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                                                                   EXHIBIT 10.34

DATE OF LOAN AGREEMENT                                                      2002

PARTIES

(1)      XCEL POWER SYSTEMS LIMITED (Company Number 00575679) whose registered
         office is at Brunswick Road, Cobbs Wood, Ashford, Kent, TN23 1EB (the
         "BORROWER")

(2)      VENTURE FINANCE PLC AS LENDER (Company Number 2281768) whose registered
         office is at Sussex House, Perrymount Road, Haywards Heath, West
         Sussex, RH16 1DN ("VF")

INTRODUCTION

A        VF and the Borrower are parties to an agreement for the purchase of
         debts ("THE AGREEMENT FOR THE PURCHASE OF DEBTS"), a stock facility
         ("THE ADVANTAGE AGREEMENT"), a term loan ("THE LOAN Agreement") and a
         cashflow loan ("THE CASHFLOW LOAN AGREEMENT") each dated as of the date
         hereof;

B        VF has agreed to make available to the Borrower a loan facility upon
         the terms and subject to the conditions set out in this Agreement.

IT IS AGREED as follows:-

1        CONSTRUCTION

1.1      DEFINITIONS

         In this Agreement, unless the context otherwise requires, the following
         words and expressions will have the meaning set out opposite them:-

         "AGREEMENT" means this agreement and the Schedule.

         "AGGREGATE LIMIT" means the amount specified in (or, if appropriate,
         calculated in accordance with) paragraph 2 of Part 1 of the Schedule,
         or such other greater or lesser amount as VF may notify to the Borrower
         from time to time, in each case in VF's absolute discretion.

         "AVAILABILITY PERIOD" means the period detailed in paragraph 7 of Part
         1 of the Schedule.

         "BASE RATE" means the Base Rate set by VF's Bankers subject to a
         minimum rate of 4.5%.

         "DEFAULT RATE" means the rate which is 4 per cent per annum above the
         Interest Rate.

         "DRAWDOWN PERIOD" means the period of 30 days following the date upon
         which the Borrower satisfies the requirements of clause 4.

         "EVENT OF DEFAULT" means any of the events specified in Clause 13.

         "FACILITY" means the loan facility to be made available by VF to the
         Borrower pursuant to this Agreement and as more particularly specified
         in clause 2.

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         "INTEREST COVER COVENANT" means the covenant specified in paragraph 4
         of Part 1 of the Schedule.

         "INTEREST RATE" means the rate specified in paragraph 3 of Part 1 of
         the Schedule charged on the Loan Account Balance outstanding from day
         to day, which interest shall be debited to the Loan Account upon the
         last Working Day of each calendar month.

         "LOAN" means the principal sum drawn under the Facility pursuant to
         Clause 3 from time to time or, as the context requires, the principal
         amount of such a sum from time to time outstanding under this
         Agreement.

         "LOAN ACCOUNT" means a loan account or accounts in the name of the
         Borrower with VF opened in connection with the Facility.

         "LOAN ACCOUNT BALANCE" means the debit balance of the Loan Account from
         time to time.

         "MAXIMUM LOAN AMOUNT" means the maximum principal amount which may be
         drawn as a Loan hereunder as detailed in paragraph 1 of Part 1 of the
         Schedule.

         "SECURITY DOCUMENT" means the document listed in Part 2 of the Schedule
         and any other documents for the time being securing (directly or
         indirectly) all or any of the Borrower's obligations under this
         Agreement and/or all or any other obligations (present or future,
         actual or contingent) of the Borrower to VF and references to any such
         documents shall include the same as varied or amended in writing by the
         parties thereto from time to time.

         "SCHEDULE" means the schedule to this Agreement consisting of Parts 1
         and 2.

         "UNENCUMBERED" means not subject to any mortgage, charge, assignment
         for the purpose of security, pledge, lien, right of set-off,
         arrangements for retention of title (other than in favour of the
         Borrower), or trust arrangement for the purpose of, or which has the
         effect of granting security or any other interest in the nature of
         security of any kind whatsoever or any agreement, whether expressed to
         be conditional or otherwise, to create any of the same.

         "VF'S BANKERS" HSBC Bank Plc or such other bank as VF may from time to
         time, at its sole discretion, appoint as its bankers.

         "WORKING DAY" means a day upon which VF and clearing Banks in London
         generally are open for business of the nature required for the purposes
         of this Agreement.

1.2      INTERPRETATION

         (a)      Any reference in this Agreement to:-

                  (i)      clause, sub-clause or Schedule shall (except where
                           the context otherwise requires) be construed as a
                           reference to the relevant clause or sub-clause in or
                           Schedule to (and forming a part of) this Agreement;

                  (ii)     a person shall include a body corporate, individual,
                           firm or an unincorporated body of persons (as the
                           case may be);

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                  (iii)    the singular shall include the plural and vice-versa;

                  (iv)     any statutory provision shall be deemed to mean and
                           to include a reference to any modification,
                           consolidation or re-enactment thereof for the time
                           being in force;

                  (v)      "Borrower" and "VF" shall, where the context admits,
                           include their respective personal representatives,
                           successors in title or assignees (whether immediate
                           or derivative).

                  (vi)     Any reference herein to any document, including to
                           this Agreement includes such document as amended,
                           novated, supplemented, substituted, extended,
                           assigned or replaced from time to time and includes
                           any document which is supplemental hereto or thereto.

                  (vii)    The meaning of general words introduced by the word
                           "other" and the word "otherwise" shall not be limited
                           by reference to any preceding words or enumeration
                           including a particular class of acts, matters or
                           things.

         (b)      The headings in this Agreement are inserted for
                  convenience only and shall not affect its
                  construction or interpretation.

         (c)      Any right or power which may be exercised or any determination
                  which may be made hereunder by VF may be exercised or made in
                  the absolute and unfettered discretion of VF who shall not be
                  under any obligation to give reasons therefor.

         (d)      Unless the context otherwise requires, expressions defined in
                  the Agreement for the Purchase of Debts shall bear the same
                  meaning herein.

2        THE FACILITY

2.1      The Facility shall consist of a loan drawn pursuant to the terms of
         this Agreement of a maximum principal amount not exceeding the Maximum
         Loan Amount.

2.2      Unless VF otherwise agrees in writing with the Borrower, the Facility
         will be used by the Borrower to fund its working capital requirements.
         VF shall not be bound to enquire as to, nor shall it be responsible
         for, the use or application by the Borrower of all or any part of the
         Facility.

3        TERM AND DRAWDOWN

3.1      Subject to Clause 4 and to the first drawing hereunder taking place
         prior to the expiry of the Drawdown Period, the Facility shall be
         available for drawing by the Borrower at any time within the
         Availability Period. VF shall not, other than in its absolute
         discretion, permit drawings to be made under this Agreement more
         frequently than the Drawing Frequency detailed in paragraph 5 of Part 1
         of the Schedule.

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3.2      VF shall not be obliged to permit any drawing hereunder (other than in
         its absolute discretion) if the Borrower is in breach of or has at any
         time breached the Interest Cover Covenant.

3.3      VF shall not be obliged to permit any drawing hereunder or make any
         payment to the Borrower pursuant to the Agreement for the Purchase of
         Debts (other than in its absolute discretion) if following a notional
         or actual combination of all accounts of the Borrower with VF
         (including all actual and/or contingent liabilities of the Borrower to
         VF at the relevant time) ("the Account Balance") the drawing or payment
         of such amount would cause the Account Balance to exceed the Aggregate
         Limit. If as a consequence of such assessment and/or combination it is
         found that the Account Balance is at that time in excess of the
         Aggregate Limit the Borrower shall forthwith upon VF's demand repay to
         VF such amount as shall be required to extinguish such excess.

3.4      VF shall be entitled from time to time and at any time to combine all
         and any accounts maintained in the name of the Borrower in the books of
         VF, such combination being deemed to have taken place on the happening
         of any Event of Default. The Borrower will upon demand in writing from
         VF pay such amount as may be required to bring the account of the
         Borrower within the monetary limits stated in this Agreement.

4        CONDITIONS PRECEDENT

         The Facility will only be available for drawing under Clause 3 if:-

         (a)      the Agreement for the Purchase of Debts has commenced and all
                  conditions precedent to the making of prepayments thereunder
                  by VF have been satisfied; and

         (b)      the Security Document duly executed by the Borrower has been
                  received by VF together with copy Board Minutes authorising
                  the entry into and execution of the same; and

         (c)      there is no Event of Default and no event has occurred which,
                  with the lapse of time or giving of notice or both, might
                  constitute an Event of Default; and

         (d)      the representations and warranties set out in Clause 10 are
                  true and accurate in all material respects; and

         (e)      the Borrower has notified VF in writing of the amount
                  requested to be drawn by the Borrower and full details of the
                  account of the Borrower to which the funds are to be remitted.
                  The Borrower acknowledges that any notice given in accordance
                  with this clause 4(e) shall be irrevocable and, unless VF
                  otherwise agrees, shall oblige the Borrower to borrow the
                  amount specified.

5        INTEREST AND FEES

5.1      Interest will be charged on the Loan Account Balance at the Interest
         Rate and shall accrue from day to day and shall be computed on the
         basis of a 365 day year and the number of days elapsed.

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5.2      The interest accrued on the Loan Account Balance from and including the
         date upon which the facility is drawn shall be debited to the Loan
         Account monthly. The Borrower and VF hereby agree that for
         administrative convenience all interest payable in respect of the Loan
         Account balance and all other sums payable by the Borrower pursuant to
         this Agreement may be debited by VF to the Current Account of the
         Borrower maintained by VF pursuant to the Agreement for the Purchase of
         Debts. VF reserves the right to require actual payment of all interest
         by cheque drawn by the Client or such other form of remittance as VF
         may from time to time specify.

6        REPAYMENT

         The principal amount of the Facility drawn by the Borrower shall (if
         not repayable at an earlier date pursuant to the terms of this
         Agreement) be repaid in accordance with the Repayment Terms set out in
         paragraph 6 of Part 1 of the Schedule. Notwithstanding any other term
         of this Agreement the Borrower may at any time repay the whole or any
         part of the Loan Account Balance from time to time.

7        DEFAULT INTEREST

7.1      If the Borrower shall fail to pay any amount due under this Agreement
         on its due date, the Borrower shall be liable (if VF so requires) for
         interest on such amount from the date of such default until the date of
         actual payment (after as well as before judgement or demand) at the
         Default Rate. The Borrower's liability under this Clause shall be in
         substitution for the liability for interest on such defaulted amount at
         the Interest Rate. Such interest shall be payable on demand and, to the
         extent not actually paid, shall be compounded monthly in arrears (and
         debited to the Loan Account or the Current Account as referred to in
         clause 5.2 above) and shall be payable before as well as after any
         judgement.

7.2      VF and the Borrower agree that the Default Rate represents a genuine
         pre-estimate of VF's additional administrative and funding costs in the
         event of the Borrower's failure to pay any sum due to VF and is not a
         penalty.

8        PAYMENTS

8.1      The Borrower will make all payments due under this Agreement without
         set-off, counterclaim or deduction whatsoever and howsoever arising.

8.2      If the Borrower is compelled by law to make any such deduction or
         withholding, the Borrower shall forthwith pay to VF such additional
         amount as shall be required to ensure that VF shall receive in
         aggregate the amount it would have received but for such deduction or
         withholding.

9        CHANGES IN CIRCUMSTANCES AND INCREASED COSTS

9.1      If at any time it becomes unlawful or impossible for VF to maintain or
         fund the whole or any part of the Loan Account Balance VF may at any
         time by written notice to the Borrower require the Borrower to repay
         the Loan Account Balance immediately, together with any outstanding
         interest and all other sums due to VF under this Agreement, the
         Agreement for the Purchase of Debts, the warrant loan Agreement and the
         Security Document.

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9.2      The Borrower shall pay to VF on demand such amount as VF may from time
         to time certify as being necessary to compensate it for any increase in
         the cost of funding the Loan Account Balance or for any reduction in
         the rate of return under this Agreement, incurred by VF as a result of
         compliance with any official directives, requirements or requests of
         any regulatory authority (whether or not having the force of law) or
         any law or regulation (including, without limitation, those relating to
         reserve assets, special deposits, taxes, capital adequacy and/or asset
         ratios).

10       REPRESENTATIONS AND WARRANTIES

         The Borrower hereby represents and warrants that:-

10.1     it has the power to enter into and perform its obligations under this
         Agreement and the Security Document and to borrow hereunder and has
         taken all necessary action (corporate or otherwise) to authorise the
         unconditional entry into and performance of its obligations under this
         Agreement and the Security Document and the utilisation of the Facility
         upon the terms and conditions contained herein and unconditionally to
         authorise the execution, delivery and performance of this Agreement and
         the Security Document in accordance with their respective terms;

10.2     all authorisations, approvals, consents, licences, exemptions, filings,
         registrations and other procedures required in connection with the
         entry into, performance and validity of this Agreement, the utilisation
         of the Facility and the execution of the Security Document have been
         obtained and are in full force and effect;

10.3     this Agreement and the Security Document constitute legal, valid,
         binding and enforceable obligations of the Borrower;

10.4     the entry into and performance of this Agreement and the Security
         Document and the transactions contemplated hereby and thereby do not
         and will not conflict with (i) any law or regulation or any official or
         judicial order, or (ii) the Memorandum or Articles of Association of
         the Borrower; or (iii) any agreement or document to which the Borrower
         is a party or which is binding upon the Borrower or its assets;

10.5     the financial and other business information and documentation
         furnished by the Borrower to VF pursuant to this Agreement;

         (a)      is and was (or shall be) when delivered true and accurate and
                  does not contain any misstatement or omit any material fact
                  and

         (b)      there has been no material adverse change in the Borrower's
                  business, assets, conditions and operation since the delivery
                  of such information to VF;

10.6     save as notified in writing to VF prior to the date of this Agreement
         all of the Borrower's assets are Unencumbered save for the security
         granted or to be granted pursuant to the Security Document;

10.7     save as disclosed to VF in writing prior to the date of this Agreement,
         no litigation, arbitration or administrative proceeding or claim exists
         which might reasonably be expected to have by itself or together with
         any other such proceedings or claims either:

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         (a)      a material adverse effect on the business, assets or condition
                  of the Borrower; or

         (b)      a material adverse effect on the ability of the Borrower to
                  observe or perform its obligations under this Agreement or the
                  Security Document is current or pending or, to the best of the
                  knowledge of the Borrower, threatened against it.

         The representations and warranties set out in this Clause 10 shall be
         deemed to be repeated on each day that any amount is or may be
         outstanding hereunder with reference to the facts and circumstances
         then subsisting as if made at each such time.

11       FINANCIAL INFORMATION

         VF reserves the right during the term of the Facility to require the
         Borrower to provide VF with such financial information about the
         Borrower as VF may from time to time reasonably require.

12       GENERAL COVENANTS

         During the time of the Facility the Borrower shall:-

12.1     not without VF's prior written consent:-

         (a)      create or permit to subsist any mortgage, charge or other
                  encumbrance over any of its assets (except pursuant to the
                  Security Document); or

         (b)      make any loans or otherwise make credit (other than normal
                  trade credit) available to any person; or

         (c)      by one or a series of transactions, whether related or not,
                  sell or otherwise dispose of all or any material part of its
                  property or assets (except in the normal course of its
                  business).

12.2     throughout the duration of this Agreement comply at all times with all
         provisions contained within the Agreement for the Purchase of Debts and
         the Security Document, and shall provide to VF all such information and
         physical access to premises owned or under the control of the Borrower
         as VF may reasonably require and the Borrower hereby grants an
         irrevocable licence to VF for VF (and any of its employees servants or
         agents) to enter upon any premises owned or under the control or
         authority of the Borrower at any time during normal business hours for
         the purposes of this Agreement, for confirming and ensuring the
         compliance by the Borrower with the terms hereof;

12.3     ensure that VF does not breach the Interest Cover Covenant;

12.4     pay all sums due to VF hereunder or otherwise on the due date for
         payment thereof;

12.5     promptly notify VF if any Event of Default arises under Clause 13 and
         of anything which might with the passage of time give rise to an Event
         of Default.

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13       EVENTS OF DEFAULT

13.1     In the event that:-

         (a)      the Borrower fails to pay on the due date any amount due under
                  this Agreement or any other agreement between the Borrower and
                  VF; or

         (b)      the Borrower fails to perform any other of its respective
                  obligations under this Agreement or any other agreement
                  between VF and the Borrower; or

         (c)      any representation, warranty or statement made under or in
                  connection with this Agreement and/or the Agreement for the
                  Purchase of Debts and/or the Warrant loan Agreement and/or the
                  Security Document is or proves to be untrue in any material
                  respect on the date as of which it was made or deemed to be
                  made or repeated; or

         (d)      the Agreement for the Purchase of Debts is terminated (or is
                  subject to notice of termination served by the Borrower on VF)
                  or any event occurs entitling VF to terminate the Agreement
                  for the Purchase of Debts (whether or not such right is
                  exercised); or

         (e)      it becomes impossible or unlawful:-

                  (i)      for the Borrower to perform any of its respective
                           obligations contained in this Agreement or the
                           Security Document or any of them; or

                  (ii)     for VF to exercise any of its rights under this
                           Agreement and/or the Agreement for the Purchase of
                           Debts and/or the Security Document; or

         (f)      this Agreement and/or the Security Document do not come into
                  or cease to be in full force and effect or is/are not for any
                  reason valid and binding upon and enforceable in all respects
                  against the Borrower or VF is of the reasonable opinion that
                  any security conferred thereby is or may be in jeopardy; or

         (g)      VF is of the opinion that there has been a material adverse
                  change in the Borrower's trading or financial position or
                  condition; or

         (h)      anything is done or permitted or omitted to be done by the
                  Borrower which VF believes may materially impair the security
                  created by the Security Document and/or prejudice or detract
                  from the Borrower's ability to perform the obligations
                  contained in this Agreement and the Security Document or any
                  of them; or

         (i)      VF is not furnished with all information required to be
                  delivered to it at the time required; or

         (j)      the Borrower is or has been in breach of the Interest Cover
                  Covenant,

         then, in any such event VF may by notice in writing terminate the
         Facility and declare the Loan Account Balance and any other amounts due
         hereunder immediately due and payable, whereupon the Borrower will
         immediately comply with such demand by repaying the Loan Account
         Balance together with all outstanding interest and any other amounts
         due under this Agreement.

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14       ASSIGNMENT AND TRANSFER

14.1     The Borrower may not transfer or assign any of its rights under this
         Agreement and/or the Security Document.

14.2     VF may, without notice and at any time, transfer or assign all or any
         part of this Agreement and/or the Facility and/or the Security Document
         and the Borrower hereby irrevocably consents to any such transfer or
         assignment (and the disclosure by VF to a transferee or assignee of any
         information about the Borrower and the Facility as VF may consider
         appropriate).

15       NOTICES

         Any notice from one party to another hereunder shall be sent to the
         addressee and be deemed delivered in accordance with the terms of the
         Agreement for the Purchase of Debts.

16       WAIVERS

         No failure or delay by VF in exercising any right, power or privilege
         under this Agreement and/or the Security Document or any of them shall
         operate as a waiver thereof nor will any single or partial exercise of
         any right, power or privilege preclude any further exercise thereof or
         prejudice any other or further exercise by VF of any of its rights or
         remedies under this Agreement and/or the Security Document. Such rights
         and remedies are cumulative and not exclusive of any right or remedy
         provided by law.

17       INDEMNITY FOR EXPENSES

17.1     The Borrower shall pay to VF on demand on a full indemnity basis
         whether or not there is a drawing under the Facility:-

         (a)      all funding breakage costs and/or costs in relation to
                  arrangements incurred by VF in connection with the funding of
                  the Loan Account Balance;

         (b)      any stamp documentary registration and other similar duties or
                  taxes in connection with this Agreement and/or the Security
                  Document;

         (c)      all costs and expenses incurred in connection with the
                  negotiation or enforcement of this Agreement and/or the
                  Security Document (including legal fees, charges,
                  disbursements, survey and valuation fees, and value added
                  tax), and

         (d)      the Facility Fee due upon delivery of this Agreement to VF,

         and if the Borrower shall fail to pay when due any of the above amounts
         VF is entitled to debit such amounts either to the Loan Account or any
         other account(s) of the Borrower with VF.

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17.2     The Borrower shall also indemnify VF against any loss or expense
         incurred by it (including all additional out of pocket expenses (of
         whatsoever nature and howsoever arising) and the cost of all additional
         management time and effort expended by VF in protecting or enforcing
         VF's rights and interests hereunder)as a consequence of any failure by
         the Borrower to pay any sum due to VF when payable. For the purposes of
         calculating the cost of such additional management time and effort VF
         shall apportion the salary costs of its personnel involved on a pro
         rata basis according to the time spent by such personnel in managing
         the Borrower's account taking account only of such time as would not
         have been spent by such personnel had such failure to pay not occurred.

18       ILLEGALITY

         If any of the provisions of this Agreement and/or the Security Document
         become invalid, illegal or unenforceable in any respect, under any law,
         the validity, legality and enforceability of the remaining provisions
         shall not in any way be affected or impaired.

19       SET-OFF

         In addition to any right of set-off or other similar right to which VF
         may be entitled in law, VF may at any time and without notice to the
         Borrower combine and consolidate all or any of the accounts between the
         Borrower and VF and/or set-off any moneys and in any currency
         whatsoever, which VF may at any time hold for the account of the
         Borrower, against any liabilities whatsoever which may be due or
         accruing due to VF from the Borrower.

20       DEMANDS AND NOTIFICATION BINDING

         Any demand notification or certificate given by VF in writing and
         signed by a duly authorised officer of VF specifying any rate of
         interest or any amounts due and payable under or in connection with any
         provision of this Agreement and/or the Security Document or any of them
         shall (in the absence of manifest error or error in law) be conclusive
         and binding upon the Borrower and in any proceedings against the
         Borrower shall be conclusive evidence of such rate of interest or
         amounts so due and payable.

21       GENERAL

21.1     The contents of any report (whether written or oral) prepared by or on
         behalf of VF for the purposes of VF considering whether or not to
         permit any drawing under or to continue the Facility shall remain
         confidential and shall not be available to the Borrower for any reason
         or purpose (save for any requirement of law) in whole or in part and
         whether in original or copy form.

21.2     VF may in its absolute discretion set-off or reserve against any monies
         due to the Borrower by VF the amount of any and/or all actual and/or
         contingent liability of the Borrower to VF at any time and from time to
         time howsoever arising (and whether pursuant to this Agreement or
         otherwise) upon or following the occurrence of an Event of Default or
         in the event of the Aggregate Limit being exceeded for whatsoever
         reason.

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21.3     VF may rely and act upon any instruction or communication received or
         purportedly received from or on behalf of the Borrower by facsimile or
         telex transmission notwithstanding that no hard original copy of such
         instruction or communication has been or is received by VF before so
         relying or acting, provided that any such instruction or communication
         is purportedly from or transmitted under the direction of an authorised
         signatory of the Borrower, and the Borrower hereby agrees to indemnify
         VF and keep VF indemnified in respect of all losses, costs, damages,
         expenses, interest or other liability incurred or suffered by VF by
         reason of so relying and/or acting.

22       GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
         English Law and the Borrower hereby submits to the exclusive
         jurisdiction of the English Courts.

IN WITNESS of which the parties have signed this agreement on the date set out
above.

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                                     PART 1

1.       Maximum Loan Amount:-(pound)350,000 (Pounds Sterling Three Hundred and
         Fifty Thousand) (clauses 1.1 and 2.1)

2.       Aggregate Limit:- 1,500,000 (Pounds Sterling One Million Five Hundred
         Thousand) including the Confidential Invoice Discounting Facility, the
         Stock Facility and the Cashflow Advance (clauses 1.1, 3.3 and 21.2)

3.       Interest Rate: 2.0% above the Base Rate from time to time of Venture's
         Bankers for the time being in force (clauses 1.1,5.1 and 7.1)

4.       Venture requires that the Fixed Charge cover, measured as the ratio of
         Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA),
         less non-financed capital expenditure to Total Interest Costs (net of
         any interest receivable) and scheduled term loan repayments, does not
         fall below 2 times when measured on a rolling 3 month basis.

         There will be a Cashflow Loan of (pound)350,000 (Pounds Sterling Three
         Hundred and Fifty Thousand). An annually renewable Arrangement Fee of
         (pound)3,500 (Pounds Sterling Three Thousand Five Hundred) plus VAT at
         the rate applicable will apply.

5        Drawing Frequency (clause 3.1)

         Daily

6        Repayment Terms (clause 6)

         All amounts owed hereunder must be repaid on or before the end of the
         Availability Period.

         Amounts repaid by the Borrower under this Agreement may, subject always
         to the other provisions of this Agreement, be reborrowed.

7        Availability Period (clause 3.1)

         The period commencing on the date of this Agreement and ending on the
         third anniversary of the date hereof or the termination of the
         Agreement for the Purchase of Debts, whichever is the earlier.

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                           PART 2 - SECURITY DOCUMENT

An all assets Debenture in such form as VF may require constituting certain
fixed charges and a floating charge over whole of the Borrower's undertaking and
assets.

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SIGNED and delivered as a deed by

XCEL POWER SYSTEMS LIMITED acting by two
directors or by one director and the
secretary:

DIRECTOR
Signature                      :/S/ CARMINE T. OLIVA
Name                           :C.T. OLIVA

DIRECTOR/SECRETARY
Signature                      :/S/ GRAHAM JEFFERIES
Name                           :GRAHAM JEFFERIES

SIGNED and delivered as a deed by VENTURE
FINANCE PLC acting by two directors or by
one director and the secretary:

DIRECTOR
Signature                      :/S/ PAUL BEVERIDGE
Name                           :PAUL BEVERIDGE

DIRECTOR/SECRETARY
Signature                      :/S/ PETER EWEN
Name                           :PETER EWEN

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