##### 



CIBC World Markets
    
    CIBC WORLD MARKETS PLC
Cottons Centre
Cottons Lane
London, England SE1 2QL
Tel:   44 (0)20 7234 4127
Fax:   44 (0)20 7407 4127
 7th November 2002 Dear Sirs Facilities Agreement dated 18 April 2000 as amended and restated on 20 June
2000 and made between Trench Electric Holding B.V. (as Parent) (1), the
Companies listed in Schedule II thereto (as Original Borrowers) (2), the
Companies listed in Schedule III thereto (as Guarantors and Charging Companies)
(3), CIBC World Markets Plc, Barclays Bank PLC, Credit Lyonnais and NM
Rothschild & Sons Limited (as Banks) (4), CIBC World Markets Plc (as Arranger)
(5), CIBC World Markets Plc (as Issuing Bank) (6), CIBC World Markets Plc (as
Agent) (7), Canadian Imperial Bank of Commerce (as Canadian Lender) (8) and
CIBC World Markets Plc (as Security Agent) (9), as further amended from time to
time, including without limitation by a side letter dated 29 November 2000, a
side letter dated 12 January 2001, a side letter dated 12 july 2001, a side
letter dated 7 March 2002, a side letter dated 9 September 2002 and a side
letter dated on or about the date hereof (the Facilities Agreement) We refer to the above Facilities Agreement and to the Trench Group Bank
presentation dated 30 May 2002 (the Presentation). Unless a contrary intention appears, terms and expressions defined in the
Facilities Agreement shall have the same meanings when used in this letter and
references to clauses and schedules in this letter are references to clauses
and schedules of the Facilities Agreement. We are writing this letter to you in your capacity as Parent (including as
agent for all of the Obligors) in our capacity as Agent.  1.
    
    AmendmentsSubject to paragraph 3 (Conditions), the Facilities Agreement shall be
amended with effect from the date of this letter as follows:  (a)
    
    Clause 1.1 (Definitions) shall be amended by the insertion of
the following definitions, in alphabetical order:




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- 2 -

Presentation 1the presentation by the Group to the Banks dated
22 November 2000;Presentation 2the presentation by the Group to the Banks dated
30 April 2001;Shanghai Factory Disposal Proceedsthe proceeds from the disposal
by the Shanghai Joint Venture of its plant and land at 427 Juman
Road, Shanghai, 200023, China;(b)
    
    Clause 15.9(a) (Capital Expenditure) shall be amended by the
deletion of the third and fourth paragraphs and the insertion in
their place of the following;  Provided that, in relation to the Capital Expenditure limits
attributable to Shanghai-Base in column (2) of the table
appearing in Schedule VIII (Capital Expenditure Projections)
only:  (a)
    
    the limits specified in such column for
the periods ending 31/12/2004, 31/12/2005 and 31/12/2006
shall be reduced in that order by the amount (up to a
maximum of US$1,190,000) by which the Shanghai Factory
Disposal Proceeds exceed US$2,000,000; and(b)
    
    100% of such limits (as may be adjusted
pursuant to paragraph (a) above) for the periods ending
31/12/2003, 31/12/2004, 31/12/2005 and 31/12/2006 and not
utilised in such periods may be carried forward for one
period only and added to the Capital Expenditure limit for
the next such period in column (2) of such table. Any
amount so carried forward shall be treated as utilised
first by the Group in that period.  For the purposes of this clause 15.9(a) (Capital Expenditure)
and Schedule VIII (Capital Expenditure) Shanghai-Base and
Shanghai-Expansion shall constitute that Capital Expenditure
as outlined in such terms in Presentation 2 and, in the case of
Shanghai-Base only shall also include the Capital Expenditure
contemplated in the presentation by the Group to the Banks
dated 30 May 2002  (c)
    
    Clause 17.1(h) (Financial Covenants) shall be amended by the
deletion of the words (parts 1 &2) at the end of that paragraph;(d)
    
    Clause 17.2(b) (Testing of Covenants) shall be amended by the
deletion of the words and (c) in the last sentence of the first
paragraph to that clause and the insertion in their place of the
words , (c), (e), (f), (g) and (h);(e)
    
    Clause 17.3 (Definitions):  (i)
    
    The following definition of Coil Technology
Licence Proceeds shall be inserted after the definition of
Adjusted Consolidated Net Worth:Coil Technology Licence Proceedsall gross amounts received
under a Line Trap Technology Head-Licence Agreement, a Shunt
Reactor Technology Head-Licence Agreement and a Series Reactor
Technology Head-Licence Agreement, each dated 16 April 2002 and
made between, amongst others, Trench Limited (as Licensor) and
Shanghai Instrument Transformer Works Co Ltd (as Licensee); ;(ii)
    
    The following amendments shall be made to the
definition of Consolidated Cash Flow:  (1)
    
    the word of at the end of the first
line of paragraph (b) shall be deleted and replaced with
,;




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- 3 -

(2)
    
    the words or, in respect of Capital
Expenditure by the Shanghai Joint Venture, equity
contributions in the Shanghai Joint Venture by Shanghai
Instrument Transformer Works Co Ltd shall be inserted at
the end of paragraph (b);(3)
    
    the words save to the extent netted off
against Capital Expenditure under paragraph (b) shall be
inserted at the end of paragraph (f);  (iii)
    
    The following paragraph and proviso shall be
inserted at the end of the definition of Consolidated EBITDA:(i) excluding, to the extent otherwise included above and
subject to the proviso below, Coil Technology Licence Proceeds;Provided that the Parent may include in EBITDA for any quarter
(without double counting) Coil Technology Licence Proceeds
which when aggregated with all other Coil Technology Licence
Proceeds so included in respect of all other quarters in the
same Accounting Reference Period shall not exceed the amount
specified below for that Accounting Reference Period: Accounting Reference Period ending on:
    
    Amount31 December 2002
    
    US$
    5,000,00031 December 2003
    
    US$
    1,000,00031 December 2004
    
    US$
    1,250,00031 December 2005
    
    US$
    1,250,00031 December 2006
    
    US$
    1,500,000
  and provided further that any portion of such amount not
included in Consolidated EBITDA for the Accounting Reference
Period specified above (the Carried Forward EBITDA
Allowance)
may be carried forward for one period only and added to the
amount specified for the next Accounting Reference Period. Any
Coil Technology Licence Proceeds included in Consolidated
EBITDA for that next Accounting Reference Period shall be
attributed to the Carried Forward EBITDA Allowance first before
the amount specified above for that Accounting Reference
Period. ;




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- 4 -

(f)
    
    The table in Schedule VIII (Capital Expenditure Projections)
shall be deleted and replaced by the table below: Period (US$ million)
    
    Non
    
    Shanghai-Shanghai
    
    -Base
    
    -Expansion(1)
    
    (2)
    
    (3)01/01/2000 to 31/12/2000
    
    
    5.00
    
    
    
    1.5301/01/2001 to 31/12/2001
    
    
    4.50
    *
    
    
    1.91
    
    
    
    1.7001/01/2002 to 31/12/2002
    
    
    4.05
    
    
    
    1.1601/01/2003 to 31/12/2003
    
    
    4.40
    
    
    
    0.8201/01/2004 to 31/12/2004
    
    
    4.50
    
    
    
    0.1901/01/2005 to 31/12/2005
    
    
    4.50
    
    
    
    0.5001/01/2006 to 31/12/2006
    
    
    4.50
    
    
    
    0.5001/01/2007 to 31/12/2007
    
    
    4.50
  (g)
    
    Schedule XVI (Swiss Reorganisation Expenditure) shall be
deleted and replaced by a new Schedule XVI (Swiss Reorganisation
Expenditure) in the form set out in the Appendix to this letter.  2.
    
    ConsentsSubject to clause 3 (Conditions), the Banks hereby grant the following
consents:  (a)
    
    for the purposes of clause 15.4 (Restrictions on disposals),
the Shanghai Joint Venture may dispose of its plant and land at 427
Juman Road, Shanghai 200023, China (the proceeds of which being the
Shanghai Factory Disposal Proceeds);(b)
    
    for the purposes of clause 9.4(c)(i)(dd) (Disposal Proceeds,
Acquisition Agreement Claims and Escrow Monies), the Shanghai Joint
Venture may reinvest the Shanghai Factory Disposal Proceeds in plant
and equipment for use in its business in China notwithstanding the
fact that such assets may be of a different general nature to that of
the Shanghai factory disposed;(c)
    
    for the purposes of clause 15.9(a) (Capital Expenditure), the
Shanghai Joint Venture may incur a maximum amount of US$4,700,000 of
Capital Expenditure for the purchase of plant and equipment for use
in its business in China which shall not be counted towards the
Capital Expenditure limits specified in Schedule VIII (Capital
Expenditure Projections) (the Additional Capex) to the extent that
such Additional Capex is funded from the following sources:  (i)
    
    US$980,000 of subscription monies from Trench
Limited for the further issue of shares in the Shanghai Joint
Venture;




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- 5 -

(ii)
    
    US$530,000 of subscription monies from Shanghai
Instrument Transformer Works Co Ltd for the further issue of shares in the Shanghai Joint Venture; and(iii)
    
    the Shanghai Factory Disposal Proceeds, provided
that the maximum amount of such proceeds that may be applied
towards such Additional Capex shall not exceed US$3,190,000 and
such proceeds must be applied in the financial year ending 31
December 2003;  (d)
    
    for the purposes of clause 15.12(c) (Shares, Loan Notes and the
Vendor Loans), the Shanghai Joint Venture may issue:  (i)
    
    shares to Trench Limited on receipt of the
subscription monies referred to in paragraph 2(c)(i) above; and(ii)
    
    shares to Shanghai Instrument Transformer Works Co
Ltd on receipt of the subscription monies referred to in
paragraph 2(c)(ii) above; and  (e)
    
    for the purposes of clause 15.13 (Investments), Trench Limited
may invest US$980,000 in the Shanghai Joint Venture by way of
subscription monies for further shares in the Shanghai Joint Venture.  3.
    
    ConditionsThe amendments and consents contained in this letter are conditional on
the following:  (a)
    
    the Shanghai Factory Disposal Proceeds being used or committed
to fund Capital Expenditure of the nature referred to in paragraph
2(b) and (c) within 6 months of such disposal or the balance of such
monies not so applied or committed at the end of such period being
applied in the manner described in clause 9.5 (Application of
Prepayment);(b)
    
    the Shanghai Joint Venture receiving further equity
contributions of US$530,000 from Shanghai Instrument Transformer
Works Co Ltd and US$980,000 from Trench Limited by 31 December 2002;
and(c)
    
    the Agent receiving within 30 days:  (i)
    
    of the date of this letter, a certified copy of the
licence agreements referred to in paragraph 2(a)(i);(ii)
    
    of the date of the subscriptions, evidence
satisfactory to the Agent (acting reasonably) that the
subscriptions referred to in paragraph 2(d) have been made; and(iii)
    
    of the date of the disposal of the Shanghai
factory referred to at paragraph 2(a)(ii) above, evidence
satisfactory to the Agent (acting reasonably) that such
disposal has occurred and as to the amount of the Shanghai
Factory Disposal Proceeds.  4.
    
    ConfirmationFor the purposes of clause 15.4 (Restrictions on disposals), the Banks
confirm that, consistent with the treatment of previous technology
licensing arrangements, the licensing by Trench Limited of certain coil
technology to Shanghai Instrument Transformer Works Co Ltd on the terms of
a Line Trap Technology Head-Licence Agreement, a Shunt Reactor Technology
Head-Licence Agreement and a Series Reactor Technology Head-Licence
Agreement, each dated 16 April 2002 and made between, amongst others,
Trench Limited (as Licensor) and Shanghai Instrument Transformer Works Co
Ltd (as Licensee) shall not constitute a disposal.




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- 6 -

5.
    
    Preservation of rights5.1
    
    For the avoidance of doubt no consents or waivers are given under this
letter in respect of any other matter or breach of, or other Event of
Default or Potential Event of Default under, the Facilities Agreement or
any other Senior Finance Document which might result from any other
circumstances at any time other than as specifically set out herein.5.2
    
    The agreement and consents of the Banks contained in this letter shall
apply only to the matters specifically referred to herein and are given in
reliance upon the information (other than any projections contained in the
Presentation)provided to the Agent on behalf of the Group being true,
complete and accurate, and such projections being prepared in good faith
based upon reasonable assumptions. Such agreement and consents shall be
without prejudice to any rights which the Finance Parties may now or
hereafter have in relation to any other circumstances or matters other
than as specifically referred to herein (and whether subsisting on the
date hereof or otherwise) or in relation to any information being other
than true, complete and accurate, which rights shall remain in full force
and effect. This letter may be executed in any number of counterparts and this has the same
effect as if the signatures on the counterparts were on a single copy of this
letter. This letter shall be governed by and construed in accordance English law and
clause 38 (Governing Law and Jurisdiction)of the Facilities Agreement shall
apply mutatis mutandisas if set out in full in this letter. Yours faithfully /s/ Nick Burnham For and on behalf of
CIBC World Markets Plc
in its capacity as Agent
for and on behalf of the Banks  By:
    N. Burnham To:   CIBC World Markets Plc We confirm our acceptance of and agreement to your letter of 7th Nov. 2002. For and on behalf of /s/ M. J. Bissell  
  Date:
    28/11/02




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Appendix Schedule XVI Swiss Reorganisation Expenditure Chf' 000's
    
    November 2001 Forecast2000
    
    2001
    
    2002
    
    TotalProfit & Loss Write offs:MIS contract termination
    
    
    (1,092
    )
    
    
    0
    
    
    
    0
    
    
    
    (1,092
    )MIS Fixed Assets write off
    
    
    (2,735
    )
    
    
    0
    
    
    
    0
    
    
    
    (2,735
    )(3,827
    )
    
    
    0
    
    
    
    0
    
    
    
    (3,827
    )Consultants/Professional advice
    
    
    (840
    )
    
    
    (1,616
    )
    
    
    0
    
    
    
    (2,456
    )Plant & Machinery write off
    
    
    (2,500
    )
    
    
    0
    
    
    
    0
    
    
    
    (2,500
    )Inventory write off
    
    
    (1,695
    )
    
    
    (1,300
    )
    
    
    0
    
    
    
    (2,995
    )Physical move of Inventory
    
    
    0
    
    
    
    (30
    )
    
    
    0
    
    
    
    (30
    )Trade receivables write off
    
    
    (1,000
    )
    
    
    0
    
    
    
    0
    
    
    
    (1,000
    )Severance/Loyalty Bonus
    
    
    0
    
    
    
    (2,079
    )
    
    
    0
    
    
    
    (2,079
    )Business Disruption etc
    
    
    0
    
    
    
    (2,093
    )
    
    
    0
    
    
    
    (2,093
    )(9,862
    )
    
    
    (7,118
    )
    
    
    0
    
    
    
    (16,980
    )Cash:MIS contract termination
    
    
    (70
    )
    
    
    (1,022
    )
    
    
    0
    
    
    
    (1,092
    )MIS Fixed Assets write off
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0(70
    )
    
    
    (1,022
    )
    
    
    0
    
    
    
    (1,092
    )Consultants/Professional advice
    
    
    (560
    )
    
    
    (1,896
    )
    
    
    0
    
    
    
    (2,456
    )Plant & Machinery Sales
    
    
    0
    
    
    
    180
    
    
    
    20
    
    
    
    200Inventory write off
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Physical move of Inventory
    
    
    0
    
    
    
    0
    
    
    
    (30
    )
    
    
    (30
    )Trade receivables write off
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Severance/Loyalty Bonus
    
    
    0
    
    
    
    (1,270
    )
    
    
    (809
    )
    
    
    (2,079
    )Business Disruption etc
    
    
    0
    
    
    
    (1,627
    )
    
    
    (466
    )
    
    
    (2,093
    )(630
    )
    
    
    (5,635
    )
    
    
    (1,285
    )
    
    
    (7,550
    )