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EXHIBIT 10.18





                              ALL ASSETS DEBENTURE

                                    GIVEN BY

                           XCEL POWER SYSTEMS LIMITED

                                REG. NO. 00575679

                                  IN FAVOUR OF

                      LLOYDS TSB COMMERCIAL FINANCE LIMITED




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ORDER OF CLAUSES

1. Covenant to Pay

2. Charging Provisions

3. Company's Obligations

4. Additional Obligations of the Company

5. Further Assurance and Power of Attorney

6. Acts of Default

7. Power of Possession and Sale

8. Appointment of Receiver and his Powers

9. Additional Powers

10. Application of Monies

11. Protection of Third Parties

12. H M Land Registry

13. Continuing and Additional Security

14. Currency Indemnity

15. Discharge

16. Service of Notices and Process

17. Jurisdiction

18. Representations, Warranties and Undertakings by Company

19. Transfers and Disclosures

20. Miscellaneous

21. Definitions and Interpretation



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THIS DEBENTURE IS MADE on the date referred to immediately after the Fifth
Schedule hereto BY THE PARTY DESCRIBED IN THE FIRST SCHEDULE HERETO ("Company")
of the one part in favour of LLOYDS TSB COMMERCIAL FINANCE LIMITED of Boston
House, The Little Green, Richmond, Surrey, TW9 1QE registered in England and
Wales with number 733011 ("Security Holder") of the other part.

1.       COVENANT TO PAY

1.1      The Company agrees with the Security Holder:

         1.1.1    to pay the Secured Monies, which are now or shall be due,
                  owing and payable to the Security Holder, in accordance with
                  the terms of the transaction, security, instrument or other
                  obligation giving rise to the Company's indebtedness to the
                  Security Holder, including those under the Financing
                  Agreement; and
         1.1.2    to discharge all obligations and liabilities, whether actual,
                  accruing or contingent, now or in future due, owing or
                  incurred to the Security Holder by the Company, in whatever
                  currency denominated and on whatever account and howsoever
                  arising, whether alone or jointly and in whatever style, name
                  or form and whether as principal or surety.

2.       CHARGING PROVISIONS

2.1      As security for the payment of the Secured Monies, the Company with
         full title guarantee now gives the following mortgages and charges in
         favour of the Security Holder namely:

         2.1.1    a FIXED CHARGE by way of legal mortgage on all freehold and
                  leasehold property owned by the Company, including but not
                  limited to land of which the Company is registered as
                  proprietor at H. M. Land Registry (details of which are set
                  out in the Third Schedule to this deed)
         2.1.2    a FIXED CHARGE on all of the following assets, whether now or
                  in future belonging to the Company:

                  (i)      the freehold and leasehold properties of the Company
                           not effectively mortgaged under clause 2.1.1
                           including such as may hereafter be acquired;
                  (ii)     all fixtures and fittings (including trade fixtures
                           and fittings) and fixed plant and machinery in, on or
                           attached to the property subject to the legal
                           mortgage under clause 2.1.1 and all spare parts,
                           replacements, modifications and additions for or to
                           the same;
                  (iii)    any other freehold and leasehold property which the
                           Company shall own together with all fixtures and
                           fittings (including trade fixtures and fittings) and
                           fixed plant and machinery in, on or attached to such
                           property and all spare parts, replacements,
                           modifications and additions for or to the same;


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                  (iv)     all plant and machinery and other equipment listed in
                           the Fifth Schedule and all spare parts, replacements,
                           modifications and additions for or to the same;
                  (v)      all fixed plant and machinery, including all spare
                           parts, replacements, modifications and additions for
                           or to the same, not listed in the Fifth Schedule;
                  (vi)     all goodwill, unpaid and/or uncalled capital of the
                           Company; (vii) all the Company's Intellectual
                           Property; (viii) all the Company's Securities;
                  (ix)     all loan capital, indebtedness or liabilities on any
                           account or in any manner owing to the Company from
                           any Subsidiary of the Company or a member of the
                           Company's Group;
                  (x)      all amounts realised by an administrator or
                           liquidator of the Company, upon enforcement or
                           execution of any order of the Court under Part IV of
                           the Insolvency Act 1986;

         2.1.3    A FIXED CHARGE upon all or any of the following assets,
                  whether now in existence or coming into existence in future:

                  (i)      all documents of title to any item of property which
                           at any time and for any purpose has been or may be
                           deposited with the Security Holder;
                  (ii)     the assets mentioned in the title documents referred
                           to in the immediately preceding sub-paragraph;
                  (iii)    all monies in the bank account specified in clauses
                           3.1.6(i) and 3.1.7 including Remittances in respect
                           of which instructions to the Company's bankers have
                           been given under clause 3.1.6(iii);
                  (iv)     all Remittances in respect of the Company's Other
                           Debts and Non-Vesting Debts which in accordance with
                           clause 3.1.6(ii) shall be received by the person or
                           at the address or post office box specified in that
                           sub-clause;
                  (v)      all other Remittances in respect of Other Debts and
                           Non-Vesting Debts received by the Company pending
                           their being dealt with in accordance with the terms
                           of this deed or any instructions given in accordance
                           with it;
                  (vi)     any account in the name of the Company under the
                           control of or operated in accordance with the
                           directions of the Security Holder.

         2.1.4    A FIXED CHARGE on all the Company's Other Debts and
                  Non-Vesting .Debts, present and future;
         2.1.5    A FLOATING CHARGE on such of the moneys present and future
                  which the Company may receive in respect of the Company's
                  Other Debts and Non-Vesting Debts and which, until any
                  direction from the Security Holder to the contrary, are paid
                  into the bank account of the Company referred to in clause
                  3.1.8 and which upon such payment will he released from the
                  fixed charge thereon;
         2.1.6    A FLOATING CHARGE on the remainder of the undertaking,
                  property rights and assets of the Company whatsoever and
                  wheresoever, both present and future, not subject to the above
                  charges.


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2.2      if the Security Holder shall enforce any of the above charges then the
         floating charges created by this deed shall immediately and without
         further formality become fixed charges. However, the Security Holder
         may also at any time give written notice to the Company immediately
         converting all or any of the floating charges into fixed charges in
         respect of the whole or any part of the Mortgaged Property subject to
         such floating charges.

2.3      Until the Security Holder shall:

         2.3.1    enforce any of the above charges; or
         2.3.2    serve any notice under clause 2.2 on the Company, converting
                  any of the floating charges into fixed charges; or
         2.3.3    give the directions referred to in any of clauses 3.1.4 and
                  3.1.6 to 3.1.9 inclusive; any Remittance which is paid into
                  the Company's bank account under clause 3.1.8 shall, be
                  released from the fixed charge created by clause 2.1.4 and
                  shall immediately become subject to the floating charge
                  created by clause 2.1.5. Such release shall not in any way
                  affect the continuation of the fixed charge created by clause
                  2.1.4 on the remainder of the Company's Other Debts,
                  outstanding from time to time.

2.4      This deed shall take effect subject to the provisions of the prior
         Encumbrances over the Company's assets detailed in the Fourth Schedule,
         except as otherwise varied by any separate deed.

2.5      The floating charges created by this deed shall, unless otherwise
         agreed by the Security Holder in writing, automatically and without
         notice be converted into fixed charges:

         2.5.1    immediately preceding the coming into existence of any
                  Encumbrance (except: as detailed in the Fourth Schedule) or
                  any disposition or dealing prohibited by his deed; or

         2.5.2    after an Act of Default.

3.       COMPANY'S OBLIGATIONS

         3.1      The Company agrees with the Security Holder that, whilst this
                  security exists, it:
         3.1.1    will deal with the Non-Vesting Debts and their Related Rights
                  as if they were Debts and their Related Rights purchased by
                  the Security Holder under the Financing Agreement and in
                  particular will not bank or deal with Remittances in respect
                  of them except by dealing with them in accordance with the
                  Financing Agreement;
         3.1.2    will not sell, transfer, lease, licence or dispose of the
                  Mortgaged .Property subject to the floating charges herein,
                  except by way of sale at full value in the ordinary course of
                  its business now being carried on;
         3.1.3    will not sell, transfer, lease, license or dispose of the
                  Mortgaged Property subject to the fixed charges herein without
                  the prior written consent of the Security Holder but such
                  restriction shall not prohibit the disposal of an asset (other
                  than freehold or leasehold property) for the purpose of its
                  immediate replacement, modification, repair and/or
                  maintenance;


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         3.1.4    will deal with the Company's Other Debts outstanding and
                  Remittances in accordance with the Security Holder's written
                  directions; until such directions are given will only deal
                  with the Company's Other Debts by way of getting in and
                  realising the same in the ordinary course of its business;
         3.1.5    will execute an assignment of the Company's Other Debts in
                  favour of the Security Holder in such form as the Security
                  Holder requires, whenever the Security Holder so demands;
         3.1.6    give instructions in accordance with the directions of the
                  Security Holder at any time

                  (i)      to debtors to pay Remittances in respect of the
                           Company's Other Debts direct into such bank account
                           under the control of the Security Holder (and whether
                           in the name of the Company or the Security Holder) as
                           the Security Holder may specify and whether or not
                           this is an account opened under the terms hereof;
                           and/or
                  (ii)     to debtors to pay Remittances in respect of the
                           Company's Other Debts to such address, or post office
                           box under the control of the Security Holder or to
                           such person employed by or only accepting
                           instructions from the Security Holder as the Security
                           Holder may specify; and/or
                  (iii)    to the Company's bankers that all Remittances in
                           respect of Other Debts, received by means of
                           electronic funds transfers direct into a bank account
                           of the Company, shall forthwith be transferred to
                           such bank account as the Security Holder may specify
                           (whether the specified bank account is in the name of
                           the Company or the Security Holder and whether or not
                           it is an account opened under the terms hereof) but
                           in each case without affecting the right of the
                           Security Holder under clause 3.1.4 to give other
                           directions;

         3.1.7    will, as directed by the Security Holder, open such bank
                  accounts in the name of the Company with such mandates as the
                  Security Holder may specify; such bank accounts can include
                  separate designated accounts or trust accounts or accounts
                  where the officers of the Security Holder are irrevocably
                  appointed as the only persons able to operate the accounts;
                  will thereafter pay into such bank accounts all Remittances
                  which the Company may receive in respect of its Other Debts;
                  will only deal with the monies in such account in accordance
                  with the written directions of the Security Holder (subject
                  only to such rights as the bank at which the account is held
                  may have in respect thereof);
         3.1.8    until any contrary direction, demand or requirement by the
                  Security Holder under this deed, will only pay Remittances,
                  which the Company may receive in respect of the Company's
                  Other Debts, into a bank account under the Company's control;
         3.1.9    will only pay or otherwise deal with the monies in any of the
                  Company's bank account referred to in clause 3.1.5 in
                  accordance with the written directions from time to time given
                  by the Security Holder (subject to any rights which the bank
                  at which the account is held has in respect thereof);


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         3.1.10   will not, charge, sell, discount, factor, dispose of or,
                  except in accordance with this deed, otherwise deal with its
                  Other Debts or the relative Remittances unless it has the
                  prior written consent of the Security Holder;
         3.1.11   after conversion of the floating charges created by clause
                  2.1.5 and/or 2.1.6 into fixed charges, will not, except as
                  permitted by the Security Holder, withdraw any credit balance
                  representing Remittances from any of the Company's bank
                  accounts under control of the Company;
         3.1.12   will authorise its bankers from time to time to provide copy
                  statements and full particulars of all the Company's accounts
                  and Facilities with them whenever requested by the Security
                  Holder;
         3.1.13   will provide such other information, as the Security Holder
                  may reasonably request regarding the Company's affairs;
         3.1.14   will, immediately it becomes aware, provide the Security
                  Holder with details of any present or future litigation,
                  arbitration or administrative proceedings in progress, pending
                  or, to the knowledge of the Company, threatened against it
                  which might have a material adverse effect on the Company's
                  ability to perform its obligations under this deed;
         3.1.15   will permit the Security Holder free access at all reasonable
                  times to inspect and take copies or and extracts from the
                  hooks, accounts and records of the Company and such other
                  documents as the Security Holder may require and will provide
                  the Security Holder with all information and facilities which
                  it may require;
         3.1.16   will grant the Security Holder or its solicitors on request
                  all reasonable facilities to enable it or them to carry out,
                  at the Company's expense, such investigation of title to the
                  Mortgaged Property and enquiries about it as would be carried
                  out by a prudent mortgagee;
         3.1.17   will use its best endeavours to detect any infringement of its
                  rights to the Intellectual Property; if aware of such
                  infringement, will immediately give the Security Holder all
                  information available to it about such infringement and will
                  commence and diligently prosecute (or permit the Security
                  Holder in the name but at the expense of the Company to
                  commence and prosecute) all proceedings necessary to prevent
                  such infringement or to recover damages;
         3.1.18   will do everything needed to ensure that the Intellectual
                  Property, to which the Company is or may become entitled, is
                  valid and subsisting and remains owned by the Company and will
                  take all such actions and proceedings as are necessary to
                  protect such Intellectual Property; if any such intellectual
                  Property shall at any time lapse or become void, will do
                  everything necessary to restore such Intellectual Property to
                  the Company;
         3.1.19   will comply in all material respects with all laws concerning
                  the Mortgaged Property and every notice, order, direction,
                  licence, consent, permission lawfully made or given in respect
                  of it and likewise with the requirements of any competent
                  authority;
         3.1.20   will duly and promptly pay all monies which may become due in
                  respect of any of the Securities; (it being acknowledged by
                  the Company that the Security Holder shall not incur any
                  liability whatsoever for such monies);

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         3.1.21   forthwith upon the execution of this deed will deposit with
                  the Security Holder all certificates or documents of title in
                  respect of the Securities, together as appropriate with duly
                  executed instruments of transfer or assignments thereof in
                  blank; (it being acknowledged that the Security Holder shall
                  at any time be entitled to have any of the Securities
                  registered either in the name of the Security Holder or
                  nominees selected by the Security Holder);
         3.1.22   will ensure the delivery or payment to the Security Holder of
                  all stocks, shares, securities, rights, monies or other
                  property accruing, offered or issued at any time by way of
                  bonus, redemption, exchange, purchase, substitution,
                  conversion, preference, option or otherwise in respect of any
                  Securities or the certificates or other documents of title to
                  or representing the same, together with executed instruments
                  of transfer or assignments in blank; (it being acknowledged
                  that the Security Holder may arrange for any of them to be
                  registered either in the name of the Security Holder or
                  nominees selected by the Security Holder).

4.       ADDITIONAL OBLIGATIONS OF THE COMPANY

4.1      The Company agrees that, at all times during the continuance of this
         security, it:

         4.1.1    will carry on the Company's business in a proper and efficient
                  manner and will not make any material alteration to the
                  Company's business, constituting as change from that carried
                  on at the date hereof;
         4.1.2    will maintain proper and up to date books of account of its
                  business; will keep such books of account and all other
                  documents relating to the affairs of the Company at the
                  Company's registered office or at such other place where the
                  same ought to be kept and will promptly provide copies thereof
                  to the Security Holder upon request;
         4.1.3    will deliver to the Security Holder the copies of its audited
                  financial statements and any reports and notes accompanying
                  them within 6 months of each year end;
         4.1.4    will punctually pay all its debts and liabilities becoming due
                  and payable and which would, on the winding up of the Company,
                  have priority over the charges created by this deed;
         4.1.5    will punctually pay all outgoings payable in respect of the
                  Mortgaged Property and will promptly produce the receipts for
                  them to the Security Holder upon request;
         4.1.6    will keep all the Company's freehold and leasehold property in
                  good and substantial repair and will allow the Security Holder
                  free access, at all reasonable times, to view the state and
                  condition of any such property, but without the Security
                  Holder becoming liable to account as a mortgagee possession;
         4.1.7    will observe and perform all the lessee's covenants in any
                  lease under which any of the Mortgaged Property may be held
                  and will take no action which might lead to such lease being
                  surrendered or forfeited;
         4.1.8    will allow the Security Holder, at the expense of the Company,
                  to carry out repairs or take any action which the Security
                  Holder shall reasonably consider necessary should the Company
                  fail to observe or perform its obligations as a lessee;


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         4.1.9    will not exercise the powers of leasing or accepting,
                  surrenders of leases, conferred on a mortgagee in possession
                  by Sections 99 and 100 of the Law & Property Act 1925, or any
                  other powers of leasing or accepting surrenders of leases,
                  without the prior written consent of the Security Holder;
         4.1.10   will make sure that an order of the Court is obtained, under
                  Section 38(4) of the Landlord and Tenant Act 1954, excluding
                  the security of tenure provisions of that Act, before granting
                  any lease;
         4.1.11   will insure and keep insured those parts of' the Mortgaged
                  Property as are of an insurable nature against loss or damage
                  by fire and other risks usually insured against and such other
                  risks that the Security Holder shall reasonably require to
                  their full insurable value with insurers approved by the
                  Security Holder;
         4.1.12   will make sure that all the Company's insurance policies will
                  be endorsed with notice of the interest of the Security Holder
                  in them and will produce to the Security Holder the receipts
                  for each current premium within fifteen days of its becoming
                  due; failing such production the Security Holder may effect or
                  renew any such insurance as the Security Holder shall think
                  fit at the Company's expense;
         4.1.13   will observe and perform all restrictive and other covenants
                  and stipulations for the time being affecting the Mortgaged
                  Property or its use or enjoyment;
         4.1.14   will not do or allow anything to be done on the Company's
                  freehold or leasehold property which shall be treated as a
                  development or a change of use within the meaning of the Town
                  and Country Planning Acts unless the prior written consent of
                  the Security Holder has been obtained;
         4.1.15   will not infringe the Town and Country Planning Acts in any
                  way which prejudices the Security Holder's security over the
                  Mortgaged Property;
         4.1.16   will deposit with the Security Holder all deeds and documents
                  of title; relating to the Company's freehold and leasehold
                  property and the insurance policies relating to the same,
                  (subject only to the requirements of any prior Encumbrance or
                  of the Company's landlord);
         4.1.17   will not permit any person to become entitled to any
                  proprietary right or interest which might affect the value of
                  the assets subject to the fixed charges herein.

4.2      If the Company holds property as a tenant or lessee and shall be
         required by the landlord either to insure or to reimburse the Company's
         landlord for any insurance premium paid by him then the Company shall
         be treated as having complied with its insuring obligation under this
         deed if it duly and promptly complies with such requirements. However
         this shall not affect the right of the Security Holder to require the
         Company to produce satisfactory evidence that the Company has complied
         with the landlord's requirements.

5.       FURTHER ASSURANCE AND POWER OF ATTORNEY

5.1      At the Security Holder's request, the Company will immediately sign,
         seal, execute, deliver and perfect all deeds and instruments and do all
         such other acts and things as the Security Holder or any Receiver
         appointed hereunder may require in order to perfect or enforce this
         security or to use the powers given to each of them in this deed or to
         enforce the obligations of the Company and/or the rights of the
         Security Holder under this deed.


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5.2      The Company will, if called upon by the Security Holder, execute a
         legal or equitable assignment of any part of the Mortgaged Property, in
         such terms as the Security Holder may require. The Company will then
         give notice of such assignment to such persons as the Security Holder
         may specify and take such other steps as the Security Holder may
         require to perfect such assignment.

5.3      The Company irrevocably appoints the Security Holder, any directors,
         officers or managers for the time being of the Security Holder and any
         other person authorised by the directors of the Security Holder and any
         Receiver appointed hereunder, jointly and each of them severally, to be
         the lawful attorneys of the Company. Such appointment gives each
         attorney the power in the Company's name and on its behalf and as its
         act and deed to carry out all acts for the purposes set out in clauses
         5.1 and 5.2. Each attorney so appointed may appoint substitute
         attorneys to carry out all or any of such purposes. The Company agrees
         to ratify and confirm any instrument, act or thing which any such
         attorney or substitute attorney may lawfully execute or do.

6.       ACTS OF DEFAULT

6.1      The Secured Monies shall become payable and the charges in favour of
         the Security Holder shall immediately become enforceable, without
         notice or demand, by the Security Holder at any time after any of the
         following events occur:

         6.1.1    if the Company shall breach any of its obligations under this
                  deed or in the Financing Agreement or any other agreement with
                  the Security Holder;
         6.1.2    if the Company shall default in paying any of the Secured
                  Monies as and when they become due; 6.1.3 if the Company shall
                  fail to give the Security Holder such information as may
                  reasonably be requested as to the business, affairs or assets
                  of the Company;
         6.1.4    if any representation, warranty or undertaking at any time
                  made by the Company to the Security Holder is or was, in the
                  reasonable opinion of the Security Holder, incorrect or
                  misleading in any respect or, being on an undertaking, shall
                  not be complied with by the Company;
         6.1.5    if the Company shall dispose or attempt to dispose of its
                  principal undertaking or a substantial part of it, without the
                  prior written approval of the Security Holder;
         6.1.6    if the Company shall be insolvent;
         6.1.7    if the Company suspends or threatens to suspend a substantial
                  part of' its business or if the Security Holder receives
                  information, from the Company or any responsible third party,
                  whether orally or in writing, that the Company is
                  contemplating or is likely to suspend a substantial part of
                  its business;
         6.1.8    if the Company shall commence negotiations with any of its
                  creditors with a view to the general readjustment or
                  rescheduling of the Company's indebtedness;
         6.1.9    if the Company shall default under any of the following with
                  any party:


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                  (i)      a trust deed; (ii) a loan agreement; (iii) an
                           Encumbrance;
                  (iv)     any other agreement or obligation relating to
                           borrowing or financing (including all liabilities in
                           respect of accepting, endorsing or discounting any
                           notes or bills and all liabilities under debt
                           purchase, factoring, discounting and similar
                           agreements);
                  (v)      any guarantee or indemnity;

         6.1.10   if any borrowing or any ether money payable by the Company:

                  (i)      becomes payable or is capable of being declared
                           payable prior to its stated date of maturity; or
                  (ii)     is not paid when due;

         6.1.11   if any Encumbrance created by the Company in favour of another
                  party becomes enforceable;
         6.1.12   if any guarantee, indemnity or other security for any of the
                  Secured Liabilities fails or ceases in any respect to have
                  full force and effect or to be continuing or is terminated or
                  disputed or is the opinion of the Security Holder in jeopardy,
                  invalid or unenforceable;
         6.1.13   if any governmental authority permits, or procures, or
                  threatens any reorganisation, transfer or appropriation
                  (whether with or without compensation) of a substantial part
                  of the business or assets of. the Company;
         6.1.14   if the Company shall, without the prior written consent of the
                  Security Holder, change the nature of its business or trading
                  in any way which the Security Holder considers prejudicial to
                  this security;
         6.1.15   if it is unlawful for the Company to perform or comply with
                  any of its obligations under this deed or under any other
                  agreement between the Company and the Security Holder or such
                  obligations or the Company are not or cease to be legally
                  valid, binding and enforceable;
         6.1.16   if, after the date of this deed, control (as defined in
                  Section 435 of the insolvency Act 1986) or the power to take
                  control of the Company changes, without prior written consent
                  of the Security Holder; or
         6.1.17   if, in the opinion of the Security Holder, a material adverse
                  change occurs in the financial condition, results of
                  operations or business of the Company.

6.2      At any time after any Act of Default:

         6.2.1    the Security Holder shall cease to be under any further
                  commitment to the Company and may at any time thereafter
                  declare the Secured Monies (or such of them as the Security
                  Holder may specify) either to be immediately due and payable
                  or to be payable at any time thereafter immediately on demand,
                  even if this conflicts with the terms of any other agreement
                  or arrangement; and/or
         6.2.2    the Company shall immediately on demand provide cash cover for
                  all of its contingent liabilities to the Security Holder
                  (including under the Financing Agreement) and for all notes or
                  bills accepted, endorsed or discounted and all guarantees or
                  other instruments entered into by the Security Holder; and/or
         6.2.3    the Security Holder may retain:

                  (i)      any monies in any account referred to in clause
                           3.1.6; and/or


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                  (ii)     any monies in any account operated by the officers of
                           the Security Holder under clause 3.1 .7; and/or
                  (iii)    any Remittance received in accordance with clause
                           3.1.6(ii)

                  for such period as the Security Holder reasonably considers
                  necessary to ensure the Company's compliance with the terms of
                  this deed; and/or

         6.2.4    the Security Holder may exercise in the name or the Company
                  any voting rights attached to the Securities and all powers
                  given to trustees by Sections 10(3) and (4) of the Trustee Act
                  1925 (as amended by Section 9 of the Trustee Investments Act
                  1961) in respect of securities, property subject to a trust
                  and any powers or rights exercisable by the registered holder
                  of any of the Securities or by the bearer thereto. The
                  Security Holder will not then need any consent or authority
                  from the Company.

7.       POWER OF POSSESSION AND SALE

7.1      At any time alter this security shall become enforceable, the Security
         Holder and/ or any Receiver appointed under this deed may, in their
         discretion, enter upon and take possession of the Mortgaged .Property
         or any part of it. They may also at their discretion, when exercising
         their powers given in this deed, sell, call in, collect and convert
         into monies the Mortgaged .Property or any part of it. By way of
         extension of these powers such sale, calling in and conversion may be
         done for such consideration as the Security Holder or any Receiver
         shall consider sufficient. It is irrelevant whether the consideration
         shall consist of cash, shares or debentures in some other company or
         any other property or partly of one and partly of some other type of
         consideration. Such consideration may be immediately payable or payable
         by instalments or deferred. Instalment or deferred payments may be with
         or without security and on such other terms as the Security Holder or
         the Receiver shall think fit.

8.       APPOINTMENT OF RECEIVER AND HIS POWERS

8.1      Section 109 of the Law of Property Act 1925 (restricting the power to
         appoint a receiver) shall not apply to this deed. At any time after an
         Act of Default or after any other event, as a result of which this
         security shall become enforceable or, if the Company at any time so
         requests in writing, the Security Holder may without further notice to
         the Company appoint any person to be a Receiver. Their appointment
         shall extend to the whole or any part of the Mortgaged Property. The
         Security Holder may remove any Receiver (except an administrative
         receiver). In case of such removal or the retirement or death of any
         Receiver, the Security Holder may appoint another in his place. At the
         time of his appointment (or at any time afterwards) the Security Holder
         may fix the remuneration of the Receiver on such basis as the Security
         Holder shall determine. This may include a fixed fee or an hourly rate
         or a commission.

8.2      The Security folder may appoint more than one person to act as the
         Receiver. Where more than one person shall be appointed to act as
         Receiver, those so appointed shall carry out their duties, exercise
         their rights, and be subject to their obligations jointly as well as
         severally. References in this deed to the Receiver shall be to each and
         all of them as appropriate.


                                      -11-

<PAGE>

8.3      Any appointment, or fixing of the remuneration of the Receiver or any
         such removal shall be made in writing and be signed by any director or
         authorised officer of the Security Holder.

8.4      Any Receiver appointed under this deed shall be the agent of the
         Company. He shall be in the same position as a Receiver appointed under
         the Law of Property Act 1925. The Company shall be solely responsible
         for his acts, omissions, losses, misconduct, defaults and remuneration.
         The Security Holder shall not in any way be liable or responsible
         either to the Company or to any other person for any of them.

8.5      The Receiver shall, without the need for any consent on the part of the
         Company, have all of the following powers, unless any shell
         specifically he excluded by the terms of his appointment. He may
         exercise these powers in such way, at such time and on such terms as he
         shall think necessary or expedient and whether in his name or the name
         of the Company. Any Receiver, whether appointed solely or jointly,
         shall have the powers granted to a receiver by the Law of Property Act
         1925 and the Insolvency Act 1986. He shall also have all of the
         following powers:

         8.5.1    to enter upon, take possession of, collect and get in the
                  Mortgaged Property and for that purpose to have possession of
                  all records, correspondence and other documents relating to
                  the Mortgaged Property;
         8.5.2    to lease the Mortgaged Property, in the name of the Company or
                  otherwise (whether or not the Receiver shall have taken
                  possession thereof);
         8.5.3    to carry on or permit the carrying on or all or any part of
                  the business of the Company and to manage, develop,
                  reconstruct, amalgamate or diversify the Company's business,
                  including purchasing supplies and materials;
         8.5.4    to do all acts which the Company might do for the protection
                  or improvement of the Mortgaged Property or for obtaining
                  income or returns from it;
         8.5.5    to raise or borrow any money, which may be needed from time to
                  time for any of the purposes of the Receiver's appointment,
                  whether in the name of the Company or otherwise; for such
                  purpose the Receiver shall have power to secure any monies so
                  borrowed by mortgage or charge over the Mortgaged Property,
                  whether ranking in priority to or pari passu with or after any
                  or all of the charges created by this deed.
         8.5.6    to sell or concur in selling the Mortgaged Property including
                  by public or private treaty, by tender, for cash or on credit,
                  in one lot or in parcels, with or without special conditions
                  or stipulations as to title, time or mode of payment of
                  purchase money or otherwise and whether forthwith upon his
                  appointment or later;
         8.5.7    to allow the whole or any part of the sale monies of the
                  Mortgaged Property to remain outstanding on mortgage of the
                  property sold or on any other security or even without any
                  security and without being responsible for any loss caused and
                  with full power to buy in and rescind or vary any contract for
                  sale and to resell without being responsible for loss;


                                      -12-

<PAGE>

         8.5.8    to let or let on hire, lease or surrender and accept
                  surrenders of the Mortgaged Property;
         8.5.9    to execute assurances of the Mortgaged Property in the name
                  and on behalf of the Company or otherwise and to do all other
                  acts and things for completing the sale of the Mortgaged
                  Property;
         8.5.10   to sever fixtures belonging to the Company and sell them
                  separately from any other part of the Mortgaged Property;
         8.5.11   to make any arrangement or compromise with any person in
                  respect of the Mortgaged Property;
         8.5.12   to repair, decorate, furnish, maintain, alter, improve, renew
                  or add to any of the Mortgaged Property as he shall think fit
                  and effect maintain, renew or increase indemnity insurance and
                  other insurances and obtain bonds;
         8.5.13   to settle, arrange, compromise, and submit to arbitration any
                  accounts, claims, questions or disputes whatsoever which may
                  arise in connection with the business of the Company or any
                  part of the Mortgaged Property or in any way relating to the
                  security constituted by this deed and to bring, prosecute,
                  defend, enforce, compromise, submit to and discontinue any
                  actions, suits, arbitrations or proceedings whatsoever,
                  whether civil or criminal;
         8.5.14   to enter into, complete, disclaim, abandon or disregard,
                  determine or rectify any of the outstanding contracts or
                  arrangements of the Company and allow time for payment of any
                  debts, either with or without security;
         8.5.15   to exercise or permit the Company or any nominee of the
                  Company to exercise any powers or rights incidental to the
                  ownership of the Mortgaged Property, in such manner as he may
                  think fit;
         8.5.16   to form a subsidiary of the Company and transfer, lease or
                  licence to such subsidiary or any other person all or any part
                  of the Mortgaged Property on such terms and conditions as he
                  may think fit;
         8.5.17   to give complete discharges in respect of all monies and other
                  assets which may come into the hands of the Receiver in the
                  exercise of his powers;
         8.5.18   to carry out and enforce specific performance of or obtain the
                  benefit of all the Company's contracts or those entered into
                  in exercise of the powers or authorities conferred by this
                  deed;
         8.5.19   to make, or require the directors of the Company to make,
                  calls upon the shareholders of the Company in respect of any
                  capital of the Company;
         8.5.20   to enforce payment, of any call so made by action (in the name
                  of the Company or the Receiver) or in any other way;
         8.5.21   to exercise all or any of the powers and authorities conferred
                  on the Receiver under the provisions of the Law of Property
                  Act 1925 without any further consent by or notice to the
                  Company;
         8.5.22   to demand and get in all rents and other income, whether
                  accrued before or after the date or his appointment;
         8.5.23   to exercise the powers conferred on a landlord or a tenant
                  under the Landlord and Tenant Acts 1927 and 1954 but without
                  liability for powers so exercised;
         8.5.24   to do all things necessary to make sure that the Company
                  performs or observes all of its obligations to the Security
                  Holder;


                                      -13-

<PAGE>

         8.5.25   to delegate to any person, for such time as the Security
                  Holder shall approve, any of the powers conferred upon the
                  Receiver;
         8.5.26   to take legal proceedings for all or any of the purposes set
                  out above;
         8.5.27   to employ and dismiss managers, solicitors, officers, agents,
                  auctioneers, workmen and employees for the purpose of carrying
                  out any of the powers and duties of the Receiver or the
                  obligations of the Company at such salaries or remuneration
                  and on such other terms of service as the Receiver in his
                  discretion may think fit;
         8.5.28   to have access to and make use of the premises, plant,
                  equipment and accounting and other records of the Company and
                  the services of its staff in order to exercise his powers and
                  duties;
         8.5.29   to do all such other acts and things without limitation, as
                  the Receiver may consider to be incidental or conducive to the
                  lawful exercise of his powers and duties.

8.6      The Security Holder may at any time give up possession of any part of
         the Mortgaged Property and/or withdraw from the receivership.

8.7      Whether or not a Receiver shall be appointed under this deed, the
         Security Holder may at any time after this security shall have become
         enforceable and without giving notice, exercise all or any of the
         powers, authorities and discretions conferral on a Receiver as set out
         above.

9        ADDITIONAL, POWERS

9.1      In addition to the powers of leasing or accepting surrenders of' leases
         conferred on mortgagees by Sections 99 and 100 of the Law of Property
         Act 1925, it shall he lawful for the Security Holder or any Receiver
         without the restrictions contained in those Sections:

         9.1.1    to grant any lease of the Mortgaged Property upon such terms
                  as the Security Holder or the Receiver shall in its absolute
                  and unfettered discretion think fit; and
         9.1.2    to accept a surrender of any lease of the Mortgaged Property
                  on such terms as the Security Holder or the Receiver in its or
                  his discretion shall think fit.

9.2      Section 103 of the Law of Property Act 1925 (restricting the power of
         sale) shall not apply. However the power or sale and the other powers
         conferred on mortgagees by that Act shall apply to this security but
         without the Act's restrictions as to giving notice or otherwise.
         Accordingly for the purposes of a sale or other exercise of any such
         powers the whole of the Secured Monies shall be treated as due and
         payable immediately upon the execution and delivery of this document.

9.3      The restrictions on the right of consolidating mortgage securities,
         which are contained in Section 93 of the Law of Property Act, shall not
         apply to this security.

9.4      The Security Holder may, at any time without discharging or in any
         other way affecting this security or any remedy that the Security
         Holder may have, grant to the Company (or to any other person) time or


                                      -14-

<PAGE>

         indulgence or abstain from perfecting or enforcing any remedies,
         securities, guarantees or rights which the Security Holder may now or
         afterwards have from or against the Company or any other person.

9.5      If the Security Holder receives or is treated as having received notice
         of any subsequent mortgage or charge affecting any of the Mortgaged
         Property then the Security Holder may open a new account with the
         Company. If it does not open a new account, it shall nevertheless be
         treated as it had done so at the time when it received or was treated
         as having received such notice. From that time all payments made by the
         Company to the Security Holder shall be credited or be treated as
         having been credited to the new account. Such payments shall not
         operate to reduce the amount secured by this deed when the Security
         Holder received or was treated as having received such notice.

10.      APPLICATION OF MONIES

10.1     All monies received by the Security Holder or by the Receiver under or
         by virtue of this deed shall be applied in the following order;

         10.1.1   in the discharge of' all Liabilities having priority to the
                  mortgages and charges hereby created or the matters referred
                  to hereafter in this clause 10.1;
         10.1.2   in payment of all costs, charges and expenses incurred in or
                  incidental to the exercise or performance (or attempted
                  exercise or performance) of any of the powers or authorities
                  conferred by or in any other way connected with this deed; AND
                  THEN
         10.1.3   in payment to the Receiver of his remuneration fixed in
                  accordance with clause 8.1 of this deed; AND THEN
         10.1.4   in payment to the Security Holder of the Secured Monies due to
                  the Security Holder in such order as the Security Holder in
                  its absolute discretion thinks lit; AND THEN
         10.1.5   in payment to the Company of any surplus.

10.2     Any surplus shall not carry interest. The Receiver or the Security
         Holder may pay any surplus into any of the Company's bank accounts
         including an account opened specifically for such purpose. The Security
         Holder shall then have no further liability for such surplus.

10.3     Following the enforcement of this security, any monies received by the
         Security Holder may be appropriated by the Security Holder in its
         discretion in or towards the payment and discharge of any part of the
         Secured Monies.

10.4     The Security Holder or the Receiver may credit any monies to a suspense
         account for so long and in such manner as the Security Holder may from
         time to time determine. The Receiver may retain the same for such
         period as the Receiver and the Security Holder consider expedient.

10.5     All monies received by the Company under any insurance policy on the
         Mortgaged Property shall be treated as part of the Mortgaged Property
         subject only to any rights of third parties having priority and to the
         requirements of any lease of the Mortgaged Property. They shall be


                                      -15-

<PAGE>

         applied at the discretion of the Security Holder either in reducing the
         Secured Monies or towards making good the loss or damage for which the
         monies became payable. Any monies received by the Company under any
         insurance on the Mortgaged Property shall be held on trust for payment
         to the Security Holder pending such application.

11.      PROTECTION OF THIRD PARTIES

11.1     No person paying or handing over monies to the Receiver and obtaining a
         discharge shall have any responsibility or liability to see to their
         correct application.

11.2     No person dealing with the Security Holder or the Receiver need enquire
         :

         11.2.1   whether any event has happened giving either the Security
                  Holder or the Receiver the right to exercise any of his
                  powers;
         11.2.2   as to the propriety or regularity of any act purporting or
                  intending to be an exercise of such powers;
         11.2.3   as to the validity or regularity of the appointment of any
                  Receiver purporting to act or to have been appointed us such;
                  or
         11.2.4   whether any money remains owing upon this security.

11.3     All the protection to purchasers contained in Sections 104 and 107 of
         the Law of Property Act 1925 shall apply to any person purchasing from
         or dealing with the Receiver or the Security Holder as if the Secured
         Monies had become due and the statutory power of sale and appointing a
         receiver in relation to the Mortgaged Property had arisen on the date
         of this deed.

11.4     No person dealing with the Security Holder or the Receiver shall be
         affected by express notice that any act is unnecessary or improper.

12.      H.M. LAND REGISTRY

12.1     The Company will notify the Security Holder of any freehold or
         leasehold property which it now owns or which it may own alter the date
         or this deed. The Company will, upon request and at its cost , join
         with the Security Holder in registering this security as a fixed charge
         against any of the freehold or leasehold property of which the Company
         is now registered or may in future apply to be registered as the
         proprietor at H.M. Land Registry.

12.2     The Company hereby applies to the Chief Land Registrar for a
         restriction to be entered on the Company's title to any land in the
         following terms:

                  "Except under an order of the .Registrar no disposition or
                  dealing by the proprietor of the land is to be registered or
                  noted without the consent of the proprietor for the time being
                  of Charge No....................."


                                      -16-

<PAGE>

13.      CONTINUING AND ADDITIONAL SECURITY

13.1     This security is a continuing security. It shall apply to all the
         Secured Monies despite any interim settlement of account until a final
         discharge of this security shall be given by the Security Holder to the
         Company.

13.2     This security is in addition to and shall not merge or otherwise
         prejudice or affect any other right or remedy of the Security Holder or
         any assignment, bill, note, guarantee, mortgage or other security now
         or in future in favour of the Security Holder or held by or available
         to the Security Holder, whether created by the Company or any third
         party.

13.3     This security shall not in any way be prejudiced or affected by:

         13.3.1   any guarantee, mortgage or other security now or in future
                  held by or available to the Security Holder or by the
                  invalidity of any of them or by the Security Holder now or
                  afterwards dealing with, exchanging, releasing, modifying or
                  abstaining from perfecting or enforcing any of then or any
                  rights which it may now or afterwards have; or
         13.3.2   by the Security Holder giving time, the payment or indulgence
                  or compounding with the Company or any other persons.

14.      CURRENCY INDEMNITY

14.1     For the purpose of or pending the discharge of any of the Secured
         Liabilities secured by this deed the Security Holder or any Receiver
         appointed hereunder may convert any monies received, recovered or
         realised under this deed (including the proceeds of any previous
         conversion) from their existing currency into such other currency as
         the Security Holder or such Receiver may think fit. Any such conversion
         shall be effected at the then prevailing spot selling rate of exchange,
         of the Security Holder's bankers, for such other currency against the
         existing currency.

14.2     The Company will indemnify the Security Holder against any shortfall
         between:

         14.2.1   any amount received or recovered by the Security Holder in
                  respect of any of the Secured Liabilities which is converted
                  in accordance with clause 14.1 into the currency in which such
                  liability was payable; and
         14.2.2   the amount payable to the Security Holder under this deed in
                  the currency of such liability.

15.      DISCHARGE

15.1     Upon payment and complete discharge and performance of all the Secured
         Liabilities and of all costs, charges and expenses incurred by the
         Security Holder under or in relation to this deed, the Security Holder
         shall, at the request and cost or the Company, duly discharge this
         security and any further security given in accordance with its terms.
         The Security Holder will also transfer to the Company any of' the
         Mortgaged Property which has been assigned or transferred to the
         Security Holder.


                                      -17-

<PAGE>

15.2     The right of the Security Holder to recover the Secured Monies or to
         enforce the terms of this deed shall not be affected by any payment or
         any act or thing which may be avoided or adjusted under the laws
         relating to bankruptcy or insolvency or under Part VI of the Insolvency
         Act 1986. Any release or discharge given or settlement made by the
         Security Holder relying on any such payment, act or thing shall be void
         and of no effect.

16.      SERVICE OF NOTICES AND PROCESS

16.1     Except as stated to the contrary herein, any written notice from the
         Security Holder to the Company and any proceedings issued by the
         Security Holder requiring service on the Company may be given or
         served:

         16.1.1   by delivering it at or posting it to the Company's registered
                  office or to such other address of the Company advised to and
                  acknowledged by the Security Holder as being effective for the
                  purposes of this clause; or
         16.1.2   by delivering it at or posting it to any address last known to
                  the Security Holder at which the Company carried on business;
         16.1.3   by handing it Company's officers;
         16.1.4   by a fax or e-mail to the Company's number or address advised
                  to and acknowledged by the Security Holder as suitable for
                  communication between the parties.

16.2     Any such notice or process shall be considered served:

         16.2.1   if delivered - at the time of delivery; or
         16.2.2   if sent by post - 48 hours from the time of posting; or
         16.2.3   if sent by fax or e-mail - at the time of transmission; or
         16.2.4   if handed over - at the time of handing over.

16.3     Any notice in writing by the Company to the Security Holder required
         hereunder shall take effect at the time it is received by the Security
         Holder at its registered office or at such other address the Security
         Holder may advise in writing to the Company for this purpose.

17.      JURISDICTION

17.1     This deed shall be interpreted and shall be governed by the laws of
         England. The Company will accept the non-exclusive jurisdiction of the
         English Courts in connection with any matter arising under this deed.

18.      REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS BY COMPANY

18.1     The Company certifies that the execution of this deed has been duly
         authorised by a resolution of the Company's Board of Directors and that
         it does not break any of the provisions of the Company's Memorandum and
         Articles of Association or of any other Encumbrance, security or
         agreement entered into prior to the date of this deed or the laws of
         any jurisdiction applying to the Company.


                                      -18-

<PAGE>

18.2     The Company represents and warrants to the Security Holder that:

         18.2.1   it is and will at all times be the sole beneficial owner with
                  full title guarantee of all the Mortgaged Property and that no
                  Encumbrances affect it except the Encumbrances (if any) set
                  out in the Fourth Schedule and general liens in the ordinary
                  course of business;
         18.2.2   it has and will at all times have the necessary power to enter
                  into and perform its obligations under this deed;
         18.2.3   this deed constitutes its legal, valid, binding and
                  enforceable obligations and is an effective security over all
                  and every part of the Mortgaged Property in accordance with
                  its terms;
         18.2.4   all necessary authorisations and consents to enable or entitle
                  it to enter into this deed have been obtained and these will
                  remain in full force and effect during the existence or this
                  security;
         18.2.5   the Company has acquired, maintained and complied with all
                  Environmental Licences (if any) needed for its use or
                  occupation of the Mortgaged Property or for the conduct of its
                  current business;
         18.2.6   the Company has complied with all other applicable
                  Environmental Laws and has not done or permitted any act or
                  omission whereby its Environmental Licences (if any) could be
                  varied or revoked;
         18.2.7   so far as the Company is aware there has been no discharge,
                  spillage, release or emission of any prescribed, dangerous,
                  noxious or offensive substance or any controlled waste on,
                  into or from any of the Mortgaged Property or any premises
                  adjoining any part of it; and no such substances or any
                  controlled waste have been stored or disposed of on or in any
                  part of the Mortgaged Property or, so far as the Company is
                  aware, in any adjoining premises except in accordance with the
                  requirements of the applicable Environmental Laws;
         18.2.8   the Company is not in breach of and has not incurred or become
                  subject to any civil or criminal liability under any
                  Environmental Laws or the terms of any Environmental Licence;
         18.2.9   the Company has obtained and maintained all such insurance
                  policies as would be maintained by prudent companies carrying
                  on business of the type carried on by the Company at all
                  relevant times and has complied in all material respects with
                  the terms and conditions or such policies.

18.3     The Company undertakes that no Encumbrances (other than a general lien
         in the ordinary course of business) ranking in priority to or pari
         passu with the charges created by this deed will arise after the date
         of this deed over the Mortgaged Property.

19.      TRANSFERS AND DISCLOSURES

19.1     This deed is freely transferable by the Security Holder. References in
         this deed to the Security Holder's shall include its successors,
         assignees and transferees.

19.2     The Company may not assign or transfer any of its obligations under
         this deed. Nor may the Company enter into any transaction which would
         result in any such obligations passing to another person.


                                      -19-

<PAGE>

19.3     The Security Holder may disclose any information about the Company and
         any member of the Company's Group and any other person connected or
         associated with it to any member of the Security Holder's Group and/or
         to any person to whom it: is proposing to transfer or assign or has
         transferred or assigned this deed. The Company represents and warrants
         that it has and (so far as permitted by law) will maintain any
         necessary authority by or on behalf or any such persons to agree to the
         provisions of this clause.

20.      MISCELLANEOUS

20.1     No delay or omission on the part of the Security Holder in exercising
         any right or remedy under this deed shall impair that right or remedy
         or operate as or be taken to be a waiver of it. Any single, partial or
         defective exercise of any such right or remedy shall not prevent the
         further exercise of that or any other right or remedy.

20.2     The Security Holder's rights under this deed are cumulative. They are
         not exclusive of any rights provided by law. They may be exercised from
         time to time and as often as the Security Holder sees fit.

20.3     Any waiver by the Security Holder of any terms of this deed or any
         consent or approval given by the Security Holder under it shall only be
         effective if given in writing. Such consent and approval shall then
         only apply for the purpose stated and be subject to any written terms
         and conditions imposed by the Security Holder.

20.4     If at any time any one or more of the provisions of this deed is or
         becomes illegal, invalid or enforceable in any respect under the laws
         of any jurisdiction then neither the legality, validity or
         enforceability of the remaining provisions of this deed nor the
         legality, validity or enforceability of such provision under the law of
         any other jurisdiction shall be in any way affected or impaired as a
         result.

20.5     Any certificate signed by a director or authorised officer of the
         Security Holder us to the amount of the Secured Monies at the date of
         such certificate shall, in the absence of manifest error, be conclusive
         evidence of such amount and be binding on the Company.

20.6     This deed may be executed in any number of counterparts. It will then
         be as effective as if all signatures on the counterparts were on a
         single copy or this deed.

20.7     The paper on which this deed is written is, and will remain at all
         times, the property of the Security Holder, even after the discharge of
         this security.

21.      DEFINITIONS AND INTERPRETATION

21.1     In this deed any words whose meaning is defined in the Financing
         Agreement shall have the same meaning.

21.2     In this deed the following words shall have the meaning set out after
         each of them:

         "ACT OF DEFAULT" - in relation to the Company - any event set out in
         clause 6.1;


                                      -20-

<PAGE>

         "DEBTS"; has the same meaning as in the Financing Agreement;

         "ENCUMBRANCE" - any mortgage, charge, pledge, lien, assignment,
         hypothecation, security interest, title retention, flawed asset
         agreement, preferential right, trust arrangement or other security
         arrangement, whether by law or agreement.

         "ENVIRONMENTAL LAW"; - all laws, directions and regulations and all
         codes of practice, circulars and guidance notes issued by any competent
         authority or agency (whether in the United Kingdom or elsewhere and
         whether or not having the force of law) concerning the protection of
         the environment or human health, including without limitation the
         conservation of natural resources, the production, storage,
         transportation, treatment, recycling or disposal of any waste or any
         noxious, offensive or dangerous substance or the liability of any
         person, whether civil or criminal, for any damage to or pollution of
         the environment or the rectification thereof or any related mutters.

         "ENVIRONMENTAL LICENCE"; - any permit, licence, authorisation, consent
         or other approval required by any Environmental Law.

         "FINANCING AGREEMENT"; - the agreement (if any) for the sale and
         purchase or Debts and/or a conditional sale agreement and/or any other
         type of agreement between the Company and the Security Holder, details
         of which are set out in the Second Schedule and any amendments or
         alterations to it or them and any replacement of it which may he agreed
         between the parties.

         "GROUP"; - IN RELATION TO ANY COMPANY, that company, the company and
         its Subsidiaries, its holding company (as defined in Section 736 of the
         Companies Act 1985) and the Subsidiaries of that holding company.

         "INSOLVENT"; - the happening of any of the following events in relation
         to the Company:

         1.       a distress or execution being levied on or issued against any
                  of the Mortgaged Property;
         2.       entering or seeking to enter into any formal scheme of
                  arrangement of its affairs or composition in satisfaction of
                  its debts with its creditors in accordance with the insolvency
                  Act 1986;
         3.       taking any corporate action by the Company for its winding up,
                  dissolution or re-organisation (otherwise than for the
                  purposes of an amalgamation or reconstruction while solvent on
                  terms previously approved in writing by the Security Holder)
                  or for the appointment of a Receiver, administrator, trustee
                  or similar officer to in respect of it all or any part of its
                  revenue or assets;
         4.       a petition being presented or an order being made for the
                  winding up of the Company;
         5.       an administration order being made or applied for;
         6.       a meeting of creditors being called for winding up the Company
                  or for any other purpose referred to in the insolvency Act
                  1986;
         7.       a statutory demand under the Insolvency Act 1986 being served;


                                      -21-

<PAGE>

         8.       an encumbrancer taking possession of any part of the
                  undertaking or properly of the Company or a Receiver or being
                  appointed over it;
         9.       entering into any informal arrangement or composition with or
                  for the benefit of the Company's general body of creditors;
         10.      being unable to pay its debts as they become due; 11. being
                  deemed insolvent under the insolvency Act 1986;
         12.      the appointment of an administrator by the holder all
                  qualifying floating charge under Schedule B1 to Insolvency Act
                  1986 (introduced by the Enterprise Act 2002); and
         13.      taking any steps towards a moratorium under the Insolvency Act
                  2000.

         "INTELLECTUAL PROPERTY" - all patents (including applications,
         improvements, prolongations, extensions and right to apply therefor)
         designs (whether registered or unregistered) copyrights, design rights,
         trade marks and service marks (whether registered or unregistered)
         utility models, trade and business names, know-how, formulae,
         inventions, confidential information, trade secrets and computer
         software programs and systems (including the benefit of any licences or
         consents relating to any of the above) and all fees, royalties or other
         rights derived therefrom or incidental thereto in any part or the
         world.

         "MORTGAGED PROPERTY"; - the subject matter of the mortgages and charges
         (or any or any part of them, if the context so allows) created by this
         deed and set out at clause 2.

         "NON VESTING DEBTS"; - all or any Debts of the Company to be purchased
         by the Security Holder pursuant to the Financing Agreement but which
         fail to vest absolutely and effectively in the Security Holder for any
         reason, together with the Related Rights to such Debts.

         "OTHER DEBTS"; - all sums due and owing or accruing due and owing to
         the Company whether or not on account of its trading both present and
         future except:

         1.       Non-Vesting Debts; and
         2.       any Debts whilst they remain absolutely and effectively vested
                  in or held on trust for the Security Holder under the
                  `Financing Agreement and whether such vesting results from a
                  legal or equitable assignment.

         "RECEIVER"; - includes a receiver or a manager or a receiver and
         manager or an administrative receiver as defined in Section 29(2) of
         the Insolvency Act 1986 or a receiver of part only of the property of
         the Company or a receiver only of the income arising from such property
         or from part of it.

         - includes an administrator appointed or to be appointed by the
         Security Holder under Schedule B1 to the Insolvency Act 1986
         (introduced by the Enterprise Act 2002) (where this deed constitutes a
         qualifying floating charge under that Act);

         "RELATED RIGHTS"; - has the same meaning as in the Financing Agreement.


                                      -22-

<PAGE>

         "REMITTANCES"; - cash, cheques, bills of exchange, negotiable and
         non-negotiable instruments, letters of credit, orders, drafts,
         promissory notes, electronic payments and any other instruments,
         methods or forms of payment or engagement.

         "SECURED LIABILITIES"; - both the Secured Monies and the obligations
         and liabilities in clause 1.1.2.

         "SECURED MONIES"; - all the monies which now or at any time to future
         may be owing due and/or payable (but remaining unpaid) by the Company
         to the Security Holder in any manner and for any reason on any account;
         Secured Monies include all such monies due by the Company, either alone
         or jointly with any other person or on any partnership account (even
         though the whole or any part of such monies is represented or secured
         by any mortgages, guarantees, trust receipts, bills of exchange,
         leasing, hire or conditional sale agreements, assignments, agreements
         for discounting or factoring of Debts or any other agreements or
         securities) and whether or not any or them have or has fallen due or
         become payable and whether or not default shall have been made in
         respect thereof, Secured Monies also means any or the following items,
         whether now or in the future:

         1.       all monies due or payable under the Financing Agreement (if
                  any) or by virtue of any guarantee or indemnity given by the
                  Company to the Security Holder;
         2.       all advances which the Security Holder has made or shall make
                  to the Company;
         3.       any indebtedness now or hereafter to be incurred by the
                  Security Holder for or at the request of the Company,
                  including all monies which the Security Holder shall pay or
                  become liable to pay for or on account of the Company or any
                  other person at the request or order of the Company or under
                  its authority, either alone or jointly with any other person
                  and whether or not by any of the following:

                  3.1      the Security Holder making direct advances; or
                  3.2      the Security Holder drawing, accepting, endorsing,
                           paying or discounting any Remittance; or
                  3.3      the Security Holder entering into any bond,
                           guarantee, indemnity or letter of credit; or
                  3.4      the Security Holder confirming orders; or
                  3.5      the Security Holder otherwise accepting any other
                           liability for or on behalf of the Company;

         4.       all monies which the Security Holder can charge to the Company
                  and all costs charges and expenses incurred by the Security
                  Holder following default in payment of any such monies or of
                  breach by the Company of any of the provisions of this deed.
         5.       the charges of surveyors and/or solicitors instructed by the
                  Security Holder in connection with any part or the Mortgaged
                  Property.
         6.       all costs and charges and expenses which the Security Holder
                  may from time to time incur in:
                  6.1      stamping, perfecting, registering or enforcing this
                           security; or


                                      -23-

<PAGE>

                  6.2      the negotiations for the preparation and execution of
                           this deed, and the Financing Agreement or any
                           guarantee, indemnity, priority arrangement, waiver or
                           consent in respect or them; or
                  6.3      obtaining payment or discharge of Secured Monies; or
                  6.4      paying any rent, rates, taxes or outgoings for the
                           Mortgaged Property; or
                  6.5      insuring, repairing, maintaining, managing or
                           realising any part of the Mortgaged Property; or
                  6.6      the preservation or exercise of any rights under or
                           in connection with this deed or any attempt to do so;
                           or
                  6.7      giving a discharge or release of this security; or
                  6.8      dealing with or obtaining advice about any other
                           matter or question arising out of or in connection
                           with this deed with the intention that the Security
                           Holder shall be afforded a full complete and
                           unlimited indemnity against all costs, charges and
                           expenses paid or incurred by it and whether arising
                           directly or indirectly in respect of this security or
                           of any other security held by the Security Holder for
                           the Secured Monies;
         7.       all monies expended by any attorney appointed under clause 5.3
                  in exercising his powers;
         8.       interest on all monies due and owing to the Security Holder at
                  such rate as may from time to time be payable pursuant to any
                  agreement or arrangement relating thereto.

         "SECURITIES"; - all stocks, shares, bonds and securities of any kind
         whatsoever and whether marketable or otherwise and all other interests
         (including but not limited to loan capital) both present and future
         held by the Company in any person and includes all allotments, rights,
         benefits and advantages whatsoever at any time accruing, offered or
         arising in respect of or incidental to the same and all money or
         property offered at any time by way of dividend, conversion,
         redemption, bonus, preference, option or otherwise in respect thereof.

         "SECURITY HOLDER"; - where the context permits includes its officers,
         agents and representatives.

         "SUBSIDIARY"; -

                  1.       a subsidiary within the meaning of Section 736 of the
                           Companies Act 1985; and
                  2.       unless the context otherwise requires, a subsidiary
                           undertaking within the meaning of Sections 258-260 of
                           the Companies Act 1985 its substituted by Section 21
                           of the Companies Act 1989.

         21.3     In the construction and interpretation of this deed:

                  21.3.1   the singular shall include the plural and vice versa;
                           reference to one gender shall include a reference to
                           any other genders;


                                      -24-

<PAGE>

                  21.3.2   references to persons shall be treated as including
                           individuals, firms, partnerships, corporations,
                           organs of government, whether local, national or
                           supra national and any other entity recognised by
                           law;
                  21.3.3   references to any Act of Parliament shall be treated
                           as including each Act as amended, modified or
                           re-enacted from time to time and all rules,
                           regulations, orders and subordinate legislation made
                           in accordance with it;
                  21.3.4   references to clauses and to schedules are to those
                           in this deed;
                  21.3.5   where the Company has an obligation to carry out an
                           act then it shall be fully responsible for the costs
                           and expenses or doing so;
                  21.3.6   where the Security Holder acts in accordance with
                           this deed the Company will indemnify the Security
                           Holder against all costs and expenses incurred;
                  21.3.7   where any discretion is vested in a Receiver or the
                           Security Holder it shall be treated as an absolute
                           discretion;
                  21.3.8   each of the provisions of this deed shall be
                           severable and distinct from one another;
                  21.3.9   references to this deed and other documents referred
                           to in it includes any supplemental or collateral
                           document to each of them or which is entered into
                           pursuant to each of them and any document varying,
                           supplementing, novating or replacing the same from
                           time to time;
                  21.3.10  references to charges shall be treated as references
                           to mortgages and charges created by this deed;
                  21.3.11  references to this security shall be treated as
                           reference to the security created by this deed;
                  2.1.3.12 any powers given in this deed to an administrator
                           shall apply to the littlest extent permitted by the
                           insolvency Act 1986;
                  21.3.13  headings to clauses are for reference only and shall
                           not affect the interpretation of this deed;
                  21.3.14  the meaning of general words introduced by the word
                           other or the word otherwise shall not be limited by
                           reference to any preceding word or enumeration
                           indicating a particular class of acts, matters or
                           things.


                                      -25-

<PAGE>

                                 FIRST SCHEDULE
                             (Page 3 - The Parties)

The Company Xcel Power Systems Limited, a Company registered in England and
Wales with Companies Registry number 00575679 and whose registered office is at:
Brunswick Road, Cobbs Wood, Ashford, Kent TN23 1EB

                                 SECOND SCHEDULE
                (Clause 21 (Definition of "Financing Agreement"),
                             Clauses 1.11 and 6.1.1)

The Agreement for the purchase of Debts entered into between the Company and the
Security Holder dated

                                 THIRD SCHEDULE
                                 (Clause 2.1.1)

Land Registered at H.M. Land Registry

None

London Borough/County and District


Title Numbers and Description


                                 FOURTH SCHEDULE
                            (Clauses 2.4 and 18.2.l)

Encumbrances to which this security is subject.


                                 FIFTH SCHEDULE
                               (Clause 2.1.2(iv))
           (Plant and machinery subject to chattel mortgage hereunder)

To be Advised


                                      -26-

<PAGE>

IN WITNESS whereof the parties have executed this deed on the 28 day of
June 2005 which is the date on which this deed becomes effective.

THE COMPANY

EXECUTED AND DELIVERED AS A DEED    )
                                    )
BY XCEL POWER SYSTEMS LIMITED       )
                                    )
                                    )
and by ........................     )
(Director)**                        )        Signature of Director
                                    )
                                    )
and** .........................     )
(* Director/Company Secretary       )        Signature of *Director/Company
                                    )        Secretary

THE SECURITY HOLDER

SIGNED and :DELIVERED as a Deed on
         day of                              on behalf of
LLOYDS TSB COMMERCIAL FINANCE LIMITED
                                                     )
by       1.**                                        )
                  duly appointed attorney            )
                                                     )   Attorney (s) for Lloyds
         2.**                                        )   TSB Commercial Finance
                  duly appointed attorney            )   imited
                                                     )

In the presence of:                                  )
Signature:   ..................................      )
                                                     )
Name:**      ..................................      )   Witness (only required
                                                     )   if one attorney signs)
Occupation:  ..................................      )
                                                     )
Address:     ..................................      )
                                                     )
             ..................................      )



Key   **  insert full names
      *   delete as applicable


                                      -27-