GUARANTEE & INDEMNITY


                                    BETWEEN

                      ELCOM INFORMATION TECHNOLOGY LIMITED

                             ELCOM HOLDINGS LIMITED

                                      AND


                     LLOYDS TSB COMMERCIAL FINANCE LIMITED



                            GUARANTEE AND INDEMNITY


<PAGE>

To        LLOYDS TSB Commercial Finance Limited
          Boston House
          The Little Green
          Richmond
          Surrey TW9 1QE


1.   We, the  Guarantors  and  Indemnifiers,  whose names appear in the schedule
     hereto  have  agreed to give you as  contained  in the  succeeding  clauses
     hereof,  as many separate and  independent  guarantees  and  indemnities as
     there are parties hereto (other than you) whereby the liabilities to you of
     each and every one of us are  guaranteed  by the  others of us and  whereby
     each one of us  indemnifies  you  against  any losses (as  defined  herein)
     arising from transactions between you and any other of us.

2.   Accordingly in this deed except where the context otherwise requires:

     (1)  words  implying  the  singular  shall  include  the  plural  and words
          implying any of the three genders  shall  include  either of the other
          two;

     (2)  the expression  "Principal"  shall mean and apply to any one of us for
          whose  liabilities any such guarantee is given and in respect of whose
          transactions with you any such indemnity is given;

     (3)  the  following  expressions  shall have the meanings  assigned to them
          below:

          "Agreement"
          any  agreement  between  the  Principal  and you  for  the  factoring,
          discounting and/or financing of book debts and/or receivables,

          "Indulgence"
          any indulgence,  agreement not to sue or release of any charge lien or
          other security or any part thereof,

          "Losses"
          losses, costs, damages, claims, interest and expenses and

     (4)  any other  expression  used in the  Agreement  shall have the  meaning
          attributed to it therein.

3.   We hereby guarantee:

     (i)  the due  performance of all the obligations of the Principal under the
          Agreement and any other agreement and

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     (ii) upon your demand in writing the due payment of all amounts  payable or
          which may at any time hereafter become payable to you by the Principal
          whether arising under the Agreement or otherwise.

4.   Without  prejudice to the provisions of paragraph 3 hereof, we hereby agree
     to indemnify you and hold you harmless against all losses you may suffer or
     incur by reason of any failure of the  Principal to comply with any term of
     the Agreement or of any other agreement between the Principal and you.

5.   The guarantee given herein shall be a continuing guarantee,  shall apply to
     the ultimate amount payable by the Principal and shall not be discharged by
     any intermediate payment or satisfaction by the Principal.

6.   Our liability under this guarantee and indemnity shall not be affected by:

     (i)  any time or  indulgence  granted by you to the  Principal or any other
          person,

     (ii) any compromise made by you with the Principal or any other person,

     (iii)any variation in the Agreement or in any other  agreement  between the
          Principal  and  you  (whether  or not  our  liability  to  you  may be
          increased thereby) or by any defect therein or in its execution or

     (iv) any change in the constitution of the Principal

     and we shall be liable hereunder in every respect as principal debtors.

7.   For the purpose of  determining  our  liability  under this  guarantee  and
     indemnity,  which shall be  additional to and not in  substitution  for any
     other  security  taken or to be taken by you in respect of the  Principal's
     obligations  to you, we shall in the absence of manifest  error be bound by
     any  acknowledgement  in writing or admission  in writing by the  Principal
     signed by an authorised  director on its behalf and by any judgment in your
     favour against the Principal.  For the purpose of determining the amount of
     any Losses we shall in the absence of manifest error accept and be bound by
     a certificate  signed by an authorised  director on your companys behalf or
     your company secretary.  In arriving at the amount payable by the Principal
     to you you shall be  entitled to take into  account all actual  liabilities
     whether  payable  presently  or in  the  future  and to  make a  reasonable
     estimate of any contingent liability.

8.   Any notice or demand on any of us shall be  validly  given if handed to any
     one of its  officials  or if  delivered  to or sent by post to its  address
     stated herein or its registered office or its address last known to you and
     if sent by post shall be deemed to be received within  seventy-two hours of
     posting.

9.   We shall  be  liable  to pay you  interest  calculated  from day to day and
     compounded  monthly at a rate  equivalent to the discount  charge for which
     provision is made in the  Agreement on all sums  demanded by you  hereunder
     from the date of your  demand to the date when  payment is  received by you
     both before and after any judgment.

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10.  Each one of us assigns to you, as security for the due  performance  of our
     obligations  hereunder any right of proof, in consequence of any winding up
     of the Principal,  in respect of any  indebtedness of the Principal to that
     one of us; and each one of us  irrevocably  appoints you and your directors
     and  secretary  for the  time  being  jointly  and each one of you and them
     severally to be his attorney to execute in his name such  documents  and to
     do such other things as you may consider  requisite to effect collection of
     any dividend or to vote at any meeting in respect of such right of proof.

11.  Our  liability  hereunder  shall be joint and several and you may  release,
     grant indulgence to or compromise with any one of us without  affecting the
     obligations  of the  other  or  others.  The  liability  of  any  one of us
     hereunder shall not be affected by:

     (i)  any defect in the execution of this deed by any other of us,

     (ii) any defect in any other  guarantee or indemnity or other security held
          by you in  respect  of the  Principal's  obligations  to you or in the
          execution thereof or

     (iii) any notice of termination hereof by any other of us.

     You may at your  discretion  (but shall not be obliged to) treat any notice
     by any one of us as notice by all of us.

12.  Any  monies  received  by you  by  virtue  of or in  connection  with  this
     guarantee  and  indemnity  may be placed by you to the credit of a suspense
     account with a view to your preserving your right to prove for the whole of
     your claim against the Principal in the event of its winding up.

13.  This  guarantee and  indemnity  shall remain in full force and effect until
     the  termination  of the  Agreement  and the  discharge  in full of all the
     Principal's  obligations thereunder and after such full discharge until the
     expiry of not less than three months notice of termination delivered by any
     one of us to your registered  office but such termination  shall not affect
     our liability as regards any  liability of the Principal  existing or known
     to be  contingent  before the expiry of the period of the said  notice with
     effect from the date of the receipt of it by you.

14.  This guarantee and indemnity  shall be construed and take effect  according
     to English law and we accept the non-exclusive  jurisdiction of the English
     Courts.  If any provision  hereof shall be held invalid or unenforceable no
     other  provisions  hereof shall be affected  and all such other  provisions
     shall remain in full force and effect.

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THE SCHEDULE


Guarantors and Indemnifiers:

(1) Elcom Information Technology Limited                                  (name)
        1st Floor, Bouverie House, 154 Fleet Street, London EC4A 2JD   (address)
England & Wales....................................    (country of registration)
2977666...........................................................      (number)


(2)Elcom Holdings Limited........................................         (name)
        1st Floor, Bouverie House, 154 Fleet Street, London EC4A 2JD   (address)
England & Wales....................................    (country of registration)
2838561.........................................................        (number)


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This  document  has been  executed  as a deed by or on  behalf  of each of us to
indicate our binding agreement to its terms.


SIGNED and DELIVERED as a deed on               )
7th day of February 2001 by you                 )
                                                )
ELCOM INFORMATION TECHNOLOGY LTD)
 acting by                                              /s/ Robert J. Crowell
     Robert J. Crowell                          )
(a Director) and                                        Signature of Director

     Peter A. Rendall
                                                )       /s/ Peter A. Rendall
(a Director / its Company Secretary             )       Signature of Director/
                                                )       Company Secretary




SIGNED and DELIVERED as a deed on               )
7th day of February 2001 by you                 )
                                                )
ELCOM HOLDINGS LIMITED acting by
     Robert J. Crowell                          )       /s/ Robert J. Crowell
(a Director) and                                        Signature of Director

     Peter A. Rendall
                                                )       /s/ Peter A. Rendall
(a Director / its Company Secretary             )       Signature of Director/
                                                )       Company Secretary




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