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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
 The Directors
Trench Electric Holding B.V. 12th July 2001 Dear Sirs FACILITIES AGREEMENT DATED 18 APRIL 2000 AS AMENDED AND RESTATED ON 20 JUNE 2000
AND MADE BETWEEN TRENCH ELECTRIC HOLDING B.B. (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) (THE FACILITIES AGREEMENT) We refer to the above Facilities Agreement and to the Trench Group Bank
Presentation dated 22 November 2000 (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 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.
    
    AMENDMENTS AND WAIVERS  (a)
    
    Clause 17.2 Testing of Covenants, paragraph (b) currently
reads: The covenant contained is clause 17.1(d) (Adjusted
Consolidated Net Worth) shall apply on a continuing basis
and be tested by reference to any losses or profits
demonstrated firstly by the management accounts and
secondly, where applicable, by the relevant audited
accounts of the Group. The covenant contained in clause
17.1(d) will only be breached if the minimum covenant level
specified is not achieved when Adjusted Net Worth is
calculated using the exchange rate applicable on the
Completion Date (in each case complying with clause 16.4
(Consistent Application). The other covenants contained in
clauses 17.1(a), (b) and (c) will be calculated using the
exchange rate employed to prepare the relevant accounts
from which the covenants are tested. The following condition shall be applied:-




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Provided that, in the case of clauses 17.1(a) and (c) the
covenant ratios will be calculated using the exchange
rate(s) employed to prepare the Financial Projections.
This proviso shall apply for the four consecutive periods
to be tested specified in those clauses up to and including
the period ending 31st December 2001 and thereafter subject
to the prior written consent from all the Banks. (b)
    
    Clause 15.9 (Capital Expenditure) and Schedule VIII (Capital
Expenditure Projections) For the purpose of clause 15.9 (Capital Expenditure), the
table in Schedule VIII (Capital Expenditure Projections)
shall be deleted and replaced by the schedule below: ShanghaiNon-Shangai
    
     Base
    
     ExpansionPeriod (US$ million)
    
    (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
    
    
    4.00
    
    
    
    1.2201/01/2004 to 31/12/2004
    
    
    4.5001/01/2005 to 31/12/2005
    
    
    4.5001/01/2006 to 31/12/2006
    
    
    4.5001/01/2007 to 31/12/2007
    
    
    4.50
  Clause 15.9(a) (Capital Expenditure) shall be deleted and
replaced with the following:(a)    Not acquire any capital assets of a value or aggregate
value (and for this purpose, aggregating with the value of
the asset purchased the amount of any liability assumed
with or Encumbrance secured on it), or otherwise incur any
capital expenditure in any Accounting Reference Period,
which, when aggregated with the value of all other capital
assets and other capital expenditure incurred by Group
Companies in that Accounting Referencing Period (but
excluding Capital Expenditure to the extent funded from the
re-investment of Net Disposal Proceeds or funds received or
recovered by any Group Company of the type referred to in
Clause 9.4 (a)(ii)) exceeds the relevant budgeted amount
specified in United States Dollars in Schedule VIII
(Capital Expenditure Projections) or such greater amount as
may be approved by the Agent (acting on the instructions of
the Majority Banks) and be specified in the budget for any
Accounting Reference Period delivered pursuant to clause
16.1 (Budget).Provided that, in relation only to the Capital Expenditure
amounts referred to in columns (1) of the table appearing
in Schedule VIII (Capital Expenditure Projections) up to 25
percent of the amount of any such Capital Expenditure not
utilised may be carried forward for one period only and
added to the Capital Expenditure limit for the next such
period and any amount so carried forward shall be treated
as utilised first by the Group in that period.Provided also that, in relation to the Capital Expenditure
limit attributable to Shanghai (Base) in the table
appearing in Schedule VIII (Capital Expenditure
Projections) only, 100% of any such Capital Expenditure not
utilised in column (2) of the period 01/01/2000-31/12/2000
in such table 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.




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For these purposes Shanghai  Base and
Shanghai 
Expansion) shall constitute that Capital Expenditure as
outlined in such terms in Presentation 2. (c)
    
    Clause 17.3 (Definitions)For the purposes of clause 17.3 (Definitions), references to the
Parent shall be deemed deleted and replaced by reference to Trench
Electric B.V.(d)
    
    Clause 9.3 (Cash Sweep)The following provision shall be applied:- Provided that for the Accounting Reference Period ending
31st December 2000 the amount to be prepaid hereunder will
be a fixed amount of US$2,250,000 (the Fixed Cash Sweep) (e)
    
    Clause 9.5 (Application of Prepayments)In clause 9.5(a) (Application of Prepayments) the following
provision shall be inserted between the words pro rata and ;: Provided that in the case of prepayments constituted by the
Fixed Cash sweep under clause 9.3 (Cash Sweep) such
prepayments shall be applied firstly against the next most
immediate instalment set out in clause 8.1 (Repayment of
Term Advances) subsequent to the Accounting Reference
Period ending 31 December 2000 and not applied pro rata
against the outstanding Term Advances. Following
prepayment in full of such instalment, any unutilised
amount of such prepayment shall secondly be applied in the
same manner against the next most immediate instalment and
so forth in respect of further such prepayments. In clause 9.5 (Application of Prepayments) a new clause 9.5(f)
shall be inserted as follows: (f) in the case of prepayments arising form Net Disposal
Proceeds pursuant to clauses 9.4 (Disposal Proceeds,
Acquisition Agreement Claims and Escrow Monies) and 9.6
(Date for Prepayments) such prepayments shall be applied
firstly against the last outstanding instalment set out in
clause 8.1 (Repayment of Term Advances) and not applied pro
rata across the outstanding instalments. Following
prepayment in full of such instalment any unutilised amount
of any such prepayment shall secondly be applied in the
same manner against the then next to last outstanding
instalment and so forth in respect of further such
prepayments. (f)
    
    Clause 17.1 (Financial Covenants)The following new sub-clauses shall be inserted in Clause 17.1
(Financial Covenants):  (i)
    
    (e) Capital Expenditure (Non-Shanghai):
Subject to the terms of clause 15.0 (Capital Expenditure),
Capital Expenditure (other than that incurred in relation to
the Shanghai Joint Venture the limits of which are specified
in columns (2) and (3) of Schedule VIII (Capital Expenditure
Projections)) incurred by the Group during any Accounting
Reference Period shall not exceed the corresponding amount
for such period set out in column (1) of Schedule VIII
(Capital Expenditure Projections).(ii)
    
    (f) Capital Expenditure (Shanghai  Base):
Subject to the terms of clause 15.9 (Capital Expenditure),
Capital Expenditure incurred in relation to the Shanghai
Joint Venture incurred by the Group during any Accounting
Reference Period (other than that referred to in (g) below)
shall not exceed the




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corresponding amount for such period set out in column (2)
of Schedule VIII (Capital Expenditure Projections).(iii)
    
    (g) Capital Expenditure (Shanghai 
Expansion): Capital Expenditure as referred to in
Presentation 1 and Presentation 2 in relation to the Shanghai
Joint Venture incurred by the Group during any Accounting
Reference Period shall not exceed the corresponding amount
for such period set out in column (3) of Schedule VIII
(Capital Expenditure Projections). For the avoidance of
doubt this element of Capital Expenditure shall be excluded
from the definition of Capital Expenditure for the
calculation of the other Financial Covenants.(iv)
    
    (h) Swiss Reorganisation Expenditure: the
aggregate profit & loss cash flow costs in effecting the
Swiss reorganisation (or elements thereof) referred to in
Presentation 1 during any Accounting Reference Period shall
not exceed the relevant amounts against such costs (or
elements thereof) for such period set out in Schedule XVI
(parts 1 & 2).  (g)
    
    Clause 17.2(b) (Testing of Covenants)Clause 17.2(b) (Testing of Covenants) shall be amended by the
deletion of the words The to shall in the first line thereof
inclusive and the insertion in their place of the words , The
covenants contained in clauses 17.1(d) (Adjusted Consolidated Net
Worth), (e) (Capital Expenditure (Non-Shanghai), (f) (Capital
Expenditure (Shanghai  Base)), (g) (Capital Expenditure (Shanghai
  Expansion)) and (h) (Swiss Reorganisation Expenditure) shall.(h)
    
    Clause 2.5 (Purpose)Clauses 2.5 (b)(iii) and (iv) shall be deleted and replaced with
the following:(iii) for the general purposes of the Group up to a maximum
aggregate amount of US$27,200,000 and (iv) in refinancing
indebtedness under the Subordinated Notes up to a maximum
aggregate amount of US$7,800,000.(i)
    
    Clause 1.1 (Definitions)The definition of Permitted Encumbrance shall be supplemented by
the insertion of a new paragraph (j) as follows:(j) Encumbrances arising from the issuance of surety bonds in
relation to contracts with an aggregate principal value or amount
not exceeding US$1,000,000 and with a tenor of one year or less.(j)
    
    A new Schedule XVI shall be inserted in the Facilities
Agreement in the form set out in the Schedule to this letter.(k)
    
    A new clause 16.2(b)(viii) shall be inserted as follows:(vii) a report on progress on achieving the projections and costs
budgeted for the Group in connection with the re-organisation of
the operations of Trench Switzerland AG as set out in Schedule
XVI.




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2.       APPROVALS For the avoidance of doubt no waivers are given under this letter in respect of
any other breach of, or other Event or 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. 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 relevance
upon the information (other than any projections)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 For and on behalf of
CIBC World Markets Plc
In its capacity as Agent
For and on behalf of the Banks By:     /s/ Richard Vaughan To:     CIBC World Markets Plc We confirm our acceptance of and agreement to your letter of 12th July 2000. For and on behalf of /s/ M. J. Bissell
Michael John Bissell Trench Electric Holding B.V.
(for itself and in its capacity as
Parent and agent for each of the Obligors) Date: 18th July 2001