                                             Name:    Guy S. Amico
                                             Title:   President

                                             INVESTOR:
                                             CORNELL CAPITAL PARTNERS, LP

                                             By:      Yorkville Advisors, LLC
                                             Its:     General Partner

                                             By:
                                                 ----------------------------
                                             Name:    Mark A. Angelo
                                             Title:   Portfolio Manager

                                       16Exhibit 10.5

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

                             POWER TECHNOLOGY, INC.

                              Amended and Restated

                        5% Secured Convertible Debenture

                             Due: November 19, 2006

No. CCP-3                                                               $514,657

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

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

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

<PAGE>

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

                                   ARTICLE I.

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

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

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

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

<PAGE>

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

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

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

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

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

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

                                       3
<PAGE>

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

                                  ARTICLE II.

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

                                  ARTICLE III.

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

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

                                  ARTICLE IV.

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

                                       4
<PAGE>

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

                                   ARTICLE V.

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

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

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

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

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

                                       5
<PAGE>

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

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

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

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

                                       6
<PAGE>

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

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

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

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

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

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

                                       7
<PAGE>

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

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

                  (g) Notices.

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

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

                  (h) Definitions.

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

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

                                       8
<PAGE>

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

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

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

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

                                  ARTICLE VI.

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

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

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

                                       9
<PAGE>

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

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

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

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

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

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

                   [REMAINDER OF PAGE INTENTIALLY LEFT BLANK]

                                       10
<PAGE>

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

                                              POWER TECHNOLOGY, INC.

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

                                       11
<PAGE>

                                   EXHIBIT "A"

                              NOTICE OF CONVERSION

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

TO:

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

Conversion Date:                         _______________________________________

Applicable Conversion Price:             _______________________________________

Signature:                               _______________________________________

Name:                                    _______________________________________

Address:                                 _______________________________________

Amount to be converted:                  US$ ___________________________________

Amount of Debenture unconverted:         US$ ___________________________________

Conversion Price per share:              US$ ___________________________________

Number of shares of Common Stock to be
issued:                                  _______________________________________

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

Issue to:                                _______________________________________

Authorized Signature:                    _______________________________________

Name:                                    _______________________________________

Title:                                   _______________________________________

Phone Number:                            _______________________________________

Broker DTC Participant Code:             _______________________________________

Account Number:                          _______________________________________

                                      A-1

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