Document:

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                                                                   EXHIBIT 10.36

DATE OF DEED OF SUBORDINATION                                   12 NOVEMBER 2002

PARTIES

(1)      VENTURE FINANCE PLC (Company Number 02281766) whose registered office
         is at Sussex House, Perrymount Road, Haywards Heath, West Sussex RH16
         1DN ("Venture")

(2)      MICROTEL INTERNATIONAL INC. (a Company incorporated under the laws of
         [ ]) and whose address for service is at 9845 Haven Avenue, Suite 100,
         Rancho Cucamonga, California, United States of America (the "Parent")

(3)      XCEL CORPORATION LIMITED (Company Number 01969006) whose registered
         office is at Brunswick Road, Cobbswood, Ashford Kent TN23 1EH (the
         "Guarantor")

INTRODUCTION

A        Venture has entered or shall enter into an Agreement for the Purchase
         of Debts (the "Agreement") with Xcel Power Systems Limited (the
         "Company") pursuant to which, the Company has assigned or shall assign
         certain of its book debts to Venture.

B        The Guarantor has given or shall give a Guarantee and Indemnity (the
         "Guarantee") in favour of Venture in respect of all of the obligations
         of the Company to Venture, including any obligations of the Company to
         Venture arising under the Agreement.

C        There exists certain intra-group indebtedness which is due owing or
         incurred by the Guarantor to the Parent and which is evidenced on
         certain intra group accounting arrangements.

D        The parties hereto have entered into this Deed to regulate the basic
         upon which all or any part of the Intra Group Indebtedness (as
         hereinafter defined) may be discharged.

IT IS AGREED THAT:

1        INTERPRETATION

1.1      In this Deed, except where the context otherwise requires, each of the
         expressions set out below shall have the meaning ascribed to it:

         "Intra Group Indebtedness" means all and any monies and/or liabilities
         which are now or shall become due, owing or incurred by the Guarantor
         to the Parent in any manner actually or contingently, solely or jointly
         and whether as principal or surety.

2        SUBORDINATION

2.1      Subject to Clause 4 below, the Guarantor hereby irrevocably warrants
         and undertakes in favour of Venture that it shall not without the prior
         written consent of Venture take steps to discharge or discharge all or
         any part of the Intra Group Indebtedness until:

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         (a)      the Agreement has been validly terminated in accordance with
                  the terms; and

         (b)      Venture has unconditionally released the Guarantor from all
                  and any of its obligations to Venture pursuant to the
                  Guarantee; and

         (c)      all and any monies and/or liabilities which are now or shall
                  become due, owing or incurred by the Guarantor and/or the
                  Company to Venture on any account whatsoever (including
                  without limitation under the Agreement and/or the Guarantee)
                  have been satisfied in full unconditionally and cannot be
                  subsequently avoided or reduced (whether or not by or in
                  pursuance of any provision of law or legal process).

3        UNDERTAKING OF THE PARENT

3.1      Subject to Clause 4 below, the Parent irrevocably warrants and
         undertakes in favour of Venture that it shall not without the prior
         written consent of Venture accept repayment of all or any part of the
         Intra Group Indebtedness from the Guarantor until the conditions
         described in Clauses 2.1(a) - 2.1(c) inclusive above have been duly
         satisfied.

4        PERMITTED REPAYMENTS

4.1      In the event that the aggregate amount of the Intra Group Indebtedness
         from time to time is in excess of two hundred thousand pounds sterling
         ((pound)200,000) (the "Threshold"), nothing in Clauses 2.1 and/or 3.1
         shall prevent the Guarantor making, nor the Parent accepting repayment
         of all and any sums in excess of the Threshold.

5        RIGHTS OF THIRD PARTIES

5.1      A person, company or other legal entity that is not a party to this
         Deed does not have any rights pursuant to it and the provisions of the
         Contracts (Rights of Third Parties) Act 1999 are excluded from this
         Deed.

6        COUNTERPARTS

6.1      This Deed may be executed in any number of counterparts or documents,
         each in the like form, all of which, when taken together shall
         constitute one and the same document.

7        VARIATION AND TERMINATION

7.1      Save as otherwise specifically provided herein, any variation of this
         Deed shall be binding only if it is recorded in a document signed by or
         on behalf of each of the parties hereto.

7.2      This Deed may be terminated only if it is recorded in a document signed
         by or on behalf of each of the parties hereto.

8        LAW AND JURISDICTION

8.1      This Deed shall be governed by and construed in accordance with English
         Law and the parties hereto irrevocably submit to the jurisdiction of
         the English Courts.

                                       2

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IN WITNESS whereof the parties hereto have executed and delivered this Deed as a
deed the day and year first above written.

Signed and Delivered as a deed by

PAUL BEVERIDGE                                                /S/ PAUL BEVERIDGE
-----------------------------                                 ------------------

as Attorney for VENTURE FINANCE PLC
in the presence of:

PAUL ARPS                                                     /S/ PAUL ARPS
-----------------------------                                 ------------------

Address of Witness

SUSSEX HOUSE, PERRYMOUNT ROAD
-----------------------------

HAYWARDS HEATH
-----------------------------

SIGNED and delivered as a deed by
MICROTEL INTERNATIONAL INC acting
by two directors or by one director and the
secretary

Director
Signature                  :        /s/ Carmine T. Oliva
Name                       :

Director/Secretary
Signature                  :        /s/ Robert B. Runyon
Name                       :

SIGNED and delivered as a deed by XCEL
CORPORATION LIMITED acting by two
directors or by one director and the
secretary

Director
Signature                  :        /s/ Carmine T. Oliva
Name                       :

Director/Secretary
Signature                  :        /s/ Graham Jefferies
Name                       :

                                       3<PAGE>

                                                                   EXHIBIT 10.37

                       AGREEMENT FOR THE PURCHASE OF DEBTS

1        PARTIES
         -------

         (1)      VENTURE FINANCE PLC ("Venture") of Sussex House Perrymount
                  Road Haywards Heath West Sussex RH16 1DN incorporated in
                  England with registered number 2281768.

         (2)      THE CLIENT ("Client") named in paragraph 1(a) of the Schedule
                  ("the Schedule") annexed to and forming part of this Agreement
                  ("this Agreement").

2        DATE
         ----

         This Agreement shall be treated as being made on the date which the
         last of either Venture or the Client shall execute it.

3        DEFINITIONS AND INTERPRETATION
         ------------------------------

         (1)      The expressions specified in Appendix A forming part of this
                  Agreement shall have the meanings assigned to them therein.
                  This Agreement shall be construed in accordance with Appendix
                  B.

         (2)      Where in connection with any legal jurisdiction outside
                  England and Wales a word or phrase in this Agreement has no
                  precise counterpart, then this Agreement shall be interpreted
                  as if that word or phrase referred to the closest equivalent
                  in the jurisdiction concerned.

4        TRANSFER OF OWNERSHIP OF DEBTS
         ------------------------------

         (1)      This Agreement is for the Sale by the Client and the Purchase
                  by Venture of all Debts, which are in existence at the
                  Commencement Date or which afterwards arise during the
                  currency of this Agreement. On the Commencement Date the
                  Client shall deliver an Offer in respect of each such Debt
                  unpaid at that date. Venture shall only accept such Offer by
                  crediting the value of the Debt, as shown in the Offer, to the
                  Debts Purchased Account, where upon Venture's ownership of
                  such Debt shall be complete.

         (2)      The ownership of every Debt coming into existence after the
                  Commencement Date and until the ending of this Agreement shall
                  vest in Venture automatically upon such Debt coming into
                  existence without any further act on the part of either
                  Venture or the Client.

         (3)      Upon the vesting in Venture of each Debt pursuant to clauses
                  4(1) and 4(2) there shall also vest in Venture the ownership
                  of all Related Rights to such Debt.

5        PERFECTION OF FACTOR'S TITLE
         ----------------------------

         The Client shall at any time, at the request of Venture and at the
         expense of the Client, execute and deliver to Venture a formal written
         assignment (with the applicable stamp duty endorsed thereon) of any
         Debt or Related Rights owned by Venture. The Client shall hold in trust
         for Venture (and separately from the Client's own property) any Debt or
         Related Rights purchased by Venture of which the ownership shall fail
         to vest in Venture for any reason.

6        PURCHASE PRICE AND NOTIFICATION OF DEBTS
         ----------------------------------------

         (1)      Subject to the other provisions of this Agreement the Purchase
                  Price of each Debt, together with its Related Rights, shall be
                  equivalent to the amount payable by the Debtor in respect of
                  such Debt, including any tax or duty, according to the
                  relevant Sale Contract, after there has been deducted
                  therefrom:

                                      -1-

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                  (i)      any discount, allowance or other deduction allowed or
                           allowable by the Client to the Debtor; and

                  (ii)     the Discount Charge in respect of such Debt,
                           calculated in accordance with clause 9(3).

         (2)      The Client shall promptly notify Venture of each Debt created
                  after the Commencement Date and vesting in Venture in such
                  manner and with such particulars and documents evidencing the
                  Debt as Venture may from time to time require. Notification
                  shall be as soon as the relevant Goods have been Delivered, or
                  at any other time if so required by Venture. A Notification
                  shall not include any Debt previously notified or subject to
                  an offer.

         (3)      If in relation to any Debt the Client is unable to give to
                  Venture every one of the warranties and undertakings contained
                  in this Agreement, then the Client shall notify such Debt to
                  Venture separately from other Debts and clearly mark the
                  relevant Notification to that effect. All such Debts shall be
                  Disapproved Debts.

7        CREDIT OF THE PURCHASE PRICE AND PAYMENT BY VENTURE
         ---------------------------------------------------

         (1)      Following receipt of a Notification, Venture shall on the next
                  Working Day credit the Purchase Price to the Debts Purchased
                  Account. For administrative convenience Venture may make such
                  credit before the deduction of any of the items which, in
                  accordance with clause 6(1), are to be deducted in computing
                  the Purchase Price. Venture may consequently, if it so wishes,
                  aggregate and debit all such items at any time thereafter to
                  either the Debts Purchased Account or the Current Account.

         (2)      Venture shall make appropriate accounting entries on the
                  Transfer Date to effect the transfer of the Purchase Price of
                  a Debt from the Debts Purchased Account to the credit of the
                  Current Account. The Transfer Date shall be:

                  (i)      where it is specified in paragraph 8 of the Schedule
                           that Venture is to collect the Debts:-

                           (a)      and where the relevant remittance is by
                                    Sterling cheque or Bill of Exchange drawn on
                                    or accepted for payment at a bank in the
                                    United Kingdom: whichever is the later of
                                    the day Venture lodges the instrument of
                                    payment with its banker for collection or
                                    the day the instrument of payment shall be
                                    payable or the day Venture shall identify
                                    such payment as being in respect of a
                                    specific Notified Debt;

                           (b)      but where the relevant remittance is by
                                    cheque or Bill of Exchange otherwise than in
                                    Sterling and/or by cheque or by Bill of
                                    Exchange drawn on or accepted for payment at
                                    a bank not in the United Kingdom: whichever
                                    is the later of either the day Venture
                                    receives notice it has received value for
                                    such remittance or the day Venture shall
                                    identify such payment as being in respect of
                                    a Notified Debt;

                           (c)      but where the payment is made by an
                                    electronic funds transfer direct to
                                    Venture's bank account: whichever is the
                                    later of either one Working Day after it is
                                    credited to such account or the day Venture
                                    shall identify it to be in respect of a
                                    specific Notified Debt;

                           (d)      but where it is specified in paragraph 5 of
                                    the Schedule that the general nature of this
                                    Agreement is "With Bad Debt Protection" and
                                    the Purchase Price of a Credit Approved Debt
                                    shall not have been transferred to the
                                    Current Account: whichever is the earlier of
                                    five Working Days after the end of the

                                      -2-

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                                    fourth calendar month following the end of
                                    the month in which the Debt shall have
                                    fallen due for payment or five Working Days
                                    after Venture receives confirmation of the
                                    Insolvency of the Debtor, (except in respect
                                    of Export Debts when it shall be the date
                                    referred to in the rider to the Schedule -
                                    as varied at Venture's discretion from time
                                    to time - by reference to the country to
                                    which the relevant invoice is addressed); or

                  (ii)     where it is specified in paragraph 8 of the Schedule
                           that the Client is to act as Agent of Venture:-

                           (a)      one Working Day after the credit of the
                                    relevant remittance to the bank account,
                                    established by Venture for the purpose of
                                    receiving such remittances; or

                           (b)      where it is specified in paragraph 5 of the
                                    Schedule that the general nature of this
                                    Agreement is "With Bad Debt Protection" and
                                    the Purchase Price of a Credit Approved Debt
                                    shall not have been transferred to the
                                    Current Account and the Client has provided
                                    evidence of the validity of the Debt and of
                                    compliance with the matters referred to in
                                    clause 12(4)(i)(c):- five Working Days after
                                    Venture shall receive confirmation of the
                                    Insolvency of the Debtor, (except in respect
                                    of Export Debts when it shall be the date
                                    referred to in the rider to the Schedule -
                                    as varied at Venture's discretion from time
                                    to time - by reference to the country to
                                    which the relevant invoice is addressed).

         (3)      Where the Purchase Price of a Debt is to be transferred in
                  accordance with clause 7(2)(i)(d) or 7(2)(ii)(b) Venture may
                  prior to such transfer deduct the amount of any Client Bad
                  Debt Risk but so that the total amount so deducted in relation
                  to a single debtor shall not exceed the amount specified in
                  paragraph 14 of the Schedule.

         (4)      If, following receipt of an instrument of payment from a
                  Debtor, but prior to receipt of notification of its clearance
                  for fate, Venture shall have transferred the Purchase Price of
                  a Debt to the Current Account, then Venture shall be entitled
                  to reverse such accounting entries on notification that the
                  instrument has failed to be so cleared for fate.

         (5)      In maintaining the Debts Purchased Account, Venture shall be
                  entitled to debit thereto any discount, allowance or other
                  deduction nature claimed by a Debtor at the time of making
                  payment of any Debt to Venture and shall give notice thereof
                  to the Client. However, upon written notice of objection by
                  the Client within 14 days of such notice the deduction shall
                  be credited back to the Debts Purchased Account and shall be
                  treated as a Disapproved Debt.

         (6)      The Client may at any time request Venture to pay to the
                  Client, but in each case subject to Venture's right of
                  set-off:

                  (i)      any amount standing to the credit of the Client on
                           the Current Account; or

                  (ii)     amounts up to the equivalent of the Availability.

                  Any payment made by Venture shall be sent in a sterling cheque
                  by post either to the Client or to any bank account of the
                  Client or, if the Client and Venture so agree verbally or in
                  writing, shall be made by Bankers Automated Clearing System
                  (sometimes known as BACS). If the Client and Venture agree
                  verbally or in writing that instead of payment by cheque or
                  BACS that Venture may make payments by the Clearing House

                                      -3-

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                  Automated Payment System (sometimes known as "CHAPS") then the
                  Purchase Price shall be adjusted by a Supplementary Discount
                  Charge and Venture shall be entitled to a transaction charge,
                  (the amount of which shall be advised by Venture from time to
                  time) in respect of each payment. Any payment shall be debited
                  to the Current Account on the day Venture shall send a cheque
                  or on the day Venture gives instructions to its bank for a
                  payment by BACS or CHAPS.

         (7)      Venture shall send or make available to the Client a statement
                  of its accounts with the Client not less than once in each
                  month or at such other intervals as may be agreed. Such
                  statement shall be treated as correct and binding on the
                  Client, except for manifest errors or errors in law or any
                  error notified by the Client to Venture within fourteen days
                  of its despatch.

         (8)      Venture shall at any time be entitled to debit to the Current
                  Account all liabilities of the Client to Venture, whether or
                  not arising under this Agreement, present, future, contingent
                  or prospective (including liability to Venture as the customer
                  of another Client of Venture or for Value Added Tax). Where
                  the amount can not be immediately ascertained Venture shall be
                  entitled to make a reasonable estimate thereof. Until such
                  liabilities shall be so debited Venture may set off the amount
                  thereof against amounts payable to the Client.

8        FOREIGN CURRENCY DEBTS
         ----------------------

         (1)      For the purpose of computing the Purchase Price of a Foreign
                  Currency Debt and crediting it to the Debts Purchased Account
                  in accordance with clause 7(1) Venture shall be entitled to
                  use the Conversion Rate on the day it is so credited.

         (2)      For the purpose of transferring the Purchase Price of a
                  Foreign Currency Debt to the Current Account in accordance
                  with clause 7(2) Venture shall be entitled to use the
                  Conversion Rate on the Transfer Date. If the converted amount
                  of the Debt transferred is more than the converted amount of
                  the Purchase Price of that Debt, the difference shall be
                  treated as an increase in the Purchase Price and if it is
                  lower the difference shall be treated as a reduction in the
                  Purchase Price.

         (3)      On Recourse or Reassignment of any Foreign Currency Debt, the
                  Repurchase Price shall be computed by reference to the
                  Conversion Rate applied in crediting the Purchase Price to the
                  Debts Purchased Account.

9        FACTORING FEES, DISCOUNT CHARGES, BANK AND OTHER CHARGES
         --------------------------------------------------------

         (1)      Venture shall, upon delivery of a Notification, be entitled
                  forthwith to charge a Factoring Fee equivalent to the
                  percentage specified in paragraph 15 of the Schedule (or such
                  other percentage or amounts as may be agreed by the parties in
                  writing) of the notified value of such Debt and credit notes
                  before the deduction of any discount or other allowance
                  allowed or allowable at any time to the Debtor. Venture shall
                  immediately debit the Factoring Fee to the Current Account.

         (2)      If the total Factoring Fees during the period of three months
                  immediately following the occurrence of a Right of Immediate
                  Termination shall be less than the total Factoring Fees during
                  the period of three months ended immediately before such right
                  shall arise, then the Client shall pay to Venture a sum equal
                  to the difference or Venture may debit the same to the Current
                  Account. This shall be payable even if this Agreement shall
                  end before the expiry of the three months and shall not affect
                  any other rights of Venture arising out of such events. Should
                  a Collection Transfer Fee become payable pursuant to clause
                  12(4)(ii) the relevant percentage for calculating the
                  Factoring Fee in respect of all Debts Notified thereafter
                  shall be the percentage stated in paragraph 17(ii) of the
                  Schedule as being the Revised Factoring Fee, in substitution
                  for that appearing in paragraph 15 of the Schedule.

                                      -4-

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         (3)      The Discount Charge to be deducted in computing the Purchase
                  Price of each Debt, in relation to which a Prepayment shall be
                  made, shall be equivalent to the rate per annum specified in
                  paragraph 16 of the Schedule (or such other rate as may be
                  agreed by the parties in writing) calculated daily, with
                  monthly rests, on the amount of such Prepayment from the date
                  on which it is debited to the Current Account until four
                  Working Days after the Transfer Date. For administrative
                  convenience Venture may calculate the Discount Charge by
                  reference to the Funds in Use at the end of each day. The
                  total of the Discount Charges so calculated shall then be
                  debited monthly.

         (4)      Venture shall be entitled to debit the Current Account and /
                  or the Debts Purchased Account with:

                  (i)      all bank charges incurred by Venture in respect of an
                           instrument of payment not cleared for fate as
                           described in Clause 7(4) for a Debt which is not a
                           Credit Approved Debt;

                  (ii)     if so provided in paragraph 15 of the Schedule, all
                           banking charges and other costs and expenses it may
                           incur in relation to any account to which it directs
                           that any payments by Debtors shall be credited;

                  (iii)    such other charges or fees as are referred to in the
                           Schedule or any rider to the Schedule and all bank
                           charges incurred in collecting Export Debts and
                           converting the proceeds of a Foreign Currency Debt
                           into Sterling;

                  (iv)     any amount due to Venture in relation to the matters
                           referred to in clauses 14 and 18(2)(v);

                  (v)      any other amounts due to Venture.

         (5)      Any amount debited to the Current Account shall be treated as
                  a Prepayment for the purpose of calculating the Discount
                  Charge.

         (6)      All charges and fees to which Venture shall be entitled under
                  the terms of this Agreement shall be calculated or charged
                  exclusive of value added tax. Value added tax shall be payable
                  upon issue by Venture of a value added tax invoice.

10       DISPUTES AND CREDIT NOTES
         -------------------------

         (1)      If a Debtor disputes its liability to pay the full Notified
                  amount of any Debt (less any discount or allowance approved by
                  Venture) the Client shall forthwith notify Venture of such
                  dispute (if the same has not already been advised to the
                  Client by Venture) and undertakes:

                  (i)      to use its best endeavours promptly to settle every
                           such dispute, subject to the right of Venture itself
                           to settle or compromise any such dispute or to
                           require that the Client should settle or compromise
                           it on such terms as Venture may in its absolute
                           discretion think fit;

                  (ii)     to perform promptly all further and continuing
                           obligations of the Client to the Debtor under any
                           Sale Contract and to give evidence to Venture of such
                           performance and to agree that in the event of the
                           failure of such performance Venture may itself
                           perform such obligations at the expense of the
                           Client;

                  (iii)    to issue promptly all credit notes due in respect of
                           Debts and to Notify same within three Working Days of
                           issue subject to the right of Venture to require that
                           no credit note shall be authorised or issued without
                           Venture's consent and that the originals of such
                           credit notes shall be sent to Venture;

                  and the Client shall be bound by anything done by or at the
                  direction of Venture in accordance with this sub-clause (1),
                  including any corresponding reduction in the Purchase Price.

                                      -5-

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         (2)      (i)      The amount of every credit note Notified pursuant
                           to clause 10(1)(iii) shall be treated as a reduction
                           of the Purchase Price of the Debt to which the credit
                           note relates and shall be debited to the Debts
                           Purchased Account.

                  (ii)     The Client shall, if requested by Venture, give
                           Venture a cheque, in favour of Venture, drawn on a
                           London clearing bank for the amount of the credit
                           note. On collection of the cheque its amount shall be
                           credited to the Current Account.

11       DISAPPROVED DEBTS
         -----------------

         (1)      A Debt shall become a Disapproved Debt:

                  (i)      if (when aggregated with all other Outstanding Debts
                           owing by the same Debtor) it is not for the time
                           being within the Funding Limit or within the Debtor
                           Concentration; or

                  (ii)     where paragraph 5 of the Schedule specifies that the
                           general nature of this Agreement is "Without Bad Debt
                           Protection" - at any time after the expiry of the
                           recourse period specified in paragraph 13 of the
                           Schedule; or

                  (iii)    where the cost and expense in effecting its
                           collection shall, in Venture's view, exceed its
                           Purchase Price (except Credit Approved Debts) - at
                           any time after Venture takes that view; or

                  (iv)     where the Debtor claims to be unable to pay because
                           of any laws, rules or regulations having the force of
                           law (other than arising solely from the Debtor's
                           insolvency) - at any time after such claim is made;
                           or

                  (v)      where it is the subject of a dispute described in
                           clause 10 (1) - when such dispute arises; or

                  (vi)     where there is a breach of warranty or undertaking
                           given by the client - at the time of such breach; or

                  (vii)    where it is (or is required to be) notified
                           separately in accordance with clause 6 (3) - at the
                           time when such notification is (or should be) made;
                           or

                  (viii)   where it does not fall within paragraph 6 of the
                           Schedule - at the time that such Debt comes into
                           existence; or

                  (ix)     Upon Venture exercising its rights under clause
                           19(2).

         (2)      Venture shall have Recourse in respect of:

                  (i)      a Debt which is a Disapproved Debt because of clause
                           11(1)(v) - at any time after the sixtieth day after
                           the arising of the dispute;

                  (ii)     any other Disapproved Debt - at any time after the
                           day on which it is due for payment or the day of its
                           Disapproval;

                  (iii)    any Debt which is not a Credit Approved Debt where
                           paragraph 5 of the Schedule specifies that the
                           general nature of this Agreement is "With Bad Debt
                           Protection" - at any time after the day on which it
                           is due for payment;

                  (iv)     the amount of any Client Bad Debt Risk - at the time
                           it is deducted from the Purchase Price of a Debt in
                           accordance with clause 7(3).

                                      -6-

<PAGE>

12       NOTICES TO AND COLLECTIONS FROM DEBTORS
         ---------------------------------------

         (1)      Whilst the ownership of any Debt remains vested in Venture or
                  any Debt is held in trust for Venture pursuant to Clause 5,
                  Venture shall have the sole right to enforce payment of and
                  determine whether such Debt shall be collected by Venture or
                  by the Client (as the agent of Venture) and to institute,
                  carry on, defend or compromise proceedings in its own name or
                  the name of the Client in such manner and upon such terms as
                  it may in its absolute discretion think fit. The Client shall
                  co-operate in such enforcement, collection or proceedings and
                  in the recovery of any Transferred Goods.

         (2)      Where paragraph 7 of the Schedule specifies that notice of
                  assignment shall be given such notice shall state, inter alia,
                  that the Debt to which it relates has been purchased by and
                  assigned to Venture and the Client undertakes:-

                  (i)      in respect of every Debt vesting in Venture, to give
                           such notice in the manner and form prescribed by
                           Venture; and

                  (ii)     to use its best endeavours to ensure that each Debtor
                           makes payment in accordance with such notice and,
                           without affecting such obligation, at its own expense
                           to despatch a letter in terms stipulated by Venture
                           to any Debtor ignoring such notice or any part
                           thereof and to send to Venture a copy of each such
                           letter.

         (3)      Even though paragraph 7 of the Schedule specifies that no
                  notice of assignment shall be given Venture may, at any time
                  by notice to the Client, require that the Client shall
                  forthwith give the notices prescribed in Clause 12(2) in such
                  form and manner as Venture may direct.

         (4)      Where there is reference to "Agent" in paragraph 8 of the
                  Schedule:

                  (i)      Venture hereby appoints the Client as the agent of
                           Venture, until notice to the contrary and without
                           prejudice to Venture's rights pursuant to Clause
                           12(1), for the purpose of administering the accounts
                           of Debtors and procuring the collection of Debts for
                           the benefit of Venture. The Client hereby accepts
                           such appointment and undertakes:

                           (a)      to act promptly and efficiently in carrying
                                    out such tasks; and

                           (b)      not to hold itself out as the agent of
                                    Venture, except while the provisions of this
                                    clause 12(4) apply, and while such
                                    provisions apply not to hold itself out as
                                    the agent of Venture for any other purpose;
                                    and

                           (c)      to obtain the prior written approval of
                                    Venture to the debt collection procedures to
                                    be adopted and shall at all times adhere to
                                    these and obtain approval to any variations;
                                    and

                           (d)      to furnish Venture, by such date in each
                                    month as Venture may direct, with copies of
                                    such records, statements and accounts of
                                    Debtors and such reconciliation's to the
                                    Debts Purchased Account as Venture may
                                    require.

                  (ii)     Venture may, at any time by notice to the Client,
                           withdraw such appointment. Upon or at any time after
                           such withdrawal Venture shall be entitled to debit
                           the Current Account with the Collection Transfer Fee
                           calculated in the manner specified in paragraph 17(i)
                           of the Schedule.

         (5)      The Client shall at its own cost forthwith deliver to Venture
                  or, if so required by Venture, directly to a bank account
                  designated by Venture the actual cash, cheque, instrument or
                  payment received by the Client in or on account of the
                  discharge of each Debt. Until so delivered, the Client shall
                  meanwhile hold such cash, cheque, instrument or payment in
                  trust for Venture. The Client shall not deal with, negotiate

                                      -7-

<PAGE>

                  or pay the same into any bank account unless so directed by
                  Venture. If it be necessary for any instrument to be endorsed
                  to enable Venture to receive payment then the Client shall
                  endorse the same prior to its delivery to Venture. If so
                  required, the Client shall give an indemnity to Venture's
                  bankers in respect of "account payee" cheques made payable to
                  the Client and so endorsed.

         (6)      Any Transferred Goods shall be notified by the Client to
                  Venture and shall be set aside and marked with Venture's name
                  as owner. Venture shall have the right without notice to the
                  Client to take possession of and sell any Transferred Goods
                  upon such terms and at such prices as Venture may in its
                  absolute discretion decide.

13       CREDIT LIMITS AND ALLOCATION OF PAYMENTS
         ----------------------------------------

         (1)      Credit Limits will be established by Venture only where
                  Paragraph 5 of the Schedule specifies that the general nature
                  of this Agreement is to be `With Bad Debt Protection'.

         (2)      Any Credit Limit may, in Venture's absolute discretion, be
                  increased, reduced or cancelled by Venture at any time. Any
                  increase must be by written or electronic notice to the Client
                  or by making the same available by electronic interrogation of
                  Venture's computer. Any such change shall take immediate
                  effect, except that no reduction or cancellation shall affect
                  any Debt which:

                  (i)      shall have arisen from Goods Delivered before the
                           service of notice on the Client of such reduction or
                           cancellation; and

                  (ii)     at the time of such service shall be (when totalled
                           with all other Debts owing by the Debtor) within the
                           Credit Limit.

         (3)      Where two or more Debts are owing by the same Debtor they
                  shall be treated as falling within the Credit Limit in the
                  order in which they are Notified.

         (4)      When a Credit Approved Debt shall be discharged by a Debtor
                  then the next Debt in the order referred to in clause 13(3)
                  shall become a Credit Approved Debt to the extent that it
                  falls within a Credit Limit.

         (5)      When Credit Approved Debts and other Debts are owing by the
                  same Debtor Venture shall have the right to allocate any
                  payment by the Debtor or any credit or allowance granted by
                  the Client to the Debtor or any sum by way of dividend or
                  benefit in satisfaction of any Credit Approved Debt in
                  priority to any other Debt, despite any contrary allocation by
                  the Debtor or the Client.

         (6)      The Client shall not disclose to the Debtor or any third party
                  the amount of or absence of any Credit Limit or the reasons
                  for such Credit Limit.

14       CREDIT BALANCES
         ---------------

         The Client hereby irrevocably authorises Venture to make payment to any
         Debtor on account of or in settlement of any credit balance appearing
         on its account in the records of Venture, whether such credit balance
         arises from the issue of a credit note by the Client or otherwise.
         Until such payment shall be made by Venture any such credit balance
         shall be a prospective liability of the Client to Venture.

15       RECOVERY OF VALUE ADDED TAX
         ---------------------------

         (1)      For the purpose of enabling the client to recover from H.M.
                  Customs and Excise any value added tax included in any Credit
                  Approved Debt unpaid for such period as would have enabled the
                  Client to make a claim for value added tax bad debt relief but
                  for its assignment to Venture, the following provisions shall
                  apply.

                                      -8-

<PAGE>

         (2)      Venture may reassign the Debt to the Client for a
                  consideration equal to the amount of value added tax included
                  in the Debt and any dividend or benefit recovered. The Client
                  also irrevocably authorises Venture in the name of the Client
                  to submit a proof of debt in the estate of the relevant
                  Debtor.

         (3)      The Client shall immediately upon receipt pay to Venture (or
                  in Venture's absolute discretion Venture may debit the Current
                  Account with) and meanwhile hold in trust for Venture the
                  amount of any dividend or other benefit received or receivable
                  in reduction of such Debt.

         (4)      On the Transfer Date Venture may set off against the Purchase
                  Price of an Outstanding Credit Approved Debt the amount of any
                  value added tax included in the Debt.

         (5)      Any payment by Venture to the Client in respect of a Credit
                  Approved Debt shall not discharge the consideration due from
                  the Debtor to the Client for the taxable supply.

16       CLIENT'S ACCOUNTS AND RECORDS
         -----------------------------

         (1)      Whether or not the Client is a body corporate, it shall
                  provide for Venture:

                  (i)      a signed copy of its and in addition such Associates'
                           audited balance sheet and accounts as Venture may
                           require for each year or accounting reference period
                           (as defined in the Companies Act 1985) ending during
                           the currency of this Agreement, within six months of
                           the end of such period (and shall promptly advise
                           Venture of any change to its accounting reference
                           period); and

                  (ii)     such other accounts or statements of its financial
                           position or affairs as Venture may at any time
                           require.

         (2)      The Client, if so required by Venture, shall procure at its
                  own expense that the Client's auditors report directly to
                  Venture on any matters relating to the financial affairs of
                  the Client.

         (3)      The Client shall promptly provide Venture (at the Client's
                  expense) with such of the Financial Records included in the
                  Related Rights or copies of them and of any other records or
                  documents of the Client as Venture may at any time require or
                  any other evidence of the performance of Contracts of Sale.

         (4)      Any official or duly authorised representative or agent of
                  Venture may at any time (at the Client's expense) enter upon
                  any premises at which the Client carries on business and
                  inspect and/or take copies of the Financial Records or other
                  records or documents of the Client.

         (5)      The Client shall permit or procure the verification of Debts
                  in such manner as shall be determined by Venture in its
                  absolute discretion.

                                      -9-

<PAGE>

17       POWER OF ATTORNEY
         -----------------

         (1)      The Client hereby irrevocably appoints Venture and the
                  Directors and the Company Secretary and every other officer
                  for the time being of Venture jointly and each of them
                  severally to be the Client's attorney in the name of the
                  Client to execute such deeds or documents and to complete and
                  endorse such instruments and to institute or defend such
                  proceedings and to perform such other acts as Venture may
                  consider requisite in order to perfect Venture's title to any
                  Debt or Related Rights and to secure performance of any of the
                  Client's obligations under this Agreement or under any Sale
                  Contract or to obtain payment of Debts.

         (2)      Venture or its Directors and the Company Secretary and every
                  other officer of Venture for the time being are empowered to
                  appoint and remove at will any substitute attorney or agent
                  for the Client in respect of any of the matters referred to in
                  clause 17(1).

         (3)      The Client agrees to ratify and confirm whatever Venture or
                  its Directors or Company Secretary or Officers substitutes and
                  agents shall lawfully do pursuant to the above power of
                  attorney.

18       WARRANTIES AND UNDERTAKINGS OF THE CLIENT
         -----------------------------------------

         (1)      In addition to and without affecting any other undertaking
                  given elsewhere in this Agreement the Client warrants and the
                  same shall be deemed repeated on the delivery of each
                  Notification, namely:

                  (i)      that save as disclosed by the Client to Venture in
                           writing no disposition, charge, trust or encumbrance
                           (whether created by the Client or otherwise) affects
                           or may affect any of the Debts or Related Rights
                           vesting in Venture and that no supplier to the Client
                           has or may have any claim to any such Debt or Related
                           Rights, whether or not by equitable tracing right;

                  (ii)     that before entry into this Agreement the Client has
                           disclosed to Venture every fact or matter known to
                           the Client which the Client knew or should reasonably
                           have known might influence Venture in any decision:

                           (a)      whether or not to enter into this Agreement;
                                    or

                           (b)      to accept any person as a guarantor or
                                    indemnifier for the Client's obligations to
                                    Venture; or

                           (c)      as to the terms of this Agreement; or

                           (d)      as to the making of any Prepayment; or

                           (e)      the designation of any Debt as a Credit
                                    Approved Debt.

         (2)      The Client undertakes to Venture:

                  (i)      to disclose promptly to Venture any such fact or
                           matter of which the Client becomes aware during the
                           currency of this Agreement, including (without
                           affecting the generality of clause 18(1)(ii)) any
                           change or prospective change in the constitution or
                           control of the Client or of any guarantor or
                           indemnifier of the Client's obligations to Venture or
                           any prospective security right to be created by the
                           Client affecting any of its assets;

                  (ii)     immediately after notifying Venture of any Debt, to
                           make an appropriate entry in the Client's Financial
                           Records regarding the sale of such Debt and in all
                           cases in which the Client acts as agent of Venture
                           pursuant to clause 12(4) to ensure that all accounts
                           and records relating to Debtors are clearly marked
                           that the Debts so recorded thereon have been sold to
                           Venture;

                                      -10-

<PAGE>

                  (iii)    to indemnify Venture against all costs and expenses
                           (including administrative costs, legal fees,
                           disbursements, opponent's and third party's costs)
                           incurred by Venture in enforcing or attempting to
                           enforce payment and collection of all Debts (other
                           than Credit Approved Debts) and in settling or
                           compromising any dispute or claim (whether justified
                           or not) by a Debtor;

                  (iv)     to pay to Venture all costs and expenses incurred by
                           Venture in entering into this Agreement and in
                           enforcing its terms or in obtaining a release or
                           waiver in respect of the matters referred to in
                           clause 18(1)(i);

                  (v)      to indemnify Venture against all claims actions and
                           demands made by any Debtor against Venture and all
                           costs interest and expenses arising therefrom except
                           where the same arises solely from the misconduct of
                           Venture;

                  (vi)     to ensure that all statements contained in and all
                           signatures appearing on every order, invoice and
                           other documents (including in particular all
                           Notifications) supplied to Venture as evidence of or
                           relating to the Debt are true and genuine.

         (3)      The inclusion of any Debt in a Notification (other than a
                  Notification pursuant to clause 6(3)) or in any report made to
                  Venture pursuant to clause 12(4)(i)(d) shall be treated as a
                  warranty by the Client that:

                  (i)      the Sale Contract does not include any prohibition
                           against the assignment of the Debt;

                  (ii)     the Goods have been Delivered and the Debt is a
                           legally binding obligation of the Debtor for the
                           Notified amount and has arisen from a Sale Contract
                           made in the ordinary course of the Client's business
                           specified in paragraph 1(e) of the Schedule which:

                           (a)      provides for the invoice to be expressed and
                                    payment to be made in a currency specified
                                    in paragraph 1(f)(i) of the Schedule and on
                                    terms of payment (which shall be stated on
                                    each and every invoice) not more liberal
                                    than those specified in paragraph 1(f)(ii)
                                    of the Schedule;

                           (b)      is subject to the law of a country specified
                                    in paragraph 1(f)(iii) of the Schedule;

                           (c)      is not regulated by the Consumer Credit Act
                                    1974; and

                           (d)      is otherwise as approved by Venture

                           and the Client will not vary or attempt to vary any
                           of the terms of any such Sale Contract without the
                           prior written consent of Venture;

                  (iii)    the Client has no obligations to the Debtor, other
                           than under any Sale Contract and there exists no
                           agreement between the Client and the Debtor for
                           set-off or for abatement or whereby the amount of the
                           Debt specified in the Notification may otherwise be
                           reduced, except in accordance with the terms of the
                           Sale Contract approved by Venture;

                  (iv)     the Client is not in breach of any of its obligations
                           under the relevant Sale Contract and the Debtor will
                           accept the Goods and the invoice therefor without any
                           dispute or claim, including claims for release of
                           liability (or of inability to pay) because of force
                           majeure or because of the requirements of any law
                           wherever applying or of rules orders or regulations
                           having the force of law in any jurisdiction; and

                                      -11-

<PAGE>

                  (v)      the Debtor has an established place of business and
                           is not an Associate, subsidiary, co-subsidiary,
                           parent or associated company of the Client or under
                           the same director or shareholder control as the
                           Client.

19       COMMENCEMENT AND TERMINATION
         ----------------------------

         (1)      This Agreement shall commence on the Commencement Date and,
                  unless terminated pursuant to clause 19(2), shall continue for
                  the minimum period set out in paragraph 3 of the Schedule and
                  thereafter for successive periods equal to such minimum period
                  unless terminated in accordance with this clause. Either party
                  may give notice in writing to the other terminating this
                  Agreement. Such a notice from Venture may be served at any
                  time. Such a notice from the Client must be served in the
                  calendar month immediately preceding the calendar month in
                  which the anniversary of the commencement of this Agreement
                  falls. In each case such notice shall be of not less than the
                  period specified in paragraph 4 of the Schedule.

         (2)      If any of the following events happen, Venture shall have the
                  right by notice to the Client to terminate this Agreement
                  forthwith or at any time thereafter:

                  (i)      the Client's Insolvency or its calling any meeting of
                           its creditors; or any petitions or applications being
                           issued before a Court with a view to the Client's
                           Insolvency;

                  (ii)     a petition for an administration order pursuant to
                           the Insolvency Act 1986 in relation to the Client
                           (being a body corporate) or a resolution of its
                           members for its winding up;

                  (iii)    the dissolution of any partnership comprising the
                           Client or any change in the constitution, composition
                           or legal personality of the Client, whether by death,
                           retirement, amalgamation, reconstruction, addition or
                           otherwise;

                  (iv)     the Client's income or assets or any part thereof
                           being seized under any execution legal process or
                           distress for rent or the making or threat of a
                           garnishee order on any person indebted to the Client
                           or the attachment or attempt of attachment to
                           Outstanding Debts or any amount owed by Venture to
                           the Client;

                  (v)      if any of the Client's obligations to third parties
                           for the repayment of borrowed money shall be declared
                           due prior to their stated maturity dates by reason of
                           default or shall not be paid when due;

                  (vi)     if at any time the Client (whether or not a body
                           corporate) is unable to pay its debts as defined in
                           paragraph 123(1) of the Insolvency Act 1986, or if a
                           statutory demand under the Insolvency Act 1986 be
                           served on the Client, or if at any time the value of
                           its assets disclosed in any balance sheet or
                           financial statement shall be less than the amount of
                           its liabilities (including any contingent or
                           prospective liabilities), or if an encumbrancer shall
                           take possession of any part of its income or assets,
                           or the making of any garnishee order on Venture
                           following a judgement against the Client;

                  (vii)    the occurrence of any of the events similar to those
                           referred to in paragraphs (i) to (vi) inclusive of
                           this clause, in relation to any person who has given
                           a guarantee or indemnity in respect of the Client's
                           obligations under this Agreement or the death of any
                           such person or the termination or attempted
                           termination of any such guarantee or indemnity;

                  (viii)   any breach of any covenant or undertaking given by
                           any person in reliance upon which Venture entered
                           into or continued this Agreement or the withdrawal or
                           attempted withdrawal of any waiver release or
                           priority given to Venture in relation to any security
                           right affecting any asset of the Client;

                  (ix)     the cessation or threatened cessation of the Client's
                           business;

                                      -12-

<PAGE>

                  (x)      any change in the business of the Client specified in
                           paragraph 1(e) of the Schedule or change in ownership
                           of 25% or more of the issued shares of the Client as
                           at the date hereof or any change in the constitution
                           or control of any other person referred to in clause
                           18(1)(ii)(b);

                  (xi)     any breach of any of the Client's obligations,
                           warranties or undertakings to Venture whether arising
                           under this Agreement or any other agreement between
                           Venture and the Client or under any guarantee or
                           charge given by the Client to Venture or otherwise
                           howsoever arising;

                  (xii)    the failure by the Client to deliver any Notification
                           for a period in excess of six weeks or the failure to
                           deliver sufficient Notifications in any period of six
                           consecutive weeks to provide Factoring Fees to
                           Venture of at least (pound)100 (Pounds Sterling One
                           Hundred) exclusive of Value Added Tax.

         (3)      Upon or at any time following an event referred to in clause
                  19(2), Venture shall have:

                  (i)      immediate Recourse in respect of all Outstanding
                           Debts but so that the ownership of none of such Debts
                           shall vest in the Client until the Repurchase Price
                           of all such Debts has been received by Venture; and

                  (ii)     the right to do any or all of the following:

                           (a)      reduce the Prepayment Percentage to zero;

                           (b)      demand immediate payment of all Funds in
                                    Use;

                           (c)      treat all Credit Approved Debts as
                                    Disapproved Debts;

                           (d)      increase the Discount Charge by 2% (which
                                    the Client and Venture agree is an
                                    acceptable increase to compensate Venture
                                    for its increased risk in such
                                    circumstances)

                           (e)      treat Debts which are afterwards Notified as
                                    Disapproved Debts.

         (4)      Venture shall have no obligations to pay any sum to the Client
                  whilst any petition or application shall be pending relating
                  to the Client's Insolvency.

         (5)      (i)      Following the occurrence of an event referred
                           to in clause 19(2), Venture shall be entitled to
                           debit the Current Account with the amount of all and
                           any losses, damage, costs and/or expenses whether
                           actual or contingent suffered or incurred by Venture
                           (including all additional out of pocket expenses (of
                           whatsoever nature and howsoever arising) and the cost
                           of all additional management time and effort expended
                           by Venture in protecting or enforcing Venture's
                           rights and interests acquired pursuant to this
                           Agreement) as a consequence of the occurrence of such
                           event. For the purposes of calculating the cost of
                           such additional management time and effort Venture
                           shall apportion the salary costs of its personnel
                           involved on a pro rata basis according to the time
                           spent by such personnel in managing the Client's
                           account taking account only of such time as would not
                           have been spent by such personnel had such event
                           referred to in clause 19(2) not occurred.

                  (ii)     In addition to all other sums payable by the Client
                           under this Agreement should an event occur which is
                           referred to in clause 19(2) which event has the
                           consequence of Venture not being able to earn from

                                      -13-

<PAGE>

                           the Client the fees and charges provided for in this
                           Agreement for any period between the happening of
                           such event and the earliest possible date upon which
                           this Agreement could be validly terminated by notice
                           from the Client, Venture shall be entitled to debit
                           the Current Account with the amount of such fees and
                           charges which Venture would have earned during such
                           period had such event not occurred (or where such
                           fees and charges are incapable of precise
                           calculation, Venture's reasonable estimate of such
                           fees and charges calculated in a reasonable manner
                           consistent with the performance and forecasts of the
                           Client prior to the happening of such event).

         (6)      The Client agrees to be bound by a certificate (except as to
                  manifest errors or errors in law) signed by the Company
                  Secretary or a Director of Venture as to:

                  (i)      the amount of the losses, damage, costs and/or
                           expenses (actual or contingent) referred to in clause
                           19(5)(i) and the fees and charges referred to in
                           clause 19 (5)(ii) and/or

                  (ii)     the amount at any time owed by the Client to Venture
                           or vice versa and however arising.

         (7)      Unless specifically provided to the contrary termination of
                  this Agreement shall neither affect the rights and obligations
                  of either party in relation to Debts which are in existence on
                  the date of termination nor the continued calculation of the
                  Discount Charge. Such rights and obligations shall remain in
                  full force and effect until duly extinguished.

20       EXCLUSION OF OTHER TERMS AND PRESERVATION OF VENTURE'S RIGHTS
         -------------------------------------------------------------

         (1)      This Agreement (including the appendices hereto and the
                  Schedule and any special conditions set out therein and any
                  procedural steps stipulated pursuant to clause 20(4)) and any
                  other document executed as a deed by both parties contains all
                  the terms agreed between Venture and the Client, to the
                  exclusion of any agreement, statement or representation
                  however made by or on behalf of Venture prior to the making of
                  this Agreement. In the event of any conflict between the terms
                  of this Agreement and the procedural steps then this Agreement
                  shall prevail. Except to the extent provided for in this
                  Agreement, no variation of this Agreement shall be valid
                  unless it is in writing and signed on behalf of the Client and
                  signed on behalf of Venture by a Director or the Company
                  Secretary or by any person from time to time authorised to
                  sign on behalf of Venture.

         (2)      Venture's rights under this Agreement shall not be affected in
                  any way by the granting of time or indulgence by Venture to
                  the Client or to any other person nor by any failure or delay
                  in the exercise of any right or option under this Agreement or
                  otherwise.

         (3)      Venture shall be entitled to rely upon any act done or
                  document signed or any telex or facsimile or oral
                  communication sent by any person purporting to act, sign, send
                  or make on behalf of the Client despite any defect in or
                  absence of authority vested in such person.

         (4)      The Client shall carry out the procedural steps stipulated by
                  Venture for the efficient working of this Agreement.

         (5)      The Client's obligations to Venture shall continue without any
                  right of set-off or counterclaim by the Client against Venture
                  until all moneys due to Venture hereunder have been paid.

         (6)      Venture may supply a copy of this Agreement or any variation
                  of it to any party having security over the Client's assets.

21       COUNTER INDEMNITY
         -----------------

         (1)      Venture will from time to time grant an indemnity (the
                  "Indemnity") to its bankers in respect of facilities granted
                  or to be granted to its Clients (including the Client).

                  (i)      In consideration of Venture entering into the
                           Agreement the Client undertakes:-

                                      -14-

<PAGE>

                           (a)      to pay Venture upon demand any sum which may
                                    actually or contingently be payable by
                                    Venture to its bankers under the Indemnity;
                                    and

                           (b)      to indemnify Venture and keep Venture
                                    indemnified and hold Venture harmless
                                    against all losses which may be incurred,
                                    suffered, claimed and/or made against
                                    Venture under the Indemnity.

         (2)      The Client irrevocably authorises Venture to debit to any
                  account in the Client's name in Venture's records the whole or
                  any part of:-

                  (i)      any sum demanded by Venture pursuant to clause 1 (i)
                           (a) above;

                  (ii)     any losses and any sums that may prospectively or
                           contingently become due under this Indemnity

         (3)     Venture may also set off all and any Losses or sums demanded or
                 due from the Client against any amount that Venture may at any
                 time owe to the Client. Where the amount of any Losses or other
                 amount due from the Client cannot be immediately ascertained
                 then Venture may make a reasonable estimate of them for the
                 purpose of making such debit or set off.

         (4)     The Client agrees that any request or demand, made upon Venture
                 appearing or purporting to be made by or on behalf of its
                 bankers, for payment of any sum under the Indemnity shall be
                 sufficient authority for Venture to make any such payment.
                 Venture need not enquire whether any such amount shall in fact
                 be due or whether the demand or request has been properly made.

         (5)     Venture may at all times set off and retain against monies due
                 to the Client under the Agreement such sums as may actually or
                 contingently be due by Venture to its bankers.

22       PROVISION OF ELECTRONIC DATA INTERCHANGE SERVICES
         -------------------------------------------------

         (1)      Venture will provide access via their web site to their
                  Electronic Data Interchange Facility and on line help screens.

         (2)      The Client undertakes to Venture:

                  (i)      to ensure that all Messages it sends are correct and
                           complete;

                  (ii)     to comply at all times with the requirements and
                           directions appearing in Venture'sweb site;

                  (iii)    to use the Services only for the Client's own needs ;

                  (iv)     ensure that all persons within the Client's
                           organisation keep the security access codes
                           confidential and to change access codes when a person
                           with such knowledge leaves their organisation;

                  (v)      to pay to Venture all charges which Venture may from
                           time to time notify to the Client as being payable in
                           respect of the provision by Venture at the Client's
                           request of any on-site technical assistance in
                           respect of the Services.

         (3)      Commencement

                                      -15-

<PAGE>

                  Venture will advise the Client that the Service is available
                  by issuing to the Client the initial security access code.

         (4)      Mutual Obligations

                  Each party undertakes:

                  (i)      to maintain adequate computer systems (hardware and
                           software) for the use of the Services and computer
                           record security;

                  (ii)     to use its best endeavours to maintain its computer
                           systems virus free;

                  (iii)    to take reasonable precautions to prevent
                           unauthorised access to the Services;

                  (iv)     to keep secret and confidential the method of
                           operation of the Services, user identification codes,
                           passwords, test keys, access codes and security
                           procedures;

                  (v)      to notify the other promptly if it learns or suspects
                           that there has occurred any failure or delay in
                           receiving or transmitting any Message, any error or
                           fraud in affecting the sending or receiving of any
                           Message or any programming error or defect or
                           corruption of any Message, and to co-operate with the
                           other party in trying to remedy the same;

                  (vi)     to take all such appropriate steps and establish and
                           maintain all appropriate procedures so as to ensure
                           that as far as reasonably practicable Messages are
                           properly stored, are not accessible to unauthorised
                           persons, are not altered, lost or destroyed, and are
                           capable of being retrieved only by properly
                           authorised persons;

                  (vii)    to ensure that any Message containing confidential
                           information as designated by the sender of the
                           Message is maintained by the recipient in confidence
                           and is not disclosed to any unauthorised person or
                           used by the recipient other than for the purposes of
                           the business transaction to which it relates.
                           Messages shall not be regarded as containing
                           confidential information to the extent that such
                           information is in the public domain, or the recipient
                           is already in receipt of it prior to transmission by
                           the sender or receives the information from a third
                           party entitled to disclose it. Any authorised
                           disclosure to another person shall be on the same
                           terms as to confidentiality as required by the sender
                           or as contained in this clause;

                  (viii)   upon becoming aware of any breach of security in
                           relation to any Message or the Electronic Data
                           Interchange Facility, or in relation to the
                           procedures implemented under this clause, to
                           immediately inform the other party to this Agreement
                           of such breach and shall use all reasonable
                           endeavours to rectify the cause of such a breach as
                           soon as possible;

                  (ix)     to notify the other party immediately if it knows of
                           or suspects any misuse or likely misuse of, or breach
                           or likely breach of secrecy in respect of the
                           Services, any Message (or any part thereof) or any
                           passwords, access codes or other similar information.

         (5)      Where permitted by law, the parties may apply special
                  protection to Messages by encryption thereof or by any other
                  agreed means.

         (6)      Logging & Copyright

                  (i)      Venture's Master Log of Messages and data received or
                           transmitted by Venture shall in the absence of
                           manifest error, be conclusive proof and evidence of

                                      -16-

<PAGE>

                           the Messages sent or received by Venture in
                           connection with or referable to the Services and of
                           the constituents of such Messages and the times at
                           which they were sent or received.

                  (ii)     The copyright and all other rights in Venture's web
                           site and in any software used or provided by Venture
                           or Venture's licensors in connection with Venture's
                           web site or the Services shall at all times remain
                           vested in Venture, or if the terms of any contract
                           that Venture has with any licensor, otherwise
                           specified, in such licensor. The Client will not copy
                           any of the same without Venture's prior written
                           consent.

         (7)      Liability

                  (i)      Every message sent by the Client must identify the
                           sender. Venture may accept and act upon any message
                           ostensibly sent by the Client even though it may not
                           originate from the Client or the person purporting to
                           send the message shall lack authority and Venture
                           shall be under no obligation to enquire as to any
                           such matter;

                  (ii)     The Client accepts that data available through the
                           Services will be subject to change during the hours
                           of business each day, particularly the details of
                           items posted to the accounts of the Client with
                           Venture and Venture shall not in any circumstances
                           whatsoever have any liability to the Client for a
                           change in such data occurring after the Client shall
                           have acted in reliance thereon. In particular the
                           Client should under no circumstances initiate payment
                           to any third party based upon a message purporting to
                           show that monies may be drawn by the Client from
                           Venture. Venture shall confirm in accordance with its
                           normal procedures the transmission of payments to the
                           Client which payments shall only be made in
                           accordance with the terms of the Agreement;

                  (iii)    Venture shall not be liable for or in respect of any
                           loss or damage or any failure to comply, or any delay
                           in complying with its obligations hereunder or any
                           other obligation in respect of the Services which is
                           caused directly or indirectly by;

                           (a)      any downtime, unavailability, failure or
                                    malfunction of any computer hardware
                                    equipment or software, or of any telephone
                                    line or other communication system, service,
                                    link or equipment, whether the property of
                                    Venture or the Client or any Internet
                                    service provider or any other party;

                           (b)      suspension, alteration or withdrawal of the
                                    Services;

                           (c)      any error, discrepancy, corruption,
                                    incorrect formatting of or ambiguity in any
                                    Message received by Venture;

                           (d)      industrial dispute, abnormal operating
                                    conditions, act or omission of the Client or
                                    any third party;

                           (e)      force majeure;

                   (iv)    Venture shall not be liable to the Client for any
                           consequential, special secondary or indirect loss or
                           damage or any loss of or damage to goodwill, profits
                           or anticipated savings suffered by the Client by
                           reason of any of the matters referred to in clause
                           22.4 (1) to (ix) inclusive (however caused);

                  (v)      The Client hereby agrees to indemnify Venture and
                           keep Venture indemnified against all liabilities,
                           damages and expenses arising out of the transmission
                           or the receipt by Venture of incorrect, corrupted,
                           ambiguous or inaccurate Messages (however caused);

                                      -17-

<PAGE>

                  (vi)     All terms and conditions implied into this Agreement
                           by law are expressly excluded to the fullest extent
                           permissible by law;

                  (vii)    Nothing in this clause 22.6 shall operate to excuse
                           Venture from liability for loss or damage caused to
                           or suffered by the Client which loss or damage is
                           directly attributable to the negligence or fraud of
                           any of Venture's officers.

         (8)      Messages

                  (i)      Each party agrees to accord the messages the same
                           status as would be accorded to a document or to
                           information sent other than by electronic means,
                           unless such Messages can be shown to have been
                           corrupted during or upon transmission to Venture;

                  (ii)     Where there is evidence that a Message has been
                           corrupted or if any Message is identified or capable
                           of being identified as incorrect it shall be
                           re-transmitted by the sender as soon as practicable
                           with a clear indication that it is a corrected
                           Message. Any liability of the sender which would
                           otherwise accrue from the sender's failure to comply
                           with the provisions of this clause 22.8(ii) shall not
                           accrue if clause 22.8(iii) applies;

                  (iii)    Notwithstanding clauses 22.8(i) and 22.8(ii) Venture
                           will not be liable for the consequences of an
                           incomplete or incorrect Message if the error is or
                           should in all the circumstances be reasonably obvious
                           to the Client. In such event the Client must
                           immediately notify Venture thereof;

                  (iv)     If the recipient has reason to believe that a Message
                           is not intended for him he should notify the sender
                           and should delete from his system the information
                           contained in such Message but not the record of its
                           receipt.

         (9)       Suspension and Withdrawal

                  (i)      Venture shall have the right without liability to the
                           Client and without notice, at any time and from time
                           to time, to suspend the operation of the Services
                           whereupon no further Messages shall be sent or
                           enquiries made by either party until Venture has
                           agreed to re-activate the Services;

                  (ii)     This service can be suspended or withdrawn for any
                           reason, clauses 22.(1), 22.(2) and 22.(9) shall
                           survive withdrawal of this Service;

                  (iii)    Withdrawal of this service shall not affect any
                           action required to complete or implement Messages,
                           which are received by either of the parties prior to
                           such withdrawal.

         (10)     General

                  Venture shall provide to the Client a telephone number and
                  e-mail address for access to Venture's "help desk" support for
                  the Services. Venture is not bound to maintain the
                  availability of the "help desk" and when available the "help
                  desk" will be staffed by Venture only during Venture's normal
                  business hours. The "help desk" will only provide assistance
                  with regard to the Services and not in respect of any other
                  software applications.

                                      -18-

<PAGE>

23       CONSTITUTION AND PLURALITY OF CLIENT
         ------------------------------------

         (1)      If the Client comprises a partnership:

                  (i)      references to the Client in clauses 12(5), 19(2) and
                           19(4) shall be treated as references to any one or
                           more of the partners;

                  (ii)     all undertakings and warranties given to Venture
                           shall be treated as having been given by every one of
                           the partners;

                  (iii)    the liability of the partners to Venture shall be
                           joint and several and Venture may release or
                           compromise with any one or more of the partners,
                           without affecting its rights against the others;

                  (iv)     Venture may in its absolute discretion treat any
                           notice to or demand on any one or more of the
                           partners as notice to or demand on them all and any
                           notice to Venture by any one or more of the partners
                           as notice by them all;

                  (v)      all the persons who have executed this Agreement
                           warrant that all the present partners of such
                           partnership are named herein and without prejudice to
                           Venture's rights will advise Venture of any changes.

         (2)      If the Client is an individual or a partnership (and not a
                  body corporate):

                  (i)      except as provided in clause 19(2) this Agreement and
                           all the terms hereof shall remain in full force and
                           effect notwithstanding any change in the constitution
                           of the Client whether by death retirement addition or
                           otherwise;

                  (ii)     the Client shall fully co-operate with Venture, when
                           requested, to enable this Agreement to be registered
                           at the Bills of Sale Registry;

                  (iii)    the Client consents to Venture storing and processing
                           information about the Client on Venture's and/or the
                           ABN AMRO Holdings NV's computers and in any other
                           way. The Client is aware that this will be used by
                           Venture and other companies in the ABN AMRO Holdings
                           NV to decide whether to continue with this Agreement
                           or to vary its terms, for training purposes, credit
                           or financial assessments, market and product
                           analysis, making payments, recovering monies and
                           preparing statistics. Information about the Client
                           may also be used so that Venture can develop, improve
                           and market its services to the Client and other
                           clients and to protect Venture's interests (including
                           establishing credit limits for the benefit of other
                           clients or obtaining settlement of any liability of
                           the Client to Venture). Venture may also use such
                           information to prevent fraud and money laundering.

                  (iv)     Venture will tell the Client if Venture makes a
                           significant decision about the Client solely using an
                           automatic decision making process. The Client can
                           them request a review by Venture.

                  (v)      Venture may from time to time make searches of the
                           Client's record at one or more trade, credit
                           reference or fraud prevention agencies. The Client's
                           record with such agencies includes searches made and
                           information given by other businesses. The details of
                           Venture's search(es) will be kept by such agencies.

                  (vi)     Venture may give information about the Client, its
                           finances, this Agreement and any Debts sold to
                           Venture to:-

                           (a)      Venture's or the Client's insurers - so they
                                    can quote for and issue any policy or deal
                                    with any claims

                                      -19-

<PAGE>

                           (b)      the Department of Trade and Industry in
                                    connection with an application under the
                                    Small Firms Loan Guarantee Scheme

                           (c)      any guarantor or indemnifier of this
                                    Agreement - so they can assess their
                                    obligations to Venture or so Venture can
                                    enforce such obligations

                           (d)      any business acting on Venture's behalf or
                                    the Client's behalf including accountants,
                                    bankers or solicitors - so they can carry
                                    out their services to Venture or the Client

                           (e)      any business providing a similar service to
                                    Venture to whom the Client may wish to
                                    transfer - to facilitate such a transfer

                           (f)      any business to whom Venture may wish to
                                    transfer the Debts - to facilitate such
                                    transfer

                           (g)      anyone else to whom Venture transfers its
                                    rights or duties under this Agreement - so
                                    they can comply with or enforce this
                                    Agreement

                           (h)      any introducer - so Venture can advise of
                                    income earned and commission due

                           Venture may also give out information about the
                           Client if Venture has a duty to do so or if the law
                           allows Venture to do so.

                  (vii)    Unless the Client objects or has objected Venture
                           (and other members of the ABN AMRO Holdings NV) may
                           also contact the Client (by letter, telephone, fax or
                           e-mail):

                           (a)      about services and products which they
                                    consider may be of interest to the Client;
                                    or

                           (b)      to carry out market research about their
                                    services and products (or those of third
                                    parties)

                  (viii)   Unless the Client objects or has objected the Client
                           consents to Venture giving the Client's name,
                           address, business details and a short description of
                           the facility contained in this Agreement to:

                           (a)      carefully selected/reputable/associated
                                    businesses/Group Companies;

                           (b)      joint venture partners

                           (c)      brokers and introducers of business to
                                    Venture Finance Plc

                           (d)      the Department of Trade and Industry

                           (e)      insurers

                  (ix)     the Client consents to Venture disclosing or
                           transferring information held about the Client to
                           countries outside the European Economic Area. The
                           Client acknowledges its awareness that such countries
                           may not have a level of data protection equivalent to
                           that of the United Kingdom. These disclosures and
                           transfers will be made for the purposes of:-

                           (a)      debt collecting

                           (b)      processing

                           (c)      head office reporting

                           (d)      statistical analysis

                  (x)      For training and/or security purposes the Client's
                           phone calls to Venture may be monitored and/or
                           recorded

                  (xi)     In respect of information about its sole trader and
                           partnership Debtors any such information disclosed to
                           Venture will be accurate and fully comply with the
                           Data Protection Act 1998.

                                      -20-

<PAGE>

24       ASSIGNMENT OR DELEGATION BY CLIENT
         ----------------------------------

         The Client shall not be entitled to assign or charge or declare a trust
         over any of its rights or delegate any of its obligations under this
         Agreement without the prior written consent of Venture.

25       NOTICES
         -------

         (1)      Any notice or demand to be served or made by Venture under the
                  terms of this Agreement shall be validly served or made:

                  (i)      if handed to the Client or to any officer of or
                           partner in the Client as appropriate; or

                  (ii)     if delivered, or sent by facsimile transmission or
                           post, to the address stated in the Schedule or the
                           address of the Client last known to Venture or to any
                           address at which the Client carries on business; or

                  (iii)    if sent by electronic mail to the Client's e-mail
                           address advised to Venture.

                  Notice or demands served personally by Venture shall take
                  effect upon such service and those made by facsimile shall be
                  treated as being received upon transmission. Notices sent and
                  demands made by Venture by post or electronic mail shall be
                  conclusively deemed to have been received no later than 10.00
                  a.m. on the next Working Day following the posting or
                  despatch.

         (2)      Any notice to be served on Venture must be in writing and
                  delivered by Recorded Delivery post to the registered office
                  of Venture or such other office, as Venture shall notify to
                  the Client for the purpose of this sub-clause. They shall take
                  effect at the time of delivery so recorded.

26       APPLICABLE LAW
         --------------

         The proper law of this Agreement both as to form and substance shall be
         the law of England and the Client hereby submits to the jurisdiction of
         the English Courts but without prejudice to the right of Venture to
         bring proceedings in the Courts of any territory in which the Client
         carries on business or may have assets.

                                      -21-

<PAGE>

                                  THE SCHEDULE

(forming part of an agreement for the purchase of Debts between Venture Finance
PLC and the Client named in section 1(a) hereof)
All references in this Schedule to definitions shall be those in Appendix A to
this Agreement

1        (a)      Name of Client (clause 1(2)):       Xcel Power Systems Limited

         (b)      Trading address of Client:          Brunswick Road
                                                      Cobbs Wood
                                                      Ashford
                                                      Kent
                                                      TN23 1EB

         (c)      Country of Incorporation:           England

         (d)      Registered Number:                  00575679

         (e)      Nature of Client's business         Design and Manufacture of
                  (clauses 18(3)(ii) and 19(2)(x))    Power Supplies

         (f)      Key provisions of Client's Sale Contract:

                  (i) Currency                        Sterling
                      (clause 18(3)(ii)(a)):

                  (ii) Terms of payment               Up to 90 days with maximum
                       (clause 18(3)(ii)(a)):         settlement discount of 5%

                  (iii) Governing Law                 England
                        (clause 18(3)(ii)(b)):

2        Commencement Date                            12th November 2002
         (clause 19(1) and definition of
         Commencement Date):

3        Minimum Period of Agreement                  Thirty Six Calendar Months
         (clause 19(1):

4        Period of Notice of Termination              Six Calendar Months
         (clause 19(1)):

5        General Nature of Agreement                  Without Bad Debt
         (clauses 7(2)(i)(d) and (ii)(b), 11(1)(ii),  Protection
         11(2)(iii) and 13(1):

6        Class or description of Debts for approval   All Debtors
         (clause 11(1)(viii)):

                                      -22-

<PAGE>

7        Provision for Notice of Assignment           No notice of assignment
         (clauses 12(2) and 12(3)):

8        Collection Arrangements                      The Client shall collect
         (clauses 7(2)(i) and (ii), 12(1) and 12(4)): the Debts as Agent of
                                                      Venture in accordance with
                                                      Clause 12(4)

9        Prepayment Percentage                        85%
         (definition of Availability and definition
         of Prepayment Percentage):

10       Review Limit                                 (pound)1,500,000 (Pounds
         (definition of Availability and definition   Sterling One Million
         of Review Limit):                            Five Hundred Thousand)
                                                      including an Advantage
                                                      Facility of up to(pound)
                                                      225,000 (Pounds Sterling
                                                      Two Hundred and Twenty
                                                      Five Thousand), a Term
                                                      Loan of up to (pound)
                                                      80,000 (Pounds Sterling
                                                      Eighty Thousand) and a
                                                      Cashflow Advance of up to
                                                      (pound)350,000 (Pounds
                                                      Sterling Three Hundred and
                                                      Fifty Thousand)

11       Debtor Concentration                         Up to 50% on BAE and up to
         (clause 11(1)(i) and definition of Debtor    20% on all others unless
         Concentration):                              otherwise approved.

12       Funding Limit                                N/A
         (clause 11(1)(i) and definition of Funding
         Limit):

13       Recourse period                              90 days from end of month
         (clause 11(1)(ii):                           of invoice date

14       Client Bad Debt Risk                         N/A
         (clauses 7(3) and 11(2)(iv)):

15       Factoring Fee, bank and other charges        0.25% plus VAT at the rate
         (clauses 9(1), 9(2) and 9(4) and definition  applicable, plus Bank
         of Factoring Fee and Export Charges):        charges

16       Discount Charge                              2.0% over the Base Rate of
         (clause 9(3) and definition of Discount      Venture's Bankers for the
         Charge):                                     time being in force for
                                                      Prepayments in Pounds
                                                      Sterling. 2.0% over
                                                      Venture cost of funds for
                                                      the time being in force
                                                      for Prepayments in agreed
                                                      currencies other than
                                                      Pounds Sterling.

17       (i)      Collection Transfer Fee             6% of the notified amount
                  (Clause 12(4)(ii))                  of all Outstanding Debts

18       (ii)     Revised Factoring Fee               2% (in substitution for
                  (Clause 9(2))                       the percentage stated in
                                                      paragraph 15 above)

                                      -23-

<PAGE>

18       Special Conditions:

         1.       Prior to Venture making any Prepayment or payment due to the
                  Client under this Agreement a release of the Debts will be
                  required from any Debenture which exists or which may come
                  into existence in the future and Venture will take a Fixed and
                  Floating Charge over the assets of Xcel Power Systems Limited.
                  Venture will require priority from any other chargeholder in
                  respect of all assets and will additionally require any other
                  floating chargeholder to either:
                  a) Not appoint a receiver without the prior written consent of
                  Venture or
                  b) Provide not less than 28 days prior written notice to
                  Venture of any intention to appoint a receiver.
                  Where the terms of any release require that all Prepayments or
                  payments by Venture to the Client shall be sent to a bank
                  account designated in the release then Venture will make
                  payment accordingly.

         2.       The Agreement is to be supported by the Corporate Guarantee
                  and Indemnity of Microtel International Inc.

         3.       The Agreement is to be supported by the Cross Corporate
                  Guarantees and Indemnities of all associated companies,
                  currently, Xcel Corporation Limited, Belix Power Conversion
                  Limited and Belix Wound Components Limited. In support of
                  Cross Corporate Guarantees and indemnities, Venture will take
                  Fixed and Floating Charges over the assets of Xcel Corporation
                  Limited, Belix Power Conversion Limited and Belix Wound
                  Components Limited.

         4.       Prior to Venture making any Prepayment, Venture will require
                  to be named as First Loss Payee and Joint Insured under the
                  terms of the stock and Buildings Contents insurance policy
                  held by the Client.

         5.       Prior to Venture making any Prepayment subordination of all
                  loans to the Group from Microtel International Inc. will be
                  required by Venture.

         6.       Venture will charge an Arrangement Fee of (pound)1,000 (Pounds
                  Sterling One Thousand) plus VAT at the rate applicable.

         7.       Prior to Venture making any Prepayment confirmation and
                  subordination of inter-company loans to the value of
                  (pound)200,000 (Pounds Sterling Two Hundred Thousand) will be
                  required by Venture.

         8.       All legal fees incurred by Venture in satisfaction of the
                  conditions are for the account of the Client.

         9.       Venture will require signed audited accounts to be provided
                  within six months of each year-end. Monthly management
                  accounts (including both profit and loss account and balance
                  sheet) will be required within 21 days of each month end.
                  Should these not be received within the agreed timescale,
                  Venture reserves the right to reduce the Prepayment
                  Percentage.

         10.      Venture will require an annotated open item aged debt analysis
                  and sales ledger control account reconciliation, agreed back
                  to the Debts Purchased Account, within 5 working days of each
                  month end.

         11.      Venture will require that a Letter be sent to all Debtors,
                  which pay by BACS, advising them of the change in bank account
                  details.

                                      -24-

<PAGE>

         12.      Venture will require that a copy of the Client's Purchase
                  Ledger be forwarded within 5 working days of each month end,
                  and Venture reserves the right to hold contingency reserves in
                  respect of contra accounts as it deems appropriate, such
                  reserves shall be deemed as Disapproved Debts for the purposes
                  of calculating Availability.

         13.      Venture requires that the Client obtain signed proofs of
                  delivery or collection in respect of each Debt and that these
                  be retained for inspection by Venture from time to time.

         14.      In the event that the balance of Debts more than 90 days from
                  the end of month of invoice date exceeds 10% of the value of
                  Debts Notified to Venture then Venture reserves the right to
                  reduce the Prepayment Percentage.

         15.      Venture will carry out periodic audits during the Agreement at
                  a cost to the Client of (pound)500 (Pounds Sterling Five
                  Hundred) per audit day, plus VAT at the rate applicable.

         16.      Venture requires that the Fixed Charge cover, measured as the
                  ratio of Earnings Before Interest, Tax, Depreciation and
                  Amortisation (EBITDA), less non-financed capital expenditure
                  to Total Interest Costs (net of any interest receivable) and
                  scheduled term loan repayments, does not fall below 2 times
                  when measured on a rolling 3 month basis.

         17.      The Eligible Collateral Formula for the AdVantage Facility in
                  respect of stock will be Raw Materials x 25% plus Work in
                  Progress x 25% less preferential creditors subject to an
                  AdVantage Limit of (pound)225,000 (Pounds Sterling Two Hundred
                  and Twenty Five Thousand).

         18.      Venture will require a detailed stock listing on a monthly
                  basis. This report will be required within five working days
                  of each period end and is to include details of all categories
                  of stock and preferential creditor balances.

         19.      The Eligible Collateral Formula for the AdVantage Loan
                  Facility in respect of Plant & Machinery will be plant &
                  machinery x 100% subject to an AdVantage Limit of
                  (pound)80,000 (Pounds Sterling Eighty Thousand).

         20.      Venture will require an annual valuation of any Fixed Assets
                  detailed within the Eligible Collateral Formula to be
                  conducted by a Valuer acceptable to Venture.

         21.      Either

                  Venture will require a waiver from the Landlord in respect of
                  any premises where stock and/or Plant & Machinery is located,
                  which is made available to us as collateral:

                  Or

                  Venture will hold a reserve in respect of 3 months rent in
                  respect of any premises where stock and/or Plant & Machinery
                  is located, which is made available to us as collateral.

         22.      There will be a Cashflow Loan of (pound)350,000 (Pounds
                  Sterling Three Hundred and Fifty Thousand). An annually
                  renewable Arrangement Fee of (pound)3,500 (Pounds Sterling
                  Three Thousand Five Hundred) plus VAT at the rate applicable
                  will apply.

                                      -25-

<PAGE>

IN WITNESS whereof such of the parties have executed this Deed in the manner
described below.

EXECUTED AND DELIVERED AS A DEED by

PAUL BEVERIDGE                                         /S/ PAUL BEVERIDGE
--------------                                         ------------------

as Attorney for VENTURE FINANCE PLC

in the presence of:

PAUL ARPS                                              /S/ PAUL ARPS
--------------                                         ------------------

Address of Witness         SUSSEX HOUSE, PERRYMOUNT ROAD, HAYWARDS HEATH
                           ---------------------------------------------

on the 12 day of November 2002

Signed as a Deed by Xcel Power Systems Limited
on the                                    )
                                          )
    23 day of October 2002                )

Acting by:

C.T. OLIVA             Director           )     /S/ CARMINE T. OLIVA
-----------------------                          -------------------------------
                                          )

GRAHAM JEFFERIES       Director/Secretary )       /S/ GRAHAM JEFFERIES
-----------------------                          -------------------------------

                                      -26-

<PAGE>

Signed and Delivered as a Deed
by
as attorney for and on behalf of                     )
LLOYDS TSB BANK Plc in the                           )
presence of                                          )

Witness signature:         (ILLEGIBLE)
                   -------------------------------------------

Witness name:     /S/ (ILLEGIBLE)
              ------------------------------------------------

Witness Address:           LLOYDS TSB BANK plc
                           HORLEY SECURITIES CENTRE
                           P.O. BOX 104
                           13 HIGH STREET
                           HORLEY SURREY RH6 7YA

EXECUTED AND DELIVERED AS A DEED by

PAUL BEVERIDGE                                       /S/ PAUL BEVERIDGE
--------------                                       ------------------

as Attorney for VENTURE FINANCE PLC

in the presence of:

PAUL ARPS                                            /S/ PAUL ARPS
--------------                                       ------------------

Address of Witness    SUSSEX HOUSE, PERRYMOUNT ROAD, HAYWARDS HEATH, WEST SUSSEX
                      ----------------------------------------------------------

Signed as a Deed by
XCEL POWER SYSTEMS LIMITED
acting by Graham Jefferies              )        /S/ GRAHAM JEFFERIES
                                                 -------------------------------
a director and                          )
Carmine T. Oliva                        )        /S/ CARMINE T. OLIVA
                                                 -------------------------------
another director/the secretary          )

                                      -27-

<PAGE>

                            APPENDIX A - DEFINITIONS

"ABN AMRO HOLDINGS NV"
Any company in which ABN AMRO Holdings NV of the Netherlands has a beneficial
shareholding either directly or indirectly or through any intermediary.

"ASSOCIATE"
An associate as defined in paragraph 184 of the Consumer Credit Act 1974 of the
Client or a director or shareholder or employee of the Client.

"AVAILABILITY"
The lesser of:
(i)      an amount calculated by applying the Prepayment Percentage to the
         credit balance on the Debts Purchased Account after deducting therefrom
         the total value of Disapproved Debts, or
(ii)     the Review Limit, if any, shown in paragraph 10 of the Schedule and
         then, as applicable, either:
(iii)    adding thereto the credit balance on the Current Account, or
(iv)     deducting therefrom the Funds in Use.

"BASE RATE"
The Base Rate set by Venture Bankers subject to a minimum rate of 4%

"CLIENT BAD DEBT RISK"
For a Debtor the amount, if any, specified in paragraph 14 of the Schedule which
will be subject to Venture's rights of Recourse and Reassignment regardless of
the amount of any Credit Limit established in respect of the Debtor and the
designation of Debts as Credited Approved Debts".

"COLLECTION TRANSFER FEE" The fee referred to in clause 12(4)(ii).

"COMMENCEMENT DATE"
The date of the commencement of this Agreement which is specified in paragraph 2
of the Schedule.

"CONVERSION RATE"
The spot buying rate notified by Venture's Bankers for the Currency of the
Debts.

"CREDIT APPROVED DEBT"
If the Schedule states that the general nature of this facility is to be "With
Bad Debt Protection" then any Notified Debt which is (when aggregated with all
other Outstanding Debts owing by the same Debtor):
(i)      for the time being within a Credit Limit;
(ii)     not one in respect of which the Client is in breach of any obligation
         under this Agreement;
(iii)    not in existence on the Commencement Date;
(iv)     not one in respect of which Venture has Recourse. shall be a Credit
         Approved Debt.

"CREDIT LIMIT"
A limit established by Venture in its absolute discretion in relation to a
Debtor.

"CURRENT ACCOUNT"
Any account maintained by Venture in the name of the Client for the recording of
transactions between Venture and the Client.

"DATA LOG"
The complete record of transmissions exchanged between Venture and the Client
representing Messages.

                                      -28-

<PAGE>

"DEBT"
Any book or other debt or monetary claim of any nature due or owing to the
Client (including any financial obligation of a Debtor under a Sale Contract)
together with any applicable tax or duty payable by the Debtor to the Client)
and where the context so admits a part of a Debt.

"DEBTOR"
Any person, including any body of persons corporate or unincorporate, incurring
any obligation to the Client (whether under a present, future or prospective
Sale Contract or otherwise) and where the context so permits the person having
the duty to administer the Debtor's estate upon death or Insolvency.

"DEBTOR CONCENTRATION"
The maximum amount of the Outstanding Debts of a single Debtor equivalent to the
percentage specified in paragraph 11 of the Schedule of all Outstanding Debts.

"DEBTS PURCHASED ACCOUNT"
Any account maintained in the records of Venture in the name of the Client for
the purpose of recording the Purchase Price of Debts (together with any Related
Rights pertaining thereto).

"DELIVERED"
In the case of Goods, means they have been despatched to or to the order of the
Debtor and, in the case of services, means they have been completed.

"DISAPPROVED DEBT"
A Debt which is disapproved in accordance with clause 11(1).

"DISCOUNT CHARGE"
The charge for Prepayments (if any) made by Venture.

"ELECTRONIC DATA INTERCHANGE FACILITY"
An Internet web site and/or any other form of electronic communication and/or
software maintained and made available for the purpose of enabling data to be
transmitted between Venture and the Client.

"EXPORT CHARGES"
A charge in addition to the Factoring Fee for each invoice. Additionally where
the general nature of this facility is "With Bad Debt Protection", a charge for
each credit application. A list of charges is available on request.

 "EXPORT DEBT"
A Debt evidenced by an invoice addressed to a Debtor outside the United Kingdom.

"FACTORING FEE" The fee referred to in clause 9(1).

"FINANCIAL RECORDS"
The ledgers, computer data, records, documents, disks, machine readable material
on or by which the financial or other information pertaining to a Debt is
recorded or evidenced and any equipment necessary for reading or amending the
same.

"FOREIGN CURRENCY DEBT"
Any Debt which is represented by an invoice expressed otherwise than in Sterling
or is payable otherwise than in Sterling in the United Kingdom in accordance
with the Sale Contract giving rise to it.

                                      -29-

<PAGE>

"FORCE MAJEURE"
In relation to any party, any circumstances beyond the reasonable control of
that party (including without limitation, any strike, lock-out or other form of
industrial action).

"FUNDING LIMIT"
In relation to a Debtor:- the amount specified in paragraph 12 of the Schedule
or such other amount as Venture may from time to time in its absolute discretion
determine.

"FUNDS IN USE"
The debit balance, if any, on the Current Account arrived at by aggregating all
Prepayments made by Venture to the Client which have been debited to a Current
Account (together with all sums treated as Prepayments by virtue of clause 9(5))
and deducting therefrom the aggregate of Debts transferred to the Current
Account in accordance with clause 7(2).

"GOODS"
Any goods, services or work done with materials supplied or hiring which are the
subject of a Sale Contract.

"INSOLVENCY"
(i)      in the case of an individual:- bankruptcy or sequestration;
(ii)     in the case of a partnership:- winding up by the court or bankruptcy or
         sequestration;
(iii)    in the case of a body corporate:- winding up by the court or voluntary
         winding up by reason of its inability to pay its debts or the
         appointment of an administrator pursuant to the Insolvency Act 1986 or
         of a receiver of any part or all of its income or assets; and
(iv)     in any case:- any informal or voluntary arrangement (whether or not in
         accordance with the Insolvency Act 1986) with or for the benefit of the
         general body of creditors of the individual the partnership or the body
         corporate.

"MESSAGE"
Data and any e-mail or Internet message transmitted electronically between the
parties via the Electronic Data Interchange Facility.

"NOTIFICATION"
An offer pursuant to Clause 4(1) or a notification of a Debt by the Client to
Venture pursuant to clause 6(2) and a credit note pursuant to clause 10(1)(iii)
and "Notified" and "Notify" shall be construed accordingly.

"OFFER"
An unconditional offer by the Client to sell a Debt and its Related Rights to
Venture with full title guarantee to be made in such form and with such evidence
of the performance of the Sale Contract as Venture may specify and where more
than one Debt is at the same time subject to an Offer it shall be treated as an
independent offer to sell to Venture each Debt so offered, which may be accepted
or rejected by Venture entirely at Venture's absolute discretion.

"ONSET OF INSOLVENCY"
(i)      in the case of sequestration or bankruptcy or winding up by the Court:-
         the date of the sequestration award or the bankruptcy or winding up
         order respectively;
(ii)     in the case of voluntary winding up:- the date of the effective
         resolution for winding up by members of the body corporate;
(iii)    in the case of the appointment of a receiver or administrator or
         judicial factor:- the date of his appointment;
(iv)     in the case of any arrangement:- the date when it is made;
(v)      in the case of a trust deed for creditors:- the date of its execution.

                                      -30-

<PAGE>

"OUTSTANDING DEBT"
Any Debt which has been included in a Notification and which remains vested in
Venture and unpaid; and "Outstanding" shall be construed accordingly.

"PREPAYMENT"
A payment made by Venture to the Client on account of any Purchase Price (before
the Transfer Date thereof).

"PREPAYMENT PERCENTAGE"
The percentage of the Purchase Price of each Debt which is specified in
paragraph 9 of the Schedule or such other higher or lower percentage of the
Purchase Price that Venture may from time to time in its absolute discretion
determine.

"PURCHASE PRICE"
The amount payable by Venture to the Client for each Debt (and any Related
Rights) vested in Venture and calculated in accordance with clause 6(1).

"REASSIGNMENT"
The transfer of ownership of a Debt from Venture to the Client.

"RECOURSE"
The right of Venture to require the Client to repurchase a Debt (together with
its Related Rights) at its Repurchase Price or such lesser amount as Venture may
require.

"RECOURSE DEBT"
A Debt in respect of which Venture shall have Recourse as provided in clause
11(2).

"RELATED RIGHTS"
(i)      all the Client's rights as an unpaid Client, under the Sale Contract
         giving rise to a Debt, other than rights relating to ownership of Goods
         but without any obligation on Venture to complete the Sale Contract;
(ii)     the benefit of all guarantees, indemnities, insurance's, instruments
         and securities given to or held by the Client in relation to such Debt;
(iii)    all cheques, bills of exchange and other instruments held by or
         available to the Client in relation to such Debt;
(iv)     the Financial Records;
(v)      the Transferred Goods;
(vi)     the right to call for the transfer to Venture of any Goods (except
         Transferred Goods) subject to a Sale Contract, except where ownership
         thereof has already vested in the Debtor.

"REPURCHASE PRICE"
In respect of a Recourse Debt the Notified amount of the Debt or the unrecovered
proportion of it.

"REVIEW LIMIT"
The maximum Funds in Use as specified in paragraph 10 of the Schedule or as
otherwise agreed by Venture.

"REVISED FACTORING FEE"
The fee referred to in the final sentence of clause 9(2).

"RIGHT OF IMMEDIATE TERMINATION"
The right of Venture to terminate this Agreement forthwith by notice in the
circumstances described in clause 19(2), whether or not Venture shall have
exercised that right.

"SALE CONTRACT"
A contract for the supply of Goods by the Client.

                                      -31-

<PAGE>

"SERVICES"
The provision to the Client of an electronic messaging capability and of certain
information via the Electronic Data Interchange Facility for the purposes of
operating the Agreement.

"STERLING"
The lawful currency of Great Britain and Northern Ireland.

"SUPPLEMENTARY DISCOUNT CHARGE"

A sum calculated by applying to the amount of any payment made by Venture to the
Client by CHAPS, as provided by clause 7(6), the rate per annum specified in
paragraph 16 of the Schedule for a period of four calendar days.

"TRANSFER DATE"
The day on which the Purchase Price of a Debt is to be transferred from the
Debts Purchased Account to the Current Account as specified in clause 7(2).

"TRANSFERRED GOODS"
(i)      Any Goods included in the Sale Contract which shall not have been
         Delivered before the Debt relating to such Goods shall have been
         notified to Venture in breach of the terms hereof; or
(ii)     Goods which any Debtor shall reject or shall return to Venture or to
         the Client or indicate a wish so to do; or
(iii)    Goods which the Client or Venture recovers from the Debtor.

"UNITED KINGDOM"
Great Britain and Northern Ireland, but excluding the Channel Islands and the
Isle of Man.

"VENTURES BANKERS"
HSBC Bank Plc or such other bank as Venture may from time to time, at its sole
discretion, appoint as its bankers.

"WORKING DAY"
A day when both Venture and the bankers of Venture are both open for the usual
conduct of business.

                                      -32-

<PAGE>

                           APPENDIX B - INTERPRETATION

(1)      In this Agreement except where the context otherwise requires:

         (i) the singular shall include the plural and vice versa;
         (ii)     any of the three genders shall include the other two;
         (iii)    references to Venture shall include Venture's successors and
                  assigns;
         (iv)     references to a "clause" (except where otherwise specified)
                  are to clauses of this Agreement;
         (v)      references to any statute shall be treated as including its
                  statutory modification or re-enactment or any relevant
                  subordinate legislation.

(2)      Headings to clauses are for reference only and shall not affect or
         limit the meaning or extent of any clause.

(3)      References in the Schedule to clauses are to clauses of this Agreement
         and references to the Appendix are to the Appendix to this Agreement.

(4)      References to "Agreement" shall be treated as including the Schedule
         and the Appendices.

(5)      Invalidity and Severability

         In the event of a conflict between any provision of clause 22 of the
         Agreement and any law regulation or decree affecting clause 22 of the
         Agreement then provision of clause 22 of the Agreement so affected
         shall be regarded as null and void or shall, where practicable, be
         curtailed and limited to the extent necessary to bring it within the
         requirements of such law regulation or decree but otherwise it shall
         not render null and void any other provision of clause 22 of the
         Agreement

                                      -33-

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