Document:

<PAGE>
EXHIBIT 10.7

                SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS
                -------------------------------------------------

       This Settlement Agreement and Mutual Release of Claims ("Agreement") is
entered into by and between SSP SOLUTIONS, INC., a Delaware corporation, MARVIN
WINKLER, KRIS SHAH, RICHARD M. DEPEW and THOMAS SCHIFF, individuals, on the one
hand (referred to collectively herein as "SSP"), and CONTROL BREAK
INTERNATIONAL, INC., a Florida corporation ("CONTROL BREAK"), on the other hand.
SSP and CONTROL BREAK shall be referred to herein collectively as the "Parties."

                                    RECITALS
                                    --------

       A. On or about July 25, 2003, CONTROL BREAK filed an action entitled
Control Break International Inc. v. SSP Solutions, Inc., et al. in the Circuit
Court of the Twentieth Judicial Circuit in and for Collier County, Florida, case
no. 03-3048 CA, alleging enforcement of certain promissory notes (the "Action").

       B. CONTROL BREAK's Complaint in the Action alleges that SSP entered into
two promissory notes with CONTROL BREAK on April 18, 2002, identified as
Promissory Note 1 and Promissory Note 2 and attached as Exhibits A and B to the
Complaint (the "Promissory Notes"). This Complaint alleges that SSP defaulted on
the Promissory Notes, and that CONTROL BREAK suffered damages as result.

       C. By entering into this Agreement, the Parties wish to avoid further
litigation and settle all existing disputes between them arising out of or
related to the Action and all other disputes between them on the terms and
conditions specified herein.

       NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:

       1. PAYMENT OF SETTLEMENT AMOUNT.

       The Parties agree that SSP shall make payment to CONTROL BREAK the sum of
Four Hundred Thousand Dollars ($400,000.00) (the "Settlement Amount") on or
before September 17, 2003.

       2. CONDITION PRECEDENT.

       Payment of the Settlement Amount listed in Paragraph 1 by September 17,
2003, shall be a condition precedent to the enforceability of this Agreement.
Should SSP fail to pay the Settlement Amount to CONTROL BREAK by this date, this
Agreement shall be void and unenforceable.

       3. DISMISSAL OF THE PRIOR ACTION AND THE PENDING ACTION.

       Within ten (10) days of receipt of Settlement Amount listed in Paragraph
1, counsel for CONTROL BREAK shall file and serve a Request for Dismissal of the
Action with the court dismissing the Action in its entirety with prejudice.

<PAGE>

         4. RELEASE.

                   (a) RELEASE BY SSP. Except for the obligations imposed upon
SSP pursuant to the terms of this Agreement, and for the rights reserved by SSP
by this Agreement, SSP, for itself and for its predecessors, successors,
assigns, affiliates, representatives, agents, principals, employees, parent
corporations or entities, subsidiary corporations or entities, attorneys,
accountants, shareholders, directors, officers (including but not limited to
Marvin Winkler, Kris Shah, Richard M. Depew, and Thomas Schiff), and each of
them (collectively, the "SSP Parties"), do hereby absolutely, fully and forever,
release, relieve, waive, relinquish and discharge CONTROL BREAK, and its
predecessors, successors, assigns, affiliates, representatives, agents,
principals, employees, parent corporations or entities, subsidiary corporations
or entities, attorneys, accountants, shareholders, directors and officers and
each of them (collectively, the "CONTROL BREAK Parties"), of and from such
manner of actions, causes of action, suits, debts, deficiencies, liabilities,
demands, claims, obligations, costs, expenses, sums of money, controversies,
damages, accounts, reckonings, security interests and liens of every kind or
nature whatsoever, whether known or unknown, suspected or unsuspected, which
relate to, or arise out of any matter, fact or transaction which arose prior to
the date of this Agreement, including, without limitation, any claims arising
out of or related to the Action. Notwithstanding the above, this release does
not extend to any claim for indemnity, contribution, breach of warranty, or
otherwise the SSP Parties might assert against the CONTROL BREAK Parties based
on any claim by the Federal Aviation Administration or its agents,
representatives, or assignees (collectively, the "FAA") against the SSP Parties
related to any product or service the CONTROL BREAK Parties sold to the FAA
through the SSP Parties.

                   (b) RELEASE BY CONTROL BREAK. Except for the obligations
imposed upon CONTROL BREAK pursuant to the terms of this Agreement, and for the
rights reserved by CONTROL BREAK by this Agreement, the CONTROL BREAK Parties,
for themselves and for their predecessors, successors, assigns, affiliates,
representatives, agents, principals, employees, parent corporations or entities,
subsidiary corporations or entities, attorneys, accountants, shareholders,
directors, officers and each of them, do hereby absolutely, fully and forever,
release, relieve, waive, relinquish and discharge the SSP Parties, and their
predecessors, successors, assigns, affiliates, representatives, agents,
principals, employees, parent corporations or entities, subsidiary corporations
or entities (including but not limited to Pulsar Data Systems, Inc. ),
attorneys, accountants, shareholders, directors and officers (including but not
limited to Marvin Winkler, Kris Shah, Richard M. Depew, and Thomas Schiff), and
each of them, of and from such manner of actions, causes of action, suits,
debts, deficiencies, liabilities, demands, claims, obligations, costs, expenses,
sums of money, controversies, damages, accounts, reckonings, security interests
and liens of every kind or nature whatsoever, whether known or unknown,
suspected or unsuspected, which relate to, or arise out of any matter, fact or
transaction which arose prior to the date of this Agreement, including, without
limitation, any claims arising out of or related to the Action.

         5. SCOPE OF RELEASES; ACCORD AND SATISFACTION. The Parties acknowledge
the fact that it is the intention of each Party hereto that, upon the execution
of this Agreement, this Agreement shall be effective as a full and final accord
and satisfaction and settlement of and as a bar to each such manner of action,
cause of action, suit, debt, deficiency, liability, demand, claim, obligation,
cost, expense, sum of money, controversy, damage, account, reckoning,

                                      -2-

<PAGE>

security interest and lien of every kind or nature whatsoever, heretofore
referred to and released, which any of the SSP Parties, on one hand, and any of
the CONTROL BREAK Parties, on the other hand, has had, has, or may have against
each other within the scope of the released matters, including but not limited
to the Promissory Notes. In connection with such waiver and relinquishment, each
Party acknowledges that it is aware that it or its attorneys may hereafter
discover facts different from or in addition to the facts which it or its
attorneys now know or believe to be true with respect to the subject matters of
this Agreement, but that it is its intention hereby to fully, finally,
absolutely and forever settle any and all claims which do now exist, may exist
or heretofore have existed among the SSP Parties, on one hand, and the CONTROL
BREAK Parties, on the other hand, in accordance with the terms of this Agreement
and that, in furtherance of such intention, the releases herein given shall be
and shall remain in effect for all time as full and complete general releases
notwithstanding the discovery of any such different or additional facts.

         6. NO RESCISSION OF RELEASES. As a part of the foregoing releases, each
Party acknowledges that it understands and accepts the risk that the facts with
respect to which this Agreement is entered into may be different from the facts
now known or believed by it to be true. The releases provided by this Agreement
shall remain in all respects effective and shall not be subject to termination
or rescission by virtue of any such differences in fact.

         7. COVENANTS NOT TO SUE.

                   (a) The Parties hereby covenant and agree not to commence
against each other any action or proceeding of any nature whatsoever with
respect to any of the claims hereby released. The Parties hereby further
covenant and agree not to join in or to participate in any action or proceeding
based upon, arising out of or relating to the claims hereby released, unless
such participation is compelled by order of a court of competent jurisdiction.

                   (b) The Parties hereby covenant and agree not to take any
acts inconsistent with the intent and purposes of the releases provided by this
Agreement.

         8. NO ASSIGNMENT OF RELEASED CLAIMS. Each Party represents and warrants
to the other Party that it has not assigned or transferred, and will not assign
or transfer, to any person or entity any of the claims hereby released.

         9. NO ADMISSION OF WRONGDOING. Each Party acknowledges and agrees that
this Agreement contemplates and provides for the resolution of disputed claims,
and that no Party makes any admission of fact or of any wrongdoing. By this
Agreement, no Party admits any liability to the other Party, except as set forth
expressly to the contrary herein.

         10. MISCELLANEOUS.

                   (a) Independent Advice. Each Party acknowledges that it has
consulted with and has relied upon its own legal counsel as it deemed necessary
in connection with the negotiation, execution and delivery of this Agreement.

                   (b) Successors and Assigns. This Agreement shall obligate, be
binding upon, extend to, and inure to the benefit of each of the successors,
assigns, grantees, and transferees of

                                      -3-

<PAGE>

each of the Parties, who may assume any and all of the above-described
capacities subsequent to the execution of this Agreement.

                   (c) Severability. Should one or more provisions of this
Agreement be determined to be illegal or unenforceable, those provisions shall
be interpreted as severable and severed from this Agreement and all other
provisions contained in this Agreement shall remain in full force and effect,
provided that the agreement which remains carries out the intent of the original
Agreement.

                   (d) Attorneys' Fees. In the event that a Party files an
action or proceeding to enforce or interpret or for breach of this Agreement,
the prevailing Party in that action or proceeding shall be entitled to recover
its costs and reasonable attorneys' fees.

                   (e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. This Agreement may be
executed and delivered by facsimile and, when so executed and delivered, shall
be binding and enforceable.

                   (f) Further Assurances. Each Party agrees to and shall
cooperate fully with the other Party in the performance of this Agreement, and
shall execute such additional agreements, documents or instruments as may
reasonably be required to carry out the intent of the Parties with respect to
this Agreement.

                   (g) Entire Agreement; Terms Read and Understood. This
Agreement constitutes the complete, final and exclusive embodiment of the
Parties' agreement with respect to the subject matters hereof, and supersedes
all prior and contemporaneous oral and written agreements, correspondence and
discussions between the Parties with respect to the subject matter hereof. The
terms of this Agreement are contractual and not mere recitals. Each Party
certifies that it has read all of the foregoing Agreement, and fully understands
all of the terms hereof. Each Party acknowledges and represents that it enters
into this Agreement of its own will and not due to any pressure or duress from
the other Party. This Agreement is executed without reliance upon any promise,
commitment or representation by a Party other than those expressly contained in
this Agreement. Except as expressly provided in paragraph 10(c), each Party
agrees that each provision of this Agreement is interdependent with, and made in
consideration of, each other provision hereof. This Agreement shall not be
amended or modified except by an instrument in writing signed by all Parties.

                   (h) Captions. Any captions to the paragraphs of this
Agreement are solely for the convenience of the Parties, are not a part of this
Agreement, and shall not be used for the interpretation or determination of the
validity of this Agreement or any provisions thereof.

                   (i) Interpretation. Wherever in this Agreement the context so
requires, reference to the neuter, masculine or feminine shall be deemed to
include each of the other, and reference to either the singular or the plural
shall be deemed to include the other.

                   (j) Representative Capacity. Each person whose signature is
affixed to this Agreement in a representative capacity represents and warrants
that he/she is fully authorized to

                                      -4-

<PAGE>

execute this Agreement on behalf of, and to bind, the Party on whose behalf
his/her signature is affixed.

                   (k) No Known Claims by the FAA. The SSP Parties represent and
warrant, without any duty to investigate, that as of the date of this Agreement,
they are not aware of any claim that the FAA asserts against the SSP Parties
related to any product or service the CONTROL BREAK parties sold to the FAA
through the SSP Parties.

         11. Expenses. Except as otherwise provided expressly to the contrary in
this Agreement, each Party shall bear all of the fees and expenses (including,
without limitation, legal fees and litigation costs) incurred by it arising out
of or relating to the Action and the negotiation and execution of this Agreement

         IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
dates set forth below.

Dated: September 17, 2003                  SSP SOLUTIONS, INC., a Delaware
                                             Corporation

                                           By: /s/ THOMAS E. SCHIFF
                                               ---------------------------------
                                           Its: CFO

Dated: September 17, 2003                  CONTROL BREAK INTERNATIONAL. INC.,
                                             a Florida corporation
                                           By: /s/ DON INNIS
                                               ---------------------------------
                                           Its: President

                                      -5-

<PAGE>

APPROVED AS TO FORM:

Dated: September 17, 2003                  RUTAN & TUCKER, LLP
                                           Michael T. Hornak

                                       By: /s/ MICHAEL T. HORNAK
                                           -------------------------------------
                                           Michael T. Hornak
                                           Attorneys for SSP SOLUTIONS, INC., a
                                           Delaware Corporation

Dated: September 17, 2003              JOSEPH B. STEWART, P.A.

                                       By: /s/ JOSEPH B. STEWART, P.A.
                                           -------------------------------------
                                           Joseph B. Stewart, P.A.
                                           Attorney for CONTROL BREAK
                                           INTERNATIONAL, INC., a Florida
                                           corporation

                                      -6-<PAGE>
EXHIBIT 10.8

                              BRIDGE LOAN AGREEMENT
                              ---------------------

         THIS BRIDGE LOAN AGREEMENT (the "Agreement") is made as of September 1,
2003, by and among the persons or entities described on EXHIBIT A attached
hereto (the "Lenders") and SSP SOLUTIONS, INC. ("Borrower").

         THE PARTIES HERETO agree as follows:

                            ARTICLE ONE. DEFINITIONS

         SECTION 1.1. DEFINED TERMS. In addition to terms defined elsewhere in
this Agreement or any Supplement or Exhibit hereto, when used herein, the
following terms shall have the following meanings:

                  (A) "DOCUMENTS" shall mean this Agreement, the Notes and any
other instruments or documents required or contemplated hereunder or thereunder,
whether now existing or at any time hereafter arising.

                  (B) "LOAN" shall mean individually, and "LOANS" shall mean
collectively, the amount(s) loaned to the Borrower hereunder.

                  (C) "NOTES" shall have the meaning set forth in Section 2.2.

                  (D) "PERSON" shall mean individually, and "PERSONS" shall mean
collectively, each of any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (whether national, federal, state,
county, city, municipal or otherwise including, without limitation, any
instrumentality, division, agency, body or department thereof).

                  (E) "TERM SHEET" means the Confidential Term Sheet of the
Company dated August 20, 2003, relating to the Series A Preferred Stock of the
Company and attached hereto as EXHIBIT B.

         SECTION 1.2. OTHER TERMS. Capitalized terms not defined herein shall
have the meaning ascribed to such terms in the Term Sheet.

          ARTICLE TWO. LOANS, ADDITIONAL CONSIDERATION AND FORBEARANCE
          ------------------------------------------------------------

         SECTION 2.1. LOAN AMOUNT. Subject to the terms and conditions of this
Agreement, on the date upon which all of the terms and conditions of the
Documents have been met or fulfilled to the satisfaction of Lenders (the
"Closing Date"), the Lenders agree to make loans in the aggregate amount of
$1,500,000 to the Borrower (such loans being herein called individually a "Loan"
and collectively the "Loans"); PROVIDED, HOWEVER, that notwithstanding anything
else contained in this Agreement, upon the occurrence and continuance of any
Event of Default, and in every such event, Borrower shall repay to the Lenders
all Loans, plus interest accrued to the date of payment.

         SECTION 2.2. PROMISSORY NOTES. The Loans shall be evidenced by
convertible bridge notes (herein called the "Notes") in the form attached hereto
as EXHIBIT C, dated the date first above written, payable to the order of the
Lender, in the principal amounts set forth opposite each Lender's name as set
forth on EXHIBIT A. The date and amount of each Loan made by the Lenders and of
each repayment of principal thereon received by the Lenders shall be recorded by
the Lenders in the records of the Lenders and the aggregate unpaid principal
amount shown on such records shall be rebuttable, presumptive evidence of the
principal owing and unpaid on the Notes. The failure to record any such amount
on such records shall not, however, limit or otherwise affect the obligations of
the Borrower hereunder or under the Notes to repay the principal amount of the
Loans together with all interest accruing thereon. The unpaid principal amount
from time to time outstanding on the Loans shall bear interest and be payable as
set forth in the Notes.

                                       1

<PAGE>

         SECTION 2.3 FORBEARANCE. Concurrently with the closing of the Series A
Preferred Stock transaction described in the Term Sheet, certain of the Lenders
will enter into a Forbearance Agreement with the Company in the form of
Forbearance Agreement attached hereto as EXHIBIT D.

         SECTION 2.4 ISSUANCE OF WARRANTS. As additional consideration for
Lenders' agreement to make the Loans, Borrower shall issue to the Lenders
warrants to purchase common stock of the Company (collectively, the "Warrants")
in the number of shares set forth each Lender's name on EXHIBIT A, with a
warrant exercise price of $1.05 per share. The form of the Warrant shall be as
set forth on EXHIBIT E. The Company is obligated to register the shares issuable
thereunder for resale under the Securities Act of 1933, as amended, pursuant to
the Term Sheet and the holder of this Warrant (and permitted assignees thereof)
is entitled to the registration rights in respect of the Warrant Shares as set
forth in the Warrant.

         SECTION 2.5 CANCELLATION OF CERTAIN EXISTING BRIDGE NOTES. Certain of
the Lenders are the holders of bridge loan notes issued by the Company that will
be used to pay the exercise price of certain warrants as described in Section
2.6 and which are more particularly identified on SCHEDULE 1C of the Forbearance
Agreement (the "Existing Notes"). Concurrently with the execution of the Notes,
the holders of the Existing Notes shall cancel the Existing Notes identified on
Schedule 1B and Schedule 1C of the Forbearance Agreement and return them to the
Company marked "CANCELED."

         SECTION 2.6 EXERCISE OF CERTAIN WARRANTS. Certain of the Lenders are
the holders and owners of warrants to purchase shares of the Company's common
stock, which warrants are attached as EXHIBIT F (the "Existing Warrants").
Concurrently with the execution and delivery of the Notes by the Company to the
Lenders, the holders of the Existing Warrants shall exercise the Existing
Warrants pursuant to the Subscription Forms attached hereto as EXHIBIT G and
shall return the Existing Warrants to the Company marked "CANCELED."

                  ARTICLE THREE. REPRESENTATIONS AND WARRANTIES
                  ---------------------------------------------

         SECTION 3.1. BORROWER. Borrower represents and warrants to the Lenders
that:

                  (A) ORGANIZATION, ETC. It is duly organized, validly existing
and in good standing under the laws of the State of its incorporation and is
duly qualified and in good standing or has applied for qualification as a
foreign corporation authorized to do business in each jurisdiction where,
because of the nature of its activities or properties, such qualification is
required.

                  (B) AUTHORIZATION: NO CONFLICT. The execution and delivery of
the Documents are all within its corporate powers, have been duly authorized by
all necessary action, have, or by the time of their execution and delivery shall
have, received all necessary governmental or regulatory approval (if any shall
be required), and do not and will not contravene or conflict with any provision
of (i) law, rule, regulation or ordinance, (ii) its certificate of incorporation
or by-laws; or (iii) any agreement binding upon it or any of its properties, as
the case may be.

                  (C) VALIDITY AND BINDING NATURE. The Documents executed by
Borrower are the legal, valid and binding obligations of Borrower, enforceable
against it, in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization and other similar laws
of general application affecting the rights and remedies of creditors and except
as the availability of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding therefor may be brought.

                  (D) NO VIOLATIONS OF LAWS. Borrower (i) is not in material
violation of any law, ordinance, rule, regulation, judgment, decree or order of
any federal, state or local governmental body or court; and (ii) has obtained
all required permits, certificates, licenses, approvals and other authorizations
from governmental agencies and entities (whether federal, state or local)
necessary to carry on its operations.

                                       2

<PAGE>

                  (E) NO DEFAULT OR EVENT OF DEFAULT. No event or condition
exists under any material agreement, instrument or document to which it is a
party or may be subject, or by which it or any of its properties are bound,
which constitutes a default or an event of default thereunder, or will, with the
giving of notice, passage of time, or both, would constitute a default or event
of default thereunder.

                  (F) SECURITIES REPRESENTATIONS. Upon conversion of the Notes
into shares of the Series A Preferred Stock as provided in the Notes, the Series
A Preferred Stock, and any shares of Company common stock into which they may be
converted, will be validly issued, fully paid and nonassessable and free from
all taxes, liens created by the Company charges with respect to the issue
thereof, with the holders being entitled to all rights accorded to the holders
of the Company's Series A Preferred Stock. Upon creation of the Series A
Preferred Stock in accordance with the Term Sheet, sufficient shares of the
Company's Series A Preferred Stock will be duly authorized and reserved for
issuance upon conversion of the Notes, and sufficient shares of Company common
stock will be duly authorized and reserved for issuance upon any conversion into
common stock of the Series A Preferred Stock.

                         ARTICLE FOUR. EVENTS OF DEFAULT
                         -------------------------------

         SECTION 4.1. EVENTS OF DEFAULT. Each of the following acts, occurrences
or omissions shall constitute an event of default under this Agreement (herein
referred to as an "Event of Default"), whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any governmental or nongovernmental body or tribunal:

                  (A) Borrower shall default in the payment when due of any
principal or interest amount due and owing to any Lender under any of the Notes;
or

                  (B) Any representation or warranty made by Borrower contained
in the Documents shall at any time have been incorrect in any material respect
when made; or

                  (C) Borrower shall default in the performance or observance of
any term, covenant, condition or agreement on its part to be performed or
observed under the Documents (not constituting an Event of Default under any
other clause of this Section 4.1) and such default shall continue unremedied for
5 days after written notice thereof shall have been given by any Lender to
Borrower; or

                  (D) Either: (i) Borrower shall become insolvent or generally
fail to pay, or admit in writing its inability to pay, its debts as they become
due, or a proceeding under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed by or
against Borrower or Borrower makes an assignment for the benefit of creditors;
or

                  (E) Borrower shall default in the performance of any of its
obligations under the Term Sheet; or

                  (F) Borrower shall be dissolved, whether voluntarily or
involuntarily and has not taken all actions required to become reinstated.

                             ARTICLE FIVE. REMEDIES
                             ----------------------

         SECTION 5.1. REMEDIES UPON DEFAULT. Upon the occurrence and continuance
of any Event of Default, and the expiration of any applicable cure period, and
in every such event:

                  (A) notwithstanding anything in the Documents, any Lender may,
in its sole and arbitrary discretion, declare the principal of and interest on
any or all of the Notes, to be forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived; and

                                       3

<PAGE>

                  (B) Any Lender may, in its sole and arbitrary discretion,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, exercise all of the remedies of a creditor under
applicable law and all of its rights and remedies under the Documents.

         SECTION 5.2. REMEDIES ARE SEVERABLE AND CUMULATIVE. All provisions
contained herein pertaining to any remedy of the Lenders shall be and are
severable and cumulative and in addition to all other rights and remedies
available in the Documents, at law and in equity, any one or more may be
exercised simultaneously or successively.

                           ARTICLE SIX. MISCELLANEOUS
                           --------------------------

         SECTION 6.1. NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay
on the part of any Lender in exercising any right, power or remedy pursuant to
the Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. Neither
any amendment, modification, supplement, termination or waiver of any provision
of the Documents, nor any consent by any Lender to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
such Lender.

         SECTION 6.2. NOTICES, ETC. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing personally delivered or sent by overnight courier or
by facsimile machine, and shall be deemed to be given for purposes of this
Agreement on the day that such writing is delivered or sent by facsimile machine
or one (1) days after such notice is sent by overnight courier to the intended
recipient thereof in accordance with the provisions of this Section 6.2. Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 6.2 of this Agreement, notices, demands,
instructions and other communications in writing shall be given to or made upon
the respective parties hereto at their respective addresses indicated for such
party below:

         If to the Borrower:       SSP Solutions, Inc.
                                   17861 Cartwright Road
                                   Irvine, California 92614
                                   Attention:  President
                                   Telecopy: (949) 851-8679

         With copies to:           Rutan & Tucker, LLP
                                   611 Anton Boulevard, Suite 1400
                                   Costa Mesa, California 92626
                                   Attention: Gregg Amber, Esq.
                                   Telecopy: (714) 546-9035

         If to a Lender:            To the address set forth underneath the
                                    Lenders' names on EXHIBIT A, with copies
                                    to the persons identified on EXHIBIT A

         SECTION 6.4. COSTS. Borrower shall be responsible for payment of
Lenders' legal fees pursuant to the Term Sheet.

         SECTION 6.5. FURTHER ASSURANCES. Borrower agrees to do such further
acts and things and to execute and deliver to Lender such additional
assignments, agreements, powers, documents and instruments as the Lenders may
reasonably require or deem advisable to carry into effect the purposes of the
Documents, or to confirm to the Lenders their rights, powers and remedies under
the Documents.

                                       4

<PAGE>

         SECTION 6.6. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which counterparts, once they are executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same agreement.

         SECTION 6.7. BINDING EFFECTS; ASSIGNMENT. This Agreement shall be
binding upon, and inure to the benefit of, Lenders, Borrower and their
respective successors, assigns, representatives and heirs. Borrower shall not
assign any of its rights nor delegate any of its obligations under Documents
without the prior written consent of the Lenders and no such consent by a Lender
shall, in any event, relieve Borrower of any of its obligations under the
Documents.

         SECTION 6.8. HEADINGS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision of this Agreement and
shall not affect the construction of this Agreement.

         SECTION 6.9. ENTIRE AGREEMENT. This Agreement, together with the
Documents, contains the entire agreement between the parties hereto with respect
to the transactions contemplated herein and supersede all prior representations,
agreements, covenants and understandings, whether oral or written, related to
the subject matter of the Agreement. Except as specifically set forth in this
Agreement, the Lenders make no covenants to Borrower, including, but not limited
to, any other commitments to provide any additional financing to Borrower.

         SECTION 6.10. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the State of Illinois and for all purposes shall
be construed in accordance with the laws of the State of Illinois.

         SECTION 6.11. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

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

         BORROWER:                           SSP SOLUTIONS, INC.
                                             a Delaware corporation

                                             By:/s/ THOMAS E. SCHIFF
                                                 -----------------------------
                                                 Name: Thomas E. Schiff
                                                 Title: CFO

                                       5

<PAGE>

         LENDERS:                            CRESTVIEW CAPITAL FUND, L.P.,
                                             an Illinois limited partnership

                                             By: /s/ RICHARD LEVY
                                                 -------------------------------
                                             Title: Managing Partner

                                             CRESTVIEW CAPITAL FUND II, L.P.,
                                             an Illinois limited partnership

                                             By: /s/ RICHARD LEVY
                                                 -------------------------------
                                             Title: Managing Partner

                                             SDS MERCHANT FUND, LP,
                                             a Delaware limited partnership

                                             By: /s/ SCOTT E. DERBY
                                                 -------------------------------
                                             Title: Managing Member

                                             /s/ RICHARD P. KIPHART
                                             -----------------------------------
                                             Richard P. Kiphart

                                       6

<PAGE>

<TABLE>

                                    EXHIBIT A
                             TO SSP SOLUTIONS, INC.
                              BRIDGE LOAN AGREEMENT
                              ---------------------

<CAPTION>

Name and Address               Send Notice       Principal Amount               New
of Lender                       Copies to             Loan                  Warrant Shares
---------                       ---------             ----                  --------------
<S>                                                <C>                         <C>

Crestview Capital Fund, L.P.                       $100,000.00                 33,333
95 Revere Drive, Suite F
Northbrook, IL 60062
Telecopy: (847) 559-5807

Crestview Capital Fund II, L.P.                    $150,000.00                 50,000
95 Revere Drive, Suite F
Northbrook, IL 60062
Telecopy: (847) 559-5807

Richard P. Kiphart                                 $500,000.00                166,667
c/o William Blair & Company
222 West Adams Street
Chicago, Illinois 60606
Telecopy: (312) 368-9418

SDS Merchant Funds, L.P.                           $750,000.00                250,000
One Sound Shore Drive
Greenwich, CT 06830

</TABLE>

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