EXHIBIT 10.18

                                    BARCLAYS                       Sorting Code:
                                BARCLAYS BANK PLC                       20-00-00
                  International Corporate Team - North America
                P.O. Box 544, 54 Lombard Street, London EC3V 9EX
                           Telephone: (0171) 699-5000



The Directors                                              Your Ref:
Aeromet International PLC                                  Our Ref:  Culff/NACT
Eurolink Way                                               Direct Line:  2361
Sittingbourne
Kent
ME10 3RN

                                                                  30th July 1998

Dear Sirs

We are pleased to advise you that Barclays Bank PLC ("the Bank") has agreed to
provide aggregate short term facilities of up to Li.4,500,000 (Four Million Five
Hundred Thousand Pounds Sterling) or its currency equivalent (the "Facility") to
Aeromet International PLC ("the Borrower") as detailed below.

The Bank is also prepared to make available a Bankers Automated Clearing System
Facility (the "BACS") of up to Li.2,000,000 (Two Million). Utilisation of the
BACS will be in accordance with the terms and conditions previously agreed.

The Bank is also prepared to provide the Borrower with a Business Master II
facility of up to Li.102,000 (One Hundred & Two Thousand Pounds Sterling) (the
"BusinessMaster"). Utilisation under the BusinessMaster shall be in accordance
with Schedule C attached hereto.

The Schedules attached hereto form part of the terms and conditions of this
letter.

Following completion of the acceptance formalities detailed below, the Facility
and the BACS and the BusinessMaster will be available for drawing by the
Borrower, subject to the following terms and conditions:

1.   Options Available Within and Utilisation of the Facility

The Facility may be utilised by way of the following options and in accordance
with the provisions of the Schedules related thereto:

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Sterling Overdraft (see Schedule A) and/or
Foreign Currency Overdraft (see Schedule A) and/or
Ancillary Facilities (see Schedule B).



          Facsimile: (0171) 699 2298 Telex: 418139 Answerback: BARCGB G

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Within the Facility the aggregate of the liabilities due, owing or incurred
thereunder shall not at any time exceed US$7,500,000 (Seven Million Five Hundred
Thousand United States Dollars) or its currency equivalent.

The Dollar equivalent of the currencies utilised or available to be utilised
under the Facility be calculated by the Bank at any time by reference to the
Bank's spot rate of exchange in the London Exchange Market for the sale of the
relevant currency or currencies for Sterling.

2.   Availability

All monies owing under the Facility and the BACS and the BusinessMaster are
repayable upon written demand by the Bank and/or any undrawn portion of the
Facility and the BACS and the BusinessMaster may be cancelled by the Bank, at
any time. Following demand and/or cancellation, no further utilisation may be
made under the Facility and the BACS and the BusinessMaster. The Bank may, at
any time after such demand and/or cancellation call for payment of full cash
cover for the full amount of all liabilities outstanding under the Ancillary
Facilities, and/or

The Bank may require the Borrower to give security over cash cover paid to the
Bank (together with interest accruing thereon) in form and substance
satisfactory to the Bank to secure the Borrower's liabilities to the Bank under
the Facility and the BACS and the BusinessMaster.

The Borrower shall indemnify the bank on demand against any loss, liability or
expense which the Bank may reasonably sustain or incur as a consequence of
making such demand or as a consequence of non-performance by the borrower of any
obligation under this letter.

Any monies not paid following a demand under this clause shall continue to bear
interest and in respect of the Sterling Overdraft, the Foreign Currency
Overdraft as calculated in the respective Schedules.

Following any payments made by the Bank on behalf of the Borrower under the BACS
and the BusinessMaster and the Ancillary Facilities, will, except for those
amounts where cash cover has been made by the Borrower as for above, continue to
bear interest at 2% per annum over the Bank's Base Rate current from time to
time until payment is made. Interest shall, if unpaid, be compounded on the
Bank's usual charging dates. Interest will continue to be charged and compounded
on this basis after as well as before demand or judgment.

The Bank reserves the right, at any time following a demand under this clause,
to purchase with Sterling any currency necessary to convert any amounts
outstanding under the Facility, together with interest accrued thereon, to
Sterling, whereupon the Borrower shall then

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become liable to pay the Bank forthwith the relevant Sterling amounts, together
with all costs and expenses incurred by the bank. Interest will continue to be
charged as detailed above.

In the absence of demand or cancellation by the Bank, the Facility and the BACS
and the BusinessMaster are available for utilisation until the 30th July 1999
and no liability or liabilities incurred may extend more than three months
beyond the above mentioned expiry date. However, the Bank will be pleased to
discuss the Borrower's future requirements shortly before that date.

3.   Security and/or Guarantees

The Borrowers obligations hereunder will be secured by a charge over debtors on
the Bank's standard form.

This security together with any other security which is now held, or hereafter
may be held, by the Bank to secure all moneys and liabilities which shall from
time to time be due, owing or incurred to the Bank by the Borrower, whether
actually or contingently.

4.   Fees

A negotiation fee of Li.15,000 (plus VAT, if any) will be payable by the
Borrower to the Bank on acceptance of this offer.

5.   Information

The Borrower undertakes to provide the Bank with copies of its audited
Consolidated Profit and Loss account and Balance Sheet as soon as they are
available and not later than 180 days from the end of each accounting reference
period, together with monthly Management Accounts and debtor listing within 30
days of each month end. In addition the Borrower undertakes to provide the Bank
with copies of Pacific Aerospace & Electronics, Inc (the "Parent") audited
Consolidated Profit and Loss account and Balance Sheet and Form 10K as soon as
they are available and not later than 180 days from the end of each accounting
reference period, together with a copy of the Form 10Q within 60 days of the
quarter end together with any other information which the Bank may reasonably
request from time to time.

6.   Change in Circumstances

In the event of any change in applicable law or regulation or the existing
requirements of, or any new requirements being imposed by, the Bank of England
or other regulatory authority the result of which, in the sole opinion of the
Bank, is to increase the cost of it of funding, maintaining or making available
the Facility and the BACS and the BusinessMaster(or any

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undrawn amount thereof) or to reduce the effective return to the Bank, then the
Borrower shall pay to the Bank such sum as may be certified by the Bank to the
Borrower as shall compensate the Bank for such increased cost or such reduction.

7.   Set-Off

Any sum of money at any time standing to the credit of the Borrower with the
Bank in any currency upon any account or otherwise (whether or not any such
account is held in the Borrower's name) or provided to the Bank as cash cover
for any outstanding liabilities under the BACS and the BusinessMaster and the
Ancillary Facilities, may be applied by the Bank at any time (without notice to
the Borrower) in or towards the discharge of any money or liabilities now or
hereafter due, owing or incurred to the Bank by the Borrower hereunder (whether
presently payable or not).

8.   Currency Indemnity

If, for any reason, any amount payable to the Bank is received or recovered in a
currency other than the contractual currency in which it is due, then, to the
extent that the amount actually received or recovered by the Bank (when
converted by the Bank into the contractual currency at the applicable rate of
exchange) falls short of the amount due in the contractual currency, the
Borrower shall, as a separate and independent obligation, reimburse the Bank on
demand (on a full indemnity basis) for the amount of such shortfall.

9.   Negative pledge

Neither the borrower nor any of its subsidiaries will create or permit to
subsist (other than in favour of the Bank) any lien (except a lien arising
solely by operation of law), mortgage, guarantee or charge or other encumbrance,
except encumbrances in existence at the date of this offer and full details of
which were disclosed in writing to the Bank prior to that date provided that the
amount secured by any such encumbrance is not at any time increased.

10.  Default Clause

If any indebtedness of the Parent or any of its Subsidiaries becomes immediately
due and payable, or capable of being declared so due and payable, prior to its
stated maturity, by reason of default on the part of any person, or the Parent
or any of its Subsidiaries failing to discharge any indebtedness on its due date
(other than a liability which the Parent or any of its Subsidiaries shall then
be contesting in good faith) then the Bank's commitment to advance the Facility
or any balance thereof shall cease and the whole amount of the outstanding
Facility and all accrued interest and other amounts owing hereunder will become
repayable forthwith on demand in writing made by the Bank at any time.

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11.  Applicable Law

This letter shall be governed by, construed and take effect in accordance with
English Law.

12.  Acceptance

Prior to the Facility and the BACS and the BusinessMaster being utilised, the
Borrower shall provide the 54 Lombard Street Branch of the Bank (the "Branch")
with the following:

(a) the enclosed duplicate of this letter duly signed on the Borrower's behalf
as evidence of acceptance of the terms and conditions stated herein,

(b) a certified true copy of a resolution of the Borrower's Board of Directors:

     (i)  accepting the Facility and the BACS and the BusinessMaster on the
          terms and conditions stated herein,

     (ii) authorising, a specified person, or persons, to sign and return to the
          Bank the duplicate of this letter,

     (iii) authorising the Bank to accept instructions and confirmations in
          connection with the Facility and the BACS and the BusinessMaster
          signed in accordance with the Bank's signing mandate current from time
          to time.

(c) confirmed specimens of the signature of those officers referred to in
(b)(ii) above.

(d) the executed charge over debtors.

This offer will remain available for a period of one month from the date of this
letter after which it will lapse if not accepted.

Yours faithfully,
for and on behalf of
BARCLAYS BANK PLC


/s/ W. J. BLACKLEDGE
----------------------------------
W J Blackledge
Associate Director

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<PAGE>
Accepted on the terms and conditions stated herein, pursuant to a resolution of
the Board of Directors (a certified true copy of which is attached hereto).

For and on behalf of
AEROMET INTERNATIONAL PLC



/s/ DON A. WRIGHT            :DIRECTOR      /s/ NICK A. GERDE          :DIRECTOR
-----------------------------               ---------------------------

DATE:  7-31-98
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                                   SCHEDULE A

Sterling Overdraft

The sterling overdraft will be available on the Borrower's current account at
this branch of the Bank (the "Branch") with interest charged at a rate of 2% per
annum over the Bank's Base Rate current from time to time. Interest together
with other charges will be debited to the Borrower's current account at the
Branch quarterly in arrears in March, June, September and December each year or
at such other times as may be determined by the Bank, and such interest will be
calculated on the basis of actual days elapsed over 365 day year.

Foreign Currency Overdraft

The Foreign Currency Overdraft will be made available in any currency (other
than sterling) as previously agreed by and arranged with the Bank, and which
currency is freely transferable and available to the Bank in the normal course
of business.

The Foreign Currency Overdraft will be available in any currency account at the
Branch with interest charged at 2% per annum over the Bank's call loan rate
current from time to time. Interest together with other charges will be debited
to the Borrower's foreign currency account at the Branch quarterly in arrears in
March, June, September and December each year or at such other times as may be
determined by the Bank, and such interest will be calculated on the basis of
actual days elapsed over a 360 day year.

                                   SCHEDULE B

ANCILLARY FACILITIES

Documentary Letters of Credit

The Bank is prepared to open Documentary Letters of Credit on instructions from
the Borrower to provide for the purchase of commodities as may be agreed by the
Bank from time to time. All Documentary Letters of Credit are issued subject to
the terms and conditions set out in the Bank's standard form for opening
Documentary Letters of Credit and are also subject to the "Uniform Customs and
Practice for Documentary Credits 500", or any subsequent revision as issued by
the International chamber of Commerce. Pricing will be decided on a case by case
basis.

Guarantees, Bonds and Indemnities

The Bank is prepared to consider issuing guarantees, bonds and indemnities on
behalf of the Borrower in respect of normally accepted and commercial
transactions, subject to prior

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agreement with the Bank and receipt of the necessary counter indemnities.
Pricing will be decided on a case by case basis.

Negotiation of Sterling/Foreign Currency Cheques and Bills of Exchange Payable
Abroad

The Bank will purchase, with recourse, suitable foreign currency and sterling
cheques payable abroad and/or approved foreign currency or sterling bills of
exchange payable abroad. The suitability of those cheques and bills of exchange
which the Bank is prepared to purchase is entirely at the discretion of the
Bank, and is subject to the Uniform Rules for the Collection of Commercial Paper
(1995 Revision). Pricing will be decided on a case by case basis.

                                   SCHEDULE C

The BusinessMaster II

The BusinessMaster II shall be used in accordance with the terms and conditions
that have already been agreed.

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CHARGE OVER DEBTORS
-------------------

DEED OF CHARGE
--------------


1.   AEROMET INTERNATIONAL PLC (hereinafter called "the Company") whose
     registered office is at EUROLINK WAY, SITTINGBOURNE, KENT ME10 3RN will on
     demand in writing made to the Company pay or discharge to Barclays Bank PLC
     (hereinafter called "the Bank") all moneys and liabilities which shall for
     the time being (and whether on or at any time after such demand) be due
     owing or incurred to the Bank by the Company whether actually or
     contingently and whether solely or jointly with any other person and
     whether as principal or surety and including interest discount commission
     or other lawful charges and expenses which the Bank may in the course of
     its business charge in respect of any of the matters aforesaid or for
     keeping the Company's account and so that interest shall be computed and
     compounded according to the usual mode of the Bank as well after as before
     any demand made or judgement obtained hereunder.

2.   A demand for payment or any other demand or notice under this security may
     be made or given by any manager or officer of the Bank or of any branch
     thereof by letter addressed to the Company and sent by post to or left at
     the registered office of the Company or its last known place of business
     and if sent by post shall be deemed to have been made or given at noon on
     the day following the day the letter was posted.

3.   The Company with full title guarantee hereby charges with the payment or
     discharge of all moneys and liabilities hereby covenanted to be paid or
     discharged by the Company by way of first fixed charge all book debts and
     other debts now and from time to time due or owing to the Company.

4.   This security shall be continuing security to the Bank notwithstanding any
     settlement of account or other matter or thing whatsoever and shall be
     without prejudice and in addition to any other security whether by way of
     mortgage equitable charge or otherwise howsoever which the Bank may now or
     any time hereafter hold on the property of the Company or any part thereof
     for or in respect of the moneys hereby secured or any of them or any part
     thereof respectively.

5.   During the continuance of this security the Company:-

     (a) shall furnish to the Bank copies of the trading and profit and loss
     account and audited balance sheet in respect of each financial year of the
     Company and of every

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     subsidiary thereof forthwith upon the same becoming available and not in
     any event later than the expiration of three months from the end of such
     financial year and also from time to time such other financial statements
     and information respecting the assets and liabilities of the Company as the
     Bank may reasonably require;

     (b) shall maintain the aggregate value of the Company's book debts
     (excluding debts owing by any subsidiary of the Company) at a sum to be
     fixed by the Bank from time to time and whenever required by the Bank
     obtain from the Managing Director of the Company for the time being or if
     there shall be no Managing Director then from one of the Directors of the
     Company and furnish to the Bank a certificate showing the said aggregate
     value;

     c) shall pay into the Company's account with the Bank all moneys which it
     may receive in respect of the book debts and other debts hereby charged and
     shall not without the prior consent of the Bank in writing purport to
     charge or assign, the same in favour of any other person and shall if
     called upon to do so by the Bank execute a legal assignment of such book
     debts and other debts to the Bank.

6.   (a) At any time after the Bank shall have demanded payment of any moneys
     hereby secured or if requested by the Company the Bank may appoint by
     writing any person or persons (whether an officer of the Bank or not) to be
     a receiver and manager or receivers and managers (hereinafter called "the
     Receiver" which expression shall where the context so admits include the
     plural and any substituted receiver and manager or receivers and managers)
     of all or any part of the property hereby charged;

     (b) Where two or more persons are appointed to be the Receiver any act
     required or authorised under any enactment, this Charge (including the
     power of attorney contained in Clause 7 hereof) or otherwise to be done by
     the Receiver may be done by any one or more of them unless the Bank shall
     in such appointment specify to the contrary;

     (c) The Bank may from time to time determine the remuneration of the
     Receiver and may remove the Receiver and appoint another in his place;

     (d) The Receiver shall be the agent of the Company (which subject to the
     provisions of the Insolvency Act 1986 shall alone be personally liable for
     his acts defaults and remuneration) and shall have-and be entitled to
     exercise all powers conferred by the Law of Property Act 1925 in the same
     way as if the Receiver had been duly appointed thereunder and in particular
     by way of addition to but without hereby limiting any general powers
     hereinbefore referred to (and without prejudice to

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     the Bank's Power of sale) the Receiver shall have power to do the following
     things namely:-

     (i)  to take possession of collect and get in all or any part of the
          property hereby charged and for that purpose to take any proceedings
          in the name of the Company or otherwise as he shall think fit:

     (ii) to raise money from the Bank or others on the security of any debtor
          debts hereby charged:

     (iii) to factor or concur in factoring and to release any of the debts
          hereby charged in such manner and generally on such terms and
          conditions as he shall think fit and to carry any such transactions
          into effect in the name of and on behalf of the Company:

     (iv) to make any arrangement or compromise which the Bank or he shall think
          fit:

     (v)  to appoint managers officers and agents for the aforesaid purposes at
          such salaries as he may determine:

     (vi) to do all such other acts and things as may be considered to be
          incidental or conducive to any of the matters or powers aforesaid and
          which he lawfully may or can do:

     (vii) to obtain access to and take copies of or extracts from any of the
          books and other records of the Company and for that purpose to go on
          or into any of the Company's land or buildings or any other land or
          buildings in or on which the Company's books and other records are for
          the time being held or deposited;

     (e) All powers of the Receiver hereunder may be exercised by the Bank
     whether as Attorney of the Company or otherwise.

7.   The Company hereby irrevocably appoints the Bank and the Receiver jointly
     and also severally the Attorney and Attorneys of the Company for the
     Company and in its name and on its behalf and as its act and deed or
     otherwise to seal and deliver and otherwise perfect any deed assurance
     agreement instrument or act which may be required or may be deemed proper
     for any of the purposes aforesaid and to take any action or proceedings in
     connection with any, debt or debts hereby charged wheresoever situate.

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8.   Any moneys received under the powers hereby conferred shall subject to the
     repayment of any claims having priority to this security be paid or applied
     in the following order of priority:-

     (a) in satisfaction of all costs charges and expenses properly incurred and
     payments properly made by the Bank or the Receiver and of the remuneration
     of the Receiver;

     (b) in or towards satisfaction of the moneys outstanding and secured by
     this security;

     (c) as to the surplus (if any) to the person or persons entitled thereto.

9.   Section 103 of the Law of Property Act 1925 shall not apply to this
     security but the statutory power of sale shall as between the Bank and a
     purchaser from the Bank be exercisable at any time after the execution of
     this security provided that the Bank shall not exercise the said power of
     sale until payment of the moneys hereby secured has been demanded or the
     Receiver has been appointed but this proviso shall not affect a purchaser
     or put him upon inquiry whether such demand or appointment has been made.

10.  All costs charges and expenses incurred hereunder by the Bank and all other
     moneys paid by the Bank or by the Receiver in perfecting or otherwise in
     connection with this security or in respect of the property hereby charged
     and all costs of the Bank of all proceedings for the enforcement of the
     security hereby constituted or for obtaining payment of the moneys hereby
     secured or arising out of or in connection with the acts authorised by
     Clause 6 hereof (and so that any taxation of the Bank's costs charges and
     expenses shall be on a full indemnity basis) shall be recoverable from the
     Company as a debt and may be debited to any account of the Company and
     shall bear interest accordingly and shall be charged on the premises
     comprised herein and the charge hereby conferred shall be in addition and
     without prejudice to any and every other remedy lien or security which the
     Bank may or but for the said charge would have for the moneys hereby
     secured or any part thereof.

11.  In this security where the context so admits the expression "the bank"
     shall include persons deriving title under the Bank and any reference
     herein to any statute or any section of any statute shall be deemed to
     include reference to any statutory modification or re-enactment thereof for
     the time being in force.

IN WITNESS WHEREOF the company has executed these presents as a deed this       
           day of                199 .

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Executed and delivered
as a deed by AEROMET INTERNATIONAL PLC


/s/ D.A. WRIGHT                        DIRECTOR
---------------------------------------

/s/ NICK A. GERDE                      DIRECTOR
---------------------------------------

Company's Registered Number 1626585
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