**Exhibit 10(ee)**
**CONFORMED COPY**
**AMENDMENT AND RESTATEMENT AGREEMENT**

 

**DATED 12th October, 2004**

**BETWEEN**

**WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC**

**AND**

**THE LENDERS NAMED HEREIN**

**AND**

**LLOYDS TSB BANK PLC**

**as Facility Agent**

 

 

**relating to a £250,000,000 Credit Agreement**

**dated 18th October, 2002 (as amended)**

 

 

 

ALLEN & OVERY

Allen & Overy LLP

London

CONTENTS

Clause
Page
1
Interpretation
1
2
Amendments
1
3
Representations
2
4
Fees
2
5
Miscellaneous
2
6
Governing law
2
Schedules
1
Lenders
3
2
Conditions precedent documents
4
3
Restated Credit Agreement
5
SIGNATORIES
69
 

**THIS AGREEMENT is dated 12th October, 2004
**BETWEEN:
(1)      **WESTERN POWER DISTRIBUTION  (SOUTH WEST) PLC** (Registered No. 02366894) (the **Company**); and

(2)      **THE FINANCIAL INSTITUTIONS**  listed in Schedule 1 (Lenders) as lenders (the **Lenders**); and

(3)      **LLOYDS TSB BANK plc**  as agent (in this capacity the **Facility Agent**). 

**BACKGROUND**
           This  Agreement is supplemental to and amends a credit agreement dated 18th October,  2002 (as amended on 29th October, 2002, 20th June, 2003  and 17th October, 2003) between, among others, the Company and the  Facility Agent (the **Credit Agreement**).

**IT IS AGREED as follows:
**1.     Interpretation**
**1.1     Definitions**

(a)     In this Agreement:

**Effective Date means 15th October, 2004 or  such other date as the Company and the Facility Agent may agree. 
(b)      Capitalised terms defined  in the Credit Agreement have, unless expressly defined in this Agreement, the  same meaning in this Agreement.

**1.2     Construction**

The principles of construction set out in the Credit Agreement  will have effect as if set out in this Agreement.

**2.     Amendments**

(a)      Subject as set out below,  the Credit Agreement will be amended from the Effective Date so that it reads  as if it were restated in the form set out in Schedule 3 (Restated Credit Agreement).

(b)      The Credit Agreement  will not be amended by this Agreement unless the Facility Agent notifies the  Company and the Lenders that it has received all of the documents set out in  Schedule 2 (Conditions precedent documents) in form and substance satisfactory  to the Facility Agent (acting reasonably) on or prior to the Effective Date.  The Facility Agent must give this notification as soon as practicable.

(c)       If the Facility  Agent fails to give the notification under paragraph (b) above by the Effective  Date, the Credit Agreement will not be amended in the manner contemplated by  this Agreement.

**3.     Representations**

The Company confirms to each Finance Party that on the date  of this Agreement and on the Effective Date, the representations given in Clause  16.2 (Status) to 16.12 (Non-Violation of other Agreements) (inclusive) of the  Credit Agreement:

(a)      are true; and

(b)      would also be true if  references to the Credit Agreement are construed as references to the Credit  Agreement as amended and restated by this Agreement.

provided that, for the purpose of this Clause 3 (Representations),  the reference to "Original Financial Statements" in Clause 16.9 (No material  adverse change) shall be deemed to be a reference to the audited consolidated  financial statements of the Company for the year ended 31st March, 2004.

In each case, each such representation is applied to the circumstances  then existing and in the case of the confirmation made on the date of this Agreement,  as if the Effective Date had occurred.

**4.     Fees**

The Company must pay to the Facility Agent for the account  of the Lenders an extension fee and an up-front fee as set out in a letter between  the Company and the Facility Agent of even date herewith.

**5.     Miscellaneous**

(a)      Each of this Agreement  and the Credit Agreement, as amended and restated by this Agreement is a Finance  Document. 

(b)      Subject to the terms  of this Agreement, the Credit Agreement will remain in full force and effect  and, from the Effective Date, the Credit Agreement and this Agreement will be  read and construed as one document.

**6.     Governing law**

This Agreement is governed by English law.

This Agreement has been entered into on the date stated at  the beginning of this Agreement.

**Schedule 1**
**Lenders**

 

Bayerische Landesbank, acting through its London Branch 

Danske Bank A/S, London Branch

Lloyds TSB Bank plc

WestLB AG, London Branch

**Schedule 2**
**CONDITIONS PRECEDENT DOCUMENTS**

1.        Either (a)  a certified copy of the constitutional documents of the Company or (b) a certificate  of the Company (signed by a director) confirming that there has been no change  in the certificate of incorporation and memorandum and articles of association  or other constitutional documents of the Company delivered to the Facility Agent  on or about the 18th October, 2002 and that such documents continue to be in  full force and effect.

2.        A certified  copy of a resolution of the board of directors or a committee of the board of  directors of the Company approving the terms of, and the transactions contemplated  by, this Agreement.

3.        Either (a)  a specimen of the signature of each person authorised on behalf of the Company  to execute or witness the execution of this Agreement or to sign or send any  document or notice in connection with this Agreement or (b) confirmation that  the specimen signature list provided by the Company to the Facility Agent on  or about the 18th October, 2002 remains accurate and complete.

4.        A certificate  of the Company confirming that utilising the Total Commitments in full would  not breach any borrowing limit contained in the Company's memorandum and articles  of association.

5.        A legal opinion  of Allen & Overy LLP, legal advisers to the Company, addressed to the Finance  Parties as of the Effective Date.

6.        Evidence  that all fees and expenses incurred in connection with this Agreement have been  or will be paid by the Company.

**Schedule 3**
**RESTATED CREDIT AGREEMENT**

** **
AGREEMENT

 

DATED 18th October, 2002

£400,000,000

CREDIT FACILITY

FOR

WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC

 

ARRANGED BY

 

BAYERISCHE LANDESBANK acting through its London Branch

DANSKE BANK A/S, LONDON BRANCH

LLOYDS TSB BANK plc

WESTLB AG, LONDON BRANCH

as Mandated Lead Arrangers

WITH

 

LLOYDS TSB BANK plc

as Facility Agent

 

 

**INDEX**

Clause
Page
1
Interpretation
1
2
Facilities
11
3
Purpose
12
4
Conditions Precedent
13
5
Utilisation
13
6
Optional Currencies
14
7
Repayment
17
8
Prepayment and Cancellation
18
9
Interest
20
10
Terms
22
11
Market Disruption
23
12
Taxes
24
13
Increased Costs
26
14
Mitigation
27
15
Payments
28
16
Representations
30
17
Information Covenants
32
18
Financial Covenants
34
19
General Covenants
35
20
Default
38
21
The Administrative Parties
40
22
Evidence and Calculations
45
23
Fees
46
24
Indemnities and Break Costs
47
25
Expenses
48
26
Amendments and Waivers
48
27
Changes to the Parties
49
28
Disclosure of Information
52
29
Set-off
52
30
Pro rata sharing
53
31
Severability
54
32
Counterparts
54
33
Notices
54
34
Language
55
35
Governing law
56
36
Enforcement
56
** **

**Schedules
1.
Original Parties
57
2.
Conditions precedent documents
59
3.
Form of Request
60
4.
Calculation of the Mandatory Cost
61
5.
Form of Transfer Certificate
63
6.
Intentionally left blank
65
7.
Form of Compliance Certificate
66
4.
**Signatories
67
** **

THIS AGREEMENT is dated 18th October, 2002 (as amended on 29th  October, 2002, 20th June, 2003, 17th October, 2003 and October, 2004)

BETWEEN:

(1)       **WESTERN POWER  DISTRIBUTION (SOUTH WEST) PLC** (registered number 02366894) (the **Company**);

(2)       **BAYERISCHE  LANDESBANK acting through its London Branch, DANSKE BANK A/S, LONDON BRANCH,  LLOYDS TSB BANK plc and WESTLB AG,LONDON BRANCH**each in this capacity as  a **Mandated Lead****Arranger**and together in this capacity, the **Mandated  Lead****Arrangers**;

(3)       **THE FINANCIAL  INSTITUTIONS**listed in Schedule 1 (Original Parties) as original lenders  (the **Original Lenders)**; 

(4)       **LLOYDS TSB  BANK plc** as facility agent (in this capacity the **Facility Agent**);

(5)       **WESTLB AG,  LONDON BRANCH** as co-ordinating bank (in this capacity, the **Co-ordinating  Bank**)

**IT IS AGREED as follows:
**INTERPRETATION**
**Definitions**

In this Agreement:

**Act means the Electricity Act 1989 and, unless the context  otherwise requires, all subordinate legislation made pursuant thereto.
**Administrative Party means a Mandated Lead Arranger,  the Co-ordinating Bank or the Facility Agent.
**Affiliate means a Subsidiary or a Holding Company of  a person or any other Subsidiary of that Holding Company.
**Applicable Accounting Principles means those accounting  principles, standards and practices generally accepted in the United Kingdom  and the accounting and reporting requirements of the Companies Act 1985, in  each case as used in the Original Financial Statements.
**Authority means The Gas and Electricity Markets Authority  established under Section 1 of the Utilities Act 2000.
**Availability Period means the period from and including  the date of this Agreement to and including:
(a)       for a Tranche  A Loan, the date that is the Final Maturity Date in relation to the Tranche  A Facility; 

(b)       for a Tranche  B Loan, the Final Maturity Date in relation to the Tranche B Facility; and

(c)       for a Tranche  C Loan, the Final Maturity Date in relation to the Tranche C Facility.

**Balancing and Settlement Code means the document, as  modified from time to time, setting out the electricity balancing and settlement  arrangements designated by the Secretary of State and adopted by The National  Grid Company plc (Registered No. 2366977) or its successor pursuant to its transmission  licence.
**Balancing and Settlement Code Framework means the agreement  of that title, in the form approved by the Secretary of State, as amended from  time to time, to which the Company is a party and by which the Balancing and  Settlement Code is made binding upon the Company. 
**Break Costs means the amount (if any) which a Lender  is entitled to receive under this Agreement as compensation if any part of a  Loan or overdue amount is prepaid.
**Business Day means a day (other than a Saturday or a  Sunday) on which commercial banks are open in London and:
(a)        if on that day  a payment in or a purchase of a currency (other than euro) is to be made, the  principal financial centre of the country of that currency; or

(b)       if on that day  a payment in or purchase of euro is to be made, which is also a TARGET Day.

**Commitment means a Tranche A Commitment or a Tranche  B Commitment or a Tranche C Commitment (as the case may be).
**Compliance Certificate means a certificate substantially  in the form of Schedule 7 (Form of Compliance Certificate) setting out, among  other things, calculations of the financial covenants. 
**Default means: 
(a)       an Event of Default;  or 

(b)       an event which  would be (with the lapse of time, the expiry of a grace period, the giving of  notice or the making of any determination under the Finance Documents or any  combination of them) an Event of Default.

**Environmental Law means all regulations and other laws  concerning the protection of human health or the environment;
**euro or **euros** or **€** means the single currency  of the Participating Member States.
**Event of Default means an event specified as such in  this Agreement.
**Existing Credit Agreement means the U.S.$500,000,000  Revolving Credit Agreement dated 30th October, 2001 between, inter alia, the  Company, J.P. Morgan plc as Arranger and Chase Manhattan International Limited  as Facility Agent and as Swingline Agent.
**Extended Final Maturity Date means the date specified  as such in the notice exercising the Term-Out Option provided by the Company  under Clause 2.5 (Term-Out Option), being a date falling no later than the day  falling 364 days after the Final Maturity Date relating to the Tranche A Facility.
**Facility means the Tranche A Facility or Tranche B Facility  or Tranche C Facility (as the case may be) made available under this Agreement  and **Facilities** shall mean each of them.
**Facility Office means the office(s) notified by a Lender  to the Facility Agent:
(a)       on or before the  date it becomes a Lender; or

(b)       by not less than  five Business Days' notice,

as the office(s) through which it will perform its obligations  under this Agreement.

**Fee Letter means any letter entered into by reference  to this Agreement between one or more Administrative Parties and the Company  setting out the amount of certain fees referred to in the Agreement.
**Final Maturity Date means
(a)       in relation to  the Tranche A Facility, the date which falls 364 days after (and including)  15th October, 2004 (unless extended in accordance with Clause 2.5 (Term-out  Option)); 

(b)       in relation to  the Tranche B Facility, the seventh anniversary of the date of this Agreement;  and

(c)       in relation to  the Tranche C Facility, the third anniversary of the Restatement Date.

**Finance Document means: 
(a)       this Agreement;

(b)       a Fee Letter;

(c)       a Transfer Certificate;  or

(d)       any other document  designated as such by the Facility Agent and the Company.

**Finance Party means a Lender or an Administrative Party.
**Financial Indebtedness means any indebtedness for or  in respect of:
(a)       moneys borrowed;

(b)       any acceptance  credit;

(c)       any bond, note,  debenture, loan stock or other similar instrument;

(d)       any redeemable  preference share;

(e)       any finance or  capital lease;

(f)       receivables sold  or discounted (otherwise than on a non-recourse basis);

(g)       the acquisition  cost of any asset to the extent payable after its acquisition or possession  by the party liable where the deferred payment is arranged primarily as a method  of raising finance or financing the acquisition of that asset;

(h)       any derivative  transaction protecting against or benefiting from fluctuations in any rate or  price (and, except for non-payment of an amount, the then mark to market value  of the derivative transaction will be used to calculate its amount);

(i)       any other transaction  (including any forward sale or purchase agreement) which has the commercial  effect of a borrowing;

(j)       any counter-indemnity  obligation in respect of any guarantee, indemnity, bond, letter of credit or  any other instrument issued by a bank or financial institution; or

any guarantee, indemnity or similar assurance against financial  loss of any person in respect of any item referred to in paragraphs (a) to (j)  above.

**Group means the Company and its Subsidiaries.
**Holding Company means a holding company within the meaning  of section 736 of the Companies Act 1985. 
**Increased Cost means:
(a)       an additional  or increased cost;

(b)       a reduction in  the rate of return under a Finance Document or on its overall capital; or

(c)       a reduction of  an amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of  its Affiliates but only to the extent attributable to that Finance Party having  entered into any Finance Document or funding or performing its obligations under  any Finance Document.

**Lender means:
(a)       an Original Lender;  or

(b)       any person which  becomes a Lender after the date of this Agreement.

**LIBOR means for a Term of any Loan or overdue amount:
(a)       the applicable  Screen Rate; or

(b)       if no Screen Rate  is available for the relevant currency or Term of that Loan or overdue amount,  the arithmetic mean (rounded upward to four decimal places) of the rates, as  supplied to the Facility Agent at its request, quoted by the Reference Banks  to leading banks in the London interbank market,

as of 11.00 a.m. on the Rate Fixing Day for the offering of  deposits in the currency of that Loan or overdue amount for a period comparable  to that Term.

**Licence means: 
(a)       the electricity  distribution licence made and treated as granted to the Company under Section  6(1)(c) of the Act pursuant to a licensing scheme made by the Secretary of State  under Part II of Schedule 7 to the Utilities Act 2000 on 28th September,  2001; or

(b)       by any statutory  amendment or replacement licence or licences granted pursuant to the Utilities  Act 2000 which permit the Company to distribute electricity in the Authorised  Area;

**Loan means, unless otherwise stated in this Agreement,  the principal amount of each borrowing under this Agreement or the principal  amount outstanding of that borrowing.
**Majority Lenders means, at any time, Lenders:
(a)       whose share in  the outstanding Loans and whose undrawn Commitments then aggregate 662/3  per cent. or more of the aggregate of all the outstanding Loans and the undrawn  Commitments of all the Lenders;

(b)       if there is no  Loan then outstanding, whose undrawn Commitments then aggregate 662/3  per cent. or more of the Total Commitments; or

(c)       if there is no  Loan then outstanding and the Total Commitments have been reduced to zero, whose  Commitments aggregated 662/3 per cent. or more of the  Total Commitments immediately before the reduction.

**Mandatory Cost means the cost of complying with certain  regulatory requirements, expressed as a percentage rate per annum and calculated  by the Facility Agent under Schedule 4 (Calculation of the Mandatory Cost).
**Margin means the percentage rate per annum determined  to be the Margin in accordance with Clause 9.5(a)(Margin), as adjusted from  time to time in accordance with Clauses 9.5(b) to 9.5(d) (Margin).
**Material Adverse Effect means something having a material  adverse effect on the Company's ability to perform its payment obligations under  this Agreement.
**Material Subsidiary means, at any time, a Subsidiary  of the Company whose gross assets or gross revenues (excluding intra-Group items)  then equal or exceed 15 per cent. of the gross assets or gross revenues of the  Group. 
For this purpose:

(a)       the gross assets  or gross revenues of a Subsidiary of the Company will be determined from its  financial statements (unconsolidated if it has Subsidiaries) upon which the  latest audited financial statements of the Group have been based;

(b)       if a Subsidiary  of the Company becomes a member of the Group after the date on which the latest  audited financial statements of the Group have been prepared, the gross assets  or gross revenues of that Subsidiary will be determined from its latest financial  statements;

(c)       the gross assets  or gross revenues of the Group will be determined from its latest audited financial  statements, adjusted (where appropriate) to reflect the gross assets or gross  revenues of any company or business subsequently acquired or disposed of; and

(d)       if a Material  Subsidiary disposes of all or substantially all of its assets to another Subsidiary  of the Company, it will immediately cease to be a Material Subsidiary and the  other Subsidiary (if it is not already) will immediately become a Material Subsidiary;  the subsequent financial statements of those Subsidiaries and the Group will  be used to determine whether those Subsidiaries are Material Subsidiaries or  not.

If there is a dispute as to whether or not a company is a Material  Subsidiary, a certificate of the auditors of the Company will be, in the absence  of manifest error, conclusive.

**Maturity Date means the last day of the Term of a Loan  (other than a Term-Out Loan) and in the case of a Term-Out Loan the date specified  as such in the Request for that Term-Out Loan.
**Moody's means Moody's Investors' Services, Inc. (or  any successor to its ratings business).
**OFGEM means the Office of Gas and Electricity Markets.
**Original Financial Statements means the audited consolidated  financial statements of the Company for the year ended 31st March, 2002. 
**Participating Member States means a member state of  the European Community that adopts the euro as its lawful currency under the  legislation of the European Union for European Monetary Union.
**Party means a party to this Agreement.
**Pro Rata Share means:
(a)       for the purpose  of determining a Lender's share in a utilisation of a Facility, the proportion  which its Commitment under that Facility bears to all the Commitments under  that Facility; and

(b)       for any other  purpose on a particular date:

   (i)       the  proportion which a Lender's share of the Loans (if any) bears to all the Loans;

   (ii)       if  there is no Loan outstanding on that date, the proportion which its Commitment  bears to the Total Commitments on that date; 

   (iii)       if  the Total Commitments have been cancelled, the proportion which its Commitments  bore to the Total Commitments immediately before being cancelled; or

   (iv)       when  the term is used in relation to a particular Facility, the above proportions  but applied only to the Loans and Commitments for that Facility.

For the purpose of sub-paragraph (iv) above, the Facility Agent  will determine, in the case of a dispute whether the term in any case relates  to a particular Facility.

**PUCHA means the Public Utility Holding Company Act of  1935, as amended, of the United States of America.
**Rate Fixing Day means:
(a)       the first day  of a Term for a Loan denominated in Sterling; or

(b)       the second Business  Day before the first day of a Term for a Loan denominated in any other currency;  or 

or such other day as the Facility Agent determines is generally  treated as the rate fixing day by market practice in the relevant interbank  market.

**Reference Banks means the Facility Agent, Bayerische  Landesbank acting through its London branch, Danske Bank A/S London Branch and  WestLB AG, London Branch and any other bank or financial institution appointed  as such by the Facility Agent under this Agreement.
**Repeating Representations means the representations  which are deemed to be repeated under this Agreement. 
**Request means a request for a Loan, substantially in  the form of Schedule 3 (Form of Request).
**Restatement Date means 15th October, 2004.
**Rollover Loan means one or more Loans (other than a  Term-Out Loan):
(a)       to be made on  the same day that a maturing Loan is due to be repaid;

(b)       the aggregate  amount of which is equal to or less than the maturing Loan; 

(c)       in the same currency  as the maturing Loan; and

(d)       to be made for  the purpose of refinancing a maturing Loan.

**S&P means Standard & Poor's Corporation (a division  of the McGraw-Hill Companies, Inc) (or any successor to its ratings business).
**Screen Rate means the British Bankers Association Interest  Settlement Rate (if any) for the relevant currency and Term displayed on the  appropriate page of the Telerate screen selected by the Facility Agent. If the  relevant page is replaced or the service ceases to be available, the Facility  Agent (after consultation with the Company and the Lenders) may specify another  page or service displaying the appropriate rate.
**Secretary of State means the Secretary of State for  Trade and Industry.
**Security Interest means any mortgage, pledge, lien,  charge, assignment, hypothecation or security interest or any other agreement  or arrangement having a similar effect.
**Sterling and **£** mean the lawful currency  of the United Kingdom.
**Subsidiary means:
(a)       a subsidiary within  the meaning of section 736 of the Companies Act 1985; and

(b)       unless the context  otherwise requires, a subsidiary undertaking within the meaning of section 258  of the Companies Act 1985.

**TARGET Day means a day on which the Trans-European Automated  Real-time Gross Settlement Express Transfer payment system is open for the settlement  of payments in euro.
**Tax means any tax, levy, impost, duty or other charge  or withholding of a similar nature (including any related penalty or interest).
**Tax Deduction means a deduction or withholding for or  on account of Tax from a payment under a Finance Document.
**Tax Payment means a payment made by the Company to a  Finance Party in any way relating to a Tax Deduction or under any indemnity  given by the Company in respect of Tax under any Finance Document.
**Term means each period determined under this Agreement  by reference to which interest on a Loan or an overdue amount is calculated.
**Term-Out Loans means the Loans (if any) drawn under  Clause 2.5 (Term-Out Option).
**Term-Out Option means the option of the Company in Clause  2.5 (Term-Out Option) to draw Tranche A Loans as Term-Out Loans.
**Total Commitments means the Total Tranche A Commitments,  Total Tranche B Commitments and Total Tranche C Commitments of all the Lenders.
**Total Tranche A Commitments means the aggregate of the  Tranche A Commitments of all the Lenders, being the total amount specified as  such in Schedule 1 (Original Parties) at the date of this Agreement.
**Total Tranche B Commitments means the aggregate of the  Tranche B Commitments of all the Lenders, being the total amount specified as  such in Schedule 1 (Original Parties) at the date of this Agreement.
**Total Tranche C Commitments means the aggregate of the  Tranche C Commitments of all the Lenders, being the total amount specified as  such in Schedule 1 (Original Parties) at the Restatement Date.
**Tranche A Commitment means:
(a)       for an Original  Lender, the amount set opposite its name in Schedule 1 (Original Parties) under  the heading "**Tranche A Commitments**" and the amount of any other Tranche  A Commitment it acquires; and 

(b)       for any other  Lender, the amount of any Tranche A Commitment it acquires, to the extent not  cancelled, transferred or reduced under this Agreement.

**Tranche A Facility means the revolving credit facility  (incorporating a term-out option) made available under this Agreement and described  in Clause 2.1 (Tranche A Facility).
**Tranche A Loan means a Loan under the Tranche A Facility  and identified as such in its Request.
**Tranche B Commitment means:
(a)       for an Original  Lender, the amount set opposite its name in Schedule 1 (Original Parties) under  the heading "**Tranche B Commitments**" and the amount of any other Tranche  B Commitment it acquires; and

(b)       for any other  Lender, the amount of any other Tranche B Commitment it acquires,

to the extent not cancelled, transferred or reduced under this  Agreement.

**Tranche B Facility means the revolving credit facility  made available under this Agreement and described in Clause 2.2 (Tranche B Facility).
**Tranche B Loan means a Loan under the Tranche B Facility  and identified as such in its Request.
**Tranche C Commitment means:
(a)       for an Original  Lender, the amount set opposite its name in Schedule 1 (Original Parties) under  the heading "**Tranche C Commitments**" and the amount of any other Tranche  C Commitment it acquires; and

(b)       for any other  Lender, the amount of any other Tranche C Commitment it acquires,

to the extent not cancelled, transferred or reduced under this  Agreement.

**Tranche C Facility means the revolving credit facility  made available under this Agreement and described in Clause 2.3 (Tranche C Facility).
**Tranche C Loan means a Loan under the Tranche C Facility  and identified as such in its Request.
**Transfer Certificate means a certificate, substantially  in the form of Schedule 5 (Form of Transfer Certificate), with such amendments  as the Facility Agent may approve or reasonably require or any other form agreed  between the Facility Agent and the Company.
**U.K. means the United Kingdom.
**U.S. Dollars and **U.S.$** means the lawful currency  for the time being of the United States of America.
**Utilisation Date means each date on which a Facility  is utilised.
**Construction**
(a)       The following  definitions have the meanings given to them in Clause 18.1 (Financial covenants):

   (i)         Consolidated  EBITDA;

   (ii)        Interest  Payable; 

   (iii)       Measurement  Period;

   (iv)       Regulatory  Asset Base; and

   (v)        Total  Gross Debt.

(b)       In this Agreement,  unless the contrary intention appears, a reference to:

   (i)        an  **amendment** includes a supplement, novation, restatement or re-enactment  and **amended** will be construed accordingly;

**assets includes present and future properties, revenues  and rights of every description;
an **authorisation** includes an authorisation, consent,  approval, resolution, licence, exemption, filing, registration or notarisation;

**disposal means a sale, transfer, grant, lease or other  disposal, whether voluntary or involuntary, and **dispose** will be construed  accordingly;
**indebtedness includes any obligation (whether incurred  as principal or as surety) for the payment or repayment of money;
**know your customer requirements are the identification  checks that a Finance Party requests in order to meet its obligations under  any applicable law or regulation to identify a person who is (or is to become)  its customer;
a **person** includes any individual, company, corporation,  unincorporated association or body (including a partnership, trust, joint venture  or consortium), government, state, agency, organisation or other entity whether  or not having separate legal personality;

a **regulation** includes any regulation, rule, official  directive, request or guideline (whether or not having the force of law but,  if not having the force of law, being of a type with which any person to which  it applies is accustomed to comply) of any governmental, inter-governmental  or supranational body, agency, department or regulatory, self-regulatory or  other authority or organisation;

the **Winding-up** of a person also includes the administration,  dissolution or liquidation or other like process of that person, any composition  or arrangement with the creditors, amalgamation, reconstruction, reorganisation  or consolidation pursuant to Part XIII of the Companies Act 1985 proposed or  carried out in respect of that person or a company voluntary arrangement pursuant  to the Insolvency Act 1986 carried out or proposed in respect of that person;

   (ii)       a  currency is a reference to the lawful currency for the time being of the relevant  country;

   (iii)      a  Default being **outstanding** means that it has not been remedied or waived;

   (iv)      a  provision of law is a reference to that provision as extended, applied, amended  or re-enacted and includes any subordinate legislation;

   (v)       a  Clause, a Subclause or a Schedule is a reference to a clause or subclause of,  or a schedule to, this Agreement;

   (vi)      a  person includes its successors in title, permitted assigns and permitted transferees;

   (vii)     a Finance  Document or another document is a reference to that Finance Document or other  document as amended; and

   (viii)    a time of day  is a reference to London time.

(c)       Unless the contrary  intention appears, a reference to a **month** or **months** is a reference  to a period starting on one day in a calendar month and ending on the numerically  corresponding day in the next calendar month or the calendar month in which  it is to end, except that: 

   (i)        if  the numerically corresponding day is not a Business Day, the period will end  on the next Business Day in that month (if there is one) or the preceding Business  Day (if there is not);

   (ii)       if  there is no numerically corresponding day in that month, that period will end  on the last Business Day in that month; and

   (iii)      notwithstanding  sub-paragraph (i) above, a period which commences on the last Business Day of  a month will end on the last Business Day in the next month or the calendar  month in which it is to end, as appropriate.

(d)       Unless expressly  provided to the contrary in a Finance Document, a person who is not a party  to a Finance Document may not enforce any of its terms under the Contracts (Rights  of Third Parties) Act 1999 and notwithstanding any term of any Finance Document,  the consent of any third party is not required for any variation (including  any release or compromise of any liability) or termination of that Finance Document.

(e)       Unless the contrary  intention appears:

   (i)        a  reference to a Party will not include that Party if it has ceased to be a Party  under this Agreement;

   (ii)       a  word or expression used in any other Finance Document or in any notice given  in connection with any Finance Document has the same meaning in that Finance  Document or notice as in this Agreement; and

   (iii)      any  obligation of the Company under the Finance Documents which is not a payment  obligation remains in force for so long as any payment obligation of the Company  is or may be outstanding under the Finance Documents.

(f)       The headings in  this Agreement do not affect its interpretation.

**Facilities**
**Tranche A Facility**

Subject to the terms of this Agreement, the Lenders make available  to the Company a revolving loan facility with a term-out option denominated  in Sterling in an aggregate amount equal to the Total Tranche A Commitments.

**Tranche B Facility**
Subject to the terms of this Agreement, the Lenders make available  to the Company a revolving credit facility denominated in Sterling in an aggregate  amount equal to the Total Tranche B Commitments.

**Tranche C Facility**
Subject to the terms of this Agreement, the Lenders make available  to the Company a revolving credit facility denominated in Sterling in an aggregate  amount equal to the Total Tranche C Commitments.

**Nature of a Finance Party's rights and obligations**
Unless otherwise agreed by all the Finance Parties:

the obligations of a Finance Party under the Finance Documents  are several;
failure by a Finance Party to perform its obligations does  not affect the obligations of any other Party under the Finance Documents; 
no Finance Party is responsible for the obligations of any  other Finance Party under the Finance Documents; 

the rights of a Finance Party under the Finance Documents are  separate and independent rights; 

a debt arising under the Finance Documents to a Finance Party  is a separate and independent debt; and

a Finance Party may, except as otherwise stated in the Finance  Documents, separately enforce those rights.

**Term-out Option**
(g)       The Company may  on one occasion only, by delivery of a notice to the Facility Agent (who shall  send a copy of the same to the Lenders) not earlier than 45 days prior to the  Final Maturity Date in relation to the Tranche A Facility, elect to draw one  or more Tranche A Loans (each a **Term-Out****Loan**) each with the same  Utilisation Date falling prior to the Final Maturity Date and each with the  same Maturity Date being a date after the initial Final Maturity Date, but no  later than the date falling four years after the date of this Agreement (such  selected date being the **Extended Final Maturity Date**). The delivery of  this notice constitutes the exercise of the Term-Out Option by the Company.

(h)       Any Tranche A  Loan outstanding after the date of the exercise of the Term-Out Option must  be repaid on its Maturity Date.

**PURPOSE**
**Tranche A Loans**

Each Tranche A Loan may be used for the core working capital  requirements of the Company (including the repayment of the Existing Credit  Agreement and certain other bilateral facilities) and in compliance with the  Licence.

**Tranche B Loans**
Each Tranche B Loan may only be used for general corporate  purposes and in compliance with the Licence.

**Tranche C Loans**
Each Tranche C Loan may only be used for general corporate  purposes and in compliance with the Licence.

**No obligation to monitor**
No Finance Party is bound to monitor or verify the utilisation  of a Facility.

**CONDITIONS PRECEDENT**
**Conditions precedent documents**

A Request may not be given until the Facility Agent has notified  the Company and the Lenders that it has received all of the documents and evidence  set out in Schedule 2 (Conditions precedent documents) in form and substance  satisfactory to the Facility Agent. The Facility Agent must give this notification  to the Company and the Lenders promptly upon being so satisfied.

**Further conditions precedent**
The obligations of each Lender to participate in any Loan are  subject to the further conditions precedent that on both the date of the Request  and the Utilisation Date for that Loan:

the Repeating Representations are correct in all material respects;  and
no Default or, in the case of a Rollover Loan, no Event of  Default is outstanding or would result from the Loan.
**Maximum number**
Unless the Facility Agent agrees, a Request may not be given  if, as a result, there would be more than 15 Loans outstanding.

**UTILISATION**
**Giving of Requests**

(i)       The Company may  borrow a Loan by giving to the Facility Agent a duly completed Request.

(j)       Unless the Facility  Agent otherwise agrees, the latest time for receipt by the Facility Agent of  a duly completed Request is 11.00 a.m. one Business Day before the Rate Fixing  Day for the proposed borrowing.

(k)       Each Request is  irrevocable.

**Completion of Requests**
A Request for a Loan will not be regarded as having been duly  completed unless:

it identifies the Facility the Loan applies to;
the Utilisation Date is a Business Day falling within the Availability  Period; 
The amount of the Loan requested is:
a minimum of £5,000,000 or its equivalent in accordance  with Clause 6.5 (Optional Currency Equivalents), and an integral multiple of  1,000,000 units of that currency; 

the maximum undrawn amount available under this Agreement for  Loans under the relevant Facility on the proposed Utilisation Date; or

such other amount as the Facility Agent may agree; and

the proposed Term complies with this Agreement.
Only one Loan may be requested in a Request.

**Advance of Loan**
(l)       The Facility Agent  must promptly notify each Lender of the details of the requested Loan and the  amount of its share in that Loan.

(m)     The amount of each Lender's  share of the Loan will be its Pro Rata Share on the proposed Utilisation Date.

(n)       No Lender is obliged  to participate in a Loan if as a result:

   (i)       its share in the  Loans under a Facility would exceed its Commitment for that Facility; or

   (ii)      the Loans would exceed  the Total Commitments.

(o)       If the conditions  set out in this Agreement have been met, each Lender must make its share in  the Loan available to the Facility Agent for the Company on the Utilisation  Date.

**OPTIONAL CURRENCIES**
**General**

In this Clause:

**Agent's Spot Rate of Exchange means the Facility Agent's  spot rate of exchange for the purchase of the relevant currency in the London  foreign exchange market with Sterling at or about 11.00 a.m. on a particular  day.
**Optional Currency means any currency (other than Sterling)  in which a Loan may be denominated under this Agreement.
**Pre-approved Currency means U.S.$ and euro.
**Sterling Amount of a Loan or part of a Loan means:
(a)       if the Loan is  denominated in Sterling, its amount; or

(b)       in the case of  any Loan denominated in an Optional Currency, its equivalent in Sterling calculated  on the basis of the Agent's Spot Rate of Exchange one Business Day before the  Rate Fixing Day for that Term.

**Selection**
(p)     The Company must select the  currency of a Loan in its Request. The Company may select Sterling or an Optional  Currency for a Loan.

(q)     Unless the Facility Agent  otherwise agrees, the Loans may not be denominated at any one time in more than  three currencies.

**Selection of Optional Currencies**
(r)       A Loan may be  denominated in an Optional Currency for a Term if:

   (i)       that  Optional Currency is readily available in the amount required and freely convertible  into Sterling in the relevant interbank market on the Rate Fixing Day and the  first day of that Term; and

   (ii)      that  Optional Currency is a Pre-approved Currency or has been previously approved  by the Facility Agent (acting on the instruction of all the Lenders).

(s)       If the Facility  Agent has received a request from the Company for a currency to be approved  as an Optional Currency (other than a Pre-approved Currency), the Facility Agent  must, within five Business Days, confirm to the Company:

   (i)       whether  or not the Lenders have given their approval; and

   (ii)      if  approval has been given, the minimum amount (and, if required, integral multiples)  for any Loan in that currency.

**Revocation of currency**
(t)       Notwithstanding  any other term of this Agreement, if before 9.30 a.m. on any Rate Fixing Day  the Facility Agent receives notice from a Lender that:

   (i)       the  Optional Currency requested is not readily available to it in the relevant interbank  market in the amount and for the period required; or

   (ii)       participating  in a Loan in the proposed Optional Currency might contravene any law or regulation  applicable to it,

the Facility Agent must give notice to the Company to that  effect promptly and in any event before 11.00 a.m. on that day.

(u)     In this event:

   (i)       that  Lender must participate in the Loan in Sterling; and

   (ii)       the  share of that Lender in the Loan and any other similarly affected Lender(s)  will be treated as a separate Loan denominated in Sterling during that Term.

(v)      Any part of a Loan treated  as a separate Loan under this Subclause will not be taken into account for the  purposes of any limit on the number of Loans or currencies outstanding at any  one time.

(w)     A Loan will still be treated  as a Rollover Loan if it is not denominated in the same currency as the maturing  Loan by reason only of the operation of this Subclause.

**Optional Currency equivalents**
(x)      Except as expressly  provided in this Agreement, the equivalent in Sterling of a Loan or part of  a Loan in an Optional Currency for the purposes of calculating:

   (i)       whether  any limit under this Agreement has been exceeded;

   (ii)       the  amount of a Loan;

   (iii)      the  share of a Lender in a Loan;

   (iv)      the  amount of any repayment of a Loan; or

   (v)       the  undrawn amount of a Lender's Commitment,

is its Sterling Amount.

(y)      The rate of exchange  to be used for calculating the amount in Sterling of any repayment or prepayment  of a Term-Out Loan in an Optional Currency is that last used for determining  the amount of the Term-Out Loan in that Optional Currency.

**Term-Out Loans - change of currency**
(z)       A Term-Out Loan  will remain denominated in the same currency through successive Terms, unless  the currency is changed under paragraph (c) below.

(aa)     The Company may change the  currency of a Term-Out Loan with effect from the start of a Term by giving notice  to the Facility Agent by 9.00 a.m. three Business Days before the first day  of that Term. The Term-Out Loan will remain denominated in that currency until  it is changed again under this Subclause.

(bb)     If a Term-Out Loan is to  be denominated in different currencies during successive Terms:

   (i)       the  Company must repay that Term-Out Loan on the last day of its current Term in  the currency in which it is then denominated (the **old currency**); and

   (ii)       the  Lenders must, subject to the terms of this Agreement, re-advance the Term-Out  Loan in the currency in which the Company requires the Term-Out Loan to be denominated  for the next Term (the **new currency**).

The amount of the Loan in the new currency will be calculated  by reference to its Sterling Amount.

(cc)     Alternatively, if the Facility  Agent and the Company agree: 

   (i)       the  Facility Agent may apply the amount (or so much of that amount as is necessary)  of the Term-Out Loan in the new currency to purchase an amount of the old currency  sufficient to discharge the obligation of the Company to repay the Term-Out  Loan in the old currency;

   (ii)       the  Facility Agent must apply any amount of the old currency purchased under sub-paragraph  (i) above towards repaying the Term-Out Loan in the old currency; 

   (iii)     the Facility  Agent will promptly notify the Company if there is a shortfall or an excess;

   (iv)     if there  is a shortfall, the Company must pay to the Facility Agent on the date the Term-Out  Loan is due to be repaid in the old currency an amount in the old currency equal  to the shortfall; and 

   (v)      if  there is an excess, the Facility Agent must pay to the Company on the date the  Term-Out Loan is due to be repaid in the old currency an amount in the new currency  equal to the excess.

If the day on which the old currency is due to be repaid is  not also a Business Day for the new currency:

   (vi)     the Facility  Agent must notify the Company and the Lenders promptly;

   (vii)     the Term-Out  Loan will remain in the old currency until the next day which is a Business  Day for both the old and the new currencies; and

   (viii)    during this  period, the Term-Out Loan will have Terms running from one Business Day to the  next Business Day.

The Company must indemnify the Facility Agent against any loss  or liability incurred by the Facility Agent as a result of any foreign exchange  contract entered into for the purpose of this Clause.

**Term-Out Loans - continuing in same Optional Currency**
(dd)     If a Term-Out Loan is to  be denominated in the same Optional Currency during two successive Terms, the  Facility Agent must calculate the amount of the Term-Out Loan in the Optional  Currency for the second of those Terms.

(ee)     The amount of the Term-Out  Loan in the Optional Currency for the second Term will be the amount determined  by notionally converting into that Optional Currency the Sterling Amount of  the Term-Out Loan on the basis of the Agent's Spot Rate of Exchange one Business  Day before the Rate Fixing Day for that Term.

(ff)      If the amount calculated  is less than the existing amount of that Term-Out Loan in the Optional Currency  during the first Term, the Company must pay, subject to paragraph (e) below,  on the last day of the first Term an amount equal to the difference.

(gg)     If the amount calculated  is more than the existing amount of that Term-Out Loan in the Optional Currency  during the first Term, each Lender must pay, subject to paragraph (e) below,  on the last day of the first Term its Pro Rata Share of the difference.

(hh)     If the calculation made by  the Facility Agent under paragraph (a) above shows that the amount of the Term-Out  Loan in the Optional Currency has increased or decreased by less than five per  cent. since it was borrowed or (if later) the most recent adjustment under paragraph  (c) or (d) above, no payment is required under paragraph (c) or (d) above.

**Notification**
The Facility Agent must notify the Lenders and the Company  of the relevant Sterling Amount (and the applicable Agent's Spot Rate of Exchange)  promptly after they are ascertained.

**REPAYMENT**
**Repayment of Loans**

(ii)      The Company must repay  each Loan (other than a Term-Out Loan) in full on its Maturity Date. No Loan  may be outstanding after the applicable Final Maturity Date.

(jj)      Subject to the other  terms of this Agreement, any amounts repaid under paragraph (a) above may be  re-borrowed.

**Repayment of Term-Out Loans**
The Company must repay all Term-Out Loans in full on the Extended  Final Maturity Date.

**PREPAYMENT AND CANCELLATION**
**Mandatory prepayment - illegality**

(kk)     A Lender must notify the  Company promptly if it becomes aware that it is unlawful in any jurisdiction  for that Lender to perform any of its obligations under a Finance Document or  to fund or maintain its share in any Loan.

(ll)     After notification under  paragraph (a) above:

   (i)       the  Company must repay or prepay the share of that Lender in each Loan made to it  on the date specified in paragraph (c) below; and

   (ii)      the  Commitments of that Lender will be immediately cancelled.

(mm)     The date for repayment or  prepayment of a Lender's share in a Loan will be:

   (i)       the  Business Day following receipt by the Company of notice from the Lender under  paragraph (a) above; or

   (ii)       if  later, the latest date allowed by the relevant law.

**Mandatory prepayment - change of control**
If, except in the context of a group reorganisation where the  Company continues to be controlled directly or indirectly, by PPL Corporation,  the Company becomes aware of any person (whether alone or together with any  associated person or persons) gaining control of the Company (for these purposes  "associated person" means, in relation to any person, a person who is (i) "acting  in concert" (as defined in the City Code on Takeovers and Mergers) with that  person or (ii) a "connected person" (as defined in section 839 of the Income  and Corporation Taxes Act 1988) of that person and "control" has the meaning  given to it in Section 416 of the Income and Corporation Taxes Act 1988):

   (iii)     within  5 days of such date, the Company shall give notice of such change of control  to the Facility Agent;

   (iv)     the Lenders  and the Company shall immediately enter into negotiations for a period of not  more than 45 days from the date of the change of control with a view to agreeing  whether the Facility shall continue to be made available and on what terms;  and

   (v)      if  no such agreement is reached within the said period of 45 days then:

(A)     any Lender may on 10 days'  notice to the Facility Agent and to the Company require the repayment of its  share in each Loan and cancel its Commitment; and

(B)     the Majority Lenders may on  10 days' notice to the Company require repayment in full of all outstanding  Loans and cancel the Total Commitments.

**Voluntary prepayment**
(nn)    The Company may, by giving not  less than three Business Days' prior notice to the Facility Agent, prepay any  Loan at any time in whole or in part. 

(oo)     A prepayment of part of a  Loan drawn in US Dollars must be in a minimum amount of $5,000,000 and an integral  multiple of U.S. $1,000,000.

(pp)     A prepayment of part of a  Loan drawn in Sterling must be in a minimum amount of £5,000,000 and an  integral multiple of £1,000,000.

**Automatic cancellation**
The Commitments of each Lender in relation to the Tranche A  Facility, the Tranche B Facility and the Tranche C Facility will be automatically  cancelled at the close of business on the last day of the relevant Availability  Period.

**Voluntary cancellation**
(qq)    The Company may, by giving not  less than three Business Days' prior notice to the Facility Agent, cancel the  unutilised amount of the Total Commitments in whole or in part.

(rr)     Partial cancellation of the  Total Commitments must be in a minimum amount of £5,000,000 and an integral  multiple of £1,000,000.

(ss)     Any cancellation in part  will be applied against the relevant Commitment of each Lender pro rata.

**Involuntary prepayment and cancellation**
(tt)      If the Company is,  or will be, required to pay to a Lender a Tax Payment or an Increased Cost,  the Company may, while the requirement continues, give notice to the Facility  Agent requesting prepayment and cancellation in respect of that Lender. 

(uu)     After notification under  paragraph (a) above: 

   (i)       the Company must  repay or prepay that Lender's share in each Loan made to it on the date specified  in paragraph (c) below; and

   (ii)      the Commitments of  that Lender will be immediately cancelled.

(vv)    The date for repayment or prepayment  of a Lender's share in a Loan will be the last day of the current Term for that  Loan or, if earlier, the date specified by the Company in its notification.

**Partial prepayment of Term-Out Loans**
No amount of a Term-Out Loan repaid or prepaid under this Agreement  may subsequently be re-borrowed.

**Re-borrowing of Loans (other than Term-Out Loans)**
Any voluntary prepayment of a Loan (other than a Term-Out Loan)  may be re-borrowed on the terms of this Agreement. Any mandatory or involuntary  prepayment of a Loan may not be re-borrowed. 

**Miscellaneous provisions**
(ww)   Any notice of prepayment and/or cancellation  under this Agreement is irrevocable and must specify the relevant date(s) and  the affected Loans and Commitments. The Facility Agent must notify the Lenders  promptly of receipt of any such notice.

(xx)     All prepayments under this  Agreement must be made with accrued interest on the amount prepaid. No premium  or penalty is payable in respect of any prepayment except for Break Costs.

(yy)     The Majority Lenders may  agree a shorter notice period for a voluntary prepayment or a voluntary cancellation.

(zz)     No prepayment or cancellation  is allowed except in accordance with the express terms of this Agreement.

(aaa)    No amount of the Total Commitments  cancelled under this Agreement may subsequently be reinstated.

**INTEREST**
**Calculation of interest**

The rate of interest on each Loan for each Term is the percentage  rate per annum equal to the aggregate of the applicable:

Margin;
LIBOR; and
Mandatory Cost.

**Payment of interest**
Except where it is provided to the contrary in this Agreement,  the Company must pay accrued interest on each Loan made to it on the last day  of each Term and also, if the Term is longer than six months, on the dates falling  at six-monthly intervals after the first day of that Term.

**Interest on overdue amounts**
(bbb)   If the Company fails to pay any amount  payable by it under the Finance Documents, it must immediately on demand by  the Facility Agent pay interest on the overdue amount from its due date up to  the date of actual payment, both before, on and after judgment.

(ccc)    Interest on an overdue amount  is payable at a rate determined by the Facility Agent to be one per cent. per  annum above the rate which would have been payable if the overdue amount had,  during the period of non-payment, constituted a Tranche B Loan in the currency  of the overdue amount. For this purpose, the Facility Agent may (acting reasonably):

   (i)     select successive  Terms of any duration of up to three months; and

   (ii)     determine  the appropriate Rate Fixing Day for that Term.

(ddd)   Notwithstanding paragraph (b) above,  if the overdue amount is a principal amount of a Loan and becomes due and payable  prior to the last day of its current Term, then:

   (i)       the  first Term for that overdue amount will be the unexpired portion of that Term;  and

   (ii)      the  rate of interest on the overdue amount for that first Term will be one per cent.  per annum above the rate then payable on that Loan.

After the expiry of the first Term for that overdue amount,  the rate on the overdue amount will be calculated in accordance with paragraph  (b) above.

(eee)    Interest (if unpaid) on an overdue  amount will be compounded with that overdue amount at the end of each of its  Terms but will remain immediately due and payable.

**Notification of rates of interest**
The Facility Agent must promptly notify each relevant Party  of the determination of a rate of interest under this Agreement.

**Margin**
(fff)    The applicable Margin for all  Loans will be determined in accordance with the table below, with:

the applicable Margin for Tranche A Loans being determined  by reference to the percentage rate per annum specified in Column 2 as set out  below opposite the long term credit rating assigned to the Company and published  by Moody's and/or S&P as specified in Column 1;

the applicable Margin for Tranche B Loans being determined  by reference to the percentage rate per annum specified in Column 3 as set out  below opposite the long term credit rating assigned to the Company and published  by Moody's and/or S&P as specified in Column 1; and

the applicable Margin for Tranche C Loans being determined  by reference to the percentage rate per annum specified in Column 4 as set out  below opposite the long term credit rating assigned to the Company and published  by Moody's and/or S&P as specified in Column 1,

**Column 1 Credit Rating (S&P/Moody's)        
**Column 2 Tranche A Margin %
**Column 3 Tranche B Margin %
**Column 4 Tranche C Margin %
A-/A3 (or higher)
0.40
0.45
 0.425
BBB+/Baa1
0.50
0.55
 0.525
BBB/Baa2
0.70
0.70
 0.70
BBB-/Baa3 (or lower)
0.95
0.95
 0.95
(ggg)   During any period in which (i) an Event  of Default is outstanding; and/or (ii) there is no long term credit rating assigned  to the Company by either S&P or Moody's, the applicable Margin for Tranche  A and Tranche B and Tranche C shall, in each case, be 1.00 per cent. per annum.

(hhh)   In the event that the long term credit  ratings assigned to the Company by S&P and Moody's would indicate a different  Margin under (a) above then the lower of the two credit ratings shall apply  to determine the applicable Margin, save that, in the event that there is more  than one notch difference between the two credit ratings, then the middle level  shall apply to determine the applicable Margin and, in the event that there  are an even number of levels between the two credit ratings (and therefore no  middle level) the higher of the two middle levels shall be used to determine  the applicable Margin.

(iii)     Any adjustment to the Margin  pursuant to paragraphs (a) to (c) above shall be made on the date of publication  by S&P and/or Moody's of a long term credit rating of the Company (or an  amendment of a previously published rating) or on the date in which no long  term credit rating is assigned to the Company, if such publication (or amendment)  would result in a change in the Margin as provided above and, for the avoidance  of doubt, such adjustment shall apply to Loans currently outstanding at such  date of publication and with effect from such date.

(jjj)     Promptly after becoming  aware of the same, the Company shall inform the Facility Agent in writing if  any of the circumstances contemplated by sub-clauses 9.5(b) through (c) apply.

**TERMS**
**Selection - Term-Out Loans**

(kkk)   Each Term-Out Loan has successive Terms.

(lll)     The Company must select  the first Term-Out for a Term-Out Loan in the relevant notice under Clause 2.5  (Term-Out Option) and each subsequent Term in an irrevocable notice received  by the Facility Agent not later than 11.00 a.m. one Business Day before the  Rate Fixing Day for that Term. Each Term for a Term-Out Loan will start on its  Utilisation Date or on the expiry of its preceding Term.

(mmm) If the Company fails to select a Term for an outstanding  Term-Out Loan under paragraph (b) above, that Term will, subject to the other  provisions of this Clause, be one month.

(nnn)   Subject to the following provisions  of this Clause, each Term for a Term-Out Loan will be one, two, three or six  months or any other period agreed by the Company and the Lenders.

**Selection - Loans**
(ooo)   Each Loan (other than a Term-Out Loan)  has one Term only.

(ppp)   The Company must select the Term for  a Loan in the relevant Request.

(qqq)   Subject to the following provisions  of this Clause, each Term for a Loan will be one, two, three or six months or  for a period of one to thirty days duration as selected by the Company or any  other period agreed by the Company and the Lenders.

**Consolidation - Term-Out Loans**
(rrr)    Unless the Company otherwise requests,  a Term for a Term-Out Loan will end on the same day as the current Term for  any other Term-Out Loan denominated in the same currency as that Term-Out Loan.  On the last day of those Terms, those Term-Out Loans will be consolidated and  treated as one Term-Out Loan.

(sss)    The Company may select different  Terms for any portion of a Term-Out Loan on the last day of the Term of that  Term-Out Loan provided such portion is a minimum of £5,000,000 and an  integral multiple of £1,000,000. Any such portion shall be treated as  a separate Loan.

**No overrunning the Final Maturity Date**
If a Term would otherwise overrun the Final Maturity Date,  it will be shortened so that it ends on the Final Maturity Date.

**Other adjustments**
The Facility Agent and the Company may enter into such other  arrangements as they may agree for the adjustment of Terms and the consolidation  and/or splitting of Loans.

**Notification**
The Facility Agent must notify the Company and the Lenders  of the duration of each Term promptly after ascertaining its duration.

**MARKET DISRUPTION**
**Failure of a Reference Bank to supply a rate**

If LIBOR is to be calculated by reference to the Reference  Banks but a Reference Bank does not supply a rate by 12.00 noon on a Rate Fixing  Day, the applicable LIBOR will, subject as provided below, be calculated on  the basis of the rates of the remaining Reference Banks.

**Market disruption**
(ttt)     In this Clause, each of  the following events is a **market disruption event**:

   (i)       LIBOR  is to be calculated by reference to the Reference Banks but no, or only one,  Reference Bank supplies a rate by 12.00 noon on the Rate Fixing Day; or

   (ii)      the  Facility Agent receives by close of business on the Rate Fixing Day notification  from Lenders whose shares in the relevant Loan exceed 50 per cent. of that Loan  that such Lenders are unable to obtain matching deposits in the relevant interbank  market or the rate at which they can do so is in excess of LIBOR for the relevant  Term.

(uuu)   The Facility Agent must promptly notify  the Company and the Lenders of a market disruption event.

(vvv)   After notification under paragraph (b)  above, the rate of interest on each Lender's share in the affected Loan for  the relevant Term will be the aggregate of the applicable:

   (i)     Margin;

   (ii)     rate notified  to the Facility Agent by that Lender as soon as practicable, and in any event  before interest is due to be paid in respect of that Term, to be that which  expresses as a percentage rate per annum the cost to that Lender of funding  its share in that Loan from whatever source it may reasonably select; and

   (iii)     Mandatory  Cost.

**Alternative basis of interest or funding**
(www) If a market disruption event occurs and the Facility  Agent or the Company so requires, the Company and the Facility Agent must enter  into negotiations for a period of not more than 30 days with a view to agreeing  an alternative basis for determining the rate of interest and/or funding for  the affected Loan and any future Loan. 

(xxx)   Any alternative basis agreed will be,  with the prior consent of all the Lenders, binding on all the Parties.

**TAXES**
**General**

In this Clause:

**Tax Credit means a credit against any Tax or any relief  or remission for Tax (or its repayment).
**U.K. Lender means a Lender which is within the charge  to U.K. corporation tax in respect of, and beneficially entitled to, a payment  of interest on a Loan made by a person that was a bank for the purposes of section  349 of the Income and Corporation Taxes Act 1988 (as currently defined in section  840A of the Income and Corporation Taxes Act 1988) at the time the Loan was  made; 
**Tax gross-up**
(yyy)   The Company must make all payments to  be made by it under the Finance Documents without any Tax Deduction, unless  a Tax Deduction is required by law.

(zzz)    If:

   (i)      a  Lender is not, or ceases to be, a U.K. Lender; or

   (ii)      the  Company or a Lender is aware that the Company must make a Tax Deduction (or  that there is a change in the rate or the basis of a Tax Deduction), 

it must promptly notify the Facility Agent. The Facility Agent  must then promptly notify the affected Parties.

(aaaa)  Except as provided below, if a Tax Deduction  is required by law to be made by the Company or the Facility Agent, the amount  of the payment due from the Company will be increased to an amount which (after  making the Tax Deduction) leaves an amount equal to the payment which would  have been due if no Tax Deduction had been required.

(bbbb)  Except as provided below, the Company is  not required to make an increased payment under paragraph (c) above to a Lender  that is not, or has ceased to be, a U.K. Lender in excess of the amount that  the Company would have had to pay had the Lender been, or not ceased to be,  a U.K. Lender. 

(cccc)   Paragraph (d) above will not apply  if the Lender has ceased to be a U.K. Lender by reason of any change after the  date it became a Lender under this Agreement in (or in the interpretation, administration,  or application of) any law or double taxation agreement or any published practice  or concession of any relevant taxing authority.

(dddd)  Where a Lender fails to give notice under  paragraph (b) above within 60 days after it obtains knowledge (or, after reasonable  due enquiry, ought to have obtained knowledge) of such event, then such Lender  shall, with respect to any claim made by it under this Clause 12.2 (Tax gross-up),  only be entitled to claim an increased payment for the period from and after  the date that is 60 days prior to the date on which the Lender does give notice.

(eeee)   If the Company is required to make  a Tax Deduction, it must make the minimum Tax Deduction and must make any payment  required in connection with that Tax Deduction within the time allowed by law.

(ffff)    Within 30 days of making either  a Tax Deduction or a payment required in connection with a Tax Deduction, the  Company must deliver to the Facility Agent for the relevant Finance Party evidence  satisfactory to that Finance Party (acting reasonably) that the Tax Deduction  has been made or (as applicable) the appropriate payment has been paid to the  relevant taxing authority.

**Tax indemnity**
(gggg)  Except as provided below, the Company must  indemnify a Finance Party against any loss or liability which that Finance Party  (in its absolute discretion) determines will be or has been suffered (directly  or indirectly) by that Finance Party for or on account of Tax in relation to  a payment received or receivable (or any payment deemed to be received or receivable)  under a Finance Document.

(hhhh)  Paragraph (a) above does not apply to any  Tax assessed on a Finance Party under the laws of the jurisdiction in which:

   (i)       that  Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions)  in which that Finance Party is treated as resident for tax purposes; or

   (ii)      that  Finance Party's Facility Office is located in respect of amounts received or  receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the  net income received or receivable by that Finance Party. However, any payment  deemed to be received or receivable, including any amount treated as income  but not actually received by the Finance Party, such as a Tax Deduction, will  not be treated as net income received or receivable for this purpose.

(iiii)    A Finance Party making, or intending  to make, a claim under paragraph (a) above must promptly notify the Company  of the event which will give, or has given, rise to the claim.

**Tax Credit**
If the Company makes a Tax Payment and the relevant Finance  Party has obtained and used any Tax Credit that is attributable to that Tax  Payment, then, if in its discretion (acting reasonably) it can do so without  any further adverse consequences for it, that Finance Party must pay an amount  to the Company which that Finance Party determines (in its discretion, acting  reasonably) will leave it (after that payment) in the same after-tax position  as it would have been in if the Tax Payment had not been required to be made  by the Company. The relevant Finance Party shall take those steps it considers  reasonable to seek and claim any tax credit.

**Tax Warranty of Lenders**
Each Lender severally warrants to the Company on the date it  becomes a Lender that it is a U.K. Lender. A Lender must promptly notify the  Company if it ceases to be a U.K. Lender after this Agreement is entered into.

**Stamp taxes**
The Company must pay and indemnify each Finance Party against  any stamp duty, registration or other similar Tax payable in connection with  the entry into, performance or enforcement of any Finance Document, except for  any such Tax payable in connection with the entry into of a Transfer Certificate.

**Value added taxes**
(jjjj)     All costs and expenses  payable under a Finance Document by the Company is exclusive of any value added  tax or any other Tax of a similar nature which might be chargeable in connection  with that amount. If any such Tax is chargeable, the Company must pay to the  Finance Party (in addition to and at the same time as paying that amount) an  amount equal to the amount of that Tax.

(kkkk)  The obligation of the Company under paragraph  (a) above will be reduced to the extent that the Finance Party determines (acting  reasonably) that it is entitled to repayment or a credit in respect of the relevant  Tax.

**INCREASED COSTS**
**Increased Costs**

Except as provided below in this Clause, the Company must pay  to a Finance Party the amount of any Increased Cost incurred by that Finance  Party or any of its Affiliates as a result of:

the introduction of, or any change in, or any change in the  interpretation or application of, any law or regulation; or
compliance with any law or regulation, 

made after the date of this Agreement.

**Exceptions**
The Company need not make any payment for an Increased Cost  to the extent that the Increased Cost is:

compensated for under another Clause or would have been but  for an exception to that Clause;
a Tax on the overall net income of a Finance Party or any of  its Affiliates;
attributable to a Finance Party or its Affiliate wilfully failing  to comply with any law or regulation; or

incurred in any period or periods ending prior to the date  falling 60 days before the date any demand in relation to that Increased Cost  is made (save where the relevant Finance Party (after due enquiry) was unaware  of the existence of such Increased Cost or where such Increased Cost is caused  by reason of a change in (or in the interpretation, administration or application  of) law with retrospective effect).

**Claims**
A Finance Party intending to make a claim for an Increased  Cost must notify the Company promptly of the circumstances giving rise to, and  the amount of, the claim.

**MITIGATION**
**Mitigation**

(llll)     Each Finance Party must,  in consultation with the Company, take all reasonable steps to mitigate any  circumstances which arise and which result or would result in:

   (i)      any  Tax Payment or Increased Cost being payable to that Finance Party; 

   (ii)      that  Finance Party being able to exercise any right of prepayment and/or cancellation  under this Agreement by reason of any illegality;

   (iii)     that Finance  Party incurring any cost of complying with the minimum reserve requirements  of the European Central Bank; or

   (iv)     the occurrence  of any market disruption event,

including transferring its rights and obligations under the  Finance Documents to an Affiliate or changing its Facility Office.

(mmmm)  A Finance Party is not obliged to take any  step under this Subclause if, in the opinion of that Finance Party (acting reasonably),  to do so might be prejudicial to it.

(nnnn)  Each Finance Party must promptly notify the  Company of any circumstances as described in 14.1(a)(i) to (iv).

(oooo)  The Company must indemnify each Finance Party  for all costs and expenses reasonably incurred by it as a result of any step  taken under this Clause 14.1 (Mitigation).

**Substitution**
Notwithstanding Clauses 14.1, if any circumstances arise which  result in:

   (i)       any  Tax Payment or Increased Cost being payable to that Finance Party; 

   (ii)       that  Finance Party being able to exercise any right of prepayment and/or cancellation  under this Agreement by reason of any illegality; 

   (iii)     that Finance  Party incurring any cost of complying with the minimum reserve requirements  of the European Central Bank; or

   (iv)     the occurrence  of any market disruption event,

then the Company, at its expense, at any time within 180 days  after the occurrence of the relevant event or circumstance, so long as no Default  is outstanding, may by notice to such Finance Party require it (and, if applicable,  its Affiliate) to novate its rights and obligations hereunder (including its  Commitments and its share of any Loans) in accordance with Clause 27 to a bank  or financial institution specified by the Company and acceptable to the Facility  Agent which is willing to take such a novation as aforesaid provided that:

   (v)       such  novation shall not conflict with or violate any law applicable to or binding  on such Finance Party (or, if applicable, its Affiliate); and

   (vi)      the  Company shall have paid to the Finance Party (or, if applicable, its Affiliate)  all amounts accrued and owing hereunder.

Notwithstanding the above, the Company shall not be entitled  to require a novation under this Clause 14.2 with respect to any Finance Party  if:

   (vii)     the relevant  Finance Party shall have mitigated the effect of the relevant event or circumstance  as provided in Clause 14.1(a), and the novation would have no greater or further  mitigating effect; or

   (viii)     the relevant  event or circumstances are applicable to all Finance Parties.

**Conduct of business by a Finance Party**
No term of this Agreement will:

interfere with the right of any Finance Party to arrange  its affairs (Tax or otherwise) in whatever manner it thinks fit or oblige any  Finance Party to investigate or claim any Tax Credit; or
oblige any Finance Party to disclose any information relating  to its affairs (Tax or otherwise) or any computation in respect of Tax. 
**PAYMENTS**

**Place**
Unless a Finance Document specifies that payments under it  are to be made in another manner, all payments by a Party (other than the Facility  Agent) under the Finance Documents must be made to the Facility Agent to its  account at such office or bank:

in the principal financial centre of the country of the relevant  currency; or
in the case of euro, in the principal financial centre of a  Participating Member State or London,

as it may notify to that Party for this purpose by not less  than five Business Days' prior notice.

**Funds**
Payments under the Finance Documents to the Facility Agent  must be made for value on the due date at such times and in such funds as the  Facility Agent may specify to the Party concerned as being customary at the  time for the settlement of transactions in the relevant currency in the place  for payment.

**Distribution**
(pppp)  Each payment received by the Facility Agent  under the Finance Documents for another Party must, except as provided below,  be made available by the Facility Agent to that Party by payment (as soon as  practicable after receipt) to its account with such office or bank:

   (i)      in  the principal financial centre of the country of the relevant currency; or

   (ii)      in  the case of euro, in the principal financial centre of a Participating Member  State or London,

as it may notify to the Facility Agent for this purpose by  not less than five Business Days' prior notice.

(qqqq)  The Facility Agent may apply any amount received  by it for the Company in or towards payment (as soon as practicable after receipt)  of any amount due from the Company under the Finance Documents or in or towards  the purchase of any amount of any currency to be so applied.

(rrrr)    Where a sum is paid to the Facility  Agent under this Agreement for another Party, the Facility Agent is not obliged  to pay that sum to that Party until it has established that it has actually  received it. However, the Facility Agent may assume that the sum has been paid  to it, and, in reliance on that assumption, make available to that Party a corresponding  amount. If it transpires that the sum has not been received by the Facility  Agent, that Party must immediately on demand by the Facility Agent refund any  corresponding amount made available to it together with interest on that amount  from the date of payment to the date of receipt by the Facility Agent at a rate  calculated by the Facility Agent to reflect its cost of funds.

**Currency**
(ssss)   Unless a Finance Document specifies  that payments under it are to be made in a different manner, the currency of  each amount payable under the Finance Documents is determined under this Clause.

(tttt)     Interest is payable in  the currency in which the relevant amount in respect of which it is payable  is denominated.

(uuuu)  A repayment or prepayment of any principal  amount is payable in the currency in which that principal amount is denominated  on its due date.

(vvvv)  Amounts payable in respect of costs and expenses  are payable in the currency in which they are incurred.

(wwww)  Each other amount payable under the Finance  Documents is payable in Sterling.

**No set-off or counterclaim**
All payments made by the Company under the Finance Documents  must be made without set-off or counterclaim.

**Business Days**
(xxxx)  If a payment under the Finance Documents  is due on a day which is not a Business Day, the due date for that payment will  instead be the next Business Day in the same calendar month (if there is one)  or the preceding Business Day (if there is not) or whatever day the Facility  Agent determines is market practice.

(yyyy)  During any extension of the due date for  payment of any principal under this Agreement interest is payable on that principal  at the rate payable on the original due date.

**Partial payments**
(zzzz)   If any Administrative Party receives  a payment insufficient to discharge all the amounts then due and payable by  the Company under the Finance Documents, the Administrative Party must apply  that payment towards the obligations of the Company under the Finance Documents  in the following order:

   (i)       **first**,  in or towards payment pro rata of any unpaid fees, costs and expenses of the  Administrative Parties under the Finance Documents;

   (ii)      **secondly**,  in or towards payment pro rata of any accrued interest or fee due but unpaid  under this Agreement;

   (iii)     **thirdly**,  in or towards payment pro rata of any principal amount due but unpaid under  this Agreement; and

   (iv)     **fourthly**,  in or towards payment pro rata of any other sum due but unpaid under the Finance  Documents.

(aaaaa)  The Facility Agent must, if so directed  by all the Lenders, vary the order set out in sub-paragraphs (a)(ii) to (iv)  above.

(bbbbb) This Subclause will override any appropriation  made by the Company.

**Timing of payments**
If a Finance Document does not provide for when a particular  payment is due, that payment will be due within three Business Days of demand  by the relevant Finance Party.

**REPRESENTATIONS**
**Representations**

The representations set out in this Clause are made by the  Company to each Finance Party.

**Status**
It is a limited liability company, duly incorporated and validly  existing under the Companies Act 1985 in England and Wales.

**Powers and authority**
It has the power to enter into and perform, and has taken all  necessary action to authorise the entry into and performance of, the Finance  Documents to which it is or will be a party and the transactions contemplated  by those Finance Documents.

**Legal validity**
Subject to any general principles of law limiting its obligations  and referred to in any legal opinion required under this Agreement, each Finance  Document to which it is a party is its legally binding, valid and enforceable  obligation.

**Non-conflict**
The entry into and performance by it of, and the transactions  contemplated by, the Finance Documents do not conflict with any borrowing or  other power or restricted granted or imposed by:

any law or regulation applicable to it and violation of which  has or is likely to have a Material Adverse Effect; or
its constitutional documents.
**No Event of Default**

No Event of Default is outstanding or will result from the  execution of, or the performance of any transaction contemplated by, any Finance  Document.

**Authorisations**
All authorisations required by it (including any authorisations  required under PUCHA or the Act, if any) in connection with the entry into,  performance, validity and enforceability of, and the transactions contemplated  by, the Finance Documents have been obtained or effected (as appropriate) and  are in full force and effect.

**Financial statements**
Its audited consolidated financial statements most recently  delivered to the Facility Agent (which, at the date of this Agreement, are the  Original Financial Statements):

have been prepared in accordance with accounting principles  and practices generally accepted in its jurisdiction of incorporation, consistently  applied; and
fairly represent its consolidated financial condition as at  the date to which they were drawn up,

except, in each case, as disclosed to the contrary in those  financial statements..

**No material adverse change**
Other than as disclosed in writing to the Mandated Lead Arrangers  prior to the date of this Agreement there has been no material adverse change  in its consolidated financial condition since the date to which the Original  Financial Statements were drawn up.

**Litigation**
No litigation, arbitration or administrative proceedings are  current or, to its knowledge, pending or threatened, which, if adversely determined,  are reasonably likely to have a Material Adverse Effect.

**Winding Up**
No meeting has been convened for its Winding-up and, so far  as it is aware, no petition, application or the like is outstanding for its  Winding up.

**Non-Violation of other Agreements:**
Its entry into, exercise of its rights and/or performance of  or compliance with its obligations under this Agreement do not and will not  violate, to an extent or in a manner which has or is likely to have a Material  Adverse Effect on it, any agreement to which it is a party or which is binding  on it.

**Times for making representations**
(ccccc)  The representations set out in this Clause  are made by the Company on the date of this Agreement.

(ddddd)  The representations in Clauses 16.2 to 16.7  (inclusive) are deemed to be repeated by the Company on the date of each Request  and the first day of each Term. 

(eeeee)  When a representation is repeated, it is  applied to the circumstances existing at the time of repetition.

**INFORMATION COVENANTS**
**Financial statements**

(fffff)  The Company must supply to the Facility  Agent in sufficient copies for all the Lenders:

   (i)       its  audited consolidated financial statements for each of its financial years; and

   (ii)       its  interim financial statements for the first half-year of each of its financial  years.

(ggggg) All financial statements must be supplied as soon  as they are available and:

   (i)       in  the case of the Company's audited consolidated financial statements, within  180 days; and

   (ii)      in  the case of the Company's interim financial statements, within 90 days,

(hhhhh)  of the end of the relevant financial period.

**Form of Financial Statement**
If any financial statement delivered or to be delivered to  the Facility Agent under Clause 17.1 is not to be or, as the case may be, has  not been prepared in accordance with Applicable Accounting Principles:

The Company and the Facility Agent (on behalf of and after  consultation with all the Lenders) shall, on the request of the Facility Agent  or the Company, negotiate in good faith with a view to agreeing such amendments  to the above financial ratio and/or the definitions of the terms used in it  as are necessary to give the Lenders comparable protection to that contemplated  at the date of this Agreement; 
If amendments are agreed by the Company and the Majority Lenders  within 25 days, those amendments shall take effect in accordance with the terms  of that agreement;
If such amendments are not so agreed within 25 days, the Company  shall:

within 30 days after the end of that 25 day period; and

with all subsequent financial statements to be delivered to  the Facility Agent under Clause 17.1,

deliver to the Facility Agent details of all such adjustments  as need to be made to the relevant financial statements to bring them into line  with the Companies Act 1985 (as in effect on the date of this Agreement) and  Applicable Accounting Principles.

**Compliance Certificate**
(iiiii)    The Company must supply to the  Facility Agent a Compliance Certificate with each set of its financial statements,  sent to the Facility Agent under this Agreement.

(jjjjj)     A Compliance Certificate  must be signed by two directors of the Company.

**Information - miscellaneous**
The Company must supply to the Facility Agent, in sufficient  copies for all the Lenders if the Facility Agent so requests:

copies of all documents despatched by the Company to its creditors  generally or any class of them at the same time as they are despatched;
promptly upon becoming aware of them, details of any litigation,  arbitration or administrative proceedings which are current, threatened or pending  and which might, if adversely determined, have a Material Adverse Effect;
promptly on request, a list of the then current Material Subsidiaries;  and 
promptly on request, such further information regarding the  financial condition and operations of the Group as any Finance Party through  the Facility Agent may reasonably request.

**Notification of Default**
(kkkkk) The Company must notify the Facility Agent of  any Default (and the steps, if any, being taken to remedy it) promptly upon  becoming aware of its occurrence.

(lllll)    Promptly on request by the Facility  Agent, the Company must supply to the Facility Agent a certificate signed by  two of its directors on its behalf, certifying that no Default is outstanding  or, if a Default is outstanding, specifying the Default and the steps, if any,  being taken to remedy it.

**Use of websites**
(mmmmm)  Except as provided below, the Company may  deliver any information under this Agreement to a Lender by posting it on to  an electronic website if:

   (i)       the  Facility Agent and the Lender agree;

   (ii)       the  Company and the Facility Agent designate an electronic website for this purpose;

   (iii)     the Company  notifies the Facility Agent of the address of and password for the website;  and

   (iv)     the information  posted is in a format agreed between the Company and the Facility Agent.

The Facility Agent must supply each relevant Lender with the  address of and password for the website.

(nnnnn)  Notwithstanding the above, the Company must  supply to the Facility Agent in paper form a copy of any information posted  on the website together with sufficient copies for:

   (i)       any  Lender not agreeing to receive information via the website; and

   (ii)       within  ten Business Days of request any other Lender, if that Lender so requests.

(ooooo)  The Company must promptly upon becoming  aware of its occurrence, notify the Facility Agent if:

   (i)       the  website cannot be accessed;

   (ii)       the  website or any information on the website is infected by any electronic virus  or similar software;

   (iii)     the password  for the website is changed; or

   (iv)     any information  to be supplied under this Agreement is posted on the website or amended after  being posted.

If the circumstances in paragraphs (i) or (ii) above occur,  the Company must supply any information required under this Agreement in paper  form.

**Know your customer requirements**
(ppppp)  The Company must promptly on the request  of any Finance Party supply to that Finance Party any documentation or other  evidence which is reasonably requested by that Finance Party (whether for itself,  on behalf of any Finance Party or any prospective new Lender) to enable a Finance  Party or prospective new Lender to carry out and be satisfied with the results  of all applicable know your customer requirements.

(qqqqq)  Each Lender must promptly on the request  of the Facility Agent supply to the Facility Agent any documentation or other  evidence which is reasonably required by the Facility Agent to carry out and  be satisfied with the results of all know your customer requirements.

**FINANCIAL COVENANTS**
**Definitions**

In this Clause:

**Consolidated EBITDA means the consolidated net pre-taxation  profits of the Group for a Measurement Period as adjusted by:
   (i)       adding  back Interest Payable;

   (ii)      taking  no account of any exceptional or extraordinary item;

   (iii)     excluding  any amount attributable to minority interests;

   (iv)     adding  back depreciation and amortisation; and

   (v)      taking  no account of any revaluation of an asset or any loss or gain over book value  arising on the disposal of an asset (otherwise than in the ordinary course of  trading) by a member of the Group during that Measurement Period.

**Interest Payable means, in relation to any Measurement  Period, all interest payable and similar charges of the Group expressed in Sterling  and determined on a consolidated basis in accordance with Applicable Accounting  Principles.
**Measurement Period means a half-year of the Company.
**Regulatory Asset Base means the regulatory asset base  of the Company most recently published by OFGEM.
**Total Gross Debt means, in respect of the Company, at  any time the consolidated Financial Indebtedness of the Company which is required  to be accounted for as debt in the annual financial statements of the Company.
**Interpretation**
(rrrrr)   Except as provided to the contrary  in this Agreement, an accounting term used in this Clause is to be construed  in accordance with the principles applied in connection with the Original Financial  Statements.

(sssss)  Any amount in a currency other than Sterling  is to be taken into account at its Sterling equivalent calculated on the basis  of:

   (i)       the  Facility Agent's spot rate of exchange for the purchase of the relevant currency  in the London foreign exchange market with Sterling at or about 11.00 a.m. on  the day the relevant amount falls to be calculated; or

   (ii)       if  the amount is to be calculated on the last day of a financial period of the  Company, the relevant rates of exchange used by the Company in, or in connection  with, its financial statements for that period.

(ttttt)    No item must be credited or  deducted more than once in any calculation under this Clause.

**Interest cover**
The Company must ensure that the ratio of Consolidated EBITDA  to Interest Payable is not, at the end of each Measurement Period, less than  3 to 1.

**Asset Cover**
The Company must ensure that the Regulatory Asset Base will  exceed Total Gross Debt by at least £150,000,000 at all times. 

**GENERAL COVENANTS**
**General**

The Company agrees to be bound by the covenants set out in  this Clause relating to it and, where the covenant is expressed to apply to  each member of the Group, the Company must ensure that each of its Subsidiaries  performs that covenant.

**Authorisations**
The Company must promptly obtain, maintain and comply with  the terms of any authorisation required under any law or regulation to enable  it to perform its obligations under, or for the validity or enforceability of,  any Finance Document.

**Compliance with laws**
Each member of the Group must comply in all respects with all  laws to which it is subject where failure to do so is reasonably likely to have  a Material Adverse Effect.

**Pari passu ranking**
The Company must ensure that its payment obligations under  the Finance Documents rank at least pari passu with all its other present and  future unsecured payment obligations, except for obligations mandatorily preferred  by law applying to companies generally.

**Negative pledge**
(uuuuu)  Except as provided below, neither the Company  nor any Material Subsidiary may create or allow to exist any Security Interest  on any of its assets.

(vvvvv)     Paragraph (a) does not  apply to: 

   (i)       any  Security Interest created under or in connection with or arising out of the  Balancing and Settlement Code or any transactions or arrangements entered into  in connection with the management of risks relating thereto;

   (ii)       in  respect of overdue amounts which have not been overdue for more than 30 days  and/or are being contested in good faith, liens arising solely by operation  of law or by order of a court or tribunal (or by an agreement of similar effect)  and/or in the ordinary course of business or operations;

   (iii)     any Security  Interest created after the date of this Agreement for the sole purpose of re-financing  all or any part of either Facility (at the option of the Company) provided that  the monies borrowed or raised on such Security Interest shall, to that extent,  be applied reasonably promptly in accordance with this Agreement in or towards  repayment of the relevant Facility;

   (iv)     any Security Interest arising  out of title retention provisions in a supplier's standard conditions of supply  of goods acquired in the ordinary course of business or operations;

   (v)      any  Security Interest created on any asset acquired after the date of this Agreement  for the sole purpose of financing or re-financing that acquisition and securing  a principal, capital or nominal amount not exceeding the cost of that acquisition,  provided that the Security Interest is removed or discharged within 6 months  of the date of acquisition of such asset;

   (vi)     any Security  Interest outstanding on or over any asset acquired after the date of this Agreement  and in existence at the date of such acquisition, provided that the Security  Interest is removed or discharged within 6 months of the date of acquisition  of such asset;

   (vii)     any Security  Interest created or outstanding on or over any asset of any company which becomes  a Material Subsidiary of the Company after the date of this Agreement where  such Security Interest is created prior to the date on which such company becomes  a Material Subsidiary of the Company and is not created or increased in contemplation  of such Company being acquired and/or becoming a Material Subsidiary of the  Company and the Security Interest is removed or discharged within 6 months of  the date of such company becoming a Material Subsidiary of the Company;

   (viii)    any Security  Interest created on any asset to secure any Financial Indebtedness incurred  in connection with the financing of any asset or project in respect of which  the repayment of that Financial Indebtedness is to be made from the revenues  arising out of, or other proceeds of realisation from, that asset or project,  with recourse to those revenues and proceeds and other assets used in connection  with, or forming the subject matter of, that asset or project but without recourse  (or with such limited recourse as the Majority Banks may from time to time agree)  to any other assets of the Group;

   (ix)     any netting  arrangements under any swap or other hedging transaction which is on standard  market terms;

   (x)      any  Security Interest created or outstanding with the prior approval of the Majority  Banks; and

   (xi)     any Security  Interest created or outstanding on or over assets of the Company or any of its  Material Subsidiaries provided that the aggregate outstanding principal or nominal  amount secured by all Security Interests created or outstanding under this exception  on or over such assets shall not at any time exceed £25,000,000 or its  equivalent.

**Disposals**
(wwwww)  Except as provided below, no member of the  Group may, either in a single transaction or in a series of transactions and  whether related or not, dispose of all or any part of its assets (other than  cash) which is substantial in the context of the consolidated total assets of  the Group.

(xxxxx)     Paragraph (a) does not  apply to: 

   (i)       any  disposal made in the ordinary course of business or operations of the disposing  entity (including, without limitation, disposals of subsidiaries or lines of  business, provided that this shall not include a disposal of the core electricity  distribution business); 

   (ii)      disposals  on normal commercial terms of obsolete assets or assets no longer required for  the purpose of the relevant Person's business or operations;

   (iii)     any realisation  of investments acquired, purchased or made by the temporary application of funds  not immediately required in the relevant Person's business or operations;

   (iv)     the exchange  of assets for other assets of a similar or superior nature and value, or the  sale of assets on normal commercial terms for cash which is payable in full  on the completion of the sale and is to be, and is, applied in or towards the  purchase of similar assets within 6 months;

   (v)      the  disposal of assets by one wholly-owned Subsidiary of the Company to another  or (if the consideration for the disposal does not exceed a normal commercial  consideration) to the Company by one of its Subsidiaries;

   (vi)     disposals  of any National Grid shares on normal commercial terms;

   (vii)    disposals in  connection with sale-and-leaseback or sale and repurchase transactions or any  other form of "off balance sheet" financing, provided that the aggregate book  value (in the books of the disposing party) of all assets the subject of all  such disposals made during the period commencing on the date of this Agreement  and ending on the date when no amount remains to be lent or remains payable  under this Agreement shall not exceed £50,000,000; and

   (viii)    any disposal  which the Majority Banks shall have agreed shall not be taken into account.

**Environmental matters**
The Company will and will ensure that its Material Subsidiaries  will comply with all applicable Environmental Law and other regulations, orders  or other law applicable to the conduct of the business of the supply or distribution  of electricity, in each case, where failure to do so would have a Material Adverse  Effect.

**Insurance**
Each member of the Group must insure its business and assets  with insurance companies to such an extent and against such risks as that member  of the Group reasonably considers to be appropriate, having regard to the insurance  arrangements of companies engaged in similar business.

**DEFAULT**
**Events of Default**

Each of the events set out in this Clause is an Event of Default.

**Non-payment**
The Company fails to pay any sum payable under any Finance  Document when due unless:

its failure to pay is caused by administrative or technical  error; and
payment is made within 5 Business Days of its due date.
**Breachof other obligations**

(yyyyy)   The Company does not perform or comply  with its obligations under Clause 18 (Financial covenants), Clause 19.5 (Negative  Pledge) or Clause 19.6 (Disposals).

(zzzzz)    The Company does not perform  or comply with any of its other obligations under any Finance Document in any  material respect or any representation or warranty by the Company in this Agreement  or in any document delivered under it is or proves to have been incorrect when  made or deemed repeated, unless the non-compliance or circumstances giving rise  to the misrepresentation, as the case may be, is capable of remedy and is not  remedied within 45 days of the earlier of the Facility Agent giving notice requiring  the same to be remedied and the Company becoming aware of such non-compliance  or misrepresentation, as the case may be.

**Cross-acceleration**
Any other Financial Indebtedness or commitment for Financial  Indebtedness of the Company is cancelled or terminated or becomes due and payable  before its normal maturity (whether by declaration or automatically), in each  case, by reason of default on the part of the Company or is not paid when due  nor within any applicable grace period, other than in circumstances where such  default or liability to pay is being contested in good faith and by appropriate  proceedings. However, no Event of Default will occur under this Clause 20.4  unless and until the aggregate amount of such Financial Indebtedness in respect  of which one or more of the events mentioned above in this Clause 20.4 has occurred  exceeds £20,000,000 or its equivalent.

**Insolvency**
(aaaaaa)     Any of the following  occurs in respect of the Company:

   (i)       it  is unable to pay its debts generally as they fall due or it is deemed by a court  of competent jurisdiction to be insolvent; 

   (ii)      it  suspends making payments on all or any class of its debts or publicly announces  an intention to do so;

   (iii)     by reason  of actual or anticipated financial difficulties, it begins negotiations with  all or any class of its creditors for the general rescheduling of its indebtedness;  or

   (iv)     a moratorium  is declared in respect of any of its indebtedness.

(bbbbbb)    If a moratorium occurs in respect  of the Company, the ending of the moratorium will not remedy any Event of Default  caused by the moratorium.

**Insolvency proceedings**
(cccccc)     Except as provided below,  any of the following occurs in respect of the Company:

   (i)       any  person presents a petition for its winding-up, administration or dissolution;

   (ii)      an  order for its winding-up, administration or dissolution is made; 

   (iii)     any liquidator,  trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative  receiver, administrator or similar officer is appointed in respect of it or  any of its assets; 

   (iv)     its directors  or other officers request the appointment of a liquidator, trustee in bankruptcy,  judicial custodian, compulsory manager, receiver, administrative receiver, administrator  or similar officer; or

   (v)     any other  analogous step or procedure is taken in any jurisdiction.

(dddddd)     Paragraph (a) does not  apply to (i) a petition for winding-up presented by a creditor which is being  actively contested in good faith and with due diligence and with a reasonable  prospect of success or (ii) a voluntary solvent winding-up, amalgamation, reconstruction  or reorganisation or otherwise part of a solvent scheme of arrangement, in each  case on terms approved by the Majority Lenders.

**Creditors' process**
A distress, attachment, execution or other legal process material  in relation to the Company's ability to perform its payment obligations under  this Agreement is levied, enforced or sued out on or against the assets of the  Company and is not discharged or stayed within 90 days.

**Licence**
Either (1) the Authority gives notice in writing of the revocation  of the Licence in accordance with its terms and that notice is not withdrawn  or contested in good faith by appropriate proceedings or (2) the Licence is  revoked, in either case, other than in circumstances which permit the Company  or its Affiliates to carry on the distribution business of the Company either  without a licence as a result of any change in the Act or regulatory regime  or with a new licence, permitting the distribution of electricity in the authorised  areas covered by the Licence, issued under the Act or pursuant to the Utilities  Act, 2000.

**Balancing and Settlement Code**
(eeeeee)   The Company ceases to be a party  to the Balancing and Settlement Code Framework Agreement other than in circumstances  where the Company is able to carry its distribution business; or

(ffffff)     the Company breaches  the Balancing and Settlement Code and such breach has or is reasonably likely  to have a Material Adverse Effect other than in circumstances where the Company  is able to carry on its distribution business.

**Unlawfulness**
It is or becomes unlawful for the Company to perform any of  its obligations under this Agreement in any material respect.

**Acceleration**
If an Event of Default is outstanding, the Facility Agent may,  and must if so instructed by the Majority Lenders, by notice to the Company:

cancel the Total Commitments; and/or
declare that all or part of any amounts outstanding under the  Finance Documents are:

immediately due and payable; and/or

payable on demand by the Facility Agent acting on the instructions  of the Majority Lenders.

Any notice given under this subclause will take effect in accordance  with its terms.

**THE ADMINISTRATIVE PARTIES**
**Appointment and duties of the Facility Agent**

(gggggg)   Each Finance Party (other than the  Facility Agent) irrevocably appoints the Facility Agent to act as its agent  under the Finance Documents.

(hhhhhh)   Each Finance Party irrevocably authorises  the Facility Agent to:

   (i)       perform  the duties and to exercise the rights, powers and discretions that are specifically  given to it under the Finance Documents, together with any other incidental  rights, powers and discretions; and

   (ii)      execute  each Finance Document expressed to be executed by the Facility Agent.

(iiiiii)     The Facility Agent has  only those duties which are expressly specified in the Finance Documents. Those  duties are solely of a mechanical and administrative nature.

**Role of the Mandated Lead Arranger**
Except as specifically provided in the Finance Documents, no  Mandated Lead Arranger has any obligations of any kind to any other Party in  connection with any Finance Document.

**No fiduciary duties**
Except as specifically provided in a Finance Document, nothing  in the Finance Documents makes an Administrative Party a trustee or fiduciary  for any other Party or any other person. No Administrative Party need hold in  trust any moneys paid to it for a Party or be liable to account for interest  on those moneys.

**Individual position of an Administrative Party**
(jjjjjj)   If it is also a Lender, each Administrative  Party has the same rights and powers under the Finance Documents as any other  Lender and may exercise those rights and powers as though it were not an Administrative  Party.

(kkkkkk)     Each Administrative Party  may:

   (i)       carry  on any business with the Company or its related entities (including acting as  an agent or a trustee for any other financing); and

   (ii)      retain  any profits or remuneration it receives under the Finance Documents or in relation  to any other business it carries on with the Company or its related entities.

**Reliance**
The Facility Agent may:

rely on any notice or document believed by it to be genuine  and correct and to have been signed by, or with the authority of, the proper  person;
rely on any statement made by any person regarding any matters  which may reasonably be assumed to be within his knowledge or within his power  to verify; 
engage, pay for and rely on professional advisers selected  by it (including those representing a Party other than the Facility Agent);  and
act under the Finance Documents through its personnel and agents.

**Majority Lenders' instructions**
(llllll)  The Facility Agent is fully protected if  it acts on the instructions of the Majority Lenders in the exercise of any right,  power or discretion or any matter not expressly provided for in the Finance  Documents. Any such instructions given by the Majority Lenders will be binding  on all the Lenders. In the absence of instructions, the Facility Agent may act  as it considers to be in the best interests of all the Lenders.

(mmmmmm)    The Facility Agent is not authorised  to act on behalf of a Lender (without first obtaining that Lender's consent)  in any legal or arbitration proceedings in connection with any Finance Document.

(nnnnnn)   The Facility Agent may require the  receipt of security satisfactory to it, whether by way of payment in advance  or otherwise, against any liability or loss which it may incur in complying  with the instructions of the Majority Lenders.

**Responsibility**
(oooooo)   No Administrative Party is responsible  to any other Finance Party for the adequacy, accuracy or completeness of:

   (i)       any  Finance Document or any other document; or

   (ii)      any  statement or information (whether written or oral) made in or supplied in connection  with any Finance Document.

(pppppp)     Without affecting the  responsibility of the Company for information supplied by it or on its behalf  in connection with any Finance Document, each Lender confirms that it:

   (i)       has  made, and will continue to make, its own independent appraisal of all risks  arising under or in connection with the Finance Documents (including the financial  condition and affairs of the Company and its related entities and the nature  and extent of any recourse against any Party or its assets); and

   (ii)       has  not relied exclusively on any information provided to it by any Administrative  Party in connection with any Finance Document.

(qqqqqq)        Nothing  in this Agreement will oblige the Facility Agent to satisfy any know your customer  requirement in relation to the identity of any person on behalf of any Finance  Party.

   (i)       Each  Finance Party confirms to the Facility Agent that it is solely responsible for  any know your customer requirements it is required to carry out and that it  may not rely on any statement in relation to those requirements made by any  other person.

**Exclusion of liability**
(rrrrrr)     The Facility Agent is  not liable or responsible to any other Finance Party for any action taken or  not taken by it in connection with any Finance Document, unless directly caused  by its gross negligence or wilful misconduct.

(ssssss)     No Party may take any  proceedings against any officer, employee or agent of the Facility Agent in  respect of any claim it might have against the Facility Agent or in respect  of any act or omission of any kind by that officer, employee or agent in connection  with any Finance Document. Any officer, employee or agent of the Facility Agent  may rely on this Subclause and enforce its terms under the Contracts (Rights  of Third Parties) Act 1999.

**Default**
(tttttt)     The Facility Agent is  not obliged to monitor or enquire whether a Default has occurred. The Facility  Agent is not deemed to have knowledge of the occurrence of a Default. 

(uuuuuu)     If the Facility Agent:

   (i)       receives  notice from a Party referring to this Agreement, describing a Default and stating  that the event is a Default; or

   (ii)       is  aware of the non-payment of any principal or interest or any fee payable to  a Lender under this Agreement,

it must promptly notify the Lenders.

**Information**
(vvvvvv)     The Facility Agent must  promptly forward to the person concerned the original or a copy of any document  which is delivered to the Facility Agent by a Party for that person.

(wwwwww)     Except where a Finance  Document specifically provides otherwise, the Facility Agent is not obliged  to review or check the adequacy, accuracy or completeness of any document it  forwards to another Party.

(xxxxxx)     Except as provided above,  the Facility Agent has no duty:

   (i)       either  initially or on a continuing basis to provide any Lender with any credit or  other information concerning the risks arising under or in connection with the  Finance Documents (including any information relating to the financial condition  or affairs of the Company or its related entities or the nature or extent of  recourse against any Party or its assets) whether coming into its possession  before, on or after the date of this Agreement; or

   (ii)      unless  specifically requested to do so by a Lender in accordance with a Finance Document,  to request any certificate or other document from the Company.

(yyyyyy)     In acting as the Facility  Agent, the agency division of the Facility Agent is treated as a separate entity  from its other divisions and departments. Any information acquired by the Facility  Agent which, in its opinion, is acquired by it otherwise than in its capacity  as the Facility Agent may be treated as confidential by the Facility Agent and  will not be treated as information possessed by the Facility Agent in its capacity  as such.

(zzzzzz)     The Facility Agent is  not obliged to disclose to any person any confidential information supplied  to it by a member of the Group solely for the purpose of evaluating whether  any waiver or amendment is required to any term of the Finance Documents.

(aaaaaaa)     The Company irrevocably  authorises the Facility Agent to disclose to the other Finance Parties any information  which, in its opinion, is received by it in its capacity as the Facility Agent.

**Indemnities**
(bbbbbbb)     Without limiting the  liability of the Company under the Finance Documents, each Lender must indemnify  the Facility Agent for that Lender's Pro Rata Share of any loss or liability  incurred by the Facility Agent in acting as the Facility Agent, except to the  extent that the loss or liability is caused by the Facility Agent's gross negligence  or wilful misconduct.

(ccccccc)     The Facility Agent may  deduct from any amount received by it for a Lender any amount due to the Facility  Agent from that Lender under a Finance Document but unpaid.

(ddddddd)     The Company must indemnify  the Facility Agent against any loss or liability properly incurred by the Facility  Agent as a result of:

   (i)       investigating  any event which the Facility Agent reasonably believes to be a Default; or

   (ii)      acting  or relying on any notice which the Facility Agent reasonably believes to be  genuine, correct and appropriately authorised.

**Compliance**
The Facility Agent may refrain from doing anything (including  disclosing any information) which might, in its opinion, constitute a breach  of any law or regulation or be otherwise actionable at the suit of any person,  and may do anything which, in its opinion, is necessary or desirable to comply  with any law or regulation.

**Resignation of the Facility Agent**
(eeeeeee)     The Facility Agent may  resign and appoint any of its Affiliates as successor Facility Agent by giving  notice to the Lenders and the Company. 

(fffffff)     Alternatively, the Facility  Agent may resign by giving notice to the Lenders and the Company, in which case  the Majority Lenders may appoint a successor Facility Agent.

(ggggggg)     If no successor Facility  Agent has been appointed under paragraph (b) above within 30 days after notice  of resignation was given, the Facility Agent may appoint a successor Facility  Agent.

(hhhhhhh)     The person(s) appointing  a successor Facility Agent must, if practicable, consult with the Company prior  to the appointment. Any successor Facility Agent must have an office in the  U.K.

(iiiiiii)     The resignation of the  Facility Agent and the appointment of any successor Facility Agent will both  become effective only when the successor Facility Agent notifies all the Parties  that it accepts its appointment. On giving the notification, the successor Facility  Agent will succeed to the position of the Facility Agent and the term "**Facility  Agent**" will mean the successor Facility Agent.

(jjjjjjj)     The retiring Facility  Agent must, at its own cost, make available to the successor Facility Agent  such documents and records and provide such assistance as the successor Facility  Agent may reasonably request for the purposes of performing its functions as  the Facility Agent under the Finance Documents.

(kkkkkkk)     Upon its resignation  becoming effective, this Clause will continue to benefit the retiring Facility  Agent in respect of any action taken or not taken by it in connection with the  Finance Documents while it was the Facility Agent, and, subject to paragraph  (f) above, it will have no further obligations under any Finance Document.

(lllllll)     The Majority Lenders  may, by notice to the Facility Agent, require it to resign under paragraph (b)  above. 

**Relationship with Lenders**
(mmmmmmm)     The Facility Agent may  treat each Lender as a Lender, entitled to payments under this Agreement and  as acting through its Facility Office(s) until it has received not less than  five Business Days' prior notice from that Lender to the contrary.

(nnnnnnn)     The Facility Agent may  at any time, and must if requested to do so by the Majority Lenders, convene  a meeting of the Lenders.

(ooooooo)     The Facility Agent must  keep a register of all the Parties and supply any other Party with a copy of  the register on request. The register will include each Lender's Facility Office(s)  and contact details for the purposes of this Agreement.

**Facility Agent's management time**
If the Facility Agent requires, any amount payable to the Facility  Agent by any Party under any indemnity or in respect of any costs or expenses  incurred by the Facility Agent under the Finance Documents after the date of  this Agreement may include the cost of using its management time or other resources  and will be calculated on the basis of such reasonable daily or hourly rates  as the Facility Agent may notify to the relevant Party. This is in addition  to any amount in respect of fees or expenses paid or payable to the Facility  Agent under any other term of the Finance Documents.

**Notice period**
Where this Agreement specifies a minimum period of notice to  be given to the Facility Agent, the Facility Agent may, at its discretion, accept  a shorter notice period.

**EVIDENCE AND CALCULATIONS**
**Accounts**

Accounts maintained by a Finance Party in connection with this  Agreement are prima facie evidence of the matters to which they relate for the  purpose of any litigation or arbitration proceedings.

**Certificates and determinations**
Any certification or determination by a Finance Party of a  rate or amount under the Finance Documents will be, in the absence of manifest  error, conclusive evidence of the matters to which it relates.

**Calculations**
Any interest or fee accruing under this Agreement accrues from  day to day and is calculated on the basis of the actual number of days elapsed  and a year of 360 or 365 days or otherwise, depending on what the Facility Agent  determines is market practice.

**FEES**
**Facility Agent's fee**

The Company must pay to the Facility Agent for its own account  an agency fee in the manner agreed between the Facility Agent and the Company.

**Arrangement fee**
The Company must pay an arrangement and participation fee in  the manner agreed between the Mandated Lead Arrangers and the Company.

**Tranche A commitment fee**
(ppppppp)     The Company must pay  a commitment fee computed at the rate of 45 per cent. of the Margin from time  to time on the undrawn, uncancelled amount of each Lender's Tranche A Commitment  calculated from the later of:

   (i)       the  date of this Agreement; and

   (ii)      the  date on which the Existing Credit Agreement is irrevocably repaid in full.

(qqqqqqq)     Accrued commitment fee  is payable quarterly in arrear. Accrued commitment fee is also payable to the  Facility Agent for a Lender on the date its Tranche A Commitment is cancelled  in full.

**Tranche B commitment fee**
(rrrrrrr)     The Company must pay  a commitment fee computed at the rate of 45 per cent. of the Margin from time  to time on the undrawn, uncancelled amount of each Lender's Tranche B Commitment  calculated from the later of:

   (i)       the  date of this Agreement; and

   (ii)      the  date on which the Existing Credit Agreement is irrevocably repaid in full.

(sssssss)     Accrued commitment fee  is payable quarterly in arrear. Accrued commitment fee is also payable to the  Facility Agent for a Lender on the date its Tranche B Commitment is cancelled  in full.

**Tranche C commitment fee**
(ttttttt)     The Company must pay  a commitment fee computed at the rate of 45 per cent. of the Margin from time  to time on the undrawn, uncancelled amount of each Lender's Tranche C Commitment  calculated from Restatement Date.

(uuuuuuu)     Accrued commitment fee  is payable quarterly in arrear. Accrued commitment fee is also payable to the  Facility Agent for a Lender on the date its Tranche C Commitment is cancelled  in full.

**Term-Out Fee**
The Company shall pay to the Facility Agent for the Lenders  a term-out fee in an amount equal to 0.1 per cent. flat of the amount of the  Term-Out Loans termed-out under Clause 2.5 (Term-Out Option) as calculated on  the Final Maturity Date in relation to the Tranche A Facility (not taking into  account any extension under Clause 2.4). The term-out fee shall be payable within  5 Business days after the initial Final Maturity Date in relation to Tranche  A.

**INDEMNITIES AND BREAK COSTS**
**Currency indemnity**

(vvvvvvv)     The Company must, as  an independent obligation, indemnify each Finance Party against any loss or  liability which that Finance Party incurs as a consequence of:

   (i)       that  Finance Party receiving an amount in respect of the Company's liability under  the Finance Documents; or 

   (ii)      that  liability being converted into a claim, proof, judgment or order,

in a currency other than the currency in which the amount is  expressed to be payable under the relevant Finance Document.

(wwwwwww)     Unless otherwise required  by law, the Company waives any right it may have in any jurisdiction to pay  any amount under the Finance Documents in a currency other than that in which  it is expressed to be payable.

**Other indemnities**
The Company shall within 15 days of demand indemnify the Facility  Agent and each Lender against any funding or other cost, loss, expense or liability  in an amount certified by it in reasonable detail (together with documentation  in support) sustained or incurred by it as a direct result of:

   (i)       the  occurrence of any Event of Default;

   (ii)      (other  than by reason of negligence or default by a Finance Party) a Loan not being  made after a Request has been delivered for that Loan; or 

   (iii)     the receipt  or recovery by any party (or the Facility Agent on its behalf) of all or any  part of a Loan or overdue sum due from the Company otherwise than on the Final  Maturity Date or Maturity Date (as relevant) of that Loan or, in the case of  an overdue sum, the last day of an interest period relating to that overdue  sum, as the case may be or a Loan or any part thereof not being prepaid in accordance  with a notice of prepayment.

**Break Costs**
(xxxxxxx)     The Company must pay  to each Lender its Break Costs.

(yyyyyyy)     Break Costs are the  amount (if any) determined by the relevant Lender by which:

   (i)       the  interest which that Lender would have received for the period from the date  of receipt of any part of its share in a Loan or an overdue amount to the last  day of the applicable Term for that Loan or overdue amount if the principal  or overdue amount received had been paid on the last day of that Term;

exceeds

   (ii)      the  amount which that Lender would be able to obtain by placing an amount equal  to the amount received by it on deposit with a leading bank in the appropriate  interbank market for a period starting on the Business Day following receipt  and ending on the last day of the applicable Term.

(zzzzzzz)     Each Lender must supply  to the Facility Agent for the Company details of the amount of any Break Costs  claimed by it under this Subclause.

**EXPENSES**
**Initial costs**

The Company must pay to each Administrative Party the amount  of all costs and expenses (including legal fees) reasonably incurred by it in  connection with the negotiation, preparation, printing, execution and syndication  of the Finance Documents.

**Subsequent costs**
The Company must pay to the Facility Agent the amount of all  costs and expenses (including legal fees) reasonably incurred by it in connection  with:

the negotiation, preparation, printing and execution of any  Finance Document (other than a Transfer Certificate) executed after the date  of this Agreement; and
any amendment, waiver or consent requested by or on behalf  of the Company or specifically allowed by this Agreement.
**Enforcement costs**

The Company must pay to each Finance Party the amount of all  costs and expenses (including legal fees) incurred by it in connection with  the enforcement of, or the preservation of any rights under, any Finance Document.

**AMENDMENTS AND WAIVERS**
**Procedure**

(aaaaaaaa)     Except as provided  in this Clause, any term of the Finance Documents may be amended or waived with  the agreement of the Company and the Majority Lenders. The Facility Agent may  effect, on behalf of any Finance Party, an amendment or waiver allowed under  this Clause.

(bbbbbbbb)     The Facility Agent  must promptly notify the other Parties of any amendment or waiver effected by  it under paragraph (a) above. Any such amendment or waiver is binding on all  the Parties.

**Exceptions**
(cccccccc)     An amendment or waiver  which relates to:

   (i)       the  definition of **Majority Lenders** in Clause 1.1 (Definitions);

   (ii)      an  extension of the date of payment of any amount to a Lender under the Finance  Documents;

   (iii)     a reduction  in the Margin or a reduction in the amount of any payment of principal, interest,  fee or other amount payable to a Lender under the Finance Documents;

   (iv)     an increase  in, or an extension of, a Commitment or the Total Commitments;

   (v)      a  term of a Finance Document which expressly requires the consent of each Lender;

   (vi)     the right  of a Lender to assign or transfer its rights or obligations under the Finance  Documents; or

   (vii)     this Clause,

may only be made with the consent of all the Lenders.

(dddddddd)     An amendment or waiver  which relates to the rights or obligations of an Administrative Party may only  be made with the consent of that Administrative Party.

**Change of currency**
If a change in any currency of a country occurs (including  where there is more than one currency or currency unit recognised at the same  time as the lawful currency of a country), the Finance Documents will be amended  to the extent the Facility Agent (acting reasonably and after consultation with  the Company) determines is necessary to reflect the change.

**Waivers and remedies cumulative**
The rights of each Finance Party under the Finance Documents:

may be exercised as often as necessary;
are cumulative and not exclusive of its rights under the general  law; and
may be waived only in writing and specifically.

Delay in exercising or non-exercise of any right is not a waiver  of that right.

**CHANGES TO THE PARTIES**
**Assignments and transfers by the Company**

The Company may not assign or transfer any of its rights and  obligations under the Finance Documents without the prior consent of all the  Lenders.

**Assignments and transfers by Lenders**
(eeeeeeee)     A Lender (the **Existing  Lender**) may, subject to the following provisions of this Subclause, at any  time assign or transfer (including by way of novation) any of its rights and  obligations under this Agreement to any other person (the **New Lender**).

(ffffffff)     Unless the Company  and the Facility Agent otherwise agree, a transfer of part of a Commitment or  rights and obligations under this Agreement by the Existing Lender must be in  a minimum amount of £5,000,000.

(gggggggg)     The consent of the  Company is required for any assignment or transfer unless the New Lender is  another Lender or an Affiliate of a Lender. The consent of the Company must  not be unreasonably withheld or delayed. The Company will be deemed to have  given its consent five Business Days after the Lender has requested it unless  consent is expressly refused by the Company within that time.

(hhhhhhhh)     The Facility Agent  is not obliged to execute a Transfer Certificate until it has completed all  know your customer requirements to its satisfaction. The Facility Agent must  promptly notify the Existing Lender and the New Lender if there are any such  requirements.

(iiiiiiii)     The Company may not  withhold its consent solely because the assignment or transfer might increase  the Mandatory Cost

(jjjjjjjj)     A transfer of obligations  will be effective only if either:

   (i)       the  obligations are novated in accordance with the following provisions of this  Clause; or

   (ii)      the  New Lender confirms to the Facility Agent and the Company in form and substance  satisfactory to the Facility Agent that it is bound by the terms of this Agreement  as a Lender. On the transfer becoming effective in this manner the Existing  Lender will be released from its obligations under this Agreement to the extent  that they are transferred to the New Lender.

(kkkkkkkk)     Unless the Facility  Agent otherwise agrees, the New Lender must pay to the Facility Agent for its  own account, on or before the date any assignment or transfer occurs, a fee  of £750.

(llllllll)     Any reference in this  Agreement to a Lender includes a New Lender but excludes a Lender if no amount  is or may be owed to or by it under this Agreement.

**Procedure for transfer by way of novations**
(mmmmmmmm)     In this Subclause:

**Transfer Date means, for a Transfer Certificate, the  later of:
   (i)       the  proposed Transfer Date specified in that Transfer Certificate; and

   (ii)      the  date on which the Facility Agent executes that Transfer Certificate.

(nnnnnnnn)     A novation is effected  if:

   (i)       the  Existing Lender and the New Lender deliver to the Facility Agent a duly completed  Transfer Certificate; and

   (ii)      the  Facility Agent executes it.

The Facility Agent must execute as soon as reasonably practicable  a Transfer Certificate delivered to it and which appears on its face to be in  order.

(oooooooo)     Each Party (other than  the Existing Lender and the New Lender) irrevocably authorises the Facility  Agent to execute any duly completed Transfer Certificate on its behalf.

(pppppppp)     On the Transfer Date:

   (i)       the  New Lender will assume the rights and obligations of the Existing Lender expressed  to be the subject of the novation in the Transfer Certificate in substitution  for the Existing Lender; and

   (ii)      the  Existing Lender will be released from those obligations and cease to have those  rights.

**Limitation of responsibility of Existing Lender**
(qqqqqqqq)     Unless expressly agreed  to the contrary, an Existing Lender is not responsible to a New Lender for the  legality, validity, adequacy, accuracy, completeness or performance of:

   (i)     any Finance  Document or any other document; or

   (ii)      any  statement or information (whether written or oral) made in or supplied in connection  with any Finance Document, 

and any representations or warranties implied by law are excluded.

(rrrrrrrr)     Each New Lender confirms  to the Existing Lender and the other Finance Parties that it:

   (i)       has  made, and will continue to make, its own independent appraisal of all risks  arising under or in connection with the Finance Documents (including the financial  condition and affairs of the Company and its related entities and the nature  and extent of any recourse against any Party or its assets) in connection with  its participation in this Agreement; and

   (ii)      has  not relied exclusively on any information supplied to it by the Existing Lender  in connection with any Finance Document.

(ssssssss)     Nothing in any Finance  Document requires an Existing Lender to:

   (i)      accept  a re-transfer from a New Lender of any of the rights and obligations assigned  or transferred under this Clause; or

   (ii)      support  any losses incurred by the New Lender by reason of the non-performance by the  Company of its obligations under any Finance Document or otherwise.

**Costs resulting from change of Lender or Facility Office**
If:

a Lender assigns or transfers any of its rights and obligations  under the Finance Documents or changes its Facility Office; and
as a result of circumstances existing at the date the assignment,  transfer or change occurs, the Company would be obliged to pay a Tax Payment  or an Increased Cost,

the Company need only pay that Tax Payment or Increased Cost  to the same extent that it would have been obliged to if no assignment, transfer  or change had occurred.

**Changes to the Reference Banks**
(tttttttt)     If a Reference Bank  (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate)  ceases to be a Lender, the Facility Agent must (in consultation with the Company)  appoint another Lender or an Affiliate of a Lender to replace that Reference  Bank.

(uuuuuuuu)     If a Reference Bank  ceases to have a London office or novates or assigns all its rights and obligations  under this Agreement or if any Commitments of any Reference Bank are cancelled  or if Loans it has advanced are prepaid it shall be replaced as a Reference  Bank by such other Bank with an office in London as the Facility Agent (after  consultation with the Company) shall designate by notice to the Company and  the Banks.

**DISCLOSURE OF INFORMATION**
(vvvvvvvv)     Each Finance Party  must keep confidential any information supplied to it by or on behalf of the  Company in connection with the Finance Documents. However, a Finance Party is  entitled to disclose information:

   (i)       which  is publicly available, other than as a result of a breach by that Finance Party  of this Clause; 

   (ii)      in  connection with any legal or arbitration proceedings;

   (iii)     if required  to do so under any law or regulation;

   (iv)     to a governmental,  banking, taxation or other regulatory authority;

   (v)      to  its professional advisers;

   (vi)     to the  extent allowed under paragraph (b) below; or

   (vii)    with the agreement  of the Company.

(wwwwwwww)     A Finance Party may  disclose to an Affiliate or any person with whom it may enter, or has entered  into, any kind of transfer, participation or other agreement in relation to  this Agreement (a **participant**):

   (i)       a  copy of any Finance Document; and

   (ii)      any  information which that Finance Party has acquired under or in connection with  any Finance Document.

However, before a participant may receive any confidential  information, it must agree with the relevant Finance Party to keep that information  confidential on the terms of paragraph (a) above.

This Clause supersedes any previous confidentiality undertaking  given by a Finance Party in connection with this Agreement prior to it becoming  a Party.

**SET-OFF**
A Finance Party may set off any matured obligation owed to  it by the Company under the Finance Documents (to the extent beneficially owned  by that Finance Party) against any obligation (whether or not matured) owed  by that Finance Party to the Company, regardless of the place of payment, booking  branch or currency of either obligation. If the obligations are in different  currencies, the Finance Party may convert either obligation at a market rate  of exchange in its usual course of business for the purpose of the set-off.

**PRO RATA SHARIING**
**Redistribution**

If any amount owing by the Company under this Agreement to  a Lender (the **recovering Lender**) is discharged by payment, set-off or  any other manner other than through the Facility Agent under this Agreement  (a **recovery**), then:

the recovering Lender must, within three Business Days, supply  details of the recovery to the Facility Agent;
the Facility Agent must calculate whether the recovery is in  excess of the amount which the recovering Lender would have received if the  recovery had been received by the Facility Agent under this Agreement; and

the recovering Lender must pay to the Facility Agent an amount  equal to the excess (the**redistribution).**

**Effect of redistribution**

(xxxxxxxx)     The Facility Agent  must treat a redistribution as if it were a payment by the Company under this  Agreement and distribute it among the Lenders, other than the recovering Lender,  accordingly.

(yyyyyyyy)     When the Facility Agent  makes a distribution under paragraph (a) above, the recovering Lender will be  subrogated to the rights of the Finance Parties which have shared in that redistribution.

(zzzzzzzz)     If and to the extent  that the recovering Lender is not able to rely on any rights of subrogation  under paragraph (b) above, the Company will owe the recovering Lender a debt  which is equal to the redistribution, immediately payable and of the type originally  discharged.

(aaaaaaaaa)     If:

   (i)       a  recovering Lender must subsequently return a recovery, or an amount measured  by reference to a recovery, to the Company; and

   (ii)      the  recovering Lender has paid a redistribution in relation to that recovery,

each Finance Party must reimburse the recovering Lender all  or the appropriate portion of the redistribution paid to that Finance Party,  together with interest for the period while it held the re-distribution. In  this event, the subrogation in paragraph (b) above will operate in reverse to  the extent of the reimbursement.

**Exceptions**
Notwithstanding any other term of this Clause, a recovering  Lender need not pay a redistribution to the extent that:

it would not, after the payment, have a valid claim against  the Company in the amount of the redistribution; or
it would be sharing with another Finance Party any amount which  the recovering Lender has received or recovered as a result of legal or arbitration  proceedings, where: 
the recovering Lender notified the Facility Agent of those  proceedings; and
the other Finance Party had an opportunity to participate in  those proceedings but did not do so or did not take separate legal or arbitration  proceedings as soon as reasonably practicable after receiving notice of them.

**SEVERABILITY**
If a term of a Finance Document is or becomes illegal, invalid  or unenforceable in any jurisdiction, that shall not affect:

the legality, validity or enforceability in that jurisdiction  of any other term of the Finance Documents; or
the legality, validity or enforceability in other jurisdictions  of that or any other term of the Finance Documents.
**COUNTERPARTS**

Each Finance Document may be executed in any number of counterparts.  This has the same effect as if the signatures on the counterparts were on a  single copy of the Finance Document.

**NOTICES**
**In writing**

(bbbbbbbbb)     Any communication  in connection with a Finance Document must be in writing and, unless otherwise  stated, may be given: 

   (i)       in  person, by post, or fax or any other electronic communication approved by the  Facility Agent; or

   (ii)      if  between the Facility Agent and a Lender and the Facility Agent and the Lender  agree, by e-mail or other electronic communication.

(ccccccccc)     For the purpose of  the Finance Documents, an electronic communication will be treated as being  in writing.

(ddddddddd)     Unless it is agreed  to the contrary, any consent or agreement required under a Finance Document  must be given in writing.

**Contact details**
(eeeeeeeee)     Except as provided  below, the contact details of each Party for all communications in connection  with the Finance Documents are those notified by that Party for this purpose  to the Facility Agent on or before the date it becomes a Party.

(fffffffff)     The contact details  of the Company for this purpose are:

Address:
Avonbank,
Feeder Road,
Bristol,
BS2 0TB
Fax number:
01179 332108
E-mail:
icutter@westernpower.co.uk
Attention:
Ian Cutter.
 (ggggggggg)     The contact details  of the Facility Agent for this purpose are:

Address:
Loans Administration
     Lloyds        TSB Bank plc
     Bank        House
     Wine        Street
     Bristol
     BS1        2AN
Fax number:
0117 923 3367
Attention:
Martin Clancy.
 (hhhhhhhhh)     Any Party may change  its contact details by giving five Business Days' notice to the Facility Agent  or (in the case of the Facility Agent) to the other Parties.

(iiiiiiiii)     Where a Party nominates  a particular department or officer to receive a communication, a communication  will not be effective if it fails to specify that department or officer.

**Effectiveness**
(jjjjjjjjj)     Except as provided  below, any communication in connection with a Finance Document will be deemed  to be given as follows:

   (i)       if  delivered in person, at the time of delivery;

   (ii)      if  posted, five days after being deposited in the post, postage prepaid, in a correctly  addressed envelope; and

   (iii)     if by  fax, when received in legible form.

(kkkkkkkkk)     A communication given  under paragraph (a) above but received on a non-working day or after business  hours in the place of receipt will only be deemed to be given on the next working  day in that place.

(lllllllll)     A communication to  the Facility Agent will only be effective on actual receipt by it.

**The Company**
All formal communication under the Finance Documents to or  from the Company must be sent through the Facility Agent.

**LANGUAGE**
(mmmmmmmmm)     Any notice given in  connection with a Finance Document must be in English.

(nnnnnnnnn)     Any other document  provided in connection with a Finance Document must be:

   (i)       in  English; or

   (ii)      (unless  the Facility Agent otherwise agrees) accompanied by a certified English translation.  In this case, the English translation prevails unless the document is a statutory  or other official document.

**GOVERNING LAW**
This Agreement is governed by English law.

**ENFORCEMENT**
**Jurisdiction**

(ooooooooo)     The English courts  have exclusive jurisdiction to settle any dispute in connection with any Finance  Document.

(ppppppppp)     The English courts  are the most appropriate and convenient courts to settle any such dispute and  the Company waives objection to those courts on the grounds of inconvenient  forum or otherwise in relation to proceedings in connection with any Finance  Document.

(qqqqqqqqq)     This Clause is for  the benefit of the Finance Parties only. To the extent allowed by law, a Finance  Party may take:

   (i)       proceedings  in any other court; and 

   (ii)      concurrent  proceedings in any number of jurisdictions.

This Agreement has been entered into on the date stated at  the beginning of this Agreement.

**SCHEDULE 1**
**ORIGINAL PARTIES**

**Name of Original Lender
**Tranche A Commitments   
**Bayerische Landesbank acting through its        London branch
£33,333,333
**Lloyds TSB Bank plc
£33,333,333
**WestLB AG, London Branch
£33,333,334 
___________  
**Total Tranche A Commitments
£100,000,000 
___________
**Name of Original Lender
**Tranche B Commitments   
**Danske Bank A/S, London Branch
£70,000,000
**Bayersiche Landesbank acting through its        London branch
£26,666,667
**Lloyds TSB Bank plc
£26,666,667
**WestLB AG, London Branch 
£26,666,666 
___________  
**Total Tranche B Commitments
£150,000,000 
___________
 

**Name of Original Lender
**Tranche C Commitments******************************************************************************************************************************************************************************************************************************************************