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                                                                    EXHIBIT 10.2


                         INVOICE DISCOUNTING AGREEMENT

                                   (RECOURSE)

                                    BETWEEN

                      LOMBARD NATWEST DISCOUNTING LIMITED

                                      AND

                                KLIPPAN LIMITED

================================================================================


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INVOICE DISCOUNTING AGREEMENT

ORDER OF CLAUSES

<TABLE>
<S>                                                  <C>
1.       Introduction                                13.     Your Undertakings to Us

2.       Start and Length of Relationship            14.     Warranties
         Between Us
                                                     15.     FacFlow

3.       Our Ownership of Debts,
         Offers and Client Advices                   16.     Information For Us

4.       Purchase Price of Debts                     17.     Termination Events

5.       Limits and Percentages                      18.     Power to Act in Your Name

6.       Decisions                                   19.     Contacting Other Parties

7.       Disputes                                    20.     Assignment, Delegation and
                                                             Force Majeure

8.       Our Accounts                                21.     Service of Notices and Process

9.       Charges and Indemnities                     22.     Law and Jurisdiction

10.      Repurchase                                  23.     Interpretation of this Agreement

11.      Agency                                      24.     General

12.      Trusts and Other Rights
</TABLE>

ANNEXES

SCHEDULE

CLIENT PARTICULARS

EXECUTION


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                         INVOICE DISCOUNTING AGREEMENT

THIS AGREEMENT IS MADE ON:          the last date shown for the signatures of
                                    the parties at the end of this document.

BETWEEN:

         (1)      LOMBARD NATWEST DISCOUNTING LIMITED ("We/Us")

                  and

         (2)      THE CLIENT NAMED IN THE CLIENT PARTICULARS ("You")

1.       INTRODUCTION

1.1      This Agreement applies only to those Debts specified in the Schedule
         at the end of this document created by you under whatever trading name
         or style you may ever carry on business. We may later extend or reduce
         the scope of this Agreement to such Debts as we agree in writing
         signed by both you and us. Certain words used in this document have
         special meanings which are explained in the Annexe of Definitions.
         Their first letter is in capitals.

1.2      You will sell to us with full title guarantee and we will purchase
         from you all Debts to which this Agreement applies which are created
         after the date of this Agreement and until its termination. You will
         also Offer to us all Debts to which this Agreement applies which are
         Outstanding on the date this Agreement is made.

2.       START AND LENGTH OF RELATIONSHIP BETWEEN US

2.1      This Agreement shall start on the date it is made and it will run for
         the minimum period shown in the Schedule. After the end of the minimum
         period our relationship with you will then continue until ended by
         either you or us giving to the other notice of at least the minimum
         shown in the Schedule. Such notice may be given at any time, even
         during the minimum period, provided it runs out on or after the end of
         the minimum period. During any period of notice you will continue to
         comply with all your obligations to us.

2.2      Should this Agreement end within the minimum period shown in the
         Schedule you must pay us a sum equal to the shortfall between the
         amount of the minimum commission charge that would have been earned
         had this Agreement continued for the minimum period, and the
         commission charges actually earned.

2.3      Should you wish to end this Agreement but give us notice of less than
         the minimum shown in the Schedule we may still agree to your request,
         subject to an additional fee. For each month or part of a month that
         your notice falls short of the minimum notice period the fee will be
         the higher of:

         2.3.1    the monthly average of the commission charges earned in the
                  six calendar months before we agree to accept your request;
                  or

         2.3.2    one twelfth of the minimum commission charge for the twelve
                  calendar months before we agree to accept your request.

2.4      We can also immediately end this Agreement by giving you written
         notice at any time after a Termination Event.


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3.       OUR OWNERSHIP OF DEBTS, OFFERS AND CLIENT ADVICES

3.1      As soon as possible on or after the date of this Agreement you will
         deliver an Offer in respect of each Initial Debt Outstanding together
         with its Related Rights. If we wish to accept an Offer, this will be
         done by crediting the Notified Value of each accepted Debt to the
         Receivables Purchased Account. Upon doing so our ownership of such
         accepted Debt shall be complete and the Debt thereby assigned to us.

3.2      You hereby transfer to us the ownership of all Debts and in addition
         you hereby assign to us all Scottish Debts (in each case together with
         their Related Rights) created after the date of this Agreement until
         the ending of this Agreement. Our ownership of such Debts shall be
         complete and they shall vest in us the moment they are created.

3.3      During the life of this Agreement you will enter the Debts and any
         relative credits onto your Customers' accounts following Delivery of
         the Goods and send us a Client Advice of them, unless they are
         Non-Notifiable Debts. Immediately you make any Adjustments you will
         send us details of them on a Client Advice.

4.       PURCHASE PRICE OF DEBTS

4.1      The Purchase Price of the Debts covered by this Agreement is to be the
         amount received by us towards the discharge of the Debts but less:

         4.1.1    Customers' prompt settlement discounts later claimed; and

         4.1.2    any other later claimed Customers' deductions, abatements or
                  set-offs; and

         4.1.3    the discounting charges and commission charges; and

         4.1.4    all other sums due to us.

5.       LIMITS AND PERCENTAGES

5.1      The Limits (except Funding Limits) shall, to start with, be as stated
         in the Schedule. We may at any time increase or decrease any or all of
         the Limits with immediate effect.

5.2      We will tell you of any changes to the Limits (except Funding Limits).
         We can tell you by written notice, oral advice or making the same
         available through FacFlow, even if no enquiry be made.

5.3      We may also set up a Funding Limit for each Customer, and will tell
         you of any balance which exceeds it.

5.4      No Prepayments will be available against Debts in excess of a Funding
         Limit. If, following a reduction of a Funding Limit, the amount of
         Prepayments already made exceeds your Availability, the excess must be
         paid back immediately to us.

6.       DECISIONS

6.1      We need not give reasons for any of our decisions and all decisions
         and information given by us are confidential. You must treat any
         information regarding Funding Limits as legally privileged and will
         indemnify us against all claims arising from breach of your duty of
         confidentiality. You must not take Funding Limits as our view of the
         creditworthiness or otherwise of a Customer. We do not operate a
         credit reference service.


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7.       DISPUTES

7.1      If any Customer disputes a Debt or his liability to pay by its due
         date or asserts any counterclaim or claim for reduction of or
         retention or set-off against a Debt (except for a settlement discount
         not exceeding 7.5%), then:

         7.1.1    you must promptly give us full details; and

         7.1.2    you must do your best to settle all such disputes and claims
                  promptly and directly with your Customers.

7.2      You must promptly raise a credit note if a Customer is entitled to
         one. Unless we have brought clause 7.3 into effect you must
         immediately deliver the credit note to the Customer and include its
         details on your next Client Advice. The credit note will be debited to
         the Receivables Purchased Account.

7.3      We may at any time write and tell you either that no credit notes can
         be despatched to your Customers without our prior consent or that any
         credit notes must be sent to us for our consent before we then
         despatch them.

7.4      Clauses 7.1 to 7.3 shall not affect those rights which we may have
         because this Agreement has been breached.

8.       OUR ACCOUNTS

8.1      The Notified Value of all Debts will be credited to our account known
         as the "Receivables Purchased Account". The balance on this account is
         our record of the prospective Purchase Price of Debts before any of
         the deductions used under clause 4.1 to calculate the Purchase Price.

8.2      You may also take Prepayments from us in respect of Debts credited to
         the Receivables Purchased Account. These payments will be debited to
         both the Receivables Purchased Account and to the Memorandum
         Discounting Statement. The amount taken must not exceed either your
         Availability or the Prepayment review level shown in the Schedule.
         Your Availability will immediately be affected if any Debt later
         becomes an Ineligible Debt.

8.3      We may debit the Receivables Purchased Account and the Memorandum
         Discounting Statement with all other sums you owe us. If the debit
         balance on the Memorandum Discounting Statement results in a negative
         Availability you must immediately pay the excess to us without our
         having to ask you.

8.4      The value of any Remittance received by us will be credited to the
         Memorandum Discounting Statement with an effective date for
         calculating discounting charges as follows:

         8.4.1    if in cleared funds by electronic means to the specific
                  account we tell you for such purpose - the same calendar day
                  that we receive the Remittance;


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         8.4.2    other Remittances paid into our bank account - four calendar
                  days after the date of lodgement by you of such Remittance,
                  provided:

                  -        for FacFlow users, you record the lodgement in
                           FacFlow on the same date it is made and tell us by
                           means of a FacFlow Transmission within such four
                           calendar day period. If your FacFlow Transmission
                           takes place later, the effective date for
                           calculating discounting charges will be the date of
                           this transmission; or

                  -        for non FacFlow users, we receive a duplicate bank
                           paying-in slip, duly stamped by the receiving bank,
                           within the four calendar day period. If we receive
                           the paying-in slip later, the effective date for
                           calculating discounting charges will be the date of
                           such receipt.

8.5      The balance on the Memorandum Discounting Statement will reflect:

         8.5.1    payments taken by you;

         8.5.2    any sums owed by you to us; and

         8.5.3    any Remittances received by us.

8.6      If the Memorandum Discounting Statement shows a credit balance we will
         normally pay this to you without your asking us but, at our
         discretion, we may withhold amounts equal to:

         8.6.1    any credit balances on Customers' accounts; and

         8.6.2    the amount of Your Responsibility.

8.7      We cannot let you take any credit balance from your Memorandum
         Discounting Statement after we have been told of the issue of a
         petition for your sequestration, bankruptcy or winding up. Provided
         that we do not exercise any of our rights under clause 17 we shall
         need to see a court order dismissing the petition before starting
         payments again.

8.8      We may at any time add together the balances on all accounts recording
         transactions between you and us. We may also at any time apply or
         set-off any amounts owing by you to us and the amount of Your
         Responsibility against any amounts owing by us to you. Where any
         amounts due by you to us, including those prospectively and
         contingently due, cannot immediately be found out we may make a
         reasonable estimate.

8.9      We will provide you with statements of the Receivables Purchased
         Account and the Memorandum Discounting Statement. These shall be
         treated as correct and binding upon you, except for those errors which
         shall be obvious or contrary to law or where we receive your written
         notice within 10 days of our despatch of such statements to you.

8.10     You will accept a certificate signed by our Company Secretary or a
         director of ours as to all or any of the following on the date
         referred to in the certificate:

         8.10.1   the balance on the Memorandum Discounting Statement;

         8.10.2   the balance on the Receivables Purchased Account;

         8.10.3   any loss or damage suffered by us;

         8.10.4   the amount of Your Responsibility;

         8.10.5   any other amount payable to us.


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         In any proceedings such certificate shall be conclusive evidence as to
         the balance, loss, damage or amount on the date so certified.

8.11     If we ask you to do anything you will pay all costs and expenses of
         doing so. If you do not carry out anything which we have a right to
         ask for then we may do it and you will pay all our costs and expenses.

8.12     All payments due from you to us shall be made in immediately available
         funds free and clear of any right of retention, set-off or
         counterclaim or any other withholding or deduction. If you are
         required by law to make any withholding or deduction, you will pay
         such additional sum needed so that we receive the full amount due to
         us under this Agreement.

9.       CHARGES AND INDEMNITIES

9.1      You will pay us the discounting charge which shall accrue from day to
         day. It will be worked out at the rate shown in the Schedule on the
         debit balance on the Memorandum Discounting Statement. Any payment to
         you will be debited to the Memorandum Discounting Statement with an
         effective date for calculating discounting charges as follows:

         CHAPS       -            the same day as the payment is taken.

         2 days BACS -            two calendar days from the date that the
                                  payment is initiated.

         3 days BACS -            three calendar days from the date that the
                                  payment is initiated.

9.2      The discounting charge shall be debited daily to the Receivables
         Purchased Account and to the Memorandum Discounting Statement. Any
         debit to the Memorandum Discounting Statement shall be treated as a
         Prepayment for the purpose of working out the discounting charge.

9.3      We shall be entitled to a commission charge at the rate shown in the
         Schedule for each Notified Debt. We shall debit this to both the
         Receivables Purchased Account and the Memorandum Discounting Statement
         at the end of each calendar month. No refund of any commission charges
         can be made either if a credit note is issued or if this Agreement
         ends.

9.4      If the total of all commission charges in each period shown in the
         Schedule falls short of the sum needed during that period to reach the
         minimum commission charge you will pay us the shortfall. If we
         consider such shortfall likely then we may debit it to the Receivables
         Purchased Account and to the Memorandum Discounting Statement.

9.5      If this Agreement does not end on the last day of a period for the
         calculation of the minimum commission charge then when the Agreement
         does end you will pay us the minimum commission charge to the end of
         such period.

9.6      Payments to you will be made by BACS or CHAPS or such other method we
         may at any time advise you. Any administration charges to you for such
         payments will be at the same rate as those of our bankers.

9.7      If our bankers charge us, you will repay to us their charges for:

         9.7.1    dealing with dishonoured Remittances;

         9.7.2    collecting any Remittances in a currency other than Sterling;

         9.7.3    collecting Remittances in Sterling drawn on a bank outside
                  the United Kingdom.


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9.8      You will pay us an arrangement fee for any variation of this Agreement
         requested by you or any additional service provided outside its scope.
         If we permit payments in excess of your Availability, we may also make
         an additional facility charge until the excess is repaid. This will
         not affect any other rights we may have.

9.9      If we make special visits to your premises or anywhere else then you
         will pay all our costs and expenses.

9.10     You will fully indemnify us against all losses, costs, demands,
         disbursements, fees and expenses of:

         9.10.1   obtaining the release of Debts from charges, trusts or other
                  encumbrances or enforcing such release;

         9.10.2   assignments or reassignments of Debts or Related Rights or
                  giving notices of assignment or reassignment;

         9.10.3   taking guarantees or indemnities from any person, including a
                  receiver;

         9.10.4   enforcing either this Agreement or any guarantee or indemnity
                  given in respect of it;

         9.10.5   all matters arising from any breach by you of this Agreement
                  or the occurrence of a Termination Event;

         9.10.6   any Customer failing to pay a Debt at its full Notified
                  Value;

         9.10.7   any solicitor or agent engaged to collect Debts or conduct
                  legal proceedings concerning Debts and all legal fees and
                  disbursements payable to any other party to such proceedings.

9.11     Changes to the discounting charge, the commission charge and the
         minimum commission charge shall only be effective if in writing signed
         by both you and us.

9.12     VAT, if applicable, will be added to all fees and charges quoted by us.

9.13     You will pay us immediately on demand any amount which we have to pay
         to any Customer by way of refund claimed under a direct debit
         guarantee given by us.

10.      REPURCHASE

10.1     We may at any time require you to Repurchase an Ineligible Debt from
         us.

10.2     Should we require you to Repurchase Debts from us we will continue to
         own all such Debts until we receive the price for all Repurchases. At
         this point we shall transfer them back to you. We shall then account
         to you for any further sums received by us from your Customers in
         respect of such Debts.

11.      AGENCY

11.1     We alone shall have sole and absolute discretion as to how to collect
         and enforce payment of Debts. We can do this in whatever way we see
         fit. Until we exercise our rights under clause 11.5 you must, at your
         expense, collect Debts and manage Customers' accounts for us as our
         undisclosed agent. You are not our agent for any other purpose.

11.2     Throughout the term of this Agreement you must ensure that all Debts
         are promptly and correctly recorded in your Accounting Records and
         that your sales ledger control bears a conspicuous notation that Debts
         have been sold and assigned to us.


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11.3     During your agency we may communicate in your name with Customers for
         the purposes of Debt verification.

11.4     You must act promptly and efficiently when carrying out your duties as
         our agent.

11.5     We may at any time vary the terms of your agency as we see fit. If we
         request you will give notice to each Customer that we are the owner of
         all your present and future Debts. We will tell you the wording of the
         notice which we can also give on your behalf. Unless we state
         otherwise, such request will act as a cancellation of your agency,
         whereupon we alone shall be entitled to collect and enforce payment of
         all Debts in whatever way we see fit, including by direct debits. You
         will fully co-operate with us and, as we direct, will help us to
         collect Debts.

11.6     After the cancellation of your agency:

         11.6.1   you must not say you are our agent;

         11.6.2   you must immediately send us your Accounting Records to do
                  with Debts;

         11.6.3   we will maintain your Customers' accounts in the form of a
                  sales ledger;

         11.6.4   you must make sure Customers pay all their Debts to us or as
                  we direct;

         11.6.5   in our absolute discretion we may settle, conduct or abandon
                  any collection activity and you will be bound by our actions
                  and decisions;

         11.6.6   in our absolute discretion we can grant time or other
                  indulgence at any time to any Customer without discharging
                  you from your obligations to us, and compromise claims with
                  Customers or accept payment from a Customer which is less
                  than the Notified Value of the Debt;

         11.6.7   in our absolute discretion we may start, defend or compromise
                  any legal proceedings and you will be bound by our actions
                  and decisions; the proceedings may be in our or your name;
                  you will give us all evidence we may at any time need,
                  whether before during or after any proceedings; you will make
                  sure that those witnesses we need will attend court; we may
                  use an alternative dispute resolution procedure involving
                  mediation or arbitration;

         11.6.8   we can repay to a Customer any credit balance shown on their
                  account;

         11.6.9   you will be responsible for paying all our charges, costs,
                  expenses and fees for collecting or attempting to collect any
                  Debt, including:

                  -        our own internal costs, expenses and court fees;

                  -        those of any solicitor or collection agent engaged
                           by us;

                  -        those payable to any other party to the proceedings;

         11.6.10  we may require you to give us security for the above costs
                  and expenses; we will credit the Receivables Purchased
                  Account and the Memorandum Discounting Statement with any
                  costs and expenses recovered.

12.      TRUSTS AND OTHER RIGHTS

12.1     From the moment that you receive any Remittance, you will hold it
         absolutely in trust for us. We may give notice to anyone that such
         trust exists.


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12.2     When you receive a Remittance you must:

         12.2.1   immediately pay it into our bank account, or into a trust
                  bank account in your name;

         12.2.2   not pay it into any other account or deal with or negotiate
                  it.

12.3     A trust bank account must be run according to our instructions. This
         means that we may irrevocably appoint our officers as the only people
         who can authorise transactions on the account.

12.4     You must authorise and indemnify our bankers so that they can credit
         our bank account with any transfers received from your bankers or your
         Customers' bankers and so they can collect the proceeds of any
         Remittances payable to you or your agents.

12.5     You must give us a letter addressed to your bankers instructing them
         to transfer to our bankers any cheques, bank giro transfers, BACS,
         CHAPS and other electronically transferred funds that may be received
         by your bank from Customers. You will not be able to cancel such
         instructions.

12.6     If we do not become the owner of any Debt or its Related Rights
         covered by this Agreement for any reason then you will be treated as
         holding such Debt or its Related Rights on trust for us free from all
         encumbrances.

12.7     You must promptly tell us about all Returned Goods. We may require you
         to set these aside marked with our name as the owner. You will then
         deliver them to us, or deal with them as we direct. We can, without
         notice, enter any premises where we believe Returned Goods or any
         other items comprised in the Related Rights are kept. We can take
         possession of or sell any Returned Goods on such terms and at such
         prices as we consider appropriate. We shall credit the net proceeds
         towards the discharge of the relative Debts. If we ask, you will
         deliver to us or allow us to take away any other items included in the
         Related Rights which we may deal with as we see fit.

13.      YOUR UNDERTAKINGS TO US

13.1     Whilst this Agreement is in force and then until you have paid all
         monies owing to us you undertake:

         13.1.1   to make sure the payment and settlement discount terms for
                  each Debt and any rights of retention, abatement or rebate
                  are not more generous than those appearing in the Schedule
                  and that these appear on every invoice and all copies;

         13.1.2   not to cancel or vary any Sale Contract or any payment terms
                  or settlement discounts after Delivery unless you have our
                  written consent;

         13.1.3   to make sure that every Sale Contract shall:

                  -        only be made in the ordinary course of your business
                           stated in the Client Particulars;

                  -        be subject to English law or Scots law;

                  -        provide for payment by the Customer in Sterling;

                  -        not include any prohibition against assignment of the
                           Debt;

         13.1.4   to make sure that neither you nor any Associate enters into
                  any other agreement for the factoring, charging, declaring in
                  trust or discounting of Debts with any other party or into
                  any arrangement prejudicial to our outright ownership of
                  Debts;


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13.1.5   to tell us immediately you know about the following:

         -        any change or contemplated change in the directors or
                  partners or the control or ownership of your company, firm or
                  business or of any guarantor or indemnifier of your
                  obligations to us;

         -        any threatened or pending Insolvency proceedings against you,
                  or against any guarantor, indemnifier or Associate;

         -        any changes in the status, address, or creditworthiness of a
                  Customer;

         -        any security holder taking any steps towards or actually
                  enforcing its security over any part of your assets or
                  undertaking;

         -        any floating charge given by you being crystallised or
                  becoming converted into a fixed charge;

         -        all retrospective or quantity discounts agreed with
                  Customers;

         -        any payment or settlement discount terms different from those
                  shown in the Schedule;

13.1.6   immediately we ask:

         -        to provide information about your Customers;

         -        to give evidence satisfactory to us of any order and the
                  completion of any Sale Contract;

         -        to exercise any reservation of title to Goods in the Sale
                  Contract;

         -        to deliver to us and not to your Customer the originals of
                  any of the items comprised in the Related Rights, together
                  with as many copies as we may require; we may forward these
                  to the Customer or other persons or organisations as
                  appropriate at your expense;

13.1.7   not to include in an Offer or a Client Advice, until we tell you, any
         Debt which shall:

         -        be due by an Associate;

         -        be due by a Customer who also supplies goods or services to
                  you;

         -        arise from Goods supplied by you on approval, trial,
                  evaluation, consignment, sale or return or similar terms;

         -        be due by a Customer who has not purchased the Goods for his
                  business;

         -        be regulated by the Consumer Credit Act 1974;

         -        arise from the sale of your capital or fixed assets;

         -        be due under a Sale Contract in a currency other than
                  Sterling unless a Currency Annexe applies;

         -        be within the category of Non-Notifiable Debts detailed in
                  the Schedule, or such other Debts as we may specify;



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         13.1.8   immediately to cease and desist from any contra accounting
                  arrangements with your Customers;

         13.1.9   not to include in an Offer or a Client Advice any Debt until
                  the Goods have been Delivered;

         13.1.10  to keep us advised of the identity of your Associates;

         13.1.11  promptly to perform all your further and continuing
                  obligations to a Customer and, if we ask, to give evidence of
                  such performance;

         13.1.12  to create such security in our favour on your undertaking and
                  assets as we may specify for your performance of this
                  Agreement, or in respect of Debts intended to be owned by us
                  but which for any reason fail to belong to us;

         13.1.13  to sign any additional documents and do anything we may need
                  to exercise or enforce our rights, to sign assignments of
                  Debts or Related Rights or endorse or Assign any instrument
                  or security included in the Related Rights; any such
                  assignment of a Scottish Debt or any of its Related Rights
                  will support the assignment given in clause 3.2 but will not
                  prejudice that earlier assignment;

         13.1.14  to follow our guidelines for the day to day efficient working
                  of this Agreement;

         13.1.15  to make sure that your warranties about Debts are complied
                  with until they are discharged;

         13.1.16  to take all steps we may require for the protection of our
                  interests under or arising out of this Agreement and in
                  mitigating any loss we may suffer.

14.      WARRANTIES

14.1     By including a Debt in an Offer or a Client Advice you will be treated
         as having given all of the following warranties to us:

         14.1.1   all the particulars contained in the Offer or Client Advice
                  are correct and complete and the Debt has not been previously
                  Notified to us;

         14.1.2   each Debt relates to an actual and bona fide sale and
                  Delivery in accordance with the Sale Contract;

         14.1.3   the Debt is payable in the U.K. without any retention,
                  set-off or counterclaim by a Customer with an established
                  place of business in the U.K.;

         14.1.4   you have the absolute right to transfer the Debt to us and,
                  except in our favour, it shall remain free from any security,
                  charge, trust, option, pledge, hypothecation, encumbrance,
                  lien or any tracing rights adversely affecting the Debt, the
                  Goods or the proceeds;

         14.1.5   our ownership of the Debt will not violate any laws or
                  agreement affecting you;

         14.1.6   the Notified Value of the Debt is the same as its Contracted
                  Value;

         14.1.7   all sums due or obligations by you to the Customer have been
                  paid or performed and you will have no other obligations
                  towards the Customer which could reduce the amount payable to
                  us for the Debt;


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         14.1.8   no right or claim of rescission, defence, adjustment or other
                  right or claim exists or will arise to reduce or extinguish
                  the Notified Value of the Debt or affect our ability to
                  collect the Debt;

         14.1.9   the correct name and address of the Customer and any required
                  purchase order number appear on the invoice or credit note,
                  on any documents supplied evidencing the Debt and all
                  correspondence;

         14.1.10  the Customer has obtained all the consents and certificates
                  necessary in order to pay the Debt;

         14.1.11  the invoice or credit note identifies the currency for
                  payment as Sterling;

         14.1.12  the Debt is one to which this Agreement applies;


         14.1.13  where the Debt relates to a claim for interest:

                  -        all legal criteria for your interest claim have been
                           fulfilled;

                  -        the principal Debt to which your interest claim
                           relates has previously been Notified;

                  -        your interest claim must be Notified to us within
                           three months of the date the principal Debt was
                           paid;

                  -        no credit payment terms have been allowed for
                           discharging your interest claim.

14.2     You warrant that prior to entering into this Agreement you have
         disclosed to us every fact or matter known to you or which you should
         have reasonably known might influence us in our decision whether or
         not:

         14.2.1   to enter into this Agreement on these terms; or

         14.2.2   to accept any person as a guarantor or indemnifier of your
                  obligations to us.

14.3     You will immediately tell us of anything which might reasonably
         influence our decision to continue with this Agreement on these terms.

15.      FACFLOW

15.1     We will provide you with FacFlow. You will provide all computer
         equipment required at your premises and will keep this equipment virus
         free and suitable for use. We shall have no responsibility for any
         damage, loss or corruption of your data, software or equipment caused
         through the loading or operation of our Software.

15.2     You undertake:

         15.2.1   to use your best endeavours to keep such equipment free from
                  any Equipment Defect or Transmission Defect and to make
                  suitable contingency arrangements to cover any such defect or
                  the withdrawal or suspension of FacFlow;

         15.2.2   immediately to load and use any Software updates which we may
                  provide;

         15.2.3   to keep secret and confidential the method of operation of
                  FacFlow, the Software and all access data and security
                  procedures and to tell us promptly if any contravention is
                  known or suspected;


                                     -13-
<PAGE>   14


         15.2.4   on a weekly basis or more frequently if we tell you, to make
                  back up copies on disk of your sales ledger records,
                  including invoices and credit notes, and to securely store
                  such copies away from your premises for at least 4 months,
                  and to advise us of their location.

15.3     You will have a non-transferable licence to use the Software.

15.4     We own all rights in the Software. You may not copy it without our
         prior written consent, except one copy solely for back-up purposes.

15.5     You and we undertake to each other:

         15.5.1   to use all reasonable endeavours to ensure that each FacFlow
                  Transmission is completely and correctly sent;

         15.5.2   to tell the other promptly if either is aware of any
                  Equipment Defect or Transmission Defect and to co-operate
                  with the other to remedy it;

         15.5.3   to maintain appropriate records in support of FacFlow
                  Transmissions and to ensure that FacFlow is not accessible to
                  unauthorised persons.

15.6     We will maintain a Transmissions Log which shall, in the absence of
         manifest error, be conclusive proof and evidence of the FacFlow
         Transmissions sent or received by us.

15.7     We may rely upon any FacFlow Transmission ostensibly sent by you even
         though it may be sent without your authority. We may also rely upon
         any FacFlow Transmission sent through your agent or intermediary.

15.8     We may without notice suspend, withdraw or reactivate the operation of
         FacFlow.

15.9     We shall have no responsibility to you for any loss or damage as a
         result of any failure or delay in complying with our obligations in
         connection with FacFlow, including that arising from any:

         15.9.1   Equipment Defect or Transmission Defect;

         15.9.2   suspension or withdrawal of FacFlow;

         15.9.3   act or omission of any third party or abnormal operating
                  conditions;

         15.9.4   failure to process any FacFlow Transmission to our internal
                  systems, even though accepted by FacFlow.

15.10    Upon withdrawal of FacFlow you will immediately return to us any
         property of ours in your possession or under your control.

15.11    You will indemnify us against all losses and damages that we may incur
         if you breach your obligations in respect of FacFlow.

15.12    FacFlow does not operate on a real time basis. Please note any
         information is only accurate to an earlier point in time. In particular
         any request by you for a payment based upon any Availability shown may
         be varied by us as further information becomes available.


                                     -14-
<PAGE>   15

15.13    Subject to clause 15.12, you and we will give each FacFIow
         Transmission the same status as if it had been in writing, signed on
         behalf of the sender and physically delivered to the recipient, unless
         the FacFlow Transmission can be shown to have been corrupted as a
         result of technical failure. FacFlow Transmissions shall be treated as
         satisfying any legal requirement for a communication to be in writing.
         You waive any rights to challenge the validity of any FacFlow
         Transmission on the ground that it was prepared and/or sent and/or
         received only in electronic form.

15.14    A FacFlow Transmission regarding Initial Debts shall be treated as
         including the following words:

         "In accordance with the Invoice Discounting Agreement between Lombard
         NatWest Discounting Ltd and ourselves the Debts referred to in this
         FacFlow Transmission shall be considered as being subject to an
         Offer".

16.      INFORMATION FOR US

16.1     You must give us a signed copy of your full set of accounts, including
         your directors' and auditor's report or such other financial reports
         as we request, for each of your accounting reference periods (as
         defined in the Companies Act 1985). You must give us these items as
         soon as you have them, which must be no later than six months from the
         end of each accounting period.

16.2     You must give us your management profit and loss account and balance
         sheet at such intervals as we tell you. You will also give us such
         other financial reports that we may ask for and you will ensure that
         your auditors or external accountants report to us directly any
         information that we require.

16.3     You will provide to us by the monthly returns due date specified in
         the Schedule:

         16.3.1   an aged analysis of Debts on the basis specified in the
                  Schedule and correct to the last day of the preceding month.
                  The ageing must also identify those Customers' accounts which
                  are either in dispute or have been passed to solicitors, debt
                  collectors or other third parties for collection;

         16.3.2   copy Customers' statements for the same period as in clause
                  16.3.1;

         16.3.3   a sales ledger control in the format we tell you reconciled to
                  the aged analysis of Debts in clause 16.3.1;

         16.3.4   any other information we may ask for.

16.4     You will let any employee, representative or agent of ours enter any
         of your business premises or locations under your control in order to:

         16.4.1   inspect Goods, stocks, Sale Contracts and evidence of their
                  performance;

         16.4.2   verify, check, remove or be provided with copies of all
                  Accounting Records.

16.5     We may at all times rely upon any signature, act or communication of
         any person purporting to act on your behalf and the same shall be
         binding upon you.

17.      TERMINATION EVENTS

17.1     In addition to the right of either you or us to give notice to the
         other to end this Agreement under clause 2.1, we may immediately end
         it at any time after any of the following events:

         17.1.1   any breach or threatened breach by you of this Agreement;


                                     -15-
<PAGE>   16

         17.1.2   the breach or threatened breach or the termination of any
                  contract between us and any of your Associates;

         17.1.3   any application by any creditor of yours for a court order
                  that we must pay money to your creditor or must stop paying
                  any monies to you;

         17.1.4   if you have an obligation to a third party for repayment of
                  borrowed money which is declared due prior to its stated
                  maturity date or you do not pay it when due;

         17.1.5   any change in your ownership, control, constitution or
                  composition reasonably considered by us to prejudice our
                  position;

         17.1.6   breach or termination by you or a third party of any
                  representation, warranty or undertaking given to us;

         17.1.7   the termination of any waiver, consent, ranking or priority
                  arrangement in our favour;

         17.1.8   your ceasing or threatening to cease to carry on your
                  business referred to in the Schedule;

         17.1.9   your Insolvency;

         17.1.10  the Insolvency or death of any person who has given a
                  guarantee or indemnity for your obligations to us, or the
                  service of a notice of intention to end such guarantee or
                  indemnity or the legal disability of that person;

         17.1.11  if any Associate factors or discounts its debts with another
                  party or is threatened with Insolvency proceedings or becomes
                  Insolvent;

         17.1.12  your failure to comply with the minimum notification
                  requirements shown in the Schedule.

17.2     Upon your Insolvency, ceasing to trade, failure to repay the entire
         Repurchase price under clause 17.4.1 or our cancelling your agency
         referred to in clause 11.5, we may:

         17.2.1   immediately debit your Receivables Purchased Account and
                  Memorandum Discounting Statement with an additional
                  commission charge of five per cent of the Notified Value of
                  the Debts then Outstanding or Notified to us thereafter in
                  order to cover our additional administrative work; and

         17.2.2   immediately increase the discounting charge by two per cent.

17.3     Upon or at any time after a Termination Event (whether or not we use
         our right immediately to end this Agreement), we may, with or without
         notice to you, do any or all of the following:

         17.3.1   reduce the Prepayment percentage to zero or such other
                  figure as we may decide;

         17.3.2   designate all or any Outstanding Debts as Ineligible Debts;

         17.3.3   create a special reserve against the Receivables Purchased
                  Account to cover Your Responsibility;

         17.3.4   add together the balances on all accounts recording
                  transactions between you and us;


                                     -16-
<PAGE>   17

         17.3.5   demand that you pay us immediately any debit balance arrived
                  at under clause 17.3.4 plus commission charges and
                  discounting charges accrued but not yet debited and an amount
                  equal to all credit balances on Customers' accounts;

         17.3.6   require you to Repurchase any Debts then Outstanding;

         17.3.7   delay at least ten calendar days, to allow for cheque
                  clearances, before paying to you any credit balance on the
                  Memorandum Discounting Statement.

17.4     Upon the ending of this Agreement, for whatever reason:

         17.4.1   you must Repurchase all Outstanding Debts from us at a price
                  equivalent to the debit balance on the Memorandum Discounting
                  Statement and all other sums due to us;

         17.4.2   you will not attempt to cancel any notices of assignment
                  given to Customers or attempt to collect Debts until you have
                  paid the Repurchase price under clause 17.4.1 and we shall
                  continue to own all Debts until so paid;

         17.4.3   you will be responsible for all credit balances on Customers'
                  accounts and indemnify us in respect of all claims for them;

         17.4.4   you will not Notify us of any Debts arising after the date on
                  which this Agreement ends; and

         17.4.5   we shall pay you any credit balance on the Memorandum
                  Discounting Statement less the amount of Your Responsibility
                  but allowing at least ten calendar days for cheque
                  clearances.

17.5     Except as otherwise provided, the ending of this Agreement shall not
         affect our respective rights and obligations in respect of:

         17.5.1   any Debts which shall have come into existence prior to such
                  termination; and

         17.5.2   all transactions or events having their inception prior to
                  such termination, including the continued running of the
                  discounting charge and our rights to set-off monies or
                  combine accounts.

         Such rights and obligations shall remain in full force and effect
         until all monies due from you shall have been received by us and all
         monies due from us to you shall have been paid.

17.6     Any discharge of your obligations to us shall be of no effect
         to the extent that any receipt by us shall later be set aside
         under insolvency law.

18.      POWER TO ACT IN YOUR NAME

18.1     To ensure that you carry out your obligations to us and as
         security for all sums which shall become due to us, you
         irrevocably appoint us and our directors, Company Secretary
         and officers, at any time, jointly and each of them severally
         to act as your attorneys as we or they think fit in order to
         do all or any of the following:

         18.1.1   complete and perfect our title to or deal with any
                  Debt, Related Rights or Returned Goods;

         18.1.2   obtain payment of and give valid discharges for any
                  Debt;

         18.1.3   secure performance of any of your obligations to us
                  or to any Customer.


                                     -17-
<PAGE>   18
18.2     For these purposes, your attorneys may do any of the following:

         18.2.1   sign all documents;

         18.2.2   endorse and/or negotiate all Remittances;

         18.2.3   conduct, defend or compromise any legal proceedings and
                  settle any indebtedness;

         18.2.4   take all other steps they consider necessary.

18.3     These powers shall continue both during and after the ending of this
         Agreement and during any disability on your part until all sums due to
         us have been paid. You will ratify and confirm whatever shall be
         lawfully done under these powers.

18.4     You also irrevocably appoint any assignee of ours or any person to
         whom we may novate this Agreement to perform any of the acts set out
         above. We may also appoint or remove a substitute attorney.

19.      CONTACTING OTHER PARTIES

19.1     We may:

         19.1.1   provide your bank, auditors, accountants and other
                  professional advisers with such information about your
                  accounts with us as they may ask;

         19.1.2   obtain from your bank, auditors, accountants and other
                  professional advisers such information as we may request.

19.2     You confirm that you have authorized the persons referred to in 19.1.2
         to give us such information.

19.3     We may disclose this Agreement and any information which we have
         obtained:

         19.3.1   to any actual or potential assignee, transferee or
                  sub-participant;

         19.3.2   to any agency, security trustee, agent and/or arranger in
                  connection with any financing of any such assignee,
                  transferee or sub-participant;

         19.3.3   in any listing particulars, prospectus or offering circular.

20.      ASSIGNMENT, DELEGATION AND FORCE MAJEURE

20.1     You consent to our novating to any other party any or all of our
         obligations, rights and remedies. This Agreement shall bind and enure
         to the benefit of our successors and assignees.

20.2     Except where the context otherwise requires, references to "we" or
         "us" shall include our successors, assignees and transferees in
         clauses conferring benefits and/or rights on us; in clauses imposing
         obligations on us, such references shall extend to such successors,
         assignees and transferees only if they shall specifically assume such
         obligations.

20.3     You will not, without our prior written consent:

         20.3.1   assign, grant security over or charge any of your rights or
                  benefits or delegate any of your duties under this Agreement;

         20.3.2   dispose of any part of your business, assets or undertaking,
                  except in the ordinary course of your business;


                                     -18-
<PAGE>   19

         20.3.3   create any securities, mortgages or charges on or over your
                  assets or undertaking.

20.4     We shall not be liable to you for any consequential, secondary or
         indirect loss, injury or damage or any loss of or damage to goodwill,
         profits or anticipated savings. However nothing shall operate to
         excuse us from liability caused by the fraud of any of our officers.

20.5     We shall have no liability to you if we are delayed in or unable to
         perform our duties directly or indirectly because of an event of Force
         Majeure.

20.6     Any waiver or apparent waiver by us of any breach of any obligation or
         provision in this Agreement cannot be treated as a general waiver or
         be construed as implying or establishing consent to any subsequent
         breach.

21.      SERVICE OF NOTICES AND PROCESS

21.1     Except as otherwise stated, any written notice from us to you and any
         proceedings issued by us requiring service on you may be given or
         served by delivering it at or posting it to:

         21.1.1   your address stated in the client particulars or such other
                  address advised to and acknowledged by us as being effective
                  for the purposes of this clause; or

         21.1.2   your registered office; or

         21.1.3   any address last known to us at which you carried on
                  business.

         It may also be handed to any officer of yours or be given by facsimile
         transmission or electronic medium to your number or address last known
         to us for communication by such means.

21.2     Any notice or process shall be considered served if:

         21.2.1   delivered    - at the time of delivery; or

         21.2.2   sent by post - 48 hours from the time of posting; or

         21.2.3   sent by facsimile transmission or electronic medium - at the
                  time of transmission; or

         21.2.4   handed over  - at the time of handing over.

21.3     Any notice in writing by you to us under this Agreement shall take
         effect at the time it is received by us at our registered office.

22.      LAW AND JURISDICTION

22.1     Our relationship with you is to be governed and interpreted by English
         law. You submit to the jurisdiction of the English courts. We may,
         however, use the courts of any other jurisdiction.

23.      INTERPRETATION OF THIS AGREEMENT

23.1     Any reference to a statute includes any amendment or replacement or
         re-enactment of that statute for the time being and any order and any
         subordinate legislation made under it.


                                     -19-
<PAGE>   20

23.2     The singular includes the plural and vice versa. Reference to any
         gender shall include any other gender. References to a person or party
         shall be construed as references to any person, firm, company,
         corporation, association, partnership, government, whether local,
         national or supra-national or other official body.

23.3     The meaning of general words introduced by the word "other" is not to
         be limited by reference to any preceding words.

23.4     Where the meaning of a word or expression in this Agreement has to be
         considered in relation to any place outside England and such word or
         expression has no exact counterpart in that place, it is to have the
         meaning of its closest equivalent as conclusively determined by us.

23.5     The interpretation and construction of this Agreement shall not be
         affected by any headings, which are for convenience only.

24.      GENERAL

24.1     The whole agreement between you and us consists of only this document,
         including any annexes referred to in the Schedule (and any document
         referred to in such annexes). References to "the Agreement" or "this
         Agreement" include all the annexes and all subsequent amendments,
         variations or extensions. All earlier agreements, prior negotiations,
         quotations, warranties, advertisements and representations shall be of
         no effect. You have not relied upon any representation made to you by
         us or on our behalf or been influenced, induced or persuaded to enter
         into this Agreement by any representation.

24.2     We may use all or any of the rights and remedies contained in this
         Agreement. They are not exclusive of each other or of any rights or
         remedies given to us by law. If we choose not to enforce or cannot
         enforce any term or condition, this will not affect our right to
         enforce the rest of the Agreement or to enforce that term or condition
         at a later date. Also, such rights and remedies shall not be affected
         if we compromise with any Customer.

24.3     This Agreement is considered by both you and us to be reasonable.
         Should any part of it be valid only if some other part were deleted
         then the Agreement will apply as if it were so deleted. The remainder
         of this Agreement will not be affected by such deletion.

24.4     Except where clauses 5.1 (where we may change Limits at our complete
         discretion) and 9.11 apply, changes to the Agreement can be made
         between you and us in any way but will only come into effect on the
         date stated in our written confirmation to you of such change or if no
         such date is stated upon despatching such confirmation.


                                     -20-
<PAGE>   21

ANNEXE OF DEFINITIONS

In the attached Agreement the following expressions have the meanings set out
below against each of them.

<TABLE>
<S>                                      <C>                                              <C>
Accounting Records                       Force Majeure                                    Related Rights
Adjustments                              Funding Limit                                    Remittances
Assign                                   Funding Period                                   Repurchase
Associate                                Goods                                            Retention Percentage
Availability                             Ineligible Debt                                  Returned Goods
BACS                                     Initial Debt                                     Sale Contract
Base Rate                                Insolvent                                        Schedule
CHAPS                                    Limits                                           Scottish Debts
Client Advice                            Memorandum Discounting Statement                 Software
Concentration Limit Percentage           Non-Notifiable Debt                              Sterling
Contracted Value                         Notified/Notify/Notifying                        Termination Event
Customer                                 Notified Value                                   Transmission Defect
Debt                                     Offer                                            Terminations Log
Delivered                                Outstanding                                      United Kingdom/U.K.
Equipment Defect                         Prepayment                                       U.K. Debt
FacFlow                                  Purchase Price                                   VAT
FacFlow Transmission                     Receivables Purchased Account                    Your Responsibility
</TABLE>

"ACCOUNTING       Any of the following:
 RECORDS"
                  (1)      accounting books, records and ledgers, financial and
                           management accounts;

                  (2)      computer data or materials about your financial
                           position, purchases and sales;

                  (3)      all invoices, credit notes or documents evidencing
                           entries in such books of accounts, records and
                           computer data and any other documents we require.

"ADJUSTMENTS"     Any entry on your Customers' accounts which changes the
                  Notified Value of Debts.

"ASSIGN"          The transfer of ownership which includes in Scotland the
                  giving of an assignation.

"ASSOCIATE"       (1)      Any subsidiary or holding company of yours as
                           defined in sections 736 and 736A of the Companies
                           Acts 1985 to 1989; or

                  (2)      any other form of associate of yours as defined in
                           section 184 of the Consumer Credit Act 1974; or

                  (3)      a director, partner, shareholder or employee of
                           yours or the spouse of any of them; or

                  (4)      any company in which you or any of them have an
                           interest other than purely for investment purposes
                           in a publicly quoted company.


                                     -21-
<PAGE>   22

"AVAILABILITY"             Your entitlement to Prepayment calculated by taking
                           the credit balance on the Receivables Purchased
                           Account and deducting:

                           (1)      the value of all Ineligible Debts;

                           (2)      the amount of Your Responsibility; and

                           (3)      the standard retention.

                           The standard retention is arrived at by:

                           (1)      taking the balance on the sales ledger
                                    control; and then

                           (2)      deducting the value of all Ineligible
                                    Debts; and then

                           (3)      multiplying the resultant sum by the
                                    Retention Percentage.

"BACS"                     The Bankers Automated Clearing System.

"BASE RATE"                The Sterling Base Rate per annum quoted, from
                           time to time, by National Westminster Bank Plc or
                           its successors or such other bank as we may tell
                           you.

"CHAPS"                    The Clearing Houses Automated Payments System.

"CLIENT ADVICE"            Your notification to us, in such way as we may
                           specify, including in a FacFlow Transmission, of
                           Debts, credit notes and Adjustments which have not
                           previously been Notified to us together with such
                           evidence of the performance of the Sale Contract or
                           reasons for a credit note as we may specify.

"CONCENTRATION             A percentage established by us of the balance of all
 LIMIT PERCENTAGE"         Outstanding Notified Debts.

"CONTRACTED VALUE"         The amount of a Debt payable by a Customer in
                           accordance with the Sale Contract after taking into
                           account any deduction, discount, claim or allowance.

"CUSTOMER"                 A person who incurs or may incur any indebtedness
                           under a Sale Contract.

"DEBT"                     Any present, future or contingent obligation of a
                           Customer to make payment under a Sale Contract
                           together with its Related Rights or where the
                           context allows a part of such obligation or its
                           Related Rights, including:

                           (1)      the future right to recover sums due
                                    following the determination, assessment or
                                    agreement of the amount of the obligation;
                                    and

                           (2)      VAT; and

                           (3)      all duties and charges.

"DELIVERED"               In relation to Goods:

                           (1)      their removal from your control and from
                                    your premises, carriers and agents; and

                           (2)      their physical delivery to the Customer in
                                    the United Kingdom or to the Customer's
                                    order; and

                           (3)      the assumption of risk therein by the
                                    Customer; and


                                     -22-
<PAGE>   23


                           (4)      complete performance of the Sale Contract.

                           In relation to services: fully performed.

                           "Deliver" and "Delivery" are to be similarly
                           construed.

"EQUIPMENT                 Any malfunction, failure, defect, downtime or
                           unavailability of computer equipment

                                   or

 DEFECT"                   software or any ancillary service or link including
                           telephone or other communication systems.

"FACFLOW"                  A computerised data enquiry and transmission system
                           between you and us as updated from time to time.

"FACFLOW                   Any item of data transmitted between you and us
 TRANSMISSION"             using FacFlow.

"FORCE MAJEURE"            Any circumstances outside our or a Customer's
                           reasonable control, including an act of God, any
                           exchange control, governmental or other official
                           regulations or requirements, the outbreak of war,
                           any terrorist act, revolution, civil insurrection,
                           strike, lockout, industrial action or failure or
                           non-operation of postal, banking or communication
                           services.

"FUNDING LIMIT"            A monetary limit established by us in respect of
                           each Customer against which the Prepayment
                           percentage will be applied.

"FUNDING PERIOD"           The period initially as specified in the Schedule,
                           after which Debts will rank as Ineligible Debts.

"GOODS"                    Any merchandise or services the subject of a Sale
                           Contract.

"INELIGIBLE DEBT"          A Debt:

                           (1)      which is disputed or in respect of which
                                    the Customer shall dispute their liability
                                    to pay or pay it by its due date for
                                    payment; or

                           (2)      in respect of which you shall be in breach
                                    of any undertaking or warranty given to us
                                    about it or any other obligations of yours
                                    to us arising from it; or

                           (3)      which remains Outstanding beyond the end of
                                    the Funding Period; or

                           (4)      in excess of our Funding Limit; or

                           (5)      owing by any Customer in excess of the
                                    Concentration Limit Percentage; or

                           (6)      in respect of which legal proceedings have
                                    been threatened against the Customer; or

                           (7)      where the Customer is Insolvent; or

                           (8)      specified by us at any other time.

"INITIAL DEBT"             A Debt Outstanding at the date of this Agreement.


                                     -23-
<PAGE>   24

"INSOLVENT"

                           (A)      In relation to you or any guarantor or
                                    indemnifier of your obligations to us - any
                                    of or the occurrence of any of the
                                    following:

                           (1)      the issue of a petition or application, the
                                    calling of a meeting or making proposals,
                                    for any of the matters listed in sub
                                    section 'B' below;

                           (2)      any part of your or their income or assets
                                    being subject to any of the following:

                                    -        seizure, distress, diligence or
                                             lien;
                                    -        enforcement of security rights;
                                    -        execution of legal process;
                                    -        sequestration;
                                    -        an injunction or interdict;
                                    -        attachment;
                                    -        other legal process;

                           (3)      the service of any statutory demand under
                                    the Insolvency Act 1986;

                           (4)      the entry or making of any judgment, order,
                                    decree or award which shall remain
                                    unsatisfied or whose terms shall not be
                                    complied with for seven days (except
                                    pending any appeal);

                           (5)      an application for a garnishee order;

                           (6)      giving notice of the intended suspension of
                                    payments of debts;

                           (7)      becoming apparently insolvent;

                           and the taking of any steps for the commencement of
                           any proceedings in respect of any of the above
                           matters.

                           (B)      In relation to a Customer - any of
                                    following:

                           (1)      in relation to an individual -
                                    bankruptcy, apparent insolvency or
                                    sequestration or the granting of a trust
                                    deed for the benefit of creditors;

                           (2)      in relation to a company - a resolution for
                                    voluntary winding up by reason of
                                    insolvency, a winding up order, the
                                    appointment of an administrator under the
                                    Insolvency Act 1986 or the appointment of a
                                    provisional liquidator or receiver (whether
                                    in or out of court) or an administrative
                                    receiver of any of its assets or income or
                                    a judicial factor;

                           (3)      in relation to a partnership - its
                                    bankruptcy, apparent insolvency or
                                    sequestration or its winding up or the
                                    appointment to it of an administrator under
                                    the Insolvency Act 1986 or the appointment
                                    of a judicial factor or an order for the
                                    bankruptcy or sequestration of any partner
                                    or the apparent insolvency of any partner
                                    or the grant by a partner of a trust deed
                                    for creditors;

                           (4)      in relation to any person - entry into a
                                    voluntary arrangement under the Insolvency
                                    Act 1986 or apparent insolvency or any
                                    formal or informal arrangement generally
                                    for the benefit of creditors;

                           "Insolvency" shall be construed accordingly.


                                     -24-
<PAGE>   25

"LIMITS"                   Any of:

                           -        the Prepayment percentage;

                           -        Funding Limits;

                           -        Funding Period;

                           -        the Prepayment review level initially shown
                                    in the Schedule;

                           -        the Concentration Limit Percentage.

"MEMORANDUM                An account operated by us to calculate discounting
 DISCOUNTING               charges.
 STATEMENT"

"NON-NOTIFIABLE            A Debt, owned by us under this Agreement, which must
 DEBT"                     not be Notified to us until we tell you, including
                           specifically those referred to in the Schedule and
                           in clause 13.1.7.

"NOTIFIED/NOTIFY           Inclusion of a Debt in an Offer or Client Advice.
 NOTIFYING"

"NOTIFIED VALUE"           The amount of the Debt as shown in an Offer or Client
                           Advice.

"OFFER"                    An unconditional offer to sell us a Debt with full
                           title guarantee to be made in such form and with
                           such evidence of the performance of the Sale
                           Contract as we may specify. Where more than one Debt
                           is at the same time subject to an Offer it shall be
                           treated as an independent offer to sell us each Debt
                           so offered which may be accepted or rejected by us
                           entirely at our discretion.

"OUTSTANDING"              A Debt unpaid by the Customer or a third party.

"PREPAYMENT"               A payment on account of the Purchase Price of Debts
                           calculated by applying the Prepayment percentage
                           initially specified in the Schedule to their Notified
                           Value.

"PURCHASE PRICE"           The price payable by us for a Debt calculated in
                           accordance with clause 4.1.

"RECEIVABLES               An account reflecting the prospective Purchase Price
 PURCHASED                 of Debts.
 ACCOUNT"

"RELATED RIGHTS"           Any of the following in relation to any Debt or
                           Returned Goods:

                           (1)      all your rights by law as an unpaid vendor
                                    or under the Sale Contract but without any
                                    obligation on us to complete the Sale
                                    Contract;

                           (2)      all evidence of the Sale Contract or its
                                    performance or any disputes arising;

                           (3)      documents of title to goods, warehouse
                                    keepers receipts, bills of lading, shipping
                                    documents, airway bills, certificates of
                                    origin, customs forms, commercial and
                                    consular invoices, insurance documents or
                                    similar;

                           (4)      the benefit of all insurances;

                           (5)      all Remittances, securities, bonds,
                                    guarantees and indemnities;

                           (6)      all Accounting Records to do with the Debt;



                                     -25-
<PAGE>   26

                           (7)      the right to call for the ownership of all
                                    Returned Goods;

                           (8)      interest.

"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 received by us, you or your agents
                           towards a Debt.

"REPURCHASE"               Our right to require you to buy back and in respect
                           of a Scottish Debt to take a reassignment from us of
                           an Outstanding Debt at a price equivalent to its
                           Notified Value or the Prepayment paid in respect of
                           it.

"RETENTION                 100% less the Prepayment percentage from time to
 PERCENTAGE"               time.


"RETURNED GOODS"           Any Goods relating to or purporting to comply with a
                           Sale Contract which any Customer shall for any
                           reason:

                           (1)      reject or give notice of rejection; or

                           (2)      return or attempt to or wish to return to
                                    you or us; or

                           (3)      which you or we recover from a Customer.

"SALE CONTRACT"            A contract in any form, including a purchase order,
                           between you and a Customer for the sale or hire of
                           Goods or the provision of services or work done and
                           materials supplied.

"SCHEDULE"                 The Schedule to this Agreement.

"SCOTTISH DEBTS"           Debts arising under Sale Contracts where either
                           those Sale Contracts are governed by Scots law or
                           the invoices for the Debts are addressed to
                           Customers in Scotland.

"SOFTWARE"                 The software provided by us to enable you to use
                           FacFlow.

"STERLING"                 The lawful currency from time to time of the U.K.

"TERMINATION EVENT"        Any event listed in clause 17.1.

"TRANSMISSION              Any programming error, corruption or other defect,
 DEFECT"                   or any delay or failure or breach of security in a
                           FacFlow Transmission.

"TRANSMISSIONS             A record maintained by us of FacFlow Transmissions.
 LOG"

"UNITED KINGDOM/           The United Kingdom of Great Britain and Northern
 U.K."                     Ireland, the Channel Islands and the Isle of Man.

"U.K. DEBT"                A Debt evidenced by an invoice addressed to a
                           Customer in the United Kingdom.

"VAT"                      Value Added Tax.


                                     -26-
<PAGE>   27

"YOUR                      Monies payable or possibly payable to us in the
 RESPONSIBILITY"           future including liability:

                           (1)      arising from debts transferred to us by any
                                    of your suppliers; or

                           (2)      as a guarantor or indemnifier of another
                                    client of ours; or

                           (3)      for the breach of your obligations to us;
                                    or

                           (4)      for legal costs and expenses;

                           and our reasonable estimate of such monies where the
                           amount cannot be immediately found out.


                                     -27-
<PAGE>   28

                   EXPORT DEBTS ANNEXE - INVOICE DISCOUNTING

EX 1     Where the Schedule to the Agreement shows that this annexe is to be
         incorporated into the Agreement then you will also Notify us of Export
         Debts and the terms of this annexe shall additionally apply.

EX 2     In this annexe the following expressions have the meanings set out
         against each of them:

         "APPROVED         A country, territory, region or continent referred
         TERRITORY"        to in the list at the end of this annexe or as we
                           may tell you in writing or by making the same
                           available through FacFlow, even if no enquiry be
                           made.

         "EXPORT           A Debt where the invoice is addressed to a Customer
         DEBT"             outside the United Kingdom and/or in respect of
                           which payment is to originate from outside the
                           United Kingdom.

EX 3     The definition of a "Non-Notifiable Debt" in the Agreement is
         extended to include:

         (1)      all Debts, which under the Sale Contract are to be
                  discharged, wholly or in part, by letters of credit; and

         (2)      all Debts where the invoice is addressed to a Customer
                  outside an Approved Territory.

EX 4     The definition of "Delivered" in relation to Export Debts shall be
         treated as if item 2 of such definition were deleted.

EX 5     When you Notify us of an Export Debt you will be treated as
         additionally warranting to us that:

         (1)      the Debt is payable by a Customer with an established place
                  of business in the country to which the invoice is addressed,
                  such country being an Approved Territory, and without any
                  set-off or counterclaim;

         (2)      the Customer has all unconditional authorities, licences and
                  permits necessary for him lawfully to purchase and import the
                  Goods and to pay for them by their due date for payment;

         (3)      the exportation of the Goods does not breach the laws of the
                  United Kingdom or any other country or territory.

EX 6     We may at any time remove any country, territory, region or continent
         from the definition of Approved Territory by written notice to you or
         by making the same available through FacFlow, even if no enquiry be
         made, but this shall not affect Debts Notified to us prior to our
         despatch of such notice.

EX 7     Where there is any conflict between the terms of this annexe and the
         remainder of the Agreement then the terms of this annexe shall
         prevail.


                                 EXP1
<PAGE>   29

                          LIST OF APPROVED TERRITORIES

1.       The following countries of the European Union - Austria, Belgium,
         Denmark, Republic of Ireland, Finland, France, Germany, Greece, Italy,
         Luxembourg, The Netherlands, Portugal, Spain, Sweden.

2.       Norway, Switzerland, Canada and The United States of America.

                               SPECIAL CONDITIONS

1.       You will obtain loss of book debt records insurance with our interest
         noted therein, or alternatively sales ledger to be backed up at least
         weekly and copy disk stored offsite.

2.       You will give all Customers paying by BACS, CHAPS or any other form of
         electronic transfer our nominated bank account details.

3.       You will retain Customer Remittance Advices and make these available
         to us upon request, where a Remittance Advice is not received you will
         retain a copy of the cheque.

4.       You must not include in an Offer or Notification any Debt until the
         Goods have been delivered in accordance with this Agreement.

5.       You will obtain proof of Delivery in all cases and make these
         available to us upon request.


                                 EXP2
<PAGE>   30

                                  THE SCHEDULE
                        (RECOURSE - DOMESTIC AND EXPORT)

<TABLE>
<S>                                                             <C>
1.       ANNEXE(S) INCORPORATED IN THIS AGREEMENT:              DEFINITIONS.
         (clause 24.1)
                                                                Export Debts.
2.       (A) MINIMUM PERIOD OF THIS AGREEMENT:
         (clause 2.1)                                           12 months from
                                                                the date this Agreement is made.
         (B) MINIMUM NOTICE PERIOD:
         (clause 2.1)                                           3 months.

3.       DEBTS TO WHICH THIS AGREEMENT APPLIES:
         (clause 1.1)                                           All U.K. Debts.
                                                                All Export Debts.
4.       MONTHLY RETURNS DUE DATE:
         (clause 16.3)                                          15th day of month following.

5.       BASIS ON WHICH ANALYSIS OF DEBTS IS TO BE AGED:
         (clause 16.3.1)                                        From each invoice date, separately identifying
                                                                the amounts of Outstanding Debts by
                                                                Customer showing Customer balances as
                                                                follows: total, up to 30 days old, 31 - 60
                                                                days old, 61 - 90 days old, and beyond 90
                                                                days old, plus a summary ageing of the
                                                                totals of each of these categories.
</TABLE>

N.B. In paragraphs 6 to 14 below:

     -        the provisions in the column headed U.K. Debts shall only
              apply to U.K. Debts and the provisions in the column headed
              Export Debts shall only apply to Export Debts;

     -        if we keep the Receivables Purchased Account and the
              Memorandum Discounting Statement in respect of Debts in
              currencies other than Sterling then any sum expressed in
              Sterling shall be treated as if the words "or its currency
              equivalent" were also added.

<TABLE>
<CAPTION>
                                             U.K. DEBTS                       EXPORT DEBTS

<S>      <C>                                 <C>                              <C>
6.       MINIMUM NOTIFICATION                We must receive a Client         We must receive a Client
         REQUIREMENTS:                       Advice from you at least         Advice from you at least
         (clause 17.1.12)                    once every 4 weeks.              once every 4 weeks.

7.       PREPAYMENT PERCENTAGE:              70%.                             70%.
         (definition of "Prepayment")

8.       FUNDING PERIOD:                     90 days from end of month        90 days from end of month
         (definition of "Ineligible          of invoice.                      of invoice.
         Debt" and "Funding
         Period")
</TABLE>


                                      SCH1
<PAGE>   31

<TABLE>
<CAPTION>
                                             U.K. DEBTS                       EXPORT DEBTS

<S>                                          <C>                              <C>
9.       PREPAYMENT REVIEW                   To be determined by us.          To be determined by us.
         LEVEL:
         (clause 8.2)

10.      DISCOUNTING CHARGE:                 1.50% above Base Rate.           1.50% above Base Rate.
         (clause 9.1)

11.      COMMISSION CHARGE:                  0.08% of the Notified Value      0.08% of the Notified Value
         (clause 9.3)                        of each Debt.                    of each Debt.

12.      MINIMUM COMMISSION                  In any period of 12              In any period of 12
         CHARGE:                             month(s) (pound) 6000.           month(s) (pound) 6000.
         (clause 9.4)
</TABLE>

         Where both U.K. Debts and Export Debts are subject to this Agreement,
         the minimum commission charge in respect of all Debts shall be (pound)
         6000.

<TABLE>
<S>                                          <C>                              <C>
13.      YOUR PAYMENT AND                    30 days from date of             30 days from date of
         SETTLEMENT DISCOUNT                 invoice with a settlement        invoice with a settlement
         TERMS:                              discount not exceeding n/a       discount not exceeding n/a
         (clause 13.1.1)                     %.                               %.

14.      ADDITIONAL NON-NOTIFIABLE           Sales to associated              Sales to associated
         DEBTS:                              companies, cash and credit       companies, cash and credit
         (clause 13.1.7)                     card sales.                      card sales.
</TABLE>

15.      CONDITIONS TO BE COMPLIED WITH BEFORE WE START MAKING PREPAYMENTS:

1.       We are to receive the corporate guarantee and indemnity of Krug
         International (UK) Ltd, Hago Products Limited, Beldray Limited and
         Bradley International Holdings Limited.

2.       We are to be satisfied with a statement of your millennium compliance.

3.       We are to receive and be satisfied with a copy of your Certificate of
         Incorporation and Memorandum & Articles and Association.

4.       We require an all assets mortgage debenture, the cost of which will be
         borne by you.

5.       We require a deed of priority from National Westminster Bank Plc in
         respect of LND'S mortgage debenture.

6.       We are to receive a letter of waiver from National Westminster Bank
         Plc, in our standard form to allow us to purchase your Debts.

7.       The practice of accepting on account payments is to cease from
         commencement. All receipts are to be correctly allocated.


                                      SCH2
<PAGE>   32
16.  SPECIAL CONDITIONS:

1.   We are to receive a copy of your quarterly management accounts within 6
     weeks of quarter end, commencing with quarter ending 30th September 1999.

2.   You will obtain loss of book debt records insurance with our interest
     noted therein, or alternatively sales ledger to be backed up at least
     weekly and copy disk stored offsite.

3.   You will give all Customers paying by BACS, CHAPS or any other form of
     electronic transfer our nominated bank account details.

4.   You will retain Customer Remittance Advices and make these available to us
     upon request, where a Remittance Advice is not received you will retain a
     copy of the cheque.

5.   You must not include in an Offer or Notification any Debt until the Goods
     have been delivered in accordance with this Agreement.

6.   You will obtain proof of Delivery in all cases and make these available to
     us upon request.

7.   Collecting drivers are to sign despatch notes in all cases.

8.   Argos is to be ledgered separately and a prepayment percentage of 50% will
     apply to this ledger.

9.   Accrual in respect of retrospective rebates is to be advised to LND at
     commencement. A reserve will be maintained and updated at audit or more
     regularly at LND's discretion.
<PAGE>   33
CLIENT PARTICULARS

CORPORATE CLIENT

NAME:                                     Klippan Limited

COMPANIES REGISTRY NO:                    02264274
ADDRESS:                                  Byron Street, Carlisle

                                          Cumbria

                                          CA2 5TD

NATURE OF YOUR BUSINESS:                  Manufacturer of child safety equipment

EXECUTION

To confirm the respective consent of each party to this Agreement and to
acknowledge having had the opportunity to take independent legal advice both
parties have executed and delivered this agreement as indicated below on the
Twenty Seventh day of September 1999.


SIGNED and DELIVERED as a deed on           )
behalf of LOMBARD NATWEST DISCOUNTING       )
LIMITED by * Stephen Harper                 )   /s/ Stephen Harper
            ---------------------------     )   ----------------------------
duly appointed Attorney in the presence     )   Attorney for Lombard NatWest
of this Witness:                                Discounting Limited

Witness' Signature:   /s/ Alex Tang
                      --------------------------------------
Witness' Full Names:  Alex Tang
                      --------------------------------------

Witness' Address:     c/o Smith House, PO BOX 50 Elmwood Ave
                      --------------------------------------
                      Feltham, Middlesex TW137QD
                      --------------------------------------

Witness' Occupation:  Account Manager's Assistant
                      --------------------------------------

CORPORATE CLIENT

SIGNED and DELIVERED as a deed on behalf of )
                                            )
KLIPPAN LIMITED                             )
------------------------------------------- )
                                            )
by *    Robert M Thornton Jr.               ) /s/ Robert M Thornton Jr.
    --------------------------------------- ) ---------------------------------
                                   Director )        Signature of Director
                                            )
and *   David Wright                        ) /s/ David Wright
     -------------------------------------- ) ---------------------------------
                                 **Director          Signature of **Director

Key
*        Insert full names.
**       Delete as applicable.