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                                                                   EXHIBIT 10.30

[*] = information redacted pursuant to a confidential treatment request. Such
omitted information has been filed separately with the Securities and Exchange
Commission.

                             DATED 30 November 2001

                               PALM EUROPE LIMITED

                                       and

                          FOOTHILL CAPITAL CORPORATION

                                   (as Agent)

                         -------------------------------
                             GUARANTEE AND DEBENTURE
                         -------------------------------

                              Brobeck Hale and Dorr

                                    Park Gate
                                 25 Milton Park
                                 Oxford OX14 4SH
                            Tel: +44 (0)1235 823 000
                            Fax: +44 (0)1235 823 030

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                                TABLE OF CONTENTS

Clause                                                                  Page

1.    Definitions and Interpretation                                     1
2.    Covenant to Pay                                                    4
3.    Charging Clause                                                    5
4.    Deposit of Title and other Documents                               8
5.    Collection of Receivables                                          8
6.    Negative Pledge and other Restrictions                             9
7.    Further Assurance                                                  9
8.    Continuing Security                                               10
9.    General Covenants                                                 10
10.   Insurance Covenants                                               11
11.   Property Covenants and Consolidation of Mortgages                 11
12.   Powers of Sale, Leasing and Accepting Surrenders                  11
13.   Opening of New Accounts                                           12
14.   Appointment and Powers of a Receiver                              12
15.   Power of Attorney                                                 16
16.   Other Powers Exercisable by the Agent                             17
17.   Application of Money received by the Agent or a Receiver          18
18.   Costs and Interest on Overdue Amounts                             18
19.   Set-Off                                                           19
20.   Transfer                                                          20
21.   Disclosure                                                        20
22.   Perpetuity Periods                                                20
23.   Forbearance and Severability                                      20
24.   Variations and Consents                                           21
25.   Service of Demands and Notices                                    21
26.   Counterparts                                                      22
27.   Adjustment of Account                                             22
28.   Proviso for Redemption and Releases                               22
29.   Security Trusteeship                                              23
30.   Third Parties                                                     23
31.   Governing Law and Submission to Jurisdiction                      23
THE FIRST SCHEDULE                                                      26
The Charging Company                                                    26
THE SECOND SCHEDULE                                                     27
Terms of Guarantee                                                      27
Collection Account Side Letters                                         30

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THIS DEBENTURE made the 30 day of November 2001

BETWEEN:

(1)   PALM EUROPE LIMITED, a company incorporated in England and Wales whose
      registered office is at 100 New Bridge Street, London, EC4V 6JA as the
      Charging Company (as defined below);

(2)   FOOTHILL CAPITAL CORPORATION, a Californian corporation with its principal
      place of business at 2450 Colorado Avenue Suite 3000W, Santa Monica,
      California 90404 as agent for itself and the Lenders (as defined below)
      (the "Agent");

WITNESSES as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   Definitions: In this Debenture, words or expressions defined in the Loan
      Agreement (as defined below) shall, unless otherwise defined below, bear
      the same meaning in this Debenture and, in addition, in this Debenture
      (unless the context otherwise requires) the following expressions have the
      following meanings:

      "Agent" shall have the meaning given to it in the Loan Agreement and shall
      include, where the context permits or requires, any successor or
      replacement or other agent or security trustee appointed pursuant to that
      agreement;

      "Assets" means all the undertakings, property, assets, rights and revenues
      of the Charging Company whatsoever, present or future, wherever situated
      in the world and includes each or any of them;

      "Charged Property" means any assets charged, secured or assigned, whether
      in law or in equity, to the Lenders and/or Agent pursuant to this
      Debenture;

      "Charging Company" means Palm Europe Limited, details of which are given
      in the First Schedule, and includes (with effect from its execution and
      delivery of an agreement under which it accedes to the Debenture, or of a
      Debenture in terms similar to this Debenture) any company which
      subsequently adopts the obligations of the Charging Company and also
      (where the context permits) includes each or any of them;

      "Collection Account" has the meaning given to it by Clause 5 (Treatment of
      Receivables);

      "Confidential Information" has the meaning given to it in the Loan
      Agreement;

      "this Debenture" means this Debenture;

      "Default" has the meaning given to it in the Loan Agreement;

      "Employee Life Assurance Policies" means all assurance policies relating
      to accident or permanent health taken out for the purpose of benefiting
      any employee or


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      his dependants to the extent that the Charging Company is legally obliged
      to pay out the benefit of such policies to the relevant employees or their
      dependants;

      "Enforcement Date" means the date upon which the Lenders and/or Agent
      shall first enforce any part of the security hereby created in accordance
      with the terms of the Loan Agreement and/or this Debenture;

      "Event of Default" means (i) a Triggering Event as defined in the Loan
      Agreement or (ii) a Triggering Event as defined in the Palm Global Loan
      Agreement;

      "Floating Charge Assets" means, insofar only as concerns the floating
      charge created by Clause 3 (Charging Clause), Assets for the time being
      comprised within such floating charge;

      "Holding Company" means a parent undertaking within the meaning of Section
      258 of the Companies Act 1985;

      "Indebtedness" includes any obligation in any currency, whether incurred
      as principal debtor or surety, for the payment or repayment of money,
      whether present or future, actual or contingent;

      "Land" means any freehold and leasehold land in England and Wales and
      immovable property in Scotland or the equivalent under any other
      jurisdiction and in each case all buildings and structures and fixtures
      upon and all things affixed or annexed to Land (including trade and
      tenants' fixtures) in which the Charging Company may in the future acquire
      an interest;

      "Lenders" has the meaning given to it in the Loan Agreement;

      "Lien" has the meaning given to it in the Loan Agreement;

      "Loan Agreement" means the loan agreement to be made between the Charging
      Company (as Subsidiary Borrower), Foothill Capital Corporation, Heller
      Financial Inc., and The CIT Group/Business Credit, Inc. (as amended,
      supplemented and/or restated from time to time, including in relation to
      an increase in the facilities provided thereunder);

      "Loan Documents" means the UK Loan Documents and the Palm Global Loan
      Agreement together;

      "Palm Global" means Palm Global Operations Limited, a company incorporated
      in the Republic of Ireland with company number 317106;

      "Palm Global Loan Agreement" means the loan agreement to be made between
      Palm Global, Foothill Capital Corporation, Heller Financial Inc., and The
      CIT Group/Business Credit, Inc. (as amended, supplemented and/or restated
      from time to time including in relation to an increase in the facilities
      provided thereunder);

      "Permitted Lien" has the meaning given to it in the Loan Agreement;

      "Receivables" means all book and other debts now or in the future owing to
      the


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      Charging Company and all rights and claims of the Charging Company
      against third parties, present and future, capable of being satisfied by
      the payment of money (except rights and claims charged in Clauses 3.1.1,
      3.1.4 and 3.1.5 and except as provided in Clause 3.8)

      "Receiver" means any receiver or receivers appointed under Clause 14
      (Appointment of Receiver) and (where the context requires or permits)
      includes any substituted receiver or receivers;

      "Recoveries" means any money received by the Agent or by the Receiver
      under this Debenture and/or under the Loan Agreement on or after the
      Enforcement Date;

      "Secured Sums" means all money and liabilities covenanted and/or
      guaranteed to be paid or discharged or indemnified by the Charging Company
      to the Lenders under the Loan Agreement and Clause 2.1 (Covenant to Pay)
      or 2.2 (Indemnity);

      "Subsidiary" means a subsidiary undertaking within the meaning of Section
      258 of the Companies Act 1985;

      "UK Loan Documents" bears the meaning given to it in the Loan Agreement;

      "United Kingdom" and "UK" means the United Kingdom of Great Britain and
      Northern Ireland;

      "writing" includes telex, facsimile transmission and any other mode of
      representing or reproducing words in a legible and non-transitory form,
      except in relation to any certificate, notice or other document which is
      expressly required by this Debenture to be signed, and "written" has a
      corresponding meaning.

1.2   Interpretation: In this Debenture, unless the context otherwise requires:

      1.2.1     words denoting the singular number only shall also include the
                plural number and vice versa; words denoting the masculine
                gender only shall also include the feminine;

      1.2.2     gender; words denoting persons only shall include corporations,
                partnerships and unincorporated associations;

      1.2.3     references to clauses, paragraphs and Schedules are to be
                construed as references to clauses, paragraphs and Schedules of
                this Debenture;

      1.2.4     references to any party shall, where relevant, be deemed to be
                references to or to include, as appropriate, their respective
                successors or permitted assigns;

      1.2.5     references in this Debenture to this Debenture or any other
                document include references to this Debenture or such other
                document as varied, supplemented, restated and/or replaced in
                any manner from time to time and/or any document which varies,
                supplements, restates and/or replaces it;

      1.2.6     references to "including" shall not be construed restrictively
                but shall be


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                construed as meaning "including, without prejudice to the
                generality of the foregoing";

      1.2.7     references to moneys, obligations and liabilities due, owing or
                incurred under the Loan Agreement shall include moneys,
                obligations and liabilities due, owing or incurred in respect of
                any extensions or increases in the amount of the facilities
                provided for therein or the obligations and liabilities imposed
                thereunder;

      1.2.8     expressions defined in the Companies Act 1985 shall have the
                same meanings in this Debenture, except that the expression
                "company" shall include a body corporate established outside
                Great Britain;

      1.2.9     any reference to any statute or any section of any statute shall
                be deemed to include reference to any statutory modification or
                re-enactment of it for the time being in force; and

      1.2.10    the limitation on liability conferred by section 6(2) of the Law
                of Property (Miscellaneous Provisions) Act 1994 ("LP (MP) Act")
                shall not apply to the covenants for title implied on the part
                of the Charging Company and Section 3(1)(b) of the LP (MP) Act
                shall be construed without the words "other than any charges,
                encumbrances or rights which that person does not and could not
                reasonably be expected to know about".

1.3   Headings: Headings in this Debenture are inserted for convenience and
      shall not affect its interpretation.

2.    COVENANT TO PAY

2.1   Covenant to Pay: The Charging Company hereby:

      2.1.1     covenants that it will on demand in writing made in accordance
                with the Loan Agreement pay or discharge to the Agent all money
                and liabilities now or in the future due, owing or incurred to
                the Agent and the Lenders by the Charging Company under or
                pursuant to the Loan Agreement as and when the same fall due for
                payment; and

      2.1.2     covenants and guarantees that it will on demand in writing made
                to it by the Agent pay or discharge to the Agent all money and
                liabilities (including all Obligations) now or in the future
                due, owing or incurred but unpaid to the Lenders by Palm Global
                (except as a guarantor for the Charging Company) under or
                pursuant to the Palm Global Loan Agreement;

      in either case, whether on or after such demand, whether actually or
      contingently, whether solely or jointly with any other person, whether as
      principal or surety and whether or not any of the Lenders was an original
      party to the relevant transaction, including all interest, commission,
      fees, charges, costs and expenses which the Lenders may claim pursuant, in
      the case of (a), to the UK Loan Documents, or, in the case of (b), to the
      Palm Global Loan Agreement and so that interest shall be computed and
      compounded in accordance with the UK Loan Documents (or in the case of
      (b),


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      the Palm Global Loan Agreement) after as well as before any demand or
      judgement.

2.2   Indemnity: The Charging Company further agrees as a separate and
      independent primary obligation to indemnify the Agent and the Lenders on
      demand in writing made to it by the Agent for and against any loss, cost,
      expenses or liability of any kind incurred as a result of any of the
      obligations hereby guaranteed or covenanted to be paid by the Charging
      Company being or becoming void, unenforceable or ineffective against the
      Charging Company or Palm Global for any reason whatsoever whether known to
      the Agent or any Lender or not and for all other amounts expressed to be
      guaranteed but which are not recovered from the Charging Company or Palm
      Global on the footing of a guarantee for any reason whatsoever.

2.3   Terms of Guarantees: The guarantee contained in 2.1.2 (Covenant to Pay) is
      given subject to, and with the benefit of, the provisions set out in the
      Second Schedule.

2.4   Demands from the Agent: The making of one demand under this Debenture will
      not preclude the Agent from making any further demands. The Agent may only
      make a demand under this Debenture for payment of the Secured Sums
      following the occurrence and during the continuance of an Event of Default
      or if otherwise entitled to do so under the Loan Agreement or under Clause
      2.1.2 or Clause 2.2.

2.5   Third Parties: No demand may be made under this Debenture in respect of
      sums due, owing or incurred under a Loan Document except to the extent
      that the Agent has become entitled to make such demand under the relevant
      Loan Document, but any third party dealing with the Agent or any Receiver
      appointed under this Debenture shall not be concerned to see or enquire as
      to the validity of any demand under this Debenture.

2.6   All sums payable by the Charging Company under this Debenture shall be
      paid without any set off, counterclaim, withholding or deduction
      whatsoever unless required by law (or where such set off, counterclaim,
      withholding or deduction is permitted by the terms of the Loan Agreement)
      in which event the Charging Company making the payment will (except in
      circumstances where it would not be required so to do under the terms of
      the Loan Agreement) simultaneously with making the relevant payment under
      this Debenture pay to the Lender such additional amount as will result in
      the receipt by the Lender of the full amount which would otherwise have
      been receivable and will supply the Lender promptly with evidence
      satisfactory to the Lender that the Charging Company has accounted to the
      relevant authority for the sum withheld or deducted.

2.7   The Agent on behalf of each Lender (but without liability on the part of
      the Agent), covenants with the Charging Company that it shall perform its
      obligations under the Loan Agreement (including any obligation to make
      available further advances).

3.    CHARGING CLAUSE

3.1   Charging Clause: The Charging Company with full title guarantee (but
      subject to any Permitted Liens) hereby charges to the Agent (for the
      benefit of itself and the other Lenders) as security for the payment or
      discharge of all Secured Sums:


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      3.1.1     by way of first fixed charge, all contracts and policies of
                insurance and assurance (or any interest therein) now or in the
                future held by the Charging Company to the extent relating to
                the Charged Property and all rights and interests of the
                Charging Company in every such contract and policy (including
                the benefit of all claims arising and all money payable under
                such contracts and policies) (but excluding Employee Life
                Assurance Policies);

      3.1.2     by way of first fixed charge, all Receivables but for the
                avoidance of doubt not including bank accounts held by the
                Charging Company other than as expressly charged in paragraph
                3.1.3 below;

      3.1.3     by way of first fixed charge, all money at any time standing to
                the credit of any Collection Account including the proceeds of
                all its Receivables, which proceeds shall, for the avoidance of
                doubt, on payment into such Collection Account, cease to be
                subject to the charges contained in the preceding provisions of
                this Clause 3.1 but shall be subject to the fixed charge
                contained in this paragraph 3.1.3;

      3.1.4     by way of first fixed charge, all equipment, machinery, machine
                tools, motors, furniture, furnishings, fixtures, vehicles
                (including motor vehicles), tools, parts, goods (other than
                consumer goods or farm products), now or in the future belonging
                to the Charging Company, wherever located, including all
                attachments, accessories, replacements, substitutions, additions
                and improvements thereto; and

      3.1.5     by way of floating charge, all Assets expressed to be subject to
                any fixed charge contained in the preceding provisions of Clause
                3.1 to the extent that the relevant fixed charge may be
                ineffective or invalid or deemed not to constitute a fixed
                charge, and any Assets comprised within a charge which is
                reconverted under Clause 3.5 (Decrystallisation of Floating
                Charge);

      but in each case so that the Charging Company shall not (save if and to
      the extent permitted by the Loan Agreement) create any Lien over any
      Floating Charge Asset (whether having priority over, or ranking pari passu
      with or subject to, this floating charge) or take any other step referred
      to in Clause 6.1 (Negative Pledge and other Restrictions) with respect to
      any Floating Charge Asset and the Charging Company shall not, without the
      prior written consent of the Agent, sell, transfer, part with or dispose
      of any Floating Charge Asset except by way of sale in the ordinary course
      of its business or as permitted under the Loan Agreement.

3.2   Crystallisation of Floating Charge: The floating charges created by the
      Charging Company in Clause 3.1.5 (Charging Clause) may be crystallised
      into fixed charges by notice in writing given at any time by the Agent to
      the Charging Company given:

      3.2.1     at any time whilst an Event of Default is continuing; or

      3.2.2     in respect of any Charged Property whilst the Agent reasonably
                considers the security over it is in jeopardy or which is in
                danger of seizure.


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      Such crystallisation shall take effect over such Floating Charge Assets or
      class or classes of Floating Charge Assets as shall be specified in the
      notice. If no Floating Charge Assets are so specified, it shall take
      effect over all Floating Charge Assets of the Charging Company.

3.3   Automatic Crystallisation:

      3.3.1     Without prejudice to any rule of law which may have a similar
                effect if the Charging Company, without the Agent's prior
                written consent, resolves to take or takes any step to charge
                (whether by way of fixed or floating charge) or otherwise create
                any Lien (other than any Permitted Lien) over (or to create a
                trust over) any of its Floating Charge Assets or to dispose of
                any such Floating Charge Assets except by way of sale or other
                disposition in the ordinary course of its business (or as
                permitted by the Loan Agreement);

      3.3.2     if any person resolves to take or takes any step to levy any
                distress, execution, sequestration or other process against any
                Floating Charge Asset relating to a liability of the Charging
                Company; or

      3.3.3     if an Event of Default takes place or if any of the Secured Sums
                become due and outstanding prior to their stated maturity;

      then the floating charge created by Clause 3.1.5 (Charging Clause) shall
      be automatically crystallised (without the necessity of notice) into a
      fixed charge over such Floating Charge Asset instantly on the occurrence
      of such event.

3.4   Floating Charge Assets acquired after Crystallisation: Except as otherwise
      stated in any notice given under Clause 3.2 (Crystallisation of Floating
      Charge) or unless such notice relates to all Floating Charge Assets,
      Floating Charge Assets acquired by the Charging Company after
      crystallisation has occurred under Clause 3.2 (Crystallisation of Floating
      Charge) or 3.3 (Automatic Crystallisation) shall continue subject to the
      floating charge created by Clauses 3.1 (Charging Clause), so that the
      crystallisation shall be effective only as to its Floating Charge Assets
      in existence at the date of crystallisation.

3.5   Decrystallisation of Floating Charge: Any charge by the Charging Company
      which has crystallised under Clause 3.2 (Crystallisation of Floating
      Charge) or 3.3 (Automatic Crystallisation) may, by notice in writing given
      at any time by the Agent to the Charging Company, be reconverted into a
      floating charge in relation to the Assets or class or classes of Assets
      specified in such notice.

3.6   Priority of Fixed Security: Any mortgage, fixed charge or other fixed
      security whenever and however created by the Charging Company and
      subsisting in favour of the Agent shall (save as the Agent may otherwise
      declare at or after the time of its creation) have priority over the
      floating charge created by Clause 3.1.5 (Charging Clause).

3.7   Debenture to have Priority: Any debentures, mortgages or charges (fixed or
      floating) created in the future by the Charging Company (except those in
      favour of the


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      Agent) shall be expressed to be subject to this Debenture and shall rank
      in order of priority behind the charges created by this Debenture.

3.8   Floating Charges over Receivables to include Intra-Group Receivables: It
      is hereby agreed, that the fixed charges given by the Charging Company
      over its Receivables under Clause 3 (Charging Clause) shall not apply to
      Receivables owing to the Charging Company by any other Group Company which
      shall instead be subject to the floating charge contained in Clause 3.1.5
      and shall not be required to be paid into the Collection Account.

4.    DEPOSIT OF TITLE AND OTHER DOCUMENTS

      Except as otherwise expressly agreed in writing by the Agent, the Charging
      Company shall deposit with the Agent, and the Agent shall be entitled to
      retain, all deeds and documents of title relating to all its Assets
      charged by way of fixed charge under Clause 3 (Charging Clause) (including
      policies of insurance and assurance).

5.    COLLECTION OF RECEIVABLES

5.1   Treatment of Receivables: The Charging Company shall collect and realise
      all Receivables in the ordinary and usual course of its business on behalf
      of the Agent and shall, except as otherwise permitted by or pursuant to
      the Loan Agreement, pay into the account or accounts agreed in writing
      between the Agent and the Charging Company on or prior to the date of this
      Debenture or such other account as the Agent may direct from time to time
      (a "Collection Account") subject to and in accordance with the Third
      Schedule all money which it may receive in respect of the Receivables
      immediately on receipt. The Charging Company shall, pending such payment,
      hold all money so received upon trust for the Agent and in accordance with
      the Agent's instructions from time to time. The Charging Company shall
      procure that any bank which maintains a Collection Account shall hold all
      credit balances thereon to the order of the Agent. The Charging Company
      shall procure that the authorised signatories of the Collection Account
      shall at all times be such persons as Agent shall direct and no other
      persons shall have authority to operate the Collection Account.

5.2   Preservation of Charges: The Charging Company shall subject to and in
      accordance with the Third Schedule procure that the bank which holds the
      initial Collection Account into which it is required to pay its
      Receivables shall enter into such collection account agreements as the
      Agent may require under the terms of the Loan Agreement and the Charging
      Company shall not modify or cause to be modified such arrangements without
      the Agent's prior written consent. The Charging Company shall use best
      endeavours to procure that the bank which holds any subsequent Collection
      Account that may be opened in accordance with Clause 5.1 shall enter into
      such collection account agreements as the Agent may require under the
      terms of the Loan Agreement and the Charging Company shall not modify or
      cause to be modified such arrangements without the Agent's prior written
      consent. In the event that the Agent does not require the Charging Company
      to enter into any specific form of collection account agreement, the
      Charging Company shall instead promptly give notice to any bank or
      financial institution (other than the Agent) with which it holds a
      Collection Account in the form set out in the Third Schedule and use all
      reasonable endeavours to ensure that the relevant bank or financial
      institution acknowledges such notice in


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      the prescribed form.

5.3   Preservation of Charges upon Factoring: If the Agent releases, waives or
      postpones its rights in respect of any Receivables for the purpose of
      enabling the Charging Company to factor or discount them to a third party,
      the charges created by this Debenture shall in all other respects remain
      in full force and effect. In particular, all amounts becoming due to the
      Charging Company from the third party and any Receivables re-assigned, or
      due to be re-assigned, by the third party to the Charging Company shall be
      subject to the relevant fixed charge created by Clause 3.1 (Charging
      Clause), subject only to any defences or rights of set-off which the third
      party may have against the Charging Company.

5.4   Delivery of Particulars of Receivables: The Charging Company shall deliver
      to the Agent such particulars as to the amount and nature of its
      Receivables as the Agent may from time to time reasonably require taking
      into account the requirements of the Loan Agreement.

6.    NEGATIVE PLEDGE AND OTHER RESTRICTIONS

6.1   The Charging Company shall not, without the prior written consent of the
      Agent or save as otherwise permitted under the Loan Agreement (and, for
      the avoidance of doubt, with the exception of any Permitted Liens):

      6.1.1     create, or agree or attempt to create, or permit to subsist, any
                Lien of any kind (including any security conferring power to
                convert a floating charge into a fixed charge in relation to any
                Asset) or any trust over any of its Assets or permit any Lien to
                arise or subsist over any such Assets;

      6.1.2     sell, assign, lease, license or sub-license, or grant any
                interest in, or otherwise part with possessions of, dispose of,
                or cease to control, any of its Charged Property, or the right
                to receive or be paid the proceeds arising on collection or
                realisation of the same or purport to do any such act (save
                that, unless otherwise prohibited by the Loan Agreement or if
                the Charged Property is expressed to be subject to a fixed
                charge, it may deal with its Floating Charge Assets in the
                ordinary course of its business) or allow any subsidiary to do
                any such thing; or

      6.1.3     dispose of the equity of redemption in respect of any Charged
                Property.

7.    FURTHER ASSURANCE

      To the extent required to comply with the Loan Agreement or any of the
      other Loan Agreements, the Charging Company shall, and shall procure that
      its Subsidiaries shall, on demand by the Agent in writing, execute and
      deliver to the Agent at the cost of the Charging Company and in such form
      as the Agent may reasonably require:

7.1   a fixed charge over any interest in any Land in the future belonging to
      the Charging Company;

7.2   a fixed charge over its Receivables or the Collection Account and,
      following the occurrence of an Event of Default which is continuing,
      unless the Agent otherwise


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      agrees, shall give a legal assignment of its Receivables and/or give
      notice to the relevant debtor or bank holding the Collection Account in
      such form as the Agent has previously approved;

7.3   where any of its Charged Property (other than land) is situated outside
      England and Wales, such fixed security under the law of the place where
      the Asset is situated as the Agent may reasonably require;

7.4   a notice to any third party of any of the fixed charges or assignments
      contained in this Debenture provided that the Agent will not require the
      Charging Company to give such notice to customers of the Charging Company
      unless either (i) such notice is required to perfect Lender's fixed charge
      or assignment over the Receivables or Collection Accounts, (ii) any
      changes are made to the Collection Accounts arrangements, or (iii) an
      Event of Default has occurred; and

7.5   such other documents as the Agent may reasonably require further to secure
      the payment of the Secured Sums, or to perfect or protect this Debenture
      or facilitate its realisation on the exercise of the Agent's rights
      thereunder, or to vest title to any Asset in itself or its nominee or any
      purchaser and to register such security or title in any applicable
      register, in each case consistent with the jurisdiction in which such
      asset is situate with such legal opinions (if any) as the Agent may
      reasonably require from lawyers acceptable to it in relation to such new
      or additional charge or other security.

8.    CONTINUING SECURITY

      This Debenture shall be a continuing security and guarantee to the Agent,
      notwithstanding any intermediate payment or settlement of account or any
      other matter whatever, and shall be in addition to and shall not prejudice
      or be prejudiced by any right of lien, set-off, combination or other
      rights exercisable by the Agent and/or the Lenders as bankers against the
      Charging Company or any Lien, guarantee, indemnity and/or negotiable
      instrument now or in the future held by the Lenders and/or the Agent on
      their behalf.

9.    GENERAL COVENANTS

9.1   Notification of Acquisition of Assets: The Charging Company shall at all
      times immediately notify the Agent in writing of its acquisition of any
      interest or right in or to any Land material to the operation of any Group
      Company's business.

9.2   Negative covenants regarding Receivables: Save as permitted by the Loan
      Agreement, the Charging Company shall not, without the prior written
      consent of the Agent (and other than to offer trade credit in the ordinary
      course of its business, charge, factor, assign, postpone, subordinate,
      set-off, release, compound, settle, cease to collect or waive its rights
      of action in connection with any of its Receivables, do or omit to do
      anything which is likely to materially delay or prejudice the full
      recovery of its Receivables or otherwise deal with its Receivables save
      than by collecting in and realising the same (to the extent required to do
      so under Clause 5.1 (Treatment of Receivables) and paying the proceeds
      into the Collection Account.


                                       10

<PAGE>

9.3   Notification of Acquisition of Land: The Charging Company shall forthwith
      notify the Agent of any agreement proposed or made by it (whether now
      subsisting or made hereafter) for the acquisition by it or any person on
      its behalf of any Land, or any estate or interest in any Land.

10.   Insurance Covenants

10.1  Covenant to Insure: The Charging Company shall ensure that the insurance
      covenants contained in Clause 6.8 of the Loan Agreement are complied with.

10.2  Application of Insurance Proceeds: All moneys received by the Charging
      Company or the Agent on any policies of insurance relating to any Charged
      Property shall be applied in the manner specified in Clause 6.8 of the
      Loan Agreement and, if any moneys payable under any policies of insurance
      are paid to the Charging Company, such moneys will be held on trust
      pending their application for such purposes.

11.   PROPERTY COVENANTS AND CONSOLIDATION OF MORTGAGES

11.1  Section 93: Section 93 of the Law of Property Act 1925, dealing with the
      restriction on consolidation of mortgages, shall not apply to this
      Debenture.

11.2  Leasing, etc.: The Charging Company shall not, without the prior written
      consent of the Agent, exercise any power of leasing, or accept surrender
      of leases of, any Land, nor (save where obliged to do so by law) extend,
      renew or vary any lease or tenancy agreement or give any licence to assign
      or underlet.

11.3  Parting with Possession: The Charging Company shall not part with
      possession (except on the termination of any lease, tenancy or licence
      granted to the Charging Company) of any Land or share the occupation of it
      with any other person, or agree to do so, without the prior written
      consent of the Agent.

12.   POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS

12.1  Statutory Power of Sale to arise on Enforcement: Section 103 of the Law of
      Property Act 1925 shall not apply to this Debenture, but the statutory
      power of sale (as varied or extended by this Debenture) shall (as between
      the Agent and a purchaser from the Agent) arise on, and be exercisable at
      any time after, the execution of this Debenture. However, the Agent shall
      not exercise such power of sale until the Agent takes action in accordance
      with Clause 9 of the Loan Agreement and/or a demand has been made in
      accordance with Clause 2 of this Debenture, or a Receiver has been
      appointed, but this provision shall not affect a purchaser or require him
      to ask whether a demand or appointment has been made.

12.2  Power of the Agent to grant Leases: The statutory powers of sale, leasing
      and accepting surrenders under the Law of Property Act 1925 exercisable by
      the Agent by virtue of this Debenture are extended so as to authorise the
      Agent (whether in its own name or that of the Charging Company) to accept
      any surrenders of any lease or vary the terms of any lease as the Agent
      may see fit or to grant a lease or leases of any Land vested in the
      Charging Company or in which it has an interest, with such rights relating
      to other such Land, and containing such covenants on the part of the
      Charging


                                       11

<PAGE>

      Company, and generally on such terms and conditions, as the Agent shall
      think fit.

12.3  The Agent may sever fixtures: The statutory power of sale exercisable by
      the Agent is extended so as to authorise the Agent to sever any fixtures
      from Land and sell them separately.

12.4  Third Parties not to be concerned with validity of demand: No person
      dealing in good faith and for value with the Agent or any Receiver, its
      agents or brokers, shall be concerned to enquire whether this Debenture
      has become enforceable, or whether any power exercised or purported to be
      exercised has become exercisable, or whether any Secured Sums remain due
      upon this Debenture, or as to the necessity or expediency of any
      stipulations and conditions subject to which the sale of any Assets shall
      be made, or otherwise as to the propriety or regularity of the sale of any
      Asset, or to see to the application of any money paid to the Agent or such
      Receiver, or its agents or brokers, and each such dealing shall be deemed
      to be within the powers hereby conferred and to be valid and effectual
      accordingly.

13.   OPENING OF NEW ACCOUNTS

13.1  Ruling off of Accounts: On receiving notice that the Charging Company has
      encumbered or disposed of any of its Assets (other than as permitted under
      the Loan Agreement), the Agent may rule off the Charging Company's account
      or accounts and open a new account or accounts with the Charging Company.

13.2  Credits not to reduce Indebtedness of Charging Company: If the Agent does
      not open a new account or accounts immediately on receipt of such notice,
      it shall nevertheless be treated as if it had done so at the time when it
      received such notice and as from that time all payments made by the
      Charging Company to the Agent shall be treated as having been credited to
      such new account or accounts and shall not operate to reduce the amount
      owing from the Charging Company to the Agent at the time when it received
      such notice.

14.   APPOINTMENT AND POWERS OF A RECEIVER

14.1  Appointment of Receiver:  At any time:

      14.1.1    after failure by the Charging Company to pay any Secured Sum due
                from it under Clause 2.2 on the due date for payment; or

      14.1.2    following the occurrence and during the continuance of an Event
                of Default; or

      14.1.3    if at any time the Agent shall be of the reasonable opinion that
                any material part of the Charged Property of the Charging
                Company is in imminent danger of seizure, distress or other
                legal process;

      the Agent may appoint by writing any person or persons to be a receiver
      and manager or receivers and managers of the Charged Property of the
      Charging Company and, in the case of Clause 14.1.3, such appointment shall
      only be in relation to the part of the Charged Property which the Agent
      believes to be in such danger.


                                       12

<PAGE>

14.2  Powers of Receivers (Joint and Several or Several): Where more than one
      Receiver is appointed, they shall have power to act separately unless the
      Agent shall in the appointment specify to the contrary.

14.3  Remuneration of Receivers: The Agent may from time to time determine the
      remuneration of the Receiver.

14.4  Power of the Agent to Remove Receiver: The Agent may remove the Receiver
      from all or any of the Charged Property of which he is the Receiver.

14.5  Further Appointment: Such an appointment shall not preclude:

      14.5.1    the Agent from making any subsequent appointment of a Receiver
                over all or any of the Charged Property over which a Receiver
                has not previously been appointed by the Agent or has been
                removed or otherwise ceased to act; or

      14.5.2    a Receiver, while continuing to act, consenting to the
                appointment of an additional Receiver to act with him.

14.6  Status of Receiver: The Receiver of the Charging Company shall be the
      agent of the Charging Company (which shall be solely liable for his acts,
      defaults and remuneration) unless and until the Charging Company goes into
      liquidation (or its equivalent under any applicable law), after which he
      shall act as principal and shall not become the agent of the Agent or the
      Lenders, in each case, with respect to the Charged Property.

14.7  Powers of Receiver: The Receiver of the Charging Company shall have and be
      entitled to exercise in relation to the Charging Company all the powers
      set out in the Law of Property Act 1925 and the Insolvency Act 1986 and in
      addition the Receiver shall have authority on behalf of the Charging
      Company:

      14.7.1    to take possession of, collect and get in all or any part of the
                Charged Property and to take and defend any proceedings
                (including proceedings for its winding up or proceedings by way
                of arbitration) in its name or otherwise as he shall think fit;

      14.7.2    to comply with and perform all or any of the acts, matters,
                omissions or things covenanted to be done or omitted by the
                Charging Company under this Debenture;

      14.7.3    to sell by public auction or private contract or let all or any
                part of the Charged Property and to let on hire lease, surrender
                and accept surrenders of leases and tenancies, grant rights,
                licences, options or easements or exchange all or any part of,
                and otherwise deal with or dispose of and exercise all rights,
                powers and discretions incidental to the ownership of, any of
                the Charged Property in the name of and on behalf of the
                Charging Company or otherwise concur in doing any of the
                foregoing in such manner and generally on such terms and
                conditions and for such consideration (whether in cash,
                debentures or other obligations, shares, stocks, securities


                                       13

<PAGE>

                or other valuable consideration and whether payable by a lump
                sum or by instalments) as he may think fit and carry out any
                such sale by conveying by deed or transferring in the name and
                on behalf of the Charging Company or otherwise, and so that
                plant machinery and other fixtures and fittings may be severed
                and sold separately from the premises containing them, and the
                Receiver may apportion any rent and the performance of any
                obligations;

      14.7.4    to repair, decorate, furnish, maintain, alter, improve, renew or
                add to the Charged Property or any part of it as he shall think
                fit and effect, maintain, renew or increase indemnity insurance
                and other insurances and obtain bonds;

      14.7.5    to appoint or dismiss managers, agents, officers, employees,
                servants, builders or workmen and employ professional advisers
                and others at such salaries or for such remuneration as he may
                think fit;

      14.7.6    to perform, repudiate, rescind, vary or enter into any
                arrangement or compromise any contracts or agreements with
                respect to the Charged Property which he may consider expedient;

      14.7.7    to settle, arrange, compromise and submit to arbitration any
                accounts, claims, questions or disputes whatsoever which may
                arise in connection with the Charged Property or in any way
                relating to the security constituted by this Debenture and
                bring, prosecute, defend, enforce, compromise, submit to and
                discontinue any actions, suits, arbitrations or proceedings
                whatsoever whether civil or criminal;

      14.7.8    to use the name of the Charging Company in the exercise of all
                or any of the power and authority conferred by this Debenture;

      14.7.9    to exercise or permit the Charging Company or any nominee of the
                Charging Company to exercise any powers or rights incidental to
                the ownership of the Charged Property or any part of it in such
                manner as he may think fit;

      14.7.10   to give valid receipts for all moneys and execute all
                discharges, assurances and things which may be proper or
                desirable for realising the Charged Property or any part of
                them;

      14.7.11   to sell or concur in selling (where necessary with the leave of
                the Court), lease or concur in leasing, licence or concur in
                licensing, grant options over and, without the need to observe
                any of the provisions of Sections 99 and 100 of the Law of
                Property Act 1925, let or concur in letting and to terminate or
                to accept surrenders of leases, licences or tenancies of all or
                any of the Assets of the Charging Company in such manner and
                generally on such terms and conditions as he shall think fit in
                his absolute and unfettered discretion and any such sale or
                disposition may be for cash, debentures, securities or other
                valuable consideration (in each case payable in a lump sum or by
                instalments) and to carry any such transactions into


                                       14

<PAGE>

                effect in the name of and on behalf of the Charging Company;

      14.7.12   to promote the formation of a Subsidiary or Subsidiaries of the
                Charging Company with a view to such Subsidiary or Subsidiaries
                purchasing, leasing, licensing or otherwise acquiring interests
                in all or any of the Assets of the Charging Company;

      14.7.13   to arrange for such Subsidiary or Subsidiaries to trade or cease
                to trade in connection with the Charged Property as the Receiver
                may think fit from time to time;

      14.7.14   to sever any fixtures from the Land of which they form part;

      14.7.15   to arrange for the purchase, lease, licence or acquisition of
                all or any Charged Property by any such Subsidiary on a basis
                whereby the consideration may be for cash, shares, debentures,
                loan stock, convertible loan stock or other securities, shares
                of profits or sums calculated by reference to profits or
                turnover or royalties or licence fees or otherwise, whether or
                not secured on the assets of such Subsidiary and whether or not
                such consideration is payable or receivable in a lump sum or by
                instalments over such period as the Receiver may think fit;

      14.7.16   to make any arrangement or compromise with the Agent and/or the
                Lenders in connection with the Charged Property as he shall
                think fit;

      14.7.17   to make and effect all repairs, renewals and improvements to the
                Charged Property and to effect, renew or increase insurances
                related thereto on such terms and against such risks as he shall
                think fit;

      14.7.18   to appoint managers, officers and agents for the above purposes
                at such salaries as the Receiver may determine;

      14.7.19   to pay the proper administrative charges of the Agent and/or
                Lenders in respect of time spent by their agents and employees
                in dealing with matters raised by the Receiver or relating to
                the receivership of the Charging Company in connection with the
                Charged Property;

      14.7.20   to commence and/or complete any building operations upon any
                freehold or leasehold Land of the Charging Company and to apply
                for and obtain any planning permissions, building regulation
                consents or licences in each case as he may in his absolute
                discretion think fit;

      14.7.21   to vary the terms of the leases of any such freehold and
                leasehold Land;

      14.7.22   to take all steps necessary to effect all registrations,
                renewals, applications and notifications as the Receiver will in
                his discretion think prudent to maintain in force or protect any
                of the Charging Company's intellectual property rights with
                respect to the Charged Property; and

      14.7.23   to do all such other acts and things as may be considered by the
                Receiver to be incidental or conducive to any of the above
                matters or powers or


                                       15

<PAGE>

                otherwise incidental or conducive to the preservation,
                improvement or realisation of the relevant Assets.

14.8  Third Parties: Neither the Agent nor the Receiver shall be liable to
      account as mortgagee in possession or otherwise for any money not actually
      received by it or him respectively.

14.9  The Charging Company irrevocably appoints the Receiver as agent of the
      Charging Company (which shall be solely liable for his acts, defaults and
      remuneration) for the purpose of exercising the authorities set out in
      Clause 14.7. Without the express consent of the Receiver or Agent, the
      Charging Company hereby covenants not to take any action falling within
      the powers of the Receiver listed in Clause 14.7 at a time when a Receiver
      has been appointed. The Receiver will exercise the power and authority
      given to him in Clause 14.7 solely for the purpose and to the extent that
      he reasonably considers necessary or desirable for enforcement against
      and/or maximising the value of the Charged Property for the purposes of
      realisation of and/or enforcement against the Charged Property. The Agent
      and/or the Receiver will give their consent to the exercise by the
      Charging Company of the authorities listed in Clause 14.7 except to the
      extent that either of them reasonably believe that such exercise by the
      Charging Company may materially prejudice the enforcement against, or the
      value of, the Charged Property.

15.   POWER OF ATTORNEY

15.1  Power of Attorney: The Charging Company by way of security hereby
      irrevocably appoints the Agent (whether or not a Receiver has been
      appointed) and any Receiver separately the attorney of the Charging
      Company (with full power to appoint substitutes and to delegate) for the
      Charging Company, in its name and on its behalf, and as its act and deed
      or otherwise, at any time during the continuance of an Event of Default
      to:

      15.1.1    execute and deliver and otherwise perfect any agreement,
                assurance, deed, instrument or document; or

      15.1.2    perform any act;

      which may be required of the Charging Company under this Debenture, or may
      be deemed by such attorney necessary or desirable (in circumstances where
      a Receiver has not been appointed, where the Charging Company has failed
      promptly so to execute, deliver, perfect or perform upon request, but
      where a Receiver has been appointed, without any requirement first to make
      such a request) to enhance or perfect the security intended to be
      constituted by it or to convey or transfer legal ownership of any Assets
      or in exercise of all or any powers, authorities and discretions conferred
      by or pursuant to this Debenture or by the Law of Property Act 1925 on the
      Lender or any Receiver.

15.2  Ratification: Without prejudice to the generality of the provisions
      contained in Clause 15.1 (Power of Attorney), the Charging Company hereby
      covenants with the Agent and separately with any Receiver that if required
      so to do the Charging Company will ratify and confirm:


                                       16

<PAGE>

      15.2.1    all transactions entered into by it or (as the case may be) them
                at its or (as the case may be) their instance in the proper
                exercise of its or (as the case may be) their powers in
                accordance with this Debenture; and

      15.2.2    all transactions entered into by it or (as the case may be) them
                in signing, scaling, delivering and otherwise perfecting any
                assignment, mortgage, charge, security, deed, assurance,
                document or act as aforesaid;

      and the Charging Company irrevocably acknowledges and agrees that such
      power of attorney is (inter alia) given to the Agent, or, as the case may
      be, the Receiver, or both, to secure the performance of the obligations
      owed to him or them by the Charging Company.

16.   OTHER POWERS EXERCISABLE BY THE AGENT

16.1  The Agent may exercise Receiver's Powers: All authority of the Receiver
      conferred by this Debenture may be exercised by the Agent at any time
      after the occurrence of any event listed in Clause 14.1 whether as
      attorney of the Charging Company or otherwise and whether or not the
      Receiver shall have been appointed and so that Clause 14.7.22 (Powers of
      Receiver) shall be read and construed as if the words "be charged on the
      Assets of the Charging Company" were substituted for the words "be deemed
      an expense properly incurred by the Receiver".

16.2  The Agent empowered to receive Book Debts: The Agent or any manager or
      officer of the Agent is hereby irrevocably empowered:

      16.2.1    to receive all book debts and other debts and claims which may
                be charged under Clause 3.1 or assigned to the Agent pursuant to
                Clause 7 (Further Assurance) in the Collection Account and, at
                any time after the occurrence of any event listed in Clause 14.1
                in any manner the Agent and/or Receiver deem appropriate; and

      16.2.2    on payment to give an effectual discharge for them and on
                non-payment (whilst an Event of Default is continuing, at its
                discretion or otherwise in accordance with the instructions of
                the Charging Company) to take and institute (if the Agent in its
                sole discretion so decides) all steps and proceedings either in
                the name of the relevant assignor or in the name of the Agent
                for their recovery and also to agree accounts and to make
                allowances and to give time to any surety. The relevant assignor
                hereby undertakes to ratify and confirm whatever the Agent or
                any manager or officer of the Agent shall do or purport to do
                under this Clause 16.

16.3  Exclusion of the Agent's Liability: None of the Agent, nor any of its
      agents, managers or officers, shall have any liability or responsibility
      to the Charging Company arising out of the exercise or non-exercise of the
      rights conferred on it by this Clause 16 except for the Agent's gross
      negligence and wilful default.

16.4  The Agent not Obliged to take action relating to Book Debts: The Agent
      shall not be obliged to make any enquiry as to the sufficiency of any sums
      received by it in respect of any book debts or other debt or claim so
      assigned to it or to make any claim


                                       17

<PAGE>

      or take any other action to collect in or enforce them.

17.   APPLICATION OF MONEY RECEIVED BY THE AGENT OR A RECEIVER

17.1  Application of Recoveries: Any money received under the powers conferred
      by this Debenture shall, subject to the discharge of any prior-ranking
      claims, but without prejudice to the rights of the Lender to recover any
      shortfall from a Charging Company, be paid or applied in the following
      order of priority:

      17.1.1    in satisfaction of all costs, charges and expenses incurred, and
                payments made, by the Agent and/or the Receiver, and of the
                remuneration of the Receiver;

      17.1.2    in or towards satisfaction of the Secured Sums in the manner
                applicable under the Loan Agreement; and

      17.1.3    as to the surplus (if any), to the person or persons entitled to
                it.

17.2  Suspense Account: The Agent may, in its absolute discretion on or at any
      time or times after demand and pending the payment to the Agent of the
      whole of the Secured Sums, place and keep to the credit of a separate or
      suspense account bearing interest at a commercial rate any money received,
      recovered or realised by the Agent by virtue of this Debenture for so long
      and in such manner as the Agent may reasonably consider necessary to
      enable it to claim the full amount in respect of which that money is paid
      in any relevant insolvency without any intermediate obligation to apply it
      in or towards the discharge of any Secured Sum.

18.   COSTS AND INTEREST ON OVERDUE AMOUNTS

18.1  Indemnity: All costs, charges and liabilities (including all professional
      fees and disbursements and value added tax and/or any similar tax) and all
      other sums paid or incurred by the Agent and/or any Receiver under or in
      connection with this Debenture or the Charging Company's affairs shall be
      recoverable (on a full indemnity basis) as a debt payable on demand from
      the Charging Company, may be debited without notice to any account of the
      Charging Company, shall bear interest in accordance with Clause 18.3 and
      shall be charged on the Assets of the Charging Company. The Charging
      Company shall indemnify the Agent against all and any costs, charges and
      expenses arising:

      18.1.1    out of any of the property charged or purported to be charged
                pursuant to Clause 3 (Charging Clause) or Clause 7 (Further
                Assurance) referable to it infringing or allegedly infringing
                any third party rights; and

      18.1.2    in relation to any proceedings referable to the Charging Company
                brought against the Agent or to which the Agent may be joined
                whether as plaintiff or defendant which relate to any of such
                Charged Property.

18.2  Types of Costs Recoverable: Without prejudice to the generality of Clause
      18.1 (Indemnity), the costs recoverable by the Agent and/or any Receiver
      under this Debenture shall to the extent the same are recoverable under
      the Loan Agreement include:


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<PAGE>

      18.2.1    all costs properly incurred by the Agent in preparing and
                administering this Debenture or perfecting the security created
                by it;

      18.2.2    all costs (whether or not allowable on a taxation by the court)
                of all proceedings for the enforcement of this Debenture or for
                the recovery or attempted recovery of the Secured Sums;

      18.2.3    all money properly expended and all costs arising out of the
                exercise of any power, right or discretion conferred by this
                Debenture; and

      18.2.4    all costs and losses arising from any default by the Charging
                Company in the payment when due of any Secured Sums or the
                performance of its obligations under this Debenture.

18.3  Overdue Amounts: Any overdue amounts secured by this Debenture shall carry
      interest at the rate and in accordance with the terms contained in the
      Loan Agreement in relation to overdue sums or such other rate as may be
      agreed between the Charging Company and the Agent. In each case, such
      interest shall accrue on a day to day basis to the date of repayment in
      full and, if unpaid, shall be compounded on the terms so agreed (or in the
      absence of such agreed terms) with monthly rests on the Agent's usual
      monthly interest days. Interest shall continue to be charged and
      compounded on this basis after, as well as before, any demand or judgment.

18.4  Currency Indemnity: Moneys received or held by the Agent pursuant to this
      Debenture may from time to time after demand has been made be converted
      into such currency as the Agent considers necessary or desirable to
      discharge the Secured Sums in that currency at such rate of exchange as
      may be applicable under the Loan Agreement or, if none, the then
      prevailing spot rate of exchange of Wells Fargo Bank, N.A or any successor
      thereto (as conclusively determined by the Agent) for purchasing the
      currency to be acquired with the existing currency.

19.   SET-OFF

19.1  The Agent may apply any money standing to the credit of the Charging
      Company with the Agent in any currency upon any account or otherwise (in
      any country and whether or not in the Charging Company's name) as cover
      for any Secured Sums at any time after an Event of Default has occurred
      and is continuing without notice to the Charging Company and may set-off,
      combine or consolidate all or any of such money with all or such part of
      the Secured Sums as the Agent may select (whether presently payable or
      not) and the Agent may purchase with any such money any other currency
      required to effect such combination.

19.2  The Charging Company irrevocably authorises the Agent in its name and at
      its expense to perform such acts and sign such documents as may be
      required to give effect to any set-off or transfer pursuant to Clause
      19.1, including the purchase with the money standing to the credit of any
      such account of such other currencies as may be necessary to effect such
      set-off or transfer.

19.3  The foregoing provisions of this clause shall be in addition to and
      without prejudice to such rights of set-off, combination, consolidation,
      lien and other rights whatsoever


                                       19

<PAGE>

      conferred on the Agent by law.

20.   TRANSFER

      The Agent and the Lenders may at any time transfer all or any part of its
      rights in relation to this Debenture and the Secured Sums to any person or
      otherwise grant an interest in them to any person to which it is entitled
      to make such a transfer under the Loan Agreement.

21.   DISCLOSURE

      Except as otherwise provided in this Debenture, Agent and Lenders shall
      not disclose any Confidential Information without the consent of the
      Charging Company concerning the Charging Company, this Debenture and the
      Secured Sums other than:

21.1  to any Affiliate of the Agent or the Lenders and their officers,
      directors, employees, agents and advisors; and

21.2  to any actual or prospective transferee or grantee referred to in Clause
      20 (Transfer) on a confidential basis.

      The above authority is without prejudice to any obligation of the Agent
      and the Lenders to make disclosure imposed by law, rule or regulation or
      required by any authority or regulator.

      If Agent or a Lender is required by any law, rule, or regulation or
      judicial process to disclose any Confidential Information, to the extent
      permitted by applicable law, it shall promptly give notice to Charging
      Company so that Charging Company may seek a protective order or other
      appropriate remedy. If Charging Company does not obtain such a protective
      order or other remedy, to the extent permitted by applicable law, Agent or
      the Lender, as applicable, will endeavour to furnish only that portion of
      the Confidential Information that it reasonably believes to be legally
      required.

22.   PERPETUITY PERIODS

      The perpetuity period applicable to the trusts hereby constituted shall be
      80 years.

23.   FORBEARANCE AND SEVERABILITY

23.1  No Waivers: All rights, powers and privileges under this Debenture shall
      continue in full force and effect, regardless of the Agent exercising,
      delaying in exercising or omitting to exercise any of them.

23.2  Invalidity and Severability:

      23.2.1    None of the covenants and guarantees given and none of the
                charges created by the Charging Company under this Debenture
                shall be avoided or invalidated by reason only of one other or
                more of such covenants, guarantees or charges being invalid or
                unenforceable.

      23.2.2    Any provision of this Debenture which for any reason is or
                becomes illegal,


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<PAGE>

                invalid or unenforceable shall be ineffective only to the extent
                of such illegality, invalidity and unenforceability, without
                invalidating the remaining provisions of this Debenture.

24.   VARIATIONS AND CONSENTS

24.1  Variations in Writing: No variation of this Debenture shall be considered
      valid and as constituting part of this Debenture, unless such variation
      shall have been made in writing and signed by the Agent and the Charging
      Company.

24.2  Variation: The expression "variation" shall include any variation,
      supplement, extension, deletion or replacement however effected.

24.3  Conditional Consents: Save as otherwise expressly specified in this

      Debenture or the Loan Agreement, any consent of the Agent may be given
      absolutely or on any terms and subject to any conditions as the Agent may
      determine in its entire discretion.

25.   SERVICE OF DEMANDS AND NOTICES

25.1  Notices to Companies: A demand for payment or any other communication to
      be given to the Charging Company under this Debenture may be made or given
      by any manager or officer of the Agent and must be in writing addressed to
      the Charging Company and served on it at the address for service of the
      Charging Company stated in the First Schedule or to the address last
      notified to the Agent by the Charging Company or its existing or last
      known place of business (or, if more than one, any one of such places), or
      by facsimile transmission to the facsimile number stated in the First
      Schedule or to the facsimile number last notified to the Agent by the
      Charging Company or by any other form of electronic communication which
      may be available.

25.2  Notices to Agent: Any communication to be given to the Agent under this
      Debenture must be given to the Agent in writing served on it at 2450
      Colorado Avenue, Suite 3000, Santa Monica, California, 90404 (marked for
      the attention of the Business Finance Division Manager), or by facsimile
      to facsimile number 310 453 7443, with copies to Brobeck Phleger Harrison
      LLP, 550 South Hope Street, Suite 2100, Los Angeles, California, 90071,
      marked for the attention of John Francis Hilson, facsimile number 213 745
      3700, or the address last notified to the Charging Company by the Agent in
      writing.

25.3  Deemed Service: A notice or demand shall be deemed to be duly served on
      the Charging Company:

      25.3.1    if delivered by hand, at the time of actual delivery;

      25.3.2    if transmitted by facsimile, at the time the facsimile
                transmission report (or other appropriate evidence) confirming
                that the facsimile has been transmitted to the addressee is
                received by the sender; and/or

      25.3.3    if sent by first class prepaid post, at noon on the third
                Business Day following the day of posting and shall be effective
                even if it is misdelivered or returned undelivered;


                                       21

<PAGE>

      provided that, where delivery or transmission occurs after 6.00 p.m. in
      the place of delivery on a Business Day or on a day which is not a
      Business Day, service shall be deemed to occur at 9.00 am in the place of
      delivery on the next Business Day.

      In proving such service it shall be sufficient to prove that personal
      delivery was made or that the envelope containing the communication was
      correctly addressed and posted or that a facsimile transmission report (or
      other appropriate evidence) was obtained that the facsimile had been
      transmitted to the addressee.

25.4  Service on Agent: Any communication to the Agent shall be deemed to have
      been given only on actual receipt by it.

26.   COUNTERPARTS

      This Debenture may be executed by the parties in any number of copies, all
      of which taken together shall constitute a single Debenture.

27.   ADJUSTMENT OF ACCOUNT

      If the state of account between the Lenders and the Charging Company by
      reference to which any Secured Sums are calculated for the purposes of
      this Debenture requires adjustment at any time because of any claim made
      against the Lenders by an officeholder (within the meaning of Section 234
      of the Insolvency Act 1986) then, notwithstanding any other provision of
      this Debenture:

27.1  the Charging Company's liability to the Lenders will be correspondingly
      adjusted; and

27.2  the Agent may treat any release or settlement made by it with the Charging
      Company before any such adjustment is required as being of no effect; and

27.3  the Agent may recover from the Charging Company such sum as will place the
      Lenders in the same position as if such release or settlement had not been
      made.

      If any claim is made against the Agent or any Lender under any insolvency
      law with reference to this Debenture, the Agent or the Lender may agree
      the claim or settle it on any terms it chooses without asking for the
      Charging Company's agreement. If the Agent or the Lender does agree or
      settle such claim, the Charging Company will be liable under this
      Debenture as if a court order had been made containing the terms which the
      Agent or the Lender agreed or settled. The Charging Company will be
      responsible for all costs and expenses which the Agent or the Lenders
      properly incur in defending such a claim.

28.   PROVISO FOR REDEMPTION AND RELEASES

      (Subject to the provisions of the Second Schedule), following payment and
      discharge in full of the Secured Sums to be paid or discharged by the
      Charging Company under the Loan Agreement, the Palm Global Loan Agreement
      and this Debenture or if the Charging Company wishes to dispose of an
      Asset charged by way of fixed charge under this Debenture where such
      disposal is permitted under this Debenture the Agent will, at the request
      and cost of the Charging Company, execute a release and reassignment of
      all or the relevant part of the security given by the Charging


                                       22

<PAGE>

      Company comprised in this Debenture in such form as the Charging Company
      may reasonably require.

29.   SECURITY TRUSTEESHIP

      The Agent shall hold the guarantees and security created by this Debenture
      and any other document creating guarantees or security given by the
      Charging Company in trust for the benefit of itself and the Lenders on the
      terms and subject to the conditions set out in this Debenture or such
      other security document (each a "Relevant Document") and the Loan
      Agreement. The Agent shall not have (or be deemed to have) any obligations
      to, or trust or fiduciary relationship with, any person other than those
      for which specific provision is made in any Relevant Document or the Loan
      Agreement. The Agent, in carrying out its functions as agent and security
      trustee under any Relevant Documents shall not be agent or trustee for any
      party other than the Lenders; and shall, for the avoidance of doubt, have
      all the rights, privileges, immunities and indemnities accorded to the
      Agent under the Loan Agreement and which are accorded to a gratuitous
      trustee under English law.

30.   THIRD PARTIES

      Third parties shall for the avoidance of doubt be entitled to the benefit
      of Clauses 12.4 and (with respect to the agents, managers and officers of
      the Agent) 16.3 of this Debenture in accordance with the Contracts (Rights
      of Third Parties) Act 1999. The Debenture may for the avoidance of doubt
      be amended without the consent of any party other than the Charging
      Company and the Agent.

31.   GOVERNING LAW AND SUBMISSION TO JURISDICTION

31.1  Governing Law: This Debenture shall be governed by and construed in all
      respects in accordance with English law.

31.2  Submission to Jurisdiction:

      31.2.1    The Charging Company irrevocably submits for the benefit of the
                Agent to the non-exclusive jurisdiction of the courts of England
                for the purpose of hearing and determining any dispute arising
                out of this Debenture.

      31.2.2    For the purpose of enforcement of any judgement against its
                assets, without prejudice to any other permitted mode of
                service, the Charging Company agrees that service of any writ,
                notice or other document for the purpose of any proceedings in
                such courts shall be duly served upon it if delivered or sent by
                registered post to the Charging Company at the address for
                notices specified in Clause 25 (Service of Demands and Notices)
                or such other address in England or Wales as the Charging
                Company may notify from time to time to the Agent.

      31.2.3    The Charging Company irrevocably agrees not to claim that any
                such court is not a convenient or appropriate forum and agrees
                that a judgment in proceedings brought in such courts shall be
                conclusive and binding upon them and may be enforced in any
                other jurisdiction.


                                       23

<PAGE>

31.3  Freedom of Choice: The submission to the jurisdiction of the courts
      referred to in Clause 31.2 (Submission to Jurisdiction) shall not (and
      shall not be construed so as to) limit the right of the Agent to take
      proceedings against the Charging Company in the courts of any country in
      which the Charging Company has assets or in any other court of competent
      jurisdiction nor shall the taking of proceedings in any one or more
      jurisdictions preclude the taking of proceedings in any other jurisdiction
      (whether concurrently or not) if and to the extent permitted by applicable
      law.

THIS GUARANTEE AND DEBENTURE has been executed by the Charging Company as a Deed
and signed by the Agent on behalf of itself and the other Lenders but shall only
be treated as having been executed and delivered to take effect on the day and
year first above written.


                                       24

<PAGE>

Chargors

EXECUTED and DELIVERED as a                     )
Deed by PALM EUROPE LIMITED                     )
(pursuant to a resolution of its Board          )
of Directors) acting by:                        )

                              Director /s/ Judy Bruner

                              Director/Secretary /s/ Stephen Yu

Agent

SIGNED by                                       )
for and on behalf of                            ) /s/ John Nocita
FOOTHILL CAPITAL CORPORATION                    )     Vice President


                                       25

<PAGE>

                               THE FIRST SCHEDULE

                              The Charging Company

=============================================================================
Name of Charging Company       Registered      Address for Service and Fax
                               Number          or Telex Number
-----------------------------------------------------------------------------
Palm Europe Limited            03903962        220 Wharfdale Road,
                                               Wokingham, Berkshire,
                                               RG41 5TB

                                               Fax number: (44) 118 927 8791
                                               For the attention of the
                                               Legal Department

                                               With a copy to:
                                               Palm Inc.
                                               5470 Great America Parkway
                                               MS12106
                                               Santa Clara CA95052

                                               Fax number: 001 408 878 2790
                                               For the attention of the
                                               General Counsel

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


                                       26

<PAGE>

                               THE SECOND SCHEDULE

                               Terms of Guarantee

1.    This Guarantee will continue in full force irrespective of whatever
      dealings may occur between the Agent, the Lenders, the Charging Company
      and Palm Global including, without limitation, by way of the granting of
      additional time for the performance of any obligation or the variation of
      any obligation.

2.    If this Guarantee ceases for any reason to be binding on the Charging
      Company as a continuing security in relation to Palm Global, then the
      Agent may break such accounts of the Charging Company and Palm Global with
      the Agent as the Agent deems appropriate and open new accounts for the
      account holders affected.

      If that is done, no money credited to such new account at that time or
      later will have the effect of reducing the amount due to the Agent on the
      original account. If that is not done, the Agent will still be treated as
      if it had broken all such accounts at the time when such notice expired or
      this Guarantee ceased to be a continuing security and as if all payments
      made to the Agent then or later had been credited to a new account with
      the same result.

3.    This Guarantee is to be in addition to and is not to prejudice or be
      prejudiced by any other guarantee or security (including any other
      guarantee signed by the Charging Company) which the Agent may hold from or
      on account of Palm Global either now or in the future. This Guarantee may
      be enforced without the Agent first taking any steps or proceedings
      against Palm Global or having recourse to any such other guarantee or
      security.

4.    The Charging Company shall not have the right to:

      (a)   make any claim (whether by way of proof in liquidation or otherwise)
            against Palm Global or any property of Palm Global or claim or prove
            in competition with the Agent in the liquidation of Palm Global; or

      (b)   participate in any security held or money received by the Agent on
            account of the Secured Sums; or

      (c)   stand in the place of the Agent in respect of any such security or
            money,

      until in each case all Secured Sums have been repaid to the Agent in full.
      Notwithstanding the foregoing the Charging Company shall have the right,
      until the occurrence of an Enforcement Event, to make a claim with respect
      to, participate in, or stand in place of the Agent in respect of any
      Receivables owing to the Charging Company by any other Group Company which
      are subject to the floating charge referred to in Clause 3.8 of this
      Debenture.


                                       27

<PAGE>

      However, if so directed by the Agent but not otherwise, the Charging
      Company shall prove in Palm Global's liquidation for the whole or any part
      of the money due or owing to the Charging Company from Palm Global in any
      manner whatever and the benefit of such proof and of all money received by
      the Charging Company in respect of it shall be held on trust for the Agent
      and applied in reduction of the Secured Sums.

      Notwithstanding paragraphs 4(a), (b) and (c) above, if the Charging
      Company holds or receives any security, monies or property, it shall hold
      such security, monies or property on trust for the Lenders and it shall
      forthwith pay or transfer the benefit of the security, monies or property
      to the Agent.

5.    The Agent may at any time (without affecting its rights against the
      Charging Company under this Guarantee) grant, extend, increase, renew,
      vary, waive the terms of, determine or refuse any credit or facility to
      Palm Global, or take, hold, exchange, vary, release, abstain from
      perfecting or enforcing any guarantee or security for the Secured Sums, or
      compromise with or extend time or grant waivers, releases or any
      indulgence to Palm Global or any co-surety, or make any arrangement,
      concession or settlement with any of them or do or omit or neglect to do
      anything whatever which, but for this provision, might exonerate or
      discharge the Charging Company's obligations under this Guarantee (except
      for a specific written release given by the Agent of such obligations).

6.    After this Guarantee becomes enforceable, no payment received by the Agent
      from any source in respect of the Secured Sums will be treated (regardless
      of the manner in which the Agent may deal with it in its books or
      otherwise) as reducing the Charging Company's liability to the Agent under
      this Guarantee, so that until the Agent has received payment in full of
      all Secured Sums, it will be deemed, as between the Agent and the Charging
      Company and except for any payment by Palm Global, to remain wholly
      unsatisfied, so that the Agent may prove in Palm Global's and the Charging
      Company's liquidation for the full amount outstanding.

7.    The Agent may keep the guarantee held by it for the Charging Company's
      liability under this Guarantee in order to protect the Agent against any
      possible claim under insolvency law for any relevant period after all
      Secured Sums has been satisfied which the Agent reasonably considers to be
      necessary to avoid any risk under applicable insolvency law. If a claim is
      made against the Agent within that period, the Agent may keep the
      guarantee until that claim has finally been dealt with.

8.    The winding-up or dissolution of Palm Global will not affect the Charging
      Company's liability under this Guarantee and any sum payable to the Agent
      at the date of the commencement of such winding-up or immediately prior to
      such dissolution (as the case may be) will be treated as continuing to be
      payable until actually paid in full.

9.    If any question arises as to the capacity of Palm Global in relation to
      any dealing between Palm Global and the Agent or as to the capacity,
      authority or power of any officer, employee or agent of Palm Global to
      bind it to any transaction with the Agent, that question shall, as between
      the Agent and the Charging Company, be disregarded and the Charging
      Company will for the purposes of this Guarantee be and continue to


                                       28

<PAGE>

      be liable to the Agent in respect of any such dealing, transaction and/or
      Secured Sums as if the Charging Company were a principal debtor.

10.   Any money received by the Agent under or by virtue of this Guarantee may
      be converted by the Agent at any time as it thinks fit (and
      notwithstanding any previous conversion) into any currency in which any
      part of the Secured Sums is due or owing to the Agent, in which event the
      net amount available to the Agent in such other currency (after allowing
      for all costs of conversion) shall be deemed to be the amount received by
      the Agent under or by virtue of this Guarantee.

11.   Any admission or acknowledgement in writing by Palm Global or on its
      behalf of the amount of any Secured Sums or otherwise in relation to this
      Guarantee, or any judgment or award obtained by the Agent against Palm
      Global, or any proof by the Agent in winding up which is admitted, or any
      statement of account furnished by the Agent the correctness of which is
      certified by any one of its presidents, vice presidents, officers or
      managers, will be binding and conclusive on the Charging Company (except
      in the case of manifest error).

12.   Notwithstanding any other provision of this Guarantee, this Guarantee
      shall not operate to guarantee any money or liability if and insofar as
      such money was borrowed or such liability was incurred directly or
      indirectly for the purpose of the acquisition by any person of shares in
      the Charging Company or its holding company or the reduction or discharge
      of any existing liability incurred for the purpose of such acquisition and
      if and for so long as it would not be lawful under Chapter VI, Part V, of
      the Companies Act 1985 for such money or liability to be guaranteed by
      this Guarantee.

13.   Other than with the prior written consent of the Agent, the Charging
      Company shall not terminate its guarantee contained in this Debenture
      whilst any part of the Secured Sums guaranteed by the Charging Company
      remains outstanding.


                                       29

<PAGE>

                               THE THIRD SCHEDULE

                         Collection Account Side Letters

         [*FORM OF NOTICE TO BE SERVED BY THE CHARGING COMPANY TO BANK
            HOLDING THE COLLECTION ACCOUNT TOGETHER WITH THE FORM OF
                   ACKNOWLEDGEMENT REQUIRED FROM THAT BANK*]

To:   Bank of America, N.A.
      1 Alie Street
      London
      E1 8DE
      England

      For the attention of David Watson
                                                                30 November 2001

We, Palm Europe Limited, refer to the guarantee and debenture (the "Debenture")
dated on or around the date of this notice and made between ourselves and
Foothill Capital Corporation (as the Agent).

1.    We each hereby give you notice that pursuant to the Debenture we, with
      full title guarantee, have charged by way of first fixed charge to the
      Agent all our rights, title and interest in and to all sums which may at
      any time be standing to the credit of the accounts listed in the table
      below, which were opened by us in your books (the "Collection Accounts"
      and each one of them a "Collection Account").

      ======================================================================
           Company/Account Description         Collection      Bank Branch
                                             Account Number
      ----------------------------------------------------------------------
      Palm Europe Limited Euro Account      [*]               London
      ----------------------------------------------------------------------
      Palm Europe Limited US Dollar Account [*]               London
      ----------------------------------------------------------------------
      Palm Europe Limited Sterling Account  [*]               London
      ----------------------------------------------------------------------

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

2.    In connection therewith and by way of security for the Secured Sums (as
      defined in the Debenture) we hereby irrevocably and unconditionally
      instruct and authorise you (notwithstanding any previous instructions
      whatsoever which we may have given you to the contrary):

      (a)   to disclose to the Agent without any reference to or further
            authority from us and without any enquiry by you as to the
            justification for such disclosure, such information relating to the
            Collection Accounts, the amount from time to time standing to the
            credit thereof and the debts represented thereby as the Agent may,
            at any time and from time to time, request you to disclose to it;
            and


                                       30

<PAGE>

      (b)   unless the Agent so authorises you, not to permit withdrawals from
            the Collection Accounts and to hold all moneys from time to time
            standing to the credit of the Collection Accounts to the order of
            the Agent and pay all or any part of those moneys to the Agent (or
            as it may direct) promptly following receipt of written instructions
            from the Agent to that effect; and

      (c)   not to accept any future instructions with respect to the Collection
            Accounts from Palm Europe Limited (including, but without
            limitation, any instructions concerning the mandates or other
            authorities relating thereto and in particular the Bank Authorities
            attached to this letter provided to you by Palm Europe Limited in
            respect of the Collection Accounts (such attached Bank Authorities,
            the "Bank Authorities")) except with the express written consent of
            the Agent in each case and to take instructions with respect to the
            Collection Accounts only where such instructions include the
            signature of one or more of the authorised signatories of the Agent
            as such authorised signatories are specified as Category B
            signatories in the Bank Authorities until the Agent instructs
            otherwise.

3.    In consideration of you agreeing to accept such instructions, Palm Europe
      Limited hereby agrees to indemnify you against any losses, claims,
      actions, proceedings, judgments, demands, damages, liabilities, costs and
      expenses (including, without limitation, legal fees and allocated costs
      for in-house legal services) which you may incur as a result of compliance
      with these instructions in connection with any legal proceedings relating
      to the Collection Accounts and/or which you may otherwise incur in
      connection with this letter and/or any acceptance by you of such
      instructions except insofar as such loss, damages, costs and liabilities
      are caused as a direct result of your gross negligence or wilful default.

4.    The arrangements and authorisations contained in this letter may not be
      modified without the Agent's consent.

5.    The Agent by countersigning this letter:

            (a)   instructs you, until your receipt of further notice from, or
                  purportedly from, it to the contrary (the "Notice") or,
                  subject to the provisions of paragraph 6.3 below, the expiry
                  of six months from the date of this letter, whichever is the
                  earlier, which Notice may be either delivered to you either by
                  hand, or by post to 26 Elmfield Road, Bromley BR1 1WA, England
                  Attn: Client Services or by fax, and if by fax to fax number
                  020 8313 2170 marked for the attention of David Watson, and
                  you have a reasonable time, acting promptly, to act on such
                  Notice, to transfer once on each Business Day (as defined
                  below) amounts standing to the credit of the Collection
                  Accounts of Palm Europe Limited on that day to Palm Europe
                  Limited's current account (being on the date of this letter
                  (i) in the case of Euro Account Number [*], to Euro Account
                  Number [*]; (ii) in the case of US Dollar Account Number [*],
                  to US Dollar Account Number [*]; and (iii) in the case of
                  Sterling Account Number [*], to Sterling Account Number [*],
                  in each


                                       31

<PAGE>

                  case held with you in the name of Palm Europe Limited) or to
                  such other account as the Agent may notify you from time to
                  time;

            (b)   permits you to debit from the Collection Accounts outstanding
                  charges due to you by Palm Europe Limited or which you may
                  otherwise incur for the maintenance and operation of the
                  Collection Accounts or to exercise any other rights referred
                  to in the exceptions set out in paragraph (d) of the enclosed
                  letter of acknowledgement;

            (c)   acknowledges and agrees to the other provisions of this
                  letter.

In the event of a conflict between the provisions of the International Account
Agreement entered into or to be entered into between you and Palm Europe Limited
dated January 29, 2001 (the "IAA") and this letter, the provisions of this
letter shall prevail.

6.

6.1   Palm may request the Agent, by written notice (given in accordance with
      the terms of the Debenture) given not more than 10 Business Days nor less
      than 4 Business Days before the date of expiry of the instructions
      referred to in paragraph 5(a) (as such instructions may be renewed from
      time to time in accordance with paragraph 6.2 below) and with a copy to
      you by fax to fax number 020 8313 2170 marked for the attention of David
      Watson, to renew such instructions for a further period.

6.2   The Agent may renew the instructions set out in paragraph 5(a) by notice
      delivered to you by, or purportedly by, the Agent either by hand, or by
      post to 26 Elmfield Road, Bromley BR1 1WA, England Attn: Client Services
      or by fax, and if by fax to fax number 020 8313 2170 marked for the
      attention of Mark Watson. Such renewal shall be at the absolute discretion
      of the Agent and for such period as the Agent thinks fit. Such notice
      referred to in this paragraph 6.3 will not be effective until you receive
      such notice and have a reasonable time, acting promptly, to act on it.

6.3   Each of Palm Europe Limited and the Agent acknowledge and agree that you
      shall not be obliged to cease making and you shall not be liable to Palm
      Europe Limited or the Agent for any failure by you to cease making any
      transfer referred to in paragraph 5(a) (as such instructions in such
      paragraph 5(a) may be renewed from time to time in accordance with
      paragraph 6.2 above) where you have not received a copy of the request
      from Palm Europe Limited referred to in paragraph 6.1 above, or the Notice
      from the Agent under paragraph 5(a) above. For the avoidance of doubt, for
      the purposes of whether or not you have received a copy of such request
      from Palm Europe Limited there shall be ignored whether such request was
      in fact given by Palm Europe Limited to the Agent by written notice in
      accordance with the terms of the Debenture.

7.    The Agent acknowledges that your mandate with respect to the Collection
      Account is governed by and in accordance with the IAA. Accordingly, any
      instructions given to you by the Agent with respect to the Collection
      Account (including, without limitation, the instructions in paragraph 5(a)
      above or under paragraph 6.2 above) shall be given in accordance with and
      subject to the terms of the IAA and you will


                                       32

<PAGE>

      only be required to comply with the terms of such instructions to the
      extent that you would have been required so to comply under the terms of
      the IAA if such instruction had been given by Palm Europe Limited.

      For the purposes of determining the extent that you are required to comply
      with instructions given by the Agent as set out in the preceding paragraph
      there shall be ignored the effect of any restriction on Palm Europe
      Limited's ability to give instructions or other restrictions in relation
      to the Collection Account contained in this letter, or other restriction
      on the ability of Palm Europe Limited to give mandatory instructions
      arising in connection with enforcement of the charges contained in the
      Debenture, or any restriction contained in any document, agreement or
      instruction to which the Bank is party of which the Agent has not been
      notified prior to delivery of this letter.

8.    This letter shall be governed by and construed in accordance with the laws
      of England. Each of you, Palm Europe Limited and the Agent agrees that the
      courts of England shall have jurisdiction to settle any disputes arising
      out of or in connection with this letter and accordingly any proceeding,
      suit or action arising out of or in connection with this letter
      ("Proceedings") may be brought in such courts and each of you, Palm Europe
      Limited and the Agent hereby irrevocably submits to the jurisdiction of
      such courts. Nothing in this paragraph shall limit any party's right to
      take Proceedings in any other court of competent jurisdiction, nor shall
      the taking of such Proceedings in one or more jurisdictions preclude the
      taking of Proceedings in any other jurisdiction, whether concurrently or
      not, to the extent permitted by the law of such other jurisdiction. The
      Agent irrevocably agrees that any writ, summons, order, judgment or other
      document relating to or in connection with any Proceedings may be served
      on it in connection with Proceedings in England and Wales by service on
      its agent Brobeck Hale and Dorr of Alder Castle, 10 Noble Street, London
      EC2V 7QJ.

      For the purposes of this letter a "Business Day shall mean a day (other
      than a Saturday or Sunday) on which banks are open for general business in
      London and (a) in relation to any date for payment or purchase of a
      currency other than euro, the principal financial centre of the country of
      that currency; or (b) in relation to any date for payment or purchase of
      euro, which is also a day on which Trans-European Automated Real-time
      Gross Settlement Express Transfer payment system is open for the
      settlement of euro."

Please confirm your acknowledgement of the terms of this letter by signing
enclosed letter of acknowledgement and by returning the same to Brobeck Hale and
Dorr, Park Gate, 25 Milton Park, Oxford, OX14 4SH, and to Foothill Capital
Corporation at 2450 Colorado Avenue, Suite 3000, Santa Monica, California, 90404
(marked for the attention of the Business Finance Division Manager), or by
facsimile to facsimile number 310 453 7443, with copies to Brobeck Phleger
Harrison LLP, 550 South Hope Street, Suite 2100, Los Angeles, California, 90071,
marked for the attention of John Francis Hilson, facsimile number 213 745 3700.


                                       33

<PAGE>

Signed by:  Palm Europe Limited

acting by:  /s/ Judy Bruner

Signed by:  Foothill Capital Corporation

acting by


                                       34

<PAGE>

To:         Foothill Capital Corporation
            2450 Colorado Avenue
            Suite 3000
            Santa Monica
            California 90404

            For the attention of the Business Finance Division Manager

We, Bank of America, N.A. hereby acknowledge receipt of a notice of charge from
Palm Europe Limited and Foothill Capital Corporation of which the attached is a
copy (the "Notice of Charge").

In consideration of the payment by you to us of the sum of (pound)1.00 we hereby
confirm, agree with and undertake to you as follows:

      (a)   subject as follows, we accept the instructions and authorisations
            contained in the Notice of Charge and agree to be bound by and to
            perform them upon the terms and subject to the conditions set out in
            the Notice of Charge;

      (b)   to the best of our knowledge we have not received notice of any
            other assignment of or charge over or other third party rights in
            the Collection Accounts and we will notify you (at the address
            specified in the last paragraph of the Notice of Charge) if we do
            receive any such notice, and subject as follows, no security exists
            in our favour on, over or with respect to the Collection Accounts;
            and

      (c)   we will hold all moneys standing to the credit of the Collection
            Accounts to the order of the Agent;

      (d)   we will not exercise any right to combine accounts or any rights of
            set-off, counterclaim or lien or any similar rights in relation to
            the moneys standing to the credit of the Collection Accounts except
            for: (i) any account charges or other charges in respect of the
            maintenance and operation of the Collection Accounts; and/or (ii)
            any costs and expenses we may incur by reason of any payment to or
            withdrawal from any Collection Accounts in accordance with the terms
            of the Notice of Charge; and (iii) any amount payable by Palm Europe
            Limited pursuant to the indemnity contained in the Notice of Charge.

This letter shall be governed by and construed in accordance with the laws of
England.

Signed by


 ...................................
for and on behalf of
Bank of America, N.A.


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<PAGE>

To:   The Directors
      Palm Europe Limited

                                                                30 November 2001

Dear Sirs

Collection Account Letter

We refer to the debenture of today's date (the "Debenture") granted by Palm
Europe Limited (the "Charging Company") to ourselves as the Agent (as defined in
the Debenture).

1.    The terms defined in the Debenture shall, where the context so admits,
      have the same meanings in this letter.

2.    We refer in particular to the following provisions of the Debenture:

      (a)   by sub-clause 3.1.2 (Charging Clause), the Charging Company created
            first fixed charges over book and other debts and monetary claims
            (present and future);

      (b)   by sub-clause 3.1.3(a) (Charging Clause), the Charging Company
            created first fixed charges over any cash balances standing to the
            credit of any Collection Accounts relating to the Charging Company,
            including the proceeds of Receivables; and

      (c)   by sub-clause 5.1 (Treatment of Receivables), the Charging Company
            is required to pay into such account as the Agent nominates,
            pursuant to this letter, all debts and claims charged by it pursuant
            to the Debenture.

3.    In accordance with sub-clause 5.1 (Treatment of Receivables) of the
      Debenture, we set out below details of the Charging Company's operating
      account which is to be its Collection Account for the purposes of the
      Debenture and hereby require that the Charging Company pays into its
      Collection Account all moneys which it may henceforth receive in respect
      of Receivables and other debts and claims charged by the Debenture until
      further instructed by us to the contrary.

      =======================================================================
           Company/Account Description         Collection      Bank Branch
                                             Account Number
      -----------------------------------------------------------------------
      Palm Europe Limited Euro Account      [*]               London
      -----------------------------------------------------------------------
      Palm Europe Limited US Dollar Account [*]               London
      -----------------------------------------------------------------------
      Palm Europe Limited Sterling Account  [*]               London
      =======================================================================


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<PAGE>

4.    We confirm that we will not at any time before the Enforcement Date as
      defined in the Debenture without your consent:

            (i)   require any transfer to be made to any account other than your
                  current account (as referred to in the Notice of Charge or in
                  accordance with paragraph 5 of this letter); or

            (ii)  give any authorisation or instruction under paragraph 2(b) of
                  the Notice of Charge which is inconsistent with (i) above.

5.    We will, however, if directed by you to do so (at any time before the
      Enforcement Date) by notice in writing containing details of your new
      current account (being an account in the name of Palm Europe Limited),
      notify the bank holding the Collection Account that your current account
      has changed for the purpose of paragraph 5(a) of the Notice of Charge.

Please sign and return the enclosed copy of this letter to indicate your
agreement to its terms.

Yours faithfully


----------------------------
For and on behalf of
Foothill Capital Corporation

We hereby acknowledge and agree to the foregoing terms of this letter.


/s/ Judy Bruner
----------------------------
For and on behalf of
Palm Europe Limited

Dated:


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