Date 1 March 2001




                              ALL ASSETS DEBENTURE


                                    GIVEN BY



                      ELCOM INFORMATION TECHNOLOGY LIMITED

                                  IN FAVOUR OF



                     LLOYDS TSB COMMERCIAL FINANCE LIMITED

<PAGE>



ORDER OF CLAUSES

1.      Covenant to Pay
2.      Charging Provisions
3.      Companys 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

<PAGE>

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 1QB 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 Companys 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;

                (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 Companys Intellectual Property;

                (viii)  all the Companys 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  Companys
                        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;
<PAGE>

                (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  Companys  bankers have been
                        given under clause 3.1.6 (iii);


                (iv)    all  Remittances  in respect of the Companys 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 Companys  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  Companys  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 be 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.

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
                Companys 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
                Companys Other Debts, outstanding from time to time.

2.4     This deed  shall take  effect  subject  to the  provisions  of the prior
        Encumbrances  over the Companys 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 this deed; or

        2.5.2   after an Act of Default.

3       COMPANYS 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;

<PAGE>

        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;

        3.1.4   will  deal  with  the  Companys  Other  Debts   outstanding  and
                Remittances  in  accordance  with the Security  Holders  written
                directions;  until such directions are given will only deal with
                the Companys  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 Companys 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 Companys
                        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 Companys
                        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 Companys  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 this deed will only pay  Remittances,  which the
                Company may receive in respect of the Companys Other Debts, into
                a bank account under the Companys control;

        3.1.9   will only pay or  otherwise  deal with the  monies in any of the
                Companys 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);

        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 Companys 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 Companys 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 Companys affairs;

        3.1.14  will, as soon as reasonably  practicable after 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 Companys  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 of and extracts from the books,
                accounts and records of the Company and such

<PAGE>

                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
                Companys reasonable 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;)

        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  Companys  business in a proper and  efficient
                manner and will not make any material alteration to the Companys
                business, constituting a 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 Companys
                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 Companys  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 in possession;

        4.1.7   will observe and perform all the lessees  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;

<PAGE>

        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 Companys  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 reasonably think
                fit at the Companys 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 (not
                to be  unreasonably  withheld or delayed) 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   Holders  security  over  the
                Mortgaged Property;

        4.1.16  will deposit with the Security Holder all deeds and documents of
                title relating to the Companys  freehold and leasehold  property
                and the insurance  policies relating to the same,  (subject only
                to the requirements of any prior  Encumbrance or of the Companys
                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 Companys
        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
        landlords requirements.

5.      FURTHER ASSURANCE AND POWER OF ATTORNEY

5.1     At the Security  Holders  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.

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 Companys 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

<PAGE>

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 Companys indebtedness;

        6.1.9   if the Company shall default under any of the following with any
                party:

                (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 other 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
                of 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
<PAGE>

        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  3.1.5;
                        and/or

                (ii)    any monies in any account  operated  by the  officers of
                        the Security Holder under clause 3.1.6; and/or

                (iii)   any  Remittance   received  in  accordance  with  clause
                        3.1.5(ii)  for  such  period  as  the  Security   Holder
                        reasonably  considers  necessary  to ensure the Companys
                        compliance with the terms of this deed; and/or

        6.2.4   the Security  Holder may exercise in the name of 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  thereof.  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 after 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  Holder  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.

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 shall specifically
        be  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
        fit, necessary or

<PAGE>

        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 of all or any part of the
                business  of the Company  and to manage,  develop,  reconstruct,
                amalgamate  or  diversify  the  Companys   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  Receivers  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;

        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 Companys  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;

<PAGE>


        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 of 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;

        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  conferred 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 be 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 of sale and the other  powers
        conferred  on  mortgagees  by that Act shall apply to this  security but
        without  the  Acts  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 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 if 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.
<PAGE>

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 fit; 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  Companys  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
        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 as 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

<PAGE>

12.1    The Company will notify the Security Holder of any freehold or leasehold
        property  which it now owns or which it may own  after  the date of 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 Companys 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................

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 them or any rights which it may
                now or afterwards have; or

        13.3.2  by the Security  Holder giving time for 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  Holders  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 of 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.

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.


<PAGE>

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  Companys  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 Companys officers;

        16.1.4  by a fax or e-mail to the Companys  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 Companys  Board of Directors and that
        it does not break any of the  provisions of the Companys  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.

18.2    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  of 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

<PAGE>

                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 of 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  Holders  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.

19.3    The Security Holder may disclose any  information  about the Company and
        any  member of the  Companys  Group and any other  person  connected  or
        associated with it to any member of the Security Holders 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 of 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 Holders 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 unenforceable 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 as 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 of 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

<PAGE>

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;

        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 Laws; - 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 matters.

        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
        of 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 be 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 or 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;

        8.      an encumbrancer taking possession of any part of the undertaking
                or property 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 Companys general body of creditors;

        10.     being unable to pay its debts as they become due;

        11.     being deemed insolvent under the Insolvency Act 1986.

               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 of the world.
<PAGE>

        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.

        Related Rights; - has the same meaning as in the Financing Agreement.

        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 in 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 of 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 of 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 of 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 of the Mortgaged Property

6.      all costs and charges and expenses  which the  Security  Holder may from
        time to time incur in:

<PAGE>

        6.1     stamping, perfecting, registering or enforcing this security; or

        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 of 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
                as 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;

        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 of 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;

<PAGE>


        21.3.11 references to this security shall be treated as reference to the
                security created by this deed;

        21.3.12 headings to clauses are for reference  only and shall not affect
                the interpretation of this deed;

        21.3.13 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.

<PAGE>

                                 FIRST SCHEDULE
                             (Page 3 - The Parties)

The Company

Elcom Information Technology Ltd a  Company registered in England and

Wales with Companies  Registry number 2977666 and whose registered  office is at
1st Floor Bouverie House, 154 Fleet Street, London EC4A 2JD




                                 SECOND SCHEDULE
    (Clause 21 (Definition of Financing Agreement), Clauses 1.1.1 and 6.1.1)

The Agreement for the purchase of Debts entered into between the Company and the
Security Holder dated 1 March 2001




                                 THIRD SCHEDULE
                                 (Clause 2.1.1)

Land Registered at H.M. Land Registry

London Borough/County and District            Title Numbers and Description

<PAGE>


                                FOURTH SCHEDULE
                            (Clauses 2.4 and 18.2.1)

Encumbrances to which this security is subject.



                                 FIFTH SCHEDULE
                               (Clause 2.1.2(iv))
            (Plant and machinery subject to fixed charge hereunder)


<PAGE>

IN WITNESS  whereof the parties have  executed this deed on the 1st day of March
2001 which is the date on which this deed becomes effective.

THE COMPANY

EXECUTED AND DELIVERED AS A DEED             )
                                             )
BY  ELCOM INFORMATION TECHNOLOGY LIMITED     )  /s/ Robert J. Crowell
                                             )  Signature of Director
                                             )
                                             )
acting by   Robert J. Crowell                )  /s/ Peter A. Rendall
(Director)*                                  )  Signature of **Director/Company
                                             )  Secretary
and*          Peter A. Rendall               )
(** Director)                                )
                                             )

THE SECURITY HOLDER

EXECUTED AND DELIVERED AS A DEED             )
BY LLOYDS TSB COMMERCIAL FINANCE             )
LIMITED                                      )  /s/ Peter Anderson
                                             )  Signature of Director  Attorney

acting by   Peter Anderson                   )  /s/ Simon Barnes
(Director)*Attorney                          )  Signature of **Director/Company
                                             )  Secretary
and*          Simon Barnes                   )
(** Director/Attorney)                       )
                                             )


Key  *       = insert full names
     **      = delete as applicable
     ***     = insert Companys name

{17032.00019:AHP1030.DOCv}