Document:

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                                                                    EXHIBIT 10.2

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT FOR DISTRIBUTION, AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT UNLESS SOLD
PURSUANT TO RULE 144 OF THAT ACT OR UNLESS THE SALE, PLEDGE, HYPOTHECATION OR
TRANSFER IS OTHERWISE EXEMPT FROM REGISTRATION. THE COMPANY MAY REQUEST A
WRITTEN OPINION OF COUNSEL (FROM COUNSEL ACCEPTABLE TO THE COMPANY) SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION
WITH SUCH SALE, PLEDGE OR HYPOTHECATION, OR OTHER TRANSFER. THIS NOTE OR ANY
SECURITY ISSUABLE UPON THE CONVERSION HEREOF MUST BE SURRENDERED TO THE COMPANY
OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE,
HYPOTHECATION OR ANY OTHER TRANSFER OF ANY INTEREST IN THIS NOTE OR ANY SUCH
SECURITY.

                       SECURED CONVERTIBLE PROMISSORY NOTE

Note No.: ___                                                     April 16, 2002
                                                              Irvine, California

        FOR VALUE RECEIVED, SSP Solutions, Inc., a Delaware corporation
("Company"), promises to pay to ______________________ ("Holder"), or its
registered assigns, the principal sum of _________________ THOUSAND DOLLARS
($__________), or such lesser amount as shall equal the outstanding principal
amount hereof, together with interest from the date of this Secured Convertible
Promissory Note (this "Note") on the unpaid principal balance at a rate equal to
10% per annum, computed on the basis of the actual number of days elapsed and a
year of 365 or 366 days, as the case may be, compounded annually. Interest on
the outstanding principal balance of this Note shall be payable quarterly as
described in Section 2. Subject to Section 5, all unpaid principal, together
with any then unpaid and accrued interest and other amounts payable hereunder,
shall be due and payable on the Note Maturity Date (as defined below). Subject
to Section 5, any unpaid principal and accrued and unpaid interest on the Note
Maturity Date shall be payable in cash. Upon payment in full of all principal
and interest payable hereunder, this Note shall be surrendered to the Company
for cancellation.

        This Note is secured pursuant to a Securities Purchase, Registration
Rights and Security Agreement, dated as of the date hereof, by and among the
Company and certain investors in the Company, including Holder (the
"Agreement"). This Note and the similar Secured Convertible Promissory Notes
issued to the other investors pursuant to the Agreement are collectively
referred to as the "Notes." Pursuant to the Agreement, the investors also
acquired Warrants to Purchase Common Stock (the "Warrants").

        The following is a statement of the rights of Holder and the conditions
to which this Note is subject, and to which Holder, by the acceptance of this
Note, agrees:

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        1.     CERTAIN DEFINITIONS.

               (a) "Common Stock" means shares of the common stock, $.01 par
        value per share, of the Company.

                (b) "Event of Default" means any of the events specified as such
        in Section 4(a).

               (c) "Holder" means the person or entity specified in the
        introductory paragraph of this Note or any transferee that is at the
        time the registered holder of this Note. The Holder or transferee is an
        "accredited investor" as defined under U.S. federal securities laws or
        otherwise will qualify to allow this offering to take place as a private
        placement under applicable securities laws.

               (d) "Note Maturity Date" shall mean the earlier of (i) December
        31, 2005, or, (ii) the date as of which the outstanding principal and
        accrued interest on this Note and all other payments payable hereunder
        are due and payable by Holder pursuant to Section 4(b).

        Other capitalized terms not defined in this Note have the same meaning
as in the Agreement or in the Warrants, as the case may be.

        2.     INTEREST.

        This Note will bear interest at a rate of 10% per annum. Accrued
interest on this Note shall be due and payable quarterly on the first day of
each calendar quarter beginning July 1, 2002, with a final installment due on
the Note Maturity Date, whether by acceleration, scheduled maturity or
otherwise, unless such amounts are converted into Common Stock pursuant to the
terms set forth herein. Subject to Section 5, any accrued interest on this Note
that is due prior to the Note Maturity Date shall be payable in cash or, at the
option of the Company, in shares of Common Stock valued at the arithmetic mean
of the Closing Sale Price of the Company's Common Stock for the 30 day period
ending on the day prior to the day the interest payment is due. Subject to
Section 5, any accrued interest on this Note that is due on the Note Maturity
Date, whether by acceleration, scheduled maturity or otherwise, shall be payable
in cash.

        3.     PREPAYMENT.

        This Note may not be prepaid without the prior written consent of the
Holder.

        4.     EVENTS OF DEFAULT.

               4.1 EVENT OF DEFAULT. Each of the following events shall
        constitute an "Event of Default" under this Note:

                      (a) Subject to Section 5, the Company fails to pay, within
               five business days of the date when it first becomes due under
               the terms of this Note, the cash portion, or fails to issue the
               Warrant portion, of any accrued interest coming due on a
               quarterly basis prior to the Note Maturity Date.

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                      (b) Subject to Section 5, the Company fails to pay all
               amounts owed within ten business days of the Note Maturity Date
               as required under the terms of this Note.

                      (c) The Company (i) applies for or consents to the
               appointment of a receiver, trustee, liquidator or custodian of
               itself or of all or a substantial part of its property, (ii) is
               unable, or admits in writing its inability, to pay its debts for
               borrowed money generally as they come due or its trade payables
               within 90 days of invoice, (iii) makes a general assignment for
               the benefit of its creditors, (iv) is dissolved or liquidated in
               full or in part, (v) commences a voluntary case or other
               proceeding seeking liquidation, reorganization or other relief
               with respect to itself or its debts under any bankruptcy,
               insolvency or other similar law now or hereafter in effect or
               consents to any such relief or to the appointment of or taking
               possession of its property by any official in an involuntary case
               or other proceeding commenced against it, or (vi) takes any
               action for the purpose of effecting any of the foregoing, and an
               order for relief entered or such proceeding shall not be
               dismissed, discharged or stayed within 60 days of commencement.

                      (d) Proceedings for the appointment of a receiver,
               trustee, liquidator or custodian of the Company or all or a
               substantial part of the property thereof, or an involuntary case
               or other proceedings seeking liquidation, reorganization or other
               relief with respect to Company or the debts thereof under any
               bankruptcy, insolvency or other similar law now or hereafter in
               effect shall be commenced, and an order for relief entered or
               such proceeding shall not be dismissed, discharged or stayed
               within 60 days of commencement.

                      (e) Any of the representations or warranties made by the
               Company herein, in the Agreement or in any agreement, certificate
               or financial statements heretofore or hereafter furnished by the
               Company in connection with the execution and delivery of this
               Note or the Agreement shall be false or misleading in any respect
               at the time made and results in a Material Adverse Effect.

                      (f) The Company (i) fails to issue Conversion Shares to
               the Holder or to cause its Transfer Agent to issue Conversion
               Shares, or, if applicable, cash, upon proper exercise by the
               Holder of the conversion rights of the Holder in accordance with
               the terms of this Note, (ii) fails to transfer or to cause its
               Transfer Agent to transfer any certificate for Conversion Shares
               issued to the Holder as and when required by this Note or the
               Agreement, and such transfer is otherwise lawful, or (iii) fails
               to remove any restrictive legend or to cause its Transfer Agent
               to transfer any certificate or any Conversion Shares issued to
               the Holder as and when required by this Note, the Agreement or
               any other related agreement and such legend removal is otherwise
               lawful, and any such failure described in subclauses (i), (ii) or
               (iii) continues uncured for five Business Days.

                      (g) The Company fails to perform or observe, in any
               material respect, any other covenant, term, provision, condition,
               agreement or obligation of the Company under the Agreement, this
               Note or any related agreement, including but

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                not limited to the payments of interest (other than quarterly
                interest payments), liquidated damages and late fees, provided
                the Holder has provided the Company notice and an opportunity to
                cure within ten trading days of any such event of default under
                this Section 4.1(g) and provided that the failure results in a
                Material Adverse Effect.

                        (h) Any governmental agency or any court of competent
                jurisdiction at the instance of any governmental agency assumes
                custody or control of the whole or any substantial portion of
                the properties or assets of the Company and the action is not
                dismissed within 60 days thereafter.

                        (i) Any money judgment, writ or warrant of attachment,
                or similar process in excess of $500,000 in the aggregate is
                entered or filed against the Company or any of its properties or
                other assets and remains unpaid, unvacated, unbonded or unstayed
                for a period of 60 days or in any event later than five days
                prior to the date of any proposed sale thereunder.

                        (j) The Registration Statement is not declared effective
                by the SEC within 180 days from the Closing Date.

                        (k) The Company (or any subsidiary thereof if guaranteed
                by the Company) defaults (unless the default is the subject of a
                bona fide dispute and the Company has set aside adequate
                reserves) in any of its obligations under any of the other Notes
                or any mortgage, credit agreement or other facility, indenture
                agreement, factoring agreement or other instrument under which
                there may be issued, or by which there may be secured or
                evidenced any indebtedness for borrowed money or money due under
                any long term leasing or factoring arrangement of the Company in
                an amount exceeding an aggregate of $500,000, unless waived,
                extended or cured within ten Business Days, whether the
                indebtedness now exists or if hereafter created and the default
                results in the indebtedness becoming or being declared due and
                payable prior to the date on which it would otherwise become due
                and payable.

                        (l) The Common Stock is delisted from the Principal
                Market or suspended from trading on the Principal Market without
                resuming trading and/or being relisted or thereon or listed on
                another Principal Market or having the suspension lifted, in
                either case, for more than either five consecutive trading days
                or 15 trading days in the aggregate during any 12 month period
                (which need not be consecutive).

                        (m) The Company suspends the Holder's conversion rights
                for more than five trading days in the aggregate during any 12
                month period; provided, however, that this Event of Default
                shall not be deemed to grant the Company any right to any such
                suspensions.

                        (n) If the effectiveness of the Registration Statement
                lapses for any reason or the Holder is not permitted to resell
                Registrable Securities under the

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                Registration Statement, in either case, for more than 30
                Business Days, in the aggregate, during any 12 month period.

                      (o) Except for the security interests granted under the
               Agreement and except as may arise under government contracts, the
               Company or any Guarantor grants or agrees to grant a security
               interest in any intellectual property of the Company or any
               subsidiary.

                      (p) A default causing acceleration of any Principal Note
               occurs.

                4.2 ACCELERATION. If an Event of Default (other than an Event of
        Default specified in Section 4.1(c) or (d) with respect to the Company
        occurs and is continuing, then the Holder may declare the outstanding
        principal and accrued interest on this Note and all other payments
        payable hereunder to be forthwith due and payable immediately, without
        presentment, demand, protest or further notice of any kind, all of which
        are hereby expressly waived by the Company, to the fullest extent
        permitted by applicable law. If an Event of Default specified in Section
        4.1(c) or (d) occurs and is continuing, then the outstanding principal
        and accrued interest on this Note and all other payments payable
        hereunder shall become and be immediately due and payable without any
        declaration or other act on the part of the Holder. The Holder by notice
        to the Company may rescind an acceleration and its consequences if the
        rescission would not conflict with any judgment or decree and if all
        existing Events of Default have been cured or waived. No such rescission
        shall affect any subsequent default or impair any right thereto.

        5. CONVERSION.

                5.1 AUTOMATIC CONVERSION. Subject to the limitations set forth
        in Section 5.7, if at any time after the Registration Statement has been
        declared effective and on or before the payment in full or conversion of
        this Note (a) the Closing Sale Price of a share of the Company's Common
        Stock equals or exceeds $3.00 (subject to appropriate adjustment in the
        event of a stock split, stock dividend, combination or similar event)
        for 20 consecutive trading days, (b) the average daily trading volume
        during the 20 trading day period equals or exceeds 100,000 shares and
        (c) the Company previously has filed a Registration Statement with the
        Securities and Exchange Commission, and such Registration Statement
        previously has been declared effective by the SEC and the effectiveness
        thereof continues throughout each day of the 20 trading day period, then
        the principal will automatically convert into shares of Common Stock at
        the Conversion Rate (as defined below). Accrued interest due may be
        converted, at the same rate, at the option of the Company. The
        conversion will be deemed to have occurred as of the close of business
        on such 20th consecutive trading day. The Company shall notify the
        Holder in writing within one trading day after any automatic conversion,
        and will cause certificate representing the Conversion Shares to be
        issued within two trading days after automatic conversion, and will
        deliver those certificates to the Holder by overnight courier
        immediately after receipt of the original of this Note for cancellation.

                5.2 CONVERSION PROCEDURE IN THE EVENT OF AUTOMATIC CONVERSION.
        In the event of automatic conversion, the outstanding principal (and
        accrued interest due, if

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        elected by the Company) under this Note will convert automatically
        without any further action by the Company whether or not the Note is
        surrendered to the Company or its transfer agent. The Company will not
        be obligated to issue certificates evidencing the securities issuable
        upon automatic conversion of this Note unless this Note is either
        delivered to the Company or its transfer agent, or the Holder notifies
        the Company or its transfer agent that this Note has been mutilated,
        lost, stolen or destroyed and executes an agreement reasonably
        satisfactory to the Company to indemnify the Company from any loss
        incurred by it in connection with this Note. At its expense, the Company
        will, as soon as reasonably practicable thereafter, issue and deliver to
        the Holder a certificate for the number of shares to which the Holder
        will be entitled upon conversion (bearing such legends as are required
        by applicable state and federal securities laws in the opinion of
        counsel to the Company), together with a check payable to the Holder for
        any cash amounts payable as described in Section 5.5.

                5.3 VOLUNTARY CONVERSION. Subject to the limitations set for in
        Section 5.3, the Holder may, at any time before this Note has been
        repaid in full, elect to convert all or any portion of the outstanding
        principal (and accrued interest due, if elected by the Holder) into
        shares of Common Stock at the Conversion Rate.

                5.4 CONVERSION PROCEDURE IN THE EVENT OF VOLUNTARY CONVERSION.

                        (a) Each voluntary conversion of this Note shall be
                effected by the surrender of this Note at the principal office
                of the Company at any time during normal business hours,
                together with a written notice by the Holder stating that the
                Holder desires to convert the entire, or a specified increment
                of, principal of this Note into Common Stock. Each conversion of
                a Note will be deemed to have been effected as of the close of
                business on the date on which this Note has been surrendered and
                the notice has been received, and at that time, the rights of
                the Holder of this Note will cease and the person or persons in
                whose name or names any certificate or certificates for Common
                Stock are to be issued upon conversion will be deemed to have
                become the Holder or Holders of record of the shares of Common
                Stock represented thereby.

                        (b) Within two trading days after a conversion has been
                effected, the Company will deliver to the converting holder:

                                (i) a certificate or certificates representing
                        the number of shares of Common Stock issuable by reason
                        of conversion in such name or names and such
                        denomination or denominations as the converting holder
                        has specified; and

                                (ii) a replacement Note representing the
                        principal amount of this Note delivered to the Company
                        in connection with the conversion but which was not
                        converted.

                        (c) The issuance of certificates for Common Stock upon
                conversion of this Note will be made without charge to the
                Holder of this Note for any tax in

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                respect thereof or other cost incurred by the Company in
                connection with conversion and the related issuance of Common
                Stock. Upon conversion of any portion of this Note, the Company
                will take all actions as are necessary in order to ensure that
                the Common Stock issuable with respect to conversion will be
                validly issued, fully paid and nonassessable.

                        (d) The Company will not close its books against the
                transfer of this Note or of the shares of Common Stock issued or
                issuable upon conversion of this Note in any manner which
                interferes with the timely conversion of this Note, and will at
                all times reserve for issuance the maximum number of shares of
                Common Stock into which this Note is convertible.

                5.5 FRACTIONAL SHARES; INTEREST. No fractional shares shall be
        issued upon conversion of this Note. In lieu of Company issuing any
        fractional shares to Holder upon the conversion of this Note, Company
        shall pay to Holder an amount in cash equal to the product obtained by
        multiplying the Conversion Rate applied to effect such conversion by the
        fraction of a share not issued pursuant to the previous sentence. Upon
        conversion of this Note in full or the payment of outstanding amounts
        specified in this Note, the Company shall be released from all its
        obligations and liabilities under this Note.

                5.6 CONVERSION RATE. The initial Conversion Rate shall be $1.00
        per share of Common Stock. The Conversion Rate shall be subject to
        adjustment as described in Section 6.

                5.7 CONVERSION RESTRICTIONS.

                        5.7.1 BENEFICIAL OWNERSHIP LIMITATION. Notwithstanding
                anything herein to the contrary, the Holder may not convert, and
                the Company may not cause the Holder to convert, this Note to
                the extent such conversion would result in the Holder, together
                with any affiliate thereof, beneficially owning (as determined
                in accordance with Section 13(d) of the Exchange Act and the
                rules promulgated thereunder) in excess of 4.999% of the then
                issued and outstanding shares of Common Stock, including shares
                issuable upon conversion or exercise of this Note or any other
                instrument of the Company (including the Warrant which
                accompanied this Note) held by the Holder after application of
                this Section 5.7. Since the Holder will not be obligated to
                report to the Company the number of shares of Common Stock it
                may hold at the time of a conversion hereunder, unless the
                conversion at issue would result in the issuance of shares of
                Common Stock in excess of 4.999% of the then outstanding shares
                of Common Stock without regard to any other shares which may be
                beneficially owned by the Holder or an affiliate thereof, the
                Holder shall have the authority and obligation to determine
                whether the restriction contained in this Section 5.7 will limit
                any particular conversion hereunder and to the extent that the
                Holder determines that the limitation contained in this Section
                applies, the determination of which portion of the principal
                amount of this Note is convertible shall be the responsibility
                and obligation of the Holder. If the Holder has delivered a
                Conversion Notice for a principal amount of this Note that,
                without regard to any other shares that the

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                Holder or its affiliates may beneficially own, would result in
                the issuance in excess of the permitted amount hereunder, the
                Company shall notify the Holder of this fact and shall honor the
                conversion for the maximum principal amount permitted to be
                converted on the Conversion Date in accordance with this Section
                5.7. If this Note was not surrendered on the Conversion Date,
                the Company shall provide the Holder written notice of the
                amount actually converted. If the Holder surrendered this Note
                on the Conversion Date, the Company shall, at the option of the
                Holder, either retain any principal amount tendered for
                conversion in excess of the permitted amount hereunder for
                future conversions or return such excess portion of the Note to
                the Holder. The provisions of this Section 5.7 may be waived by
                the Holder (but only as to itself and not to any other holder of
                a Note or Warrant) in whole or in part (x) upon not less than 61
                days prior notice to the Company and (y) immediately upon
                written notice to the Company in the event of the occurrence or
                notice of an intended or pending Change of Control. Other
                holders of Notes and Warrants shall be unaffected by any such
                waiver. For purposes of this Section 5.7, "Change of Control"
                means (i) the consolidation, merger or other business
                combination of the Company with or into another Person (other
                than (A) a consolidation, merger or other business combination
                in which holders of the Company's voting power immediately prior
                to the transaction continue after the transaction to hold,
                directly or indirectly, the voting power of the surviving entity
                or entities necessary to elect a majority of the members of the
                board of directors (or their equivalent if other than a
                corporation) of such entity or entities, or (B) pursuant to a
                migratory merger effected solely for the purpose of changing the
                jurisdiction of incorporation of the Company), (ii) the sale or
                transfer of all or substantially all of the Company's assets,
                (iii) a purchase, tender or exchange offer made to and accepted
                by the holders of more than 50% of the outstanding shares of
                Common Stock, or (iv) the execution by the Company of an
                agreement to which the Company is a party or by which it is
                bound providing for any of the events set forth in (i), (ii) or
                (iii) above.

                        5.7.2 LIMITATION ON NUMBER OF SHARES ISSUABLE.
                Notwithstanding anything herein to the contrary, unless the
                requisite stockholder vote has been obtained, the Company shall
                not be required to issue to the Holder, upon conversion of the
                Notes or exercise of the Warrants, in excess of, as of Closing
                Date, 19.9999% of the issued and outstanding shares of Common
                Stock multiplied by a fraction, the numerator of which is the
                original principal amount of this Note and the denominator of
                which is the aggregate original principal amount of all the
                Notes at a price below the market price of the Common Stock on
                such date (the "Maximum Aggregate Share Amount"), unless the
                Company first obtains stockholder approval permitting such
                issuances in accordance with Nasdaq rules. If the number of
                shares of Common Stock which would, notwithstanding the
                limitation set forth herein, be issuable and sold to the Holder
                equals or exceeds the Maximum Aggregate Share Amount, then, at
                any time thereafter, from time to time, at the sole election of
                the Holder, in whole or in part, the Company shall honor the
                conversion of this Note by the Holder at the

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                lowest possible conversion price (but not lower than the
                Conversion Rate) which would permit such conversion without
                violating Nasdaq Rule 4350(i).

        6.      ADJUSTMENT OF CONVERSION RATE.

        The Conversion Rate shall be adjusted from time to time as follows:

                6.1 ADJUSTMENT OF CONVERSION RATE UPON ISSUANCE OF COMMON STOCK.
        If and whenever on or after the date of issuance of this Note, but
        before April 16, 2003, the Company issues or sells, or is deemed to have
        issued or sold, any shares of Common Stock (including the issuance or
        sale of shares of Common Stock owned or held by or for the account of
        the Company, but excluding shares of Common Stock issued or deemed to
        have been issued by the Company upon exercise or conversion of the Other
        Securities) for a consideration per share less than a price (the
        "Applicable Price") equal to the Conversion Rate in effect immediately
        prior to such issuance or sale, then immediately after such issue or
        sale the Conversion Rate then in effect shall be reduced to an amount
        equal to such consideration per share.

                6.2 EFFECT ON CONVERSION RATE OF CERTAIN EVENTS. For purposes of
        determining the adjusted Warrant Exercise Price under Section 6.1, the
        following shall be applicable:

                        6.2.1 Issuance of Options. If the Company in any manner
                grants any 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, exchange or exercise of any
                Convertible Securities issuable upon exercise of any such Option
                is less than the Applicable Price, 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 6.2.1, the "lowest price per share for which one share
                of Common Stock is issuable upon exercise of such Options or
                upon conversion, exchange or exercise 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 and upon
                conversion, exchange or exercise of any Convertible Security
                issuable upon exercise of such Option. No further adjustment of
                the Conversion Rate 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, exchange or exercise of such
                Convertible Securities.

                        6.2.2 Issuance of Convertible Securities. If the Company
                in any manner issues or sells any Convertible Securities and the
                lowest price per share for which one share of Common Stock is
                issuable upon such conversion, exchange or exercise thereof is
                less than the Applicable Price, 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 issuance or sale of such
                Convertible Securities for

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                such price per share. For the purposes of this Section 6.2.2,
                the "lowest price per share for which one share of Common Stock
                is issuable upon such conversion, exchange or exercise" 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, exchange or exercise of such
                Convertible Security. No further adjustment of the Conversion
                Rate 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 Rate had been or are to be made pursuant to other
                provisions of this Section 6.2, no further adjustment of the
                Conversion Rate shall be made by reason of such issue or sale.

                        6.2.3 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 Rate in effect
                at the time of such change shall be adjusted to the Conversion
                Rate 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 acquirable
                hereunder shall be correspondingly readjusted. For purposes of
                this Section 6.2.3, if the terms of any Option or Convertible
                Security that was outstanding as of the date of issuance of this
                Note 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 shall be made if such
                adjustment would result in an increase of the Conversion Rate
                then in effect.

                6.3 EFFECT ON CONVERSION RATE OF CERTAIN EVENTS. For purposes of
        determining the adjusted Conversion Rate under Sections 6.2 and 6.3, the
        following shall be applicable:

                        6.3.1 Calculation of Consideration Received. 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 $.01. 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 therefor will be deemed to be the net amount received
                by the Company therefor. 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

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

                        6.3.2 Record Date. If the Company takes a record of the
                holders of Common Stock for the purpose of entitling them (a) to
                receive a dividend or other distribution payable in Common
                Stock, Options or in Convertible Securities or (b) 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.

                6.4 ADJUSTMENT OF CONVERSION RATE UPON SUBDIVISION OR
        COMBINATION OF COMMON STOCK. If the Company at any time after the date
        of issuance of this Note 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, the Conversion
        Rate in effect immediately prior to such subdivision will be
        proportionately reduced and the number of shares of Common Stock
        obtainable upon conversion of this Note will be proportionately
        increased. If the Company at any time after the date of issuance of this
        Note 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, the Conversion Rate in effect immediately prior to
        such combination will be proportionately increased and the number of
        shares of Common Stock obtainable upon conversion of this Note will be
        proportionately decreased. Any adjustment under this Section 6.4 shall
        become effective at the close of business on the date the subdivision or
        combination becomes effective

                6.5 DISTRIBUTION OF ASSETS. If the Company declares or makes 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

                                      -11-
<PAGE>

        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 Note, then, in each such case:

                (a) the Conversion Rate in effect immediately prior to the close
        of 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 Rate by a fraction of which
        (A) the numerator shall be the Closing Sale 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 Sale Price of the Common Stock on the
        trading day immediately preceding such record date; and

                (b) the number of Conversion Shares obtainable upon conversion
        of this Note shall be increased to a number of shares equal to the
        number of shares of Common Stock obtainable immediately prior to the
        close of business on the record date fixed for the determination of
        holders of Common Stock entitled to receive the Distribution multiplied
        by the reciprocal of the fraction set forth in the immediately preceding
        clause (a).

                6.6 CERTAIN EVENTS. If any event occurs of the type contemplated
        by the provisions of this Section 6 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 Rate and the number of shares
        of Common Stock obtainable upon conversion of this Note so as to protect
        the rights of the holders of the Notes; provided that no such adjustment
        will increase the Conversion Rate or decrease the number of shares of
        Common Stock obtainable as otherwise determined pursuant to this Section
        6.

                6.7 NOTICES.

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

                (b) The Company will give written notice to the holder of this
        Note at least 20 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 Organic Change, 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.

                (c) The Company will also give written notice to the holder of
        this Note at least 20 days prior to the date on which any Organic
        Change, dissolution or liquidation

                                      -12-
<PAGE>

        will take place, provided that such information shall be made known to
        the public prior to or in conjunction with such notice being provided to
        such holder.

        7. PRIORITY; AGREEMENTS RELATING TO COLLATERAL.

                7.1 PRIORITY OF SECURITY INTEREST. The initial Holder and any
        subsequent Holder of this Note, by accepting this Note, acknowledges and
        agrees that the Holder's security interest in the Collateral is (a) a
        pro rata security interest (as described in the Agreement) with the
        holders of other similar Notes issued by the Company pursuant to the
        Agreement and (b) is junior in priority to the security interests of the
        holders of any Senior Debt (as defined below).

                7.2 SENIOR DEBT. "Senior Debt" means an amount owing by the
        Company, including principal, interest (including any interest accruing
        during any bankruptcy proceeding), premium, if any, fees (including,
        without limitation, any commitment, agency, facility, structuring,
        restructuring or other fee), costs, expenses and indemnities, from time
        to time for indebtedness for borrowed money under notes, debentures or
        other evidence of indebtedness issued to, or agreements with, a
        commercial bank or similar financial institution whose principal
        business is the lending of money solely for the purpose of obtaining
        working or permanent capital for the Company, which amount and repayment
        terms thereof have been designated by the Company in writing as of the
        date hereof to the Holder as "Senior Debt." The Holder hereby waives any
        and all notice of renewal, extension or accrual of any of the Senior
        Debt, present or future, and agrees and consents that without notice to
        or consent of the Holder: (a) the obligations and liabilities of the
        Company or any other party or parties under the Senior Debt may, from
        time to time, in whole or in part, be renewed, refinanced, replaced,
        terminated, decreased or released; (b) the holders of Senior Debt and
        their representatives may exercise or refrain from exercising any right,
        remedy or power granted by any document creating or evidencing the
        Senior Debt or at law, in equity, or otherwise, with respect to the
        Senior Debt or in connection with any collateral security or lien (legal
        or equitable) held, given or intended to be given therefor (including,
        without limitation, the right to perfect any lien or security interest
        created in connection therewith); and (c) any and all collateral
        security and/or liens (legal or equitable) at any time, present or
        future, held, given or intended to be given for the Senior Debt, and any
        rights or remedies of the holders of Senior Debt and their
        representatives in respect thereof, may, from time to time, in whole or
        in part, be surrendered, released, perfected, unperfected or waived by
        the holders of Senior Debt and their representatives.

                7.3 EXECUTION OF SUBORDINATION AGREEMENT. By accepting this
        Note, the Holder agrees that, upon the request of any holder of Senior
        Debt, it will execute and deliver a subordination agreement for the
        benefit of such holder of Senior Debt (in form reasonably acceptable to
        the Holder and its counsel) reflecting the terms of this Section 7;
        provided, however that the foregoing shall not require the Holder to
        execute or deliver any agreement which provides for additional terms of
        subordination or otherwise adversely modifies (whether by change,
        addition or deletion) the terms hereof.

                                      -13-
<PAGE>

               7.4 ADDITIONAL ENCUMBRANCES. The Company shall not, without the
        prior written consent of the Representative of the Investors and the
        holders of a majority in principal amount of the outstanding Notes,
        create or suffer to exist any lien or security interest on or with
        respect to the Collateral, except liens or security interests (a) in
        favor of holders of Senior Debt or Notes of the Company, (b) securing
        taxes, assessments or governmental charges or levies, or (iii) that
        arise in the ordinary course of business and not created in connection
        with the borrowing of money or the obtaining of credit.

               7.5 OBTAINING INSURANCE. The Company shall in good faith seek and
        evaluate insurance products relative to the intellectual property of the
        Company. If the terms, costs and availability of funds provided by such
        insurance products are reasonably acceptable to the Company, the
        Representative of the Investors and the holders of a majority in
        principal amount of the outstanding Notes, such insurance products shall
        be obtained at the Company's sole cost and expense, provided that the
        coverage lasts through the term of this Note.

        8. COSTS.

        In addition to all unpaid principal and accrued interest due and payable
hereunder, the Company agrees to pay to the Holder upon demand all reasonable
costs and expenses incurred (including, without limitation reasonable fees and
expenses of counsel) in connection with (a) the enforcement of the terms of or
protection of the Holder's rights under this Note, (b) any waiver requested by
the Company of the Holder's rights under this Note, (c) any proposed amendment,
modification, refinancing, restructuring or work-out of the credit evidenced
hereby and (d) collecting any obligations under this Note through
reorganization, bankruptcy or any other proceeding.

        9. USURY.

        It is the express intent of the Company and the Holder that the payment
of all or any portion of the outstanding principal amount of and accrued
interest under this Note be exempt from the application of any applicable usury
or similar laws under any state, federal or foreign jurisdiction. The Company
hereby irrevocably waives, to the fullest extent permitted by law, any objection
or defense which the Company may now or hereafter have to the payment when due
of any and all Note principal or accrued interest arising out of or relating to
a claim of usury or similar laws and the Company hereby agrees that neither it
nor any of its affiliates shall in the future bring, commence, maintain,
prosecute or voluntarily aid in any action at law, proceeding in equity or other
legal proceeding against the Holder based on a claim that the Company's payment
obligations under this Note violate the usury or similar laws of any state,
federal or foreign jurisdiction. Notwithstanding the foregoing, if any interest
is paid on this Note that is deemed to be in excess of the then legal maximum
rate, then that portion of the interest payment representing an amount in excess
of the then legal maximum rate shall be deemed a payment of principal and
applied against the principal of this Note.

        10.    UNCONDITIONAL OBLIGATION: FEES, WAIVERS, OTHER.

        The Company and the Holder (by acceptance of this Note) agree as
follows:

                                      -14-
<PAGE>

               (a) No forbearance, indulgence, delay or failure to exercise any
        right or remedy with respect to this Note shall operate as a waiver, nor
        as an acquiescence in any default, nor shall any single or partial
        exercise of any right or remedy preclude any other or further exercise
        thereof.

               (b) The Company hereby expressly waives demand and presentment
        for payment, notice of nonpayment, notice of dishonor, protest, notice
        of protest, bringing of suit, and diligence in taking any action to
        collect amounts called for hereunder, and shall be directly and
        primarily liable for the payment of all sums owing and to be owing
        hereon, regardless of and without any notice, diligence, act or omission
        with respect to the collection of any amount called for hereunder or in
        connection with any right at any and all times which Holder had or is
        existing hereunder.

        11.    NOTICES.

        All notices and other communications provided for hereunder shall be in
writing and delivered, mailed or transmitted by any standard form of
telecommunication. Notices and other communications to the Holder shall be
directed to it at its address noted on the Company's records; and notices and
other communications to the Company shall be directed to it at its address at
SSP Solutions, Inc., 17861 Cartwright Road, Irvine, California 92614; or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other party pursuant hereto. Any notice or other
communication shall be deemed to have been duly given (a) when sent by Federal
Express or other overnight delivery service of recognized standing, on the
business day following deposit with such service; (b) when mailed by registered
or certified mail, first class postage prepaid and addressed as aforesaid
through the United States Postal Service, upon receipt; (c) when delivered by
hand, upon delivery; and (d) when telecopied, upon confirmation of receipt. Any
party hereto may by notice so given change its address for future notice
hereunder.

        12.    PAYMENT.

        Except with respect to payments in kind that are permitted hereunder,
payment shall be made in lawful tender of the United States.

        13.    NO THIRD PARTY RIGHTS.

        Nothing expressed in or to be implied from this Note is intended to
give, or shall be construed to give, any person, other than the parties hereto
and their permitted successors and assigns, any benefit or legal or equitable
right, remedy or claim under or by virtue of this Note.

        14.    REPLACEMENT OF NOTE.

        Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Note (or any security issued on
conversion of this Note), the Company will issue a replacement instrument, at
the Holder's expense, representing such securities in lieu of such lost, stolen,
destroyed or mutilated instrument, provided that the Holder agrees to indemnify
the Company for any losses incurred by the Company with respect to such
instrument.

                                      -15-
<PAGE>

        15.    AMENDMENT.

        Except as expressly provided herein, neither this Note nor any term
hereof may be amended, waived, discharged or terminated other than by a written
instrument referencing this Note and signed by the Company and the Holder. This
Note is one of a series of similar Notes issued by the Company. Notwithstanding
the foregoing, this Note may be amended, waived, discharged or terminated by a
written instrument referencing this Note and signed by the Company, the
Representative of the Investors and the holders of a majority in principal
amount of the outstanding Notes of the Company. Any such amendment, waiver,
discharge or termination effected in accordance with the preceding sentence
shall be binding upon each holder of any Notes of the Company outstanding. The
Holder acknowledges that by the operation of this paragraph, the holders of a
majority of the outstanding principal amount of the Notes will have the right
and power to diminish or eliminate all rights of the Holder under this Note.

        16.    GOVERNING LAW.

        This Note and all actions arising out of or in connection with this Note
shall be governed by and construed in accordance with the laws of the United
States of America and the State of California, without application of conflicts
of law principles. In any action, dispute, litigation or other proceeding
concerning this Note (including arbitration), exclusive jurisdiction shall be
with the courts of California, with the County of Orange being the sole venue
for the bringing of the action or proceeding.

        17.    WAIVER OF JURY TRIAL.

        BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, AND
UNDERSTANDING THEY ARE WAIVING A CONSTITUTIONAL RIGHT, THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO, THIS NOTE, THE AGREEMENT AND/OR ANY RELATED
AGREEMENT OR THE TRANSACTIONS COMPLETED HEREBY OR THEREBY.

                            [signature page follows]

                                      -16-
<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Note to be issued as of
the date first written above.

                                        SSP SOLUTIONS, INC.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Richard M. Depew, President

                                        By:
                                            ------------------------------------
                                            Thomas E. Schiff,
                                            Chief Financial Officer

                                      -17-<PAGE>
                                                                    EXHIBIT 10.3

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B)
AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER THAT ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER THAT ACT.

                               SSP SOLUTIONS, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:_____________                               Number of Shares: ______
Date of Issuance: April 16, 2002

        SSP SOLUTIONS, INC., a Delaware corporation (the "Company"), hereby
certifies that, for $10.00 and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, ____________________,
the registered holder hereof or its permitted assigns, is entitled, subject to
the terms set forth below, to purchase from the Company upon surrender of this
Warrant, at any time or times on or after the date hereof, but not after 11:59
P.M. Eastern Standard Time on the Expiration Date (as defined herein),
____________________ (______) fully paid nonassessable shares of Common Stock
(as defined herein) of the Company [30,000 SHARES FOR EACH $50,000 OF NOTE] (the
"Warrant Shares") at the Warrant Exercise Price (as defined herein); provided,
however, that, if the number of shares of Common Stock into which the Secured
Convertible Promissory Note issued to the registered holder hereof in connection
with the Agreement (as defined below) may be converted (the "Conversion Shares")
is less than the number of Warrant Shares indicated above, then the number of
Warrant Shares shall be equal to the number of Conversion Shares.

1.      PURCHASE AGREEMENT.

        This Warrant is one of the Warrants (the "Warrants") issued pursuant to
the Securities Purchase, Registration Rights and Security Agreement dated as of
April 16, 2002, among the Company and the Persons referred to therein (the
"Agreement"). Capitalized terms not defined herein shall have the same meaning
as in the Agreement.

2.      DEFINITIONS.

        The following words and terms as used in this Warrant shall have the
following meanings:

        (a) "Business Day" means any day other than a Saturday, Sunday or other
day on which the Principal Market is authorized or required to be closed to
trading.

<PAGE>

        (b) "Closing Sale Price" means, for any security as of any date, the
last closing trade price for such security on the Principal Market as reported
by Bloomberg Financial Markets ("Bloomberg"), or, if the Principal Market begins
to operate on an extended hours basis and does not designate the closing trade
price, then the last trade price at 4:00 p.m., New York City Time (or such other
time as the Principal Market publicly announces is the official close of
trading), as reported by Bloomberg, or, if the foregoing do not apply, the last
closing trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
closing trade price is reported for such security by Bloomberg, the last closing
ask price for such security as reported by Bloomberg, or, if no last closing ask
price is reported for such security by Bloomberg, the average of the highest bid
price and the lowest ask price of any market makers for such security as
reported in the "pink sheets" by the National Quotation Bureau, Inc. If the
Closing Sale Price cannot be calculated for that security on that date on any of
the foregoing bases, the Closing Sale Price of such security on such date shall
be the fair market value as mutually determined by the Company, the
Representative of the Investors and the holders of Warrants representing at
least two-thirds (2/3) of the shares of Common Stock issuable upon the exercise
of the Warrants then outstanding. If the Company and the holders of the Warrants
are unable to agree upon the fair market value of the Common Stock, then the
Company shall immediately submit via facsimile the disputed determination of the
fair market value to an independent, reputable investment banking firm. The
Company shall cause the investment banking firm to perform the determinations or
calculations and notify the Company and the holder of the results no later than
48 hours from the time it receives the disputed determinations or calculations.
The investment banking firm's determination or calculation, as the case may be,
shall be deemed conclusive absent manifest error.

        (c) "Common Stock" means (i) the Company's common stock, par value $0.01
per share, and (ii) any capital stock into which the Common Stock has been
changed or any capital stock resulting from a reclassification of the Common
Stock.

        (d) "Convertible Securities" means any stock or securities (other than
Options) directly or indirectly convertible into or exchangeable or exercisable
for Common Stock.

        (e) "Expiration Date" means the date three years from the date of this
Warrant or, if such date does not fall on a Business Day or on a day on which
trading takes place on the principal exchange or automated quotation system on
which the Common Stock is traded, then the next Business Day.

        (f) "Other Securities" means (i) shares of Common Stock issued upon
exercise of warrants of the Company issued prior to, and outstanding on, the
date of issuance of this Warrant and (ii) the shares of Common Stock issued upon
conversion of the Notes.

        (g) "Options" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

        (h) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

                                      -2-
<PAGE>

        (i) "Principal Market" means The Nasdaq National Market, or, if the
Common Stock is not traded on The Nasdaq National Market, then the principal
securities exchange or trading market for the Common Stock.

        (j)    "Securities Act" means the Securities Act of 1933, as amended.

        (k) "Subscription Form" means the Subscription Form attached hereto and
incorporated herein as Exhibit A.

        (l) "Warrant" means this Warrant and all Warrants issued in exchange,
transfer or replacement of this Warrant.

        (m) "Warrant Exercise Price" shall be $1.30 per share, subject to
adjustment as hereinafter provided.

3.      EXERCISE OF WARRANT.

        3.1 EXERCISE; DELIVERY OF CERTIFICATES. This Warrant may be exercised,
at the option of the holder, at any time and from time to time (a) after
effectiveness of the Registration Statement and (b) prior to the end of business
on the Expiration Date, for all or any part of the Warrant Shares. This Warrant
may be exercised by delivering the payment of the Warrant Exercise Price for the
number of Warrant Shares being purchased and concurrently surrendering this
Warrant to the Company at its principal office (the "Designated Office"),
together with the Subscription Form attached hereto duly completed and signed.
The Warrant Shares purchased under this Warrant shall be and are deemed to be
issued to the holder as the record owner of those shares as of the close of
business on the date on which this Warrant was surrendered and payment made
therefor. Certificates for Warrant Shares so purchased shall be delivered to the
holder within three Business Days after this Warrant has been exercised, and, in
case of a purchase of less than all of the Warrant Shares purchasable upon
exercise of this Warrant, the Company shall cancel this Warrant and, within
three Business Days, shall execute and deliver to the holder a new Warrant of
like tenor for the balance of the Warrant Shares. Each stock certificate so
delivered shall be registered in the name of the holder or, subject to
compliance with applicable laws, such other name as shall be designated by the
holder.

        3.2 PAYMENT OF WARRANT PRICE. Payment of the Warrant Exercise Price may
be made, at the option of the holder (i) by certified or official bank check,
(ii) by wire transfer, or (iii) by "Cashless Exercise" as described in Section
3.4.

        3.3 NO FRACTIONAL SHARES. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock issued upon exercise of this Warrant shall be rounded up or down to
the nearest whole number.

        3.4 CASHLESS EXERCISE. Notwithstanding anything contained herein to the
contrary, the holder of this Warrant may, at its election exercised in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the "net number" of shares of Common Stock determined according to the
following formula (a "Cashless Exercise"):

                                      -3-
<PAGE>

        Net Number = (A x B) - (A x C)
                     -----------------
                             B

               For purposes of the foregoing formula:

                      A = the total number of shares with respect to which this
                      Warrant is then being exercised.

                      B = the Closing Sale Price of the Common Stock on the date
                      immediately preceding the date of the subscription notice.

                      C = the Warrant Exercise Price then in effect for the
                      applicable Warrant Shares at the time of such exercise.

        3.5     EXERCISE RESTRICTIONS.

                3.5.1 BENEFICIAL OWNERSHIP LIMITATION. Notwithstanding anything
        herein to the contrary, the holder may not exercise, and the Company may
        not cause the holder to exercise, this Warrant to the extent such
        exercise would result in the holder, together with any affiliate
        thereof, beneficially owning (as determined in accordance with Section
        13(d) of the Exchange Act and the rules promulgated thereunder) in
        excess of 4.999% of the then issued and outstanding shares of Common
        Stock, including shares issuable upon conversion or exercise of this
        Warrant or any other instrument of the Company (including the Note which
        accompanied this Warrant) held by the holder after application of this
        Section 3.5. Since the holder will not be obligated to report to the
        Company the number of shares of Common Stock it may hold at the time of
        an exercise hereunder, unless the exercise at issue would result in the
        issuance of shares of Common Stock in excess of 4.999% of the then
        outstanding shares of Common Stock without regard to any other shares
        which may be beneficially owned by the holder or an affiliate thereof,
        the holder shall have the authority and obligation to determine whether
        the restriction contained in this Section 3.5 will limit any particular
        exercise hereunder and to the extent that the holder determines that the
        limitation contained in this Section 3.5 applies, the determination of
        the amount of this Warrant is exercisable shall be the responsibility
        and obligation of the holder. If the holder has delivered a Subscription
        Form that, without regard to any other shares that the holder or its
        affiliates may beneficially own, would result in the issuance in excess
        of the permitted amount hereunder, the Company shall notify the holder
        of this fact and shall honor the exercise for the maximum amount
        permitted to be exercised on the exercise date in accordance with this
        Section 3.5. If this Warrant was not surrendered on the exercise date,
        the Company shall provide the holder written notice of the amount
        actually exercised. If the holder surrendered this Warrant on the
        exercise date, the Company shall, at the option of the holder, either
        retain any portion of the Warrant Exercise Price tendered for exercise
        in excess of the permitted amount hereunder for future exercises or
        return such excess portion of the Warrant Exercise Price to the holder.
        The provisions of this Section 3.5 may be waived by the holder (but only
        as to itself and not to any other holder of a Note or Warrant) in whole
        or in part (x) upon not

                                      -4-
<PAGE>

        less than 61 days prior notice to the Company and (y) immediately upon
        written notice to the Company in the event of the occurrence or notice
        of an intended or pending Change of Control. Other holders of Notes and
        Warrants shall be unaffected by any such waiver. For purposes of this
        Section 3.5, "Change of Control" means (i) the consolidation, merger or
        other business combination of the Company with or into another Person
        (other than (A) a consolidation, merger or other business combination in
        which holders of the Company's voting power immediately prior to the
        transaction continue after the transaction to hold, directly or
        indirectly, the voting power of the surviving entity or entities
        necessary to elect a majority of the members of the board of directors
        (or their equivalent if other than a corporation) of such entity or
        entities, or (B) pursuant to a migratory merger effected solely for the
        purpose of changing the jurisdiction of incorporation of the Company),
        (ii) the sale or transfer of all or substantially all of the Company's
        assets, (iii) a purchase, tender or exchange offer made to and accepted
        by the holders of more than 50% of the outstanding shares of Common
        Stock, or (iv) the execution by the Company of an agreement to which the
        Company is a party or by which it is bound providing for any of the
        events set forth in (i), (ii) or (iii) above.

                3.5.2 LIMITATION ON NUMBER OF SHARES ISSUABLE. Notwithstanding
        anything herein to the contrary, unless the requisite stockholder vote
        has been obtained, the Company shall not be required to issue to the
        holder, upon conversion of the Notes and exercise of the Warrants, in
        excess of, as of the Closing Date, 19.9999% shares of Common Stock
        multiplied by a fraction, the numerator of which is the original
        principal amount of the holder's Note and the denominator of which is
        the aggregate original principal amount of all the Notes at a price
        below the market price of the Common Stock on such date (the "Maximum
        Aggregate Share Amount"), unless the Company first obtains stockholder
        approval permitting such issuances in accordance with Nasdaq rules. If
        the number of shares of Common Stock which would, notwithstanding the
        limitation set forth herein, be issuable and sold to the holder equals
        or exceeds the Maximum Aggregate Share Amount, then, at any time
        thereafter, from time to time, at the sole election of the holder, in
        whole or in part, the Company shall honor the exercise of this Warrant
        by the holder at the lowest possible exercise price (but not below the
        Warrant Exercise Price) which would permit such exercise without
        violating Nasdaq Rule 4350(i).

4.      COVENANTS AS TO COMMON STOCK.

        The Company hereby covenants and agrees as follows:

        (a) This Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.

        (b) All Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.

        (c) During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved at least 100% of the number of shares of Common Stock needed to provide
for the exercise of the rights then

                                      -5-
<PAGE>

represented by this Warrant and the par value of said shares will at all times
be less than or equal to the applicable Warrant Exercise Price.

        (d) The Company shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance upon
exercise of this Warrant) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of Common Stock from
time to time issuable upon the exercise of this Warrant; and the Company shall
so list on each national securities exchange or automated quotation system, as
the case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated quotation system.

        (e) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant.

        (f) This Warrant will be binding upon any entity succeeding to the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets.

5.      TAXES.

        The Company shall pay any and all taxes which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant.

6.      WARRANT HOLDER NOT DEEMED A STOCKHOLDER.

        Except as otherwise specifically provided herein, no holder, as such, of
this Warrant shall be entitled to vote or receive dividends or be deemed the
holder of shares of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the holder of this Warrant of the Warrant
Shares which it is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on such holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 6, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to

                                      -6-
<PAGE>

the stockholders of the Company generally, contemporaneously with the giving
thereof to the stockholders.

7.      REPRESENTATIONS OF HOLDER.

        The holder of this Warrant, by the acceptance hereof, represents that it
is acquiring this Warrant and the Warrant Shares for its own account and not
with a view towards, or for resale in connection with, the public sale or
distribution of this Warrant or the Warrant Shares, except pursuant to sales
registered or exempted under the Securities Act. The holder of this Warrant
further represents, by acceptance hereof, that, as of this date, the holder is
an "accredited investor" as that term is defined in Rule 501(a)(3) of Regulation
D promulgated by the Securities and Exchange Commission under the Securities
Act. Upon exercise of this Warrant, the holder shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company,
representations concerning the Warrant Shares in substantially the form of the
first sentence of this Section 7.

8.      OWNERSHIP AND TRANSFER.

        (a) The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee. The Company may treat the
person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events recognizing any transfers made in accordance with the terms of
this Warrant.

        (b) This Warrant and the rights granted hereunder shall be assignable by
the holder hereof without the consent of the Company.

        (c) The Company is obligated to register the Warrant Shares for resale
under the Securities Act pursuant to the Agreement and the initial holder of
this Warrant (and certain assignees thereof) is entitled to the registration
rights in respect of the Warrant Shares as set forth in the Agreement.

9.      ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES.

        The Warrant Exercise Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be adjusted from time to time as
follows:

        9.1 ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES UPON
ISSUANCE OF COMMON STOCK. If and whenever on or after the date of issuance of
this Warrant, but prior to April 16, 2003, the Company issues or sells, or is
deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding shares of Common Stock issued or deemed to have
been issued by the Company upon exercise or conversion of the Other Securities)
for a consideration per share less than a price (the "Applicable Price") equal
to the Warrant Exercise Price in effect immediately prior to such issuance or
sale, then immediately after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such

                                      -7-
<PAGE>

consideration per share. Upon each such adjustment of the Warrant Exercise Price
pursuant to the immediately preceding sentence, the number of shares of Common
Stock acquirable upon exercise of this Warrant shall be adjusted to the number
of shares determined by multiplying the Warrant Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
acquirable upon exercise of this Warrant immediately prior to such adjustment
and dividing the product thereof by the Warrant Exercise Price resulting from
such adjustment.

        9.2 EFFECT ON WARRANT EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Warrant Exercise Price under Section 9.1, the following
shall be applicable:

                9.2.1 Issuance of Options. If the Company in any manner grants
        any 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, exchange or exercise of any Convertible Securities issuable
        upon exercise of any such Option is less than the Applicable Price, 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
        9.2.1, the "lowest price per share for which one share of Common Stock
        is issuable upon exercise of such Options or upon conversion, exchange
        or exercise 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 and upon
        conversion, exchange or exercise of any Convertible Security issuable
        upon exercise of such Option. No further adjustment of the Warrant
        Exercise 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, exchange or exercise of such Convertible Securities.

                9.2.2 Issuance of Convertible Securities. If the Company in any
        manner issues or sells any Convertible Securities and the lowest price
        per share for which one share of Common Stock is issuable upon such
        conversion, exchange or exercise thereof is less than the Applicable
        Price, 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
        issuance or sale of such Convertible Securities for such price per
        share. For the purposes of this Section 9.2.2, the "lowest price per
        share for which one share of Common Stock is issuable upon such
        conversion, exchange or exercise" 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, exchange or
        exercise of such Convertible Security. No further adjustment of the
        Warrant Exercise 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 Warrant
        Exercise Price had been or are to be made pursuant to other provisions
        of this Section 9.2, no further adjustment of the Warrant Exercise Price
        shall be made by reason of such issue or sale.

                                      -8-
<PAGE>

                9.2.3 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 Warrant Exercise Price in effect at the time of such
        change shall be adjusted to the Warrant Exercise 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
        acquirable hereunder shall be correspondingly readjusted. For purposes
        of this Section 9.2.3, if the terms of any Option or Convertible
        Security that was outstanding as of the date of issuance of this Warrant
        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
        shall be made if such adjustment would result in an increase of the
        Warrant Exercise Price then in effect.

        9.3 EFFECT ON WARRANT EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Warrant Exercise Price under Sections 9.2 and 9.3, the
following shall be applicable:

                9.3.1 Calculation of Consideration Received. 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 $.01. 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 therefor will be deemed to be the net
        amount received by the Company therefor. 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 Closing Sale 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 therefor 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 fair
        value of any consideration other than cash or securities will be
        determined jointly by the Company and the holders of Warrants
        representing at least two-thirds of the shares of Common Stock
        obtainable upon exercise of the Warrants then outstanding. If such
        parties are unable to reach agreement within ten days after the
        occurrence of an event requiring valuation (the "Valuation Event"), the
        fair value of such consideration will be determined within five Business
        Days after the tenth day following the Valuation Event by an
        independent, reputable appraiser jointly selected by the Company and the
        holders of Warrants representing at least two-thirds of the shares of
        Common Stock obtainable upon exercise of the Warrants then outstanding.
        The determination of such appraiser shall be final and

                                      -9-
<PAGE>

        binding upon all parties absent error and the fees and expenses of such
        appraiser shall be borne by the Company.

                9.3.2 Record Date. If the Company takes a record of the holders
        of Common Stock for the purpose of entitling them (a) to receive a
        dividend or other distribution payable in Common Stock, Options or in
        Convertible Securities or (b) 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.

        9.4 ADJUSTMENT OF WARRANT EXERCISE PRICE UPON SUBDIVISION OR COMBINATION
OF COMMON STOCK. If the Company at any time after the date of issuance of this
Warrant 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, the Warrant Exercise Price in effect immediately prior
to such subdivision will be proportionately reduced and the number of shares of
Common Stock obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time after the date of issuance of this Warrant
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, the
Warrant Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of shares of Common Stock obtainable
upon exercise of this Warrant will be proportionately decreased. Any adjustment
under this Section 9.4 shall become effective at the close of business on the
date the subdivision or combination becomes effective.

        9.5 DISTRIBUTION OF ASSETS. If the Company declares or makes 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 Warrant, then, in each such case:

        (a) the Warrant Exercise Price in effect immediately prior to the close
of 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
Warrant Exercise Price by a fraction of which (A) the numerator shall be the
Closing Sale 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 Sale Price of the Common
Stock on the trading day immediately preceding such record date; and

        (b) either (A) the number of Warrant Shares obtainable upon exercise of
this Warrant shall be increased to a number of shares equal to the number of
shares of Common Stock obtainable immediately prior to the close of business on
the record date fixed for the determination of holders of Common Stock entitled
to receive the Distribution multiplied by the

                                      -10-
<PAGE>

reciprocal of the fraction set forth in the immediately preceding clause (a), or
(B) if the Distribution is of common stock of a company whose common stock is
traded on a national securities exchange or a national automated quotation
system, then the holder of this Warrant shall receive an additional warrant to
purchase Common Stock, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the amount of the
assets that would have been payable to the holder of this Warrant pursuant to
the Distribution had the holder exercised this Warrant immediately prior to such
record date and with an exercise price equal to the amount by which the exercise
price of this Warrant was decreased with respect to the Distribution pursuant to
the terms of the immediately preceding clause (a).

        9.6 CERTAIN EVENTS. If any event occurs of the type contemplated by the
provisions of this Section 9 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 Warrant Exercise
Price and the number of shares of Common Stock obtainable upon exercise of this
Warrant so as to protect the rights of the holders of the Warrants; provided
that no such adjustment will increase the Warrant Exercise Price or decrease the
number of shares of Common Stock obtainable as otherwise determined pursuant to
this Section 9.

        9.7    NOTICES.

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

        (b) The Company will give written notice to the holder of this Warrant
at least 20 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 Organic Change
(as defined below), 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.

        (c) The Company will also give written notice to the holder of this
Warrant at least 20 days prior to the date on which any Organic Change,
dissolution or liquidation will take place, provided that such information shall
be made known to the public prior to or in conjunction with such notice being
provided to such holder.

        10. PURCHASE RIGHTS; REORGANIZATION, RECLASSIFICATION, CONSOLIDATION,
MERGER OR SALE.

        (a) In addition to any adjustments pursuant to Section 9, if at any time
the Company grants, issues or sells any Options, Convertible Securities or
rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of Common Stock (the "Purchase Rights"), then the
holder of this Warrant will be entitled to acquire, upon the terms applicable to
the Purchase Rights, the aggregate Purchase Rights which the holder could have
acquired if the holder had held the number of shares of Common Stock acquirable
upon

                                      -11-
<PAGE>

complete exercise of this Warrant immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of the Purchase Rights.

        (b) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction which is effected in such a way that
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "Organic Change." Prior to
the consummation of any (i) sale of all or substantially all of the Company's
assets to an acquiring Person or (ii) other Organic Change following which the
Company is not a surviving entity, the Company will secure from the Person
purchasing the assets or the successor resulting from the Organic Change (in
each case, the "Acquiring Entity") written agreement (in form and substance
satisfactory to the Representative of the Investors and to the holders of
Warrants representing at least two-thirds of the shares of Common Stock
obtainable upon exercise of the Warrants then outstanding, whose approval shall
not unreasonably be withheld) to deliver to each holder of Warrants in exchange
for the Warrants, a security of the Acquiring Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant and
satisfactory to the holders of the Warrants (including, an adjusted warrant
exercise price equal to the value for the Common Stock reflected by the terms of
such consolidation, merger or sale, and exercisable for a corresponding number
of shares of Common Stock acquirable and receivable upon exercise of the
Warrants (without regard to any limitations on exercises), if the value so
reflected is less than the Warrant Exercise Price in effect immediately prior to
such consolidation, merger or sale). Prior to the consummation of any other
Organic Change, the Company shall make appropriate provision (in form and
substance satisfactory to the holders of Warrants representing at least
two-thirds of the shares of Common Stock obtainable upon exercise of the
Warrants then outstanding) to insure that each of the holders of the Warrants
will thereafter have the right to acquire and receive in lieu of or in addition
to (as the case may be) the shares of Common Stock immediately theretofore
acquirable and receivable upon the exercise of the holder's Warrants (without
regard to any limitations on exercises), such shares of stock, securities or
assets that would have been issued or payable in such Organic Change with
respect to or in exchange for the number of shares of Common Stock which would
have been acquirable and receivable upon the exercise of the holder's Warrant as
of the date of the Organic Change (without taking into account any limitations
or restrictions on the exercisability of this Warrant).

11.     LOST, STOLEN, MUTILATED OR DESTROYED WARRANT.

        If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall promptly, on receipt of an indemnification undertaking (or in the case of
a mutilated Warrant, the Warrant), issue a new warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated or destroyed.

12.     NOTICE.

        Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Warrant must be in writing and
will be deemed to have been

                                      -12-
<PAGE>

delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:

               If to the Company:

                      SSP Solutions, Inc.
                      17861 Cartwright Road
                      Irvine, California 92614
                      Telephone: 949-851-1085
                      Facsimile: 949-851-8679
                      Attention: President

               With copy to:

                      Rutan & Tucker, LLP
                      611 Anton Boulevard, Fourteenth Floor
                      Costa Mesa, California 92626-1998
                      Telephone: 714-641-5100
                      Facsimile: 714-546-9035
                      Attention: Gregg Amber, Esq.

        If to a holder of this Warrant, to it at the address and facsimile
number set forth on Exhibit A to the Agreement, with copies to the holder's
representatives as set forth on Exhibit A to the Agreement, or at such other
address and facsimile as is delivered to the Company upon the issuance or
transfer of this Warrant. Each party shall provide five days' prior written
notice to the other party of any change in address or facsimile number. Written
confirmation of receipt (A) given by the recipient of the notice, consent,
waiver or other communication, (B) mechanically or electronically generated by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of the transmission or (C) provided by a
nationally recognized overnight delivery service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

13.     AMENDMENTS.

        This Warrant and any term hereof may be changed, waived, discharged, or
terminated only by an instrument in writing signed by the party or holder hereof
against which enforcement of such change, waiver, discharge or termination is
sought.

14.     DATE.

        The date of this Warrant is April 16, 2002 (the "Warrant Date"). This
Warrant, in all events, shall be wholly void and of no effect after the close of
business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 7 shall

                                      -13-
<PAGE>

continue in full force and effect after such date as to any Warrant Shares or
other securities issued upon the exercise of this Warrant.

15.     AMENDMENT AND WAIVER.

        Except as otherwise provided herein, the provisions of the Warrants may
be amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the Representative of the Investors and the
holders of Warrants representing at least two-thirds of the shares of Common
Stock obtainable upon exercise of the Warrants then outstanding; provided that
no such action may increase the Warrant Exercise Price of the Warrants or
decrease the number of shares or class of stock obtainable upon exercise of any
Warrants without the written consent of the holder of the Warrant.

16.     SECTION DESCRIPTIVE HEADINGS; GOVERNING LAW.

        The descriptive headings of the several sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant. The corporate laws of the State of Delaware shall govern all issues
concerning the relative rights of the Company and its stockholders. All other
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of California. In any action, dispute, litigation or other proceeding
concerning this Warrant (including arbitration), exclusive jurisdiction shall be
with the courts of California, with the County of Orange being the sole venue
for the bringing of the action or proceeding.

17.     COSTS.

        The Company agrees to pay to the holder of this Warrant upon demand all
reasonable costs and expenses incurred (including, without limitation reasonable
fees and expenses of counsel) in connection with (i) the enforcement of the
terms of or protection of the holder's rights under this Warrant, (ii) any
waiver requested by the Company of any of the holder's rights under this Warrant
and (iii) any proposed amendment, modification or restructuring of this Warrant.

18.     WAIVER OF JURY TRIAL.

        BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, AND
UNDERSTANDING THEY ARE WAIVING A CONSTITUTIONAL RIGHT, THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR

                                      -14-
<PAGE>

PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO, THIS
WARRANT, THE AGREEMENT AND/OR ANY RELATED AGREEMENT OR THE TRANSACTIONS
COMPLETED HEREBY OR THEREBY.

                            [SIGNATURE PAGE FOLLOWS]

                                      -15-
<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as
of the 16th day of April, 2002.

                                        SSP SOLUTIONS, INC.

                                        By:
                                            ------------------------------------
                                            Richard M. Depew, President

                                        By:
                                            ------------------------------------
                                            Thomas E. Schiff,
                                            Chief Financial Officer

                                      -16-
<PAGE>

                              EXHIBIT A TO WARRANT

                                SUBSCRIPTION FORM

        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                               SSP SOLUTIONS, INC.

        The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("Warrant Shares") of SSP
Solutions, Inc., a Delaware corporation (the "Company"), evidenced by the
attached Warrant (the "Warrant"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

        1. FORM OF WARRANT EXERCISE PRICE. The holder intends that payment of
the Warrant Exercise Price shall be made as:

           ____________  "Cash Exercise" with respect to _________________
                         Warrant Shares; and/or

           ____________  "Cashless Exercise" with respect to _________________
                         Warrant Shares (to the extent permitted by the terms of
                         the Warrant).

        2. PAYMENT OF WARRANT EXERCISE PRICE. If the holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the holder shall pay the sum of $___________________ to the Company in
accordance with the terms of the Warrant.

        3. DELIVERY OF WARRANT SHARES. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

        Date: _______________ __, ______

                                        ----------------------------------------
                                        Name of Registered Holder

                                        By:
                                            ------------------------------------

                                        Name:
                                              ----------------------------------

                                        Title:
                                               ---------------------------------

                                      -17-
<PAGE>

                                 ACKNOWLEDGMENT

        The Company hereby acknowledges this Subscription Form and hereby
directs [TRANSFER AGENT] to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated __________, 200__
from the Company and acknowledged and agreed to by [TRANSFER AGENT].

                                        SSP SOLUTIONS, INC.

                                        By:
                                            ------------------------------------

                                        Name:
                                              ----------------------------------

                                        Title:
                                               ---------------------------------

                                      -18-
<PAGE>

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

        FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of SSP Solutions, Inc., a Delaware
corporation, represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.

Dated:  _________, 200_                 ----------------------------------------

                                        By:
                                            ------------------------------------
                                            Its:
                                                 -------------------------------

                                      -19-

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