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                                                                   EXHIBIT 10.34

                              DATED JANUARY 7, 2002

                         PALM GLOBAL OPERATIONS LIMITED

                                       and

                          FOOTHILL CAPITAL CORPORATION

                                   (as Agent)

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

                                   Arthur Cox
                                   ----------

                                Earlsfort Centre
                                Earlsfort Terrace
                                    Dublin 2

                                    WJ1841/jb

                                    28/11/01

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                                TABLE OF CONTENTS

Clause                                                                      Page

1        DEFINITIONS AND INTERPRETATION                                        1
2        COVENANT TO PAY                                                       4
3        CHARGING CLAUSE                                                       6
4        DEPOSIT OF TITLE AND OTHER DOCUMENTS                                  8
5        RECEIVABLES                                                           8
6        NEGATIVE PLEDGE AND OTHER RESTRICTIONS                                8
7        FURTHER ASSURANCE                                                     9
8        CONTINUING SECURITY                                                   9
9        GENERAL COVENANTS                                                    10
10       INSURANCE COVENANTS                                                  10
11       PROPERTY COVENANTS AND CONSOLIDATION OF MORTGAGES                    10
12       POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS                     11
13       OPENING OF NEW ACCOUNTS                                              11
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             17
18       COSTS AND INTEREST ON OVERDUE AMOUNTS                                18
19       SET-OFF                                                              19
20       TRANSFER                                                             19
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                                  23
29       SECURITY TRUSTEESHIP                                                 23
30       GOVERNING LAW AND SUBMISSION TO JURISDICTION                         23
         THE FIRST SCHEDULE:  The Charging Companies                          25
         THE SECOND SCHEDULE:  Terms of Guarantee                             26

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THIS DEBENTURE made the 7th day of January, 2002

BETWEEN:

(1)   PALM GLOBAL OPERATIONS LIMITED, a company incorporated in Ireland whose
      registered office is at 25-28 North Wall Quay, Dublin 1, 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 Global Operations 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;

            "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

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            or 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
            Palm Europe Loan Agreement or (ii) an Event of Default as defined in
            the Loan Agreement;

            "Floating Charge Assets" means, insofar only as concerns the
            floating charges created by clause 3.1 (Charging Clause), Assets for
            the time being comprised within such floating charge;

            "Holding Company" means a holding company within the meaning of
            Section 155 of the Companies Act 1963;

            "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 Ireland 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 Loan Agreement and the Palm Europe Loan
            Agreement together;

            "Palm Europe" means Palm Europe Limited, a company incorporated in
            England and Wales with company number 3903962;

            "Palm Europe Loan Agreement" means the loan agreement to be made
            between Palm Europe Limited, 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;


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            "Receivables" means all sums of money receivable by the Charging
            Company now or in the future consisting of or payable under or
            derived from any of its Assets;

            "Receiver" means any receiver and manager or receivers and managers
            appointed under clause 13.1 (Appointment of Receiver) and (where the
            context requires or permits) includes any substituted receiver and
            manager or receivers and managers;

            "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 within the meaning of Section 155 of
            the Companies Act 1963;

            "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 gender;

      1.2.2. 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;


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      1.2.6. references to "including" shall not be construed restrictively but
            shall be 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 1963 shall have the same
            meanings in this Debenture, except that the expression "company"
            shall include a body corporate established outside Ireland; and

      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;

      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 to it by
                  Agent 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 or any other contract or arrangement in
                  existence between the Agent or the Lenders, on the one hand,
                  and the Charging Company, on the other hand, 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 Europe (except as a guarantor for the Charging Company)
                  under or pursuant to the Palm Europe 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 Loan
            Agreement, or, in the case of (b), to the Palm Europe Loan Agreement
            and so that interest shall be computed and compounded in accordance
            with the Loan Agreement (or in the case of (b), the Palm Europe Loan
            Agreement) after as well as before any demand or judgement.


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            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 Europe 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 Europe 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 repayment 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).


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3. CHARGING CLAUSE

      3.1.  Charging Clause: The Charging Company as legal and beneficial owner
            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:

            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 debts (other than book
                  debts) now or in the future owing to the 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 effectively charged
                  under the preceding provisions of this clause 3.1);

            3.1.3. 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

            3.1.4. by way of floating charge, all stock, inventory, Receivables
                  and book debts of the Charging Company and 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 clauses 3.1.4 (Charging Clause) may be
            crystallised into fixed charges by notice in writing given at any
            time by the Agent to the Charging Company given:


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            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.

            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 charges created by clauses 3.1.4 (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 charges
            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.


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      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 charges created by clause 3.1.4 (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 Agent) shall be expressed to be
            subject to this Debenture and shall rank in order of priority behind
            the charges created by this Debenture.


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.    RECEIVABLES

      5.1.  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 possession of, dispose of,
                  or cease to control, any of its Charged Property, or the right
                  to receive or be paid the proceeds arising on disposal 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.


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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 claims or the accounts into
            which Receivables have or are to be paid and, following the
            occurrence of an Event of Default which is continuing, unless the
            Agent otherwise agrees, shall give a legal assignment of its
            Receivables and/or give notice to the relevant debtor or account
            holding bank in such form as the Agent has previously approved;

      7.3.  where any of its Assets (other than land) are situated outside
            Ireland, 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 charges or assignments
            contained in this Debenture provided that the Agent will not require
            the Charging Company to give such notice to customers of Charging
            Company unless 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

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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.

      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 its
            insurance is such 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 17: Section 17 of the Conveyancing Act 1881, 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.


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12.   POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS

      12.1. Statutory Power of Sale to arise on Enforcement: The restrictions in
            Section 20 of the Conveyancing Act 1881 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 Conveyancing Act 1881
            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 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


                                       11

<PAGE>

            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/or 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 all or any part of
            the Assets 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.

      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 and the provisions of section 24(6)
            of the Conveyancing Act 1881 shall not apply.

      14.4. Power of the Agent to Remove Receiver: The Agent may remove the
            Receiver from all or any of the Assets 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 Assets 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


                                       12

<PAGE>

            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 below:

            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 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


                                       13

<PAGE>

                  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 powers 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 Security Assets 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 Section 18 of the
                  Conveyancing Act 1881, 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 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

<PAGE>

            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 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 convenants 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 for 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


                                       15

<PAGE>

            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 Conveyancing Act 1881 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:

            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

<PAGE>

16.   OTHER POWERS EXERCISABLE BY THE AGENT

      16.1. The Agent may exercise Receiver's Powers: All powers 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
            (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) 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 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

<PAGE>

            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 accordingly 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:

            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

<PAGE>

            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 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


                                       19

<PAGE>

      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

      Nothing herein shall authorise or permit the postponement of any estate or
      interest arising under any trust created by this Deed from vesting outside
      the perpetuity period. In this context the perpetuity period means the
      period commencing on the date of this Deed and ending on the expiration of
      21 years from the date of the date of the last survivor of the issue now
      living of his late Britannic Majesty King George V.

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.


                                       20

<PAGE>

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


                                       21

<PAGE>

            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;

            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 236
      of the Companies Act 1963) 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.


                                       22

<PAGE>


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 Europe 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 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 the laws of Ireland.

30.   GOVERNING LAW AND SUBMISSION TO JURISDICTION

      30.1. Governing Law: This Debenture shall be governed by and construed in
            all respects in accordance with the laws of Ireland.

      30.2. Submission to Jurisdiction:

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

            30.2.2. 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 25.1 (Service of Demands and
                  Notices) or such other address in Ireland as the Charging
                  Company may notify from time to time to the Agent.

            30.2.3. The Charging Company irrevocably agrees not to claim that
                  any such court is not a convenient or appropriate forum and
                  agrees that a judgment


                                       23

<PAGE>

                  in proceedings brought in such courts shall be conclusive and
                  binding upon them and may be enforced in any other
                  jurisdiction.

      30.3. Freedom of Choice: The submission to the jurisdiction of the courts
            referred to in Clause 30.2 (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>


                               THE FIRST SCHEDULE
                              The Charging Company

<TABLE>
<CAPTION>
===============================================================================================================
<S>                                         <C>                     <C>
                                                                    Address for Service and Fax or Telex
Name of Charging Company                    Registered Number       Number
---------------------------------------------------------------------------------------------------------------
Palm Global Operations Limited              317106                  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
===============================================================================================================
</TABLE>


                                       25

<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 Europe for 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 Europe, then the
      Agent may break such accounts of the Charging Company and Palm Europe 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 Europe either now or in the future. This Guarantee may
      be enforced without the Agent first taking any steps or proceedings
      against Palm Europe 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 Europe or any property of Palm Europe or claim or prove
            in competition with the Agent in the liquidation of Palm Europe; 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.
      Nothwithstanding 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 3.1.4 of this
      Debenture.


                                       26

<PAGE>

      However, if so directed by the Agent but not otherwise, the Charging
      Company shall prove in Palm Europe's liquidation for the whole or any part
      of the money due or owing to the Charging Company from Palm Europe 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 Europe, 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 Europe 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 Europe, to remain wholly
      unsatisfied, so that the Agent may prove in Palm Europe'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 security
      until that claim has finally been dealt with.

8.    The winding-up or dissolution of Palm Europe 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 Europe in relation to
      any dealing between Palm Europe and the Agent or as to the capacity,
      authority or power of any officer, employee or agent of Palm Europe 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


                                       27

<PAGE>

      continue to 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 Europe 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
      Europe, 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 section 60 of the
      Companies Act, 1963 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.


                                       28

<PAGE>

Chargor

PRESENT when the common seal of            )
PALM GLOBAL OPERATIONS LIMITED             )
(pursuant to a resolution of its Board     )
of Directors) was affixed hereto:          )

                                           /s/ Judy Bruner  Director

                                           /s/ Stephen Yu   Director/Secretary


Agent

SIGNED by                                  )
for and on behalf of                       )
FOOTHILL CAPITAL CORPORATION               )

                                           /s/ John Nocita  Vice President

                                       29